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Oral Answers to Questions
(1 year, 9 months ago)
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Liz Twist (Blaydon) (Lab)
The Minister for the Cabinet Office and Paymaster General (Jeremy Quin)
The UK and its international partners stand shoulder to shoulder in implementing sanctions against malignant actors on the international stage. This includes the most severe sanctions ever against Russia, which represents over £18 billion in assets frozen and reported to the Office of Financial Sanctions Implementation. Contracting authorities must comply with our sanctions, which have legal force.
Liz Twist
On the question of procurement more widely, the British Chamber of Commerce found that, in 2021, small and medium-sized enterprises were receiving a relatively small amount of direct Government procurement money compared with five years ago. Can the Minister explain why SMEs are being increasingly sidelined from access to public procurement under his Government?
Jeremy Quin
Far from sidelining SMEs, the Government are absolutely focused on ensuring that they get a fairer share of the Government procurement pie. I am delighted that the Procurement Bill will put an obligation on contracting authorities to have regard to what their tenders will do for SMEs. That will ensure that, right at the early stages of the process, as well as displaying a long pipeline notice, contracting authorities think through how they can make certain that those tenders are best adaptable to SMEs and their requirements.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
In November, it was revealed in The Guardian that the company Infosys was still operating in Russia, eight months after it announced that it would withdraw. Just a month later, that company was awarded a lucrative contract worth £1.7 million of taxpayers’ money. Was the Minister aware of that when that contract was awarded, and do the Government believe that public money should be going to those who are operating in Russia?
Jeremy Quin
We set out in policy procurement note 01/22 our approach to public procurement and links with Russia. That PPN speaks for itself, and I am sure the hon. Lady is familiar with it. It requires contracting authorities to check from whom they are receiving goods and services. It is primarily aimed at those who are Russia or Belarus-based, or who have significant control. I do not know the particulars of the circumstances that she mentions, but the Government’s approach through PPN 01/22 is very clear.
Ian Levy (Blyth Valley) (Con)
David Duguid (Banff and Buchan) (Con)
The Minister for Veterans’ Affairs (Johnny Mercer)
Research shows that only 0.7% of households who were homeless or at risk of homelessness in 2021 and 2022 had support needs as a result of having served in the armed forces, but we will end veteran homelessness this year via Op Fortitude. This new referral scheme will provide a central point for local authorities and charities to identify those in need and refer them to a network of support.
Ian Levy
I am aware that the Minister recently visited Forward Assist, where he met veterans from the north-east, including from Blyth and Cramlington in my constituency, and he knows the admirable work that it does helping veterans overcome challenges such as homelessness, mental health difficulties and social isolation. Will he join me in expressing gratitude to everyone at Forward Assist for its commendable efforts in assisting veterans as they transition back to civilian life?
Johnny Mercer
My hon. Friend is a huge champion of the charity Forward Assist, which has done incredible work over a long period. The Government and I are clear that there are two groups of veterans who are under- represented in this space. One is foreign and Commonwealth veterans, and the other is women. We are absolutely determined to correct that. I recognise that there are difficult issues, such as military sexual trauma. We launched the women’s strategy only 10 days ago, and I urge all female veterans to contribute to that so that we can make sure that their needs are met.
David Duguid
I thank the Minister for his response. Can he update the House on what this Government are doing across all nations of the United Kingdom to support veterans who are experiencing homelessness, including in Scotland?
Johnny Mercer
Op Fortitude was something we piloted at Christmas, and it will go live in the next six weeks. It is a single, defined pathway out of homelessness that local authorities will be able to refer into. It is backed up by £8.5 million, and it buys 910 supported housing placements. That is across the United Kingdom. We do not want to see any homeless veterans by the end of this year, and we will strain every sinew to make sure we achieve that goal.
Patricia Gibson (North Ayrshire and Arran) (SNP)
Some 90% of veterans who try to claim personal independence payment for post-traumatic stress disorder have their applications rejected, according to armed forces charities. This is leaving veterans facing homelessness, being reliant on food banks and, in some cases, even considering suicide. Can the Minister explain why it is that veterans are being forced to rely on charities rather than being given the help that they need by this Government?
Johnny Mercer
That question might have been relevant six or seven years ago, but this Government have completely transformed how we deal with veterans, particularly vulnerable veterans, in this country, and recognise that there is a transition between charity and Government responsibility. If there are any individual cases, I am more than happy for the hon. Lady to refer them to me. There has never been better support for armed forces veterans in this country than that given today, and I am determined that all veterans will feel the benefit.
Dave Doogan (Angus) (SNP)
The Royal British Legion estimated in 2020 that there were up to 4,000 homeless veterans in the UK. In Scotland, there is a duty to find permanent accommodation for all unintentionally homeless applicants, including veterans. Will that exemplar be matched in England and an action group set up? What specifically are this Government doing to help eradicate homelessness, particularly with respect to ex-servicemen and women?
Johnny Mercer
I do not recognise those figures at all. There are homeless veterans in this country, including some who are involuntarily sleeping rough because of a lack of provision. We are ending that this year through clear homelessness pathways and through working with Riverside, Stoll and Alabaré and other brilliant service charities to make sure that there are no homeless veterans by the end of this year. Again, if there are any examples, I am more than happy for hon. Members to write to me and I will take up individual cases, but we will end it this year. I remind Members that, if we continue to go around saying that there are lots of homeless veterans when that is not the case, that will be self-defeating as we attempt to make this the best country in which to be a veteran.
Robbie Moore (Keighley) (Con)
Martin Vickers (Cleethorpes) (Con)
The Minister for Veterans’ Affairs (Johnny Mercer)
We have already completed delivery of over 35% of our strategy action plan commitments. Veterans are being supported into employment in the public sector. We are accelerating our investment to end veteran homelessness. The veterans’ survey has been a game changer, and Op Courage is delivering more mental health support than ever before and is on track, despite what the Opposition might say.
Robbie Moore
We have many fantastic veterans across Keighley and Ilkley, including George Metcalf and Pete Western, whom I have met on numerous occasions to talk about supporting veterans in their civilian lives. Could my right hon. Friend outline the schemes available to help increase veteran employment and to assist their transition into the civilian workplace?
Johnny Mercer
I am clear that having a job—a meaningful job—is the No. 1 factor that will improve the life chances of any veteran and their family. We are putting a great deal of resource and time and effort into that space. On pathways into the public sector, the STEP into Justice programme gets people into the justice system. The Office for Veterans’ Affairs has a veterans employment group. There are some fantastic employment opportunities. We are trying to bring it all together so that it is clearer for people. I commend the work of James Cameron and Mission Automotive in that space. I would like to see those pathways across different sectors, and we are looking to roll that out this year.
Martin Vickers
I recognise the excellent work that is being done by the Minister and his team. Could he give more detail about Operation Fortitude in respect of homeless veterans? And while he is on his feet, could he give a word of praise to Alex Baxter and his team in Cleethorpes, who do so much for veterans? May I invite him to visit them some time in the near future?
Johnny Mercer
I of course pay tribute to Alex in Cleethorpes, and to everybody who works in this sector. I say to the House again that the nation has a duty to these people. It is not about me, the Government or charities delivering—it is the nation’s commitment and we all need to work together. I pay tribute to the charities that do that work.
Op Fortitude is a referral pathway that will enable anyone who has served and is at risk of homelessness to get into good-quality supported housing, to access wraparound care and treatment for addiction or any comorbidity factors, and ultimately to upskill and get back into civilian life. It is a game-changing programme and I am proud to deliver it.
Dan Jarvis (Barnsley Central) (Lab)
The Minister and I have worked closely together supporting foreign and Commonwealth soldiers and veterans, so I wonder if he shares my concern about the case of Vilikesa Tubuitamana. He proudly served for 18 years, including two tours of Afghanistan and two tours of Iraq, but sadly his service resulted in severe PTSD. He was honourably discharged on medical grounds and awarded £46,000 to help fund his medical needs and a new life. Shockingly, however, it appears that the Ministry of Defence has used the money awarded for his PTSD to settle an administrative mix-up, leaving him—a father of three—penniless. Will the Minister have a look and see what can be done to support him?
Johnny Mercer
Of course. Clearly, I am not a Minister in the Ministry of Defence, but I raised this formally with the Minister for Defence People, Veterans and Service Families earlier this week. I am aware of that case. I totally accept that there are individual cases where the results are not in keeping with making this country the best in the world to be a veteran. That is why I thank the hon. Gentleman for raising that case. There is a deficit when it comes to looking after our foreign and Commonwealth personnel, particularly veterans, in this country. He has done great work on this over many years in highlighting their cases, and I hope the sunlight we can bring to this case can bring us to a fair resolution.
Alan Brown (Kilmarnock and Loudoun) (SNP)
After my office intervened on behalf of Sandy, who had been wounded serving in Northern Ireland, by writing to the Secretary of State, we got an inaccurate response that has left Sandy feeling even more frustrated about his treatment and his attempts to get a fairer war pension. Given that the survey by the all-party group on veterans found that 76% of veterans rated their experience of claiming compensation through Veterans UK as poor or very poor, when will there be root-and-branch reform of Veterans UK? Will the Minister promise to take up Sandy’s case and review what has been sent to our office?
Johnny Mercer
I am more than happy for the hon. Gentleman to send me his case. My line on Veterans UK has been the same for four years now. There are good people who work there and they work very hard in delivering that service. Governments of all colours have under-invested in that organisation for many years. When I first became a Minister, they were working on paper records. Jointly with the Minister for Defence People, Veterans and Service Families, I have commissioned a review of that service to make sure that it works for people like the individual who has been mentioned. I am clear that the service is not good enough in some areas. We are working on that and I hope that the hon. Gentleman will see the results of the review, which we launched last week, in the next three to six months.
Rachel Hopkins (Luton South) (Lab)
The Minister for Veterans’ Affairs recently commented in the Express:
“for too long veterans services have suffered from under-investment, and been over-reliant on paper records and outdated tech.”
I agree, but I fear that after 13 years in government, despite the rhetoric and his threat to shave off his eyebrows if he does not deliver, there is no serious plan to deliver the standard of services that all our veterans and their families deserve. So will he confirm what specific resources his office will be allocated for the implementation of the recommendations of the cross-departmental veterans’ welfare services review?
Johnny Mercer
I am a huge personal fan of the hon. Lady, but a lot of what she says in this space is simply not the case. I have written to her to correct the record. I think she may have inadvertently misled the House when talking about Op Courage waiting times. There are problems in this sector and I have spent a long time trying to correct them, but the reality is that the things she mentions, such as waiting times for Op Courage, are just factually not correct. There are areas where we need to work. We have launched the quinquennial review of compensation schemes. I have been going down this path for quite a long time. Never before have a UK Government committed to veterans’ services like the Government have today. That is the reality of the situation. Being a veteran now in this country is fundamentally different from how it was when I started, but I look forward to continuing to work with her in the months ahead.
Selaine Saxby (North Devon) (Con)
The Minister for the Cabinet Office and Paymaster General (Jeremy Quin)
It is always a pleasure to share good news with you, Mr Speaker. Just three years into our 10-year programme, we have already hit 50% of our target to relocate 22,000 roles from London across the UK. Therefore, more than 11,000 roles have been relocated from London, spreading prosperity and opportunities across the whole of our United Kingdom.
Selaine Saxby
Does my right hon. Friend agree that Devon is the natural habitat for the Department for Environment, Food and Rural Affairs and that, if we are keen to ensure our food security, surely we should locate the Department among our farmers, fishermen and the Met Office, not to mention our world-class universities specialising in climate and marine sciences, and where rurality is an immersive experience?
Jeremy Quin
Departments select places for role relocations using workforce and locational analysis, as well as many other factors, which I am sure would include those referred to by my hon. Friend. As she knows, DEFRA already has 550 full-time employees in Devon and nearly 2,000 across the south-west more widely. I know from previous experience as a Minister that she is a fantastic advocate for her constituency and I am certain that she will continue to make her case.
Martyn Day (Linlithgow and East Falkirk) (SNP)
Yesterday, I joined striking PCS workers on their demonstration, some 130,000 of whom were on strike for better pay and conditions. Irrespective of where in the UK civil servants have been relocated to, their pay and conditions are still determined at Westminster, leading to industrial action across all four nations. When will the Government finally deliver a pay uplift reflecting the work of civil servants throughout the UK?
Jeremy Quin
Individual Departments determine the pay and conditions for their civil servants. There are ongoing discussions with officials. I also met members of the PCS in January. We want to get a resolution. We want to get people back to work, but no one is helped by the current range of industrial action that hits some of the most vulnerable people in our society.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
The Minister for the Cabinet Office and Paymaster General (Jeremy Quin)
I thank all those who attended the meeting of the all-party parliamentary group on haemophilia and contaminated blood chaired by the right hon. Lady last week. The Government acted on an interim compensation proposal for those infected in the autumn, paying out more than £450 million, and have accepted that there is a moral case for compensation. I am truly delighted that Sir Brian Langstaff has announced his intention to produce a second interim report, which, as I understand it, will be published before Easter. That will help the Government to meet our objective to be able to respond quickly when the final report is published in the autumn, although I do not wish to understate the complexity of the work involved in addressing the impact of the scandal.
Dame Diana Johnson
I thank the Paymaster General for attending the meeting with the all-party parliamentary group; we very much appreciated his input. What also came out of that meeting was a desire from those who have been infected and affected to have further information about what the Government are doing in preparation for the reports from Sir Brian—the final report particularly —later this year. I wonder whether the Paymaster General will set out how he feels he can best engage with those infected and affected in the coming months to show that progress is being made and set out a plan for that involvement with those infected and affected.
Jeremy Quin
The right hon. Lady makes a reasonable challenge. She has battled on this issue for many years. I am focused on that interim report from Sir Brian. We have already had the benefits of the Sir Robert Francis study, which I am sure has informed the work of Brian Langstaff and his team. When we see the interim report, it will be incumbent on us to give an immediate reaction—a reaction as soon as is practical—to it, and then to set out what we will be doing to build towards the final report, which, as I say, will be published in the autumn. I know that it has been a long wait for those infected and affected. It is not over yet, I am afraid. There is an awful lot of work to be done, but we are approaching the endgame as these reports come through.
Kenny MacAskill (East Lothian) (Alba)
Andrew Western (Stretford and Urmston) (Lab)
The Chancellor of the Duchy of Lancaster and Secretary of State (Oliver Dowden)
The Cabinet Office plays a unique role in government, bringing together different Departments across Whitehall to deal with the most complex challenges facing our country. As a founding and current member of the Open Government Partnership, the UK remains committed to improving government transparency. The fifth national action plan for open government sets out the UK’s commitments, and work will start shortly on the sixth plan.
Kenny MacAskill
It is several years and, indeed, several Prime Ministers since we had the Union connectivity review. Thankfully, Boris’s bridge has crashed and burned, but, as with the Budget, there were good aspects within it. Sir Peter Hendy, a man who knows about transport, was important in emphasising the vital strategic actions of the east coast main line and the A1 not simply for Scotland, but for the north-east of England. Sadly, questions to the Department for Transport simply result in intimation that there are regular meetings with the Scottish Government, and I have to say that the same obfuscation seems to come from the Scottish Government. We seem to have had no progress whatsoever since Sir Peter Hendy’s Union connectivity review. Can the Government please provide some clarity about what their intentions are on upgrading the east coast main line and the A1?
Oliver Dowden
I am sure that my right hon. Friend the Secretary of State for Transport will be happy to provide that, and that he will be able to report to the hon. Gentleman the record levels of investment made across our whole United Kingdom under this Government.
Andrew Western
From partygate to VIP fast lanes, the level of sleaze we have seen under this Government amounts to a grotesque abuse of power, so transparency is surely necessary to restore public confidence. On that basis, does the Secretary of State agree with me about the need for a truly independent ethics commission, free from political interference, that brings together the various roles and responsibilities of the various bodies and committees responsible for upholding standards in public life to create a single, powerful entity that can restore public trust and confidence?
Oliver Dowden
We have very high levels of transparency. I have to say to the hon. Gentleman that Labour Members like to talk the talk, but they do not walk the walk. If they really want to restore public confidence through transparency, they should release now the details of the meetings that took place between the Labour party and Sue Gray. They continue to refuse to do so but are perfectly able to, consistent with the rules of the Advisory Committee on Business Appointments.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
The Fair Tax Foundation revealed that between 2014 and 2019, one in six public contracts were won by businesses connected to tax havens. That means that billions of pounds of taxpayers’ money is going towards those who try to avoid paying tax. It is fair that the public have a right to know how their money is spent, so will the Secretary of State support Labour’s measures to increase tax transparency in our procurement system?
Oliver Dowden
We already have high levels of transparency, and the Procurement Bill is going through Parliament. The most important thing is to crack down on tax avoidance through tax havens, which is what we saw in yesterday’s Budget and what we have seen previous ones—for example, by addressing the double Irish issue.
Kirsty Blackman (Aberdeen North) (SNP)
In December, the Committee on Standards in Public Life said it was concerned that 18 months had been lost because of the Government’s failure to respond to its report “Upholding Standards in Public Life”, which recommended stronger rules and a better compliance culture for central Government. When can we expect a formal response from the Government?
Oliver Dowden
We are working through the responses. Clearly, a new Administration came in in November, but we will shortly be in a position to publish all the responses to the report. I am working through it with the Prime Minister and publication will come shortly.
Kirsty Blackman
How can we be assured of transparency and integrity in decision making if we do not have a register of Ministers’ interests that has been published any time in the past 10 months?
Oliver Dowden
The Government will publish the latest version of that register shortly. The House has discussed and considered this issue, and the hon. Lady may have heard the comments made by the Leader of the House. We are moving to a situation in which we both produce the transparency returns more rapidly and align them more closely with the parliamentary register, but it is important that we get the systems in place so that that can be done properly.
Rob Roberts (Delyn) (Ind)
The Minister for the Cabinet Office and Paymaster General (Jeremy Quin)
The Infrastructure and Projects Authority’s standards, tools and training for Government projects help to ensure that projects are set up for success. The IPA’s transforming infrastructure performance programme is helping to reduce the cost of projects.
Rob Roberts
It came as a shock to one of my constituents recently when I pointed out that more than 9,000 public sector workers are paid more than the Prime Minister, including £620,000 being paid to the chief executive of the continually failing HS2 Ltd. It is all public money, so does the Minister agree that we have to demand value for money from such appointments and cap excessive salaries from the public purse?
Jeremy Quin
I agree with my hon. Friend that it is essential that we get value for money from the investments we make in our people. There is a role for well-paid people to deliver important projects for the people of this country, but I assure him that any payments above £150,000—that covers the entire remuneration package, not just the salary—must be not only justified by the relevant Department, but personally signed off by the Chief Secretary to the Treasury, who takes a very close interest in such matters.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
Ministers have lifted the cap on consultancy spending for Government Departments at a time when many members of the public are struggling to pay bills or put food on the table. Uncapping the spend on consultancy fees, rather than investing in building and nurturing internal civil service talent, may be short-sighted. Will the Minister reinstate the cap and instead focus on the internal development of skills?
Jeremy Quin
There is a difference between a cap and a control, and it is up to Departments to ensure that they are getting value for money in what they spend. Cutting bureaucracy and cutting exercises that take up a lot of civil service time but that are not productive is a good thing. There is a role for consultancy, alongside growing and nurturing the resources inside the service. It is important that we always get value for money, but that is best generated by having a Department that is laser-focused on value for money in what it is spending and on why it is spending it.
Sir Christopher Chope (Christchurch) (Con)
The Parliamentary Secretary, Cabinet Office (Alex Burghart)
The rapid response unit was created in 2018 and disbanded in August 2022. It was formed as a central resource in the Government Communication Service that used publicly available information to improve Government’s ability to identify where certain narratives about our work were gaining traction online and to understand public sentiment about Government policies. On disbandment, the information collected was archived and it will be retained in line with the Cabinet Office information retention policy, which is available online.
Sir Christopher Chope
But why has my hon. Friend refused to admit in answer to parliamentary questions that the rapid response unit collected and stored information on sitting MPs? As my subject access request has confirmed that I was one of those MPs, can he explain why the unit was using taxpayers’ money to snoop on me, who authorised this and why?
Alex Burghart
My hon. Friend is welcome to come and have a meeting with me and officials in the Cabinet Office to discuss any concerns that he has about the rapid response unit. I have asked them this morning whether there were any monitoring emails that contained his name. I have been given assurances that there were not, but I am very happy for him to come to the Department and talk through all the possible implications. The truth is that the Government have a number of media monitoring services that check what is going on. They monitor not just what MPs and peers say, but what journalists say and anything that is reported in the mainstream media. As my hon. Friend’s name has appeared in newspaper articles in connection with various stories, it is natural that it would be picked up by those monitoring services.
Mr Speaker
I do have concerns about what has been mentioned. If there are dossiers on MPs, we need to know. If someone put in for an urgent question to get to the bottom of this, I would be very tempted, because I do think it needs clarification. A Government Department holding records on MPs may be fine, but it may not be, so I do have great worries.
Alex Burghart
As I said, Mr Speaker, we have media monitoring units so that when people’s names appear in the media, be they MPs, peers or people who are not Members of either House, they will be recorded on those systems. There is nothing untoward about this, I can assure you.
Patrick Grady (Glasgow North) (SNP)
The Chancellor of the Duchy of Lancaster and Secretary of State (Oliver Dowden)
The responsible Department for the Retained EU Law (Revocation and Reform) Bill is the Department for Business and Trade.
Patrick Grady
I do not know whether there is precedent for a piece of legislation bouncing around so many Departments in such a short period. Is there not an irony that the Bill is causing more bureaucracy and red tape of the type that Brexit was supposed to do away with? It is costing hundreds of thousands, if not millions, of pounds in civil service time, it is causing massive uncertainty across a range of industries, and it is presenting a dangerous cliff edge for so many hard-won rights. Surely, no matter which Minister or Department is in charge of it, the Government should just dump it altogether.
Oliver Dowden
I completely disagree with the hon. Gentleman’s characterisation. Through this Bill, we are making the most of our opportunities outside the EU by making sure that we take control and that this place takes control of its own statute book. The hon. Gentleman’s question comes as no surprise to me, because the Scottish National party would be perfectly happy for us to align dynamically with the European Union in perpetuity.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
The Parliamentary Secretary, Cabinet Office (Alex Burghart)
I am delighted to tell the House that the Government are absolutely committed to supporting SMEs in a variety of ways, from transparently publishing contract pipelines to simplifying bidding processes. The Procurement Bill currently making its way through Parliament will create a simpler and more transparent procurement regime that will open up further business to SMEs.
Gerald Jones
Analysis by Spend Network found that big corporations were still winning 90% of contracts deemed suitable for smaller businesses. These are worth £30 billion per annum. Will the Minister outline what the Government are doing to ensure that SMEs win procurement contracts that they are suited for?
Alex Burghart
The hon. Gentleman will be delighted to hear about the Procurement Bill currently making its way through Parliament. It will come to Report stage after the Easter break. It will help SMEs across the country, including in his constituency and mine, because we have worked hand in glove with the Welsh Government to make sure that the new procurement rules are available in England, Wales and Northern Ireland. I am pleased to say that that is possible only because we left the EU.
Andrew Jones (Harrogate and Knaresborough) (Con)
The Chancellor of the Duchy of Lancaster and Secretary of State (Oliver Dowden)
Strengthening our national resilience is one of my personal priorities, and my Department continues to lead on this crucial work across Government. We identified seven immediate priorities through the resilience framework; of those, we have already published four. We will soon publish an updated national risk register. Since I last addressed the House, I have also chaired a dedicated resilience Sub-Committee of the National Security Council.
Andrew Jones
Our preparedness for national emergencies relies on our local resilience, too. In North Yorkshire, we have a high-functioning local resilience forum. Is my right hon. Friend ensuring that these local forums are all operating at the standards needed, and are integrated into our national resilience plans?
Oliver Dowden
My hon. Friend makes an important point. We work closely with all resilience forums, which are essential to our whole-of-society resilience approach to any emergency response. There are well-established processes for Government to liaise with local resilience forums to enable national and local integration. In addition, the 2022 resilience framework commits to strengthening local resilience forums, including through clearer accountability and assurance.
Fleur Anderson (Putney) (Lab)
We all know how distressing it was for the relatives of people who died from covid to read the former Health Secretary’s leaked WhatsApp messages. There were some dreadful revelations about life and death decisions that were made, and about how they were made. The outcomes of the covid inquiry will be vital for learning lessons to strengthen national resilience—there could be another covid tomorrow. Will the Secretary of State confirm that all evidence from Ministers and former Ministers held on official channels, private emails and WhatsApps has been provided to the independent covid inquiry so that no more delays are caused by the Government?
Oliver Dowden
I can give the hon. Lady that assurance. There has been total and full transparency from Government, as we are required to do under the terms of the Act and the relevant legislation.
Steven Bonnar (Coatbridge, Chryston and Bellshill) (SNP)
The Chancellor of the Duchy of Lancaster and Secretary of State (Oliver Dowden)
Our economic security is more important than ever, which is why it was at the heart of this week’s integrated review refresh. As part of that refresh, we announced an ambitious programme to bolster our economic defences, which I am leading from the Cabinet Office. That includes a new body in MI5, the National Protective Security Authority, to give businesses the frontline expert national security advice they require, as well as a new supply chain strategy and improved export controls. Those measures will put us at the front of the pack for economic security and ensure that we remain one of the most attractive places in the world to invest.
Steven Bonnar
The former Prime Minister has declared outside earnings of £4.8 million since he left office in disgrace—all of that, of course, on top of his MP’s salary. Why is the taxpayer now being hit for more than £220,000 in partygate legal fees on his behalf during a cost of living crisis? Is that fair?
Oliver Dowden
As the hon. Gentleman may know, there is a long-standing convention that Ministers of either party—this applies to Ministers of both political parties who have been in government—are entitled to legal support in respect of decisions that they made in government. That is an important constitutional safeguard to ensure that Ministers can act freely in government.
Sir Christopher Chope (Christchurch) (Con)
Mr Speaker
May I remind the hon. Member that this is topical questions?
The Parliamentary Secretary, Cabinet Office (Alex Burghart)
There is no Ministry of Truth; there is the Cabinet Office. The rapid response unit was disbanded in August last year, and I am happy to meet my hon. Friend to talk about any of his concerns, particularly any parliamentary questions that he feels have not been answered properly.
Angela Rayner (Ashton-under-Lyne) (Lab)
The Prime Minister stood on the steps of Downing Street and promised to restore integrity, accountability and respect in Government. Reports this week suggest that concerns were raised at the highest levels in Government about the Deputy Prime Minister’s intimidatory behaviour, and yet nothing was done. Can the Secretary of State clarify here today, did the Cabinet Office warn the Prime Minister about the conduct of the Deputy Prime Minister before he was reappointed to the Cabinet?
Oliver Dowden
The right hon. Lady will know that we have been through this process many times before. I thought the Labour party believed in due process. The due process is that Adam Tolley, a very senior KC, is investigating all aspects of that, and I am not going to pre-empt his report in any way.
Angela Rayner
Yet again, the Secretary of State hides behind the so-called independent inquiry and dodges the question. The reality is that he is protecting a corrupt standards regime upheld by the Conservatives for the last 13 years, with the Prime Minister as judge and jury. Can the Secretary of State say today, in no uncertain terms, when Adam Tolley’s fact-finding mission is complete, will the Prime Minister’s ethics adviser be asked to provide a judgment about whether there has been a breach of the ministerial code by the Deputy Prime Minister?
Oliver Dowden
As the right hon. Lady will know, the Prime Minister’s ethics adviser is independent. It will be a matter for him to decide whether he wishes to take further action, in consultation with the Prime Minister. We see this time and again from the Labour party. They call on us to have an independent inquiry. As soon as we announce an independent inquiry, they ask us to pre-empt it. They ask us to have transparency, yet when it comes to transparency from the Labour party, they still have not provided details of the extensive meetings they had with a serving civil servant. It is in the public interest to declare that, and they have still failed to do so.
David Simmonds (Ruislip, Northwood and Pinner) (Con)
Oliver Dowden
My hon. Friend raises an important point. We have a number of structures in Government to ensure that Departments work effectively together. In relation to parliamentary legislation, there is the Parliamentary Business and Legislation Cabinet Committee, which is led by the Leader of the House. There is also the Economic and Domestic Affairs Secretariat, which ensures co-ordination between different Departments, and those are long-established practices.
Dame Angela Eagle (Wallasey) (Lab)
Oliver Dowden
First, I should say that I oversaw that appointment process. I have every confidence in its propriety, and I am sure the inquiry will find that that was the case. In order to ensure that it is an independent inquiry, it is independent from the Cabinet Office, so I cannot give commentary on its timings; that is for the person conducting it.
Mark Jenkinson (Workington) (Con)
As the country grinds to a halt once again and children are denied education at the hands of militant trade unions, we learn that the Labour party wants to repeal every anti-strike law in the country. Does my right hon. Friend agree that the public cannot afford or trust a Labour Government while they remain in the pocket of militant trade unions?
Oliver Dowden
It may not surprise the House to hear that I totally agree with my hon. Friend. I am afraid we have seen more evidence of that in this House this year. When this Government brought forward legislation to protect hard-working people from disruptive strikes, the Opposition failed to support minimum service levels.
Chris Stephens (Glasgow South West) (SNP)
The Minister for the Cabinet Office and Paymaster General (Jeremy Quin)
Civil service pay is determined at delegated levels between the Departments concerned. At the senior ranks of the civil service, it is more of a Cabinet Office responsibility. I have met the leadership of the PCS—I did so in January. There are ongoing discussions between officials in the Cabinet Office and the unions. We want to see this resolved, but I do not believe that matters are helped one iota by people going on strike and having an impact on the very people they are employed to serve, and I know do serve with great commitment and dedication.
Martin Vickers (Cleethorpes) (Con)
Can the Minister outline what immediate plans the Government have to relocate civil servants out of London? Does he agree that my Cleethorpes constituency and neighbouring Grimsby, as major centres for the renewable energy sector, would be an ideal location for officials who oversee that sector?
Jeremy Quin
The good news to share with my hon. Friend is that we have already got halfway to our target of 22,000 jobs moved out of London around the UK, and a huge number of those jobs have gone to the north of England. I am sure that my hon. Friend will make his case for his constituency in his normal, incredibly effective way.
Christine Jardine (Edinburgh West) (LD)
Alex Burghart
The hon. Lady will be pleased to hear that there is a major communications programme to address just that issue.
Selaine Saxby (North Devon) (Con)
I thank the Minister for Veterans’ Affairs, my right hon. Friend the Member for Plymouth, Moor View (Johnny Mercer) for coming to visit the Veterans Charity in Barnstaple earlier this year. Does he agree that such charities run by veterans often play an excellent complementary role to the excellent work his Department is doing?
The Minister for Veterans’ Affairs (Johnny Mercer)
I of course pay tribute to the Veterans Charity—it was a fantastic visit—but I also pay tribute to my hon. Friend’s advocacy of it over many years. It has been extraordinary. It provides great services down in the south-west, and I pay tribute to it.
Daniel Zeichner (Cambridge) (Lab)
It has recently been revealed that the Crown Commercial Service in the Cabinet Office is planning to replace local buying and distribution agreements for food and catering services with what it calls a single national prime supplier. That will have a profound effect on many local and regional wholesalers in Cambridge and across the country. Can the Minister tell us what assessment he has made of that impact, and will he meet me and representatives of those wholesalers to assess the situation?
Alex Burghart
The Crown Commercial Service is always looking at ways in which it can save taxpayers’ money, but it is also mindful to protect small and medium-sized enterprises, which remain a priority for this Administration.
Andrew Jones (Harrogate and Knaresborough) (Con)
The global expansion of cyber-space is changing the way we live and work. Can my right hon. Friend outline what steps he is taking to advance our national cyber-security strategy and to bolster our defences against malign actors around the world?
Oliver Dowden
Clearly the landscape in which we are operating is getting more risky over time, with geopolitical elements, as the House is aware. I am spending more and more of my time ensuring that we reach appropriate levels of cyber-security, working with the National Cyber Security Centre and other agencies.
Jessica Morden (Newport East) (Lab)
I echo the earlier question from my right hon. Friend the Member for Kingston upon Hull North (Dame Diana Johnson) about the contaminated blood scandal. The inquiry is coming to an end, and another interim report is due shortly. I just reiterate that it is so incredibly important for those affected, including bereaved parents such as the Smiths in my constituency, that we know that the Government are preparing now and are ready to act quickly on compensation for those people who have waited so long.
Jeremy Quin
The hon. Lady has campaigned vigorously on this on behalf of her constituents. I am aware of her absolute focus on this matter of major concern. There is work ongoing; I think we will be helped a great deal by Brian Langstaff’s second interim report, which I believe will address compensation. That will help us get that underpinning. It is an incredibly complex issue, as I am discovering, but I can assure the hon. Lady that work is being conducted in Government to make certain we are ready for the second interim report, and then the final one.
Alan Brown (Kilmarnock and Loudoun) (SNP)
In 2016, Hinkley Point C was estimated to cost £18 billion. The latest update is that it is going to cost £33 billion. The UK Government want to replicate Hinkley Point C at Sizewell C; why, then, are they still estimating the cost of Sizewell C at £18 billion? When are they going to come clean about the real cost of Sizewell C?
Jeremy Quin
Some of the precision of that would be better answered by my colleagues in the relevant Department, but what I will say to reassure the hon. Gentleman is that the Infrastructure and Projects Authority learns with every single project that we do. I have discussed this with the IPA, and there will be a huge amount of learning from the planning that has already gone on as to how we can make certain that future projects learn from experience and are more cost-effective. That was the case with how we have built schools: right across the Government service, we are finding ways of learning and applying that more regularly.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
I am going to have another go. Will the Paymaster General agree to a series of update meetings with those infected and affected by the contaminated blood scandal in the months leading up to Sir Brian Langstaff’s final report? That is a specific question.
Jeremy Quin
The next point in this process will be the second interim report, and when that is published, I will meet the right hon. Lady and her colleagues from the all-party parliamentary group if that is helpful. That is about two weeks away, in the Easter recess.
Patrick Grady (Glasgow North) (SNP)
Given that Brexit was all about this place taking back control, why are the Government using so many Henry VIII clauses and awarding themselves other delegated powers in the Brexit legislation that they are passing? Is it not about time that we had a proper review of how delegated legislation works, along the lines recently proposed by the Hansard Society?
Oliver Dowden
I hope that the hon. Gentleman would appreciate that, given the sheer volume of European legislation that we accumulated during our membership, we have to move rapidly to establish sovereign control. That is why we have the provisions in that Bill. The provisions of the Bill have been approved by this House and are currently under consideration in the other place, so Members have had ample opportunity to make their views known and to vote on it.
Dan Jarvis (Barnsley Central) (Lab)
The Veterans’ Minister and I recently met the hero, Ben Parkinson. I was certainly concerned to hear that there was not provision within the system to cover the cost of Ben’s wheelchair. Could the Minister say whether provision was made in yesterday’s Budget to cover those costs, and if so, will he take the opportunity to pay tribute to Ben and his family for their persistence in making the case?
Johnny Mercer
The hon. Gentleman is referring to the veterans mobility fund. He is absolutely right: none of these individuals with these catastrophic injuries should be contributing anything to their specialist mobility equipment. That is why, yesterday, we managed to reinstate the veterans mobility fund, and I pay tribute to Ben and his family for their campaigning on that issue. It is an important piece of work, and we will make sure we see it through.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
Figures show that 50% of female spouses of serving personnel aged 30 to 49 experience loneliness, in contrast to 27% of women of the same age in the general population. What steps are Ministers taking to ensure that adequate emotional support services are available to the spouses and families of serving personnel?
Johnny Mercer
That is a question for the Minister for support personnel, my right hon. Friend the Member for South West Wiltshire (Dr Murrison), but I know that he would mention all the work that has gone into groups such as Recruit for Spouses, and all the work that those groups do. There is a massive unmet skillset in that space that we should take advantage of; there are some brilliant skills there, and I know the Ministry of Defence is working hard on that at this time.
Health and Disability White Paper
(1 year, 9 months ago)
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Marsha De Cordova (Battersea) (Lab)
(Urgent Question): To ask the Secretary of State for Work and Pensions if he will make a statement on “Transforming Support: The Health and Disability White Paper” published by the Government.
The Minister for Disabled People, Health and Work (Tom Pursglove)
Yesterday, the Secretary of State published “Transforming Support: The Health and Disability White Paper”. This White Paper is a significant milestone, demonstrating the Government’s commitment to ensuring that disabled people and people with health conditions can lead independent lives and fulfil their potential. It sets out an ambitious policy reform package that will transform the health and disability benefits system, and help disabled people and people with health conditions to start, stay in and succeed in work.
We will deliver action in three ways. First, we will transform the future benefits system so that it focuses on what people can do, rather than on what they cannot, including by removing the work capability assessment. In our new system, there will be no need to be found to have limited capability for work or work-related activity in order to receive additional income-related support for a disability or health condition. We will introduce a new universal credit health element that people receiving both personal independence payment and universal credit will be entitled to, which will enable people to try work without the fear of losing their benefits. We will roll this out carefully from 2026-27, and we will ensure that no one currently on universal credit and with limited capability for work or work-related activity will lose out once they move on to the new system.
Secondly, while de-risking work is one side of the coin in supporting disabled people and people with health conditions into work, we know that we also need to provide more employment and health support for this group. The White Paper sets out how we will introduce a new personalised approach to employment support and engagement, with the aim of helping people to reach their potential and live a more independent life. We are investing in additional work coach time and tailored support. The Chancellor also set out yesterday that we will introduce a new programme called universal support, which will provide wraparound support for individuals and employers, as well as additional money to provide more mental health and musculoskeletal treatment for this group.
Finally, we will ensure that people can access the right support at the right time, and have a better overall experience, by testing new initiatives to make it easier to apply for and receive health and disability benefits. I am certain that our White Paper reforms will support more people to reach their full potential and reap the health and wellbeing advantages of work.
Marsha De Cordova
Thank you, Mr Speaker, for granting this urgent question.
Although we know that most of the proposals set out in the White Paper will not be implemented until the next Parliament, a significant number of ill and disabled people will be impacted. We see the Government using a carrot-and-stick approach, which will leave many sick and disabled people with the stick and the real threat of the ramping up of sanctions, as indicated by the Chancellor during his Budget statement yesterday. Just this week the Information Commissioner’s Office ruled that the Department for Work and Pensions must release “sensitive” research into its sanctions regime following the Work and Pensions Committee report, which found that there is very little evidence that the sanctions work. Instead, it found that they have a significant impact on the health and finances of those who have been sanctioned. There are real consequences to some of the Government’s actions.
Nobody is arguing that scrapping the work capability assessment is not welcome. However, relying solely on the PIP assessment is not the solution, given the current experiences of PIP assessments, which show that they are deeply flawed; the DWP is losing or conceding in four out of five appeals. Moreover, the Institute for Fiscal Studies said yesterday that up to 1 million people currently on incapacity benefits could lose out as a result of scrapping the work capability assessment and relying on using PIP only. Also under the new proposals disabled people will not automatically be in the “no work-related requirements” conditionality group and will now be subject to the decisions of a work coach.
We also did not hear any additional investment in the Access to Work scheme, so can the Minister say how many people will be impacted and what the cost is of these new proposals? It is estimated that 1 million people will lose out. How are the Government intending to mitigate that? Will the PIP assessment framework change or stay as it currently is? Given the poor decision making on so many PIP assessments, what action is being taken to fix the flawed decision-making process and the assessment itself? How will the DWP ensure that the policy proposals do not remove vital protections against sanctions and risk pushing people further into poverty? Finally, when are the Government intending to publish the sensitive research into the sanctions regime?
Tom Pursglove
I am hugely appreciative of the hon. Lady, who always speaks with great passion on these issues. I welcome the cautious welcome from her about the broad thrust of the reform we are trying to deliver, which is to remove the structural disincentive to work. That manifests itself in the many conversations I have with disabled people and their representative groups, when they tell me that many disabled people would like to try to work, but fear doing so and then losing their entitlement if it does not work out. That is not an acceptable situation, and it is right that we change it. I hope that as a House, as we move forward with these reforms, we can come together and deliver something that achieves that objective, which is plainly the right thing to do.
It was before my time in the House, but I well remember debates in previous years about the work capability assessment. It is welcome that we are scrapping the work capability assessment through these reforms. The reforms also offer an opportunity to focus on quality when it comes to the PIP assessment and on making sure that we get the right decisions first time. The hon. Lady will note, for example, that one of the commitments we have made in the White Paper is trying to match specialist assessors with people’s conditions. That is another thing people have regularly been asking for, and we are determined to test that and see what difference it can make. Again, this is all about being responsive to the feedback we have received.
On the issue of sanctions that the hon. Lady mentioned, I know that the legal case she touched on is under consideration by Ministers elsewhere in the Department at the moment. No doubt we will come forward and say more about that in due course, but I want to be clear that it is not my intention or the Department’s intention to force anyone to do something that is not right for them. We are committed to personalised, tailored support that meets individual needs and aspirations. The Secretary of State will talk about that in more detail during the Budget debate later. A lot of that will be voluntary. I would hope that people will want to engage with universal support and will want to engage with Work Well, because this is about trying to help and support people. For people with health conditions, for example, this is a way in which we can work harder and tirelessly with them to help them get better. Work is of course an important determinant of better health outcomes. The White Paper is explicit in saying that we will move forward with this in a way that is appropriate for individuals. For those where work is not appropriate, they will not be expected to do it.
It is also important to set out for the House that there will be transitional cash protection in place. No one who currently has limited capability for work or work-related activity will lose out as they move to the new system. We are specifically protecting those with pregnancy risk or who are undergoing cancer treatment, and we are also keeping a contributory health and disability benefit. Of course, what I really want to do—this is key to all of the work I do in this role—is to work constructively with the hon. Lady and with disabled people and their representative groups to make sure that we get this reform right. This is the biggest welfare reform for over a decade, and we have to get this absolutely right.
Selaine Saxby (North Devon) (Con)
I warmly welcome the announcement of the Government’s new universal support programme. Does my hon. Friend agree that it will help disabled people in my constituency find an appropriate job, backed by £4,000 of resources per person? It will further enhance the exceptional work done by Disability Confident and the Barnstable Jobcentre Plus. Might he come to visit and see for himself?
Tom Pursglove
I commend my hon. Friend for the work she does on the ground in her constituency, working constructively with the jobcentre and employers to help facilitate employment opportunities. I am really excited about the opportunities universal support will bring. We know from existing schemes that where people are supported in taking and then retaining roles, it is hugely powerful and effective in bettering their health and employment outcomes. That is precisely what we are doing through universal support with those 50,000 opportunities. I am excited to work with my hon. Friend on implementing that in her area, and I would of course be delighted to visit and see more of what is going on on the ground.
Ms Karen Buck (Westminster North) (Lab)
No one will mourn the passing of the work capability assessment; Labour has been calling for reform of that for a long time. It needed to change, because people’s lives do not fit neatly into a binary system of work or no work. However, disabled people and those with serious health issues want and deserve support and reassurance in work and out of it, and what people fear, understandably, is that under the guise of reform their lives will be made harder and vital financial support might disappear.
The devil is always in the detail, so I have a few questions for the Minister. The PIP assessment is designed for a totally different purpose from the WCA; how will he reconcile those completely different systems? What will happen in future to those people who do not currently receive PIP—those on the limited capability for work and work-related activity element of universal credit, and particularly those with short-term and fluctuating conditions? Unless it is the Minister’s intention that some 750,000 people will lose £350 a year, an alternative needs to be in place; what will that alternative be?
Do the Government believe that it is fair that the hundreds of thousands of people with disabilities that prevent them from even engaging in work-related activity should receive less financial support through UC than people who are entitled to PIP, and if so what is the basis for that justification? If the intention is to allow work coaches to use discretion in all such cases, how will we ensure consistent decision making and decision making that is based on a proper understanding of serious health conditions and their impact on daily life? What provision is made within the Department to ensure that capacity for that is in place?
As transparency and openness are so essential in building confidence, will the Minister now publish the report on the operation and effectiveness of sanctions? By publishing the White Paper, the Government have started this debate; the minimum we need now is openness and clarity about how those ideas are intended to work in practice.
Tom Pursglove
May I first welcome what I think is a cautious welcome from the Opposition for the reforms that we are seeking to advance? I think it reflects some of the utterings that we have heard from Labour Members over recent weeks and months about the direction of travel they want, recognising that there will be people for whom work is not appropriate. I repeat the point that, where that is the case, we will not be expecting people to engage with this support, but it is right that that structural impediment to work is removed from the system, that those who want to work are supported in being able to do so, and that we make sure that we have a system that is responsive to that and that also has health as a focus. I hope we can move forward on a cross-party basis on those terms.
On the specific point about PIP, again it is important to recognise that we will look very carefully at whether those individuals who are not currently in receipt of PIP meet the PIP criteria, and we will act accordingly. Also of course, anybody who thinks they may be eligible for PIP is able to apply for it. I would always encourage people who might be eligible for any given benefit to apply for it.
On the point about the health top-up, I can confirm that the award rate for the new UC health element will be at the same level as is currently awarded to those who have LCWRA. I again make the point about the approach that we intend to take: the reform will be carried out on a staged geographical basis, beginning with new claims in 2026-27. Of course, legislative steps will need to be taken to bring this reform to fruition, but there is much to welcome and I hope we can come together. On the point about the legal case, as I said earlier, colleagues elsewhere in the Department are considering next steps and will come forward in due course.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I welcome the announcement in the Budget. As my hon. Friend will recall, I wanted to introduce the universal support package alongside universal credit. Its purpose was to intervene and help to change people’s lives, which was what was missing for all those years and needs to be there now. It was intended to replace what has been a very difficult benefit, originally introduced by Labour along with the work capability assessment. Throughout that time, I wanted to see universal credit together with universal support to help people get over their difficulties.
According to a recent survey on sickness benefit, 700,000 people want to find work, but the limits to what they can do seem so difficult that they fear losing their benefit. This measure, hopefully, should change that. However, I urge the Government to do the final bit, which is to bring in the other group who are still receiving employment and support allowance and not yet receiving universal credit, so that the interventions can help them and we can have a progressive, positive way of helping people with sickness or disability to fulfil their potential and lead productive lives, because work is a health treatment.
Tom Pursglove
My right hon. Friend speaks with passion and authority on these issues, and he has a wealth of experience of delivering meaningful change in the welfare system that has improved the lives of millions of people. This is the next chapter—the next step in that journey—and one thing I know for sure is that I shall want to draw on my right hon. Friend’s experience and expertise and hear his ideas about how we can get this right. Like him, I am excited about the opportunities that universal support can provide in matching people to roles and supporting retention, with all the wraparound care and support that goes with that. There is a great deal of best practice from which we can learn. I was in Tower Hamlets yesterday, and saw a fantastic example involving NHS talking therapies. I want to ensure that more people are able to engage with that sort of support.
Marion Fellows (Motherwell and Wishaw) (SNP)
Why do this Government intend to expose more disabled people to the punitive benefits sanction regime? It does not work, and the automation of sanctions will make the position even worse.
Why was there no guidance in the White Paper on statutory timescales for reasonable adjustments to enable more disabled people and those with long-term conditions to work? The SNP and many stakeholders continue to call for urgent improvements to end the payment gap. Why is there no mention of that? Why will the Government not ensure that flexible working is a day one right by default, rather than the onus being on the worker? Why is there no uplift for legacy disability claimants who were missed out during the pandemic? PIP assessments are already failing many disabled people and forcing them into challenging decisions which are ultimately overturned. Why is more being added to PIP assessments?
Will the Minister consider using dignity, fairness and respect as the White Paper proceeds into legislation, as the Scottish Government do?
Tom Pursglove
I would argue that dignity, fairness and respect underpin all the work that I do as Minister for Disabled People, Health and Work, all the work of my colleagues in in the Department for Work and Pensions and, of course, all the work of our officials, who approach their responsibilities with real seriousness and want to help and support people in a way that is appropriate for them. That goes to the heart of these reforms.
This is about a tailored approach, whereby people are helped into work when that is appropriate for them. When we can improve people’s health outcomes, we ought to be doing so in a joined-up way. No one will be forced to do anything that is not appropriate for them. As I said earlier, I want people to feel that they would want to engage with the employment support we are offering, and that is reflected in the fact that so many disabled people tell us that they wish to try these opportunities, but fear losing their support if it does not work out.
The PIP journey is now down to 14 weeks, but there is more to do in that regard. I am not complacent about it, and I want to drive forward work on digitalisation. Let me also say that I have a very constructive working relationship with the Scottish Government Minister with responsibilities in this area, and I absolutely commit myself to working with him as we deliver this reform. I know I am set to meet the hon. Lady next week, when we may be able to follow up some of these points.
Sir Christopher Chope (Christchurch) (Con)
The Government’s initiative to emphasise the need to improve health outcomes is fundamental to this. May I draw my hon. Friend’s attention to today’s edition of the Daily Express and its Justice for Jab Victims crusade? A two- page article describes the problems that thousands of people are experiencing as a result of receiving covid-19 vaccines that have not worked out in the way they had hoped.
Tom Pursglove
I appreciate my hon. Friend’s welcome for our proposed reforms. I have not seen the article to which he refers, but I will certainly have a look at it once I have left the Chamber, and I shall be happy to speak to him separately about it.
Sir Stephen Timms (East Ham) (Lab)
There are very welcome measures in the White Paper, although a lot of the detail is still missing. The work capability assessment is to be scrapped, starting in three or four years’ time, and replaced with
“a new personalised health conditionality approach”
to assess entitlement to what the Minister just referred to as the “health top-up” in universal credit. That sounds like a new assessment of some kind. Can he tell us what it means?
Tom Pursglove
I suspect that these issues will come up when I appear before the Select Committee along with my hon. Friend the Minister for Employment in a few weeks’ time. I look forward to that opportunity to delve into these reforms in some detail. The detail of our proposed approach needs to be worked through. I am clear that stakeholder engagement, working with disabled people and hearing views from this House will help to inform that. I want people to feel that they can engage with the programmes announced in the Budget, as well as with the existing provision. That will happen on a voluntary basis, but we need to move the reform forward in a pragmatic way. We will say more about it as we move forward with implementation.
Mark Jenkinson (Workington) (Con)
I thank my hon. Friend for bringing forward steps to abolish the work capability assessment. Does he agree that that will enable more disabled people in my constituency to take up work without fear of losing financial support?
Tom Pursglove
My hon. Friend hits the nail on the head about what we are trying to achieve with these reforms. He is a passionate campaigner for employment opportunities in Workington, and has had considerable success in that regard during his time in this House. I appreciate his welcoming the reforms, which are about helping people to achieve their aspirations. If work is something that people want to do, Government ought not to put barriers in place to prevent that. That is precisely what we are determined to do away with.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
I thank my hon. Friend the Member for Battersea (Marsha De Cordova) for asking this important urgent question.
The sanctions do not work. Measures to tackle disability employment gaps are way overdue, and I pay tribute to many groups across Vauxhall, including Autism Voice in Clapham, which I recently visited. They do a lot of work to try to help disabled people back into the work market but, sadly, the employment gap is still there. Many employers discriminate and are not prepared to give disabled people an opportunity, because of the widespread perception that disabled people are less capable, regardless of whether they are the best candidate. What are the Government are doing to tackle negative attitudes about disabled people, which are preventing many of them from fulfilling the opportunities that they should be taking?
Tom Pursglove
The hon. Lady is right to raise this issue. We all have a duty and a responsibility to be brilliant advocates and allies of disabled people, promoting opportunities for them at every turn. I expect that we will be in a position to say more about autism specifically over the coming weeks—something that I feel very passionately about as Minister for Disabled People. We are doing work on perceptions, and there is more work to be done over the coming months. We have a campaign that I expect to come to fruition in the not-too-distant future. I want to see more employers sign up to schemes such as Disability Confident. There is more to do, although we have seen real strides forward, with 1 million more disabled people in employment achieved five years early, but we must take the next steps forward. There is so much untapped potential from people who can contribute and offer so much to their workplaces.
David Simmonds (Ruislip, Northwood and Pinner) (Con)
I welcome the focus in the White Paper on people with learning disabilities. For many years my constituent Jeremy Child has run the project Community ConneX, formerly Harrow Mencap, which supports adults with learning disabilities to grow their confidence with a view to entering the workplace. Does the Minister agree that such projects are a critical part of the infrastructure that will make this White Paper a success in practice?
Tom Pursglove
I thank my hon. Friend for raising the work of Community ConneX, which makes a huge difference in his community. I see that replicated in many of the visits that I undertake in this role. I was in Bristol just before Christmas and it was inspiring to see the work experience placement opportunities that are being provided, often by charitable organisations. I want to work with them to translate those early steps towards employment into roles in other workplaces—full-time work if that is appropriate for someone, or part-time work if that is appropriate in other circumstances.
There is so much that we can do, and I want to place on record my thanks to everyone who works in those initiatives—they are often charitable endeavours, as I say—for everything that they to do help to facilitate this. Working with them will be a key part of how we move this forward.
Justin Madders (Ellesmere Port and Neston) (Lab)
May I suggest to the Minister that, as part of this, he looks at reforming statutory sick pay? The pandemic laid bare the inadequacies of that system. Millions of people do not qualify at all, and the rate is one of the lowest in Europe. If we are genuine about getting people with long-term health conditions into the workplace, we need a proper safety net for when they fall ill.
Tom Pursglove
I appreciate the hon. Gentleman’s thoughts on statutory sick pay. If there are particular ideas or suggestions that he would like me to consider, I would be very happy to do so.
Dr Luke Evans (Bosworth) (Con)
I am really pleased that the Government are dealing with the issue of an ageing population and the difference between good health and poor health. The reality is that many people will live with long-term health conditions. I have seen at first hand that when someone has a heart attack or a stroke, they struggle to get back into the workplace. Is this part of changing the environment to make sure that people have support all the way through, from diagnosis to desk? If so, how will my hon. Friend ensure that the environment is compassionate and supportive all the way through to getting people back into work?
Tom Pursglove
Compassionate and supportive is precisely the approach that I see when I carry out my visits and look at the employment support that is being provided. As I said, I was at the NHS talking therapies service in Tower Hamlets yesterday, and I saw that for myself. It was inspirational to hear the testimony of people who have been through that service about the difference that it has made for them. It has supported those with mental health conditions, in particular, by seeing work as a real determinant of better health outcomes for them and supporting them to work.
My hon. Friend knows more than many Members in this House just how valuable better health is for people. The work that he has done in his professional life means that he has a lot of experience in this area, which I am keen to pick up. I know we are due to meet, and I would be keen to hear his ideas.
Rachel Hopkins (Luton South) (Lab)
Waiting times for Access to Work grants have skyrocketed under the Conservative Government, with the average clearance time now more than two months. Although plans to enhance the Access to Work support offer are welcome, how does the Minister plan to reduce waiting times so that disabled people can access the support that is available before an employer pulls a job offer?
Tom Pursglove
I am not satisfied with where we are in relation to Access to Work, and that is why I am driving a real effort within the Department, which is resulting in more staff being dedicated to it. We are refining our practice, streamlining processes and reflecting feedback, particularly on workplace assessments and travel claims. Those are two areas where some really constructive ideas have come forward and we are now looking to roll them out.
As I said in relation to PIP, digitalisation is key to this. It is about making sure that processes are easy to access and navigate. When we bring those factors together, they will help us to make a meaningful difference in shifting the dial on Access to Work applications.
Robbie Moore (Keighley) (Con)
I welcome this health and disability White Paper, because we know that health issues may mean that people feel unable to carry on working or struggle to continue in the working environment. I thank my hon. Friend for the Government’s new £400 million fund to increase the availability of mental health and musculoskeletal resources. Does he agree that this support will help people across the country, including in Keighley and Ilkley, who need such support to stay in work for longer?
Tom Pursglove
My hon. Friend is a brilliant champion for his constituents, and he is always arguing for improved employment opportunities for residents in his area. The Budget commitments, which my right hon. Friend the Secretary of State will no doubt touch on during today’s debate, amount to more than £500 million of employment support by 2025-26. That very much reflects the best practice that is being delivered out there in the country, building on it and cascading it further. I think it is fair to say that my hon. Friend’s constituents and mine, and those of hon. Members across this House, will feel the benefit of this work in the years ahead.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his answers on this important issue. Large numbers of my constituents have disabilities and are on benefits, and have understandable concerns, so I seek some reassurance. Will he outline whether greater financial incentives can be offered to employers to take time to put in place procedures to allow disabled people to be part of the team yet work from home? That would allow more people to overcome their physical restrictions and be a huge asset to a team, and thereby gain confidence and independence through employment.
Tom Pursglove
The hon. Gentleman is right to touch on the fact that disabled people contribute so much to our workplaces, and I want to extend their contribution further so that we can unleash the potential in our society. With the right help and support, we will build on the successes that we have seen in getting people into work. The target of getting 1 million more disabled people into work was met five years early, but that is not the end of the story.
We need to continue to move forward, which is why the hon. Gentleman is right to also touch on the support that we have in place and our work with employers. Access to Work is an important part of that, because it supports the physical things that people need in workplaces to facilitate employment opportunities. Another area that I am passionate about and want to look at closely, and relates to what the Chancellor said yesterday about occupational health, is what more we can do to improve soft skills for employers to ensure that they have good-quality workplace conversations to best support those who are coming to work for them, and those who work for them already.
Martin Vickers (Cleethorpes) (Con)
The report points out that autistic people are the least likely of all disabled people to be in work. It goes on to reference the nine local authorities where there has been a pilot, which is to be extended to a further 28. Does that 28 include the nine? Can the Minister outline the criteria for local authorities to participate?
Tom Pursglove
I am happy to provide further detail for my hon. Friend separately. We recognise that there is real value and opportunity in having locally led and locally initiated employment opportunities and support that are tailored to meet localised needs on the ground and that work closely with the health system. That is reflected in our announcements. We need to take that forward in a joined-up way and work across Government. There is a real determination from not just Ministers in the Department for Work and Pensions but the Prime Minister, the Chancellor and Ministers in the Department of Health and Social Care—this is a cross-Government effort. I am happy to provide him with more background about the work that we are doing.
Andrew Jones (Harrogate and Knaresborough) (Con)
It is fantastic that we have seen 2 million more people with disabilities enter the workplace in the last decade and that, as my hon. Friend said earlier, those who want and are able to work are supported to do so. I have spoken before about my support for the Disability Confident and Access to Work schemes. The White Paper builds on all the progress made thus far. Can he outline more about how the Access to Work scheme will evolve with an enhanced package and about the flexibility? Basically, can he update the House? The programme is fantastic, but there needs to be significantly greater awareness.
Tom Pursglove
It is fair to say that the Access to Work scheme is a flagship scheme that has made a big difference over the years in helping to support disabled people into work. As we move forward with the reforms, we want to look at how we can be more ambitious on Access to Work and, as I touched on earlier, what more we can do to support employers to have those soft skills so that they have good-quality workplace conversations with employees about how they can be best supported. We also want to ensure that we deliver digitalisation to bring waiting times down. Frankly, I do not want anyone to have to wait longer than necessary to start work, if that is something that they want to do. We must support people to retain their roles.
Saudi Arabia’s Execution of Hussein Abo al-Kheir
(1 year, 9 months ago)
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Mr David Davis (Haltemprice and Howden) (Con)
(Urgent Question): To ask the Secretary of State for Foreign, Commonwealth and Development Affairs if he will make a statement on Saudi Arabia’s execution of Hussein Abo al-Kheir.
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Leo Docherty)
Saudi Arabia, of course, remains a Foreign, Commonwealth and Development Office human rights priority country, in part because of the continued use of the death penalty. It is long-standing UK policy to oppose the death penalty in all circumstances, in all countries, as a matter of principle. The Saudi Government are well aware of the UK’s opposition to the use of the death penalty. The UK Government have consistently raised the issue of the death penalty, including the case of Jordanian national Mr Hussein Abo al-Kheir, with the Saudi authorities. The Minister for the middle east and north Africa and for human rights, Lord Ahmad of Wimbledon, has actively raised concerns about the death penalty and the specific case of Mr al-Kheir with the Saudi authorities on multiple occasions, including doing so with the president of the Saudi Human Rights Commission in December 2022 and when he visited the kingdom in February 2023. Lord Ahmad also raised the case with the Saudi ambassador to the UK, including in November 2022 and in January of this year.
On learning about the imminency of the execution, which took place on Saturday 11 March, Lord Ahmad again spoke to the president of the Saudi HRC, the Saudi vice-Foreign Minister and the Saudi ambassador. Saudi Arabia is committed to an ambitious programme of economic and social reform, through “Vision 2030”, which has already delivered significant change, including increased freedoms and economic opportunity for women. However, the human rights situation is likely to remain a key issue in our engagement for the foreseeable future. We will continue to discuss human rights and the death penalty, including individual cases of concern, with the Saudi authorities.
Mr Davis
Hussein Abo al-Kheir had been on death row since 2015. He had been tortured into a false confession and always maintained his innocence. When I was told this weekend that his execution was imminent, I urgently wrote to the Prime Minister, the Foreign Secretary, the junior Minister, Lord Ahmad, the British ambassador to Saudi Arabia and the Saudi ambassador to the UK, calling for intervention to prevent Hussein’s execution—I received no formal reply, although I understand that a letter has arrived in my office since I have been in the Chamber. Hussein was subsequently executed. A response given on Tuesday to questions from the Father of the House appeared to suggest that, despite my representations, only low-level attempts were made to talk to the Saudis over the weekend. In 2015, the Foreign Secretary’s predecessor, Philip Hammond, intervened himself, successfully, to prevent the execution of a Saudi youth activist, and he prevented many more executions by so doing; that intervention saved Ali’s life. I firmly believe that a stronger intervention over the weekend could have saved Hussein’s life and perhaps more to come.
Saudi Arabia continues to be one of the most prolific users of the death penalty, killing more than 130 individuals in 2022. Since 1 March this year, the Kingdom has executed 11 people, including for non-violent drug offences. That goes against Saudi Arabia’s informal moratorium on the use of the death penalty for drug-related offences. Being soft with totalitarian states comes back to bite us, as we know from the Russian example. We must make it clear to our ally that it must abide by international standards of civilised behaviour; doing so might just save the lives of those who remain on death row.
Leo Docherty
I am grateful to my right hon. Friend for describing the number of letters he has sent and pointing out that a response has been had. I am pleased that that is the case. I assure him that a range of interventions were made, as I described, at the most senior level by Lord Ahmad. That describes the energy with which he has made these representations, so we can be confident that a great deal of energy was expended in that effort. Of course, we cannot speculate as to the particulars of the case. My right hon. Friend mentioned the apparent spike in cases. Again, it might not be useful to speculate, but it might be that a pre-Ramadan surge of cases is adding to the apparent uptick. I understand that the moratorium relates to drug use rather than drug smuggling, and this case pertained to an allegation of and conviction for smuggling rather than use, which I think is relevant. It is not useful to speculate further on the particulars of this case, but we do make clear our continued opposition to the use of the death penalty, and our close working relationship with the Saudi authorities allows us to do just that in a way that allows us to appeal for clemency.
Catherine West (Hornsey and Wood Green) (Lab)
I thank the right hon. Member for Haltemprice and Howden (Mr Davis) for his characteristic defence of these principles in the House and for securing this urgent question.
On behalf of the Labour party, I extend my condolence to the family of Hussein Abo al-Kheir, a Jordanian national who leaves behind eight children. Labour stands unequivocally against the death penalty wherever it is used in the world. The taking of human life as punishment, regardless of the crime, is a gross breach of a person’s human rights.
Mr al-Kheir was arrested in 2014 for alleged drug smuggling; however, because there was no proper trial with a proper defence and he had no legal advice, it is very difficult to know the exact detail of the case. He consistently denied the charges. While he was in custody, he was allegedly so severely beaten and tortured that he lost his eyesight. Moreover, he was denied basic due process and was unable to instruct a lawyer throughout his time in custody. Despite interventions from the Government and the UN High Commissioner for Human Rights, his execution went ahead on Sunday.
I reiterate the point made earlier: has the UK become less robust on the question of human rights in the Kingdom of Saudi Arabia since 2015? Saudi Arabia is a founding member of the Arab League, which is bound by the Arab charter of human rights; what urgent actions are the Government taking to ensure that our partners comply with the Arab League and its human rights charter?
In the run-up to Ramadan, what extra measures are the Government taking to open dialogue with the Kingdom of Saudi Arabia, so that we can avoid a repeat of last year’s execution of 100 people? In the strategic dialogue with the Kingdom of Saudi Arabia, will the Minister press for the value of the sanctity of human life, a principle that we in this House all agree on?
Leo Docherty
I join the hon. Lady in vocally opposing the death penalty. That is at the core of all our diplomatic work so we entirely share that view. As she said, we do not know the exact details of this case, so it is not useful to speculate, but we can be sure that we continue to engage through our mission in Riyadh and other multilateral channels.
To answer the hon. Lady’s question directly, we are certainly no less robust than we were previously in our absolute determination to oppose the death penalty around the world, and at bilateral fora as well as multilateral fora. She mentioned the Arab League and the advent of Ramadan; that gives us even more urgency in the representations we make. We will continue to press and engage at the multilateral and bilateral level to oppose this practice.
Sir Christopher Chope (Christchurch) (Con)
Will the Government learn from this tragic case the lesson that in dealing with Saudi Arabia an energetic junior Minister is an inadequate substitute for the real thing—either the Prime Minister or the Foreign Secretary? Does the history not show that we have made a big mistake in not putting up our top team?
Leo Docherty
I think history shows that energetic junior Ministers can make a difference in terms of building relationships, but of course our alliance with Saudi Arabia is of such import that it merits a great deal of senior attention, which is why it gets it.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
We on the SNP Benches pass on our condolences to the family of Mr al-Kheir. No matter what alleged crimes may have been committed, the SNP is unequivocally against capital punishment.
Exactly a year ago, the Saudi regime executed 81 men in a single day, and Saudi’s international partners, including this one, issued empty statements about the importance of human rights. Yet again, this morning the Minister has at times sounded like a Saudi Government spokesperson.
Mr al-Kheir was charged with drug offences, but the UN working group on arbitrary detention found that his detention lacked legal basis. For too long the Government have been content to disregard the Saudi regime’s appalling human rights record in the name of £2.8 billion-worth of arms exports since 2019. The Saudi’s UK-made warplanes, bombs and missiles are playing a central role in the Saudi-led coalition’s attacks on Yemen. We have called many times for that to cease. What will it take for that to end?
Finally, Mr al-Kheir’s case was raised in the House of Commons in November, when the Under-Secretary of State for Foreign, Commonwealth and Development Affairs, the hon. Member for Macclesfield (David Rutley) stated that the Saudi authorities had “clearly” tortured him and described his treatment as “abhorrent”. The following week, the Under-Secretary of State asked for his words to be struck from the record, saying that he had spoken in error. Will the Minister guarantee that everything that is put on the record will stay there and that UK Ministers will not bow down to pressure from the Saudi Government?
Leo Docherty
I join the hon. Gentleman in his opposition to the death penalty. We are all agreed on that—we are unequivocal. He mentions human rights in the Kingdom of Saudi Arabia, and I can assure him that that is at the core of our sustained and continued bilateral engagement. He mentions the words of the Under-Secretary of State for Foreign, Commonwealth and Development Affairs, my hon. Friend the Member for Macclesfield (David Rutley), on a previous occasion in this House. It is important to note that he did correct the record subsequently.
Hilary Benn (Leeds Central) (Lab)
This barbaric execution was in breach of the Saudi authorities’ commitment to stop using the death penalty in drugs cases. They have also promised to stop executing minors, but Abdullah al-Howaiti was 14 when he was arrested and tortured, and 17 when he was sentenced to death. If his sentence is upheld soon, he could be executed at any time. We have heard from the right hon. Member for Haltemprice and Howden (Mr Davis) how the Government intervened successfully in the case of another minor. Will the Government now make representations, through the Foreign Secretary, to try to save Abdullah’s life?
Leo Docherty
The right hon. Gentleman mentions the moratorium. My understanding is that that was for the use of drugs, not the smuggling of drugs. That is important to note, I think. He mentions the individual case of a minor. I am very pleased to give him an assurance that I will ask my ministerial colleague Lord Ahmad to follow that up and write to him with an update on that particularly alarming case.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
Forgive me if I am a little irritated, but this feels like human rights for slow learners. Surely it makes no difference whether it is for the smuggling or for the use of drugs—the death penalty should not be tolerated. Since 2015, we have not had a single public condemnation or appeal from a Prime Minister or a Foreign Secretary in relation to a Saudi death penalty case. Is that as a result of a change of policy? I have to say to the Minister that I suspect that the Saudi Arabians actually know that we do not like the use of the death penalty. They are not embarrassed by private representations, but they might be embarrassed by public representations, which have made a difference in the past.
Leo Docherty
They do know that we oppose it, because we tell them.
Sir Stephen Timms (East Ham) (Lab)
Why did the Foreign Secretary not make representations to stop this execution, given that that approach has succeeded in the past?
Leo Docherty
I have described the fact that energetic ministerial attention was given to this. I cannot speculate on whether or not the Foreign Secretary was made aware of the particular calls that were being made and the particular level of engagement, but his concern and interest in this is surely undoubted.
Ian Paisley (North Antrim) (DUP)
Has the Minister considered any human rights or wider implications for diplomacy following the Saudi-Iran deal brokered by China in the past few days?
Leo Docherty
We watch this with interest and we applaud diplomatic progress in all its forms. I think this points to the crucial role that Saudi Arabia has as a responsible actor and as a nation that wants to maintain peace and stability in the Gulf region. That is why it is a particularly valued partner.
Patricia Gibson (North Ayrshire and Arran) (SNP)
The execution of Mr al-Kheir by the Saudi regime after reports of a forced confession to drug offences is an outrage. Given that this is a regime that publicly flogs, beheads or crucifies those convicted of the so-called crime of homosexuality, we should hardly be surprised by this latest horror. Is the Minister proud that this blood-soaked regime, which has no regard for human rights, is the UK’s biggest arms customer, with £2.8 billion- worth of arms licences approved for sale to the Saudis since 2019 by the UK Government?
Leo Docherty
We are proud that we continue very energetically to advocate for the advancement of human rights in Saudi Arabia, and our particularly close relationship with the Saudi Arabians allows us to do that. If we did not have a close relationship, we would not be able to help the Saudi Arabians advance human rights in their own country, so it is for the benefit of both sides.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
I send my condolences to Mr al-Kheir’s family. Concerns have been raised that Saudi Arabia is using the death penalty to silence dissidents and protesters convicted of non-lethal offences, while claiming publicly to be applying the penalty only to murder. What conversations have Ministers had around the misinformation that is being spread to the international community regarding that?
Leo Docherty
I do not think that we can usefully speculate about that— the intent of the use of that. It is useless to speculate. But we do continue to engage to argue against the use of the death penalty. That is our long-standing position and we continue to make that point to our interlocutors.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his responses to the questions. In 2015, the Prime Minister, David Cameron, and the Foreign Secretary, Philip Hammond, publicly called on the Saudi Arabian authorities to prevent the execution of a child defendant called Ali al-Nimr. Ali at that time was spared the death penalty and was released in 2021. Intervention on that occasion worked well and saved a life. Since 2015, the UK Government—I say this very respectfully—have failed to speak out publicly about similar cases. Can the Minister confirm whether there has been a change of policy not to raise these cases publicly?
Leo Docherty
Our policy is unchanged. We resolutely continue to oppose the death penalty. We make that very clear. That has been our long-standing policy position and that continues to be the case.
Leo Docherty
I am happy to clarify. If that is the case, I am very happy to accept that clarification.
Business of the House
(1 year, 9 months ago)
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Thangam Debbonaire (Bristol West) (Lab)
Will the Leader of the House give us the forthcoming business?
The Leader of the House of Commons (Penny Mordaunt)
The business for the week commencing 20 March will include:
Monday 20 March—Continuation of the Budget debate.
Tuesday 21 March—Conclusion of the Budget debate.
Wednesday 22 March—Debate on a motion to approve a statutory instrument relating to the Stormont brake in the Windsor framework, followed by consideration of Lords amendments to the Public Order Bill, followed by consideration of Lords amendments to the Trade (Australia and New Zealand) Bill, followed by consideration of Lords amendments to the UK Infrastructure Bank Bill [Lords].
Thursday 23 March—General debate on World Down Syndrome Day, followed by general debate on tackling the energy trilemma; the subjects for these debates were determined by the Backbench Business Committee.
Friday 24 March—Private Members’ Bill.
The provisional business for the week commencing 27 March includes:
Monday 27 March—Consideration in Committee of the Illegal Migration Bill (day 1).
Thangam Debbonaire
I thank the Leader of the House for the forthcoming business.
Yesterday, the Chancellor announced—or should I say re-announced—his Budget proposals because it was not just that policies had been leaked or even briefed to journalists beforehand—this time, the Chancellor had actually tweeted them out himself. Once upon a time, leaking a Budget was a resignation offence. MPs must be given the chance to scrutinise proposals properly on behalf of our constituents in this place first. If I sound like a broken record, Mr Speaker, it is because I keep having to say that. It is a requirement under section 9 of the “Ministerial Code”. Could the Leader remind the Chancellor?
Speaking of swerving scrutiny on major policy, did the Leader approve of her Government sneaking out their announcement on the huge delays to High Speed 2 via a written ministerial statement late last Thursday afternoon—a significant announcement that, again, should have been made in-person to this House first? Tens of thousands of jobs and billions of pounds of economic growth are on the line. What was the Transport Secretary thinking? Hang on, is he thinking anything at all? How would we know? We have not seen much of him lately.
The Department for Transport has reportedly launched a leak inquiry after insiders handed my colleague, the shadow Transport Secretary, documents blowing apart the Government’s case for the delay. However, it is not a leak inquiry that the Government need—it is a search party. The Transport Secretary has not uttered a single word publicly. Unlike his colleague the Chancellor, he has not even been tweeting. Nor has he appeared in this place. Instead, he sends—[Interruption.] Oh, I am told from a sedentary position that he was here yesterday. Why could he not come here on Tuesday, instead of sending his junior? He clearly is around. Where is he? Whether it is the No. 47 bus in Bristol or the trans-Pennine non-express in the north, our transport system is broken. Could the Leader track down the Secretary of State and remind him of his duties?
Will the Leader give us a heads up on what they might try to slip out this afternoon? Who knows—perhaps an announcement of another couple of hundred thousand pounds of taxpayer-funded legal fees for the right hon. Member for Uxbridge and South Ruislip (Boris Johnson)? Is that what they are sneaking out today, or is it something else?
Now, I have said it before, and I will have to say it again. Cabinet Ministers disrespecting this House and our constituents is not good enough. I am not sure that the Leader having quiet words in their ears is working. So perhaps she could get them to write out lines—“I must respect Parliament” 100 times. I am afraid to say that she might need to grab a pen herself, because last week I asked her several very reasonable questions on the scrutiny of the asylum Bill and she did not answer a single one. Perhaps she could have a go at just two. One—has she considered any post-legislative scrutiny of the Nationality and Borders Act 2022, which the Government introduced last year to solve the same problems that they say the asylum Bill will solve now, or will we be back here next year when the Bill fails? I look forward to announcing when the House will finally consider Labour’s plans that I outlined last week. Two—where is the Government’s impact assessment? The Leader previously said that Government impact assessments were very handy. They are more than that. They are an essential tool for MPs to scrutinise legislation, so why have the Government not published one for the asylum Bill? What are they hiding? Could it be that that Bill is simply unworkable, and the Government know it?
The asylum Bill is unworkable, just like their Budget. Under the Tories, a £1 billion tax cut for the richest 1%; Labour will reverse it. Under the Tories, we are the weakest economy in the G7; under Labour, we will have the strongest growth. Under the Tories, the biggest hit to living standards since comparable records began—hon. Members should read the Blue Book. Under Labour, higher living standards built on good jobs and productivity grown across every part of our country. Under Labour, a better Britain.
Penny Mordaunt
I will pass it on to the Transport Secretary that the hon. Lady is missing him dreadfully. She will understand that he has a pressing in-tray, and some of that pressure could certainly be alleviated if the Labour party condemned the transport strikes. I will just leave that thought with her.
Ministers have always been entitled to legal representation while they are in office. That is the standard procedure that has served Governments of every political hue. There are no plans to change that.
The hon. Lady will know that I have been to see all permanent secretaries with my right hon. and noble Friend Lord True, the Leader of the House of Lords, to ensure that all Departments understand their obligations to this House. We have been met with some encouraging actions since our meetings with them.
The hon. Lady asked me to cover the asylum Bill—the Illegal Migration Bill, as it is known—and I note that the Opposition, rather than choosing to attack the policies in that Bill, are choosing to attack their presentation, which I always take as an encouraging sign. It is right that we have proper scrutiny of that Bill. She will know that many actions that we have taken before have been thwarted by legal workarounds. Legal cases have informed the additional measures that we are taking in the Bill. The hon. Lady offers Labour’s plans to stop illegal migration; I am afraid that its plan is to only assist those people if they are able to come here illegally. We want to use our resources to help those people to whom we have the most moral obligation, and we are in a position to help them.
I am disappointed that the hon. Lady does not welcome the measures in the Budget. The country is going through tough times. She talks about living standards. I remind her that under Labour the lowest paid in this country had half the personal tax thresholds that they do now, and they would have seen their council tax bills rise by 110%.
This Budget is one that addresses the issues of hard-working families and businesses, with £94 billion in cost of living support, a fuel duty freeze for the 13th consecutive year, unprecedented expansion of free childcare, the ending of the poverty premium on prepayment meters, the abolition of Labour’s work capability assessment, levelling-up and new regeneration partnerships, and funds to keep leisure centres and pools going, which many colleagues have asked for at business questions. I am sorry also that the hon. Lady has not welcomed the extra £5 billion for defence and security and the path to increasing our defence spending to 2.5% of GDP, which Labour has made no commitment to equal. Nor has she welcomed the many measures to modernise our economy and to stimulate growth and investment.
Instead, we have had the unedifying spectacle of His Majesty’s Opposition talking down the country. Earlier this week, the shadow Digital, Culture, Media and Sport Secretary, the hon. Member for Manchester Central (Lucy Powell), likened the United Kingdom to Putin’s Russia. Yesterday, the Leader of the Opposition said our nation was a “sick man”. Ours is a great nation, and the modernisation of our economy that we are bringing in will set the potential of this country free—our science bases, our financial centres, our creative industries, our manufacturing and new technologies, and our social and third sectors.
It is only after a Labour Government that this nation becomes the sick man of Europe. Every time Labour has left office, the country has been worse off than when it inherited it. No Labour Government have ever left office with lower unemployment than when they came to power. When they were last in power, youth unemployment rose by nearly 45%, and their slash-and-burn spending meant there was no money left. Labour’s unfunded spending commitments would cost every household an additional £3,000, and it continues to block measures to support families and businesses and to stop the boats. We will stand up for the people of this country. We will deliver on their priorities and on their values, and we will champion the UK across the world.
Sir William Cash (Stone) (Con)
As Chairman of the European Scrutiny Committee, may I ask the Leader of the House to kindly tell the House when the statutory instrument relating to the Stormont brake will be laid? Will it be today or tomorrow? On what statutory or other basis, and under what statutory instrument procedure, will it be laid? When will it be referred to the Joint Committee on Statutory Instruments? When the date of the Withdrawal Agreement Joint Committee sitting is set, will she be good enough as to make such inquiries as are necessary to put me and my Committee in possession of those facts and make them publicly available?
Penny Mordaunt
I will certainly write to my hon. Friend to give him all the details related to this. The instrument will be published on Monday, when he will be able to see the legal basis on which it is published. It will be laid before Parliament under normal procedures. I am announcing it today because I want people to have early notice. I will write to my hon. Friend, as Chairman of the European Scrutiny Committee, and to other Members who have a direct interest to spell that out.
Deidre Brock (Edinburgh North and Leith) (SNP)
The Leader of the House will no doubt be disappointed that despite it containing some welcome news, for instance about prepayment meters—a tribute to the many months of campaigning on this issue by my hon. Friend the Member for Glasgow North East (Anne McLaughlin)—I will not be opening with fulsome praise for her Chancellor’s Budget. Why? Despite the largest fall in living standards and disposable income for decades being endured by the vast majority of people throughout the UK, instead of holding out a helping hand to those folks, the Chancellor has just rewarded the wealthiest with a hefty leg up the pensions ladder, and instead of the investment that is desperately needed for cheaper, cleaner renewables, we get billions ploughed into nuclear. So instead, I will be asking the Leader of the House for a debate on broken British dreams and sunk hopes—that is not a country and western song, Mr Speaker.
The £20 billion over 20 years that the Chancellor has announced for nuclear and carbon capture projects will not support retrofitting homes to permanently cut energy costs for households, or much cheaper onshore wind developments, tidal energy, green hydrogen, heat pumps, district heating or solar. It will not win the global race for investment into those industries against the US and the EU, among many others.
The Treasury and the Chancellor do not appear capable of thinking outside their outdated energy sources box. Instead, they are giving us the reclassification of nuclear so as to receive the same investment opportunities as renewables—nuclear, Mr Speaker! There is not one successful evolutionary power reactor project in the world, and we still have no real solution for the safe disposal of waste that remains radioactive for centuries. Nuclear plants take years to build, and always run over budget and over time. Why are the Government so thirled to nuclear, when there are cheaper, safer, proven alternatives that will bring us to net zero targets much more quickly?
I must add: why is there no more support for tidal energy, which can provide a clean and reliable baseload and has vast potential in Scotland? We already have the world’s leading wave and tidal energy test centre based in Orkney, while companies such as Nova Innovation in my constituency are pioneers in this technology.
The UK Government’s actions suggest again that they are not taking the climate crisis seriously. The Leader of the House joined forces years ago with director Richard Curtis to champion the UN sustainable development goal targets when she was International Development Secretary. However, when I have asked her about environmental issues in the past, she has avoided the questions altogether. Is she still committed to and leading on these issues within her Government or not?
Penny Mordaunt
I knew there would be no mention of the £320 million of extra funding for Scotland, the investment zone and the other measures to benefit households and businesses in Scotland. I welcome those things, even if the SNP does not.
This week, the hon. Member asked me about measures to alleviate the cost of living and help improve living standards. We have a £94 billion package, which was announced in the Budget. She does not like what we have done on pensions for key professions such as doctors and experienced teachers. I am very sorry that is not welcomed, as I think it will be welcomed by many in those professions and will tempt them to stay in the workplace.
On the UN sustainable development goals, this Government have not just left those with Departments; we have put them at the heart of Government. They are in the annual reports of every Department, and we report against them.
The hon. Member talks about carbon capture and tidal energy. I remind her that the Treasury actually had a carve-out for tidal energy. We recognise that these emerging technologies will find it difficult to compete with other renewables with more advanced and developed technology. We have done that because we believe tidal is part of the answer, and we want the technology to develop. On carbon capture, I am sorry that she is not keen on the £41 million we have invested in the Scottish cluster. I gently remind her that the SNP promised to invest £80 million, and I do not think it has invested anything yet, which is very unfortunate. It is exactly from the playbook of “Look at what we say, not what we do” politics.
The hon. Member wants us to listen to her concerns, and her colleagues have this week raised issues about a lack of scrutiny, but she does not want us to look at their attendance record in debates. We have heard her raise her dismay at divisive language, but she does not want us to clock the hate-fuelled bile that comes from many SNP campaigners at anyone who loves the Union or dares to challenge them on any of their policies.
The hon. Member wants to preach about offshore tax havens and offshore schemes, but she wants us to discount the use of such schemes—as we discovered this week—by the Scottish Government, as we have seen in the CalMac tax scandal. She wants us to listen to her party leadership candidates saying they can be trusted on healthcare, that they will turbocharge the economy and that they are brimming with ideas, but she does not want us to recognise that they have crushed health, stifled growth and need to set up commission after commission to find some ideas.
The hon. Member would also like us to see the SNP as a champion of democracy, but not to look at its rejection of the referendum result. Does she not recognise the extraordinary occurrence this week of membership candidates in the leadership contest having to write a letter to guarantee a free and fair election? If the candidates were called Moe, Larry and Curly, it could not get any more slapstick. Given the SNP’s previous form and contempt for democracy, I wonder if it is actually going to adhere to the result of this contest. Will the candidates try to test the result in the courts, cry foul or attempt a rerun of the process on their own and claim it is legitimate? I am afraid we have two more weeks of this, but we know the outcome already: whoever wins, Scotland will lose.
Brandon Lewis (Great Yarmouth) (Con)
My right hon. Friend will be aware of the coverage over the past week or so of the sad loss of properties in Hemsby in Great Yarmouth through the impact of weather on our coastline. Does she agree that huge credit and thanks are due to the independent Hemsby lifeboat crew, Great Yarmouth Borough Council, and the local businesses and residents who have supported people who have suffered from loss of property and tried to keep the area safe? Will she look at the possibility of finding some Government time to have a debate about our collective approach to this rapidly changing and impactful coastal erosion in the east of England?
Penny Mordaunt
I join my right hon. Friend in putting on record our thanks to all those agencies, including the council and the lifeboat crew, who were instrumental in assisting in the emergency response. As he knows, we have been investing in flood defences and in trying to alleviate coastal erosion, and we will continue to do so. I understand that £40 million has been invested on the flood defence side in my right hon. Friend’s constituency. I know that he has already raised this issue with the Secretary of State, but I will make sure that she has heard my right hon. Friend’s remarks today. I remind my right hon. Friend that the next questions on this topic are on the 30th.
Ian Mearns (Gateshead) (Lab)
Following my little advertisement last week, I am glad to say that we received no fewer than seven applicants at the Committee on Tuesday, so that is working. If Members are unsure about how to apply for Backbench Business debates, staff in the Table Office will help them with advice on how to do so.
I thank the Leader of the House for announcing next week’s business, including our proposed debates on World Down Syndrome Day and tackling the energy trilemma. If we are allocated time on the 30th, we are proposing a debate on public access to nature and a general debate on matters to be raised before the Adjournment, as it will be the last business prior to the Easter recess.
Could we have a statement about changes to the warm home discount payment, which is an issue a number of constituents have contacted me about? I am very glad to say that the payment is going up from £140 to £150, and the number of eligible households is also going to increase, but surprisingly, some households that had previously received that benefit will no longer do so, including some single-person disabled households that are in receipt of disability benefits. There will be about a 36% reduction in the number of people in that category who will receive the benefit, so can we have a statement to clarify the situation and to say how we can rectify what I think is an anomaly that probably was not intended?
Penny Mordaunt
I thank the hon. Gentleman for another advert and more encouragement for the work his Committee does. Given that the next questions for the relevant Department are not until 18 April, I will write to the Secretary of State to make him aware of the hon. Gentleman’s concerns. It does sound like an issue that needs to be addressed.
Simon Hoare (North Dorset) (Con)
I lose my virginity this morning: in nearly eight years in this place, this is my first question on the business statement, and I hope that the fact that it is a first underscores the seriousness of the issue I wish to raise with the Leader of the House. As a Chairman of a Committee of this House, I know—as I hope does she—the important, independent and cross-party work that all Committees of the House do on behalf of the House, including the Committee of Privileges. My right hon. Friend will know that there has been speculation about its current investigation, which, as she will remember, was approved without amendment or Division in this House. Does she agree that members of that Committee are doing the House a service and that they should be free and unfettered in getting on with their work, and free of interference or intimidation?
Penny Mordaunt
I am glad that my hon. Friend has come to the House today to ask his first business question, and he raises a very serious matter. He is right to say that Members serving on the Privileges Committee are doing this House a service, and we should all remember that. They need to be permitted to get on with their work without fear or favour.
I also remind right hon. and hon. Members of the House that this House asked the Committee to do this work. We referred this matter to the Committee for it to consider; we asked it to do this work and to do it well, and it should be left to get on with it. That is the will of this House, and I think a very dim view will be taken of any Member who tries to prevent the Committee from carrying out this serious work, or of anyone from outside the House who interferes. On a personal level, an even dimmer view will be taken of anyone from the other place who attempts to do similar.
Carolyn Harris (Swansea East) (Lab)
Following a gas explosion in my constituency earlier this week, in which one of my constituents, Brian Davies, tragically lost his life, will the Leader of the House join me in offering condolences to the family and friends of Mr Davies? Will she also share my well wishes for those affected, especially the 29 families who are not yet able to return to their homes? Finally, will she join me in offering heartfelt thanks to all the emergency services, the Red Cross, community groups, council leader Rob Stewart, local councillors, the local authority and volunteers, who are all working tirelessly to provide support for the residents of Morriston, where this tragic incident occurred?
Penny Mordaunt
I thank the hon. Lady for raising this matter. I know that the whole House will want to send our deepest sympathies and condolences to the family and friends of Mr Davies, and our thoughts and good wishes to all, particularly the 29 families who have been so terribly affected. I join her in thanking all the agencies and volunteers who have been working so hard to alleviate the impact and to ensure that everyone can, where possible, get back to life as normal, and I thank the hon. Lady for the work she has done in leading her community through this horrible incident.
Sir Greg Knight (East Yorkshire) (Con)
Will the Leader of the House look at the desirability of rescheduling some of our parliamentary business? Is she aware that the decision to debate private Members’ Bills on certain Fridays of the year was taken at a time when Thursday sittings ended at 10 pm? Now that Thursdays finish much earlier, most Members use Fridays as a constituency day to deal with increasing casework. Is there therefore not a good case—I would argue there is an overwhelming case—for scheduling private Members’ Bills in future for debate on Tuesdays and Wednesdays, after the moment of interruption?
Penny Mordaunt
I am always keen to hear suggestions for innovation from Members, and I shall certainly look at that proposal. I remind Members that these are ultimately matters for the House, but I have heard what my right hon. Friend has said. If he would like to come and talk to me about his ideas, I would be very happy to see him.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
May I renew my call for a debate or statement in relation to the operation of the alternative fuel payment scheme? I have heard from no fewer than 126 constituents who use electricity to heat their homes. Almost half of them have received the payment, and half of them have not. The Government have said that they will not claw back payments that have been made incorrectly in these circumstances, so it seems to be utterly random whether someone gets the money or not. At the end of the day, it is also exceptionally unfair.
Penny Mordaunt
I thank the right hon. Gentleman for raising this issue again. My office has spoken to the Department about this matter on a number of occasions. I will do so again after this session, and I will also ask that a Minister contact the right hon. Gentleman’s office.
Alicia Kearns (Rutland and Melton) (Con)
Sexual orientation is not a pathology, and it does not need treating. Conversion therapy is quackery by charlatans, who package it up to try to hide their bigotry. The Leader of the House has been incredibly supportive of my proposed ban on conversion therapy. First, does she share my horror that only one of the three SNP leadership candidates was willing to say that they would ban it? Secondly, following my amendment to the Online Safety Bill, the Government promised to finish pre-legislative scrutiny by the next King’s Speech. Can we please have an update on where we are with getting the Committee set up and the PLS finished?
Penny Mordaunt
We want to end this barbaric quackery, as my hon. Friend is right to call it. They are appalling practices, and the Minister will very shortly bring forward measures to do exactly that. She is considering all the consultation responses, but we are on schedule to have pre-legislative scrutiny by the Joint Committee in this parliamentary Session, with a view to bringing forward a Bill in due course.
Abena Oppong-Asare (Erith and Thamesmead) (Lab)
My constituency has been rocked by the deaths last Thursday of Nadja de Jager and her two young sons, Alex and Max, aged 7 and 9, and my thoughts are with the family and friends left behind. The school has been working really hard with the community to provide support and I want to thank the teachers, who have gone over and beyond. Will the Leader of the House grant me a meeting to discuss what further support can be given to the school and what further support can be given to schools going through similar tragedies in the future?
Penny Mordaunt
I thank the hon. Lady for her question, and I know the whole House will want to join with the sentiments she has expressed not just for the immediate family affected but all their classmates and the whole community. The Department for Education and the partners it works with have good practice and measures that can be put in place when a community has gone through this type of shocking event, and I will be very happy after this session to facilitate a meeting between the hon. Lady and someone from that Department who can assist her in that respect.
Tim Loughton (East Worthing and Shoreham) (Con)
You, Mr Speaker, are of course very familiar with my Civil Partnerships, Marriages and Deaths (Registration etc) Act 2019, section 3 of which obliges the Secretary of State to produce a report on pregnancy loss and section 4 of which obliges the Secretary of State for Justice to produce a report on coroners investigations into stillbirths. This Act became law in February 2019, the last meeting of the pregnancy loss review advisory panel was in October 2018 and the consultation on the coroners issue closed on 18 June 2019. I have been trying to get meetings with the Under-Secretaries at Health and at Justice for the last six months, and I have raised this issue every time I am at Health or Justice questions, but that meeting has been cancelled, postponed or changed six times since Christmas alone, most recently this Monday, when one of the Ministers had the wrong date in the diary and then the date he did have he could not do either. This is really important and this is really shoddy treatment when trying to get support to get through legislation that the House has agreed to. Will the Leader of the House use her best offices to bang some heads together and get that meeting with those officials and me so that we can progress this important legislation?
Penny Mordaunt
That is an appalling situation and I am very sorry to hear about it. I will, after this session, raise it with the Secretary of State and the permanent secretary at that Department and ask them to get in touch with my hon. Friend’s office to set up those meetings. It is right that we make progress; this is a matter of law.
Mr Speaker
I will just add that I support the Leader of the House. Members should be treated with respect, and Ministers are here to answer to Members of Parliament who represent their constituents. I hope this message has gone back pretty clearly: get it sorted quickly. I am sure the Leader of the House will take this up and I will also take it up.
Grahame Morris (Easington) (Lab)
Tomorrow is St Patrick’s day [Hon. Members: “Hear, hear.”] Exactly. But it is also the first anniversary of P&O Ferries’ appalling assault on the legal and employment rights of almost 800 UK-based seafarers. RMT, Nautilus and the TUC reminded us all this week that, despite assurances from Ministers, neither P&O nor the parent company DP World has received any punishment or sanctions for their law-breaking and egregious treatment of their loyal workforce, so may we have a debate in Government time on the Government’s Maritime 2050 strategy and on why previous ministerial commitments to hold P&O Ferries to account have apparently sunk without trace?
Penny Mordaunt
I thank the hon. Gentleman for his question. He will know that my prime concern in this has been with regard to the Seafarers’ Wages Bill, but I will write to the Department and make sure that the Secretary of State has heard the hon. Gentleman’s concerns today and get him an answer.
John Howell (Henley) (Con)
May I seek the advice of my right hon. Friend on how I can make the Istanbul convention, which deals with the domestic abuse of women and girls, better known in this House? Is that by statement or by debate?
Penny Mordaunt
I thank my hon. Friend for all the work he has done internationally on the convention. I know he has been doing some recent work on this. He will have assisted his aim today by raising this important convention on the Floor of the House, but he will know the usual means by which he can direct other Members’ attention to it: by securing a debate either through the Backbench Business Committee or on the Adjournment. I will certainly make sure that the Foreign Secretary has heard about the work that my hon. Friend is doing and his keenness that we do more to promote others signing the convention and ratifying it.
Sammy Wilson (East Antrim) (DUP)
I am pleased that the Leader of the House has announced that there will be a debate on the Stormont brake next Wednesday. It would have been helpful if the statutory instrument could have been published this week for proper consideration. Regardless of that, we welcome the debate. I am sure that she will be aware that in Washington this week, my leader indicated that the Windsor framework still does not address many of the difficulties caused by the Northern Ireland protocol. In particular, the Stormont brake is inadequate because it does not ensure that MLAs in Northern Ireland can stop the application of EU law. There are still 300 areas of EU law that will apply to Northern Ireland, even after the Windsor framework, and the European Court of Justice will still adjudicate on them. Will the Leader of the House ensure that adequate answers are given by the Ministers responsible, explaining the difference between the rhetoric and the reality of the framework document?
Penny Mordaunt
My right hon. Friend raises some important points. He will know that in order to implement the Windsor framework, a series of statutory instruments will need to be brought forward, and we need to ensure good time to debate those and areas of concern. This SI, which I have described as a keystone in that Windsor framework, is a section on which the whole framework depends. It will be an important debate. The SI will be published on Monday. That is the earliest I think we can bring that forward, but I wanted to give all hon. and right hon. Members as much notice as possible.
Bob Blackman (Harrow East) (Con)
In just a few weeks’ time, we will be celebrating the coronation of King Charles III, and people up and down the country will be planning their celebrations. It therefore would be helpful if we could have a statement from the relevant Minister on the arrangements for communities to celebrate in the time-honoured fashion. Will the Leader of the House join me in congratulating Conservative-run Harrow Council, which has agreed to waive all fees for street parties on such a celebratory day?
Penny Mordaunt
That is a good innovation by my hon. Friend’s local authority, and I encourage all Members to make use of this moment to celebrate the country, as well as our new King. There will clearly be opportunities for civic action and some volunteer days, as well. I hope that everyone will make use of that moment and that time.
Barbara Keeley (Worsley and Eccles South) (Lab)
Last week, the BBC announced appalling proposals to axe the BBC Singers, the UK’s only full-time professional choir, and to cut 20% of the jobs in the BBC Philharmonic, the BBC Symphony Orchestra and the BBC Concert Orchestra. These proposals have led to an outpouring of disbelief and anger from the classical music sector and the public. Some 120,000 people have signed a petition challenging the cuts, as have global leaders in classical groups, many choir groups and more than 700 composers from the UK and worldwide. Many have criticised the lack of impact assessment, costings or consultation with those musicians affected by the decision. I therefore ask the Leader of the House to make time for a debate on this cultural vandalism by the BBC, which would be so extremely damaging to the future of music in this country.
Penny Mordaunt
I thank the hon. Lady for raising that. I know it is of concern to many Members, as well as many people outside the House. The hon. Lady mentioned cuts to some of the orchestras, but the BBC Singers is the only orchestral choir involved. The decision is obviously independent from Government, but I understand that an internal consultation is currently taking place with staff. I think that if the hon. Lady were to apply for a debate in the usual way, it would be very well attended.
Selaine Saxby (North Devon) (Con)
While there has been much good news for business this week, I am gravely concerned about the unavailability in the current leasing round of the proposed strike price for floating offshore wind in the Celtic sea to international developers who have, up to this point, shown serious interest in developing the sector in the UK and bringing green jobs to our coastal communities. Given the importance of renewable energy—as detailed by the Chancellor only yesterday—can my right hon. Friend advise me on the best way to ensure that the leasing round does not fail, and we do not see this international investment literally float off overseas?
Penny Mordaunt
My hon. Friend has done a huge amount to champion the Celtic sea, and, indeed, established the all-party parliamentary group for the Celtic sea. The Government estimate that our ambition of 50 GW of offshore wind, outlined in the British energy security strategy—including 5 GW of innovative floating offshore wind—could support 90,000 direct and indirect jobs by 2030. That is incredibly important. The Crown Estate will launch its 4 GW Celtic sea leasing round later this year, and within that, developers will be expected to outline their approach to supply chains. I will ensure that the Chancellor and the Secretary of State have heard what my hon. Friend has said today, and that the spotlight is kept on the Celtic sea.
Brendan O’Hara (Argyll and Bute) (SNP)
Yesterday’s 10% increase in spirits duty is a disaster for Scottish whisky and gin producers and will have a significant impact on those in already economically fragile rural communities such as my constituency, whose whisky has bankrolled the UK Treasury for decades while receiving received precious little in return. Could we therefore have a debate in Government time in which the Chancellor can explain exactly why he has chosen a path that could not only destroy a hugely successful Scottish industry but, at the same time, potentially kill the goose that has for so many years laid the Treasury’s golden egg?
Penny Mordaunt
As the hon. Gentleman will know, we have held rates down for whisky, but if he really wants to support the sector, he might like to take a good look at the deposit return scheme that the Government plan to introduce. He might also like to support the Government’s efforts to secure free trade agreements, including our imminent succession to the comprehensive and progressive agreement for trans-Pacific partnership.
Mark Jenkinson (Workington) (Con)
I supported the successful bid for new unitary authorities in Cumbria, which highlighted eminently achievable savings of 11%, or about £30 million, in Cumberland. All seven predecessor councils were able to set balanced budgets, but neither of the new councils has shown any intention of realising those savings, and both have already come cap in hand to the Government asking permission to borrow to fill eye-watering budget gaps before they have even taken control—to the tune of £40 million in Cumberland. On top of that, the new Labour-led Cumberland Council has abused a loophole to impose a devastating 6.7% council tax increase on my constituents.
Will my right hon. Friend join Cumbrian Conservative MPs in calling for the new councils to get round the table and agree a devolution deal for Cumbria so that we can super-charge growth, and can we have a debate in Government time on the true cost of Labour councils?
Penny Mordaunt
As my hon. Friend will know, during the previous Labour Government council tax increased by 110%. During the same period in which we have been in government, it has risen by just 36%. The situation that my hon. Friend has described is a shame and it is shameful. He will know that my right hon. Friend the Secretary of State for Levelling Up, Housing and Communities wants to return to conversations about a devolution deal for that region, and I would encourage my hon. Friend to engage in those conversations, as I know he is doing already. However, it is deeply disappointing that people should be taking such an attitude to taxpayers.
Justin Madders (Ellesmere Port and Neston) (Lab)
The activities of bailiffs have been closely examined as a result of the prepayment meter scandal of recent weeks, but can we look at their wider activities? My constituent’s life is being made a misery by one such company, Bristow & Sutor, regarding a parking fine that they have paid but about which they are still being harassed and threatened with the vehicle being taken away. The company will not respond to her or to me, and it seems completely unaccountable and unaware of the distress that it is causing. As a House, we should be looking more at what bailiffs are doing.
Penny Mordaunt
The hon. Gentleman knows how to apply for a debate, which I am sure would be well attended. With regard to prepayment meters, we should also look at how some of the warrants were issued, sometimes in bulk. Greater transparency on that would be welcomed by all hon. Members.
Tom Randall (Gedling) (Con)
May we have time to debate Labour-run Nottingham City Council’s handling of the Victoria Centre market in Nottingham city centre? In February last year, my constituent Rajesh Dhingra contacted me about the effect that the uncertainty is having on his business and on other traders. More than a year later, they are no further forward, with the suspicion that the market is being deliberately run down with a view to selling it off. In the words of one trader:
“Nottingham City Council didn’t do a good job of running the market. They’re making an even worse job of closing it down.”
I have not had any response to my recent emails to the council. Does my right hon. Friend agree that the council should not be able to run down the market as a way of trying to avoid paying proper compensation to stallholders?
Penny Mordaunt
That is a shocking situation. We very much value markets and want to support them, which is why we made a permanent fixture of the permitted development right that enables markets held by or on behalf of local authorities to be operational for an unlimited number of days. It is shocking that there is a lack of clarity about what is happening for stallholders, who want to be able to plan what they will do next if the market is to be shut down. If that is the case, they should be paid a fair rate.
Ian Paisley (North Antrim) (DUP)
Making off without paying—common theft, in fact—remains a massive crime across the whole United Kingdom. The British Retail Consortium has suffered losses from thefts of that nature to the tune of £700 million a year, which is appalling, as the Leader of the House will agree. Can we have a debate in Government time on what measures can be put in place to deter and reduce that crime, and to increase co-operation across county lines?
Penny Mordaunt
The hon. Gentleman will not have long to wait for the next questions, which are on 20 March, and I will certainly ensure that the Home Secretary has heard his concerns.
Anna Firth (Southend West) (Con)
I rise to add my voice to the issue raised by the hon. Member for Worsley and Eccles South (Barbara Keeley). Last week, the director of two of Southend’s best choirs, the brilliant Rosemary Pennington, wrote to me about the BBC’s decision to disband the BBC Singers. The Leader of the House knows well that the BBC Singers is the only full-time professional choir in the UK. It goes back to 1924 and does an incredible amount of outreach work in schools, as well as performing at all the major UK festivals. Will she find time for a debate on the future of classical music in this country, which is central to our heritage and mental health? Will she join me in calling on the BBC to reconsider that devastating decision? It is not a new strategy for classical music; it sounds more like no strategy.
Penny Mordaunt
I feel that there is consensus from hon. Members on both sides of the Chamber, so I anticipate an Adjournment or Backbench Business debate on the subject soon. On the wider issue, the Chancellor yesterday reaffirmed the Government’s support for classical music, alongside other cultural sectors, by extending the higher rates of theatre tax relief, orchestra tax relief and museums and galleries exhibition tax relief for a further two years. I also put on record my immense pride at the Music Man Project, which is a wonderful choir and orchestra in my hon. Friend’s constituency. It played at the Mountbatten festival of music at the weekend and received a standing ovation from everyone in the Royal Albert Hall, led by His Majesty the King.
Ellie Reeves (Lewisham West and Penge) (Lab)
Four years ago, my constituent was made homeless following a no-fault eviction. She was placed in temporary accommodation—just one room in a dilapidated hostel—with her two children. Unable to afford soaring rents and with council waiting lists at a record high, four years later she is still there. She is a teacher in a local primary school. Can we please have a debate in Government time about the housing crisis in this country?
Penny Mordaunt
I am sorry to hear about the situation that the hon. Lady raises. I would hope that there is more that can be done in this case, and I am sure that she has raised it with the local authority. I will certainly send her some information that might be helpful, to make sure that her local authority is giving her constituent all the assistance that she needs. The hon. Lady will know that the next Question Time for the Department for Levelling Up, Housing and Communities is on 27 March, and she may wish to raise the case there.
Taiwo Owatemi (Coventry North West) (Lab)
Fifty people have lost their jobs as administrators begin to rifle through the remnants of the Coventry City of Culture Trust. Not only have the livelihoods of very hard-working constituents disappeared, but a much-loved local gallery, the Reel Store, will have to close its doors very soon. Can we have a debate in Government time on the efficacy of Coventry City of Culture Trust to ensure that there is proper oversight?
Penny Mordaunt
The hon. Lady raises an important matter. I think this is probably a topic for an Adjournment debate, given that it is a highly local issue. The next questions to the Secretary of State for Culture, Media and Sport are not until after recess, so I shall make sure that the Department has heard the hon. Lady’s concerns.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
My constituent Sameena Begum was misdiagnosed with cataracts in both eyes by Optical Express. A procedure in her left eye resulted in a detached retina and further emergency surgery. While she was recovering from the botched procedure, Optical Express called to ask if she wanted treatment in her right eye, but a second opinion had discovered that there was in fact no cataract in her right eye at all. This experience left Sameena with badly damaged eyesight and little recourse, because the sector is largely unregulated. Can we have a debate on bringing forward such regulations?
Penny Mordaunt
That is a shocking case to hear about, and I shall make sure that the Secretary of State for Health and Social Care has heard the hon. Member’s concerns about it. If he would like to give my office some more details on the case, and on what complaint and redress have already been sought, I shall do my best to ensure that his constituent is better served.
Matt Western (Warwick and Leamington) (Lab)
Can we have a debate in Government time on the delivery of infrastructure in new developments, such as those south of Warwick and Leamington? We have a new school being built there, but thousands of houses have already been delivered and the school will not open until September 2024. It is massively over budget and has been built on the side of a hill on marginal land, rather than in the heart of the community. Now parents have these delays, and they will have to send their children to different schools. Can we have a debate on infrastructure in new developments?
Penny Mordaunt
I thank the hon. Gentleman for that; he will know how to apply for a debate in the usual way. I shall certainly make sure that his concerns have been heard by the relevant Department.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
After yesterday’s Budget, the Secretary of State for Levelling Up sent a letter to the leader of Hull City Council regarding the levelling-up partnerships. The Secretary of State says in the letter,
“we will partner with you to develop a shared understanding of your area’s unique challenges and opportunities”.
I must say that I am very exasperated that after 13 years of a Conservative Government, they have not been able to understand Hull’s challenges and the tremendous opportunities of the Humber estuary. We have renewables, one of the largest port complexes in the UK and an outstanding university. Perhaps that is why we were missed off the list for the 12 investment zones that were announced yesterday. Please can we have a debate so that I can educate the Government about the tremendous opportunities in Hull and the Humber?
Penny Mordaunt
I am always happy to assist the right hon. Lady in securing time to talk about her constituency. The Government very much recognise its potential and the opportunities that are there, which is probably why the Secretary of State has written to her local authority.
Carla Lockhart (Upper Bann) (DUP)
A little boy, a wee warrior called Adam Watson, from my constituency, will be forever nine years old, having lost his fiercely fought battle with leukaemia just last August. His mum and dad, Sara and David Watson, amid their deep sense of grief, are campaigning to improve wraparound services for children who have been diagnosed with that dread disease, cancer, and their families. One change Sara and David are particularly interested in is having a payment or support package made available to parents because of the need to attend appointments and support their children through their diagnosis. Will the Leader of the House agree to raise this issue with the relevant Department? Will she also encourage the Secretary of State to meet Sara and David, who will be visiting this place in the coming weeks?
Penny Mordaunt
I am sure the whole House will join me in expressing our deepest sympathies to Sara and David and our admiration to them for turning what must have been this most appalling tragedy into some positive action to benefit other families. The hon. Lady will know that across Government we are very focused on ensuring that people are able to cope not just with their own ill health or fluctuating conditions, but when they are caring for another or their child is ill. I shall certainly raise this matter with several Departments that will have an interest and ask that they make Ministers available to meet the family when they come to Westminster.
Hilary Benn (Leeds Central) (Lab)
Further to the question asked by my hon. Friend the Member for Lewisham West and Penge (Ellie Reeves) a moment ago, the Leader of the House knows that there is an affordable housing crisis in this country, in significant measure because of the catastrophic decline in the number of council houses. Leeds has 26,000 people on the waiting list, more than 5,000 of whom have the very highest priority—they need to be urgently rehoused. Given the lack of support announced in the Budget yesterday, will the Leader of the House encourage the Levelling Up Secretary to come to the House to make a statement about what the Government are going to do to build more homes that our constituents can actually afford to rent?
Penny Mordaunt
The right hon. Gentleman touches on an issue that affects both social housing and affordable housing. He will know that more than 2.2 million additional homes have delivered since we came into power, including more than 632,000 affordable homes, and that the annual housing supply is up 10% on the figure for the previous year, with the third-highest yearly rate in the past 30 years. Blockages are occurring to developments that have been planned for and where sites have been identified. There are lots of reasons for that, but one is a lack of capacity in planning departments. I know that the chief planning officer at the Department for Levelling Up, Housing and Communities is very much looking at this issue to see what we can do to build capacity in local authorities, so that we can get on with these developments and give everyone a warm, safe, secure home.
Christian Wakeford (Bury South) (Lab)
I declare an interest as chairman of the all-party group on alcohol harm.
No one chooses to be an addict, yet the Equality Act 2010 has a memorandum of exclusion that treats addiction as a personal choice. May have a debate in Government time on addressing this issue, so that addiction is seen for what it is, a mental health illness and not a personal choice?
Penny Mordaunt
This is a serious matter and I thank the hon. Gentleman for raising it and for all the work that the all-party group is doing. Many Departments will touch on this issue, but primarily it is about healthcare. If the sentiments that sit behind his question are to be fulfilled, it should remain that Department that is in the driving seat on this policy.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
Can we have a debate in Government time on the activities of short-selling attack group Viceroy Research and its leader Fraser Perring? I am told that it is working hand in glove with Boatman Capital, which launched the short-selling attack on Babcock International while it was overhauling our nuclear submarines. Mr Perring is a not infrequent visitor to Moscow, and is now targeting Home REIT, which provides homelessness services, including to homeless veterans. We must ensure that short-selling groups are not another weapon in Putin’s arsenal. Where there are links between short-selling attack groups and the Kremlin, we need to know.
Penny Mordaunt
I thank the right hon. Gentleman for his question on a very important matter. I will ensure that the Security Minister has heard his concerns. He is overseeing the strengthening of the architecture in government to identify what is going on behind particular deals. I do not have details of the case that the right hon. Gentleman raises, but he will know that in recent years we have strengthened capacity in government to spot what is going on and to ensure that everyone is wide-eyed about it. I will raise this case with the Security Minister.
Alan Brown (Kilmarnock and Loudoun) (SNP)
My constituent Andrew Barbour is a policeman who suffers with dyslexia. The Child Maintenance Service did not implement the reasonable adjustments that he requested, and sent him a letter that he could not comprehend. He telephoned the CMS and was told not to increase his payments. That information was wrong and led to his ex-partner getting a court order for a wage deduction, causing him not only embarrassment but a breakdown in the relationship. He has now lost access to his kids. He got an apology letter from the CMS, but it was in the wrong format and the envelope was addressed to the “blind man”, causing him further embarrassment when a kind-hearted and diligent postman knocked on his door and offered him assistance. When will the Government get a grip of the CMS, and when will my constituent get the support that he deserves from that organisation?
Penny Mordaunt
I am always happy to help the hon. Gentleman with individual cases that he raises, as I have done in the past, and I would be happy to help on this issue as well. It is important that people who have a disability and need particular support and accessible information get that. That is good practice and it is what we expect all agencies to do. If he would like to give me the details of that case, I will raise it.
Andrew Western (Stretford and Urmston) (Lab)
Residents of Bath Crescent in Old Trafford have been without heating and hot water since January due to the inability of their housing provider Your Housing Group to resolve outstanding issues. This is a 59-property sheltered accommodation scheme for the over-55s and is home to many elderly and extremely vulnerable residents. Does the Leader of the House agree that Your Housing Group’s failure to resolve these issues is nothing short of a disgrace? Will she agree to a debate in Government time on what more powers the Government feel they need to hold housing providers to account when they so flagrantly neglect their most vulnerable residents?
Penny Mordaunt
I agree wholeheartedly with the hon. Gentleman. This would be a bad enough situation for anyone to endure, but given that it is sheltered housing accommodation, it is a scandal if they have been left so long without the basics needed for a warm and secure home. I sincerely hope that, when it has heard what he said, by this afternoon we will have an appropriate response from Your Housing Group.
To give the hon. Gentleman some comfort, he will know that this week we announced how we are strengthening residents’ abilities to hold housing associations or landlords to account for shoddy service and for not doing what they should to keep people safe, secure and healthy in their homes. We take a dim view of that, and I hope that the housing group will leap into action this afternoon.
Patricia Gibson (North Ayrshire and Arran) (SNP)
As life expectancy stalls in England and has actually fallen in Scotland, there is widespread anger and concern at plans to further increase the state pension age, which will disproportionately impact the poorest. Given that the pension injustice perpetrated on women born in the 1950s has gravely undermined confidence in the state pension system, will the Leader of the House make a statement setting out why she believes increasing the state pension age while life expectancy is falling is justifiable?
Penny Mordaunt
The question the hon. Lady should be asking is why life expectancy in Scotland is falling. That is what needs to be addressed, and it will be done by a combination of better healthcare, better diagnosis and better opportunities for communities. We very much want people to be able to enjoy their retirement. That is one reason why we introduced and have kept to the triple lock on pensions, and we are always keen to ensure that people are accessing pension credit and all the other assistance that they are entitled to.
Jim Shannon (Strangford) (DUP)
You caught me off kilter there, Mr Deputy Speaker—I was going to do my usual bobbing up and sitting down, but thank you for calling me.
Yesterday North Korea fired yet another long-range missile using money that was meant to support the people of North Korea, who really need that money. At the very bottom of the ladder in North Korea are Christians, who face isolation, starvation and, in some cases, arrest and execution in prison camps. North Korea is No. 1 on the world watch list for persecution of Christians—it is the most dangerous place anywhere in the world to be a Christian. Will the Leader of the House join me in making a statement of solidarity with this often forgotten but much supported group?
Penny Mordaunt
I will happily join the hon. Gentleman in that, and I sure that every Member of this House would thank him for making sure people know that our eyes are on these individuals, whether they be Christians or others who are being brutalised by particular regimes. We will always remain focused on them and do whatever we can through our envoys and other means to ensure that they are protected.
Patrick Grady (Glasgow North) (SNP)
First, may I pay tribute to the late Baroness Masham of Ilton? Mass was offered for the repose of her soul in the crypt chapel last night, and she was widely respected across both Houses.
Cyclone Freddy has caused devastation across Malawi and Mozambique in recent days, leading to the loss of over 200 lives and compounding many ongoing challenges, including an outbreak of cholera in Malawi. Could the Leader of the House arrange for a Foreign, Commonwealth and Development Office Minister to come here early next week to update the House on how the Government are responding to this humanitarian situation and how they are tackling the long-term causes and effects of climate change?
Penny Mordaunt
I join the hon. Gentleman in the sentiments he expresses about Baroness Masham.
This is a devastating situation. I know that many communities across Scotland will be particularly focused on Malawi because of the strong ties they have. The UK is working closely with the Government of Malawi and international agencies to respond to the cyclone and its aftermath. We are supporting the emergency operations centre that has been established and working closely with partners to identify the needs of all those affected, and we are looking at options for further UK support to help those stranded. I know that many Members are concerned about this, and I will ensure that the Foreign Secretary and his ministerial team have heard the asks for an update.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
Prostate cancer is the most common cancer in men, and a common side effect of treatment is incontinence. One in 25 men over 40 experience urinary incontinence and one in 20 men over 60 experience faecal incontinence generally, but there is no statutory requirement for sanitary bins in men’s toilets, which my constituents have voiced concerns about. Will the Leader of the House schedule a debate in Government time on the need for equal access to hygiene bins in public toilets?
Penny Mordaunt
The hon. Lady raises a very interesting and important point. I will certainly raise this with the two prime Departments concerned and discuss good practice guidelines that they may know about. She knows how to apply for a debate, which I think would help to raise awareness about these issues, which will be a concern to half the population.
Mr Deputy Speaker (Mr Nigel Evans)
I thank the Leader of the House for her business statement and for responding to questions for one hour and eight minutes.
Security of Government Devices
(1 year, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Chancellor of the Duchy of Lancaster and Secretary of State (Oliver Dowden)
As this week’s integrated review refresh demonstrated, the Government are strongly committed to bolstering our national security to meet the challenges of both today and tomorrow. We take the security of Government devices very seriously, and we are constantly working to ensure that those devices remain as safe and secure as possible. As part of that effort, I recently commissioned a review by our cyber-security experts to assess the risks posed by certain third-party apps on Government devices and in particular the installation and use of TikTok. I know that there has been a lot of interest in this issue in the House, so I wanted to take this opportunity to update Members.
The review has concluded and it is clear that there could be a risk around how sensitive Government data is accessed and used by certain platforms. As many colleagues will know, social media apps collect and store huge amounts of user data, including contacts, user content and geolocation data. On Government devices, that data can be sensitive, and so today we are strengthening the security of those devices in two key respects.
First, we are moving to a system where Government devices will only be able to access third-party apps that are on a pre-approved list. This system is already in place across many Departments, and now it will be the rule across Government. Secondly, we are also going to ban the use of TikTok on Government devices. We will do so with immediate effect. This is a precautionary move—we know that there is already limited use of TikTok across Government—but it is also good cyber hygiene.
Given the particular risk around Government devices that may contain sensitive information, it is both prudent and proportionate to restrict the use of certain apps, particularly when it comes to apps where a large amount of data can be stored and accessed. This ban applies to Government corporate devices within ministerial and non-ministerial departments, but it will not extend to personal devices for Government employees or Ministers or the general public. That is because, as I have outlined, this is a proportionate move based on a specific risk with Government devices. However, as is always the case, we advise individuals to practise caution online and to consider each social media platform’s data policies before downloading and using it. Of course, it is the case that Ministers receive regular security briefings and advice on protecting data on their personal devices and on mitigating cyber threats.
We will also be putting in place specific, very limited exemptions for the use of TikTok on Government devices where it is required for operational reasons. Those exemptions will only be granted by security teams on a case-by-case basis, with ministerial clearance provided as appropriate. Overall, this approach aligns with action taken by allies, including the United States, Canada and the EU.
Our security must always come first. Today we are strengthening that security in a prudent and proportionate way, and I commend this statement to the House.
Angela Rayner (Ashton-under-Lyne) (Lab)
I welcome the statement and thank the Minister for advance sight of it. But once again the Government are late to the game. In August last year, Parliament closed its TikTok account. As the Minister has just said, in December the US banned TikTok from official devices, and nearly a month ago the European Commission followed suit. On 28 February, however, the Secretary of State for Science, Innovation and Technology said that the app was a matter of “personal choice.” She said, “We have no evidence”, and that a ban would be “very forthright”.
What has changed? Two weeks, two Ministers, two completely different policies later, and it is the same pattern over and over again: a Government behind the curve, with sticking-plaster solutions, forced to lurch into a U-turn at the last minute. We need a strong, clear- eyed and consistent approach—one that ensures that we can protect our national security and that puts us in a strong position to engage with states such as China where it is in our interest to do so, in areas such as climate change and trade.
The Minister announced a restriction on official devices to a pre-approved list of third-party apps and a ban on TikTok. How does the ban on TikTok differ from it simply not being on that approved list? Why is the ban limited only to central Government Departments? How will it apply, for example, to devolved Governments or Parliaments? Can the Ministry of Defence, for example, keep its account?
The Minister said that the TikTok ban is based on
“a specific risk with Government devices”.
Can he go a little further on that? What exactly is the specific risk and why does it apply only to official devices in central Government? Will the Minister tell us what advice has been issued to other Ministers, including those who already actively use TikTok? What criteria will be used for the list of pre-approved apps that he has announced today? Which apps will be included and which will not? On what grounds?
Today’s announcement feels like closing the stable door after the horse has bolted. If the Minister was serious about overhauling security at the heart of Government, why was the review limited only to the use of third-party apps on Government devices? Why not carry out a root-and-branch review of the technology used by his colleagues? The reality is that this Government’s track record of upholding security at the heart of Government is appalling, from their chronic use of private emails to the hacking of the phone of the former Foreign Secretary, the right hon. Member for South West Norfolk (Elizabeth Truss). Will the Minister say whether there were any discussions during this process about Ministers’ use of private messaging, such as WhatsApp, and email? Will he confirm that he will make it a priority to make good on promises to update the guidance on the use of private emails by Ministers, which is now a decade old?
In the Procurement Bill’s Second Reading debate, the Chair of the Foreign Affairs Committee, the hon. Member for Rutland and Melton (Alicia Kearns), described the Government’s approach to tracking down security threats in our supply chain as “relentless whack-a-mole”. She said we needed a more systematic and proactive approach to identifying risks in the UK’s supply chain, especially when it comes to goods and services bought with taxpayers’ money. I agree with her; does the Minister?
If the Minister is truly serious about national security at the heart of Government, why did he vote against Labour’s amendments to the Procurement Bill that would have mandated that suppliers that pose a risk to the UK’s national security must be excluded from being granted taxpayers’ money? The Government have a duty to uphold the highest standards of security at the heart of Government. Today’s announcement is nothing but a temporary fix—a sticking plaster—while gaping holes remain in our national security. We must fix this problem; is the Minister committed to doing so?
Oliver Dowden
The right hon. Lady raised a large number of issues; I will try to address as many as I can and am happy to write to her on any that I do not cover.
First, the Government’s overall approach to national security is set out in the integrated review refresh that was published at the beginning of the week. In respect of China specifically, it sets out a three-pronged approach of protect, align and engage; this element of our activity clearly relates to protect.
The right hon. Lady asked why the decision has taken some time. We have always taken an evidence-based approach. I thought it was appropriate that we gather sufficient evidence and understand the nature of the problem. I did that in November. It is an appropriate way to deal with national security challenges and I will continue to take it.
The right hon. Lady asked about the limited list. We already have an approved list of apps but it does not apply to every Government Department. We are now ensuring that it applies across all Government Departments. I do not believe there is a risk extant at the moment; this is about ensuring that we continue to guard against risk on an ongoing basis.
The ban applies not just to central Government Departments but to all Government agencies, including arm’s length bodies. On the devolved Administrations, I have written to the leaders in Scotland and Wales and the appropriate officials in Northern Ireland.
In respect of Ministers, they receive extensive advice when they take office and are expected to follow that with all the devices they use. In respect of private messaging, we are updating the guidance on non-corporate communications to ensure that we have a consistent approach across Government, but, again, I do not believe that we have serious concerns on that.
Finally, on the right hon. Lady’s slightly overblown rhetorical point about Government taking action, I say gently to her that I have always been willing to take decisive action to protect national security. It is exactly the approach that I took in respect of banning Huawei from our 5G network before many of our allies did so. It is exactly the approach that I took within weeks of taking office in respect of Government surveillance devices on sensitive sites with Chinese technology on them. However, we must proceed with an evidence-based and proportionate approach. That is what will command public confidence and that is the approach that I am taking today.
Mr Deputy Speaker (Mr Nigel Evans)
Order. I would just like to say that, for those in their offices who wish to take part in the Budget debate, they really should start making their way towards the Chamber now.
Alicia Kearns (Rutland and Melton) (Con)
Today’s ban is a welcome precautionary move. I congratulate my right hon. Friend because he did make the right decision on Huawei and, again, on surveillance, and, again, today. None the less, TikTok’s ability to act as a data Trojan horse is gravely concerning and the myriad data-exploiting technologies on our streets and in our pockets require a national discussion. That national discussion can start with the Procurement Bill. I welcome the right hon. Member for Ashton-under-Lyne (Angela Rayner) raising the amendments that I have laid to that legislation. We must protect ourselves from hostile states spyware. May I urge my right hon. Friend to personally put an eye to those? Hostile states will go to extreme lengths to spy on us. That is their job, and our job is to make sure that we protect ourselves and our people. Tackling techno-authoritarianism must be one of our foremost priorities if we are to deliver on the resilience piece that the Prime Minister set out in the integrated review.
Oliver Dowden
As ever, my hon. Friend raises some very important points. On the Procurement Bill, of course we continue to engage with Members on both sides of the House as we approach Report. I know that Ministers in my Department are meeting the hon. Lady about the amendments that she proposes. In respect of this legislation, we have taken a very big step forward. For the first time, contracting authorities across the public sector can reject tenders from suppliers that pose a threat to national security, including where that threat arises from a parent or subsidiary company, so we are both lowering the bar and increasing the power. We did not have any of those powers when were in the European Union, so this is a significant step forward and I am very happy to look at further amendments that can build on those proposals.
Kirsty Blackman (Aberdeen North) (SNP)
I thank the Minister for advanced sight of his statement. I agree with other Members that this is a welcome and proportionate step by the Government. It is good to see that, in some areas, the UK Government are taking seriously the risk of highly sensitive data being accessed and used by bad actors. I wish to ask a couple of questions. First, how will the Government ensure that these guidelines are adhered to by Ministers and by civil servants using Government devices? Will the Government ensure that the information and evidence they have compiled is shared with Parliament’s security advisers to ensure that MPs are given the best and most up-to-date advice possible, in particular on apps that use geolocation data?
The Government have been dragging their heels around a number of security risks. A number of companies—including Huawei, TikTok and Hikvision—pose human rights risks and, in some cases, it has taken too long to close down or mitigate those risks. For example, Hikvision cameras are still being used, despite their being involved in human rights atrocities, for the facial recognition of Uyghur Muslims in mosques. The issue is not just the safety and security of our citizens but that taxpayers’ money is being used to fund companies that are committing atrocities. When will the Government take a look at the wider situation to ensure that we are not, by the back door, propping up regimes and companies that commit atrocities and human rights abuses?
Oliver Dowden
I thank the hon. Lady for her questions. First, on how we ensure adherence, this instruction is going to Government Departments from the Cabinet Office, so we would expect that adherence to happen. We are one Government, and the Cabinet Office is responsible for co-ordination. Were there any evidence of non-compliance, I would take that up directly with the Ministers responsible for each of those Departments. I would expect them to take it seriously, as they have done in relation to previous guidance.
The hon. Lady raises an important point about the security of Members of Parliament. I discussed that with Mr Speaker prior to making this announcement, and there is already a high level of engagement between the Government and the parliamentary authorities, including through my right hon. Friend the Security Minister. Clearly, Parliament is independent of Government, but we are very willing to provide all necessary information to help parliamentarians make appropriate decisions.
On human rights abuses in China, that is something the Government have never been shy of calling out or engaging with the Chinese Government on, and we will continue to do so.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I say to my right hon. Friend—not to be churlish—so far, so good. Most of our allies have already done this, but I simply make the point to him that he cannot stop there. The reality is that, even though Government phones will have this taken out of them—this TikTok leak element—the key thing is that private telephones remain on Ministers’ desks and are used for communications. I honestly do not believe, whatever the complaints are, that in reality those private phones will never be used for Government business. They will be, they are, and there is no way of stopping that to some degree. Can he not now say that any Government Minister or senior official who has TikTok on their private phone should remove it, because that gets rid of the risk?
I have an amendment down concerning Hikvision cameras. I have never known it so difficult to drag any information out of Government as the sites at which they are using these cameras. They should now be removed from every single site that is a Government base, and the reality is that they are dragging their feet. Could he turn to that as well?
Oliver Dowden
I thank my right hon. Friend for his questions. I will take the second point first. I am happy to meet him and provide further information about the sites where Hikvision is used. I should say that this point applies to surveillance technology from Chinese companies; it is not just about Hikvision.
The broader point my right hon. Friend makes is a legitimate one, and it is a balance that the Government have to try to get right. It is the case that many social media apps use huge amounts of data harvesting, and it is also the case that sophisticated foreign hostile state actors are perfectly capable of using many mechanisms to obtain bulk data aside from direct ownership. On balance, we believe that this is the correct approach.
Ministers of course need to exercise heightened caution in respect of the rules. It may be that communications devices are used for routine administration and so on, but substantive Government business should be conducted on Government devices. In addition, bespoke security advice is provided to Ministers, and they are expected to adhere to it.
Matt Western (Warwick and Leamington) (Lab)
I am slightly surprised at the delay in introducing this, because I was under the impression that we had been briefed nine to 12 months ago by the security services that there was such a risk from TikTok and so on that we were strongly advised to remove it if we had it on our phones. Given the Oakeshott papers and the amount of ministerial correspondence that seems to be going on, we do not know, when we get messages from a Minister, whether that is on a private phone or a Government phone. Will the Minister explain how we should know that in the future, and what the risk is of our data actually being drawn down by a ministerial phone?
Oliver Dowden
On the first point, the Government already had a list of allowed apps, and TikTok was not on it. That was for most Departments, but some Departments do not adhere to it, so this is about ensuring that we close the remaining gaps.
On Government data used on private phones, we will shortly be issuing refreshed guidance on non-corporate communications. Essentially, substantive Government business should be conducted only on Government phones. If Members of this House are contacted about substantive Government business, that should be from a Government phone.
Theresa Villiers (Chipping Barnet) (Con)
This seems like a sensible move, but of course, it is tackling only one part of the security and safety risks in the online world. Can I urge the Minister to get a move on with the Online Safety Bill, which contains other important safeguards to keep children safe online?
Oliver Dowden
As my right hon. Friend knows, the Online Safety Bill is currently passing through Parliament, and does not directly fall under my jurisdiction as Chancellor of the Duchy of Lancaster. However, that Bill does introduce world-leading reforms, and we are making good progress.
Across the board, it is important for right hon. and hon. Members to appreciate that this is one small part of what the Government are doing. Through the National Cyber Security Centre, we genuinely have world-leading expertise, and we have countries from around the world coming to the United Kingdom to understand that expertise. All ministerial decisions are informed by that, but it is also the case that technology is moving very rapidly, so we have to constantly move to make sure that we deal with threats. We have to do so in a proportionate way, because we also have to recognise that there are many benefits from people using new forms of technology, and we do not want to stifle innovation and growth.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
I congratulate the Minister on a quite remarkable achievement: he made that entire statement without once using the words “China” or “Chinese”, which I think tells us quite a lot about the way in which the Government approach matters like this. This is the right thing to do, but I have to say to him that playing whack-a-mole like this—one week it is Huawei, next week it is Hikvision, and the week after that it is TikTok—is no substitute for a coherent cross-Government strategy. If he really wants an evidence-led, proportionate piece of policy for Government, why do the Government not now move to include genomics in the definition of critical national infrastructure?
Oliver Dowden
On the point about our approach to China, I gently say to the right hon. Gentleman that he should pick up a copy of the integrated review refresh. At pages 32 and 33, it sets out in explicit terms our approach to China. We are totally clear-eyed about the threat in respect of China: it has been, and remains, the most significant state threat faced by the United Kingdom, but it is also the case that China remains one of the largest economies in the world, so we cannot totally disengage from economic relations with China. The approach of “protect, align and engage” is a sensible and proportionate one that puts us very much at the front of the pack, alongside the United States and Japan, in the toughness and robustness of our approach to China.
David Johnston (Wantage) (Con)
I warmly welcome my right hon. Friend’s precautionary measure today. Does he agree that for members of the public, there is also the question of whether or not they use TikTok? The irony is that in China, it is not allowed to exist in the same format due to the country’s algorithm laws, so members of the public need to think quite carefully about whether or not they want to use TikTok.
Oliver Dowden
My hon. Friend makes an important point. I also say to him that TikTok is not alone in harvesting vast amounts of data, so caution needs to be used in respect of all social media apps and other apps that harvest very large amounts of data. Many people do not realise quite how much data is being harvested—contacts, geolocation and so on. In respect of TikTok, there is of course an additional risk, given the ultimate ownership in China and China’s national security laws. It is due to a combination of both those factors that we believe, on a risk-based approach, that it is not appropriate to have it on Government devices, but we are not advising people against using it in a personal capacity, subject to the caution that should always be used in respect of social media. I believe that is an appropriate balance for us to take.
Andrew Western (Stretford and Urmston) (Lab)
I align myself with the comments of the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith), in that these changes are broadly welcome as a set of measures, but are perhaps limited and should go further on the use of personal devices by Ministers. To that end, can the Minister tell us whether the Secretary of State for Energy Security and Net Zero will be leading by example and doing us all a favour by deleting his TikTok account?
Oliver Dowden
Perhaps the Secretary of State is more au fait with social media than me, but I am confident that he will adhere to the guidance that he will receive as a Minister and that sensitive Government documents will be dealt with not on his personal device but on his corporate communications devices.
Matt Warman (Boston and Skegness) (Con)
I welcome the continuation of the robust approach that the Minister took with Huawei and its application to TikTok. That is something that we should all welcome. He mentioned Government agencies. Does he agree that some of the most sensitive Government data is held by agencies, arm’s length bodies and, indeed, local government. Does he agree that they should all heed the advice that he has issued today?
Oliver Dowden
The short answer is yes. What falls directly within my purview is Government Departments and arm’s length bodies. I have written to my colleagues in the devolved Administrations and I will be writing to relevant local authorities as well.
Mr Deputy Speaker (Mr Nigel Evans)
I thank the Chancellor of the Duchy of Lancaster for his statement and for responding to questions.
Ways and Means
Budget Resolutions and Economic Situation
(1 year, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Rachel Reeves (Leeds West) (Lab)
The reality of yesterday’s Budget is clear: long-term growth downgraded, household incomes falling, public services on their knees. Families are facing the biggest hit to living standards since records began. The only surprise was a huge handout to the richest 1% of pension savers. Yet again, working people and businesses—the key to our economic success—have been put at the bottom of the pile.
The questions people will be asking themselves after 13 years of Conservative Government are these. Am I and my family better off? Are our school, hospitals and transport systems working any better than 13 years ago? Frankly, is anything in Britain working better today than it did when the Conservatives came into office? The answer to those questions is a resounding no.
Labour believes that the tax burden must be shared fairly. That is why I have announced today that Labour will reverse the changes to tax-free pension allowances. It is the wrong priority, at the wrong time, for the wrong people. Instead, we would create a targeted scheme to encourage doctors to work overtime and not to retire early. That could be done at a fraction of the cost, as the British Medical Association has said.
The Government’s policy to give tax cuts to the wealthiest 1% is unravelling before our eyes. Paul Johnson, the director of the Institute for Fiscal Studies, says that even on the “optimistic” Office for Budget Responsibility costings, it will cost an eye-watering £100,000 per job retained. The Resolution Foundation said:
“The beneficiaries from these reforms stand to gain large amounts, and they are heavily concentrated among the very rich”.
It added that
“this giveaway could lead to inheritance tax ‘abuse’”.
Pensions expert John Ralfe has said that
“this is not about supporting a hard-pressed NHS, it is really a tax giveaway...for the very highest earners.”
Labour recognises the mess that the Government have got into with our NHS workforce planning, and we have called for changes to doctors’ pensions, but we will oppose this untargeted scheme for the wealthiest and we will put this measure to a vote in Parliament next week. I defy Conservative Members to vote in favour of a policy that they know will do absolutely nothing to lift the living standards of their constituents.
Last autumn we saw the Chancellor of the day announce reckless tax cuts to help the richest, too. Why does this keep happening? The reason why the Tories get the wrong answers is that they have the wrong priorities for our country and the wrong analysis of the economy. Wealth does not just trickle down from the top; it comes from the efforts of millions of working people and thousands of businesses. That is Labour’s approach to growth.
Theresa Villiers (Chipping Barnet) (Con)
The right hon. Lady denounces the abolition of the lifetime allowance, but it was actually something that never applied under Labour at all. If Labour is so concerned about its loss, why did it not introduce it in the first place?
Rachel Reeves
Gordon Brown introduced a lifetime allowance for pensions savings, as I am sure the right hon. Lady remembers. However, the point here is about priorities. For all our constituents, there is an average tax increase per household of £650, starting next month with the freezing of the tax thresholds and the increase in council tax. Yet yesterday, the only permanent tax cut provided in the Budget was for people who already have pensions savings of more than £1 million. I just do not believe that that is the priority for our constituents, and I think hon. Members right across the House, if they think about it, know that too.
Mr Deputy Speaker—is that what I call you?
Rachel Reeves
It is wonderful to see you in your place. We were told that this was a “Budget for growth”, but the documents published with this Budget confirm that the UK economy will shrink this year. The Chancellor expects us to cheer at the news that the economy will shrink a little bit less than he previously thought. Is that really what “good” looks like for the British economy?
The Office for Budget Responsibility also confirmed that we will have the weakest growth in the G7 this year and next year, and it saw growth downgraded for each of the last three years of the forecast period. All the while, the UK is the only G7 economy that is still smaller than it was before the global pandemic.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
This Budget will not do a great deal for my Slough constituents who are really struggling to make ends meet and pay their bills, apart from a big tax cut for the very richest in our society. My constituents will have the highest tax burden and the biggest drop in disposable income since the second world war inflicted on them. Does my right hon. Friend agree that this Budget will not actually help to solve the cost of living crisis?
Rachel Reeves
I have spent time in my hon. Friend’s Slough constituency talking to working people and businesses. On the most recent couple of visits there, I do not remember anyone saying, “The big priority for families and businesses in Slough is a tax cut for the 1%.” Instead, they were saying, “Let’s have a targeted scheme for the NHS, as Labour has called for, instead of this blanket approach for the top 1%.”
The Government have, to be fair, given us some growth: growth in stealth taxes, growth in mortgage costs and growth in NHS waiting lists. There is no plan for the future, just a Tory legacy of pain. It will take a Labour Government to spark and sustain growth, lift people’s living standards in every part of the country, meet the challenges of the future and achieve the change that our country desperately needs.
When I meet people in industry, I hear frustration from employers who cannot get and retain the staff that they need. It is a feeling the Tories know all too well, with three Prime Ministers in one year, and the current Chancellor the fourth in that role since just last summer. Yet somehow, it is the same Tory Government. It is a bit like Trigger’s broom in “Only Fools and Horses”, with its 17 new heads and 14 new handles, only much less useful.
After his five months as Chancellor, the right hon. Member for South West Surrey (Jeremy Hunt) might feel that he should qualify for a Conservative party long-service award. In fact, of the past three Chancellors, he is the first to deliver a Budget, although the last Chancellor did last long enough to deliver a mini-Budget that crashed our economy—an extreme experiment in ultra-Tory ideology, using Britain’s economy and people’s livelihoods as their laboratory. It must never happen again.
Alex Cunningham (Stockton North) (Lab)
Our country has some amazing assets and amazing opportunities to invest in the green industries of the future, but we see a lacklustre plan from the Tory Government to exploit them. Does my right hon. Friend agree that this Government of gimmicks have all but given up on leading the way and creating jobs and opportunities as we decarbonise our economy and, in reality, want to import everything from abroad? Surely it is time that they nicked our plan.
Rachel Reeves
I know that in my hon. Friend’s constituency, there are huge opportunities for the jobs and industries of the future—for example, in carbon capture and storage and in green hydrogen.
I will not be churlish: I must admit that there were some good ideas in the Budget yesterday—the ones that my colleagues and I have announced in the last few months, which we are happy to support. There was a fairer deal for people on prepayment meters who are paying a premium—we called for this last August. There was also preventing a fuel duty increase, a plan to help the over-50s back into work and better childcare provision for working parents. They were all called for by Labour and are now backed by the Tories. The truth is, however, that after 13 years of Tory Government, people will rightly ask, “Is that it? Is that really all they think it takes to reverse 13 years of low growth, falling living standards and crumbling public services?”
Of course, we welcome the freeze in energy prices—after all, we proposed it—but politics is about priorities. Labour first called for a windfall tax to help people with their bills 14 months ago. We were clear that keeping energy prices down was our top priority, and that it was wrong for oil and gas giants to profit from the windfalls of war at everyone else’s expense. Yet again, however, the Chancellor chose yesterday to leave billions of pounds of windfall profits on the table, which could be supporting families and businesses during this cost of living crisis. It is a question of who pays, and the Government are turning to the public and saying, “You.”
There seems to be a disconnect between what I heard from the Chancellor yesterday and the experiences of my constituents and many people across the country. The Tories claim that their plan is working, but the Resolution Foundation says that the typical household will be £1,100 worse off as a result of the Government’s policies over the period of just this Parliament. Is that really what success looks like to them?
The reality is that people are still weighed down by a prolonged cost of living crisis that is taking its toll. Debt advice organisations have faced a tidal wave of demand from people, but incredibly, the jobs of thousands of debt advisers are at risk. Let me be clear: more people are struggling not because they have forgotten how to budget, but because Tory Budgets are simply not working for them.
One of the biggest costs people face is their monthly mortgage or rent. The Chancellor said yesterday that the impact of the mini-Budget had disappeared—seriously? He should tell that to the family facing a £2,000 hike in their mortgage payment, as confirmed by the Office for Budget Responsibility yesterday. That means less money to spend on the local high street, meals out with the family or an annual holiday. That is the lasting damage that the Conservatives have done to the living standards of working people. The last thing that the country needed in the middle of a cost of living crisis was a Tory mortgage penalty.
Despite all the damage that the Tories have done, I am optimistic about the future for our country. I have had the privilege of seeing great innovation across Britain, from the development of battery operated trains at Hitachi in County Durham to hydrogen-powered engines at JCB in Staffordshire and pioneering research at Rolls-Royce into carbon neutral aviation. I know the potential that we have as a country. That is what Labour’s green prosperity plan is all about. It is a plan to decarbonise our economy, drive down bills and let British businesses and workers compete in the global race for the jobs and industries of the future.
Iain Stewart (Milton Keynes South) (Con)
The right hon. Lady rightly points to the great innovation, research and development that is happening in British companies. Does she not agree that the measures that the Chancellor announced to help to discount research and development will be a major boost to such industries?
Rachel Reeves
The problem is that last autumn, the Chancellor announced a scrapping of the R&D schemes, but then brought back something this week that we are supposed to cheer about. The plan that Labour has set out will rely on Government and business working and investing together.
As President Biden’s Inflation Reduction Act galvanises green energy in the United States and Governments from Europe to Asia and Australia respond, it is not enough here in Britain to cling to old ideas and old methods while other countries steal ahead in the global race. Our growth plans will be alongside a modern industrial strategy, reform of business rates, changes to the apprenticeship levy and measures to fix the broken Brexit deal in order to increase the order books for British industry. There is so much more that the Government could be doing to boost growth, create good jobs and get Britain’s economy firing on all cylinders, but I heard so little of that in the Chancellor’s Budget yesterday.
The verdict is in. The Federation of Small Businesses says that the Budget leaves “many feeling short-changed” and that
“the Government’s lack of support for small firms in critical areas is glaring.”
It says that
“trickledown economics here simply does not work.”
The British Chambers of Commerce highlights that, yet again, the Government
“failed to reform business rates”,
and the Society of Motor Manufacturers and Traders says:
“There is little that enables the UK to compete with massive packages of support to power a green transition that are available elsewhere.”
The Institute for Fiscal Studies describes capital expensing as “temporary tweaks”, concluding that:
“There’s no stability, no certainty, and no sense of a wider plan.”
As for working people, the TUC points out that:
“Real wages will not return to 2008 levels until 2026”
and that
“workers across the economy will have looked at this Budget and thought ‘was that it?’”.
This is a Government who are struggling to paper over the cracks after their 13 years of neglect and shoddy workmanship. The roof is leaking, the windows are rotten and the foundations are suffering from subsidence. The Tories are totally incapable of building the country and economy that we need.
Alex Cunningham
I am grateful to my right hon. Friend for giving way a second time, even though she would rather not. I wonder whether she has seen the comments from the Federation of Small Businesses, which said that, on investment in the labour market, the measures that small businesses were looking for are missing, and that the measures are well wide of the mark and irrelevant to the 5.5 million-strong small businesses in our communities.
Rachel Reeves
Small businesses are the backbone of our economy, and the words from the Federation of Small Businesses should have a chilling effect on those on the Government Front Bench.
Beyond the economy, growth rates and living standards, if we want any further evidence of the Government’s failure, just look at our public services. Public services play a crucial role in achieving a strong economy and a good society. They adapted during the pandemic and were critical to our response in the fight against covid, with people taking personal risks to keep others safe and supported. Thirteen years of Conservative Government has weakened our public services and devalued the people working in them. Labour would make choices in the national interest.
Yet again, the Budget failed to abolish non-dom tax status. As we know, non-doms have no bigger champion than in Downing Street, but Labour believes that those who make Britain their home should pay their taxes here. The non-dom rules are costing us £3 billion every year. Ending that tax exemption could fund the biggest expansion of the NHS workforce in a generation.
It is not just our NHS that has suffered. We have lost all kinds of community assets over the last 13 years, from libraries to Sure Start centres and youth clubs. Let us take one example: since 2010, 382 swimming pools have closed in England under the Tories. Yesterday, the Chancellor announced a £63 million package to keep the remaining ones open, but, at the same time, the Prime Minister has upgraded the local electricity network to heat his own swimming pool. I wonder whether he will be inviting the local kids who have lost their swimming pools to come and use his facilities.
This Government have no plan to clean up the mess they have made over 13 years. Each and every time they promise to solve a problem, they fail and the country pays the price. We need a Budget for growth, yet growth has been downgraded. We needed to raise living standards, yet household incomes are falling at their fastest rate since records began. We needed a proper windfall tax on the energy giants, but instead they continue to enjoy the windfalls of war. We needed a Budget for home ownership, yet mortgage costs have risen because of the Tories’ kamikaze mini-Budget last year. We needed a Budget with a plan to invest in our NHS workforce, but the Prime Minister and Chancellor chose to defend the non-doms instead.
The Tories have had their chance and they have blown it; they are out of ideas and they are out of time. We need a general election and a Labour Government to give our country its future back.
The Secretary of State for Work and Pensions (Mel Stride)
This Budget and the measures it sets out for providing additional support and encouragement for millions of people to re-engage with the labour market spoke to the very heart of our Conservative principles of compassion, of incentive, of self-reliance and of collective responsibility. Above all, it spoke to that age- old truth that work matters: that work is the source not just of income or paying the bills, and not just of supporting businesses or growth, but of something arguably greater still—of individual pride, of self-worth, of better health, and of making a fundamental contribution to the whole of society. That is the Conservative way.
Chris Stephens (Glasgow South West) (SNP)
The Secretary of State talks about compassionate Conservatism; does he believe the measures in the Budget will increase or decrease sanctions over the next 12 months?
Mel Stride
Our policy and rules around sanctions have not been changed by the Budget, but it is important that where somebody can work and is offered support to work and decides to take benefits and not engage with the system, sanctions can under certain circumstances be appropriate. That is not to say that sometimes people will not have perfectly reasonable reasons for not engaging with the jobcentre, in which case no sanction will be applied. The hon. Gentleman seems so often to be suggesting that there is no scope or role for sanctions whatsoever within our benefit system, and that is not going to help the very people we are out to support.
This Budget will help break down the barriers stopping people moving into work or progressing within it, and it is most particularly a Budget for those who face the greatest employment challenges. It is a Budget for disabled people and those with health conditions, with new and extended employment support, better integration of work and health services, and, through our health and disability White Paper, the biggest reform to the health and disability benefits system for a decade. It is a Budget for older workers, with the removal of disincentives in the pensions tax system, and with more help to retrain and reskill and more tools to help people plan for the future.
Grahame Morris (Easington) (Lab)
I am fascinated by the Secretary of State’s contribution and the improvements in pensions, particularly for high earners, but did the Chancellor forget to mention the injustice to mineworkers and the opportunity presented to address that historical injustice through a fair share of the Mineworkers’ Pension Scheme to assist some of the people who are existing on meagre and modest pensions?
Mel Stride
I am very happy to engage in detail with the hon. Gentleman on the specific point he raises, but as to the general point of removing the pensions lifetime allowance, Labour has to decide exactly what its policy is. The right hon. Member for Leeds West (Rachel Reeves) tells us this afternoon that she is against the policy, but we know that it will mean that thousands upon thousands of additional highly skilled people working in the national health service will as a consequence stay in the national health service where we need them. The shadow Health Secretary, the hon. Member for Ilford North (Wes Streeting), who is in his place on the Front Bench, made exactly the same point not that long ago—[Interruption] —saying that a failure to act could cost lives. I say to the right hon. Lady: what is it? Political opportunism, or standing shoulder to shoulder with our national health service and the millions of people up and down the country who depend on it?
Rachel Reeves
My hon. Friend the Member for Ilford North (Wes Streeting) called for a targeted scheme for doctors. That would be at a fraction of the cost. Can the right hon. Gentleman tell me how many doctors will benefit from this scheme?
Mel Stride
I have made it very clear that thousands upon thousands will be affected. The right hon. Lady is adopting a completely perverse policy in view of the position taken by the shadow Health Secretary until quite recently, when political opportunism around this Budget reared its head. I say that we should stand up for the national health service and the millions of people who depend on it, and we should do what is right for them. That is the right thing to do.
This is also a Budget for parents, with a multibillion-pound extension to childcare support. I note and appreciate the right hon. Lady’s welcome for those proposals. They formed a major centrepiece of the Budget, and I am pleased that she has personally welcomed them.
Mr Dhesi
I am so glad that the Secretary of State is talking about pension reforms, but the Resolution Foundation noted that the beneficiaries of these reforms will predominantly gain large amounts of money, and they will be concentrated among the very rich. Does he agree with the Resolution Foundation’s conclusion:
“The more you think about this policy, the worse it is”?
Mel Stride
I point the hon. Gentleman to page 9 of the distributional analysis that accompanied the Budget, where he will find that those in the lowest income deciles proportionally benefit the most from the measures in this Budget. It is thoroughly progressive. I urge him to look at page 9 of the distribution report, where he will find his answer.
This is also a Budget for people who are looking for work and want to earn more, with more intensive support through jobcentres to help people to get a job or increase their pay. In total, my Department’s measures in this Budget represent an investment of £3.5 billion to boost workforce participation.
Christian Wakeford (Bury South) (Lab)
To go back to the childcare proposals, they have the potential to be transformative, although the Chancellor did say that they will not fully come into force until 2026. For someone who has a one-year-old or a two-year-old now, their child will be too old to benefit. What is being done to help parents who are struggling right now?
Mel Stride
The answer to the hon. Gentleman’s inquiry is in the early measures, which I was going to come on to. The Chancellor has dealt with the one-month requirement for the up-front payment by making it clear that jobcentres will fund that payment. That will come in in the short term, as will the increase in the cap—the maximum amount that those who claim those benefits can receive.
Before I come on to specific measures in detail, I think it is important to put workplace participation in the wider context of a robust and resilient UK labour market and economy. As confirmed again by Tuesday’s labour market statistics, unemployment is at a near-historic low of 3.7%, payroll employment is at an all-time high and economic inactivity continues its downward trend. However, there are still 1.1 million job vacancies, and we have many people who could work and want to work, but who do not work. This Budget will help to unlock that potential and fill the vacancies. It builds on our key Conservative belief that we should make work pay, and on our sustained efforts to reward and incentivise employment to get more people into work. That is why, as well as keeping unemployment low, I am determined to see participation in the labour market continue to rise and inactivity fall. In doing so, we will see more people fulfil their potential and more employers get the skills they need to support their businesses and ensure the economy grows for the future.
Over the past few months, I and my Ministers have been leading work across Government to look in detail at the issue of participation in the labour market. I have looked carefully at the cohorts that make up the 8.9 million inactive people in the economy and the nature of the barriers these groups face, and I and others have thought innovatively about how we can help many of them into the workforce. That involved examining in detail international comparators, as well as engaging with a wide range of stakeholders and experts, and I thank in particular those who served on my expert panel.
It is clear from this work that concerted action across the board is required, and yet it is important to recognise that the level of economic activity in the UK is lower than in the United States, France and Italy. It is below the EU average and below the average of OECD countries. However, it is equally important to recognise that, whereas for most other comparable countries the increase in inactivity that occurred during the pandemic has since returned broadly to its pre-pandemic level, in the UK it has remained elevated. So this Budget focuses on economic inactivity and on the key groups that I considered in my review: disabled people and those with health conditions, the over-50s, parents and carers, and people looking for work or working a low number of hours.
We know that many disabled people and people with health conditions want to work and benefit from the positive impact on health and wellbeing that employment can bring. We have made good progress, contrary to the remarks of the right hon. Member for Leeds West. There are over 1 million more disabled people in work compared with 2017—a milestone that I am particularly proud of and that we marked last year, having delivered on this commitment five years early. That is a record of which this Government can be proud.
Sir Stephen Timms
I am pleased that the White Paper says the Department will keep a focus on the disability employment gap, which is the really telling indicator. Will the new target that the Secretary of State sets relate to that gap, rather than a rather arbitrary number of increased jobs?
Mel Stride
The right hon. Gentleman will know that hitherto we have indeed focused on a gap. The Department will come forward with something to say on that in the not-too-distant future, and he will have to wait until that point to know the exact kind of target, although I recognise that the current measure has value.
The measures we have set out in the Budget and in our health and disability White Paper will help to remove barriers, so that disabled people have the same opportunity as anybody else to thrive in work. Some 20% of those who have been assessed through the work and capability assessment as having limited capability to work and to look for work say that they want a job at some point in the future, but one of the barriers to work is the health and disability benefits system itself. For too many disabled people, the system feels like it focuses on what they cannot do, rather than what they can do.
Having listened to disabled people, the White Paper that we published at Budget yesterday sets out how we will fundamentally rewire the benefits system, changing it from a system that can often leave people feeling that moving towards work is too risky and that they might not be able to return to benefits if that work does not work out. I want to give people the confidence to try work without the worry that they will not be able to access benefits again promptly if a job does not last. Under our new approach, people will have the confidence that they will receive support for as long as it is needed. Our reforms will also provide additional support to those disabled and long-term sick who request it.
These reforms have been years in the making and follow the Green Paper that we published in July 2021. We have engaged widely on these changes, including with disability charities and disabled people’s organisations, as well as with disabled people themselves who have been through the current process and understand how and why it needs to change. Just as we have taken a measured approach to developing this way forward, so we will operationalise this approach with care.
Chris Stephens
The Secretary of State is being generous in giving way. A number of disabled charities are sceptical about the package that he is putting together because of the severe delays to the Access to Work scheme, which are blocking people from going into employment. How does he plan to tackle that in the coming year?
Mel Stride
As I just suggested, we will take a measured and appropriate approach to the delivery of a fundamental reform of how these benefits will work. It will involve primary legislation, most likely in the next Session next year, and it will be rolled out some time after that. There will be plenty of time to ensure that we have thorough engagement with stakeholders, disabled people and those who represent them, to ensure that we get exactly those matters right.
In addition, our new Work Well partnerships programme —delivered through the health system—will pilot a new model for delivering integrated work and health support in local areas, providing employment-based targeted health support to prevent people from falling out of work or to enable a return to work quickly. For those who need more intensive help, there will be universal support. We will work directly with employers to quickly match people with jobs and provide up to 12 months of personalised place and train support. This approach means that after helping someone into work, we will stay with them to ensure that they remain in employment.
We are also investing to expand the additional one-to-one support that work coaches are already providing to disabled claimants in one third of jobcentres. From the spring, we will start to make this extra support more widely available, so that it is in place across the entire jobcentre network by 2024. We will also work with the occupational health sector and employers to reform the market and improve access to quality occupational health services. That will include testing financial incentive and support models to help small and medium-sized businesses and the self-employed overcome barriers to occupational health services.
Mel Stride
It gives me great pleasure to give way to my illustrious predecessor.
Chloe Smith
My right hon. Friend is very kind. May I say how pleased I am to see this work making progress? Does he agree that all these factors together make for a golden opportunity to encourage employers to rise to the challenge and do more? All the support that he is laying out, and the major reforms that have been put on the table, also represent an opportunity for employers to recognise that they, too, will get support to encourage somebody to start with them, stay with them and succeed in their workplace.
Mel Stride
My right hon. Friend is absolutely right, and I thank her for what she did when she was Secretary of State, and before that as Minister for Disabled People, Health and Work. I am fully aware of the contribution that she made, having spent some months in the Department. She is right that we need to think about not just providing support on what one might say is the supply side, but making sure that employers are in the right place so that the demand is there. We see that across the various cohorts, including with Disability Confident and with those who interface with our 50-plus job champions, to make sure that they engage with more elderly workers in an appropriate way. She is right to raise that point.
There is little doubt that the experience and skills of older workers are a huge asset to our economy, but more than 1 million over-50s have taken early retirement. With them, they taken many skills and much experience from which business could benefit. Let me slay one myth: that older people will never return to work. We know that four in 10 50 to 65-year-olds who have left their jobs since the start of the pandemic would consider returning to work. Last year, we introduced a package of additional support for the over-50s, including DWP’s network of 50-plus champions, which is carrying out outstanding work. My right hon. Friend the Chancellor introduced significant encouragement to the over-50s through the changes he made to the lifetime allowance for pensions yesterday.
We know many people overestimate how far their savings and pensions will go in retirement, so to help more people in their 40s and 50s get a reality check about what retirement decisions mean for their long-term wealth and wellbeing, we are digitising the midlife MOT. This will deliver a fivefold increase in the number universal credit claimants who access the tool each year in jobcentres. We will also work with employers and pension providers to help nudge people to access it.
Gaining new skills and getting the right training and experience are vital to helping people move back into work, and that is why we are significantly expanding the number of placements in the DWP’s sector-based work academy programmes by 40,000 in the next two years, with around £30 million in funding just announced. Our new type of apprenticeship, returnerships, to be introduced by the Department for Education, will bring together the Government’s existing skills programmes, focusing on flexibility and previous experience and speeding up training.
Turning to parents and carers, we know that 1.7 million people say they are economically inactive because they have caring responsibilities. One of the biggest barriers to work is the affordability of childcare. To help parents return to work, the Budget expands the support on offer by providing 30 hours a week of free childcare for 38 weeks a year to eligible working parents of children aged nine months to 3 years. We will also increase support for parents on universal credit by paying the initial childcare costs for parents on universal credit up front, instead of in arrears, which we know creates one of the biggest barriers to moving into work. We are, as I have already stated, increasing the maximum amount that can be claimed.
It is right that people who can work and are available for work are helped to do so wherever possible. That is why I have put a particular focus within the DWP on testing and implementing new and innovative interventions that help unemployed people on universal credit to move into work and to support people who work only a small number of hours to progress. Through our additional jobcentre support pilot, we are rolling out daily work support across 60 jobcentres. That will occur over two weeks at two crucial points in a claimant’s journey when they are most at risk of falling out of the labour market.
We are also increasing the administrative earnings threshold in universal credit to increase conditionality. We are stepping up jobcentre engagement for partners in universal credit households who are not working or who have low earnings. Because this Conservative Government are on the side of young people, we are expanding the DWP youth offer to enable more people on universal credit to see a work coach in a youth hub or to benefit from the expertise of our youth employability coaches.
This Budget, together with our White Paper, will fundamentally change and enhance the effectiveness of the benefits system. It will provide more practical and financial support. It will boost participation in the workforce. It will turbocharge our labour market. It will unleash untapped talent up and down the country. It will pump renewed life into our businesses. It will strengthen our economy, and so strengthen our communities. It will still and will always be there to place an arm around those who need help the most. We on the Government Benches will never forget the power of work to change lives and to give to each and every one of us that vital chance—that gift—that employment brings.
Chris Stephens (Glasgow South West) (SNP)
First, I refer the House to my declaration in the Register of Members’ Financial Interests, as I will be making some remarks about public sector pay.
In this House a couple of years ago, I made a comparison that the Government were rather like those wicked characters the Warleggans in the period drama “Poldark”. I did not quite realise that that was a premonition on my part, because once again we have a Budget that benefits the rich on the backs of the very poor. The real issue here is what the Budget does not say and the huge disappointment it was.
Ministers confirmed this week that they are reneging on the promise given to me three years ago to publish the Department for Work and Pensions review of the factors driving food bank usage. The Chancellor referred repeatedly in his speech to the Prime Minister’s ambitions and objectives. One thing that the Chancellor did not mention was the Prime Minister’s stated wish to eliminate the need for food banks. Why no mention? Why no review? Why no costed plan to deliver on that particular ambition? The most vulnerable yet again are being failed by the Government and by the state. What possible reason or reasons can there be for not publishing what should be vital research to address the very factors that cause too many of our citizens across these islands to turn to food aid provision? Is it because the very factors that do so are the responsibility of the Government?
As we have been reminded by the leader of the Public and Commercial Services Union, of which I am the parliamentary chair, more than 40,000 civil servants—people on the Government’s own payroll—are having to resort to food aid provision. We know that many of those relying on it are people who have received a sanction from the Department for Work and Pensions, but we also know that some who are using it actually work for the Department, and are themselves responsible for and employed in delivering benefits to the poorest. Yet the Budget tells us in no uncertain terms that more people, not fewer, will be sanctioned. It is hard to reach any conclusion other than that the failure by Ministers to publish the Department’s own research on food bank use is due to decisions made by Ministers past and, I regret to say, present.
We had an exchange with the Secretary of State about sanctions, during which he said that there were some circumstances in which they were appropriate. However, we know from the Government’s own figures that the number of sanctions has skyrocketed in the last year. In response to recent written parliamentary questions, the Department has said it “would incur disproportionate cost”—yes, the answer to a written question contains the words “disproportionate cost”; I know that some Members will find that unusual—to find out how many children were living in households where a sanction had been applied, how many people living in sanctioned households were receiving hardship payments, how many people with a sanction had a medical condition, or how many people had been in hospital or attending a medical appointment when they were deemed to have failed to comply and were therefore sanctioned.
Patricia Gibson (North Ayrshire and Arran) (SNP)
My hon. Friend is talking about the impact and the scale of sanctions. Does he agree that the people who are sanctioned are pushed further and further into poverty, which goes against the Government’s own stated objective of getting people into work? The further into poverty people are, the more difficult it is for them to enter the workplace.
Chris Stephens
That is exactly what happens. What is also happening is that people who receive sanctions then miss out on cost of living payments, so they incur not just one punishment but a double punishment—and that, too, is pushing people into poverty.
Mel Stride
I have enormous respect for the hon. Gentleman, as he knows, but I genuinely wish to clarify one point. Is he at least saying that there are some circumstances in which a sanction is appropriate?
Chris Stephens
I will come on to that point, and yes, I will say that; but how can be it be humane to proceed with a ramping up of sanctions without knowing the basic facts, when Members are asking questions about, for example, how many children are living in households where a sanction has been applied? Does the Secretary of State not accept that with more people at risk of being sanctioned, now is the right time to roll out the yellow card benefit warning system for which many of us have been arguing, to ensure that misfortune does not lead to people being left destitute?
There are some things that the Secretary of State could do before sanctions are applied, and I believe that such a warning system is one of them and would help people into work. The Department did consider it, and we thought, when I was a member of the Work and Pensions Committee, that it was heading in that direction, but then it changed course. Perhaps the Secretary of State will want to look at the issue again. I would encourage him to look at the great work done by the Committee in this regard, and particularly at its suggestion that the yellow card system would be appropriate.
The fact remains that the measures in the Budget require those who are struggling on low incomes to jump through extra hoops, such as attending jobcentres even when they are working in what we all agree are vital roles, for example as teaching assistants or care workers. The earnings threshold has more than doubled in the space of just a year. This puts hundreds of thousands more people at risk of benefits sanctions, although we know sanctions do not work ethically, practically or economically. The Chancellor needs to understand that, no matter what he is promising for the future, far too many people are struggling to survive now.
There remains a large degree of scepticism about the employment support package, which the Secretary of State talked about today and the Chancellor referred to yesterday. Some believe that tighter sanctions will likely be a disaster for people on universal credit, and they will not help people into work, as my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) said. The Federation of Small Businesses has said that the proposals to help people with poor health to get back to work are “ill-designed” and poorly thought out, and some “won’t happen for years”. Those with health conditions and disability have been let down by a Government who have ignored employers’ views on what can best help. The FSB continued:
“Small measures on subsidising occupational health are welcome but not the big bang needed.
“Measures on the over 50s are token efforts at best…The principle of what’s announced on childcare is positive—but this Government’s Achilles heel is in delivery”.
So, as the FSB says, we will believe it when we see it.
The Royal National Institute of Blind People has said:
“For those of working age, employment should be a route to coping with rising costs. “
But it remains of the view that urgent action is needed
“to fix the Access to Work scheme—a scheme where, right now, thousands of people are facing severe delays of many months to get the support and equipment they need to do their jobs”.
I hope that the Secretary of State will note its comments, because Access to Work is clearly not helping enough people and the delays are preventing people from getting into work.
Not everyone is convinced that the childcare reforms will help get people into work. Even if the money is there to pay for childcare, there is no workforce—the pay is very bad—to deliver it. The UC changes in the administrative earnings threshold will mean more Department for Work and Pensions staff caught up in in-work conditionality, as well as swathes of extra work for staff in jobcentres. There was no mention in the Budget about whether there are any extra staff to deliver what we believe will be huge amounts of additional work. The Secretary of State is saying that there will be, so while he is answering that question, perhaps he can say what pay rise he is going to give DWP staff as well. They took industrial action yesterday. [Interruption.] I am chair of the Public and Commercial Services Union parliamentary group, but my union is Unison, of which I am a proud member. I think that answers the question from the Exchequer Secretary. I would have thought he would have done his research to have known that. Perhaps there is a very real need for civil service pay to be addressed, and I will come on to that later.
Another issue that has not been tackled is deductions. One measure that would have cost the Government very little but could have resulted in many fewer people needing to use food banks would have been to ease significantly the rate of deductions from UC. Better still would have been to waive deductions resulting from official error, or to introduce a one-off amnesty on deductions. Why no action on that, the single biggest factor affecting people going to food banks? Despite almost half of all households on UC now facing a deduction, during the last six-month period, ending January 2023, just 14 cases were fully waived and a further five were partially waived. So will the Secretary of State revise the guidance to ensure every household subject to a deduction is automatically informed of their right to request a waiver?
On public sector pay, the Budget offered nothing. As the Prime Minister sorts out his swimming pool heating, it is incredible that public swimming pools were the only public services mentioned for support in the Budget speech. Although the pension cap cut might help our NHS to retain doctors, the measure could have been limited to medicine or the NHS, rather than being a lifetime tax cut for the wealthy. The only mention, without actually announcing more money, was that cutting public sector debt would lead to more money for public services. Public sector pay bodies have noted that only a 3.5% pay rise is affordable under current Treasury allocation; as the IFS said, that is a political choice. The TUC has said that the lack of support for public services and for public pay is the “elephant in the room”. The Budget goes nowhere near a high-wage, high-skills economy.
With strikes all over the country, it is striking that the Budget said nothing about them. Public transport, public health and even public sector TV hosts are on strike, but the Government seem to prefer to fight a culture war over Gary Lineker than pay attention to ensuring that our public services have the funds they need.
The Government are again scrambling to fix the economic problems of their own making. Yesterday’s Budget is a huge disappointment to people, businesses and charities left paying for the UK Government’s mistakes. They created a crash a few months ago—there is selective amnesia about that—and they have not yet said sorry for it. There is, however, one thing on which I agree with the Chancellor, who said:
“Independence is always better than dependence.”—[Official Report, 15 March 2023; Vol. 729, c. 844.]
We could not have put that better ourselves.
Several hon. Members rose—
Mr Deputy Speaker (Sir Roger Gale)
Order. I remind hon. Members that, unlike the procedure on Budget day, there will be wind-up speeches today. That means that we shall go into the wind-ups at around 4.30 pm. Given that there are 25 or so Members standing, I am not going to impose a formal time limit, but I urge colleagues to confine their remarks to somewhere in the region of seven minutes. That will not, of course, include the maiden speech that may be made later this afternoon.
Chloe Smith (Norwich North) (Con)
May I—possibly in advance of myself—welcome the hon. Member for West Lancashire (Ashley Dalton) to the House? I worked closely with her predecessor on the British Sign Language Act 2022, and I look forward to her also taking a close interest in related matters.
I support this Budget, because I think that the Government can help British businesses to grow and British people to succeed. The Chancellor is right to try to do both by focusing on employment, because he can help more people into jobs. Three quarters of UK companies struggle with labour shortages, although we are not alone in that internationally. With over 1 million job vacancies, employers have to find talent in new places. They should be open to the nearly 9 million people who have not recently looked for work—people who are, in the jargon, “economically inactive”.
That is more than one in five people of working age. They include people who have retired early, are long-term sick or disabled, or have caring responsibilities. Among those 9 million people, there are 1.7 million who say that they want jobs. If businesses do not match those people with their 1.1 million vacancies, the country is stunted. Too many people are being wrongly written off.
My right hon. Friend the Secretary of State for Work and Pensions is right, then, to look at why fewer Brits are participating in the economy. The Chancellor knows what all our constituents know—namely, that taxes must stretch to pay for every person who is on benefits rather than in work. I think we all also know that immigration is not the solution to businesses’ gaps if billions of pounds are spent in failing to get British workers fit for where their talents can take them. I understand the Government’s acknowledgement in this Budget that the UK labour market can have access to talent from abroad where needed. I see the Migration Advisory Committee’s recommendations to address short-term pressures, but as the MAC does its wider shortage occupation list review, which will conclude this autumn, I urge my right hon. Friend the Work and Pensions Secretary not to waver in putting the health and skills of our own workforce first.
Every unfilled vacancy is a missed chance for a person to gain skills and experience. The cost of having millions of people who are not in work but who could be in work is both billions of pounds and an appalling waste of opportunity. The human price of 2.5 million people out of work with long-term sickness is an even greater tragedy. We should be moving heaven and earth to treat them and help them to be well.
We know that work is good for health, but the NHS does not link up with work. Musculoskeletal problems and mental ill health are two of the most widespread constraints on people’s functional ability, but in many cases they are treatable. I welcome the Budget’s tailored employment support in mental health and MSK health services, as well as the expansion of the well-established and successful individual placement and support scheme. Those measures and a few others will support people with long-term health conditions to access the services they need, effectively manage their conditions and feel supported to return to or reman in employment. I will be particularly interested to see the results of the pilot of the new programme, Work Well.
In the autumn, the Chancellor correctly prescribed:
“The NHS must help people into work.”
It was welcome that he explained yesterday that, to implement this idea successfully, the Department for Work and Pensions and the Department of Health and Social Care will work together. That is vital. When I served as Minister for Disabled People, Health and Work, and later as Secretary of State, we made some progress, but there is much more to do to demand, define and deliver what citizens really need from public support across both health and welfare.
The Budget is sensible in further promoting occupational health; businesses also have to invest more to help people to stay healthy in the workforce, because British firms need a strong workforce of their own and have every interest in retaining brilliant people once they have recruited them.
I wish to touch on the doubters who say that the Budget targets too few people given the gaps in our workforce, the million vacancies out there and the millions of people who could work. To that argument I say that it is not all about what the Government can do; it is about employers and society as well. The Chancellor is right to pull the levers that he has, but he does not have all the levers. Businesses must plan and invest in both skills and health to get the workforce that they need.
Society must recognise the urgent imperatives of inclusion. If our buildings, high streets and transport networks are not physically open to people with disabilities, and the boulevards of our culture contain blocks as well, some people simply cannot take part. I argue for universal design—for inclusive design from the outset—for tangible and intangible things throughout our society, because it allows everyone to take part from the start. That is the right thing to do and, what’s more, it is the smart thing to do for businesses as well.
Across Government, business and society, now is the time for high ambitions. That is one reason why I welcome the bold reforms to welfare that are set out in the “Transforming Support” White Paper. The other reason that I welcome that publication is that I wrote most of it. I hope it remains a great read.
Work will not be right for all, but it is wrong that too many people are written off from even trying a job. Everyone should have the same opportunity for a fulfilling working life, regardless of whether they have a disability or health condition. Many disabled people say they would like to work, with the right support, and thousands had their say as part of the process to put the White Paper’s ideas together. We focused, therefore, on stepping up employment support; improving trust and transparency in the system overall; and reforming the system for the future so that it focuses on what people can do rather than what they cannot.
People need to have the confidence that they will have the support they require for as long as it is needed, without the worry of losing out if they try work. We should not encourage people to “pass a test” by proving how ill they are; we should not sustain a distortion and disincentive in the welfare system that stops people from trying work if that is suitable for them.
Hand in hand with reform goes more support, so the new universal support scheme will be welcomed. I hope that the Chancellor and my right hon. Friend the Secretary of State have heard the cross-party determination— I add my own voice to it—that access to work should keep pace. We have seen strong progress with more disabled people being in work, and we should build on this momentum by setting a new disability employment goal and capitalising on employers’ willingness and need to find new talent.
I also wish to reflect on the other employment measures that the Chancellor announced yesterday. He is right to take an approach that spans all the elements of the problem of economic inactivity—or, in other words, do things for all the people who want to work and whose talents are wanted—so we should welcome the childcare measures, the measures for the over-50s, the focus on flexible working and more. We should also look around the globe: we could learn from Sweden and from Japan’s ageing society; on ill health and disability, we could look to Australia; and on making sure that the workplace and everything related to it is open to all, Canada’s Accessible Canada Act sets a clear vision of a country with no disabling barriers by 2040.
We need a range of solutions, because people’s positions, problems, motivations and incentives vary. But make no mistake: we face an urgent imperative. We need to take steps now, because the goals of growing the economy and halving inflation are important ones. Continued labour shortages block growth and bring inflation. The Prime Minister is morally right to cut NHS backlogs anyway, but he must also do so with this urgent need in mind: to get British people and the British economy back on their feet together.
The Prime Minister will also need to demand delivery across all of government to deliver such a big and important goal. I would like to see continued accountability, under one Secretary of State, for the labour market and all the levers that the Government hold to help people to start, stay and succeed in work. This should include the wide-ranging work of the Minister for Disabled People, Health and Work and the ministerial disability champions who need to drive transformation across all of government—national and local—on behalf of disabled people who should not have to battle bureaucracy daily.
Together, Government and employers can bridge the gap in our labour market. Without the action outlined in this Budget, the gap will get even bigger, which would be a tragedy for millions of Britons. With the action in this Budget and the progress on which it builds—of which I am proud to be a part—we can help more British people to succeed. Everybody’s talents should be included in growing our economy.
Ellie Reeves (Lewisham West and Penge) (Lab)
Today, I want to ask a simple question: exactly who does our economy work for? If the past 13 years are anything to go by, it is certainly not ordinary working people. We are seeing: wages flatlining; inflation soaring; mortgages rising; a generation forced to pay extortionate rents because buying a property is a forgotten dream; public services rolled back; and schools, hospitals and local authorities with slashed resources, but with demand through the roof. This is the Tory’s record after 13 years in power. What do they have to say? “Can’t pay your rising bills, then get a better paid job, take on more hours, cut your consumption.” In so many cases, this is not just out of touch, but insulting. It is insulting to the teacher in my constituency who has been living in temporary accommodation. She cannot afford private rent let alone get on the property ladder, so, for the past four years, where has she and her two children been living? She has been living in one room in a dilapidated hostel. Should she get a better job? It is insulting to the care worker who is already working 14-hour shifts and barely able to afford food and other essentials after paying her bills. Should she take on more hours? It is insulting to the family of the elderly lady who passed away this winter because she could not afford to heat her home. She could not even follow the advice to cut her consumption because she could not afford heating in the first place.
My constituents are paying the price of this Government’s failure to get the economy working for them. Instead, what have they received from this Government? They have received: a mini-budget that crashed our economy, pushing pension funds to the brink; dither and delay in taking on the oil and gas giants as they made their eye-watering windfall profits; and the highest tax burden in 70 years because the Government failed to unleash the sustained growth of which our country is capable. Indeed, we are the only G7 country with a smaller economy now than before the pandemic. But what would you expect when the Tories have spent more time trying to hold their party together than making any effort to hold our country together?
There is another way, a different approach that can fix our economy. Labour would give our country certainty, attracting foreign investment and getting our economy moving again. We would invest in the industries of the future, creating high-paid, skilled jobs, ensuring that we are a world leader in clean energy. We would make our tax system fairer, working in the interests of ordinary working people.
Instead, what did we get from this Government in yesterday’s Budget? A £1 billion handout for the richest 1% and their pension pots. Labour would scrap the non-dom status, end tax breaks for private schools and private equity bosses and reverse the changes to the tax-free pension allowance, using the money to give our schools and hospitals the resources they need for more doctors, teachers and nurses.
I started by asking who our economy worked for. The sad truth is that it works for far too few of us: not the elderly couple using food banks who are now having to consider giving up their pets to keep up with rising prices and higher bills; not the mother and her three children with respiratory issues living in a small, damp and mould-infested home who are now facing homelessness because their landlord is putting up the rent; and not the mother with terminal cancer, a priority patient, who collapsed on the floor unable to move, waiting more than four hours for an ambulance while her partner and young daughter watched and waited. Our country can no longer afford the Tories. It is time for a Government who understand what ordinary working people are going through, who make the tax system fairer, who ensure access to decent housing, and who deliver strong public services. All of that is possible, but only when there is a Labour Government.
George Eustice (Camborne and Redruth) (Con)
I give my advance apologies to the Minister and to Opposition Front Benchers for the fact that I will not be able to stay for the wind-ups due to a family commitment.
I believe there is much to welcome in this Budget. In particular, the availability of capital allowances will be very important for our manufacturing sector. I believe that manufacturing in this country has been undervalued for far too long. Allowing full offsetting of capital investment is going to be particularly important to those manufacturers, who in turn have a crucial role to play in the levelling-up agenda, since they are the ones out there in the country who will offer the high-paid jobs and do the research and development. But today, I want to focus on a different matter, which is the Government’s announcement on childcare. It is undoubtedly the case that this announcement will be welcomed by some, but for me it is only half a policy, because as the Chancellor said yesterday, its aim is to help those who want to return to work to do so. The operative words there are “those who want to”.
The Chancellor cited a poll that showed that 50% of mothers would return to work if they could afford it. A couple of things come out of that: first, half of mothers do not want to return to work, even if they could afford to. We should support them too, and we should value that choice. Secondly, if we did a different poll of mothers who had returned to work and put their children in childcare, and asked them a different, converse question—“Would you choose to spend more time with your child in those precious first few years if you could afford to?”—I think a very large number of those mothers would say yes. If we went further still and did a poll of mothers who now have teenage children, and asked them whether they regret not being able to spend more time with their children when they were under the age of five, in those precious pre-school years, I think many of them would say that they regretted not being able to do so, and often would have done if they were able to afford to.
The truth is that many mothers—many parents—return to work because they cannot afford not to, because there is a relentless cultural pressure that suggests that they must, and because they have concerns about losing their footing on the career ladder. It is a sorry state of affairs that our society does not value motherhood more than it does, and that the term “stay-at-home mother” is today almost a derogatory one. I also believe that the Treasury economists have got their numbers wrong on this. At the heart of the problem is the fundamental flaw in the way that GDP is measured. Let me give an illustrative example of two mothers with young children who are neighbours, if each of those mothers chooses to stay at home to look after their toddler, they are deemed economically inactive. However, if those same two mothers were to come out of their front door in the morning, swap toddlers and look after one another’s children for the day, and invoice one another at the end of the day, they would suddenly become economically active. The economists in the Treasury have something they can measure: something they can express in GDP, something they can value in the only way they know how to value things, which is money that can be measured. But has the economy actually grown as a result, or have we simply captured the social capital that is inherent in motherhood, monetised it, and forced it into a box where it can be measured? If we step back and look at what we have actually done in such a scenario, we can see that all we have really done is needlessly separate two mothers from their children for no better reason than to accommodate an inadequate economists’ formula. Current Government policy, one-sided as it is, is carrying on in that way. I think it is doubtful that it will create the growth that the Treasury hopes for, but what it will definitely do is enable Treasury bean counters to double-count the economic activity of two mothers looking after their children.
At the heart of this is something we have always known, particularly on the Government Benches, which is that GDP is not an accurate measure of the wealth of a nation. The Conservative party has always recognised that. Indeed, when David Cameron became Prime Minister in 2010, he said that
“it’s time we focused not just on GDP but on GWB—general wellbeing.”
He went on:
“Wellbeing can’t be measured by money or traded in markets. It’s about...above all, the strength of our relationships.”
Behind that central Conservative belief were a string of creative policies. Chief among them was the idea of a transferable tax allowance to support families, so that a partner who chose to stay at home and care for their child could have their tax allowance transferred to the working member of the household, and they could afford to have one of the parents stay at home and look after the child. I think it is an absolute tragedy that David Cameron never got to introduce that policy, because the family and a belief in the family was probably what defined him more than anything else. I do not know why he did not do it—I suspect he was ground down by bean counters in the Treasury—but my challenge to the Government today is to pick up the baton. They should reject the shallow and inaccurate mentality of economists, recognise the value of the family, recognise that GDP is not the only measure of a nation’s wealth, and bring forward proposals for a transferable tax allowance.
If a transferable tax allowance is deemed unattractive, the Government should look at what other countries have done. I understand that in France there is a slightly different system, in which tax allowances are linked to the number of children in a household. It achieves the same objective in a more targeted way, and perhaps we could consider pursuing that.
I know there is an obsession in the Treasury that taxation should be done on an individual basis, but that is entirely inconsistent with the approach we take to the benefit system, in which benefits are allocated on a household and family basis. The Treasury needs to make up its mind about whether it believes that benefits or tax should be done individually, or on a family or household basis, but it makes no sense whatsoever to have two different systems.
During the pandemic and during lockdown, I think some people reappraised their work-life balance, and perhaps some of the economic inactivity we obsess about today is because some people decided they wanted to spend a bit more time with their family. The Government could recognise and understand that, and try to accommodate it, rather than dishing up a menu of rhetoric around boot camps, productivity and so forth.
I hope the Government will pick up some of the proposals to recognise the family through the tax system. The Conservative party has been asking the Government to do this and, in particular, I pay tribute to my hon. Friend the Member for Penistone and Stocksbridge (Miriam Cates) for her groundbreaking work in this area. I urge Ministers to recognise that the failure to recognise the family in this way in the Budget must be corrected at the earliest opportunity.
Mr Deputy Speaker (Sir Roger Gale)
I call the Chair of the Work and Pensions Committee.
Sir Stephen Timms (East Ham) (Lab)
Thank you, Mr Deputy Speaker, and I apologise for my late arrival in the debate.
It is striking how hard it is for Conservative Chancellors to resist the temptation to hand out big tax cuts to the wealthiest while raising tax for ordinary people. We can sympathise with the Chancellor in that he meets many such people—many people among the 1% wealthiest pension savers in the country—who are very courteous and very nice to him over convivial dinners, and they explain to him their frustrations with the Government’s pensions tax policy. These are good eggs, and who could possibly begrudge them a £1.2 billion tax cut? But the reality is that pension tax relief is already massively skewed in favour of the best-off, and the Chancellor, when times are hard, has decided to give another billion to the wealthiest in pension tax relief.
I do welcome the adoption of the Select Committee recommendations on support in universal credit for the costs of childcare, which was announced yesterday. As the Secretary of State explained, allowing the costs to be paid up front from universal credit and lifting the cap—absurdly, it had not been raised since 2005—will remove very important barriers to work, including a barrier to those who are working part-time from working full-time.
There is much to welcome in the health and disability White Paper, which says that the system will be changed so that it focuses on
“what people can do, rather than what they can’t”.
That is laudable, but precisely the same form of words was used by Alistair Darling to introduce changes to the incapacity benefit system 25 years ago. Whether the detail turns out to be a good thing will depend on the detail, which is largely absent. The Secretary of State spoke about consultation. The Government’s ill-fated disability strategy came to grief in the courts because had not adequately consulted disabled people. We must hope that that lesson has been learned.
Nobody will mourn the work capability assessment, which the White Paper says will be replaced by
“a new personalised health conditionality approach”.
Can Ministers tell us what that means? The White Paper goes on to explain that it
“will provide more personalised levels of conditionality and employment support”,
but I am afraid that leaves us none the wiser. The problem is that, despite being years late, much of the vital detailed work does not seem to have been done yet.
I welcome some of the specific proposals to reform PIP—for example, I am pleased that the call to match people’s primary health condition with a specialist assessor will at least be tested. Many PIP assessments come up with the wrong answer, as we know, because when people appeal against the determination, the great majority win their appeal—in fact, the proportion who do so has been going up. The White Paper proposes to place more weight on the PIP assessment in future, so it is even more important that we get it right. The only way to do that is to record all the assessments, so that if the decision is subsequently found to be wrong, it is possible to go back, work out why and consider how to avoid the same mistake being made again in future.
The White Paper says that there will be an increase in recording, which is a good thing, but the Select Committee proposed five years ago that all assessments should be recorded, with an opt-out for the claimant if they did not want their assessment to be recorded. In the new contract for assessments to be agreed this year, the Department should instruct providers to record assessments by default with a clear opt-out option. That proposition is supported by all three assessment providers. It will ensure that there is an objective record of the assessment, which will reassure claimants and allow assessment quality to be audited. When recordings are available and the findings of assessments are overturned, the recordings should be checked at least on a sample basis to see whether an erroneous outcome could have been avoided.
I welcome the White Paper’s commitment to test the feasibility of sending a copy of the assessor’s report to claimants automatically before the decision is made, which was also recommended by the Select Committee five years ago. I hope that the feasibility testing will be brief so that that can be introduced across the system soon.
It is disappointing that there is still not yet a target for disability employment in the White Paper. The Government congratulate themselves on achieving the previous very undemanding target early, but I am pleased that the White Paper says:
“Our goal to reduce the disability employment gap remains.”
In the 2015 election campaign, David Cameron announced a target to halve the disability employment gap. Unfortunately, that target was quickly scrapped as soon the general election was out of the way. I hope that a clear target on the disability employment gap will now be adopted.
Much will depend on the support that disabled people receive from work coaches. Polling by the charity Scope found that half of jobseekers with complex disabilities do not feel supported by work coaches. The initial training for work coaches does not seem to cover the barriers to work faced by disabled people, and jobcentres lack the specialist assistive technology that many disabled people need to look for and apply for work.
The White Paper refers to the potential of the UK shared prosperity fund to provide employment support. It is disappointing that there will be, I think, a two-year gap between the European social fund ending and the UK shared prosperity fund being allowed to support employment projects. A witness to the Select Committee yesterday suggested that the flexible support fund might be expanded, at least temporarily, to try to bridge that gap.
That could lead to a large amount of important employment support capacity not being lost, which it will be if the gap is allowed to take effect.
Lastly, I appeal to the Secretary of State to spare us the embarrassment of the Department’s appealing against the ruling this week by the Information Commissioner that the Department’s research on the impact of benefit sanctions must be published. The Department promised to publish it. As was her wont, his predecessor but one, the right hon. Member for Norwich North (Chloe Smith), decided to hide as much as possible if it contained any hint of a question mark about the Department’s policies. I welcome his review of that approach, and I hope he will show with this particular case that things have now changed.
Theresa Villiers (Chipping Barnet) (Con)
The worst health emergency for 100 years and the worst energy price shock for 50 years have done severe damage to our economy in the last few years, but the Budget has demonstrated the positive impact of the difficult decisions taken in the autumn statement to repair the public finances and restore stability after the damage done by global economic turmoil. As we have heard, unemployment is near a 50-year low, productivity is higher now than it was before the pandemic, and the OBR predicts that we will not go into recession, that inflation will fall and that growth is returning. That means we are on track to meet the first three of the Prime Minister’s five priorities, which are to halve inflation, grow the economy, reduce debt, cut NHS waiting times and stop the boats.
At the heart of the Budget and the Government’s wider economic policy is helping people with cost of living pressures. Taken together, the measures in the Budget and those previously announced are worth £94 billion over this year and next—one of the largest support packages in Europe—which is an average of more than £3,300 for every household in the country. In advance of his statement, I asked the Chancellor for the continuation of Government support for energy bills. I also made the case for families struggling with childcare costs, raising the issue alongside others in Parliament just a week or two ago, so I am really pleased with the plan to extend the 30 hours of free childcare for working parents to cover children from the age of nine months to four years. It is also very welcome that the childcare component of universal credit can now be paid up front.
This package is a truly radical set of changes, and investing in early years education and childcare is a sound economic move. Not only will it bring more parents back into the workplace to help address labour shortages; high-quality early years provision can also be an engine of social mobility, helping children to get the best start in life in order to enable them to realise their potential and succeed in their aspirations. The increase in the rates to be paid to childcare settings for delivering the free entitlement is a crucial part of this endeavour. It has been a key ask of the sector, but what is now proposed is still a very big change and implementation will not be easy, so I will be scrutinising progress carefully as a member of both the all-party parliamentary group for nursery schools, nursery and reception classes, and the APPG on childcare and early education.
I welcome the changes to the pension tax rules, which have been pushing experienced GPs and hospital doctors to cut their hours and retire early, just when we need them most. I have raised that problem with successive Health Secretaries and Chancellors of the Exchequer. The lifetime allowance is, I am afraid, a classic example of where taxes get so high that they deter work and depress economic activity. It is not just about the very high taxes paid if a person hits the lifetime allowance limit; it is also about the uncertainty, which means that doctors have cut their hours even if they have not hit the limit, because they fear reaching it. Both are causing problems with the retention of our hard-working doctors, so I believe that the changes announced by the Chancellor yesterday will play an important part in reducing those NHS waiting times in the way that we all want. I hope that it will also mean that my constituents have faster and better access to GP appointments.
Finally, I want to highlight some areas where further action is needed in relation to Budget matters. Implementation of reforms relating to the regulatory climate for artificial intelligence and the approval of medicines, as announced yesterday, are welcome, but I would like to see a more concerted push to improve regulation to make it more targeted and more agile and to ensure that it keeps up with technological change. This area can play a crucial role in raising productivity, boosting growth and making this country the science super-power that the Prime Minister wants it to be. It is also crucial to raising living standards in the long term.
The taskforce on innovation, growth and regulatory reform set out a blueprint for starting this reform process, and I would ask the Minister to report back on progress in implementation of the taskforce’s recommendations. I welcome the indication by the Chancellor that he will come back with a plan for one of TIGRR’s key proposals —to unlock productive investment from pension funds—but we do need to get on with this. The freedom to make our own choices on regulation and design these rules according to our own national interest is a key benefit from Brexit, and we need to grab the opportunity that it presents.
Lastly, I fully back, of course, the caution shown in this Budget on the public finances. Bearing down on inflation and getting debt under control must be our top priority. But as the economic situation, I hope, continues to improve, I would ask my right hon. Friend the Chancellor to strive to find the room for further pay increases for the public sector and, of course, for wider tax reductions in the longer term.
Clive Efford (Eltham) (Lab)
When I looked at the clock as the Chancellor finished speaking yesterday, I was shocked that his speech had been only an hour. The speech was well padded out. I thought at one stage that he was going to tell us how much the Government planned to spend on paper clips in the next year. He started by announcing that we were not going into a recession, expecting praise for not taking us into a recession that the Conservatives had brought us to the brink of in the first place. It was a bit like an arsonist asking to be thanked, having set light to your house, for then ringing the police. Average energy bills have doubled in the past 18 months, the average mortgage is up by £2,000, and household incomes are lower in real terms than 13 years ago. Those are the worst figures since records began.
We have had 13 years of cuts to our public services, leaving them in a parlous state, and we went into covid with record numbers on NHS waiting lists—2.5 million people. We now have an estimated 7 million people waiting for hospital appointments. According to a Nuffield Trust report published last year, our NHS is short of 12,000 doctors and 50,000 nurses and midwives, and we will need over 500,000 more NHS and care workers by 2030. Where was anything in the Budget to deal with that crisis? Oh, we did have one thing; we had a tax cut for the wealthiest 1% to keep doctors in the NHS. Only the Tories could turn a crisis in the NHS into an excuse to cut taxes for the wealthiest 1% in this country.
Someone with a £2 million pension pot will get a tax saving of £275,000. How is that justifiable? Yet next month the tax thresholds will be frozen. For a basic rate taxpayer, that is £500 a year, for a higher rate taxpayer, that is £1,000, but in this Budget it is somehow justifiable to make that tax cut to the richest 1%. It is just not fair. In the past decade, we have seen the Conservatives stand by while a disproportionate share of national income has gone to the wealthiest. The OBR has confirmed that the cost of living crisis means that living standards will fall by 5.7% over the next two years. Average real-terms household incomes are at a 50-year low due to a decade of consistent low growth. The Resolution Foundation’s “Stagnation nation” report, published late last year, shows that in each decade since the 1970s, average household incomes rose by 33% until 2007, but since the Tories took power, weak productivity growth has fed directly into flatlining wages and sluggish income growth, with real wage growth falling below zero in the 2010s.
The Government’s own figures show that incomes have grown by an average of 9% since 2008—0.7% a year—having grown by an average of 2.2% in each of the previous 20 years. Their excuse is to blame everyone else, but everyone else internationally has been through the same shocks as us. How do the Tories explain the fact that average household incomes in the UK are 16% lower than in Germany and 9% lower than in France, having been higher than both in 2007?
Wealth inequality in this country has grown under the Conservatives, and a failure to tax the assets of the super-rich is leading to widening inequality. The more wealth someone accumulates, the less tax they pay. The Government should be looking at how we tax wealth and tackle that growing inequality. Since the banking crash in 2007-08, it has become easier to borrow money, which has meant that the wealthiest people have been able to buy assets, and we do not tax those assets. I would like to see a discussion about a tax on wealth above £10 million. A 1% tax on that wealth would raise £11 billion. I have spoken to many people who are in that tax bracket, and they say that a 1% tax on their wealth at that level would not cause them to take flight and go abroad—they would not notice it. No one is going to up their family and their children’s future because they would pay 1% tax on their wealth above £10 million.
We could equalise capital gains with income tax rates. There is cross-party support for this measure, which could raise £15.2 billion. It is not a radical suggestion, because it is what Nigel Lawson did back in the 1970s. I welcome the fact that the Government are offering tax relief for investment in R&D, because that could reward people who pay their tax in that way.
It is not fair that people who pay rent to somebody who has bought properties pay national insurance contributions on their wages, but the person they pay rent to does not pay national insurance contributions on the income from that rent. We should look at expanding the range of national insurance to make the system fair. The Labour party supports reform of non-dom status, which would raise £3.2 billion.
There is money in the system that we can use to resolve many of the problems we face with the crisis in our public services. It is a travesty that, given the strikes we are facing and the crisis in the national health service, there was nothing about that in the Chancellor’s statement yesterday. It is time for a new form of government. It is time for a Government who will tackle inequality and create a fairer taxation system that will benefit the whole country, not leave people to sink or swim. We need an active Government who will be on people’s side, intervene when necessary and do what is necessary to create a fairer and more equitable society.
Richard Drax (South Dorset) (Con)
I welcome the hon. Member for West Lancashire (Ashley Dalton) to the House, and I refer the House to my entry in the Register of Members’ Financial Interests.
We are the party of low taxes, or we are nothing. It is a core Conservative value that we believe people should keep more of their money. In that regard, I commend the Chancellor for scrapping the pensions allowance. It is rather strange that the Opposition are wailing about it when they themselves wanted to remove it, albeit just for doctors. This reform will not just help doctors, but help to retain headteachers, police chiefs, senior officers in the armed forces, air traffic controllers, prison governors and many others.
However, what concerns me is the tax pressure on those who receive less. We are still facing the highest burden of taxation since the end of the second world war. I fear we are falling into the socialist trap of raising expectations that the Government will provide all the answers; they cannot, and should not try to. The consequence is higher and higher taxes to pay for services such as extra childcare. I entirely endorse the excellent speech by my right hon. Friend the Member for Camborne and Redruth (George Eustice) on the problems that this policy could raise. While welcomed by many, it fails to recognise that if families paid less tax, they would have more disposable income to pay for services such as childcare, rather than relying on the Government. Raising the tax threshold, especially at the higher rate, would help in that regard. The insistence that the Government can spend people’s money better than them is not our philosophy.
I accept in full that we are paying a heavy price for locking the country down during the pandemic, and now dealing with a major war in Europe, but this is not the time for faint hearts and overcaution, especially with a general election looming. For we know—we have just heard—where Labour will take us: myriad new taxes, a rise in existing ones, and a party driven sadly by the few, not the many, and by envy, punishing those who work hard and want to provide for their families. Let us stop reinforcing Labour’s values and start reminding the country of ours.
On that note, despite the many calls for corporation tax not to be raised from 19% to 25%, the increase will go ahead. Despite being mitigated by some capital allowances, it is a regressive and regrettable move. This after the Chancellor pledged to reduce corporation tax to 15% last year when he stood for the leadership of our party—how right he was then. Yesterday’s Budget rightly placed great emphasis on growth, and while I am all for getting people back to work, I am not in support of a tax hike on those who create the jobs in the first place. Beyond that, the increase will be a major and negative factor for companies deciding where and how much to invest. Let us not forget that the corporation tax of our nearest competitor, the Republic of Ireland, is a meagre 12.5%. As my right hon. Friend the Member for Wokingham (John Redwood) said of an earlier Chancellor:
“Lawson brought intellectual self confidence and energy to the task of being Chancellor. He fearlessly slashed income tax and corporation tax rates. Extra revenue poured in as growth improved.”
Surely that is what business needs: a visionary Conservative Government committed to creating an environment that gives wealth creators the incentives to take risk and create the prosperity and jobs that all of us in this House want. Unfortunately, that is not evidenced when we look at the oil and gas industries.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Will the hon. Gentleman give way?
Richard Drax
I will not, because we do not have time and others wish to speak.
Because of pandering to the green lobby and unachievable targets, oil and gas companies face punitive tax rates such as the 50% corporation tax rate and a 35% windfall levy. As the war in Europe has reminded us, energy security is paramount. Over-reliance on supply from overseas has left many countries—not just us—vulnerable to fluctuation in prices and supply. Regrettably, we are a long way from ending our reliance on fossil fuels, so surely it is common sense to encourage investment here at home, not to increase our carbon footprint by importing from abroad.
Before I conclude, I must mention defence. While the extra £11 billion over five years is to be welcomed, it is not nearly enough, with little—if any—of that money going to our conventional forces. This at a time when the world is increasingly unstable. Arbitrary figures for defence spending plucked out of thin air by both sides demean our armed forces and us in the House. In the face of some very real threats, a thorough appreciation needs to be undertaken and the defence budget set accordingly. To be an effective NATO partner, we need the mass to sustain a prolonged and major confrontation. Right now, we do not have it.
I conclude on a point of caution. As I hinted strongly at the start of my speech, this over-reliance on Government to provide the solution to everything must stop. It is simply unsustainable. Our Conservative Government would do well to recall the words of JFK in his inaugural address:
“Ask not what your country can do for you—ask what you can do for your country.”
Ashley Dalton (West Lancashire) (Lab)
Thank you, Mr Speaker, for the opportunity to make my maiden speech in this debate. It is a particular honour to be called to do so by a fellow Lancastrian and my constituency neighbour.
I take my place as my predecessor, Rosie Cooper, leaves frontline politics. A servant to West Lancashire for over 17 years, Rosie conducted herself with the utmost dignity and respect throughout her tenure as a Member of Parliament. Despite facing some of the most heinous and challenging circumstances anyone in this place could face, Rosie displayed great resilience and continued to serve West Lancashire with grace and diligence.
Everyone in this place entered politics to make a difference. As Rosie leaves to take up a new role in the NHS, which I know is so important to her and her politics, she can genuinely say she made a difference. Through the British Sign Language Act 2022, which was brought about by her private Member’s Bill, Rosie secured equitable recognition for people who use BSL as their primary language—a group of people that in the most recent census was 22,000-strong. I know that they and many others are truly thankful for her hard work and unwavering commitment.
You will know, Mr Speaker, that on the way into my constituency you pass a road sign that reads simply “In West Lancashire we’ve got it all”, and it is no exaggeration. With a Roman market town, villages recorded in the Domesday book, the growers and farming communities of the Lancashire plain, and a 1960s new town, West Lancashire truly does have it all.
Look back at the gingerbread women of Ormskirk—women in the 1700s who knew their own worth, and with a recipe so successful it is still used today, took their place in Ormskirk’s economy; and look forward to the innovators and community builders of the future being moulded by the thriving Edge Hill University. West Lancashire’s story is one of making your mark.
For me, West Lancashire’s best asset is its people. The people of West Lancashire represent what it means to be British. They are hard-working, innovative and, most of all, ambitious. But all too often, their ambition is frustrated by a lack of opportunity. I hear stories from my constituents in Skelmersdale—Skem—that they feel trapped and confined by their circumstances. It is a great sadness that for many people in Skelmersdale, their ambition for their children is that they leave Skem—that they get out to get on. Opportunities that exist in Manchester or Liverpool are opportunities that should be accessible to folk in West Lancashire, but they simply are not. West Lancashire is brimming with potential but is literally being left behind.
During the by-election, while I was out campaigning, Sandra stopped me in the street to talk about what is important to her. She probably recognised me from the hundreds of leaflets that she had had through her door. Sandra was really proud of her grown-up children working hard to provide for their own families, but she told me that they were each working two or three jobs and were barely able to just get by. As proud as she is of her children, Sandra told me that getting by should not be this hard. When the best that hard work can deliver is just getting by, something has gone wrong.
Yet, like the gingerbread women of the 1700s, West Lancashire still dares to succeed. There are people like Paula and Maureen, who started the Sewing Rooms in Skelmersdale, a social enterprise to tackle social exclusion and train and employ women in the textiles industry. In the face of a global pandemic, they made masks. When faced with a cost of living crisis, they developed, made, and sold thermal cooking bags that use little to no energy to cook hot food. On the back of that success, they have won the contract to design and make the kit for the Great Britain gymnastics team at the Special Olympics world games in Berlin this year. There are people like 19-year-old Rossi Forrest, who sold me my Christmas tree last year from the new nursery and garden centre in Bickerstaffe that he started from scratch. And people like Jo, who sells pyjamas and underwear on historic Ormskirk market, and whose thermal vests and long johns kept me warm during a long—very long—winter by-election.
Across West Lancashire, people are working hard and daring to succeed. But in the face of a cost of living crisis and a stagnating economy, it is too often an uphill struggle. It should not be this hard. This Budget was an opportunity for the Government to show that they believe in West Lancashire as much as I do. Instead, it is another sticking plaster on 13 years of economic failure, with small businesses and sole traders once again expected to fend for themselves. The people of West Lancashire are ambitious, but their ambition is not being matched by government. While wages are down, mortgage repayments are up. Whilst living standards are down, the tax burden is up. When my constituents need an economy that is moving, we are at a standstill. This is not a Budget for Sandra. It is not a Budget for Paula and Maureen. It is not a Budget for Rossi, and it is not a Budget for Jo, either.
Politics is often spoken about in abstract terms, as though it is something that happens to someone else, somewhere else, separate from our communities. When I stand to speak, 100 years since the first women were elected to this place and nearly 300 years since the gingerbread women of Ormskirk made their mark, I speak with the voices of Sandra, Rossi and Jo, and all the other people of West Lancashire, because the politics in here must meet the ambition of the communities out there. What we choose to do shows where our priorities lie. Our priorities are born out of what we stand for. On the Labour Benches we stand for meeting the ambition of the people of West Lancashire and beyond, not for getting by but for getting on.
Iain Stewart (Milton Keynes South) (Con)
May I start by warmly congratulating the hon. Member for West Lancashire (Ashley Dalton) on a fine maiden speech? Many issues divide us in this House, but one that unites us is the utter apprehension that we feel before making our maiden speech, and the enormous relief we feel afterwards. She did her family and her constituency proud. I echo her comments about her predecessor Rosie Cooper, who I enjoyed working with on many issues. I hope, similarly, to have a collegiate working relationship with her successor. Let me give the hon. Lady a little friendly advice: after a Budget, she should take time to read through the detail of the Red Book, because sometimes we find unpleasant surprises but sometimes we find very welcome announcements. That is what happened to me yesterday afternoon.
As Chair of the Transport Committee, it will probably not surprise colleagues that I will start by talking about transport matters. A very welcome announcement in the Red Book was the Government recommitment to the next stage of East West Rail, which goes through my constituency. When fully opened, it will create a really important rail transport link connecting Oxford, Milton Keynes, Bedford and Cambridge. It is not just a transport link; it will help unlock enormous economic developments in the area and create the jobs of the future in many of the high-value clusters that we have along there. As well as the announcement that details will be coming out soon, there is the additional investment for local authorities to plan for developments around the new stations. That is an important part of putting in new transport infrastructure. It is not just about the line itself, important though that is in aiding modal shift, but how it helps much wider economic growth.
On a local basis, I welcome the excess of £1 million to fix potholes in Milton Keynes—I can tell those on the Front Bench that we sorely need it. Also on the transport front, but looking more widely across the country, it is a positive step that additional powers and funding are going to the mayoral combined authorities to develop integrated transport solutions for those cities and towns across the country. In particular, I welcome the ability to develop cross-modal ticketing options. Access to good transport underpins the economy and people being able to attain new jobs, and I very much welcome those announcements.
Looking longer term at transport, the Budget included some significant measures to help underpin future investment, looking not just at what the Government are spending, but how that can work in tandem with the private sector and institutional investors to help give us the assets we need in the longer term. In particular, there were the measures to extend the remit of the UK Infrastructure Bank.
Many Members have commented on the changes to pension funds. I add this point: the ability of institutional investment funds to help support the development of our infrastructure is an enormous opportunity. On the insurance side, the Association of British Insurers has identified that the post-Solvency II changes could unlock an additional £100 billion of investment for our infra- structure over the next 10 years. Similarly, there is great opportunity with pension funds. Encouraging people to save more into their pension funds does not just help retain people in the workforce; it helps create those institutional funds that can be invested to all our advantage.
The other welcome development that I will touch on is the creation of the new investment zones, which is another step in the right direction along with measures such as freeports, innovation accelerators and the various levelling-up funds. It will help stimulate partnership working between the public sector, the private sector and academic research and development. The principal of Strathclyde University, Sir Jim McDonald, has a great phrase—“the triple helix”—about combining those three and unlocking their potential to develop new technologies and how that then spreads out into the wider economy.
The one bit of advice I give to my hon. and right hon. Friends is that these schemes are great in themselves, but more can be done. When I was a Minister in the Scotland Office, my portfolio of responsibilities included growth deals in Scotland, which have proved to create effective partnership working among the public, private and academic sectors. Some of those deals are coming to their planned end and some of the levelling-up funds will conclude in the next year or two, so there is an opportunity to look at what comes next and to combine these different types of Government investments, institutional investments and working with the private sector to let local areas develop their economies to thrive in the future. I should declare a little interest: I am writing a paper on this for the think-tank Onward. It is still in production, and I doubt it will ever hit the bestseller shelf at Waterstones, but I hope it will contain some useful ideas, and I think it will probably command cross-party support because there is a growing consensus that the right way forward is to unlock and help realise locally generated ambitions. Central Government do not always have the answers; I am not breaching any confidences in saying that, and it applies to Governments of all political stripes.
The steps the Government have taken thus far with the investment zones, accelerators and so forth are good in themselves, but there is an opportunity to blend them so that the whole is greater than the sum of the parts. I look forward to contributing to the debate on that, but this is a Budget to be welcomed for the measures I have outlined and many others as well.
Andrew Western (Stretford and Urmston) (Lab)
I congratulate my hon. Friend the Member for West Lancashire (Ashley Dalton) on her outstanding maiden speech. Having known her before her election to this place, I knew she would quickly make an impact and she certainly did that with her contribution today.
In his Budget speech yesterday, the Chancellor said:
“In November we delivered stability; today it is growth.”—[Official Report, 15 March 2023; Vol. 729, c. 847.]
That is a bold statement, and upon closer inspection one may even say a brazen one: brazen not only because that stability was required because of the Conservative Government’s kamikaze Budget and their crashing of the economy, but more pertinently because on this Chancellor’s watch our economy will not grow, but will shrink, by 0.2% this year. In fact, we only avert technical recession this year because the pain is distributed in such a way that it avoids two successive quarters of output decline—not because this Government have averted economic shrinkage, and not because they have delivered the laser-like focus on growth that our economy needs. Far from it, the evidence tells us that this Government have been asleep at the wheel: while we in the UK see economic contraction this year, every other G7 country is forecast growth. While we in the UK see an economy that is still some 0.8% smaller than before the pandemic, every other G7 economy has grown to be larger than it was before the virus intervened.
Conservative Members tell us to look at the longer-term picture: they say that this was always going to be a difficult year and their action has lessened the blow. That is nonsense, because this claim fails to take into consideration that growth projections for years three to five of the forecast period are revised down, and at the same time our underlying debt is set to increase from 92.4% of GDP this year to 93.7% of GDP next year. This is Tory Britain: they crashed our economy last year, and they have no plan to put it right this year.
But let me turn to what this Budget says about the Conservative approach to basic fairness. The uplift in the annual tax-free allowance on pension contributions, from £40,000 to £60,000, benefits only those whose retirement funds constitute the largest 1% of pension pots in the country. Alongside lifting the lifetime allowance, that amounts to a huge tax break for some of the wealthiest people in the land. That this announcement came on the very same day that the OBR informed us we will have the lowest real living standards since records began speaks volumes about the appalling priorities of this Government.
I have said before in this place that politics is ultimately about choices, and this Tory Government have made the wrong choices yet again. Not once in his speech yesterday did the Chancellor mention the words “fair” or “fairness,” and I cannot say I am surprised. They have form on fairness, and time and again they show us whose side they are really on.
I accept that we need to address the shortage of doctors somehow, particularly as the Government continue to reject Labour’s fully costed proposal to scrap non-dom status and fund the largest workforce expansion in NHS history. So while I welcome the pension changes as they pertain to NHS staff, this should have been a bespoke offer available only to them, and in my view it should initially have been a pilot so that we could assess its future impact. Moreover, although the Government claim to want to help over-50s back to work, their unfair tax break for the wealthiest 1% has created a perverse situation whereby some over-50s may well be able to retire sooner, because their pension pots will have grown large enough for them to do so at a younger age than they had planned. Joined-up government? Don’t make me laugh. We have a Government at sixes and sevens, and a Chancellor without the clarity of purpose that is needed to turn our economy around.
How do we know this? Well, let us recap. The Government want to level up, but we have the lowest investment in the G7. The Prime Minister wants debt to go down, but debt as a share of GDP will be up next year. The Chancellor wants to help with living costs, but we have the worst real living standards since records began. The Health Secretary wants to fix the NHS workforce, but the Prime Minister will not scrap non-dom status to fund it. The Work and Pensions Secretary wants to get over-50s back to work, but the Chancellor has just given a huge tax break to the richest, which means that they may well retire earlier than ever. It is preposterous. You could not make it up.
We have had 13 years of this grotesque contradiction between words and action, this lack of vision, this fundamental mismanagement. The Government have no idea, no clue, and no plan for economic growth. They have crashed our economy, they have undermined our standing in the world, and they have decimated our public services. We are seeing sticking-plaster politics time and again, rather than the long-term solutions that our country needs. Because they are unable or unwilling to unleash the ambition of the British people to realise the fastest growth in the G7, we languish at the bottom of the pile.
The Chancellor said yesterday that this Budget showed that his plan was working, but the reality is that this tired, out-of-touch, failing Government have no credible plan at all. It is time for a change. It is time for a Labour Government. For me, the next general election cannot come soon enough, and given this half-hearted attempt at a Budget for growth, it cannot come soon enough for the Conservative party either.
Peter Gibson (Darlington) (Con)
Let me begin by congratulating the hon. Member for West Lancashire (Ashley Dalton) on her maiden speech, and on her warm tribute to her predecessor.
I welcome this Conservative Budget, and commend the Chancellor for the measures that he has announced. He is delivering on the Government’s priorities: to halve inflation, grow the economy and reduce debt, so that we can create better-paid jobs and opportunities across the United Kingdom. I know that this Budget for growth will guarantee a better future for the people of Darlington, and for people up and down the country.
The focus of today’s debate is employment. At the outset, I want to highlight the fantastic new data which shows that the claimant count in Darlington has decreased by 11.3% in the past year, and is now below the point where it was before the pandemic. This is good news for Darlington, because it means that the Government are helping to get more of my constituents back to work and my plan to deliver more jobs as the MP for Darlington is delivering also. This Conservative Government, working with our Conservative council—led by the fantastic Jonathan Dulston—and the Conservative Tees Valley Mayor, the amazing Ben Houchen, have ensured that Darlington and the wider region are blessed with new opportunities for local people to build their careers in the town where they grew up, championing our ambition to allow people to stay local but go far. Nothing can demonstrate that better than the delivery of the Darlington Northern Economic Campus, thanks to my honourable friend the Prime Minister. With civil service jobs from eight different Government Departments, there are fantastic job opportunities—more and better opportunities than we have ever had before—enabling people to play a real part in shaping the future of our country. Indeed, I regularly look to see which civil service jobs are being advertised. As of yesterday, there were 314 jobs advertised that are potentially based in Darlington. In addition, with 80% of those jobs at the northern economic campus in Darlington going to local people from our region, we are truly empowering our community.
We know that employment is the best route out of poverty and this Budget is delivering on removing barriers to employment that have prevented many of my constituents from continuing their working lives. I warmly welcome the announcement to extend childcare, enabling parents to return to work, and also the further support that we see for disabled people. Abolishing the work capability assessment will ensure that we make the system better for disabled people and that they find the job that is right for them. I know from my own constituency casework that many disabled people want to work and to contribute to society, and these steps will help with that.
I have welcomed the unprecedented investments that this Government have made in the Tees Valley on many occasions in this House, such as the £14.6 million awarded to Darlington-based engine maker Cummins to develop a hydrogen combustion engine. Cummins is a fantastic local employer, and these investments will allow it and other such businesses to continue to deliver high-skilled jobs for local people in cutting-edge green technologies well into the future. With that in mind, the £20 billion investment to develop one of the first carbon capture and storage clusters in the north-east is also hugely welcome, putting us well on the way to making net zero Teesside a reality.
Investment zones are another hugely welcome step. The Tees Valley Combined Authority has been one of the areas identified for this policy, which would see the Tees Valley potentially getting a further £80 million over the next five years. This will be a great boost to our economic growth, bringing in more jobs and more investment. I welcome the measures in this Budget to encourage further investment in the Tees Valley and the continued transformative impact that that will have on the region.
As we are discussing employment, it is important to remember that there are limited levers the state has to control the ability of people to get into work. In my own constituency of Darlington, we have a number of organisations that work with local people to ensure that their potential is not wasted. Let me take the opportunity to praise the work of the Morrison Trust and the Conservative-led Darlington Borough Council’s youth employment initiative, which has done such an amazing job. By recognising individual needs and targeting support, both have been hugely successful in supporting people in Darlington into work—people who had been finding it hard to get a job for a variety of reasons.
I also pay tribute to First Stop, which, through work that I have done with it, has secured £50,000 of funding from the Harrison Centre for Social Mobility. First Stop provides information, advice, guidance and support to people who are experiencing difficulties in their lives that may make them vulnerable to a range of outcomes. In addition to providing one-to-one sessions, it also provides workshops, training and activities, including job clubs each week.
There are a couple of things that I would have liked to have seen in the Budget. First, I would have liked the enhancements that we have seen in the west midlands and Manchester devolved areas to be applied to the Tees Valley—I hope that they will come in due course. I draw the House’s attention to my entry in the Register of Members’ Financial Interests and to my role as co-chair of the all-party parliamentary group on hospice and end of life care, and I would have liked to have seen further specific support for this sector, but I will maintain the pressure on my local integrated care boards to deliver what is needed for our local hospices.
In conclusion this is a Budget for growth. This Conservative Government have set out a plan to meet the real challenges faced by our country, boost economic growth and continue our commitment to our ambitious levelling-up agenda. This Budget is good for the country, good for the Tees Valley and good for the people of Darlington.
Christian Wakeford (Bury South) (Lab)
It is an honour to follow the hon. Member for Darlington (Peter Gibson), although he appears to have listened to a slightly different Budget statement yesterday.
I would like to start by welcoming my hon. Friend the Member for West Lancashire (Ashley Dalton) to her place and congratulate her on her magnificent maiden speech. It is certainly an achievement to not mention any roundabouts whatsoever when talking about West Lancs.
This Budget was a huge opportunity for the Government to make amends for the previous Prime Minister they burdened us with and the kami-Kwasi Budget that they unleashed on the country. But it is an opportunity that the Government missed. This could have been a Budget for workers, but it was not. This could have been a Budget for health, but it was not. This could have been a budget for justice, but it was not. This could have been a Budget for growth, but it really was not. This could also have been a Budget for education, but guess what? It was not.
What we got was a sticking-plaster Budget from a Government on life support. There was nothing for public sector workers, nothing to tackle court backlogs, nothing for dentistry and nothing for health inequalities. Growth has been downgraded and we have the biggest fall in living standards since records began. Is it any wonder that the proud people of this country are living without any hope, wondering how they will get by? They lie awake at night waiting for the next heating bill and are filled with dread as that brown envelope comes through the letterbox. They have no chance to save, their dreams of buying a home are dashed, the fridge grows ever emptier and they have no money to fill it. This is a Budget that lets the people of this country down. Quite frankly, they deserve better.
I will, however, go on record to give credit to the Chancellor for the action on pegging alcohol duty to inflation. Having previously accompanied alcohol-related charities to a meeting with the Exchequer Secretary, I know that that is hugely welcome and I thank him for it. The action taken on prepayment meters will also help many of my constituents. Such actions can and will save lives, and I give credit where it is due on those two matters.
However, among G7 countries we have the lowest rate of business investment and are likely to have the weakest economy and to be the only country with negative growth. The list of self-inflicted problems on the Chancellor’s desk must have been piling up so high that it was possible to see them from Trafalgar Square.
The problem that persists is that of childcare. One third of parents who use formal childcare say that they have to rely on some form of debt just to pay for it. One in four parents also say that childcare costs now account for more than three quarters of their take-home pay. Although action is welcome, without any new investment I am afraid that it is doomed to fail. It does not benefit people who have children now, and there are so many questions about whether it will benefit them at all. Will it cut the cost of childcare? Will it deliver high-quality childcare for every family? Will it deliver the growth that our country needs?
But not to worry, because the Budget had some of the tax cuts for which Government Back Benchers have been begging. To be fair, the Government have borrowed the money—£1 billion, to be precise—from the magic money tree. I am afraid, however, that this is not good news for nurses, junior doctors or people who work in retail, and it is definitely not good news for posties, firefighters, teachers or cleaners. In fact, it is not really good news for anyone other than the Government’s friends in the City, who they seem to care about so much. Yes, abolishing the lifetime allowance and increasing the annual allowance paid into pensions will affect about 1% of people in this country, but they happen to be the wealthiest 1%. That is the Chancellor’s answer to the cost of living crisis—giving more bankers a tax cut.
I heard the Chancellor this morning trot out the line that this is to help doctors, but that gives rise to a question. If this really is about doctors, why not introduce a bespoke scheme similar to that suggested by the shadow Health and Social Care Secretary, my hon. Friend the Member for Ilford North (Wes Streeting)? A conscious and political choice has been made to ignore the people of this country who are struggling to make ends meet, while at the same time giving all higher earners the benefit of a further tax cut.
If the Chancellor wanted to help the NHS, he would have found the money to pay for nurses and junior doctors, and to bring down waiting lists, but they were not mentioned in the Budget statement. Right now, a junior doctor on the lowest band level in Bury earns less per hour than a barista in Pret. They have also experienced a wage decrease of more than 14%, while nurses have experienced a decrease of more than 10%. People in Bury South are waiting on average eight weeks for a mental health appointment, 28 days for a GP appointment and over a year for an operation. That is before we get to the complete impossibility of accessing a dentist. In 2023, this is the Government’s legacy for the NHS, and it is not one that anyone is proud of.
Let me be clear: only a Labour Government will improve the NHS, reform the justice system, raise education standards and provide growth to the country. Only a Labour Government can protect the country from this reckless Conservative party, which is increasingly out of touch and out of ideas, and thankfully, running out of time.
Jackie Doyle-Price (Thurrock) (Con)
It is a pleasure to participate in the debate. I congratulate the hon. Member for West Lancashire (Ashley Dalton). I have to say that I like her style: I like people who can bring subjects to life and talk with real empathy about the experience of their constituents. I look forward to hearing more of her speeches, but I suspect that we will have a few more ding-dongs than the spirit in which I am addressing her now suggests.
That brings me to the speech from my former hon. Friend, the hon. Member for Bury South (Christian Wakeford). He paints a rather Dickensian picture, but that view is not widely shared—certainly not by my constituents, who are not without hope. They recognise that we are going through a challenging period and that it is incumbent on all of us as a nation to put our shoulders to the wheel and get on with it.
The hon. Member for Eltham (Clive Efford), who is no longer in his place, talked about the level of earnings and economic growth today compared with 2007. In 2008, we went through a massive financial crisis that required significant taxpayer intervention, which reminds us that when the taxpayer has to intervene, it does not come for free—there are consequences for the wider economy and everybody in it. Just as having to deal with that financial crisis made us poorer in the long run, so too does fighting a fatal disease and defending freedom against the actions of a dictator.
All those things that we collectively decide to take action on cost the taxpayer—every taxpayer in this nation—and have an impact on our economy, but those are the choices that we make, because they are the responsible and right thing to do. Nothing comes for free; everything has to be paid for by taxpayers. The more tax we take from them, the more we limit their ability to contribute to the economy.
Every Budget is a balance of decisions about how best to support those who need it, of course, and how best to fund our public services, as well as how best to generate the revenue to pay for them. Sometimes, those policies pull in different directions, but we should never forget that all the money that we take from taxpayers is theirs. When we make a change to the pension tax regime, therefore, we are not giving money away to the rich; we are letting them keep more of what they earn, which is the right thing to do. The virtue of that is not only that they keep more of what they earn, but that we incentivise doctors to work for longer and address that capacity within the health service, and we incentivise everyone to work more and contribute to the economic life of the country.
Collectively, we in this place spend an awful lot of time—I say this as somebody who spent their whole career in the public sector, which makes me somewhat unusual on the Conservative Benches—debating public services and how much we should pay public sector workers, because that is what we decide to fund from here. I often think, however, that we take for granted the private sector’s ability to generate the wealth that pays for those services.
That is why yesterday’s Budget was important. Opposition Members can find ways to criticise it, but it focused on the need to tackle inflation, which we all know impoverishes people and kills jobs, so it is right to nip it in the bud. We also know that inflationary pressures are made not here but by global factors, which is why we need to ensure that we are not too short-termist in addressing some of those demands. If we agree to high wage demands for public sector workers, they will fall through to the private sector. Last week, I met a local employer who employs 200 people and, frankly, his business cannot sustain the wage demands he is facing from his employees without making job cuts. That is the reality of the situation. So the more we can do to combat inflation, the more we can restrict the damage it will do to our economy in the long run.
As I said earlier, we really need to champion our private companies and make sure that we are providing the best possible conditions for them to flourish. I want to highlight a few success stories, because I am very proud of the businesses I represent in my constituency, and some of them are great British brands. Not many Members will know that the mayonnaise in their sandwich will have been made in Purfleet in my constituency. If they go to the opera, everything they see on stage will have been made in Thurrock. Every newspaper they buy has come through the port of Tilbury. These are the businesses that really keep our life going. We are looking to the future, too. We have a new investment in Tevva trucks in Tilbury, which is bringing the manufacture of hydrogen-powered trucks to this country.
There is plenty to be hopeful about and plenty to be ambitious about. What we need to do is make sure that we are creating the best possible conditions for our businesses to flourish, to provide high-paid jobs and to generate the wealth of this country. That is what we are going to do on the Government Benches, and everybody will be better off if we succeed.
Kate Osborne (Jarrow) (Lab)
I start by welcoming my hon. Friend the Member for West Lancashire (Ashley Dalton) to her place, and congratulate her on a fabulous maiden speech.
The Government have spent 13 years failing the majority in this country, keeping us in a vicious cycle of economic and political failures. The spring Budget yesterday promised more of the same. With this Budget, the Government have failed my Jarrow constituents. The majority of people in this country know someone who is relying on a food bank or someone who cannot afford to pay their energy bills. The only people who do not seem to know anyone who is struggling are those sitting on the Government Benches. They cannot be listening to their constituents, even though some of them love posing for smiley pictures at food banks. The 40% of civil servants who are using food banks are not smiling. The nurses, firefighters, teachers, care workers and other key workers using food banks are not smiling. I say to the Chancellor yes, they can budget; they are much better at it than him, it seems.
The 700,000 workers who took strike action over pay yesterday are also not smiling. In fact, very few people in the country are smiling. The falls in household disposable incomes this year and next will be the worst in a century. People across the UK are struggling to afford food, rent, heating and childcare. Mortgages are £2,000 a year higher than they were before the Government’s mini-Budget last September. These costs have escalated during the cost of living crisis, but these issues have been ongoing since long before inflation reached its highest point in 40 years because of their failure to govern.
Under this Government, pensioner poverty is up, child poverty is up and fuel poverty is up, and public services such as the NHS, schools, local government and so much more are on their knees. Yet for workers, real wages are down. In fact, one in five pensioners—more than 2 million people—are living in relative poverty in the UK, an increase of more than 200,000 pensioners living in poverty in the last year alone. I have been holding cost of living advice roadshows, and at the event in Boldon in my constituency, my constituent Joan, who is 94 years old, told me that she is struggling and that living now is harder than it was for her family in the 1930s. This Government pretend to be on the side of pensioners, to get their votes, but they fail them again and again. The Chancellor attempted to make a thing of helping pensioners, but the reality is that his spring Budget helps only those who are already well off; pensioners in poverty will receive no help. As the shadow Chancellor said, this is a £1 billion pensions bung for the top 1%.
People reliant on incapacity benefits could lose hundreds of pounds a month as a result of the Chancellor’s reforms to the welfare system; once again, the Conservative party attacks some of the most vulnerable in society. The Chancellor’s delivering for women has been much lauded, because of the provision of childcare, yet this Budget does nothing to tackle the financial discrimination women face on a daily basis, the gender health gap, the pay gap or the cost of living crisis, the burden of which falls in the main on women. As for childcare, the CBI has estimated that extending the free hours scheme to one and two-year-olds would cost £8.9 billion a year, more than double what the Chancellor awarded, so how will nurseries deliver it? Relaxing minimum staff-to-child ratios will not work and, yet again, less affluent parents will be affected the most. It is no wonder that so many people are saying that enough is enough, and that real change is needed. This Government, once again, failed to prioritise the majority or even those who need support the most, instead protecting the wealthiest in society.
In Jarrow, 40% of constituents are unable to afford to turn on the heating. That comes as no surprise, as electricity prices in the UK have risen by 66.7% and gas prices have risen by 129% in the 12 months to January 2023. The so-called “price freeze” does not help the many who are struggling to pay the already high costs. After accounting for Government support, typical household net energy bills will be 17% higher again in 2023-24 than this year. This is just unsustainable; millions more will be driven into fuel poverty.
Small businesses were once again neglected, and the Government’s false rhetoric on levelling up continues. More still goes to London and the south-east than the north will ever see, but I hope the promise for money for South Tyneside is actually delivered. It came as a surprise to the leader of South Tyneside Council, whom I spoke to this morning, that we were mentioned in the Budget; despite our bid being described as a strong bid with a very good-quality delivery plan and costs, it was rejected. The Government refused to provide the scores for the bid, even though the levelling-up Minister said that full feedback would be given. So can today’s Minister confirm whether the Chancellor’s announcement yesterday now means that the bid has been successful after all? Or is this money earmarked for something else? The town centres in Hebburn and Jarrow, and the redevelopment of our cultural centre, Jarrow Hall, is much needed. Will the Chancellor actually deliver this investment now or is this just more empty rhetoric?
In conclusion, as we always see from this Government, in the main the Chancellor’s Budget serves the most wealthy in our society, with £9 billion in tax cuts to corporations and £6 billion in cuts to fuel duty—yet nothing from this Government for our teachers, lecturers, nurses, junior doctors, NHS staff or civil servants. Poverty is a political choice. This spring Budget has proved that the Tories will make that choice over and over, callously disregarding the devastating impact on communities. With this Budget, the Government have once again failed my Jarrow constituents.
Mary Kelly Foy (City of Durham) (Lab)
I congratulate my hon. Friend the Member for West Lancashire (Ashley Dalton) on her wonderful and passionate maiden speech, and welcome her to her place.
The Budget does not even come close to resolving the cost of living crisis faced by so many of my constituents right now. The Chancellor said that Britain will not enter a “technical recession” this year; that is of little comfort to my constituents. For more than 12 years, people in Durham and the north-east have suffered thanks to the austerity politics of the Conservative party. Child poverty is sky high in Durham, food bank use has rocketed, and people across the country face record-breaking waiting times for NHS services.
Not just in my constituency or the north-east but for working-class people across our country, incomes are down, housing costs are up and public services have been trashed. What was the Chancellor’s response to this malaise? “Back to work.” He may as well have said, “On your bike.” There is nothing to sort out the cost of living crisis, nothing to sort out the housing crisis and nothing to sort out the crisis in our public services.
We needed a people’s Budget; instead, we got a bankers’ Budget. We needed to see a pay rise for our workers, who have been forced to strike because of poverty pay, but we did not get one. We needed to see a long-term commitment on the energy price cap, but we did not get one. It is yet another Budget in which the Conservative party has not prioritised working people. In fact, our country is in the midst of the longest pay squeeze for more than 200 years—not that our multi- millionaire Chancellor and Prime Minister would know.
Now, the Chancellor wants to force disabled people back to work with an even stricter sanctions regime. Sanctions are ineffective and harmful and have led to deaths. If only the Government went after the tax evaders who owe us billions with the same obsession.
If the Government had wanted to encourage people back to work, and to stay in work, they could have increased the minimum wage, scrapped fire and rehire and taxed the rich—the sort of policies that would give people dignity in work and get our country out of the rut that the Conservative party has created; the policies that Labour will implement once we are in government. Instead, the Chancellor has given £9 billion in tax cuts to corporations and at least £2 billion in tax cuts for the pensions of the highest earners.
Even the Government’s flagship childcare policy will require working parents to wait for more than two years to see it rolled out. As my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) has pointed out, the cost of childcare does not end when children go to school. Where is the funding for universal breakfast clubs? Where was the announcement for a real green industrial strategy? Where was the funding for our NHS—both for its workforce and for patients? Without proper investment, staff will continue to leave the NHS and health inequalities will worsen.
This has been a dark week in our politics. On Monday, we debated the immoral Illegal Migration Bill—or the anti-refugee Bill, as it should be called. The Bill scapegoats refugees—people fleeing from climate change and from war. Now we have a Budget that fails to resolve the real issues that working people in our country face. Whether it is at home or abroad, the Conservative party does not care for working people or the most vulnerable people. The nasty party is well and truly back, with its divide-and-rule politics.
Ronnie Cowan (Inverclyde) (SNP)
In every community throughout the UK that has a high level of employment, people experience better health, both physical and mental, less crime, better school outcomes and longer life. The result is less strain on the health service and criminal justice system. Admittedly, that is a simplified summary and we can, and no doubt will, debate wages and work conditions—at a time when the strength of the trade unions is being attacked by this Conservative and Unionist Government, it is right that we do so—but I want to focus today on the positives.
I want this Government to help an industry that employs local people and could generate huge profits, pay its tax to the Exchequer and help to offset the environmental damage we are doing to our precious planet. That would be a win-win-win scenario. I was drawn to the Red Book section on green industries, which starts at paragraph 3.83; I wondered whether it was in there, but it was not. To my absolute horror, nuclear energy was. It is almost as if the nuclear industry does not create pollutants. It is almost as if generation after generation will not be left to clear up our mess. No matter what title this Government give it—the latest being “environmentally sustainable”—nuclear is not green.
I was pleased that carbon capture got a shout-out, but that was at the end of the section on green industries investment, so in eager anticipation I read the part in chapter 3 entitled, “Growing the Economy: Creating a culture of Enterprise”. Here we go at last, I thought, but no. What better way is there to grow the economy and help the local community than by creating jobs so that people have a disposable income to spend locally, thereby benefiting the local community and all associated supply chains? All the usual Budget day suspects got a nod, but nothing new—no enterprise. There is nothing that could employ local people and generate huge profits, which would help them to pay their tax to the Exchequer and to offset the environmental damage that we are doing to our precious planet.
I will have to lead the UK Government by the nose, which is a pity, because evidence of the benefits of this industry has been available for centuries. Indeed, it was promoted and even enforced by King Henry VIII in the 16th century. Back then, a quarter of all arable land was dedicated to growing hemp. Before the Government recoil in horror, hemp is not cannabis—don’t come over all unnecessary on me. It is estimated that a medium-sized economically viable establishment would employ 120 people, all paying tax. Hemp production was encouraged in the 16th century in order to manufacture rope and canvas for the King’s Navy, but now we can also make clothing, shoes, biodegradable plastics, insulation panels, food, paper and biofuels. Currently, the Government are spending billions of pounds on retrofitting homes through the ECO4 and ECO+ schemes, but they are using products made from petrochemicals, which release harmful volatile organic compounds emissions into the air of buildings.
Why not encourage local farmers to grow hemp and supply local contractors with carbon-negative natural fibre alternatives at scale? What could be a better use of public money? In fact, there are more than 50,000 known uses for the hemp plant, so finding markets for hemp would not be a problem. It will sell, it will be profitable, and the Government could reap the benefit, but it does not end there. A hectare of hemp absorbs 22 tonnes of atmospheric carbon during its four-month growing cycle. Hemp produces four times the biomass of the same-sized area of forest, making it a far more sustainable source of material. Hemp does not need pesticides, insecticides or even fertiliser to grow in the UK. Hemp has natural antimicrobial properties, so it passively cleans the air in buildings. Hemp has a high capacity for moisture absorption, allowing for a controlled atmosphere within buildings. Hemp construction materials act as a long-term carbon sink.
A £60 million investment would create a facility that is capable of growing 32,000 acres of hemp per year, which would sequester more than 207,000 tonnes of CO2 per annum. That is just the CO2 photosynthesised by hemp in its four-month growing cycle, and does not include the carbon sequestered into the soil or the net effect of replacing high embodied carbon products from international supply chains and their emissions. As a wee bonus, hemp regenerates the soil it grows in, so it would work well in crop rotation. Winter wheat and spring barley yields increase by 16% to 18% when they follow hemp in rotation, and hemp cleans groundwater because it has a deep root and a root mass that absorbs residual pesticides and insecticides from the soil, preventing run-off into streams and rivers and thereby avoiding costly remediation by the water companies to achieve UK drinking water standards.
The barrier to this industry’s raising the funds it requires is simple: licensing. To make the industry a success, the Government need only open their mind to the reality of what hemp is and distribute licences appropriately. The industry will take care of the rest. Hemp is not a plant from the past; it is a plant that can pave the way to a cleaner, greener future, and its benefits are clear for all to see if we are prepared to open our eyes and ears to the possibilities. Finally, if raising tax from it is the trigger that is required, so be it. But we should not wait too long, because the world is switching on to this and we in the UK are being left behind in our nuclear bunkers.
Taiwo Owatemi (Coventry North West) (Lab)
I start by congratulating my hon. Friend the Member for West Lancashire (Ashley Dalton) on her brilliant maiden speech. She has done both her family and her constituents proud, and it is an honour to have her in the House.
Yesterday, I listened carefully to the Chancellor’s Budget. As with every Budget, there were announcements that I welcomed, and some where I thought opportunities were missed and the Government could, and should, have gone further. First, I welcome the Government’s suicide prevention support for those with poor mental health, which is vital for our communities. However, there was no additional funding announced to better support NHS services, so I am concerned that the measures that are needed to prevent people from falling into further mental health difficulties in the first place are missing. Prevention is always better than cure, and I am afraid that this Government do not seem to recognise that.
After years of substandard housing, I also welcome the Government’s additional funding for our veterans. These brave men and women have put their lives on the line to protect us and keep us safe, so the very least that we can do is provide them with good accommodation and a place to call home.
This Budget was a chance for the Government to unlock Britain’s promise and potential, but instead, they decided to continue papering over the cracks of 13 years of economic failure. My constituents in Coventry North West are being failed by a Conservative party unprepared to take the necessary bold steps to boost employment for everyone across the UK—not simply creating more jobs in the capital, but delivering for communities across the country. Coventry has seen a spike in the out-of-work benefit claimant count across all age ranges in the past month, and has an overall unemployment rate that is significantly higher than not only the national average, but the regional trend, making it all too clear that this Government are failing to reach groups in my city who need support. I am talking about the young, without whose economic input any growth remains merely a mirage. Without fundamental reforms to jobcentres, support for community groups and active engagement with employers, the Government look set to waste an entire generation of talent, to the severe detriment of us all.
Earlier this year, the further education college in Coventry was forced to stop offering new apprenticeships. That college told me that it found it almost impossible to recruit staff to teach the courses, and instead was having to rely on agency staff. That is just one instance of a wider trend: the Government talk about breaking down barriers to work, but up and down the country, they are still failing the next generation on getting them the skills needed to prosper in the workplace of the future. That is having a disastrous effect on businesses in Coventry, which are crying out for skilled workers. It is even more heartbreaking when I talk to young people in my constituency: they consistently tell me how desperate they are for training, yet because of long-term underfunding and a failure of leadership, they miss out on those opportunities, and vacancies continue to be at a record high.
The Chancellor should have taken the opportunity of yesterday’s Budget to reassess the apprenticeship levy and its scope. For there to be any substantial increase in employment, the Government should support training costs, shorter apprenticeship courses and a wider range of apprenticeships. Getting people into work as quickly as possible must be a priority. In government, Labour will localise employment support, because we know that people embedded in their communities know what is needed in their areas. That is only right: no longer should politicians and civil servants in Westminster make employment decisions for places they know little about. My constituents must be allowed to control their own future.
The reality is that Britain has been falling behind since 2010. The UK has grown more slowly than its peers. Productivity has grown by a paltry 0.4%—the second slowest rate in the G7—with wages lower now than they were in 2010, and because of this crippling economic mismanagement, the Government have consistently failed to invest in our workforce.
The cost of living crisis is hitting people particularly hard because incomes have been squeezed during the past 13 years of Conservative government. In my constituency, ordinary families, disabled people and pensioners are facing difficult choices. Mums are skipping meals so that their children do not. Families are struggling to buy new school shoes and uniform for their children. Older people are hesitating to put the heating on because they are worried about the costs. That is a damning indictment of this Government’s economic failure.
With men earning £162 more per week and £3 more per hour than the women in my city, helping women get back to work and making sure they are paid their fair share is central to the long-term health of the economy. Currently, one in five women in their 50s is caring for an older, sick or disabled relative, rendering them economically inactive, and yet there has been nothing from the Government to tackle the care crisis that would help my constituents get back to work. Only a Labour Government will do what is necessary: uplift skills across the country, invest in apprenticeships, localise employment support and finally get Britain back to work.
I want to make three points on childcare, which is a major issue affecting families in my constituency. I have gone through the details of the Budget, and it is clear to me that the announcement failed to meet the needs of families in my constituency. First, families need immediate support to meet their childcare needs, not a mere promise that they should hold on until 2026. Secondly, the number of early years settings available is decreasing every year, and some families are having to wait as long as 18 months to secure a place for their child so are unable to fully utilise the support available.
Thirdly, early years centres such as Georgie Porgies Pre-School in my constituency need urgent help to keep their doors open. Many of these centres will want to offer the additional hours that the Chancellor announced but are financially struggling. What they wanted to hear from the Chancellor’s Budget was a plan to update the current childcare operating system, an increase in line with inflation of payments per child, per hour, and a scrapping or a reduction of business rates. None of that was announced yesterday, and yet again, special educational needs and disability schools have been neglected, with no announcement on how we will support settings such as Springfield House in Solihull that provide respite care for families in my constituency. It seems that the Government continue to neglect those with the greatest needs.
Rachel Hopkins (Luton South) (Lab)
The Budget is an opportunity for a Government to demonstrate their priorities, and what we saw yesterday is a Conservative Government content to oversee the managed decline of the economy while dishing out a bung to the richest 1% and their pension pots, at the same time as working people continue to suffer. The Resolution Foundation has stated that 67% of the childcare and pension tax changes will go to the richest half of households. The policies in the Budget do not amass to a plan that commits to the serious long-term ambition that the UK economy needs, with no belief in the potential of the UK and no plan to tackle the declining living standards of my constituents. Quite simply, the House has been presented with a Budget that barely papers over the cracks of 13 years of failure and makes no attempt to tackle the systemic issues damaging our communities.
Despite the Chancellor’s claims yesterday, the Office for Budget Responsibility downgraded the UK’s long-term growth forecast and confirmed that the hit to living standards over the past two years is the largest since comparable records began. The UK is forecast to be the weakest economy in the G7 this year and the only country that will see negative growth, and we know that it is working people who will pay the price under the Conservative Government, with wages lower in real terms now than in 2010. That decline started with the Conservatives and the Liberal Democrats stripping our economy during the coalition years, which paved the way for the difficulties our communities now face.
This Budget represented a huge opportunity to break from 13 years of stagnation and unlock Britain’s potential, but that opportunity was well and truly ignored. The question for me is, where do yesterday’s announcements leave my Luton South constituents? Will they feel better off under this Tory Government in the months and years ahead? The answer is no. The average yearly wage in Luton is around £2,000 below the UK average. Not only does the Budget fail to take meaningful steps to close this gap; it also allows for more and more people to be forced into hardship. As the Resolution Foundation points out, the freeze to income tax thresholds since 2022-23 means that typical households will be £1,100 worse off by 2027-28, seeing their living standards continue to fall.
I know that many Conservative Members will point to employment levels, but they mask the surge in the number of people who are suffering in-work poverty, many of them relying on insecure contracts in the gig economy or multiple low-paid jobs. Low wages mean that people rely on universal credit and housing benefit to just about keep a roof over their heads. That is increasingly not enough, however, because the Government have frozen housing benefit for three years while rents have risen at their fastest rate in 16 years. Prosperous, thriving communities are not built on insecure, low-paid employment. Instead, pursuing decently paid and secure jobs with strong employment rights should be a key part of a Government agenda that prioritises creating a fairer society and a stronger economy.
What is in the Budget for the hard-working people of Luton South? Nothing but a continued squeeze on their living standards. Instead of sticking-plaster politics, we need an aspirational plan for the future. As the UK has the lowest business investment in the G7, the Conservative Government should be committed to working with businesses to encourage investment, not just giving out tax breaks and crossing their fingers. Indeed, the Institute for Fiscal Studies has criticised the Government’s lack of long-term certainty as “ridiculous”, and the Resolution Foundation has said that the measures will not increase business investment.
Small and medium-sized businesses in Luton South that have weathered the turbulence of the pandemic now need backing to return to firing on all cylinders. As the Federation of Small Businesses has said, however, yesterday’s measures are almost as though the Government think the small business community does not exist. The UK will benefit from the creation of good, well-paid, future- proof jobs in our communities only if the Government create the environment for businesses to grow.
With Luton’s historic connection to the automotive sector through the Vauxhall plant, we needed the Budget to include support to tackle the increased costs, and to facilitate the transition to manufacturing electric vehicles, all while rules of origin restrictions quickly approach. But Make UK has said that the Budget
“does little to tackle the real and immediate threat manufacturers face with rocketing energy bills”
and the Society of Motor Manufacturers and Traders has said that it includes
“little…that enables the UK to compete with the massive packages of support to power a green transition that are available elsewhere.”
Just look at Spain. Its Government have announced a huge investment into the electrification of automotive manufacturing. Without Government action, we will fail to meet our climate targets or reap the benefits of delivering net zero. The UK and Luton’s proud traditions of automotive manufacturing, and the supply chains, need backing.
We need to build a better Britain, and it is clear once again that Conservatives are just not up to the job. As I said at the beginning of my speech, a Budget is an opportunity for a Government to demonstrate their priorities, but these Conservative priorities are not on the side of my Luton South constituents. We know that a Labour Budget would be, and it would be underpinned by a focus on delivering the highest sustained growth in the G7, creating good jobs and growing productivity across our country. We are ready to deliver the transformative change that communities such as Luton and the UK deserve.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
I congratulate my hon. Friend the Member for West Lancashire (Ashley Dalton) on her excellent maiden speech in this Budget debate.
How could the Chancellor devise a Budget that was so out of touch with the problems facing our country? In the context of a cost of living crisis that is sweeping our nation, devastating household budgets and squeezing already low wages, the Government have offered very little in this Budget to help ordinary working people. It is clear that the Government are out of touch and out of time.
When I meet my Slough constituents, they are concerned about paying their bills, earning a fair wage, having an affordable roof over their heads and keeping their families safe. In my regular advice surgeries—five a month, including on a Sunday morning—constituents do not come to me asking for less to be done to tackle modern slavery, for the richest to get a tax cut, or for the economy to stagnate. Yet that is exactly what is being delivered by 13 years of Tory government. It is Tory MPs’ priorities over the public’s priorities.
Even when it comes to addressing real issues that matter to those who are struggling, the Chancellor’s announcements were woefully inadequate. On childcare, he has announced measures that will not be fully up and running until after an election, long after the Tories will, I hope, have been booted out of power by the British people. There is no real plan to magic up extra capacity to cater for the additional provision that has been promised. On pensions, their gift to the top 1% prioritises those who need it least. It is a nearly £1 billion giveaway to benefit only a small number of high-earning individuals.
The Government have tried to copy and paste Labour policy on energy bills, but they have implemented too little too late; they are failing our country and all they have managed to come up with is a windfall tax that has more holes in it than a Swiss cheese. At every turn, the Budget creates inequalities and solidifies the failures of the past 13 years. The Government are creating a stagnant economy. There is a chronic lack of ambition among Ministers. It is not just Opposition parties who highlight the continued failures. The Office for Budget Responsibility forecast shows that the UK’s current account deficit will be just above 6% of GDP—the widest gap since the 1940s. According to the CBI, we are investing five times less in green industries than Germany and roughly half what France and the USA invest. The highly respected Institute for Fiscal Studies has heavily criticised the lack of long-term certainty provided in the Budget, calling the lack of strategy “damaging”.
In critical business centres such as Slough, this has a real impact. We are proud to be home to Europe’s largest trading estate in single ownership and some of the country’s most iconic and influential brands, which rely on responsible stewardship of the economy.
We have a potential labour force of 2.6 million people living within an hour’s drive. We have the highest GDP per capita in the country, for a unitary authority. This has all been achieved in spite of the Government, not because of them.
We must truly harness our business power, and ensure that local communities reap the benefits, particularly as we build back from the pandemic, yet businesses are struggling more than ever. This lack of ambition and the Government’s persistent underfunding of vital services has left constituents short-changed, paying for Government incompetence. Under the Tories, UK Government funding for Slough Borough Council has been slashed to less than half of what it was in 2010. It is no wonder that local councils up and down our country are struggling under this Government’s watch. These cuts leave constituents desperate to see investment in tackling issues that they face every single day—crime, NHS waiting lists and housing shortages. Where were the measures to tackle this, when house building has halved in 50 years, forecasts show that mortgage rates will be twice as high for my constituents as they were in 2021 and house prices have risen to eight times an average salary? Those are all problems of the Government’s own making, all being ignored by our Chancellor. It is all slogans and no substance.
My constituents can see right through this facade. People can see the difference when they pay for their weekly shop, try to use cash-strapped public services, or check their bank accounts. They can see who the Government have prioritised in this Budget. There have been endless failures on crime, housing, bills, wages and growing our economy, but there is a better way. Labour will ensure the highest sustained growth in the G7, creating good jobs and boosting productivity in every corner of the UK—all things my constituents rely on for a better quality of life, and something that they so richly deserve.
Grahame Morris (Easington) (Lab)
It is a great honour to follow my hon. Friend the Member for Slough (Mr Dhesi) and his excellent speech. In the time that I have, I wonder if I might focus on one specific issue —council tax and its failings. I was very interested in the contribution of my hon. Friend the Member for Eltham (Clive Efford), when he spoke about the advantages of a wealth tax for those with more than £10 million in assets. It should not be discounted—I think there is a lot of merit in it. My hon. Friend the Member for Leeds East (Richard Burgon) has also advocated such a policy.
We heard a lot from the Chancellor yesterday. There were a lot of Es flying around— [Interruption.] I was paying attention, Madam Deputy Speaker. There are a couple of Es in levelling up, but unfortunately Easington did not get any levelling-up money. That is meant to be the Government’s priority.
It would be worthwhile for the Government to address the fundamental unfairness of council tax. I want to explore why replacing council tax with a proportional property tax should command the support of those on the Opposition and Government Benches. It is advocated by the Fairer Share campaign, which I recommend the Minister and other Members have a look at. Fair taxation is the foundation on which Labour can build a better Britain and help to secure the missions recently set out by the Leader of the Opposition. For the Conservatives, abolishing council tax in favour of a proportional property tax would demonstrate a long-term and systematic commitment to levelling up. It would help to alleviate and mitigate the cost of living crisis and deliver a tax cut—a council tax cut—to more than 75% of households in the country, and 100% of households in Easington.
The problem with council tax is very simple. In the days ahead, the majority of people will receive a council tax bill. At Prime Minister’s questions, a lot of political capital was made about Conservative councils being better than Labour councils, but the truth is that almost all councils, irrespective of their political colour, are facing huge pressures. Most people will face a council tax increase of about 5%. The County Councils Network reported in February that three in four councils will increase council tax by the maximum amount permitted. This is an issue that cuts across all parties. My county council, Durham County Council, is led by a Conservative-led coalition. It faces a £10.2 million deficit, despite raising council tax by the maximum—5%—and proposing cuts of £12.4 million.
The truth is that the system is broken. It is the poorest households that pay more and get less, while councils remain unable to fund vital services. Currently, households are taxed based not on their ability to pay, but on the 1991 valuation of their home and the area in which they live. That means that local authorities must impose tax levels on their residents to cover the costs of essential statutory services such as caring for looked-after children and adult social care regardless of the wealth, or lack of it, in those communities. For that reason, an £8 million townhouse in Westminster bizarrely, or perversely, ends up paying less council tax each year than somebody living in a £150,000 home in my constituency. The most affluent areas have other advantages, with Westminster City Council better placed to raise revenues through business rates, fees and charges such as car parking charges compared to poorer local authorities like mine.
This is the opposite of levelling up. It is widening the economic gap between London and the regions, as well as between the richest and poorest in society. The theme of the Budget yesterday was boosting employment, and the key to that aim is strengthening regional economies to sustain additional employment. A proportional property tax strengthens local economies and supports employment by cutting taxes in the regions by £6.5 billion. A huge annual economic stimulus of £6.5 billion would empower people to participate in their local economy. For the poorest communities such as mine, the average household saving could be as high as £900 a year.
The Government’s refusal to invest in our poorest communities will hold back regeneration, growth and employment. Rather than the Government’s tax and spend investment policy, a proportional property tax is much more efficient at allowing the poorest communities to keep more of their own money to spend and invest in their own local economy as they see fit. That might be a philosophy that the Conservatives could agree with.
The success of the levelling-up fund should be judged on the extent to which it narrows the economic divisions in our country. In fact, those divisions are widening and inequality is growing. The north-east region as a whole received just £108.5 million, compared with £210.5 million and £151.3 million allocated to the south-east and London respectively.
I am disappointed that the Chancellor said nothing in the Budget about the regressive council tax. I am proud that the Durham County Council Labour group is the first in the country to call for the introduction of a proportional property tax to replace the iniquitous council tax. It is a simple and fair tax applied equally, no matter whether someone lives in Peterlee, Pimlico, Belgravia, Blackhall, Horden, Hartlepool or Hounslow. The Government can deliver a tax cut to more than 18 million households, support regional economies and help levelling up. A proportional property tax is a levelling- up tax. I hope that both the Government and the Opposition will support it.
Catherine West (Hornsey and Wood Green) (Lab)
I rise to speak in the context of the devastating news that the tax burden is the highest in 75 years. I will make two points: one on families in my constituency and one on the impact on the high street. We have seen zero improvement and the degradation of public services, as emphasised in the speech by my hon. Friend the Member for Easington (Grahame Morris). Public services have not improved. Local authorities have received a 40% funding cut since 2010, and people are complaining of not being able to see GPs or get basic operations done in the NHS.
Despite a big leg-up for millionaires in yesterday’s Budget, there is precious little for working families. Every day I hear devastating stories from families living in overcrowded council homes, or struggling with a 20% increase in privately rented homes or a major spike in mortgage payments. I welcome the relief on energy bills for another three months and prepayment meter charges being brought in line with direct debit payments. For households experiencing deep poverty, that measure will make a difference.
The plight of local families is being felt on the high street, in the closure of shops, bank branches, pubs, cafes and the post office. We are told in Wood Green that due to the collapse in family budgets, WHSmith is folding, and so is our post office. Lack of money in people’s pockets means devastated high streets. Our high streets needed a rescue package yesterday, but there was precious little on offer for small businesses.
Schools are seeing the impact of energy bills. I was at a meeting recently at Stroud Green Primary School, and many Hornsey schools told me that this year, above any other, they see their budgets collapsing. One big difference to family budgets is the introduction of universal school meals for all primary school children being brought in as a one-off emergency measure this financial year in London. That will have a big impact on food scarcity in the local communities.
The sense of strain has made families feel very isolated and unsupported. I welcome the debate we have had around the mental health of children as a result of some of the announcements in the Budget, yet some of them are coming in far too late; they are being announced now, but are to be introduced only in 2026. That is far too late: we need to see things in this academic year, not be waiting several years.
In a powerful debate in Westminster Hall in the last week we heard the shocking statistic that over 200 school- children are lost to suicide every year. This is the impact of the stress and strain on working families. Even before the pandemic, mental health waiting lists were soaring, and I have heard from many constituents, as we have heard from many Members today, about children waiting months or years for the support they need.
Teachers tell me that they are struggling with the increasing number of children who clearly need specialist support. While my borough is subject to extra help for special educational needs from the Department for Education, this must come in at the same time as improvements to the public sector, because sometimes there are not enough therapists or specialists to assist children with special educational needs. Some families have told me they have had to wait up to 18 months for an assessment of their child’s needs, putting huge strain on schools; they do not have the expertise to provide extra support from their budgets, which of course have not really increased since 2010. The Government’s flagship special educational needs and disabilities review is all words but no action, and while I welcome the announcement on building new schools, when will they open their doors? We need to speed up the delivery of some of the announcements made yesterday.
There is the same problem with the Chancellor’s childcare offer. There is no support for this academic year, and the programme will not come in until 2026. And I think the Chancellor might have stolen an idea from Labour on wraparound care, because I am sure I saw my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) going to breakfast clubs and after-school clubs where they do exist. We know from the Foundation Years Information and Research group that early years funding is needed now, not in two years. I hope the Chancellor understands the desperate urgency of this situation.
Sadly, when it comes to support for families and schools, the Budget is littered with disappointments and delays. I hope the Minister will take back to the Department the urgency of the matter. With the mental health crisis and parents struggling, what we really need is a fresh approach as soon as possible.
Alex Cunningham (Stockton North) (Lab)
While she has gone off for a well-earned cup of tea, I add my tribute to my hon. Friend the Member for West Lancashire (Ashley Dalton). She has good reason to love her constituency, and I am sure that our mutual friend, Claire, from my constituency would also congratulate her today. I also declare my interest as chair of the all-party groups on carbon capture, utilisation and storage and on the chemical industry, because I am going to mention both.
The Government have been keen to talk up the Budget, which the Chancellor claims will sort out the broken economy, an economy wrecked by successive Tory Governments. If they are so confident that this is a Budget that will make a difference to all our people, they should test it by putting it to the country with a general election now. They will not do that, because they know the public can see through the latest round of gimmicks that do very little to help struggling families.
The OBR confirms that the hit to living standards over the past two years is the largest since comparable records began. The UK will be the weakest economy in the G7 this year, and the only country that will see negative growth. Wages are worth less than they were 13 years ago. Yes, we have a short extension to the energy support scheme, but as ever with this Government, the greatest support seems to be funnelled towards the richest 1%; many a CEO and City banker will have been raising a glass of champagne to the Chancellor in the City last night.
I join the Carbon Capture and Storage Association in welcoming the Chancellor’s allocation of up to £20 billion of support for the early development of carbon capture, usage and storage. I just hope it means that the much-promised project for Teesside, which I have been championing for donkey’s years, will at last be confirmed, but we lack detail on what will be happening and where and when. So, we still have a Government-controlled roll-out, rather than unleashing industry as we have seen under the US Inflation Reduction Act 2022.
Ruth Herbert, chief executive of the Carbon Capture and Storage Association, says:
“We look forward to seeing which projects have been chosen to move to construction, the forward timeline for selecting the next CCUS clusters that need to be operational this decade, and a swift passage of the Energy Bill through Parliament, to finalise the regulatory framework for the industry.”
We have had enough anguish over the years on Teesside, as elsewhere, and I know that everyone involved is hoping and praying that this will not be yet another false dawn for carbon capture and storage and something will actually happen. When we look beyond the initial clusters, it is clear that further support will be needed to decarbonise all the UK’s industrial regions.
As a Teessider, I am pleased to see the Chemical Industries Association react positively to the Budget, although it made the point that
“there remain massive and urgent challenges if it is to truly compete on a global stage.”
The association’s chief executive, Steve Elliott, said
“chemical business leaders will feel this is better than first feared, especially with confirmation of full expensing of qualifying capital investment in year one…investment zones…the extension of the climate change agreement scheme”
as well as the support for CCUS. However, he also made the point that
“this still leaves the UK lagging behind some key competitor countries…Companies are already taking those decisions on future investments—especially in the green technology arena—so we would urge the Chancellor to accelerate any UK response to America’s Inflation Reduction Act.”
I join the association in that view.
I welcome the idea of investment zones and will back the provision of one for Teesside, but, as with so many other promises for our area, we are yet to see the previous promises of tens of thousands of jobs fulfilled. There have been a few hundred, but that is a long way from tens of thousands. The CBI has said that the UK is being left behind in the global race for good green jobs: as we have already heard today, it is investing five times less in green industries than Germany, and roughly half what France is investing.
The previous Labour Government gave the green light to 10 new nuclear power station sites, but the Tories have not managed to complete one in the last 13 years, and yesterday’s announcement offered nothing that had not already been announced. While there was some good news for large-scale companies, small businesses were left waiting for news that never came. The Federation of Small Businesses was disappointed with the Budget, saying:
“On investment and labour market—the measures that small businesses were looking for are missing.
Measures announced by the Chancellor are well wide of the mark and irrelevant to the 5.5 million strong small business community. They are caught in between irrelevant tax reductions for big businesses, and just energy support for households…This is a particularly painful set of announcements, considering the sacrifices they made to stay afloat in the face of Covid, rampant inflation and the energy supply shock.
Proposals to help people with poor health back to work are ill-designed and poorly thought out”
—and this is a business organisation—
“and some won’t happen for years. Those with health conditions and disability have been let down by a Government that’s ignored employers’ view on what can best help.”
Health is always a priority for me when it comes to Budget speeches, and yes, in my 13th Budget speech in a row, I plead with the Government to address the health inequalities in my area, to reinstate the plan cancelled 13 years ago, and to build us our new hospital in Stockton. I do not know if it was one of the 40 pledged by the Government, but that pledge is straying further and further from reality, and did not even warrant a mention yesterday.
I will end with a topic of which the Tories seem to have little or no understanding: poverty. Since the Tories came to power, the number of children living in poverty in the Tees Valley has skyrocketed to over 40%, the highest level in the country, and the proportion of children living in absolute poverty continues to rise in every single north-east local authority area. Research by the TUC has revealed that the north-east also has the highest rate of child poverty in key worker families, up by 18,000 in the last two years. The chair of the North East Child Poverty Commission, Anna Turley, said yesterday that the Chancellor showed
“a deeply concerning level of complacency about child poverty, and the scale of the challenge we face both as a country and particularly here in the North East.”
The childcare announcement is significant, and I give it a cautious welcome. I sat on the last Childcare Bill Committee some seven years ago, and warned then that the plans would not fly because of lack of investment. The Minister then said the market would create itself. It did not, and costs remain high and places available restricted. I hope that this time they will get it right. Children and families in my constituency and across the country deserved a Budget that would pull them up out of hardship and allow them to thrive and fulfil their potential, not one that makes the lives of the wealthier even easier. Our Government of gimmicks cannot sort the mess they have created, so it is time to test their plans with the people, as I said at the beginning of my remarks, and call a general election.
Kirsty Blackman (Aberdeen North) (SNP)
I can understand why, when it comes to policies on spending, on tax and on the Budget, we have an ideological divide across this Chamber. I can understand that the Conservatives want to go down a different route to those of us who are left of centre, but I cannot understand the experiential divide that seems to occur. I do not understand how those of us on the Opposition Benches are being approached by constituents who have lost all hope, who have nothing to look forward to and who are looking at their energy bills wondering how they are possibly going to make it through the next few days, let alone through the next few months, yet those on the Government Benches do not seem to be experiencing that. The hon. Member for Thurrock (Jackie Doyle-Price) said that her constituents had not lost all hope. A number of Members seem to be standing up talking about things that do not affect or are not the highest priorities for our constituents.
I have been representing communities and individuals in Aberdeen in an elected role for the past 15 years, and I have never seen such levels of desperation as those we currently face. I have never seen the numbers of people who are contacting our surgery or our office talking about suicide. I have never seen these levels of worry and debt—and I was an MP for Aberdeen when the oil price crashed, when we saw major impacts and job losses in our city.
The fact is that an absolute lack of hope is being offered, and this week’s Budget could have done something to alleviate that. The Government should have gone far further than a freeze on energy prices. They should have been looking at what people’s energy bills were previously and working to reduce them, not simply freezing them. As our leader in Westminster, my hon. Friend the Member for Aberdeen South (Stephen Flynn) said yesterday, the reality for people in Scotland is not that an average household is paying £2,500—in Scotland, it is £3,500. One of the Conservative Members yesterday stood up and talked about the fact that we had had a warm winter. It was -8˚C in Scotland this week in some places. It absolutely has not been a warm winter. People are freezing, unable to afford their energy bills.
If we want to talk about and think about boosting employment, boosting jobs and boosting growth—boosting employment and boosting jobs are two different things—we need to make changes. The UK Government need to make changes in their approach. The first thing they could do, given the amount of in-work poverty, is increase the minimum wage to something that people can actually afford to live on and pay their bills with.
The reality is that that real living wage is going to have to go up, because inflation is going up. We can take the total measure of inflation and look at that, but food prices are going through the roof. The Government and the Bank of England can do what they like to reduce inflation, but no matter by how much mortgages are rising and how much people are squeezed, they will still have to buy pasta, rice and potatoes. They will not be able to stop buying those things. Inflation will continue on the things that matter the most to people, even if we manage to discourage some incredibly rich people from buying yet another fancy sports car—that is brilliant; that will really reduce inflation! That will not reduce the costs for our constituents that are currently spiralling, and it will not reduce the costs where it matters.
We need to see a proper increase in universal credit. We need to see that money that was taken away—the uplift introduced during the pandemic—reinstated. We need to see proper decision making by this Government, not their saying, “Universal credit is broken so we will increase the number of sanctions.” That does not help my constituents who are having to go to food banks or those who are working and having to have their wages topped up by universal credit. It costs the Government money to top up those wages, by the way. We could be in a situation where they increase the national minimum wage to a better level, and then they would get more tax as a result and end up in a situation where fewer people required universal credit. I do not see why that is not a win-win for the UK Government.
To create the jobs and growth that we need to see, one of the biggest things that the UK Government could do is to encourage immigration. Brexit has done what it can to reduce the number of people working in our NHS. People are talking about not being able to get a doctor’s appointment, but that is not because too many people are coming into the country; it is because of the exodus from our NHS as a result of Brexit and the way that the UK Government continue to treat doctors, nurses and anybody who comes here from another country. The Illegal Migration Bill will only add to the hostile environment that has been created.
The changes to post-study work visas will do the same. They create investment in our country, which is wonderful, so reducing them would be a significant problem. We need the Government to rethink immigration. For example, if asylum seekers, many of whom are highly qualified, are escaping desperate circumstances and want to work, were allowed to work, it would help some of our communities where there is a lack of people working.
I am pleased to see the changes that allow NHS doctors to have their pensions, but those changes should have been restricted to NHS workers—not for all doctors in the private sector or people in other roles. All the issues that I have heard from my constituents relate specifically to doctors, and that is the issue that we have raised.
On CCS, I am pleased to hear that something is happening, but the previous version of the Acorn Project was pulled by the Chancellor during a Budget speech 10 years ago. We need investment in the Acorn Project in Peterhead, Aberdeenshire.
Sir Mark Hendrick (Preston) (Lab/Co-op)
I start by apologising for being slightly late for the debate and I appreciate your indulgence, Madam Deputy Speaker, in allowing me to take part. I also extend my congratulations to my hon. Friend the Member for West Lancashire (Ashley Dalton) on an excellent maiden speech. I am sure she will make a major contribution to the House in her time here.
In the short time available, I will focus on energy. In January 2022, the Labour party urged the Government to introduce a windfall tax on oil and gas producers. The Government copied the policy to some extent, although they changed the name to the energy profits levy, and effectively implemented it from May 2020. The tax on what were becoming record profits was limited to 25%, but the tax rate introduced for companies producing renewable energy was set at 45% because of their much larger percentage profits. Although I agree that those profits should be taxed, the large difference between the levy on oil and gas revenues and on renewable energy source revenues makes it seem like the Government are applying higher taxation on companies for their good behaviour.
In the Budget, the Government have provided for a three-month extension of the energy price guarantee, which limits typical bills to £2,500 at a cost of £3 billion. Although that is good for the consumer, it effectively subsidises energy production with taxpayers’ money and it still allows energy companies to retain huge profits. In 2022, Shell reported profits of £32.2 billion—the highest in its 115-year history—and BP made profits of £23 billion in the same year, up from £10.6 billion. Those are grotesque figures that make millionaires and billionaires even richer while my constituents, and those of many other hon. Members, struggle to put food on the table and pay their mortgages, and nurses have to go to food banks to feed their families.
I welcome the commitments in the Budget to renewable energy and to carbon capture and storage. I am glad to hear that Great British Nuclear will be formed immediately with a mandate to run a so-called down-selection process for small modular reactors. The Government will match fund a proportion of private investment, but they have not specified whether the winners will be guaranteed orders or sites. Details of the selection process are expected at the end of March, but no firm date has been given. It has not been specified how many technologies will be chosen, and whether this will be open just to light water designs or to advanced nuclear designs, such as Newcleo’s lead-cooled fast nuclear reactors. Advanced modular reactor technology represents the next step in nuclear technologies beyond recent small modular reactors. These reactors will burn plutonium, which is a waste product, and Newcleo is offering to invest in them from private funding without recourse to public funding. It is a win-win situation for the UK, and I believe Great British Nuclear must take these new advanced reactors seriously.
I would also like to speak about artificial intelligence. On a positive note, as a vice-chair of the all-party parliamentary group on artificial intelligence, I welcome the Government’s announcement of £900 million for a new supercomputer facility to help the UK’s AI industry. AI technology will revolutionise the way we live, work and play. It is vital for the UK’s future that we develop it as much as possible for the benefit of ordinary people, not just to make money for rich corporations at the expense of poor people in this country.
As a final point, I am a little bit bemused that the Government’s Budget did not include help for social enterprises and co-operatives. I know the Government have co-operated on my private Member’s Bill—it is now in the House of Lords—which I welcome, but I had hoped there would be some support for co-operatives and mutuals in this year’s Budget.
Madam Deputy Speaker (Dame Rosie Winterton)
I call the shadow Business Secretary.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
Thank you, Madam Deputy Speaker, for calling me to close the Budget debate this evening. I begin by acknowledging all 28 speeches we have heard today, but I want to pay a particular tribute to my hon. Friend the Member for West Lancashire (Ashley Dalton) for her outstanding maiden speech. I thought she captured the history and pride of her constituents, but also their ambitions and aspirations, in a truly impressive way. I also want to refer to the fact that she is a graduate of the Jo Cox women in leadership scheme. For the shadow Chancellor and me—we were both asked to speak on the day Parliament was recalled following the loss of Jo—to be able to open and close this debate and see a graduate of that scheme take her place and give a maiden speech like that, of such quality, is truly one of the legacies that Jo deserves. I know the whole House will share that sentiment.
As we have heard, this Budget has come at a time of profound importance for the country. Many Members have said that too many of their constituents are not just struggling to afford the little things that make life worth living, but finding it a stretch to afford the basics. We see every public service squeezed to breaking point. Frankly, very little in this country is working as it should. At the same time, there is an urgent need to proceed with net zero, and win the prize of the jobs and industries that will sustain our economy for generations to come. Acknowledging these challenges is not talking Britain down; it is facing reality head-on.
Yet, after looking at those challenges, what was the Chancellor’s big idea yesterday? What was the rabbit out of the hat and the only thing we did not know was coming? It was that huge tax giveaway for thousands of the very highest earners, during a cost of living crisis. I think we have learned something in this debate today, because we have found out that the Government cannot even tell us how many doctors that will benefit. I do not think they are unwilling to tell us; I do not think they know. As my right hon. Friend the Member for East Ham (Sir Stephen Timms) said, they never seem to miss an opportunity to give something away to those at the top.
Most of all, we have had another Conservative Budget and another set of lost opportunities to rise to the challenges we face. Fundamentally, it is a Budget for growth that downgrades growth. Many Members have rightly highlighted that the cost of living crisis is dominating the lives of their constituents and the hard-working people who have seen their wages stall while prices have risen.
Grahame Morris
My hon. Friend is very kind to give way, and he is making an excellent speech, but can I just ask his opinion about left-behind areas? It is all very well for the high earners who are getting advantages with their pension pots, but does he see the benefits, particularly in former mining communities, of implementing the recommendation of the Business, Energy and Industrial Strategy Committee report and returning the investment fund and the full miners’ pension scheme surplus to retired miners and their widows, who are struggling with the cost of living crisis, not least with huge fuel bills?
Jonathan Reynolds
I am grateful to my hon. Friend for his question. He will know that he represents several members of my family, so I have personal knowledge of his constituency, and they think he is a very fine Member of Parliament. Because of my family and my personal heritage of growing up in County Durham and mining communities, I know the issues he talks about, particularly those around profit sharing and the surplus and reserves of the mineworkers’ pension scheme. There is a case to look at there, and I would be more than happy to engage with him on those issues for the benefit of his constituents and those of other Members in the Chamber.
We are seeing people cutting back on all they can, but still being left with too much month at the end of their money. The British public need only ask the following questions. Are they better off after 13 years of this Government? Are they safer? Are the public services they rely on working better than a decade ago? No, no, and no again. At the core of that failure is the hard truth that, over 13 years, the Government have turned the UK into the worst-performing major economy in the world. That failure is at the heart of what is hitting people’s pay packets and public services. As we have heard many times in the debate, the British economy is the only developed economy in the world that has still not recovered to its pre-pandemic size.
Catherine West
My hon. Friend is making an excellent speech. Does he agree that without reforming housing—be it the overly pricey private sector, the lack of social homes or the mortgage crisis created by the last Budget—there can be no real growth?
Jonathan Reynolds
I am grateful to my hon. Friend for raising those points, because housing is another area that we heard very little about in the Budget yesterday. Perhaps that was because of the mortgage premium that many people in this country are paying as a result of the last Conservative mini-Budget, if we are still able to call it that—the impact certainly was not mini. My hon. Friend makes some very good points about what that means for her constituents.
We have seen the lowest business investment of any G7 nation, and wages are at the same level as they were in 2008. I spend pretty much all my time talking to businesses, and I often genuinely find myself thinking, “With all the brilliant things in this country, how have this Government managed to do so badly?” The big story of the Budget is the same as ever: low growth, high taxes and poor public services. To truly realise the ambition of this country, we have to change course from that. Half measures on childcare, which will take years to come to fruition and just pile more costs on to providers and parents, will not cut it. Saying we want to be a science superpower or a leader on clean energy is not the same as delivering the measures to actually do it, and spending millions of pounds on a handful of very wealthy people getting even bigger pensions will not drive the kind of dynamic labour market we need. The big, bold and radical ambition for this country will come only from a Labour Government.
Crucially, the Budget comes at a time when we can no longer put off the major decisions on net zero, because our competitors are pulling ahead. The Inflation Reduction Act in the United States and the Net-Zero Industry Act in the EU have radically affected the relative competitiveness of the UK, which is a point that my hon. Friend the Member for Stockton North (Alex Cunningham) made particularly well. When it comes to climate change and the chance to reindustrialise parts of Britain, we are presented with the fierce urgency of now.
This year, we have already had bad news from Ford, which is cutting jobs in Essex. We have had bad news from British Steel, which is cutting jobs in Scunthorpe. We have had bad news from AstraZeneca, which has chosen Ireland over Cheshire. This is the challenge that I wanted the Budget to rise to, because I want to see the Government put up a fight for Britain. After 13 years, I am sick of austerity, poor public services and stagnation. If, like us, people want hope, optimism and change, it should be clear by now that it will not come from doing more of the same.
We all know that the Government have a poor record on crime, but perhaps even we did not expect them to be so brazen as to commit an act of burglary themselves by taking so many of Labour’s ideas for the Budget. Indeed, we have heard many speeches today extol the benefits of childcare reform, keeping the energy price freeze and ending the injustice of prepayment meters. I say to Ministers that they are very welcome, as we are more than happy to share our ideas with a Government who have seemingly run out of their own. But rather than have the half-fat versions of our plans, why not go the whole way and bring the fundamental change that this country needs with a full Labour Government?
At the top of that list is that Labour believes that this country needs an industrial strategy, one that is not about picking winners; an industrial strategy means having a plan to keep Britain competitive in the global race. This Government have a curious mix of big state, top-down targets and a kind of total libertarianism in how to deliver them. For example, it is Government policy to force residential and commercial property to meet higher standards in just four years’ time or be removed from the market; to decarbonise home heating; and to phase out petrol and diesel vehicle sales in just seven years’ time. But the Government are not on track to meet any of those targets because there is no plan to deliver any of them. Just to retain our existing automotive industry we will need 10 battery gigafactories, but we have one. Germany has 10 times that capacity, and every day we fall further behind, more jobs and industries go elsewhere.
Only private investment and public investment pulling in the same direction can deliver the wall of money we need to renew this country. We accept that we cannot possibly equal the awesome fiscal firepower of the United States, but we can make the UK more competitive, we can target funding where it will make a difference and we can make markets deliver what we need. Let us consider a sector such as steel. We know that we must make the transition to green steel or face the likely end of the UK steel industry. Governments from across the world—Sweden, Austria, Canada, Germany—are partnering with their steel sectors to go green. We know that there is market demand for that here in the UK, but we have not got a Government willing to be the partner that industry needs. So Labour’s industrial strategy will work in partnership with industry to keep Britain competitive, not with random pots of money with no return to the taxpayer or endless changes to the corporation tax and investment regime, but with a long-term plan to make Britain investible again.
Labour also believes in a fundamentally different approach to our economy and our politics. We know what every good business leader knows: sustained growth comes from working people, and they are our biggest asset. So where is the employment Bill the Government pledged? Where is the promise, 12 months on, that there will be no more P&O Ferries ever tolerated again in the UK? Basic rights, such as sick pay, holiday pay and protection against unfair dismissal, should be for everyone. That is why we in the Labour party will always be the party of good work and good wages, and where this Government have failed to act, we will act, with our new deal for working people to do just that.
I did welcome one part of the Budget: the trailblazer announcements on devolution to my area in Greater Manchester and to the west midlands. We believe that the country is too centralised, and too often that leads to poor public services and the inefficient use of public money. But why should only two parts of England get the chance to shake themselves free from the dead hand of this Conservative Government? Why can the remaining 90% of the country not have that option too? That is why we will give every community the power it needs to shape its own destiny.
For all the talk of going for growth, at the core of this Budget is the same old Conservative malaise: the lack of ambition and vision that has turned us back into the sick man of Europe. I have sat through 13 years of Conservative Budgets, and as the years go on their claims get thinner and thinner. Last year, when inflation was rising, it was all down to global forces, but this year when it has peaked and it is set to fall, all of a sudden that is down to Conservative genius. Frankly, the British people are not fooled.
Listening to Government Members today, it seems they want to congratulate themselves on a job well done because a Conservative Chancellor got to his feet and this time has not crashed the markets, because we narrowly and technically avoided a recession, and because the growth forecasts are bad but not quite as bad in the short term as last time. Is that what the Conservatives have come to? Is that the measure of success? Have we set a bar so low that we will trip over it as we leave the Chamber today? People are paying more than £1,000 more on their mortgages right now because of recent Conservative actions. Investment and jobs are leaving our shores because of those actions. Our constituents are stuck on waiting lists because of those actions. The lack of action on tackling that is unforgivable.
We believe that Labour has the ambition to match Britain’s potential. We will take this country from the bottom of the G7 to the top. We will have the highest sustained growth of our competitor countries and deliver the public services that people can rely on. We will deliver more doctors and nurses to get waiting lists down; police officers back on the streets; higher wages and better jobs in industries that people will be proud to work in; and a plan to reindustrialise Britain, to give back our hope and our future. That is why it is clear that only a Labour Chancellor can deliver the change that our country so desperately needs.
The Exchequer Secretary to the Treasury (James Cartlidge)
It is a real pleasure to conclude today’s debate. I am glad that the hon. Member for Stalybridge and Hyde (Jonathan Reynolds) welcomed the measures in relation to the north-west and the Mayor. I join him in congratulating the hon. Member for West Lancashire (Ashley Dalton) on her brilliant maiden speech, which I very much enjoyed. I especially enjoyed hearing about the women of Ormskirk and their famous gingerbread. I understand that King Edward VII is rumoured to have stopped the royal train in Ormskirk to get his supply of gingerbread to take with him to Balmoral. Her speech was delivered with great passion and I was particularly pleased to hear her tribute to her predecessor, with which we all agreed.
Yesterday, the Chancellor delivered a Budget for growth —a Budget that builds on the decisions we took in the autumn to deliver stability and sound money; that provides a blueprint for prosperity that will spur on the economy and make us one of the most prosperous nations in the world; and that spreads opportunity. At the heart of the Budget is the steps we are taking to spread the opportunities of employment, to tackle labour shortage and to tear down the walls that stop people working.
Many Opposition Members said there was nothing in the Budget about public sector workers. I hope they will join me in welcoming the fantastic news we heard, less than an hour ago, that an agreement has been reached that will provide a fair and reasonable pay deal for health workers, from nurses to paramedics and midwives, thereby ending strike action across the NHS.
On the subject of workers in our brilliant NHS, we have seen today the most extraordinary U-turn yet by the Labour party. We should remember that barely six months ago the shadow Secretary of State for Health and Social Care, the hon. Member for Ilford North (Wes Streeting), told us that Labour policy was not to have a specific scheme for the NHS but to abolish the lifetime cap. Let me quote what he said six months ago:
“I’m not pretending that doing away with the cap is a particularly progressive move. But it is one that sees patients seen faster, and will inevitably save lives. I’m just being hard-headed and pragmatic about this.”
We totally agree with him.
Mr Dhesi
Perhaps the Minister would like to retract his statement, because I think he is inadvertently misleading the House. When the shadow Secretary of State said that, he referred specifically to that scheme for doctors, not for everybody. He was not talking about giving the 1% throughout our whole country—the rich—that huge tax cut.
James Cartlidge
The quote says,
“doing away with the cap”.
The removal of the cap is a tax measure that applies to all people who qualify for it. There is a really important point that Opposition Members probably want to listen to: there is a real danger in making up policy as one goes along. To be clear, our tax change will come in immediately, or as soon as we can possibly do it—it will come in on 6 April—but it is our view that a specific scheme for the NHS would take up to a year to put in place. Were we to bring forward an NHS-only scheme, the Department of Health and Social Care would have to consult on that scheme and then respond to the consultation. Only after that could it start to develop the scheme, because it could not predetermine the consultation. After that, the Department would have to transfer eligible people into the scheme. All that assumes that there would not be legal challenges from those who would argue that such a scheme should apply to other key people in the public sector, such as headteachers, senior police officers and senior people in the Ministry of Defence who might think that they too work hard in our public services. The Labour party has made it up as it has gone along. The fact is that Labour has U-turned from a perfectly sensible policy back to being ridden with the politics of envy, which we have heard from every single Opposition Member today.
Turning to some of the speeches, my right hon. Friend the Member for Norwich North (Chloe Smith) made an excellent contribution. She speaks with great expertise and passion on the matter of getting the disabled into work. She made the very important point that that is not just for the Government and that we also need to talk about the role that employers can play. I hope she will be pleased to hear that in the build-up to the Budget I, along with my hon. Friend the Minister for Employment and the small business Minister—my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake)—engaged directly with employer groups and worked with them to come up with some of the Budget’s proposals, particularly the extension of the occupational health subsidy pilot, the returneeship policy and boot camps for over-50s. Those are very positive measures.
The hon. Member for Glasgow South West (Chris Stephens) said that all the measures we have taken are on the backs of the poor, while the hon. Member for Jarrow (Kate Osborne) and other Opposition Members said that we have let down those on the lowest incomes. I remind the House that this year it is possible, for the first time, to earn £1,000 a month without having to pay any income tax or national insurance. We have doubled the personal income tax allowance since 2010, and in the last year we have increased benefits in line with inflation. On energy support, this financial year we have given a £650 cost of living payment to those on benefits, and in the financial year to come it will be £900. Those are not the actions of a Government turning their back on the poor. This is a Government taking difficult decisions to balance the books of this country, but in a compassionate way that helps those who have the least.
Chris Stephens
If the Government are doing so much for the poor, can the Minister tell us why in-work poverty is on the rise and why 40,000 civil servants, who work for this Government, are having to use food banks?
James Cartlidge
The key statistic is that since 2010 we have cut unemployment by 1.2 million. We have near record lows in unemployment and almost record highs in employment. Of course, we want to go further.
I am glad that the Chairman of the Work and Pensions Committee, the right hon. Member for East Ham (Sir Stephen Timms), welcomed some of the Budget’s measures, particularly the important increase in the universal credit childcare cap and aspects of the White Paper. I am sure he is looking forward to engaging in detail with my right hon. Friend the Work and Pensions Secretary, who is sitting next to me.
My right hon. Friend the Member for Chipping Barnet (Theresa Villiers) was absolutely right to say that the Prime Minister has set these targets and that this year we are making fantastic progress on three of them. Inflation is set to more than halve this year. That is not a minor detail. Inflation—driven, after all, by Putin’s invasion of Ukraine—has been the biggest reason why there have been problems with growth in countries all around the world. She also made very important points about the extension of the energy price guarantee. Yes, inflation is falling, but that shows that we continue to take steps to support people with the cost of living. We know that those pressures have not completely gone away. The elevated prices of food and other products in our shops have all come from that surge in energy prices. That is why we have extended the energy price guarantee and continued the freeze on fuel duty and the 5p tax cut on petrol and diesel for motorists.
The hon. Members for Eltham (Clive Efford) and for Easington (Grahame Morris) both put forward some very interesting proposals, which I hope have been noted by shadow Front Benchers, for a range of new wealth taxes to undermine the competitiveness of the UK. If there has been a theme among Opposition Members today, it has been a return to the politics of envy and of undermining aspiration and competitiveness.
My hon. Friend the Member for South Dorset (Richard Drax) made an excellent point. We may exchange views on which taxes we should take action on, but he reminded us of the reason why we have had to take those difficult decisions. It is because of huge external factors that Opposition Members do not like to talk about. They include a pandemic, followed, literally, on 24 February, the day on which the pandemic regulations ceased, by Putin’s invasion of Ukraine. It has been an extraordinarily challenging time, requiring us to put in place £390 billion of additional support. We can debate whether it should have happened, but it did happen and, as my hon. Friend the Member for Thurrock (Jackie Doyle-Price) has said, that has consequences for taxes and we have had to take those difficult decisions.
I also agree with the very important point made by my hon. Friend the Member for South Dorset about energy security. He is absolutely right. We are proud of the huge progress that we have made in reducing our emissions, at a faster rate than any other G7 country. Last year, 40% of our electricity was from renewables. The figure in the United States was just 20%. Yes, we welcome the steps that the US is taking through the Inflation Reduction Act 2022, but no one should be under any illusion that we are not making huge steps forward ourselves. However, we must always remember the role of energy security, which is why my hon. Friend the Member for South Dorset is right that, rather than turning our back on the North sea as others have suggested, we should be maximising the UK’s domestic supplies of energy. That is why I hope that colleagues will welcome the steps that we are taking in respect of small modular reactors. There was also the important announcement, which was welcomed by several Opposition Members, including the hon. Members for Preston (Sir Mark Hendrick) and for Stockton North (Alex Cunningham), of £20 billion investment in carbon capture and storage.
I am delighted that my hon. Friend the Member for Milton Keynes South (Iain Stewart), the Chair of the Transport Committee, welcomed the news on East West Rail, which we have had exchanges on in previous Treasury questions. He is absolutely right about the central role that new infrastructure plays in driving growth and connectivity, and I hope that the announcement brings great benefit to his constituents.
Alex Cunningham
I am grateful to the Minister for acknowledging the support for carbon capture and storage, but this must be the start of the investment. We need another wave of investment followed by another wave after that. Are the Government really committed to it?
James Cartlidge
We have announced £20 billion of funding, which shows the strength of our commitment. We want to decarbonise and continue our rapid progress to net zero, but, along the way, we must maintain energy security, otherwise what have we learned from what has happened in the past 12 months, following the invasion of Ukraine? Our constituents want to know that we will do everything possible to grow the supply of UK domestic energy.
Sir Mark Hendrick
Is the Minister aware of Newcleo, a British company, that will burn waste plutonium in Cumbria without public subsidy or recourse to public funds, but purely with private investment?
James Cartlidge
I am not aware of that specific company but the hon. Gentleman is welcome to write to me. None the less, he is right to talk about the need for private investment.
Another important step that we took in the Budget, which the hon. Member for Inverclyde (Ronnie Cowan) referred to—I am not sure whether he was supportive of it—was changing the taxonomy so that we encourage more private investment into nuclear, which is so important.
James Cartlidge
I apologise, but I cannot give way. I only have two and a half minutes left. The hon. Gentleman made a very entertaining speech and I enjoyed what he said on hemp, and I hope that he writes to the Secretary of State for Environment, Food and Rural Affairs to pursue that.
Yesterday, the Chancellor unveiled the biggest ever employment package. In the knowledge that, following Brexit, we will move from an employment model based on unlimited low-skilled migration to one based on high wages and high skills, we brought forward a set of major reforms to remove barriers to work. We have incredible potential. The World Bank has said that, out of all big European countries, we are the best place in which to do business. In the sectors of the future, we lead the world—whether that is financial services, life sciences, advanced manufacturing, creative industries or tech, but those sectors, and the entire economy, need a pipeline of talent. That is why we are introducing reforms that say to those who are long-term sick or have a disability that we will help you into, and at, work; reforms that ensure that those who can and want to work, do work, because independence is always better than dependence; reforms that help some of the most experienced people back into work; and reforms that mean women are no longer held back by the cost of childcare. With those reforms, we can grow our economy.
Ordered, That the debate be now adjourned.—(Scott Mann.)
Debate to be resumed Monday 20 March.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
On a point of order, Madam Deputy Speaker. You will be aware that, earlier today, the Chancellor of the Duchy of Lancaster came to the House to make a statement on the security of Government devices. Apparently, in the future, Ministers and officials will not be allowed to have TikTok on their Government-provided device. I am sure that much of the support in the Chamber for that came as a result of the presumption that many of us made: that it would mean that we would no longer have to endure the sight of the Secretary of State for Energy Security and Net Zero on this young person’s app. It is now reported, however, that the right hon. Gentleman—who, I understand, wishes to be known as “the wolf of Whitehall” in future—has posted a meme on the app saying, “I’m not leaving.” Madam Deputy Speaker, how do we get some clarity on the Government’s messaging here? Surely a risk is a risk, whether it is on a Minister’s private phone or one provided by the Government?
Madam Deputy Speaker (Dame Rosie Winterton)
I thank the right hon. Gentleman for that point of order. As he says, there was a statement about this issue earlier. I am afraid that it is, in fact, not a matter for the Chair to rule on this particular aspect of TikTok and anybody’s name on it, but the right hon. Gentleman has obviously put his point on the record. I am sure that if Members sitting on the Treasury Bench feel that there is anything they need to feed back to any particular Department, they will do so. I think that we had probably better leave it at that, frankly.
Ed Davey (Kingston and Surbiton) (LD)
On a point of order, Madam Deputy Speaker. At Prime Minister’s questions last week, I raised the case of Jean, after her grieving grandson asked me to raise it in Parliament in order to highlight the tragic impact of long ambulance delays. After speaking with Jean’s grandson last night, I now understand that some of the details provided to me, which I relayed to this House, were not accurate. While the substantive point remains—Jean did call for an ambulance and was told that she would have to wait for at least eight hours—Jean did not pay for her parking, and she did not die within the first hour of arriving at the hospital. I wish to correct the record by withdrawing those particular remarks.
Madam Deputy Speaker
I thank the right hon. Gentleman for that point of order about what is obviously a very sad case that he raised at PMQs. I am grateful to him for coming to the House—I presume that this is as soon as he knew that the information had been incorrect. I am sure that the whole House appreciates the fact that he has corrected the record. Thank you.
HS2 Ltd and Local Community Relations
(1 year, 9 months ago)
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Saqib Bhatti (Meriden) (Con)
This House has heard much about HS2 this week, so I can reassure the Minister that my intent is not to repeat what has already been said. Instead, I want to focus on HS2’s community engagement—or, I am sorry to say, its lack of meaningful engagement. I deliver this debate based on my interactions with HS2, and my reflections on dealing with it over the past three years. As the Minister will be aware, my constituency of Meriden reflects every aspect of the HS2 debate. On the one hand, it has the interchange station and the related Arden Cross development, making my constituency one of the best-connected parts of the country and the world. HS2 is forecast to create tens of thousands of jobs and thousands of homes.
On the other hand, HS2 Ltd is ripping up villages in my constituency such as Balsall Common and Hampton in Arden, blighting areas of outstanding natural beauty and damaging the green belt. Those villages are more than just their beautiful environments: they are proud, close-knit communities that care about their surroundings and about the legacy that will be left for future generations, and I am privileged to represent each and every one of my constituents who live there. It is those communities that I am standing up for today, and it is those communities that I believe HS2 Ltd wilfully ignores and, in many cases, treats with contempt. Just to be clear, I am sure that if HS2 Ltd were asked, “Have you engaged with the local community?”, it would list a lot of things that it has done. However, the community—the people who we serve—will say, “They come to you; they speak at you; they tell you they have listened and that they will act; and then they continue as they were, and communities are left bewildered and we are left to go through the cycle over and over again.”
I want to highlight three examples of the interactions that I believe exemplify how HS2 Ltd is not living up to its responsibilities, and is failing to be—in the words of its own policy—“good neighbours”. The first is the haulage route going through my village of Balsall Common, which was meant to be a temporary route to help facilitate the movement of materials. Since 2016, long before I was even elected, the residents of Balsall Common had been providing manageable, achievable alternatives that would have mitigated all the disruption and allowed the project to go forward on time. It was the first major HS2-related issue that was brought to me when I was elected, and despite numerous interactions, HS2 Ltd remained adamant that its way was the only way. Constituents complained to me that the briefings would happen and action points would be taken away, only for HS2 to return and present the same PowerPoint time after time. Nothing would change. I was also on the receiving end of this; time after time, I was given the same briefings and the same PowerPoint presentations, and nothing changed.
HS2 finally got its planning application through for the haulage route, but the Minister will be aware that that route is not yet up and running. HS2 has not been able to access the land, because the preparatory works are not yet completed. I do not just mean the physical preparatory works; I mean all the other things that need to happen, such as getting the licences and consents, and working with Solihull Metropolitan Borough Council to put the resources in place to make the project go forward. As a result, the project is being delayed and the costs are rising.
What was HS2’s solution? To pursue the application for an alternative route through Waste Lane and Kelsey Lane, which are both small village lanes. Do not let the name Waste Lane fool you, Madam Deputy Speaker; it is a beautiful lane, but HS2 wants to use it to enable hundreds and hundreds of lorry movements day in, day out. Both Waste Lane and Kelsey Lane are narrow residential lanes. They are used by children to get to school, and it is causing immense anxiety for my constituents to know that there will be hundreds and hundreds of lorries going through those lanes every day if HS2 gets its way.
How did we get here? It was obvious to my constituents from 2016 that HS2’s plan was to wind down the clock until only its options remained viable. What a shame it could not just work with everybody and find alternative ways to move the project forward. The Minister will no doubt be aware that I am fighting any solution that results in hundreds of lorries going up and down Waste Lane and Kelsey Lane. Why should my constituents pay for HS2’s arrogance, complacency and incompetence?
The second example that I want to use is that of residents who have been blighted by HS2. My constituent Iain Smith in Berkswell village has a property that is surrounded by an HS2 works compound. A small portion of his property was identified for access requirements, and he was entitled to compensation. He did not want to move out, and the property was not compulsorily purchased, so there he is, a literal neighbour to one of the compounds for HS2. I have visited it, and he is completely surrounded. What does that get him? HS2 making his life miserable, in his own home.
I have lost count of the number of times I have had to fight for Iain, all because HS2 has decided to be slow and obstructive. With continued damage to his property and his gates, as well as dust, daily noise and work outside agreed hours, it is clear that HS2 has no intention of upholding its responsibilities to Iain as a good neighbour. In fact, he has to fight claim after claim regarding damage on his property, with payments that are constantly delayed.
Iain now suffers flood damage. A ruling from the Independent Construction Commissioner stipulated that the contractor was responsible for the damage, and Iain has submitted three quotations for making good the damage. That is a reasonable way to do things; many public sector bodies request three quotations. But all he has been offered is an amount that does not even cover the cost of replacing the carpet, which has been ruined, let alone all the other damage internally and externally.
When we spoke, Iain said that he is sitting in a house where one room is unusable because the carpet is saturated, it smells and it is damp, and plasterwork is falling off the walls. He never used to have damp issues; they started only two years ago, in January 2021. Now he is fearful when it rains that water will start pouring into the house and he will have to pump it out. It was recommended that HS2 should provide proper drainage, but nothing has materialised. To make matters worse, HS2 has now referred the case to the small claims court, which is not the correct process in such situations. It is as if HS2 has tried to figure out ways to make Iain’s life more difficult.
I also want to highlight the case of Stephen Fletcher. He owns Ram Hall Farm, a farm that has been in his family for six generations and more than 140 years, and it produces the famous Berkswell cheese. If the Minister is ever in Berkswell to see what HS2 is up to, I invite him to visit Ram Hall Farm and sample the cheese. I have been to the farm and sampled the cheese, and I have seen what HS2 is up to right next door. Mr Fletcher is the sole tenant of the land, but he also has a freehold farmhouse that he jointly owns with his wife—a farmhouse that has now dropped in value because it is blighted by HS2. Despite the commitment that people along the route would be “at the heart” of HS2’s property compensation schemes, that is not the reality. Fairness, as encapsulated in the overarching principles of the compensation code, requires that my constituent be compensated by HS2, but all it does is frustrate the claim at every turn, denying what he is owed and deserved. Once again, HS2 does not care about being a good neighbour.
My asks here are simple. I ask the Minister to follow in the footsteps of his predecessor, my right hon. Friend the Member for Pendle (Andrew Stephenson), who demanded that HS2 act as good neighbours and, frankly, review the way it deals with blighted properties and blighted land. Ultimately, I want fast, common-sense resolutions for my affected constituents, including Stephen Fletcher and Iain Smith.
The third issue is that of the Balsall Common viaduct, and subsequently, I fear, the Hampton in Arden viaduct; today, HS2 has released images of the Hampton in Arden viaduct, and I have to say it is uglier than the Balsall Common viaduct. I will reassure the Minister, though, and say that that matter is for another debate on another day. I can only describe the Balsall Common viaduct as a big concrete monstrosity in the middle of our countryside. On 10 March, the Minister kindly wrote to me in response to my letter of 16 January, in which I raised my concerns about the Balsall Common viaduct. In his letter, the Minister said he was keen to ensure that the process for engaging local communities was working well. Well, I can assure him it is not.
If HS2 Ltd is asked, it will say it has engaged with constituents. The Minister wrote to me about the briefings it has done and the “You said, we did” engagement event. However, those engagements were nothing more than a tick-box exercise. I attended the “You said, we did” event; in reality, it was the “You said, and we did nothing” event. There were no alternatives put forward, and no options that allayed the concerns of my constituents, despite HS2 Ltd telling the Transport Committee that it would offer alternative options. Instead of alternatives, all we have is a proposal for a big, white, concrete elephant. In fact, representatives of HS2 Ltd told local councillors that engagement did not mean consultation. In other words, it did not have to listen; it could just explain. Does the Minister agree with that? Is HS2 correct that its engagement should be one of explaining and not consulting?
The fact is, my constituents are being very reasonable. They have already sacrificed so much. All they ask is that HS2 work with them, rather than against them, to ensure that the viaduct can fit with the local area and character and, ultimately, look beautiful. It can be done. We just have to look at another one of HS2’s viaducts, the Colne Valley viaduct, to see that viaducts can actually be aesthetically beautiful. Even the one in Birmingham, the so-called “Bellingham bridge”—named after Jude Bellingham—has more character than what my constituents are being punished with.
There were two things that stood out at the engagement event I attended. I have a copy of the slides that I am happy to share with the Minister. One of the concerns raised with me was about graffiti. It is understandable that my constituents would be concerned that a concrete block viaduct would be a red rag to vandals. What was HS2’s answer to that concern? It spoke of its zero-tolerance policy to graffiti, and referenced the graffiti policy implemented on High Speed 1. However, in 2020-21, High Speed 1 itself said that graffiti remains a “significant issue”.
To appease my constituents, HS2 Ltd decided that rather than addressing the substantive concerns, it would introduce a weaving pattern in tribute to a flax plant that apparently grows in the village of Berkswell. I have yet to find a constituent who is appeased by these squiggly lines on the concrete, but I must say this: if this had been an episode of “The Apprentice”, the person who introduced that design would have soon found themselves on the way home in the back of a taxi.
If HS2 Ltd wants to look at historical and meaningful references, I suggest that it should be looking at the deep and rich history of the inventors and architectural heavyweights who have built this nation. Where is the nod to Sir Christopher Wren, or Brunel, or even to the modern-day Sir Norman Foster? This very building—this beautiful Palace in which we stand—was designed by Augustus Pugin himself. Instead of trying to recreate their work, HS2 Ltd is trying to give the people of Balsall Common a recreation of spaghetti junction. Instead of giving them a piece of artwork that we can remember and be proud of, it gave my constituents flax.
On this issue, my ask is simple. As the Minister will know, it is not too late to fix this. I have already objected to the planning application, but HS2 can withdraw it and come up with better plans. If it loses the planning application, it will simply result in further delays. Let us fix this before it gets to that. We need to demand that HS2 Ltd comes back with better plans. It will move on from my village and my communities and they will be left with ugly concrete blocks for decades if we do not do anything. Let us challenge and push HS2 to do better. It is not too late; we can and we should demand better. When I was elected, I committed to holding HS2’s feet to the fire and I ask that the Minister stand with me so that we can find viable, sustainable and acceptable solutions.
Before I conclude, I pay tribute to the local parish councils and residents associations who have done an immense job. I feel lucky to have such a conscientious and pro-active group of parish councils in my constituency. Berkswell Parish Council, Balsall Parish Council, Hampton-in-Arden Parish Council and Hampton-in-Arden society have all played their part. I also thank the ward councillors who have been working very hard to get HS2 Ltd to listen.
I have a lot of time for the Minister—he has already engaged with me on this issue, and I know that he was an excellent Chair of the Transport Committee—but he should know that I will keep coming back on these issues, I will keep requesting debates and I will keep demanding answers. My constituents deserve to be heard.
Sir William Cash (Stone) (Con)
I am grateful to my hon. Friend the Member for Meriden (Saqib Bhatti) for giving me this opportunity to make a short speech. I have a similar problem to him. I have a dossier, which of course I have already passed to the Minister, who has kindly agreed to come up to my constituency. We have had 10 years of misery with HS2’s miscommunications, as we have struggled to navigate a clear path forward with it. Farmers have received plans that cut their farms in half, severing access to their land and property. Notices have been served as late as possible and with ill consideration for damage and jeopardy. We have had loss of crops and late payment of agreed fees, causing significant cash-flow problems and financial ruin. Land has been left in a deplorable state. HS2 has threatened to acquire “every area of land” with
“no assurance that any right of access will be granted in a substantive form”.
It has deployed unnecessary and intimidating security on farms that have been family homes for generations. In another instance, no offer of a price for a property had been made nine months after the valuer himself had been along to have a look at it.
The bottom line is that this is completely and totally unacceptable. The truth is that HS2 needs to be given a real rocket, and I look forward to the Minister doing just that. If he does not, and my constituents continue to live in the misery to which they have been subjected over all these years, it will be a disgrace. It is a disgrace already, but it can be rectified. I look forward to the Minister coming up to my constituency—north and south—so that we can have a proper discussion and he can see for himself how HS2 has let my constituency down.
The Minister of State, Department for Transport (Huw Merriman)
I thank my hon. Friend the Member for Meriden (Saqib Bhatti) for securing this debate and my hon. Friend the Member for Stone (Sir William Cash) for his contribution.
I grew up in a part of the country where both HS2 and East West Rail are under construction, and indeed, I shall be in that town this weekend again. I therefore fully recognise the change and upheaval that HS2 can bring to the communities that it passes through, represented by my hon. Friends and by Members across the House. As construction approaches its peak, so too does the level of disruption, and I appreciate that road closures, lorry movements and noise are now a lived reality for many people. I want to see HS2 Ltd leave a positive legacy for communities. Communities should be appropriately consulted, responded to efficiently and objectively, involved in plans and informed about the works affecting them.
When things go wrong, which happens from time to time, efforts should be made to learn from mistakes and come back with better solutions. My hon. Friend the Member for Meriden mentioned his constituents Mr Stephen Fletcher and Mr Iain Smith. I will write to him and ensure that the matter is investigated. Where matters need to be dealt with in their favour, we will do just that.
Perhaps I may focus on the two matters that were brought up with regard to fixed structures, and indeed the roads. First, I recognise my hon. Friend’s concern about the design of the Balsall Common viaduct and the process that HS2 Ltd has gone through to develop it. As I said in my letter to him, which he referenced, I am keen to ensure that the process of engaging local communities in the design of the project’s key elements, such as the viaduct, is working well. I am aware that HS2 Ltd has held a number of well-attended engagement events and briefings with local people and their representatives as the design has progressed over the year. Although I am assured by HS2 Ltd that the viaduct has been carefully designed to reflect its environmental context and position, I have also heard—as the House has heard from my hon. Friend—that the engagement feels like an explaining rather than a listening event.
I am keen to put on the record that good community ideas and suggestions must be heard and worked upon. That is not only good to ensure that the community receives the legacy that they want, but it is polite. It is important to note that the options considered as part of the design process are constrained by certain factors, such as the structural performance requirements of a high-speed railway. My hon. Friend has made unfavourable comparisons with the design of another HS2 viaduct further south in Colne Valley, which I visited some weeks back. HS2 Ltd stresses that it is a different type of structure in a different context. However, like me, HS2 Ltd will have heard my hon. Friend’s call for the viaduct to fit with the local area and character. The schedule 17 application for the design of the Balsall Common viaduct was submitted in January, and the decision currently rests with Solihull Metropolitan Borough Council. I will await its decision with interest, as I know will my hon. Friend.
Let me turn to the matters raised on Waste Lane and Kelsey Lane and the appeals. I note my hon. Friend’s concerns about the use of lorry routes in Balsall Common. The inspector has made a recommendation to Ministers on the appeal, and the issue is now being considered by Ministers in my Department and in the Department for Levelling Up, Housing and Communities. We anticipate a decision in the coming weeks. In the meantime, my hon. Friend will understand that it would not be appropriate for me to comment on the case, although I can say that the House has heard his views on the appropriateness of Waste Lane and Kelsey Lane.
Turning to community engagement concerns, including the matters referenced by my hon. Friend the Member for Stone, the Department takes the monitoring of HS2 construction seriously. HS2 Ltd and its contractors are held to account by the independent construction commissioner, the HS2 residents commissioner and the Department for Transport’s team of independent construction inspectors. I met the HS2 construction commissioner in February, and the residents commissioner before that, to discuss current issues affecting communities and to better understand how HS2 Ltd and its contractors are responding to those challenges. Regular reporting is just one of the ways in which we monitor and proactively assure not just the cost and efficiency of the project, but how HS2 is being delivered. HS2 Ltd and its contractors are rightly required to comply with exacting environmental requirements, including a comprehensive code of construction practice, which specifies measures to minimise the full range of impacts that any construction project has on affected people and communities, as well as all the undertakings, assurance and environmental commitments contained in the HS2 Acts.
Effective communication with affected parties is also crucial. I thank my hon. Friends the Members for Meriden and for Stone for giving examples of when we do not always get it right but we need to do so. I am committed to making sure that issues are resolved as quickly as possible and lessons are learned for the future.
My hon. Friend the Member for Stone delivered a litany of concerns on behalf of his constituents. He has asked for a rocket to be delivered. I am not sure I will be arriving in his constituency in a rocket, but I will come. He has asked me to see whether these matters can be rectified. I know, working in partnership with him, that we have every chance of doing a better job, if he feels that job is not being done at the moment. I look forward to visiting him and his constituents.
To conclude, I will continue to work as Rail Minister with hon. and right hon. Members and others in the community on making sure that we get the delivery of infrastructure projects right. I want HS2 to be an example to other transport projects, not just in what it delivers, but in the way it is delivered, and I recognise that that means making improvements, learning from experience and changing how we operate in order to become better, and I am committed to HS2 Ltd doing that. Limiting construction impacts in the first place should be a primary concern for all working on HS2, but so should treating people and places with the respect they deserve and ensuring that any impacts are mitigated or avoided when not required.
I thank my hon. Friends the Members for Meriden and for Stone for this debate. It is vital that we continue to discuss our transport projects openly and transparently and that all hon. and right hon. Members use this Chamber to press me to ensure that their constituents are represented, as has happened here today.
Question put and agreed to.
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Backbench Business
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Relations with China: Xi Jinping Presidency
(1 year, 9 months ago)
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Jim Shannon (Strangford) (DUP)
I beg to move,
That this House has considered the matter of relations with China during the presidency of Xi Jinping.
I place on the record my thanks to the Backbench Business Committee for granting this debate. It was put in for at short notice; we wanted to do it as quickly as we could, so we thank the Committee for agreeing to it. It is important that we have the opportunity to discuss the last 10 years under China’s leader, Xi Jinping, and how his time in office has seen a drastic rise in nefarious activities inside and outside China, many of which have been used to attack human rights, freedom of speech and media, and freedom of religion and belief. I declare an interest as chair of the all-party parliamentary group for international freedom of religion or belief. That topic is very close to my heart. It is one of the reasons why I am here and it is ultimately and initially the reason why I asked for this debate.
We speak up for those with a Christian faith across the world, for those with other faiths and, indeed, for those with no faith, so I am pleased to see right hon. and hon. Members here today, to see the shadow spokespersons and to see the Minister in his place. When it comes to speaking up for freedom of religion and belief in China, we could write a book on the number of occasions when China has disregarded it, has discriminated, has persecuted and has used actions that are illegal in any democratic society against those of Christian faith and, indeed, other faith. I am speaking here of the genocide of Uyghurs in Xinjiang., which the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) and others in the House and here today have brought to the attention of MPs on regular occasions.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
It is reported that, in its efforts to control the Uyghur population, the Chinese Communist party has forced Uyghur women to marry Han Chinese men, to have abortions and to repress their Uyghur culture and religion. Does the hon. Member agree that Ministers must recognise the plight of the Uyghur people, and the Uyghur tribunal’s finding that they have been subject to a genocide?
Jim Shannon
The hon. Lady is absolutely right. The disgraceful and quite illegal treatment of the Uyghurs in China has disturbed us and put a burden on our hearts for them. We cannot understand how any country that espouses freedom—as China likes to say it does whenever it does the very opposite—can act in that way. The forced sterilisation of women, the abuse of women, the imprisonment of millions of Uyghurs in camps and the taking away of their religious liberty and their right to express themselves concern us greatly, so the hon. Lady is right to highlight that matter and to ensure that we have the opportunity to understand it.
The crackdown in Hong Kong is another issue. We watched as we handed over Hong Kong to the Chinese. The Chinese made lots of assertions that they would ensure that freedom was maintained, and for a short period it was, but things have gone downhill over the past few years, and China is cracking down hard on any expression in Hong Kong.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
On the question of Hong Kong, is it not obvious that one reason why the Chinese Government did not honour the terms of the joint declaration was that they were given lots of signals from this country that we did not really care that much about it and that we were quite glad to be shot of Hong Kong? Signals matter, and the signals that we send every time we prefer trade to human rights are entirely the wrong signals to be sending.
Jim Shannon
The right hon. Gentleman is truly wise in his words, and I fully agree with his comments. I had the same concern. When the deal was done, there seemed to be almost wishful thinking from the UK Government that things would be all right, when the reality should have told us—and the Government—that they definitely would not.
The issue of tying business and economic opportunities in with human rights is something I have espoused in Westminster Hall, but also in the main Chamber and through the APPG as well. We need to marry the two together; the one cannot succeed without the others’ interpretation.
Margaret Ferrier
The hon. Gentleman is being generous with his time. Hundreds were expected to march in Hong Kong for gender equality ahead of International Women’s Day, but the demonstration was called off with just hours’ notice by organisers. Human Rights Watch said that the authorities seemed to be approving demonstrations while intimidating organisers and participants with jail time to deter participation. Does the hon. Gentleman share my concern about the continued impact of Hong Kong’s national security laws on the right to peaceful protest?
Jim Shannon
I do, and with some annoyance, anger and compassion for the residents of Hong Kong because they are being denied the freedom they once had. The UK Government have obviously stepped in and offered some passage for many Hong Kongers to come here to live. That is good news, but would it not be better if they were able to stay in their own country and exercise the freedom they once had?
We also have the continuing repression in Tibet. It was a salient reminder, when I did my research before this debate, when I found out that the suppression in Tibet has been going on since 1950. That is five years before I was born, so Tibetans’ freedoms have been denied and restricted for a long, long time. I understand that the inauguration of a new Dalai Lama will be at the behest of the Chinese Communist party. A religious group cannot appoint its own leader in Tibet, but only because the Chinese Communist party will not let them. Again, that is another example of what is going on inside China, and of China’s influence and control.
Tim Loughton (East Worthing and Shoreham) (Con)
I am hoping to speak in the debate, so I will not intervene much. Just to be clear, whatever the Chinese Communist party Government think, the next Dalai Lama will be the responsibility of the people of Tibet and those entrusted by the current Dalai Lama to produce his successor. It will not be a result of what the Chinese Communist party allow or do not allow.
Jim Shannon
The hon. Gentleman is absolutely right. The information I have suggested that the Chinese Communist party was going to try to use its influence to ensure that any choice would be the choice of the Chinese Communist party, but if, as the hon. Gentleman said, there is some control over that, that would be one of the good things that could come out of this.
The issue of forced organ transplantation from members of the Falun Gong has been in my heart in this House for some 10 years now. It is being done on a commercial scale, and people have lost their lives. We must never forget the impact of that on the Falun Gong.
There is also the persecution of Christians. Churches have been destroyed, with secret police sitting in church services, taking notes of those who are there, and recording car numbers and which houses people return to. We have also had the rise of cyber-surveillance in China, which is another indication of those being imprisoned, beaten and injured all because they happen to have a different religious opinion. Today, we had some good news: the Government indicated that they would suspend their agreement with TikTok. That is good news when it comes to security issues, and we must welcome it.
In my time as an MP, I have seen the UK move from the “golden era” espoused by David Cameron and George Osborne to the confusion and lack of cohesion on China under this Government. In each case, the policies were driven by economics. Economics is of course relevant, but our policies must encompass other important factors such as our human rights obligations, and take into account our moral compass and what we believe. There is a real fear that focusing solely on money would mean that the UK’s fundamental beliefs in human rights and the rule of law are subjugated for the purpose of trade deals. The right hon. Member for Orkney and Shetland (Mr Carmichael) referred to that; it is one of the key issues, and I seek clarification and encouragement from the Minister on it. That would be great for China and other authoritarian states, but terrible for the UK’s standing in the world. I urge extreme caution and recommend change.
We are watching in real time the reduction of democratic states and the rise of authoritarian regimes. According to the Economist Intelligence Unit, 23 countries out of 167 monitored in 2020 could be called democracies. Fifty were considered authoritarian, and the others attained some form of flawed democracy or hybrid system, more likely than not under the control of one person.
China and Russia are leading the global rise in authoritarian states. They are seeking to build their own alliances, disrupt democratic processes in other countries, interfere in elections, and create their own channels for communication and cyber-control away from the norms and standards expected by international treaties. They support each other at institutions such as the United Nations, where the evil axis gathers together to defend each other’s interests and provide financial and political support for one another. The unfortunate thing for us is that democracies seem incapable of working together to fight back against that in a single-minded, focused manner, so I have great concerns.
The Chinese Government have committed a series of ongoing human rights abuses against the Uyghurs since 2014. I and others, including the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith), who is in the Chamber, have raised that issue. Abuse is also perpetrated against other ethnic and religious minorities in Xinjiang province. This is the largest scale detention of ethnic and religious minorities since world war two. It is of that size; it is almost impossible to take in the number.
The United States has declared China’s human rights abuses a genocide, as have legislators in several other countries, including Canada, the Netherlands, Lithuania and France. We have even done so in this House of Commons in a debate led by the right hon. Member for Chingford and Woodford Green. The Parliaments of New Zealand, Belgium and the Czech Republic condemned the Chinese Government’s treatment of the Uyghurs as severe human rights abuses or crimes against humanity, which they truly are.
China continues to deny any wrongdoing and threatens politicians and even entire countries with retaliation simply for daring to raise and debate these issues. Diplomats are deployed to berate senior Government officials and speak at news stations to explain that everyone is wrong and at this is all just Sinophobia and anti-China rhetoric. No, it is not; it is much more than that.
Atrocities in Tibet have been going on since 1950—so much so that we barely react any more. The hon. Member for East Worthing and Shoreham (Tim Loughton) has spoken about Tibet for as long as I have been in this House, and long before that, I believe. He has highlighted it on many occasions. We cannot forget about it. We need to focus on what is happening there, which is hard to take in, with regularity and ferocity. Children are forced into re-education boarding schools as a way of eradicating their language and religion, with the hope that they will reject their own families and culture. Such policies have left a trail of family destruction and have cut cultural and historical memory.
China plans to choose the next Dalai Lama, but I am very pleased that the hon. Gentleman said that those of the Dalai Lama’s religion will make that choice. I hope that will be the case and that China does not influence it in any way. We wait to see what happens.
Hong Kong wants to be a peaceful and prosperous city, a thriving economic and social hub in Asia, and truly global in its influence, but it has been brought to its knees in just three years since the introduction of the national security law.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I thank the hon. Gentleman for giving way. I am grateful—
Sir Edward Leigh (in the Chair)
Order. I should say to the right hon. Gentleman that, as a matter of courtesy, he should have been here at the beginning of this debate.
Sir Iain Duncan Smith
I understand. I was about to explain and apologise, Sir Edward, for not having got here earlier: a Minister waylaid me.
On Hong Kong, the Americans have now sanctioned about 10 people in the Hong Kong Administration for their behaviour over the new security laws. The UK, which once used to be responsible for Hong Kong and is a signatory to the Sino-British agreement, has sanctioned absolutely nobody. Does the hon. Gentleman think that is a balanced position to take on Hong Kong?
Jim Shannon
It is certainly not balanced. The right hon. Gentleman is absolutely right. He has highlighted this point in the Chamber on numerous occasions. He consistently and regularly points directly out to the Government that this matter must be addressed. If we are going to do things right, and it is our job in this House to do so, that has to be addressed. If the United States can sanction more people than we could even consider—I understand the number is maybe two in our country—we have to and we must do more. I congratulate the right hon. Gentleman on all he does; we recognise his contribution.
The national security law is an arbitrary piece of legislation, the details of which were kept secret until after it was passed. It criminalises any act of disobedience or dissent, and any challenge to the Government can be swept up in the catch-all categories of secession, subversion, terrorism and, crucially, collusion with foreign or external forces. Rather than being used to protect people, the national security law is being used to silence—the very opposite. Newspaper and internet news outlets have been shut, journalists arrested and protesters detained—all accused of one or more of the four national security law charges.
The most infamous case of the law being used to crush media freedom in Hong Kong as that of Apple Daily, the most popular newspaper in Hong Kong, which is pro-democracy and openly called out Chinese Communist party activities. It was founded by a British citizen, Jimmy Lai, whose spent his 800th day in a Hong Kong prison last Friday 10 March. His national security law trial is repeatedly delayed, as the Hong Kong authorities scramble to find a new set of legal machinations just to keep him in prison. He is a British citizen. We should be doing more for him. I do not see that, and it disappoints me.
China has broken its promises to Britain and to the people of Hong Kong that the city would enjoy its way of life under the one country, two systems formula, which promised a high degree of autonomy for 50 years following the 1997 handover. Hong Kong is now a puppet state of China. The recent multimillion dollar campaign, “Hello Hong Kong”, called on the world to come to the reopened city. It fell flat, given that 47 democracy campaigners were put on trial the very next day. Welcome to Hong Kong—“If you come to Hong Kong, here is what happens to you.”
Across the world, China seems to be at the centre of multiple political and economic scandals, whether that is spy balloons over America or interference in Canada’s election. There seems to be an increasing sense that China has never been bolder in asserting itself around the world. The belt and road initiative, adopted by the Chinese Government in 2013, to invest in more than 150 countries and international organisations, is considered a centrepiece of Chinese leader Xi Jinping’s foreign policy.
We can see China’s tentacles across Africa and in countries around the world. The policy has been used to extend Chinese economic and political influence around the world. It has been used to secure votes at multinational organisations such as the United Nations, the Association of Southeast Asian Nations, and in many regional groupings across the world. It forces countries into debt economics. Even EU states now have ports, docks and infrastructure projects funded by the belt and road initiative, at a time when the EU should be shoring up its own defence, cyber and technological strategies. The initiative is causing splits inside the EU and creating division among Governments. That is great news for China and for other authoritarian states.
Here in the UK, we have seen the rise of China’s economic and political engagement. In 2022, more students came to the UK from China than anywhere else. Nearly one in four international students is from China—approximately 152,000 students. Of the 2,600 international students studying at Queen’s University in Belfast, we have a vibrant Chinese community of more than 1,200 students.
Along with that, we have seen the explosion of Confucius Institutes across the UK. The United Kingdom is host to 30 Confucius Institutes, more than any other country. Their ostensible purpose is to teach Mandarin and to promote Chinese culture, but in reality they are part of the above-ground arm of the Chinese Communist party’s United Front Work Department.
According to a 2022 report by the Henry Jackson Society and the Committee for Freedom in Hong Kong Foundation, those 30 institutes have been funded to the tune of as much as £46 million, mostly from the Chinese Government. Unlike the British Council, Confucius Institutes are formally part of the propaganda system of the Chinese Communist party, dependent on Chinese Government funding and, in general, subject to People’s Republic of China speech restrictions. Although Confucius Institutes are described as language and culture centres, the report confirms that only four of the 30 institutes stick solely to language and culture. Quite clearly, they do their own thing and ignore much of what is going on.
Operating from prestigious universities such as the University of Edinburgh and the London School of Economics, Confucius Institutes have been informing Government policy and politicians, offering consultancy services to business, promoting trade and co-operating with UK organisations that work with the United Front Work Department, the interference activities of which were recently highlighted by MI5 and reported prominently in the papers and media. That is not innocent language and cultural exchange.
In spite of the political attention paid to Confucius Institutes, and the press and academic attention during the last six years, the pattern has gone unnoticed, and its ramifications have been ignored—an issue that the right hon. Member for Chingford and Woodford Green brings to this House on many occasions. To combat those negative practices, the Government should consider the introduction of legislation to remove Confucius Institutes completely from UK universities. Will the Minister confirm whether the British Government will do just that? Further, it has been suggested that the Government should provide funding for UK universities to allocate to China studies and bolster knowledge regarding China’s presence in the UK. I believe that that merits consideration. It is not the direct responsibility of the Minister, but it is certainly one for Education Ministers.
Time is passing, but I should mention the fact that many believe that there is a notable level of political interference—from funding from Chinese nationals to Members of Parliament, to the beating of Bob Chan in Manchester last October. I am sure we all vividly remember this man, who was beaten by the Chinese consul general and other diplomats in full view of the public and cameras. The consul general then went on TV to admit to and justify his actions; he did not even feel ashamed or regretful. The appropriate action should have been taken, yet it appears that it was left to fade into the background. Eventually, two months later, China recalled the diplomats, and it appears that no steps whatever were taken by the British to send the message that that behaviour is not tolerated. Again, that is disappointing and regrettable. I always say things respectfully to the Ministers, but I want my Government and my Ministers to be strong when it comes to standing up for human rights and against things that are wrong across the world.
As a nation, we should be seeking constructive relationships with countries around the world. I understand that not all will be savoury, but we should be making human rights and good conduct cornerstones of our foreign relations—even, or especially, as the right hon. Member for Orkney and Shetland said, when it comes to trade and development. That is what sets our country apart from authoritarian ones such as China. There is no reason for the UK not to have a constructive relationship with China, but we should not be afraid on any occasion to say no and to show strength, and we need to do that more regularly and more courageously.
Mr Carmichael
The hon. Gentleman has given a comprehensive tour de raison of the issues. Considering it as a whole—I get a sense that he is coming to his peroration—does he think it reasonable or sensible that the integrated review refresh that we heard about on Monday now does not classify China as a threat?
Jim Shannon
That was a disappointment. The right hon. Gentleman is absolutely right. It is clear from my contribution, and will be clear from what others will say, that we do see China as a threat. We want to have a working relationship, but we have to recognise that China quite clearly does not.
Surely, if any lessons are to be learned from the relationship with Russia over the last 10 years, for example, it is that kowtowing, appeasing or ignoring will lead to only more egregious actions by the aggressor state—from Russia in the past, but from China in the future. China has been watching the war that Russia has inflicted on Ukraine, and it will have noted that while Russian troops are killing, raping and bombing Ukrainian citizens, Western states in some cases have been prevaricating and debating what to do in response. China is watching, and so is Taiwan. Sending weapons is good, but it could all have been avoided if the warning signs about Russia were heeded several years ago.
Margaret Ferrier
Following the announcement that Honduras is seeking diplomatic ties with China, Taiwan has just a few remaining formal allies on the global stage, most of which are small, poor nations in the Pacific. Does the hon. Gentleman agree that the UK must use its influence on the world stage to help protect Taiwan’s rights as an independent nation?
Jim Shannon
I certainly do and I very much welcome the Prime Minister’s announcement this week of the submarine deal between the UK, USA and Australia. That shows that there is a commitment, although of course we probably want to see much more than that. The hon. Lady is absolutely right and I thank her for that intervention.
If we think that things are bad now, imagine the pain that will be inflicted on the UK and the world when—I use these words carefully—China invades Taiwan. Hon. Members will note that I said “when” rather than “if” China moves to take Taiwan. Xi Jinping has reaffirmed his commitment to communist Chinese rule of Taiwan, by force—his words—if necessary.
We cannot fall asleep at the wheel while getting lulled to sleep by the comfort of investments, trade, and cash flows. We should begin the careful process of reducing our reliance on Chinese-made goods and products right now. Let us start taking a careful look at where British businesses invest and give them warnings that contracts and treaties may not be upheld, and to be careful about where they invest their money.
Let us start speaking up for those who are being oppressed in Xinjiang, Hong Kong and Tibet. Let us get British citizen Jimmy Lai out of prison and let us not ponder solely on how China might react, but instead give China pause for thought about what it might lose by not working with the United Kingdom.
I believe in good relations; I also believe in doing what is right, as we all do in this Chamber. I know that there is a balance to be struck.
Sir Iain Duncan Smith
I apologise to the hon. Gentleman for intervening on him again. However, I just want to make the point that I have met Jimmy Lai’s family, and the one thing they asked for is that the British Government give full public recognition to the fact that he is a British citizen and a British passport holder. The British Government have said that they will not do that because it might exacerbate problems, but honestly Jimmy Lai knows and expects that after the next court case this year he is likely to be imprisoned for a very long time—maybe for the rest of his life. He wants the world to know that he is a British passport holder and British citizen; he is proud of that and wants representation.
Jim Shannon
Again, the right hon. Gentleman makes the case for Jimmy Lai. I think the Minister—I am sure that he is taking note of all this—and his officials will ensure that Jimmy Lai becomes part of our priorities in this House now and for the future, as should be the case.
As the Bible says—Sir Edward, I know that you and I read it every day—
“speak the truth in love”.
I do not see the balance thus far. I ask the Minister to look at where we are, and where we need to be, and to begin the journey there. Human rights and moral obligations are not merely desirable; they are the very foundation on which any relationship should be built. We have a chance to change this situation—to move it upwards—and get it right. That is what I urge the Minister to begin to do today.
We are all here for one purpose: to speak up for those who have no voice—and there are many of them. Right hon. and hon. Members have spoken up for others across the world on many occasions. Today we focus on the evil intentions of China. Yes, we want to work with China, if possible, and address human rights and religious liberties, and the right for people to have freedom of expression in relation to where they worship. Those things are not happening there. We must highlight that today, and ensure that our Minister has a firm grip of what is happening. I hope that the Minister will respond to our asks.
Tim Loughton (East Worthing and Shoreham) (Con)
I pay tribute to the hon. Member for Strangford (Jim Shannon), who said most of what I was going to say but I will give it a go anyway. Let me start with my declaration of interests—they are not at all financial, otherwise there would be a problem—as somebody who has been sanctioned by China. That is something I am very proud to shout about at every opportunity. I also declare an interest as chair of the all-party parliamentary group for Tibet, an association I have had for many years, and before this place, as the hon. Gentleman said.
Another day, yet another debate on China’s abuses of human rights. Earlier in the Chamber, there was another announcement relating to China, on TikTok, which I will come on to in a minute. This debate is about relations with China under the dictatorship of President Xi over the last 10 years, so it is worth starting by looking at some of the words he has said on the record and then putting some meat on the bones of how that has actually worked out in practice.
In March 2013, Xi Jinping started his first five-year term as the President of China. More consequentially, in November 2012 he first assumed the two most powerful positions in China: general secretary of the Chinese Communist party and the chairman of the party’s central military commission. Changes in leadership positions in China’s one-party state are made every five years and normally follow a two-step process: the first occurring in the CCP and the second involving the Government. At the CCP’s 20th party congress in October 2022, Xi was appointed general secretary for a third five-year term and once again as chair of the party’s CMC, confirming his dominance over the party and the country at large. That third term appointment broke the recent precedent of the country’s leadership serving only two terms.
More recently, on 11 March, he secured a precedent-breaking third term as President of China, as well as chairman of the CMC, with nearly 3,000 members of the National People’s Congress voting unanimously in the Great Hall of the People. Funnily enough, no other candidates ran. Effectively, he is becoming a dictator for life, the likes of which we have not really seen since the fall of the iron curtain and some of those potentates under the control of the Soviet empire in eastern European states before they were able to win their liberty and return to Europe, freedom and democracy.
In his speech in March to the National People’s Congress, Xi Jinping said:
“Since its founding, the Communist Party of China has closely united and led the Chinese people of all ethnic groups in working hard for a century to put an end to China’s national humiliation.”
Note that he mentioned working with “all ethnic groups” across China; I think there are 57 different ethnic groups. That does not really apply if someone is a Uyghur, Tibetan, a Hongkonger or of Mongolian ancestry. It has not really worked out well for them. He said:
“the Chinese nation has achieved the great transformation from standing up and growing prosperous to becoming strong, and China’s national rejuvenation has become a historical inevitability.”
On military and defence, he went on to say:
“We need to better”—
a split infinitive, I apologise—
“co-ordinate development and security. We should comprehensively promote the modernisation of our national defence and our armed forces, and build the people’s military into a great wall of steel that can effectively safeguard our nation’s sovereignty, security and the interests of our development.”
On Taiwan, he said:
“Realising China’s complete reunification is a shared aspiration of all the sons and daughters of the Chinese nation, as well as the essence of national rejuvenation…resolutely oppose foreign interference and separatist activities aimed at ‘Taiwan independence’ and unswervingly promote progress towards national reunification.”
Those words should not come as a surprise. Two years earlier, in a speech—I am quoting selectively, but I think you will get the gist, Sir Edward—marking the 100th anniversary of the Chinese Communist party, he said:
“We will never allow anyone to bully, oppress or subjugate China…Anyone who dares try to do that will have their heads bashed bloody against the Great Wall of Steel forged by over 1.4 billion Chinese people…Only socialism can save China, and only socialism with Chinese characteristics can develop China…No one should underestimate the Chinese people’s staunch determination, firm will, and strong ability to defend national sovereignty and territorial integrity…The historical task of the complete reunification of the motherland must be fulfilled, and will definitely be fulfilled.”
I watched a programme last night about the Nazis in the 1930s, and so much of President Xi’s language there was redolent of what was heard in the 1930s under Hitler. It is a shame that Gary Lineker did not refer to that as well, because that is where the real dangers lie. It is chilling when one listens to the very words that the people running China put into the public domain. We should take them exceedingly seriously. For previous Governments to refer to “golden ages” of relationships between the United Kingdom, the west and China, under the same dictator who expressed those words, is a complete fantasy—and a dangerous fantasy at that. We need to wake up to that.
I worry greatly about the threat that China poses. It is a threat, whatever language the Government might like to use. Let us touch on the China 2049 policy, which President Xi has been following. China 2049 in an overarching plan, set out by the President in October 2017, when he used a speech to describe a broad plan to achieve national rejuvenation by 2049. The date would mark the centenary of the founding of the People’s Republic of China by the CCP. It largely refers to the CCP’s plan to transform the Chinese army—the People’s Liberation Army—into a world-class military by 2049. A mid-term goal is to have completed the modernisation of the PLA by 2035.
According to an annual report from the Pentagon to the US Congress in November 2021:
“The PRC is increasingly clear in its ambitions and intentions. Beijing seeks to reshape the international order to better align with its authoritarian system and national interests, as a vital component of its strategy to achieve the ‘great rejuvenation of the Chinese nation.’”
China seeks to achieve that by merging foreign policy, economic power, defence and military strategies, and its Government and political systems into one master plan. Everything is traduced to that. Everything China does has that long-term, great goal in mind.
China now has the world’s largest navy, with roughly 355 ships and submarines. The People’s Liberation Army has 975,000 active duty personnel in combat units, and has accelerated its training and fielding of equipment at a pace exceeding that of recent years. It is also expanding its nuclear weapon capabilities faster than previously predicted. The rapid acceleration of Beijing’s nuclear stockpile, which could top 1,000 deliverable warheads by 2030, is designed to match and even surpass the US global military might, according to the Pentagon. The US has 3,750 nuclear weapons in its stockpiles, and has no plans to increase that figure. The Chinese air force is the world’s third largest, with more than 2,800 aircraft in total, 2,250 of which consist of fighters, strategic bombers and attack aircraft. That expansion is part of the great Chinese plan to dominate the world economically and militarily, as well as in other areas that I will come to.
That is the context in which we have to judge the threat posed by the actions of President Xi and his Communist party cronies. We know how that has panned out in Xinjiang, Tibet, Hong Kong and elsewhere. Some of us have often been lone voices in the wilderness on the plight of the Tibetans. Since the early 1950s, and particularly since the invasion and takeover of Tibet in 1959, what has been playing out in Tibet—with the 1 million Tibetans who have lost their lives at the hands of the Chinese Communist party dictators—is a forerunner of what the CCP is capable of doing, and is doing, within the borders of China; and what it would like to do beyond the borders of what we recognise as China.
The hon. Member for Strangford fleshed out many of the horrors going on against the Uyghurs. It is estimated that several million Uyghurs are being held captive in concentration camps, where activities include mass surveillance, torture and repression of religion. They are interned for reasons that include communal religious activities, behaviour indicating “wrong thinking”—whatever that is—or for just no reason at all. The World Uyghur Congress observes that the camps operate as prisons, with no communication with family outside. The CCP regime is pursuing a campaign of forced sterilisation and forced abortion, along with the destruction of the Uyghur language. China is trying to erase the Uyghur people.
In 2021, Uyghur regions set an unprecedented near zero population growth, given the effects of sterilisation. According to Dr Joanne Smith Finley, a reader in Chinese studies at Newcastle University and a fellow sanctionee, when she interviewed a Uyghur man from Ürümqi, he said that some people were given medicine in those camps to change their thinking, only to become mentally ill. The CCP is aiming to wipe out three specific categories: intellectual Uyghurs, rich Uyghurs and religious Uyghurs.
A sub-committee in the Canadian Parliament has concluded that the acts carried out by China on the Uyghurs amount to genocide by the general accepted definition. That was the conclusion of the Uyghur tribunals, so well presided over by Sir Geoffrey Nice at the end of last year. That was the conclusion of a unanimous vote in Parliament at a debate we held last year on the subject. It is about time the British Government acknowledged that the Chinese are guilty of genocide and continue to wage that ghastly oppression against the Uyghur people. Many other Parliaments have acknowledged it. We must catch up.
This is not just about the Uyghurs within the borders of China. Uyghurs abroad have also been intimidated and spied on through apps such as WeChat by the Communist party, according to the Uyghur Human Rights Project. The late former Chief Rabbi Lord Sacks said,
“As a Jew, knowing our history, the sight of people being shaven headed, lined up, boarded onto trains, and sent to concentration camps is particularly harrowing.”
We all saw those grim images and have heard so much that the Communist party has developed multiple levels of surveillance in the forms of Skynet and the “Safe City” and “Sharp Eyes” projects to keep track of every movement of its citizens. Of course, it is also spying on us through devices made in China and deployed across the west, including in the United Kingdom. Virtually weekly, we find a new case of the Chinese being able to survey what is going on in sensitive institutions in the UK.
Xi Jinping’s Tibet policy has been the systematic eradication of any and all distinctive features of Tibetan identity, carried out unchecked despite blatant human rights abuses. It includes plans to control the next incarnation of His Holiness the Dalai Lama, the uprooting of Tibetan children as young as four from their families into colonial boarding schools, the resettlement of Tibetan nomads and farmers in unfamiliar environments, including the harsh and uninhabitable frontier areas of Tibet along the Indian border, and Government-imposed restrictions on studying Tibetan language and religion.
Free Tibet and Tibet Watch have noted that the CCP has introduced massive changes in the past five years, from forcibly relocating Tibetans to clamping down on all aspects of religion, culture and language. Anyone caught in possession of a simple photograph of His Holiness the Dalai Lama is subject to a minimum five-year jail sentence without any questions being asked. Recently, the new crackdowns have led Tibet to be ranked 176th out of 180 countries by the Reporters Without Borders foundation in its press freedom index and to be ranked among the worst for civil and political rights in the “Freedom in the World” report by Freedom House. There are more foreign journalists in North Korea than in Tibet, such is the closed society. Our ambassador has not been able to travel to Tibet for several years now, nor have any of her staff. Most notably, torture and mistreatment have increased dramatically without impunity.
Chinese culture and the Mandarin language has been deemed the correct way forward after the 11 January 2020 passage by the 11th National People’s Congress of the “Regulations on the Establishment of a Model Area for Ethnic Unity and Progress in the Tibet Autonomous Region”. They are meant to safeguard the one-ness of the motherland, but contain punitive measures to punish those defecting from this one-ness.
Sir Iain Duncan Smith
Does my hon. Friend recall that about a year and a half ago on the border of Tibet and India, Chinese troops aggressively tried to push the border back again, and a number of Indian soldiers were killed in that process? They have never once issued any kind of apology, and they continue to see the border as a moveable point to where they want it to be. There’s no diplomacy there.
Tim Loughton
That is the problem: the Chinese constantly test and push the parameters. They literally push the borders in that case to test the resolve of the west and those around them to stand up, take issue, object, call out and do something about their abuses of the international rule of law and the basic human rights that we all take for granted. That was one of many incidents. I am sure that many more have gone unreported.
The hon. Member for Strangford did a fine job of outlining Hong Kong as the latest hotspot for China’s oppression of all liberties. There are the ongoing 47 primary national security law cases. The trial of the 47 people charged with conspiracy to subvert state power in the Legislative Council, launched by Hong Kong’s pro-democracy campaign in 2020, officially began on Monday 6 February. The 47 people were charged with conspiracy to subvert state power and organising and planning acts to undermine the Government. That may well be what my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) and I are guilty of under the terms of our sanctions, but we have never actually been fully told. None of the very nice people in the Chinese Communist party head office have written to tell us why we have been sanctioned and on what basis we might be unsanctioned.
All 47 defendants were denied bail and have been held in custody for more than 700 days. The prospect of a fair trial is, of course, derisory. In August 2022, the Department of Justice directed that the case would be heard without a jury and would instead be adjudicated by a bench of three national security judges, who were appointed by Hong Kong authorities.
Margaret Ferrier
The United Nations Committee on Economic, Social and Cultural Rights has expressed concerns over Hong Kong’s national security law. It is particularly concerned about the “lack of transparency” around the detention and trials of arrestees and
“the lack of access to lawyers”
in these cases. Does the hon. Member share these concerns and agree that Ministers should seek further clarity about the reality on the ground?
Tim Loughton
The hon. Lady is absolutely right. Hong Kong used to be a beacon of freedom, liberty, the rule of law, enterprise and entrepreneurialism in the far east. How quickly virtually all those characteristics have been snuffed out. There is not even a pretence that there is a fair trial any more. It is disgraceful that there were—and still are—some lawyers from the United Kingdom and other western countries sitting in the so-called courts in Hong Kong and overseeing the Mickey Mouse justice that the Chinese Communist party have imposed on previously free members of the community in Hong Kong.
Sir Iain Duncan Smith
I apologise for intervening on my hon. Friend again, but there is a further extension of that. I pointed out to the Government the other day—to no less a person than the Prime Minister—that, about a year and a half ago, the United States officially warned all their companies that they can no longer rely on the application of common law in Hong Kong as a protection of their business interests. The UK Government have yet to do anything of the sort. It is, of course, some Commonwealth and UK judges who still continue the farrago of saying that they somehow protect those interests.
Tim Loughton
My right hon. Friend is right again. Too often in this country, we seem to be playing catch up with some of the much more proactive and obvious measures taken by the US Administration, usually with unanimous support across all parties in Congress. Many of those laws are now having an impact on China and beginning to make it wake up to the fact that its actions have consequences. I fear that, too often, it is because people in this Chamber today and like-minded colleagues put pressure on the Government that, eventually, they might just catch up with some of the measures that should have been passed into our law at the same time as they were passed in the United States.
Sir Edward Leigh (in the Chair)
Order. I have to move the wind-ups at 2.28 pm, and I think Mr Carmichael wishes to speak. Is that correct?
Tim Loughton
I will approach my peroration forthwith on that basis.
I will not mention Jimmy Lai because, again, the hon. Member for Strangford mentioned him. He also mentioned at length the Confucius Institutes, an example of how the tentacles of the Chinese Communist party extend everywhere—globally and within the UK in our boardrooms, businesses, schools, campuses, local authorities and in the bogus police stations, effectively, that China has set up. There was the disgraceful episode at the Manchester consulate, where the consul thought it was his job to beat up demonstrators. There was no pretence to try to get out of it. Is that not what he was there for? Is that not what the Chinese Communist party pays him to do? Never has a greater or more honest admission come from an official of the Chinese Government.
Internationally, what is China doing as part of the China 2049 plan? It controls something like 104 ports and has its teeth in infrastructure projects around the world. It effectively holds Governments to ransom, with huge loans imposed on them. We know what has happened with the port in Sri Lanka, the airport in Uganda and some of the schemes that have fallen to pieces. It places huge debts on many east African countries in particular, which is the real characteristic of the belt and road project. China has a stranglehold on rare earth mining, controlling 58% of critical minerals mining and 73% of the global production capacity for lithium, which goes into lithium-ion batteries and is crucial for anti-climate change measures relating to renewable and environmentally friendly sources of energy. I could go on—
Tim Loughton
But I will not, as you just cautioned me.
Lastly, I welcome the Government’s announcement today on the use of TikTok on Ministers’ devices, in so far as it goes. I do not have you down as a TikTok devotee, Sir Edward—I may be doing you a disservice—but did you know that in China, western TikTok is banned and the addictive algorithms used over here are illegal? Last year, the internet watchdog made it mandatory for domestic companies to give users the choice to opt out of their data being used for personalised content in China. Over here, we know the situation: TikTok and its parent company ByteDance have close ties with the Chinese Communist party and are required to comply with the People’s Republic of China surveillance demand under the cyber-security law. Under standard contractual clauses, data can be transferred to ByteDance or other entities in the PRC from users in the UK and the rest of the west.
We should be nowhere near that system, frankly. The UK Information Commissioner’s Office should initiate an audit under section 146 of the Data Protection Act 2018 to investigate whether TikTok can protect the data being transferred under the legal regime in the PRC. If not, the ICO should consider intervening and prohibiting the data transfer as it cannot be respected in the PRC.
Whatever the Government want to call it and whatever phraseology they use, China is the greatest threat to the peace and security of the globe, and we need to plan accordingly. If people do not believe me, I urge them to read the words of the lifetime dictator who is in control of that country.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
It is a pleasure to follow the hon. Member for East Worthing and Shoreham (Tim Loughton) and the hon. Member for Strangford (Jim Shannon), who secured the debate. I am reminded of the days when I used to have to read case reports. I would read the lengthy and definitive judgments and then I would come to one that just said, “I concur”, and I would fall on it like manna from heaven. To the two hon. Gentlemen who have already spoken in the debate, I say, “I concur”.
I will make two points. My first is about the position of people coming here from Hong Kong under the British national overseas sponsorship scheme. Last night, I had the enormous pleasure of spending time at a symposium at the London School of Economics, run by the Hong Kong Public Affairs and Social Services Society. It highlighted the importance of understanding that for all those Hongkongers who have settled here, their arrival is not the end of the story; it is just the beginning. The trauma of leaving their home in the way they had to will have caused many other issues, and our obligation to support them did not stop when they cleared passport control at Heathrow airport.
My more significant point is about not so much the position that has been outlined at some length, but the approach of Ministers and Government officials in response to it. Today in the main Chamber, the Chancellor of the Duchy of Lancaster managed to make a whole statement about TikTok without using the words “China” or “Chinese” once.
Last Wednesday, in this very Chamber, I initiated a debate on genomics and national security. In his reply, the Minister responding said something quite remarkable:
“I had been prepared to pay tribute to the work of BGI”
—that is the Chinese genomics giant—
“when my officials pointed out that at that point Genomics England was suffering several hack attacks from BGI each week.”—[Official Report, 8 March 2023; Vol. 729, c. 120WH.]
I know that he was talking off script at that point. I could tell because I was watching him; I could also tell from the way the blood drained from the officials’ faces. The next day in Hansard, there was a letter of ministerial correction. It said:
“There is no evidence of attempted hacking of Genomics England in 2014 from BGI.”—[Official Report, 9 March 2023; Vol. 729, c. 2MC.]
Stalin at the height of the Soviet Union could not have improved on that. I have no doubt that the correction was initiated by officials as a consequence of the representations that they then had. Clearly, they were not of a mind to stand up to those representations and the pressure that was being put on them. Genomics needs to be part of our critical national infrastructure; the Government need to move on that. From what we see, the time has now surely come for BGI Group itself to be the subject of a security review by the United Kingdom Government.
If we are to be serious about the way in which we rebalance our relationship with China, we need to get the balance between trade and human rights right. The right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) and I were both members of Cabinet in the golden age, so we have seen how it used to work. We understand that that has to change. That would be a good point at which the Government could start. If the Minster could express a view on that, I think we would all consider our time today to have been very well spent.
Tommy Sheppard (Edinburgh East) (SNP)
I thank the hon. Member for Strangford (Jim Shannon) for securing this debate. We do not take enough time to consider relations with China in the round. When we talk about it, it tends to be very specific, so I welcome this opportunity. There has been little said today that I would disagree with, if anything, so there is a broad consensus in the Chamber.
We have all watched, with concern and alarm, developments in China over the past decade: the strengthening of the state’s grip over civil society, the well-documented civil and human rights abuses, and the growth of mass surveillance of the population to an extent we have never seen before. Those are causes for great concern. There is something almost unique about China. Throughout history, the UK has had to work with other countries and Governments with whom it has profound philosophical and political disagreements, but never has a country penetrated our economy and society to such an extent as China has over the last generation.
It strikes me that the interface between us and China does not happen out there, in a place beyond these shores; it happens in the towns and cities within these islands. There is considerable Chinese investment and ownership in our economy. There is a degree of intervention in academia and our universities that is without precedent. In my city of Edinburgh, there are thousands of Chinese students, and the same is true in most of our universities. Our universities have grown wealthy by charging these students from middle-class Chinese families considerable fees to come here; it has been a very big growth industry for them. When it comes to communications, among other things, the Chinese influence is quite certain, but we seem to have little capacity to understand, analyse and be aware of this interface. I hope that the Government will look at how that could be improved, and how we could develop that capacity.
We have heard the Government’s strategy described as “robust pragmatism”. If I knew what that was, I might agree, but until we get more definition, it is difficult to do so. As the right hon. Member for Orkney and Shetland (Mr Carmichael) said, the Chancellor of the Duchy of Lancaster implied today in the main Chamber that “robust pragmatism” means being aware of China’s economic influence and our economic relations when we formulate our attitudes towards it, and when we take action. That much is self-evident, I suppose. Let us hope that “robust pragmatism” does not mean setting aside our concerns or our criticisms about human and civil rights abuses because of that economic relationship; it cannot mean that. We need a strategy from the Government that shows how we can press our case on international human rights while navigating the economic relationship, and how, on occasion, we can use that economic relationship as leverage to achieve other social and political goals.
To conclude, I have three questions to put to the Minister, which I hope he will answer in his summing up. First, we have had a lot of discussion about Hong Kong. An international agreement has clearly been broken. Is it not bizarre that there are national sanctions on individuals in Myanmar, Russia and Belarus, but not Hong Kong? The breaking of that agreement, the way in which it was traduced and the movement in a different direction has not happened by accident; there are people making it happen. Those people ought to be identified and sanctioned by this country, as they have been by other countries. When will we see Magnitsky-style sanctions against people in Hong Kong, to hold them responsible for what they have done?
Secondly, the SNP has long pressed for the establishment of a commissioner to look at foreign investment in this country, with a view to examining illicit foreign investment. We see such investment particularly from Russia, but there is a case for looking at Chinese investment as well. It would be a step forward to have a commissioner who was charged with examining incoming finance and determining whether any of it was illicit.
Finally, my hon. Friend the Member for Argyll and Bute (Brendan O'Hara) brought forward a ten-minute rule Bill last year that sought to outlaw imports from Xinjiang unless it could be proven that the products were made without the benefit of forced labour. We ought to be able to do that. Given what we know about the human rights situation in that region of China, there should be an onus on those involved to give that proof.
Sir Iain Duncan Smith
Companies that import from China can have no excuse for not doing that, because companies such as Oritain can track all the genetic fingerprints. They can tell exactly where a product was grown or manufactured, and what happened to it. There is no excuse at all. The Government should get on with doing this.
Tommy Sheppard
But to be clear, there is no reason why we should not oblige importers to prove that the products that they import were not made with slave or forced labour. That seems a very easy way in which we could use our economic capacity to enhance and protect human rights.
Catherine West (Hornsey and Wood Green) (Lab)
It is a pleasure to serve under your chairmanship, Sir Edward. I declare an interest as a founding member of Hong Kong Watch. I am unsure how many Members of this House have lived in China, but I am in a somewhat unique position, having spent an academic year in Nanjing in the 1990s. At the time, China was emerging on the world stage and growing economically, and there was an anticipation and excitement that the relatively new economic opening that had been embraced at home and abroad might be followed by political reforms, even if dreams of a democratic China were far-fetched. In the years since, particularly since the introduction of the core leadership concept of President Xi Jinping, we have seen the emergence of a China with a sense of closing and an increasing domestic authoritarianism. That contrasts with what was experienced by foreign teachers in the mid-90s in Nanjing.
China prides itself on its economic growth, which has undeniably lifted millions out of grinding poverty since 1990. It has a rich and proud history, and is keen to be taken seriously on the global stage. Sadly, the trend is increasingly towards authoritarianism at home, and a more assertive and at times aggressive approach to defence and foreign diplomacy. In recent years, China has unlawfully occupied islands and islets in the South China sea, which has caused tension with neighbours in the region. There have been increasing numbers of menacing military manoeuvres in the Taiwan strait and hand-to-hand combat with neighbours in India, as the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) mentioned.
At the same time, through its development policies, China is courting influence in the global south through the belt and road initiative. That has changed the balance of voting power in international for a, and challenged the notions of international law that have governed diplomacy since the end of the second world war. We have also seen a brutal and unprecedented crackdown on domestic dissent; the well documented appalling treatment of the Uyghurs in Xinjiang has been described by many, and by a vote of this House, as a genocide. The freedoms and liberties promised to Hongkongers in the legally binding Sino-British joint declaration have long since been undermined.
As the hon. Member for East Worthing and Shoreham (Tim Loughton) said, freedom of religion or belief has been compromised in Tibet, and there have been attacks on Buddhist temples and faith leaders. Unfortunately, the regularity of reporting by the Foreign, Commonwealth and Development Office on the hotspots of Xinjiang, Hong Kong and Tibet has decreased. I hope that the Minister will recommit his Department to more regular reporting, so that parliamentarians can be kept up to date on the human rights picture.
Naturally, the approach under Xi Jinping has heralded a step change in our approach to China; the heady, and arguably naive, days of the so-called golden era have been replaced by a growing understanding that a more coherent, robust and level-headed approach to UK-China relations is needed. Unfortunately, the Government have been dragging their heels when it comes to changing the way that we approach China to take into account the change in China under Xi Jinping. Ministers were slow to withdraw British judges from the Hong Kong court of final appeal, despite Labour’s and other parliamentarians’ consistent demands for action. There is a litany of examples in which their action has simply not matched the severity of the situation, including in the case of the appalling and brutal attack of protesters outside the Chinese consulate in Manchester, the reports of Chinese police stations in the UK, and the malign use of technology such Hikvision and TikTok. It took three urgent questions to drag Ministers to the House to take action on the first of those. On TikTok, only today have the Government confirmed that they will take action. We are lagging behind our allies—we are behind the curve again.
There are other cyber threats that need to be taken seriously. I am on record as having tabled many questions on the Beijing Genomics Institute. The Government lack a comprehensive strategy on cyber threats to the UK from malign actors. The Minister will point to this week’s publication of the refreshed integrated review; I accept that the review goes far further than the 2021 iteration in acknowledging that China poses an “epoch-defining challenge” for the UK. I particularly welcome the Government’s commitment to doubling the funding available for increasing Whitehall’s China capabilities and Mandarin training. Both are vital steps that we in the Labour party have called for.
I also note Monday’s AUKUS announcement and the significant commitment to regional security through that partnership, which has the Labour party’s full support, but we must still do more to live up to the challenge that the integrated review lays out in detail, so that our actions and posture match the at times bellicose approach taken by Xi Jinping in Beijing. That is particularly the case with Hong Kong, where young democracy activists and British citizens—including Jimmy Lai, whose crime was to defend freedom of expression—are on trial, and where the national security law continues to undermine the freedoms promised to the people of Hong Kong. Will the Minister say whether the UK will come into line with the US on sanctions to the leadership of the Hong Kong Government? It is good that the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) voiced those concerns.
Regretfully, the integrated review refresh makes little mention of Hong Kong and the challenges faced by the city and its people, or of how the British Government will support those facing arbitrary trial and detention simply for standing up for their legally promised rights. Members have made a powerful case about how China has changed under Xi Jinping’s creeping authoritarianism, and about China’s strengthening military and ever-increasing defence budget—a 7% increase was announced just this week.
I will press the Minister on several points related to how the UK should respond to Xi Jinping’s China and follow up from the integrated review. First, what steps will the Government take to support British nationals detained in Hong Kong, as China continues to apply its draconian national security legislation and erode the essential freedoms enshrined in the joint declaration of 1984, which came into effect in July 1997? For example, how good is the day-to-day consular access to Jimmy Lai?
Secondly, what support will the Government as a whole provide to newly arrived Hong Kong nationals in the UK? The right hon. Member for Orkney and Shetland (Mr Carmichael) mentioned his work in his constituency and around the UK in that regard, and other Members mentioned work in their constituency. I attended a useful group in Haringey borough that was organised for newly arrived Hongkongers, but are they safe from surveillance by individuals from the Chinese Communist party who are based in the UK? Will the Minister join the Home Office in looking at that on behalf of parliamentarians who are concerned about the safety of those newly arrived communities?
Thirdly, will the FCDO support human rights defenders in Xinjiang and Tibet? Will developments be monitored, so that they can inform the FCDO’s reporting cycle? It is vital that parliamentarians have relevant, up-to-date information about the human rights infringements of such an important trading partner.
Finally, what steps are the Government taking to increase UK support and influence in countries of the global south, particularly in the wider Indo-Pacific region? That is essential if we are to support our allies and partners while China continues to increase its global influence.
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Leo Docherty)
It is an honour to respond to the debate, Sir Edward. I am answering on behalf of my good friend the Minister of State for the Indo-Pacific, my right hon. Friend the Member for Berwick-upon-Tweed (Anne-Marie Trevelyan).
I am grateful to the hon. Member for Strangford (Jim Shannon) for calling the debate, and I am grateful for the contributions from my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton), the right hon. Member for Orkney and Shetland (Mr Carmichael), the hon. Member for Edinburgh East (Tommy Sheppard) and the Opposition Front Bencher, the hon. Member for Hornsey and Wood Green (Catherine West). I will try to cover the various points raised.
I was grateful for the opening remarks of the hon. Member for Strangford, which were wide-ranging, interesting and pertinent. I deeply appreciated the way he set out the barbaric treatment of the Uyghurs in Xinjiang. He also addressed the concerns we all have about the situation in Hong Kong, particularly with regard to the constraints on freedom of expression. He also mentioned Tibet, the persecution of Christians and the ominous race towards cyber-surveillance in China. I am grateful for the comprehensive nature of his remarks, and I will try to address his points.
I will first address the points raised by the hon. Member for Hornsey and Wood Green. We continue to support Hongkongers in Hong Kong, but also those newly arrived here, and we continue to monitor their safety. We are all clearly moved by the scale of arrival, but the warm nature of the welcome is also impressive. We will continue to support human rights defenders in China and Hong Kong, and we continue to work in the global south—that is a core part of our diplomacy—to ensure that Chinese disinformation, among other issues, are countered.
This is clearly a timely debate, given the very much expected news last week that President Xi Jinping will serve an unprecedented third term as President, but also because of our release of the integrated review refresh and, of course, the AUKUS announcement on a remarkable alliance with two of our most valued security allies.
Let me dwell briefly on the integrated review refresh. In 2021, we assessed that China’s increasing assertiveness, and its growing impact on many aspects of our lives, will be one of the defining factors of the 21st century. That remains our assessment, but the review foreshadowed the intense global turbulence of the last two years. The refresh, which the Foreign Secretary presented on Monday, sets out how we are meeting the challenge of this more volatile world head on. Clearly, it is about much more than China—it is also about Russia’s threat to European security—but it also recognises the very significant challenge that China presents, in terms of military, diplomatic and economic activity. The review is clear in stating that China has becoming more authoritarian at home and more assertive overseas, and that it presents us with an “epoch-defining challenge”.
Mr Carmichael
The Chancellor of the Duchy of Lancaster said in the Chamber today that China is
“the most significant state threat faced by the United Kingdom”.
Does that form of words encapsulate Government policy? I have to say, many of us would have been happier to read that in the IRR.
Leo Docherty
China remains, as identified in the original integrated review, the biggest long-term state threat to the UK’s economic security. No one is disputing that. What the refresh seeks to do is build a strategy around that. Page 30 of the refresh says:
“China under the Chinese Communist Party (CCP) poses an epoch-defining and systemic challenge with implications for almost every area of government policy and the everyday lives of British people.”
That is comprehensive, and it is very clear that the refresh is seeking to build a strategy around that analysis.
Furthermore, we know that the challenge includes China using its economic power to coerce countries with which it disagrees. Its aggressive stance in the South China sea and the Taiwan strait threatens to bring danger, disorder and division. In other words, it threatens to create an international order favourable to authoritarianism. We will work closely with others to push back against any attempts by the Chinese Communist party to coerce or threaten other countries. That is a great deal of what AUKUS is seeking to do, as we all saw earlier this week.
We have already taken robust action to protect UK interests and values since the last integrated review. That includes new powers to protect our critical industries under the National Security and Investment Act 2021; bolstering the security of our 5G network through the Product Security and Telecommunications Infrastructure Act 2022; and training more than 170 civil servants in Mandarin. Hon. Members have mentioned Confucius Institutes; clearly, the Home Office and the Security Minister are looking at them in great detail.
The integrated review refresh takes this approach further. We will double funding for Chinese expertise and capacities in Government so that we have more Mandarin speakers and China experts. That will boost skills and knowledge for Government staff on China, including on economic and military policy, as well as Mandarin language skills. We would all welcome that.
Let me dwell on Xinjiang. The hon. Member for Strangford made a very good case and laid out the horrors we have seen there, and I am thankful to him for that. The UK has led international efforts to hold China to account for that through the United Nations and our sanctions regime. We were the first country to step up to lead a joint statement on China’s human rights record in Xinjiang at the United Nations. Since that first statement in 2019, we have worked tirelessly to broaden the network of countries speaking out. Most recently, on 31 October, the UK played a leading role in securing the support of a record 50 countries for a joint statement on China’s human rights violations in Xinjiang. We have also implemented measures to ensure that UK organisations are not complicit in these violations through their supply chains. We will continue to call out China and put pressure on it to change.
Catherine West
Could the Minister give some specific examples of companies or importers that have had products halted because they are connected to slavery or human rights abuses in Xinjiang?
Leo Docherty
Seeking to be up to date, I will ask the Minister of State for the Indo-Pacific to write a letter to the hon. Lady to that effect.
Let me move to the issue of Hong Kong. The hon. Member for Strangford raised this in meaningful terms and noted where China’s national security law has stifled opposition and criminalised dissent. Of course, the UK Government acted quickly and decisively to introduce a bespoke immigration route for British national overseas status holders and their immediate family members. More than 150,000 BNO visas have been granted, providing a route to UK citizenship. We welcome the contribution that that growing diaspora makes to life in the UK, as we welcome the contribution of the diaspora with links to mainland China. We will continue to stand up for the rights and freedoms of the people of Hong Kong, as agreed in the Sino-British joint declaration.
Let me turn to the issue of Taiwan. China’s military exercises in August last year undermined peace and stability in the Taiwan strait. Those are not the actions of a responsible international power. The UK has a clear interest in peace and stability in the Taiwan strait. This issue must be settled by the people on both sides of the strait and through constructive dialogue, without the threat or use of force or coercion. We do not support any unilateral attempts to change the status quo.
To conclude, China under Xi Jinping poses an epoch-defining challenge with implications for almost every area of Government policy and everyday life in Britain.
Sir Iain Duncan Smith
I want to take the Minister back, because I thought he was going to be a bit more explicit about the BNO passport and the situation of Jimmy Lai. May I just elide the two, because they are relevant, and press my hon. Friend to be a little clearer? There are BNO passport holders who have fled over here, to the UK, who are now deeply worried about their status. They think of Jimmy Lai and see that the British Government seem quite incapable at this stage of making it publicly and absolutely clear that he is a passport holder and citizen and of publicly demanding access rights to that man, who is incarcerated. If they will not do that for a British passport holder, what do the BNO passport holders feel about their status? Does the Minister realise that that will be very damaging?
Leo Docherty
I am grateful for the question. It is a good opportunity for me to highlight the fact that the Minister for the Indo-Pacific has met the family of Jimmy Lai. I think, therefore, it would be right for me to give my right hon. Friend the reassurance that that Minister will write to him with an update and an answer to that question.
On Monday, my right hon. Friend the Foreign Secretary set out how we will protect our national security, align with partners and engage with China where it is in our national interests to do so. First, we have already taken robust action to protect UK interests and values since the last integrated review. That includes new powers to protect our critical industries under the National Security and Investment Act 2021; and in relation to Hong Kong, we have acted quickly and decisively to introduce a bespoke immigration route for BNO status holders and family members.
Secondly, we will align and deepen our co-operation with core allies to influence China. That includes being the first country to lead a joint statement on human rights violations in Xinjiang, and sustaining pressure on China by broadening the range of countries speaking out. Thirdly, we will engage with Beijing on key global issues such as climate change and the war in Ukraine. We will continue to press China to join the UK in pushing Putin to cease all hostilities and withdraw his forces from Ukraine.
Under the integrated review refresh, my right hon. Friend the Prime Minister has set the direction across Government for a consistent, coherent and robust approach to China that is rooted in the UK’s national interest and aligned with our allies. I commend this strategy to the Chamber today.
Jim Shannon (Strangford) (DUP)
I thank all right hon. and hon. Members for their contributions—including the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier), who always speaks on behalf of those in Hong Kong and the Uyghurs. We all appreciate her intelligent interventions. I give special thanks to the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith). Whenever he gets up to speak, I sit down to listen. Many others in the Chamber do the same: we recognise that he speaks words of wisdom. He clearly underlined the question of when the UK Government will demand the release of Jimmy Lai, a British citizen. When will he be released? That is not too much to ask.
The hon. Member for East Worthing and Shoreham (Tim Loughton) has campaigned on behalf of Tibet for a long time. One of the first Westminster Hall debates that I attended—about 10 years ago now; that is hard to believe—was led by the hon. Gentleman. He referred to the authoritarian lifetime President of China. He made a comparison with the Nazis of the 1930s and discussed China’s attempt to change the world order by strengthening its navy, air force and army. As always, he spoke up for the Uyghurs, those in Tibet and the Dalai Lama. He also mentioned the Confucius Institutes, which we are all concerned about.
The right hon. Member for Orkney and Shetland (Mr Carmichael) shared his wisdom, referring to how his debate on genomics last week had developed beyond this Chamber. He said that it had to be part of the critical structure of the United Kingdom. The hon. Member for Edinburgh East (Tommy Sheppard) also referred to the Confucius Institutes and growing Chinese influence. He discussed China’s key role in Hong Kong and across the world, including the United Kingdom, and its strategy.
The hon. Member for Hornsey and Wood Green (Catherine West) spoke of the genocide against the Uyghurs and the UK’s need to show strength against China. She gave examples of where the independent review does not challenge China as we would like it to have. At the end, the Minister spoke of what the United Kingdom is doing. We would probably like to see a bit more courage, strength and determination; I say that with respect. We need to see those things as the UK Government strategy goes forward.
I finish with this comment. This April, one of Hong Kong’s most senior finance officials is planning to visit the UK. If we were any sort of strong, forward-thinking, determined and courageous country, we would say to him, “You know something? You’re not welcome until we see the changes that should be happening.” I thank you for your chairmanship, Sir Edward, and everyone else who has contributed.
Question put and agreed to.
Resolved,
That this House has considered the matter of relations with China during the presidency of Xi Jinping.
Car Parking: Care Workers
(1 year, 9 months ago)
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Damien Moore (Southport) (Con)
I beg to move,
That this House has considered the matter of car parking charges for care workers.
It is a pleasure to serve under your chairmanship, Sir Robert. I thank all hon. Members here in Westminster Hall today and the Backbench Business Committee for granting the application for this debate.
Care workers play an immeasurably important role in our society, looking after our loved ones and being with them through what for many will be the most difficult times of their lives. If it were not for their selflessness, diligence, dedication and good humour, our loved ones would have a far more difficult time and the knock-on effects on the older generation could be huge. Being a care worker is a difficult job, requiring hands-on work to support a diverse range of needs. For the 490,000 domiciliary care staff in England, delivering care and support to people in their own homes can involve dozens of short journeys every day. These workers must be trained and knowledgeable in so many things, including taking blood pressure, administering medicine, assisting patients with eating and even the art of making a good cup of tea.
Care work is undoubtedly a complex role that requires strong interpersonal skills. Given the demands of this tough and skilled job, it is perhaps not surprising that the vacancy rate in March last year stood at almost 11%, representing 165,000 vacancies. That was up from 7% a year earlier, which represented 110,000 vacancies. In domiciliary care, the vacancy rate is 13%—a figure far higher than in residential care, where the vacancy rate stands at almost 9%.
Yet as the number of vacancies grows, demand for social care is rising and that is expected to continue. I have noticed it especially in my constituency of Southport, which has an ageing population; we would greatly benefit from an uptake in the number of people wishing to work in the care sector. The increase in vacancies will place yet further stress on our hardworking care workers, so it is no wonder that Skills for Care estimates that the turnover rate of directly employed staff working in adult social care was 29% between 2020 and 2021, which is equivalent to approximately 400,000 leavers.
I appreciate that I am painting a bleak picture, but the situation is not all doom and gloom. Covid shone a spotlight on what many of us have been arguing for years: that we need to do more to support those who work hard in social care. The Government’s adult social care reform White Paper, published in December 2021, set out a 10-year vision for adult social care, along with funded proposals to be implemented in the following three years. Yet 10 years is simply too long for my hard-pressed constituents to wait, especially when a cheaper and simpler solution lies much closer to hand.
A few years ago, a particularly memorable constituent came to see me at one of my weekly constituency surgeries, held at the Atkinson library every Friday at 11 am. She worked in social care and was clearly excellent at her job; I felt confident that the elderly and vulnerable in Southport would be fine in her safe hands. However, she had a major problem with our local authority, Sefton Council. Every time she parked outside one of her clients’ houses, she would have to pay 90p for a parking ticket, and this was happening up to two dozen times a day. The cost of these tickets adds up, especially for those who are already earning close to the minimum wage.
Abena Oppong-Asare (Erith and Thamesmead) (Lab)
I thank the hon. Gentleman for securing this debate; it is important that we discuss this issue. I thought it would be helpful to give the example of a constituent of mine who has contacted me—a home care provider who has difficulties in driving from one client to the next and often struggles with parking. Does he agree that we should consider measures to help to ease the pressures on hardworking care workers, particularly because such measures would help to alleviate stress and save them time as they try to help their clients?
Damien Moore
The hon. Lady is absolutely right. What we are trying to do is remove from care workers’ lives the stress of paying for parking tickets and finding a parking space. There are times when a carer will pay for a half-hour parking ticket, although when they are in a client’s house they might find that they need to call an ambulance. That could take a few hours to arrive, during which time they will not be able to pop out and top up the parking meter. When they receive a parking penalty charge, which can lead to a lengthy challenge process for which few people have the time or energy, that causes additional stress.
I am sure that all Members here have at some point engaged with the Chancellor to see what he can do to better support our constituent care workers. His Majesty’s Revenue and Customs already offers tax relief on mileage incurred for work purposes, but there is currently no nationwide scheme in place to help with parking charges. Consider instead if care workers were simply allowed to keep their money in their pockets and did not have to go through complex bureaucracy; that will be possible only if we get this right and end needless car parking charges.
After speaking with my constituents, I immediately wrote to Sefton Council to raise the issue, but was quickly told that it was not interested in changing policy. I then wrote to the Government to ask if they could compel the council to change the policy by providing ringfenced funds to support my hardworking constituents. I was delighted when the then Health Secretary, my right hon. Friend the Member for West Suffolk (Matt Hancock), announced that the Government would be introducing the covid-19 parking pass, proving that we can do this if we really want to.
The scheme entitled on-duty NHS staff, health and social care workers, and NHS volunteer responders, to free parking in local authority off-street car parks and on-street bays in England. It was a fantastic scheme, and it worked wonders for not only the bank balances but the mental health of my social care worker constituents. No longer were they finding themselves squeezed even tighter by virtue of simply doing their job. With less time spent fumbling around looking for parking spaces, paying, and, sadly, often appealing a parking ticket, those workers could spend more time supporting people who draw on care in their own homes. It was win-win, for everyone.
Then the covid scheme came to an end. With the vacancy rate increasing, I felt all of the work had been undone. A permanent solution is required. Today, with the Minister present, I call on the Government to introduce a nationwide standardised green badge system—similar to the blue badge—for social care workers on duty and making care visits. It should be nationally recognised, with eligibility set at a national level. It should be available for all care workers who travel to provide care in clients’ homes. Care workers should be the permit holders, and, in keeping with the efficiency it would introduce, there should be a simple standardised application and issuing service. Engage Britain’s research shows that such a proposal has 80% support across all major political parties, as reflected by the diversity of Members who often bring up the issue.
Parking is normally an issue for local authorities, but we saw over covid that central Government can take the initiative in this area, and, with one sweep of the pen, put this easy and cheap solution in the hands of our care workers. After all, it is the Department of Health and Social Care’s responsibility to look after social care workers, so this parking protocol is its responsibility, not that of local councils. Similar arguments were made about the blue badge system, yet today’s standardised system is widely held up as being a great success. We need that success for our care workers too.
Some parking exemption schemes have survived the Government’s closure of their own scheme post covid, as hon. Members from Cornwall, Devon and Manchester will know. Those schemes would also benefit from the administrative simplicity of the central standardised system that I propose.
I finish with an impassioned plea. It is so rare that we are presented with such simple solutions. My proposed green badge has already been trialled nationwide throughout covid by the Government’s scheme, and was a resounding success. Both macro research from Engage Britain and micro research, such as anecdotal conservations with my constituents, show the huge benefits that free car parking has had and will continue to have if reimplemented. It is a low-cost, low-admin solution with tangible benefits for everyone who works in care, and for all those who have loved ones in care.
Jim Shannon (Strangford) (DUP)
I thank the hon. Member for Southport (Damien Moore) for setting the scene so well. I always try to contribute in debates on health issues, as Members know. Here we are again: the hardy annuals are back. The Minister, the shadow Minister, the hon. Member for Denton and Reddish (Andrew Gwynne) and others are here to contribute.
I am an advocate for care in the community. I feel strongly about the problems the hon. Member for Southport outlined.
I know the Minister has responsibility only for the mainland, but I always try to give a Northern Ireland perspective to any debate. It will be not just a Northern Ireland perspective, but a personal one, as it relates to my brother. He had a very severe motorbike accident when he was 39 years of age, some 18 years ago now. They said he would never be independent again and would never be able to do the things he once did. And he cannot, because he has been left with some fairly severe brain injuries.
Although our Keith cannot multitask, he can still have a life—but it is restricted and he is dependent on others. My mother is 91 years of age. I refer to her as a spitfire, because she is a lady who pushes and pushes. She pushed for Keith because she wanted him to return home and have a life, even though it would be with care attendants for a time. She pushed him into rehabilitation. He was determined, but she also made sure that the carers and the health system pushed for him. She pushed the workers in the care homes to keep driving him further. She pushed the trust to provide the care for him. Keith has been living at the bottom of my lane—I live on a farm and the house he lives in is a house that I built—and he gets picked up by the bus drivers outside the house. There is no bus stop. They drop him into Ards and he goes to the centre where he learns further rehabilitation and engages with others who have similar disabilities. It gives him the chance to have as normal a life as possible.
His care workers come in four times a day and help him get up. He has a brilliant life even with all his limitations. It is clear that Keith would have been in a care home under supervision and without care in the community had it not been for the pushing of my mother and others who wanted to give him a good level of care. I have no shame in saying that care workers are not paid enough. We need to right that wrong. We will all say that here, because we all believe it. It is a truth. The debate allows us to go beyond just a clap, which is commendable, and to send the message that we applaud their work and will make changes to support them further.
While Keith has a driveway that the workers park in, many town centre homes do not have parking. To park on the street will mean a ticket from the ever-present, sometimes overzealous, traffic warden. Currently, staff pay the minimum amount for an hour’s parking, even though the call will last only 15 minutes, and they cannot claim for that. It presents a problem, which the hon. Member for Southport has outlined very well. To me it is very clear: all staff should have a parking charge exemption permit issued by local authorities that entitles them to an hour’s free parking either on the street, as long as no obstruction is caused, or in a local car park where feasible. Those are not big things to ask for, but they would change the lives of care workers where we are.
It is right and proper that in Northern Ireland health trusts car parking is set to become free next year. I know that is not the Minister’s responsibility, but I wanted to mention it. I have grave concerns when I read articles such as that on the BBC 12 hours ago that cited the massive overspend of £500 million and the fact that:
“The Department of Health has said there are channels to generate income, such as continued car parking charges…prescription charges…and charging for domiciliary care...It’s thought that each £15m generated would enable about 30,000 assessments, diagnostic tests or procedures for patients with cancer or time-critical conditions.”
That is a matter for another debate, but I wanted to make the point that there are always things we can do financially. It would be a massive slap in the face for our care workers to continue to pay for parking, and we should do our best to help them.
The facts are clear. Care workers, district nurses and all of those in care in the community simply are not remunerated to the level they should be. If a call lasts longer, they do not get overtime. It comes out of their own time. I have a good relationship with a district nurse in Strangford who makes her patient tea and toast even if that means that she cannot take her tea and toast at lunchtime, and that is her contribution to the person she looks after. I do not think that any MP, including yourself, Sir Robert, who would be unable to give an example of that very thing happening with the care workers in their constituencies—those good people. She sacrifices her time for her patients’ comfort and, to add to that, she has to pay for the parking to do so.
The request is clear, and the hon. Member for Southport has outlined it. There is something wrong with the picture, which is why I wholeheartedly support him. More than that, as I always do, I look to the Minister—who, I believe, clearly understands our requests—to make representations to other Cabinet colleagues to ensure that additional discussions take place to enable care workers to get the help they need. If the Minister is of a mind to do so, I ask her to have some discussions with Northern Ireland officials to ensure that we are encouraged to do something similar back home through the Northern Ireland Assembly.
We have drained our health workers of good will, expecting more and more and sometimes, unfortunately, granting less and less. We need to start working on rebuilding trust and good faith, and this is a great step in that journey. I am encouraged by today’s good news that we seem to be moving closer to a wage settlement. Let us welcome that good news, but let us also try to welcome more good news for care workers when it comes to giving them the help with car parking that they need so much.
Andrew Gwynne (Denton and Reddish) (Lab)
It is a pleasure as always to serve under your chairmanship, Sir Robert, and to speak on behalf of the shadow Health and Social Care team. I thank the hon. Member for Southport (Damien Moore) for securing this important debate and for all the work he has done to raise awareness and champion the cause, which I do not think anybody can have any issue with. I very much support it—let us get it over the line.
We have had a small but perfectly formed debate today. As well as thanking the hon. Member for Southport for securing the debate from the Backbench Business Committee, I also thank the hon. Member for Strangford (Jim Shannon) for always giving the Northern Ireland perspective in these debates. It is really important that we learn from different parts of the United Kingdom, because no one home nation has the right answer to all these things. It is good to learn from one another and have the perspective from other parts of the United Kingdom as we deliberate on what we should be doing here in England to support our care workers.
I thank my hon. Friend the Member for Erith and Thamesmead (Abena Oppong-Asare) for her contribution. She is absolutely right about how we need to come together across party lines and support care workers. Parking is a big issue and a pressure on those who work in our health and care system. I also place on the record my thanks to care workers, because they do an extraordinary job, as has been highlighted throughout the debate. We should never take their efforts for granted, because they are the linchpin in ensuring that the most vulnerable people in society are cared for and looked after in their time of need.
I am not making a party political point, but we know that the care sector is in crisis. It is under enormous stress and strain; the demand far outstrips the ability for us to meet many expectations. Primarily, a recruitment and retention issue in the workforce is at the heart of that. As a consequence of those pressures, many staff feel undervalued, overworked and underpaid, and it is our duty as parliamentarians to try to resolve those issues. We will support the Government on the measures they introduce; we have our own ideas as well, which the next Labour Government can hopefully introduce, but while the current Government are in office we will work with them to try to resolve these issues.
Problems such as parking charges put additional financial pressure on carers already going above and beyond and compound the stress that many of those people are under. That is demonstrated by the difficulty in retaining domiciliary care staff. As Nuffield Health points out, more than one in three domiciliary care workers left their roles last year, and many opted to work in sectors that offer better working conditions and pay.
Two issues are at play here. There is, of course, the specific issue of car parking changes, but that speaks to the question of how we treat our social care staff in general. Some good points have been made, mainly by the hon. Member for Southport in opening the debate, about free parking for domiciliary care workers—what the charity Engage Britain refers to as a green badge scheme for care workers. As the charity points out, several local authorities already operate a similar scheme, but a bit of a postcode lottery in provision seems to be developing. At the heart of the issue are care workers who are just trying to do their job.
I want some clarity from the Minister on a few questions. First, have the Government considered the green badge proposal? There is a huge problem here. It cannot be right that care workers are effectively being priced out of doing an essential job. They are desperately trying to care for vulnerable individuals, rushing between houses and having to worry about whether they will be able to afford the parking. I am not comfortable with that being a calculation that care workers have to make in 21st century Britain, and I sincerely hope and expect that the Minister feels the same. Will the Minister set out whether the Government are in conversation with care leaders and staff on what support can be offered?
Secondly, in the absence of a national free parking scheme, what steps is the Minister taking to engage with care agencies to incentivise companies to pay their staff back for the money that they have to spend on parking? It is not right that staff can accrue personal costs in the day-to-day administration of their employment and not be fairly recompensed by their employer. There needs to be a clear message from the Government that that is not an acceptable business practice.
Engage Britain provided my office with a good quote from a care support worker on a zero-hour contract, who said that with free parking,
“social care workers will be able to make appointments on time, with less stress, less rushing around”
and would be able to
“provide more attention and better support to the vulnerable people we are visiting”.
That quote raises an important point. Has there been any assessment of the impact that parking charges are having on quality of care? If care workers are scrambling around trying to find a parking place, there is a risk that they are unable to do their work to the standard that they want. Indeed, it has been brought up in the debate that, in an emergency in which a care worker has to stay with a very ill person until a blue-light response can arrive, the worker may incur not just additional parking costs but, potentially, fixed penalty notices and fines. That is totally unsustainable. It is little wonder that the care sector is asking for the Government sincerely to look again at this measure and provide more support.
That all speaks to a point that I made at the beginning of my contribution: social care staff feel that they have been neglected for many years and that they have been a bit of a Cinderella in the health and care system. We desperately need staff to feel more love from Government and to be better paid and supported in their careers. Vacancy rates are at a record level—up by 50% in the last year alone—and we now have a record 165,000 vacancies in the sector. That is totally unsustainable and we cannot just sit on our hands and wait for the system to collapse.
Labour has committed to a new deal for care workers, which would focus on recruiting and retaining the staff we need by ensuring fair pay and terms and conditions, and by improving training and career progression. We would change the remit of the Low Pay Commission, so that, alongside median wages and economic conditions, the minimum wage would reflect the cost of living. That would have a transformative effect across all sectors, but particularly on social care, where problems are especially acute. We would also ensure that new contracts for care are given to ethical providers—to providers who will provide fair pay, fair conditions and training for staff. Parking may well be part of that equation, in the terms and conditions, or through the reimbursement of costs incurred by agency staff.
The Chancellor could have used his Budget yesterday to announce a long-term workforce plan for the NHS and to reform pay for social care. He did not, even though we offered him Labour’s plan—we would have been very happy for him to pinch it. Instead, he handed a tax cut to the very wealthiest. That says all we need to know about the priorities of this Government. The next Labour Government will improve and invest in social care. At the very heart of that ambition will be ensuring that our incredible social care staff receive the pay and terms and conditions that they so deserve.
On the issue before us today, I implore the Minister to do the right thing. As the hon. Member for Southport so eloquently set out in his opening speech, this would be a small improvement, but a game changer for so many hard-pressed, social care staff. I urge the Minister to do the right thing.
The Minister for Social Care (Helen Whately)
It is a pleasure to serve under your chairmanship, Sir Robert. I congratulate my hon. Friend the Member for Southport (Damien Moore) on securing this debate on free parking passes for care workers. I know it is an issue close to his heart and I commend him on his speech.
Improving adult social care and supporting care workers is one of my highest priorities, and I am delighted that my hon. Friend shares my enthusiasm, particularly for supporting domiciliary care workers. In his compelling speech, he spoke about the difficult job they do and the skills necessary for their work, as well as some of the practicalities of the job, such as the many short journeys that some care workers will be making and the challenges that result, including parking. He also spoke about the vacancy rate in social care, particularly in domiciliary care.
Recruiting and retaining staff is a particular challenge for many care providers, especially following the reopening of the economy after the pandemic. Many people had come from the hospitality or travel sectors to work in social care during the pandemic, which was hugely helpful in those difficult times, but many then often returned to those sectors. Not all did; some had found their vocation in social care, and that has been wonderful, but others, understandably, returned to their previous sector, making it harder for the social care sector to retain and recruit staff as the economy opened up. I am hearing some positive news about recruitment at the moment, but that does not mean that it is easy. It remains a real challenge, particularly with domiciliary care and in rural areas.
As my hon. Friend also said, we are seeing a growing demand for social care, as people live longer—that is a positive for us all to remember, but it does mean more people living with health conditions, and more frail and elderly people, who need people to come in and care for them. The hon. Member for Strangford (Jim Shannon) talked about the importance of living independently. We want people to be able to live longer in their own homes. There is a time when it is better for people to live in residential care—that can be the right thing for some people—but most of us want to stay living in our own home behind our own front door for as long as possible. Domiciliary care workers, who go to someone’s home, are absolutely crucial.
My hon. Friend for Southport referred to our 10-year vision for social care, which I am truly passionate about. The shadow Minister, the hon. Member for Denton and Reddish (Andrew Gwynne), talked about the challenges that social care faces. Those challenges have been around for many decades, so we are not going to fix this overnight. I share the impatience of my hon. Friend the Member for Southport. That is one reason why I try to do things in the here and now. However, I am also realistic, and some social care reforms that we want to do will take time, hence that long-term vision.
My hon. Friend spoke very specifically about the cost of parking and rightly about the stress of looking for a parking space when the clock is ticking. He also spoke about unexpected situations, such as when care workers need to stay longer and call an ambulance. The hon. Member for Erith and Thamesmead (Abena Oppong-Asare) also spoke about that in her intervention.
I heard that my hon. Friend the Member for Southport called on his local council to fix that in his area during the pandemic. He welcomed our free parking scheme during the pandemic, so I am glad that he saw it taking good effect. That was one of many things that we tried to do to help key workers through that difficult time. That ended, and I absolutely hear his argument for a new national scheme, particularly to help care workers with parking while they are on duty.
I thank the hon. Member for Strangford. It is a pleasure to be in Westminster Hall with him at any time in the week, but particularly on a Thursday; we do this not infrequently. He spoke powerfully, if I understood him correctly; sometimes I do not pick up every word he says. He spoke about his brother, Keith. He said that, following a brain injury, Keith might well have lived in a care home, but has in fact been able to live independently with the support of family, including his mother and the hon. Member, but of course with care workers visiting. He brings a very personal perspective on the important role of care workers in our communities.
The hon. Gentleman also spoke about us working across the parts of the United Kingdom. I am always happy to talk to colleagues in other parts of the Union, because I think we can all learn from each other to try to get the best for our constituents.
Taking a step back, I want to say that I am incredibly grateful to all health and care staff. I recognise the extraordinary commitment and hard work, particularly of our care workers and domiciliary care workers, who are less frequently spoken about in Parliament. I want to ensure that care workers gain the recognition they deserve from society. I truly thank them for all the vital work they do every single day, whether in care homes, people’s homes or beyond.
Many people want to work in care because they want to make a difference to the lives of others. In my conversations with care workers, many have told me that they find their work truly rewarding. Just a few weeks ago, I had a wonderful conversation with a home care worker, who told me that she loves her job. That is great to hear, but there is no denying that it can be a very demanding job, both physically and emotionally. Domiciliary care workers play a crucial role in providing care and support to people who need it within their own home, enabling them to continue living independently even when they have substantial care needs. From going on the rounds with care workers and speaking to them, I know how committed and passionate they are about what they do.
Turning specifically to parking, I heard the points made by my hon. Friend the Member for Southport on free parking for care workers, and I am sympathetic to them. I have had many conversations with those who provide care in people’s homes about some of the challenges they face, including travel and parking costs. For instance, I share the concerns about underpayment for travel times, which is a live issue within the sector.
All social care workers are entitled to be paid at least the minimum wage—I should say, the national living wage—for the work they do. The Government are clear that time spent caring for clients, travelling between appointments and waiting to start the appointment must be included in pay calculations. I labour that point because I hear accounts, usually anecdotal, of whether travel and waiting time is being paid for. It may not be within the care worker’s control if they turn up for an appointment when, for instance, another health worker is visiting somebody and they have to wait. If they are having to wait as part of their job, of course they should be paid for that working time.
Responsibility for setting the terms and conditions for parking permit schemes and delivering social care is devolved to local authorities. Some local authorities, such as Cornwall and Devon, already run health and care parking permit schemes. I am glad to be talking about this important issue today and it is right that, at the very least, the national Government support the sector by raising awareness of and driving forward innovation and best practice. I therefore encourage local authorities who are not already undertaking similar projects to look and learn from those areas that have implemented their own parking schemes, especially as we know about the recruitment and retention challenges in adult social care. I also commit to working with my colleagues across Government, in particular in the Department for Transport and the Department for Levelling Up, Housing and Communities, to consider what more can be done to help care workers with the cost of parking.
More broadly on the adult social care workforce, the Government recognise the current workforce challenges in social care.
Andrew Gwynne
I want to take the Minister back to where she rightly said that terms and conditions are matter between the employer and the employee. She was, rightly, very robust on the expectations of the national living wage being paid for waiting to do work. Does she also take a strong view that employers should reimburse their staff for any incurred parking costs?
Helen Whately
The hon. Gentleman will allow me to pause, because I do not want to find that I have unintentionally misled anybody. I am very happy to write to him on that specific question. What I am completely happy to do here and now is reiterate the importance of social care workers being appropriately paid for the work they do. At the very least they should be paid at the legal level to which they are entitled and reimbursed for the expenses of the job they do. I hope the hon. Gentleman is happy with that response.
As I said, we recognise the recruitment and retention challenges in the social care workforce. The Government are supporting local authorities and providers with the recruitment, from both home and abroad, and retention of workers. For instance, we have been running a national recruitment campaign with continuous activity across job boards, video on demand, digital audio, radio and social media to encourage people to come and work in social care. That campaign will run until the end of this month.
In addition, in February last year we made care workers eligible for the health and care visa, and added them to shortage occupation list. The latest data published by the Home Office shows that a total of 56,900 visas were granted for care workers and senior care workers in 2022. I do not suggest for a moment that international recruitment is the whole answer to our recruitment challenges in social care, but given that we have such a substantial need for care workers, it is really important to help boost our care workforce. I have heard from many care providers who really welcome it, as it helps them to recruit and fill vacancies, and bring valuable staff into our workforce.
More broadly, the Government are making available up to £7.5 billion over the next two years to support adult social care and discharge, with up to £2.8 billion available this coming financial year and £4.7 billion the following year. That is an historic funding boost to put the adult social care system on a stronger financial footing and help local authorities to address waiting lists, low fee rates and workforce pressures in the sector.
Another way councils are able to support their adult social care workforce is through the market sustainability and improvement fund. At the autumn statement, the Chancellor announced that £400 million of new ringfenced funding would be made available for adult social care in the next financial year. We have combined that with £162 million of fair cost of care funding to create the fund. We are allowing councils to use the new funding flexibly on three target areas: support for the workforce measures; increasing fee rates paid to providers; and improving social care waiting times, which will improve adult social care market capacity and sustainability. My hon. Friend the Member for Southport might be pleased to know that Sefton Council will receive £3.6 million through that fund. Many local areas have chosen to use a significant proportion of the adult social care discharge fund on measures that support the adult social care workforce, including those who work in home care.
The hon. Member for Denton and Reddish talked about the importance of commissioning—I think he referred to ethical commissioning. I assure him that I think how local authorities commission care is really important, because it influences the terms and conditions on which care providers employ their workforce. That is one reason why, in April—just a couple of weeks away—we are starting the Care Quality Commission assurance of local authority social care provision. That will increase oversight of how local authorities are implementing the Care Act 2014, and part of that is very much about how they commission care. It will enable us to identify local authorities that are doing a really good job and will give us more information about those whose commissioning does not support their market or leads to some of the practices that we have been talking about.
As I said at the beginning, we want quick answers. My hon. Friend the Member for Southport wants change here and now, and so do I, but we also have to look to the longer term for our social care reforms. People at the heart of care must set out a longer-term vision for social care. I will shortly be publishing a plan setting out our next steps for the reforms. It will include substantial reforms to the adult social care workforce to strengthen careers and opportunities, and make adult social care a better sector to work in. That will help attract more people to work in social care and retain those valuable staff members.
I thank my hon. Friend for making the case and other Members for showing support for domiciliary care workers. I share my hon. Friend’s aspiration to support his care workers. In fact, I believe I have shown that in practice—for instance, through the support I put in place during the pandemic for the social care workforce; things I am doing right now with the funds such as the market sustainability and fair cost of care fund; and things that I will do in the future, including with our adult social care reform. I am happy to consider his proposals further as part of the work I am doing to boost our support for the care workers our constituents depend on.
Damien Moore
I thank the Minister for her remarks about the things that the Government are doing for adult social care. That is incredibly important. The more airtime we can give this issue the better. We are pushing for better conditions for care workers in our constituencies.
I thank the hon. Member for Denton and Reddish (Andrew Gwynne) for his contribution. Members on both sides of the House want to find a way forward. The hon. Member for Erith and Thamesmead (Abena Oppong-Asare) represents a very different constituency from mine, but it has the same problems. Similarly, although my constituency is different from that of the hon. Member for Strangford (Jim Shannon), who talked about his brother, the conditions are similar.
We know this is a national problem; that is why I believe it requires a national solution. Somebody who works in one local authority area but lives in another should be able to cross the border knowing that the badge is available for the place they work; it should not just have to be registered in the place they live. If they work in multiple areas, they could go to all of them, which would make it easy for them to go about their business. It is a simple, easy, effective solution to the problem.
Even if charges are refundable, people have to go through the process of the refund—the reimbursement of costs. As MPs, we know getting the costs of our work reimbursed is well-deserved because they are part of the job, but the way we have to do it can sometimes be cumbersome. It is therefore absolutely right that those providing care to the most vulnerable, some of whom have complex needs, are supported even more. Even if reimbursement is available, the process of finding a parking space, getting a ticket and getting it reimbursed is incredibly stressful. We want to take the stress out of it.
This will, of course, be something that the Government have to look at, and they will have to consider all sorts of factors and the cost. But let us talk about the cost of agency workers: it is getting out of control. If we talk about the cost of a visit to hospital, it is much cheaper than the cost of somebody being able to do their job properly. We talked about people with health conditions and the frail and elderly population. We talked about all the work we are doing on discharges. Never mind the discharges; let us stop them from going in in the first place if there is no need for them to do so.
This has cross-party support. We have shown that we can do this, but we must put extra effort into supporting our care workers because they are supporting vulnerable people, including our constituents and people in our own families. It is incredibly important that we do something for them that makes a real difference. This is something we should all want to sign up to. I appreciate in this post-covid world that there might be slight differences in the way we do that, but we must ensure that we give care workers this easy support to retain them. I commend all the work being done on recruiting them, but to retain them, we need to take that stress out of their lives. We would not want it in ours; let us not put it in theirs.
Question put and agreed to.
Resolved,
That this House has considered the matter of car parking charges for care workers.
Written Statements
(1 year, 9 months ago)
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UK-lraq Relationship on 20th Anniversary of Iraq Conflict
(1 year, 9 months ago)
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The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Leo Docherty)
My noble Friend the Minister for the Middle East, North Africa, South Asia and the United Nations, Lord Ahmad) has made the following written ministerial statement:
20 March 2023 marks the 20th anniversary of the beginning of the conflict in Iraq. This anniversary is an opportunity to remember the service and sacrifice of all those who served in the conflict. At this time, we pay particular regard to those service personnel, British, allied and Iraqi, as well as civilians who died or were wounded in the conflict in Iraq. It is also a time to reflect upon the conflict and Parliament’s role in it, and to restate the UK’s enduring commitment to support the development of a stable, prosperous and democratic future for all Iraqi people.
All of us will undoubtedly have in mind today the 179 British and allied personnel who lost their lives in the conflict. I pay tribute to them and to their bravery, and my sympathy goes out to their families for their loss. Their sacrifice and determination to make the world safer for all of us will never be forgotten. Next week Ministers from HM Government will attend commemorative events across the UK, remembering all those who served in the conflict and particularly those who gave the most. Today we have in our thoughts those service personnel that died, and those who were wounded or injured as a result of the conflict. We also remember and give thanks to all personnel of the UK armed forces who served in Iraq, and their families, who provided vital support at home whilst their loved ones were deployed.
We also have in mind the many Iraqi citizens who were killed during the conflict or who have died since in military operations, bombings, acts of terrorism or through sickness and disease. There is no doubt that the people of Iraq have faced enormous and grave challenges over the last 20 years.
As part of our remembrance, we must ensure we continue to implement the hard won and costly lessons. The UK Government have learned much from the Chilcot inquiry and continue to draw upon it as we improve national security decision making and implementation. The purpose of the inquiry was to examine the United Kingdom’s involvement in the conflict in Iraq, including the way decisions were made and actions taken, to establish as accurately and reliably as possible what happened, and to identify lessons to be learned. The FCDO continues to institutionalise the Chilcot lessons learned across policy, operations and strategy so that staff are equipped to support decision making and implementation in complex contexts.
We should also look forward. Today, the UK and Iraq share a close and enduring partnership, working together to address shared global challenges. Through the global coalition against Daesh, NATO Mission Iraq and our long-term bilateral initiatives, we remain committed to Iraq in its fight to defeat Daesh and to enjoy peace and stability. We are working with the Government of Iraq to support economic reform, energy transition, human rights and freedom of religion and belief, and to mitigate the effects of climate change. These joint efforts to unlock Iraq’s immense potential, as represented by its young population, characterise the relationship in 2023.
I saw this for myself during my visit to Iraq at the end of February. There has been significant progress since 2003 but we are committed to supporting further progress and strengthening our partnership with Iraq. The UK remains committed to preserving the unity, sovereignty and territorial integrity of Iraq. We stand shoulder-to-shoulder with the Government and people of Iraq to safeguard stability and deliver prosperity.
[HWCS640]
NHS Staff: Pay Offer
(1 year, 9 months ago)
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The Secretary of State for Health and Social Care (Steve Barclay)
I am pleased to be able to inform the House that today 16 March 2023, I have made a formal offer on pay for 2022-23 and 2023-24 to the unions representing staff on the agenda for change contract. The NHS Staff Council has discussed this offer and the Royal College of Nursing, UNISON, GMB, the chartered society of physiotherapy and the British Dietetic Association will recommend the offer to their members in consultations that will be held over the coming weeks. Strike action will continue to be paused while they are consulted.
Under the offer, over 1 million NHS staff on the agenda for change contract would receive two non-consolidated payments for 2022-23. This is on top of an at least £1,400 consolidated pay award that they have already received, which was in line with the recommendations of the independent pay review body.
Under the terms of the offer, all staff would receive an award worth 2% of an individuals’ salary for 2022-23. In addition, staff would receive a one-off bonus which recognises the sustained pressure facing the NHS following the covid-19 pandemic and the extraordinary effort these members of staff have been making to hit backlog recovery targets and meet the Prime Minister’s promise to cut waiting lists. This NHS backlog bonus is an investment worth an additional 4% of the agenda for change pay bill, and would mean staff would receive an additional payment of between £1,250 and £1,600. With both of these payments, a nurse at the top of band 5, for example, would receive over £2,000 in total.
For 2023-24, the Government have offered a 5% consolidated increase in pay. In addition, the lowest paid staff, such as porters and cleaners will see their pay matched to the top of band 2, resulting in a pay increase of 10.4%.
For example, this would mean a newly qualified nurse would get over £1,300, increasing their base salary to £28,407. A nurse at the top of band 6 would receive a pay rise of over £2,000, increasing their base salary to £42,618.
The Government firmly believe that this is a fair offer which rewards all agenda for change staff and commits to a substantial pay rise in 2023-24 at a time when people across the country are facing cost of living pressures and there are multiple demands on the public finances.
Setting pay is an annual process and, as is always the case, decisions are considered in light of the fiscal and economic context and ensuring awards recognise the value of NHS staff whilst delivering value for the taxpayer. While it is right that we reward our hard-working NHS staff with a pay rise, this needs to be proportionate and balanced with the need to deliver NHS services and manage the country’s long term economic health and public sector finances, along with inflationary pressures.
The Government asked the NHS Pay Review Body (NHSPRB) to report by the end of April 2023. We anticipate the progress made and the outcome of the union ballot to be taken into account. If the offer is accepted by unions, it will be implemented, but the Government would welcome observations from the NHSPRB on the pay deal in England.
On top of the pay package, the Government are also committing to important measures including the development of a national, evidence-based policy frame- work which will build on existing safe staffing arrangements and amendments to terms and conditions to support existing NHS staff develop their careers through apprenticeships.
In addition, having heard the concerns of nursing staff and their representatives about the specific challenges they face in terms of recruitment, retention and professional development, the Government have committed to address these issues and will therefore work with NHS employers and unions to improve opportunities for nursing career progression.
The Government are also committed to improving support for newly qualified healthcare registrants. It will commission a review into the support received by those transitioning from training into practice. And the Government will consult on the permanent easement of pension abatement rules.
This package, alongside the comprehensive NHS Long Term Workforce Plan that NHS England will publish later this year, will help to ensure that the NHS can recruit and retain the staff it needs to meet the growing and changing health and wellbeing needs of patients.
Alongside making this formal offer, I have today also written to the Royal College of Nursing to outline that, in undertaking work to address the specific challenges faced by nursing staff—in terms of recruitment, retention and professional development—this work will involve: how to take account of the changing responsibilities of nursing staff; and the design and implementation issues, including scope and legal aspects, of a separate pay spine for nursing staff exclusively.
The Government intend to complete this work such that resulting changes can be delivered within the 2024-25 pay year. In conducting this work, the Government will also consider whether any separate measures may apply to other occupational groups, taking into account the views of NHS Employers and unions.
[HCWS642]
Director of Labour Market Enforcement Interim Annual Strategy 2022-23
(1 year, 9 months ago)
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The Parliamentary Under-Secretary of State for the Home Department (Miss Sarah Dines)
Alongside my hon. Friend the Under-Secretary of State for Enterprise, Markets and Small Business (Kevin Hollinrake), I am today publishing the “Labour Market Enforcement Annual Strategy for 2022-23”, submitted by the DLME Margaret Beels OBE. The strategy will be available on gov.uk.
The Director of Labour Market Enforcement’s role was created by the Immigration Act 2016 to bring better focus and strategic co-ordination to the enforcement of labour market legislation by the three enforcement bodies which are responsible for state enforcement of specific employment rights:
The Employment Agency Standards Inspectorate;
His Majesty’s Revenue and Customs National Minimum and Living Wage enforcement team; and
The Gangmasters and Labour Abuse Authority.
Under section 2 of the Act, the Director of Labour Market Enforcement is required to prepare an annual labour market enforcement strategy, which assesses the scale and nature of non-compliance in the labour market and sets priorities for future enforcement by the three enforcement bodies and the allocation of resources needed to deliver those priorities. The annual strategy, once approved, is laid before Parliament.
In line with the obligations under the Act, Margaret Beels submitted a labour market enforcement strategy for 2022-23 in March 2022.
The director is a statutory office-holder with a degree of independence from Government, and is accountable to the BEIS Secretary of State and the Home Secretary. In agreement with sponsor Departments, the director decided to submit what she describes as an interim strategy ahead of a more comprehensive 2023-24 annual strategy, to enable the three enforcement bodies and sponsor Departments to continue to focus on work to address the recommendations in previous strategies, 2020-21 and 2021-22, published in December 2021.
This interim strategy provides an assessment of the scale and nature of non-compliance and focuses on the emerging threats posed by the dynamics of the shifting labour market. It consolidates existing themes from previous recommendations, highlights where the enforcement bodies and sponsor Departments should be focusing their efforts and sets out four priority areas, which include:
Improving the radar picture,
Improving focus and effectiveness,
Better joined up thinking,
Engagement and support.
We believe the enforcement bodies have been funded sufficiently to deliver the activities set out in the strategy. The DLME carried out stakeholder engagement for the 2022-23 strategy with the enforcement bodies prior to submission.
In previous years, we have published a Government response to the strategy setting out the approach we will take to the recommendations. For the latest strategy, we have instead worked closely with the director and their office and the enforcement bodies to agree the recommendations ahead of publication of the strategy.
We look forward to receiving the director’s 2023-24 annual strategy and a summary of the results of the director’s call for evidence to better understand the changing nature of the labour market.
[HCWS637]
Levelling Up Update
(1 year, 9 months ago)
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The Secretary of State for Levelling Up, Housing and Communities (Michael Gove)
Levelling up the United Kingdom is at the heart of our ambition as a Government. The Chancellor has announced a package of measures in his Budget which put power and money in the hands of our cities, towns, counties, and rural and coastal areas. Through this package, we continue to deliver the ambitions we set out in our levelling up White Paper, further supporting places across the country to reap the benefits of our economic success and strengthen their local economies and communities.
Devolution and local economic growth institutions in England
We have concluded our negotiations with the Mayors of Greater Manchester and the West Midlands on our “trailblazer” deeper devolution deals, subject to ratification. These deals mark a new chapter for English devolution and further progress in delivering our 2030 levelling up mission on local leadership. They transfer more control and influence over the levers of economic growth and levelling up to local, empowered, and more accountable leaders in England’s second city regions.
We have agreed a trailblazing package, including a single departmental-style settlement, unprecedented 10-year retention of business rates, devolution of post-19 skills funding and functions, and control of the affordable homes programme outside London for the first time ever. This will enable the mayors and local authority leaders to grow the economies of Greater Manchester and the West Midlands and drive levelling up, for the benefit of local residents and businesses.
These deals will act as a blueprint for deepening devolution elsewhere in England. We will begin talks with other MCAs on deeper devolution this year. The Government will set out more on plans for those talks soon.
We are continuing to work with places to implement the new devolution deals signed in 2022, and to invite new areas to come forward with proposals, as we progress towards our levelling up mission for every area of England that wants one to have a deal by 2030.
Through this work, we will empower places to take control of their own destinies. But with power must come accountability. We have published an English devolution accountability framework, which sets out clear and robust arrangements to ensure that decision-makers in areas with devolution deals are accountable to their residents and deliver value for money.
Local enterprise partnerships (LEPs)
The Government are committed to empowering local leadership at every opportunity. To this end, the Government intend for the functions of LEPs to be delivered by democratically elected local leaders, where appropriate in future. Therefore, the Government are minded to withdraw central Government support for LEPs from April 2024. The Department for Levelling Up, Housing and Communities and the Department for Business and Trade will now consult on these proposals, before confirming a decision. The Government will publish an updated policy position to confirm next steps by summer 2023.
Investment zones
The autumn statement set out the Government’s ambition to embed innovation throughout the economy and support the growth of priority sectors. Investment zones will harness existing local strengths and leverage places’ innovation potential to drive productivity and support levelling up across the UK.
Government have announced plans to enter discussions with places to host 12 high growth investment zones across the UK, each backed by £80 million over five years including generous tax incentives, bringing opportunity into areas which have traditionally underperformed economically. Investment zones will be clustered around research institutions such as universities and will be focused on driving growth the UK’s key sectors: digital and technology, creative industries, life sciences, advanced manufacturing and green industries.
Eight places in England have been shortlisted to host investment zones, with the intention to agree plans with local partners by the end of the year. The eight places are those covered by: the proposed East Midlands Mayoral Combined Authority; Greater Manchester Mayoral Combined Authority; Liverpool City Region Mayoral Combined Authority; the proposed North East Mayoral Combined Authority; South Yorkshire Mayoral Combined Authority; Tees Valley Mayoral Combined Authority; West Midlands Mayoral Combined Authority, and West Yorkshire Mayoral Combined Authority. An explanation of the methodology used to identify these places has been published on gov.uk.
The Government are also working closely with the devolved Administrations to establish how investment zones in Scotland, Wales and Northern Ireland will be delivered, which will account for the four final locations.
Levelling up partnerships (LUPs)
Levelling up partnerships will bring the collective power of Government to provide bespoke place-based regeneration in a further twenty of England’s areas most in need of levelling up over 2023-24 and 2024-25.
The following places will be invited to form levelling up partnerships over 2023-24 and 2024-25: City of Kingston upon Hull, Sandwell, Mansfield, Middlesbrough, Blackburn with Darwen, Hastings, Torbay, Tendring, Stoke-on-Trent, Boston, Redcar and Cleveland, Wakefield, Oldham, Rother, Torridge, Walsall, Doncaster, South Tyneside, Rochdale, and Bassetlaw. Our starting assumption is that we will work with the largest urban area within these local authorities, unless there is a strong rationale for choosing somewhere else.
These places have been selected based on the analysis in the levelling up White Paper which considered places in England against four key metrics: the percentage of adults with Level 3+ qualifications; gross value added (GVA) per hour worked; median gross weekly pay; and healthy life expectancy. Geographic spread has been considered to make sure regions across England benefit from the programme. The methodology used to identify the 20 places has been published on gov.uk. We also want to explore delivering this programme in Scotland, Wales and Northern Ireland, and will consult with the devolved Administrations.
Mayoral capital investment
To give mayors the resources they need to level up their areas, the Government have also provided a further £161 million for high-value capital regeneration projects in city regions across England, including business premises and food science facilities in Tees Valley, and unlocking investment in a research campus in the Liverpool city region. The funding will support delivery of 32 projects, and a list of these has been published.
Capital levelling up bids
Following the second round of the levelling up fund (LUF), in which the full £2.1 billion LUF was awarded, the Department for Levelling Up, Housing and Communities is using unallocated departmental budgets to fund, subject to subsidy checks, three further bids which narrowly missed out. These are in Sefton, Rossendale and Stockport local authorities, and are worth just under £58 million in total. Further detail on this is outlined in the accounting officer assessment for capital levelling up bids.
Capital regeneration projects
Since the conclusion of the levelling up fund round two, the Department for Levelling Up, Housing and Communities has identified further funding to support regeneration and town centre bids that were made into the fund. The Government are announcing grants for 16 projects that can start to spend and deliver quickly across England, worth a combined £211 million. These projects, subject to subsidy checks, are located in the following local authorities: Blackburn with Darwen, Blackpool, East Suffolk, Kirklees, London Borough of Waltham Forest, North East Lincolnshire, Northumberland, Redcar and Cleveland, Rotherham, Salford, Sandwell, Tameside, Telford and Wrekin, Tendring, Wigan and Wolverhampton. Further detail on the selection process is outlined in the accounting officer assessment for regeneration projects.
Community ownership fund
To empower local people to save community assets that matter most to them, the Government have announced 30 more projects across the UK that will benefit from the community ownership fund. These projects will receive a total of £7.73 million in funding, bringing the total number of assets to 98 and our overall investment to £23.9 million for neighbourhoods right across the United Kingdom. The list of successful projects has been published on gov.uk.
Other measures
To support local authorities to continue to deliver their existing development plans and bring forward new council housing supply, HM Treasury will be offering a new preferential public works loan board borrowing rate for council housing activity through the housing revenue account from June 2023.
To stimulate new housing supply and unlock development that would otherwise be stalled due to high levels of nutrient pollution, we will announce a call for evidence (CfE) from affected local authorities on nutrient neutrality credit scheme opportunities. Where high quality nutrient-credit schemes are presented, this Budget will provide investment to accelerate their delivery and unlock housing supply.
All relevant documents are available as links from www.gov.uk/government/news/levelling-up-at-heart-of-budget.
[HCWS641]
Local Authority Interventions
(1 year, 9 months ago)
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The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Lee Rowley)
Local councils play an essential role every day. They deliver core services, including to the most vulnerable citizens, they help shape our communities, and support local democracy. Where councils do not meet the high standards that we set for local Government, it is right that Government intervene in order to protect the interests of residents.
Today I am updating the House on the intervention arrangements at three councils of concern to the Department for Levelling Up, Housing and Communities. These are Thurrock Council, the London Borough of Croydon, and Slough Borough Council.
Thurrock Council
On 24 January 2023, I informed the House that the Secretary of State for Levelling Up, Housing, and Communities and I were minded to expand the ongoing intervention in Thurrock Council. Over recent months, the new leadership at Thurrock Council have worked co-operatively and collaboratively with the commissioner, Essex County Council, to start the long journey back. In addition, our proposals were to appoint an independent managing director commissioner to work alongside Thurrock’s existing commissioner, Essex County Council, to provide commissioners with further powers over governance and staffing, and to direct Thurrock Council to take additional actions to support its improvement.
I made this announcement after receiving two reports from Essex County Council in December last year, the commissioner’s first report, and an update letter on the best value inspection. Both documents laid bare the scale and complexity of the financial challenges facing Thurrock Council and noted significant concerns regarding a lack of robust governance and leadership capacity at the council.
I invited representations on our proposal from Thurrock Council, and from members of the public, which I have now received and considered.
Since that announcement, the Secretary of State and I have also received a best value inspection report on Thurrock Council from Essex County Council in its role as best value inspector, which I will publish in due course following a further representations process whereby any particular individuals criticised are given an opportunity to read and respond to those relevant parts of the report before it is published.
Having carefully considered the best value inspection report, and the representations I have received about the intervention, I am satisfied that Thurrock Council is continuing to fail to comply with its best value duty. I am today announcing a formal expansion to the intervention in Thurrock Council to implement the changes we proposed on 24 January 2023.
To begin, we will appoint Dr Dave Smith to be a managing director commissioner. He is a highly experienced former local authority chief executive who has held senior executive positions within local government for the past fifteen years, including chief executive of South Yorkshire Mayoral Combined Authority and chief executive of Sunderland City Council. He will work closely with the existing commissioner, Essex County Council, to support Thurrock Council in its improvement journey. He will be responsible for the day-to-day operations of the council and will provide strategic direction and leadership, until such time as a permanent appointment to the post of chief executive can be made. As I noted in my January announcement, I intend for this appointment to strengthen the intervention model and to increase the council’s capacity to deliver vital improvements.
The Secretary of State will also use his powers under the Local Government Act 1999 to update and expand his directions to Thurrock Council and its commissioners.
In addition to the finance powers they already hold, the new directions will permit the commissioners to exercise further powers over:
All functions associated with the governance, scrutiny and transparency of strategic decision making by the authority to ensure compliance with the best value duty. This will include oversight of an audit of the council’s governance.
All functions associated with the council’s operating model and redesign of council services to achieve value for money and financial sustainability.
The appointment, suspension and dismissal of statutory officers, including powers to determine the process for making these appointments and dismissals, and to define a new officer structure for senior positions at the council.
The development, oversight and operation of an effective performance management framework for senior positions.
The new directions will also instruct the council to take specific actions to support its improvement. These will incorporate the existing instructions to the council issued back in September, but they will go further, and instruct Thurrock Council to undertake the following new actions to the satisfaction of commissioners:
To prepare, produce and implement an enhanced improvement and recovery plan, which builds on their existing improvement plan. This will include new elements to cover:
An action plan to reconfigure the authority’s services commensurate with the authority’s available financial resources.
A plan to ensure that the Authority has personnel with sufficient skills, capabilities and capacity to deliver the improvement and recovery plan, within a robust officer structure.
An action plan to strengthen the authority’s governance function, to secure improvements in transparency and formal decision making. This should include measures to improve the authority’s scrutiny function, including the taking and recording of formal decisions.
Arrangements to secure the proper resourcing and functioning of the system of internal controls, including risk management and internal audit.
To undertake any action that commissioners may reasonably require to avoid, so far as practicable, incidents of poor governance that would, in the commissioners’ reasonable opinion, give rise to the risk of the authority failing to comply with its best value duty.
To take steps to ensure that the role of accountable body to the Thames Freeport is exercised to the satisfaction of the commissioners. This should also be reflected in the improvement and recovery plan.
As part of this next phase of intervention, Essex County Council will continue to act as a commissioner and I look forward to its report in June. As part of the January announcement, I indicated my intent to formalise the role of the leader of Essex County Council in this intervention. I can confirm that I will today issue an updated explanatory memorandum, to accompany the new directions.
I am hopeful that the expansion to the intervention that I am announcing today will help the council to address the concerns set out in the commissioner’s first report and the best value inspection update letter, and to continue its work to improve the way in which the council is run. There will be an opportunity for further reflection on Thurrock Council when I publish the best value inspection report.
The London Borough of Croydon
Regarding the London Borough of Croydon, the council has been subject to two public interest reports by external auditors relating to poor financial decision making and associated governance failings (October 2020) and failures in financial control and poor governance arrangements relating to the refurbishment of Fairfield Halls (January 2022). Croydon has issued three section 114 notices since 2020, the latest being in November 2022 following the conclusion that it cannot balance its budget in 2023-24 and beyond.
The former Secretary of State appointed an independent improvement and assurance panel in February 2021, chaired by Tony McArdle OBE and made up of independent experts, to offer the council advice, expertise and challenge as it sought to address failings related to poor financial control and governance. The panel has provided regular assurance reports to the Secretary of State on the council’s progress throughout this time, with their latest report being submitted in November 2022.
Whilst the council has struggled to resolve serious governance and financial issues for several years, I want to place on record that the Secretary of State and I recognise the positive steps taken by the council, with oversight from the improvement and assurance panel, to lay the foundations for its recovery and ensure that legacy issues are being addressed. In May 2022, Croydon changed its model of governance with the election of a Mayor, Jason Perry, and a new council. The Secretary of State acknowledges the panel’s assessment in their latest report that the Mayor has been working constructively with them and is prepared to “take firm decisions” to return the council to a sustainable financial footing. The panel have also commented that within the council there is
“much evidence of managers and staff grasping the scale of the problem and doing their best to fix it.”
Historic issues have continued to be unearthed at Croydon and their potential impact on the council and the progress it has made to date must not be underestimated, particularly given its precarious financial position. Croydon is currently unable to achieve financial sustainability on its own accord and has requested an unprecedented level of support from Government as a result of these historic issues.
On balance, the Secretary of State agrees with the panel’s latest assessment, that the acknowledged and welcome work of the new leadership has made good progress, however he has concluded, including as a result of the historic problems and the extent of improvement necessary, that the council is not meeting its best value duty.
The Secretary of State is minded to implement the intervention package set out below and in line with procedures laid down in the Local Government Act 1999 to assist the existing extensive effort to go even quicker. Officials in the Department have, as a result, written to the council seeking representations on the proposed intervention package.
The proposed package is centred on the council continuing to make the necessary improvements to the satisfaction of the improvement and assurance panel. The panel will be backed by directions issued to the council requiring it to follow the instructions of the panel if they are not satisfied with the progress being made. The panel will report to the Secretary of State every six months.
It is important that the council leads its recovery but that it does not lose momentum in making the necessary improvements. As part of the representations period, Ministers will reflect on membership of the panel to ensure the arrangements are fit for purpose to support the council moving forward.
We are inviting representations from the council on the Secretary of State’s proposals by 30 March. We want to provide the opportunity for members and officers of the council, and any other interested parties, especially the residents of Croydon, to make their views on the Secretary of State’s proposals known. Should the Secretary of State decide to intervene along the lines described here, he will make the necessary statutory directions under the 1999 Act. I will update the House in due course.
Slough Borough Council
I would also like to take this opportunity to provide an update on the intervention at Slough Borough Council. On 22 December 2022 I received a copy of the commissioners’ second report on the progress of the intervention. The report has made for stark reading. Commissioners describe there being
“a real sense that many in leadership roles do not see leading and modelling corporate improvement as their overriding responsibility but only as something they have to do”
This is wholly unacceptable. The well-publicised failures of Slough have stemmed from a poor culture of checks and balances, as well as inadequate leadership. The council and its leadership must accept this and embrace the need to change. The results of these past failures have devastated the council and made its financial position unsustainable. Within their report commissioners have gone so far as to query the viability of Slough as a unitary authority. For Slough to remain in its current form there will need to be a fundamental shift in the attitude and behaviour of the council and its leadership. The role of commissioners will be of paramount importance and their focus in the coming months will be on a new operating model for the authority.
Our intervention now needs to move from its discovery phase to one of requiring the council to do the hard work of transformation. The council must step up. Equally, we will put in place a commissioner team who will move the council through the next stage of this journey. Max Caller CBE, lead commissioner for the intervention, wrote to the Secretary of State on 1 March to tender his resignation and stated his intention to retire from public life. The Secretary of State has accepted Mr Caller’s decision and I would like to thank him not only for the work he has undertaken as part of the intervention, but also for his many contributions to the local government sector. In addition, Margaret Lee, finance commissioner, also wrote to the Secretary of State on 12 March to tender her resignation for personal reasons. The Secretary of State has accepted Ms Lee’s resignation with immediate effect and I would like to thank her for her excellent work in Slough and Croydon and wish her well for the future. We will make an announcement on the revised commissioner team in due course and we will make appointments with the experience and skill set to ensure the council progresses, alongside the enhanced senior officer team now in place at the council.
The intervention at Slough remains challenging. I strongly urge the leadership in Slough to consider the findings of commissioners’ report and reflect on what more they could be doing not only to meet the requirements of the statutory directions, but to drive forward necessary changes. Things must change.
Conclusion
I want to acknowledge the work of the dedicated staff who deliver the business-as-usual services of the councils included in today’s announcement, many of whom have strived to deliver those services over recent years despite the financial, leadership and governance challenges faced by their respective authorities. They will play a vital role in each council’s recovery. I have deposited in the House library copies of those reports I have referred to that are also being published on gov.uk today.
We are also today publishing on gov.uk the second report from the Sandwell commissioners, which the House may wish to note. The commissioners report that they have seen some progress at the council in the past six months, though there is still a lot of significant work to be done, with a particular focus on the customer journey and culture. Last week I also published the third report from the Liverpool commissioners. The report is cautiously optimistic about the council’s progress. It is clear, however, that the council faces significant change in the months ahead with a transition in officer and political leadership plus the implementation of a significant transformation programme. The continuation of the intervention in Liverpool will be vital to support the council through this period of change.
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Personal Independence Payments
(1 year, 9 months ago)
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The Minister for Disabled People, Health and Work (Tom Pursglove)
Today, the department will publish the latest statistics on making backdated payments to personal independence payment claimants who are affected by the KT and SH decision of the upper tribunal. The release will be published at https://www.gov.uk/government/publications/list-of-upcoming-releases-of-management-information-and-ad-hoc-analyses.
The KT and SH UT decision, handed down on 21 August 2020, concerned how we decide whether hearing impaired or deaf people need an aid, appliance, or supervision, to wash or bathe safely under the PIP assessment.
The department revised the guidance used for the PIP assessment process, for all new decisions, on 17 May 2021. We started the administrative exercise to check eligible claims back to the date of the UT decision on 4 April 2022.
Since April 2022, we have reviewed around 4,000 cases against the KT and SH decision. This includes cases where claimants have previously been assessed as needing an aid or appliance to hear. All reviews have been carried out by a case manager within the department.
Around 4,000 arrears payments, totalling around £11 million, have been made. No one should have seen their PIP reduced because of this exercise.
Although we have completed the exercise, claimants can still ask the Department for Work and Pensions to conduct a review of their case, if they think they are affected.
Our approach demonstrates that we have prioritised claimants who are most likely to benefit, to make backdated payments as quickly as possible.
[HCWS639]
House of Lords
Universities: Impact of Industrial Action on Students
(1 year, 9 months ago)
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Lord Storey
To ask His Majesty’s Government what assessment they have made of the impact on students of industrial action in universities.
The Parliamentary Under-Secretary of State, Department for Education (Baroness Barran) (Con)
My Lords, while the Government play no role in such disputes, we continue to monitor the impact of strikes with employers and their representatives. This Government set up the Office for Students in 2018, which has wide-ranging powers to ensure that students’ interests are protected and expects providers to do all they can to avoid disruption to students. I urge all sides to work together so that students do not suffer further learning loss.
Lord Storey (LD)
I am very grateful for the Minister’s reply. As she is aware, students—and not only students—have had a very difficult time over the past few years, particularly with Covid and the cost of living crisis. The Sutton Trust has found that 49% of university students are doing a second job to be financially supported. With 10 to 15 days of strike action meaning that in some universities students have not been able to have their lectures or tutorials, there is real stress and anxiety for final-year students about whether they will get certificates at the end of their course. I know that universities are autonomous, but could the Office for Students give more direct advice about how we can support students in these difficult times? Given that students have big loans, will they get some of that loan back?
Baroness Barran (Con)
On the noble Lord’s question relating to the role of the Office for Students, obviously it is the regulator of higher education in this country; it does not get involved in industrial disputes. It has a part to play in making sure that universities continue to meet their conditions of registration, which allow them to be eligible for public funding, and their obligations under consumer protection law.
Lord Vaux of Harrowden (CB)
My Lords, can I push the Minister on the last part of the noble Lord’s question? I should declare an interest: I have two sons who are at university at the moment, both of whom have lost a lot of days due to strike action. Normally when an organisation provides a service for a fee, it has to refund part of that fee if does not provide the service. Why is that not the case with universities?
Baroness Barran (Con)
Universities have obligations under their conditions of registration and under consumer law. Students can make complaints to the Office of the Independent Adjudicator. There were 2,763 new complaints in 2021, and we will shortly get the figures for 2022—that figure covers all issues but may well cover this one also. It is our expectation and hope that universities will respond and support students to receive the education to which they are entitled.
Lord Morgan (Lab)
My Lords, I became a university teacher in 1958 and I have never been on strike for a single day in that period, nor would I. However, throughout that long period, university teachers have been underpaid. There are difficulties now about their contracts, which was not the case earlier, in particular the use of younger, untrained teachers in a way that imperils jobs. Could one not give more professional power to university teachers so that they are properly treated?
Baroness Barran (Con)
I am sympathetic to the points that the noble Lord makes, but, as the House is aware, universities are autonomous. As autonomous institutions, they are responsible for pay and pension provision for their staff.
Lord Cormack (Con)
My Lords, as one who has three granddaughters who have been through university in the past three or four years—the last one is still going through—I know that they are being very short-changed. One granddaughter had not a single lecture last year at a very important and prestigious university; others are given “trigger warnings” before they can read Tennyson or Jane Austen. They really are getting a rough time.
Baroness Barran (Con)
I am not sure how to respond to the trigger warnings. I have tried to resist raising this, but, since everyone else has mentioned their family, I have a husband who is doing a part-time degree at the moment. His evening of teaching falls every single time on a strike day, so I am familiar with the issues to which the noble Lords refer. Universities are expected to take steps to avoid or limit disruption to learning. We would encourage all of them to do that.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, in her initial Answer, the Minister said that the Government play no role. Surely the Government set the whole legislative framework in which universities work and all the financial arrangements under which they operate. Is it not about time that the Government accepted their responsibility for all the industrial disputes that are taking place?
Baroness Barran (Con)
The Government absolutely accept responsibility for those areas where they are responsible, but I think there would be a lot of resistance in your Lordships’ House if they moved to reduce the autonomy of universities.
Lord Sandhurst (Con)
My Lords, I presume that the universities are not paying the lecturers on the days when they are on strike. Could those monies be used by way of restitution to the students? Might the Office for Students recommend that course, so that students could start issuing proceedings in the small claims court on a pro rata basis?
Baroness Barran (Con)
I am very happy to take back my noble friend’s recommendation to the Office for Students.
Baroness O'Grady of Upper Holloway (Lab)
My Lords, does the Minister agree that, as long as an employer does not face a financial penalty—for example, in reimbursing students, or indeed with the railways, where the Government initially said they had no responsibility for settling the dispute—there is less incentive on the employer to get around the table to negotiate a fair settlement?
Baroness Barran (Con)
Obviously, the noble Baroness brings many years of expertise to this matter, but I think that employers in universities and other sectors of the economy are suffering great penalties—financial, reputational and in terms of their relationships with their customers—which have a considerable impact on them.
Baroness Garden of Frognal (LD)
My Lords, I entirely accept that the Office for Students has overall responsibility for this issue, but, as we have heard, Ministers have a responsibility too. Is she saying that there is nothing at all that Ministers can do to try to mediate or to help in this dispute?
Baroness Barran (Con)
What I am saying is that we established the Office for Students to ensure that students’ interests are respected and upheld. The Government have no direct role in relation to the Universities Superannuation Scheme beyond the legislation that applies to all workplace pension schemes as regulated by the Pensions Regulator.
Lord Blunkett (Lab)
My Lords, there is a real complication between the pension scheme operated by universities and the pension scheme operated by the health service. Could the Minister talk to the Chancellor of the Exchequer about the contradiction between giving away £1 billion of public funding for consultants operating under the health service pension scheme and the situation faced by consultants in teaching hospitals, who have opted, or been encouraged, to take on a previous university pension scheme, which is now being completely changed? We might get some sense out of the issue of getting tutors back to work, if we could put a little of that £1 billion into resolving the pension problem for universities.
Baroness Barran (Con)
I am more than happy to pass on the noble Lord’s comments to colleagues in the Treasury.
Bus Industry Support
(1 year, 9 months ago)
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Lord Snape
To ask His Majesty’s Government what plans they have to support the bus industry in England following the end of the current bus subsidy arrangements.
Lord Berkeley (Lab)
My Lords, on behalf of my noble friend Lord Snape, I beg leave to ask the Question standing in his name on the Order Paper.
The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)
My Lords, on 17 February the Government announced that they will provide up to £80 million to extend the bus recovery grant until 30 June 2023. The department is evaluating the impact of this funding and working with local transport authorities and bus operators to develop sustainable solutions.
Lord Berkeley (Lab)
I am grateful to the Minister for her Answer, and I welcome the money that has been allocated. However, given that 80% of people who use buses have no alternative—in fact, in Northern Ireland, the community bus service has been completely cancelled from the end of April—is it not time for the Government to devolve the subsidy and funding of local bus services to local transport authorities to get a consistent and long-term service which will provide what people need and at a lower cost, and spread over the whole country the benefits that the Minister has provided?
Baroness Vere of Norbiton (Con)
I am not entirely sure that I follow the noble Lord’s thinking that, just by devolving it, the same amount of money will provide services at a lower cost. It is the case that local authorities get funding to support bus services, including from the fare cap, the bus recovery grant, BSOG and concessions. The simple answer here is that we have to make local transport authorities and bus operators work together more effectively.
Lord Moylan (Con)
My Lords, the Built Environment Committee noted in its report last year, which is yet to be debated, that without a continuation of the grant beyond March route mileage would fall by as much as 20%. Like the noble Lord, Lord Berkeley, I am grateful to hear that the grant has continued. None the less, newspapers report that overall mileage has fallen by 10% up to only a couple of weeks ago. Does my noble friend the Minister consider this to be a satisfactory situation?
Baroness Vere of Norbiton (Con)
My noble friend is right that some routes have been changed and others have been reduced. It is the case that, if an operator wants to reduce a route, it must put in an application to the local transport authority, which has the ability then to subsidise or to tender that route. We have to establish a network which matches the revised passenger demand following the pandemic.
Baroness Randerson (LD)
My Lords, the Campaign for Better Transport has done research which shows that, in the last two years, between this month and March 2021, when the Government launched their Bus Back Better campaign, there has been a 23% cut in bus services in England. Far from busing back better, the Government are actually presiding over the death of public transport in some areas. What are the Government planning to do to reverse this? Will the Minister commit today to the transformational reform of the bus service operators grant system, which is clearly not working?
Baroness Vere of Norbiton (Con)
I can absolutely say that the bus service operators grant will be reformed; reforms will be laid out later this year for consultation. On supporting services, we absolutely accept that we need to do what we can to provide a sustainable network which is fit for the future. That is why we have extended the funding and why we have the £2 bus fare cap. We need to evaluate that funding and the fare support to see what they have done to patronage.
Baroness Taylor of Stevenage (Lab)
My Lords, plans for a fantastic new zero-emission bus fleet in Stevenage and Milton Keynes, known as the ZEBRA project, came crashing down last week when private sector partner Arriva pulled out. Twice as many people use buses than trains, but buses need to be reliable to increase use, otherwise a vicious circle is created where passengers will not use them and operators will not run them. A new system giving communities a say on routes and fares is desperately needed. Will the Minister therefore produce the much-delayed bus strategy without any further delay and bring forward legislation, as my noble friend Lord Berkeley said, to devolve these powers across England?
Baroness Vere of Norbiton (Con)
I am not entirely aware of the strategy that the noble Baroness is talking about. We have a bus strategy and we absolutely stand by that strategy. We think that the elements within it work, but what we are dealing with at the moment—as indeed are many other transport modes—is a significant reduction in patronage. We therefore need to think about how we get the best value for money with the support that we can give, while also encouraging local transport operators to play their part.
Lord McLoughlin (Con)
My Lords, I declare my interest as chairman of Transport for the North. Bus usage has not gone back to the level that it was pre-pandemic; I think the figures at the end of March 2022 were 2.8 billion passengers as opposed to 4.1 billion passengers the year before the pandemic. Can my noble friend tell us what progress has been made with the announcement of the capping of bus fares nationally? Has that had an impact on usage? What are the longer-term plans for that cap?
Baroness Vere of Norbiton (Con)
My noble friend is absolutely right that the £2 bus fare cap is an important intervention for us to properly understand the relationship between bus fares and patronage. There are 140 operators over 4,700 routes that have taken up this bus fare cap and the Government are investing £135 million in it. We are evaluating it as we go along, and we will of course make public those findings as soon as we can.
Baroness Scott of Needham Market (LD)
My Lords, the noble Baroness will be aware that large parts of rural England no longer have a bus service and are dependent on community transport systems. In some areas, such as mine in Mid Suffolk, they have been set up in such a way that concessionary fares cannot be used on those services, nor do they qualify for the £2 bus fare cap. Can the Minister look at whether some sort of regulatory change might be in order so as to make sure that people who live in such areas are not disadvantaged?
Baroness Vere of Norbiton (Con)
The noble Baroness has written to me about this and I have responded. I cannot quite understand what might be going on in her area. It is fairly simple: if it is a Section 22 community transport service that is open to other people, concessions are allowed and the £2 bus fare applies. If it is a closed service under Section 19 that is not open to everybody then, rightly so, the national provisions do not apply. If she has any further information, I would be very happy to look into it.
Lord Kirkhope of Harrogate (Con)
My Lords, the noble Lord, Lord Berkeley, raised the question of the bus industry. This is an opportunity for us to congratulate the bus manufacturers of this country—whether Alexander Dennis in Scotland, Wrightbus in Northern Ireland or Optare in Yorkshire—which are producing world-leading buses and using the latest technology in hydrogen power as well as battery electrics to lead the world on behalf of this country. Can we congratulate them?
Baroness Vere of Norbiton (Con)
We can congratulate them; they do a fantastic job. Noble Lords will have seen that the Government announced £25 million of funding for zero-emission buses only recently—I believe that all the £25 million in funding went to Wrightbus in Northern Ireland, which has seen astonishing growth in jobs and skills and should be congratulated.
Baroness McIntosh of Pickering (Con)
My Lords, can my noble friend explain what the future of concessionary bus fares will be? They are particularly important in rural areas.
Baroness Vere of Norbiton (Con)
We have seen a decline in the number of people using concessionary fares since the pandemic; certainly, those are the sorts of people who we want to get back on to buses. It is so important. We are reviewing a number of elements of the concessionary fare structure and, of particular importance to local transport authorities, we are looking at and will be consulting on the reimbursement guidance and calculator during the course of 2023 to ensure that local transport authorities are getting the money back from the system that they need to fully cover concessionary fares.
Lord Marlesford (Con)
My Lords, seeing as we are considering public money for buses, will the Government consider the case in urban areas for switching to lightweight trams, which last for 20 years rather than 12 and, because they have steel wheels, do not emit toxic particulates from rubber? Most importantly, they run on biomethane, and the Government have a commitment to reduce by 30% the methane produced in this country by 2030.
Baroness Vere of Norbiton (Con)
The Government are a great supporter of trams. Indeed, much of the money that we gave to local metro mayors—about £5.7 billion, I think, in the CRSTS—is going to extending tram systems in their areas. Of course, for other local authorities, it is up to them to bring forward tram proposals, should they have them.
The Lord Speaker (Lord McFall of Alcluith)
The time has elapsed for this Question.
Housing: Conditions in Rented Sector
(1 year, 9 months ago)
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Lord Khan of Burnley
To ask His Majesty’s Government what recent steps they have taken to improve housing conditions for both social housing and privately rented properties.
The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)
The Government set out their ambition in the levelling-up White Paper to reduce the number of non-decent rented homes by 50% by 2030, with the biggest improvement in the lowest-performing areas. We are making progress in the social rented sector by introducing a new proactive consumer regulation regime through the Social Housing (Regulation) Bill. In the private rented sector, for the first time, we consulted on applying a minimum quality standard and we remain committed to reviewing the decent homes standard.
Lord Khan of Burnley (Lab)
From the latest English Housing Survey, the private sector has the highest proportion of non-decent homes, at 23%, whereas the figure is 10% in the social housing sector. While we had the White Paper, A Fairer Private Rented Sector, last year, we are still waiting on a renters reform Bill, which would introduce a decent home standard for the private rented sector, as well as ending no-fault evictions—something promised one way or another since 2019. When will the Minister, her department and the Government get a grip and take some meaningful action to prevent a repeat of the tragic experience that Awaab Ishak and his family faced in Rochdale? I note that the Government have introduced Awaab’s law in the social housing sector, but why are they neglecting the situation in the private housing sector?
Baroness Scott of Bybrook (Con)
We are fully committed to delivering a package of reforms that deliver our manifesto commitment to abolish no-fault Section 21 evictions, strengthen private sector renting and support both tenants and good landlords. The reforms are a once in a generation opportunity for change, and it is important that we get it right. Legislation on private rented sector reform remains a top priority for this Government and we will bring forward a renters reform Bill as soon as we can within this Parliament.
Lord Young of Cookham (Con)
My Lords, further to the noble Lord’s Question, most private landlords keep their properties in a good condition, but a minority do not. In those cases, where the tenant complains to the local council about a dangerous property, that tenant can be protected from what is called “retaliatory eviction”, so long as the council serves an improvement notice on the landlord. However, this is happening in only about a quarter of such cases, meaning that three-quarters of tenants are exposed to eviction under Section 21. What can my noble friend do to ensure that more local authorities give tenants the protection that they are entitled to?
Baroness Scott of Bybrook (Con)
My noble friend is absolutely right: local councils are responsible for enforcing standards in the private rented sector and have a duty to take action where they find hazards at the most dangerous category 1 level. The Secretary of State has asked all local housing authorities to do everything in their power to improve the conditions for tenants and to have particular regard to high-score category 2 damp and mould hazards when enforcing current standards. The Secretary of State has also asked councils to provide an assessment of damp and mould issues particularly affecting private rented housing in their area. The department is currently analysing their responses to determine what needs to be done to address the issues raised by my noble friend.
Lord Best (CB)
My Lords, has the Minister’s department had a chance to look at the recommendation from the Affordable Housing Commission for a national housing conversion fund that would finance local housing associations to acquire from private landlords properties that need a lot of attention? This would increase the amount of safe, affordable, secure social housing at the same time as improving the property, ending or reducing fuel poverty and having an impact on climate change as well. Is this a real bargain for government?
Baroness Scott of Bybrook (Con)
I have not got an answer on that specific report, but I can say that this Government are investing £11.5 billion in new, good, affordable housing, £8.6 billion of which had already been allocated. So we are looking at more good housing and, at the same time, we are challenging to ensure that those responsible for social housing in particular are making sure that those houses are in good condition.
Lord Truscott (Non-Afl)
My Lords, I declare an interest as a landlord and a former renter. I am all in favour of a decent homes standard, but when will the Government introduce regulation of letting and managing agents? Some of these agencies are real cowboys. They deal in millions of pounds and they are completely unregulated. When will the Government stop dithering and introduce regulation?
Baroness Scott of Bybrook (Con)
I do not have a timescale for the introduction, but we are looking at this issue. We have found that some of these sectors are self-regulating much better than they were, but we will continue to keep an eye on this issue and forward it to legislation if necessary.
The Lord Speaker (Lord McFall of Alcluith)
The noble Lord, Lord Campbell-Savours, will make a virtual contribution.
Lord Campbell-Savours (Lab) [V]
My Lords, what additional consideration is being given to the millions of pensioners, many living in poorly heated social housing and rented property conditions, who, despite existing support schemes and fearful of escalating bills, appear unwilling to turn up the heat and too often suffer in silence? Despite the excellent work of charities such as Age Concern, should not further support be given to targeting this vulnerable group with sensitive advice and even government-sponsored visitor support programmes, perhaps through a multiplicity of agencies?
Baroness Scott of Bybrook (Con)
The noble Lord brings up a very important point. As he knows, the Government have put £37 billion into supporting all households through this difficult economic time. Specifically for older people, what I have been doing, personally, as a Minister for Faith, is talking to faith and community leaders about doing exactly this—ensuring that older people, particularly, and disabled people, know what they are entitled to, making sure that they get it and also stopping some of the fear that is happening. I also thank the many warm hubs this winter that have been opening their doors in churches and community centres in order to look after these people and make sure they know what they are entitled to.
The Lord Bishop of Exeter
My Lords, there is an important rural dimension to this issue. In north Devon, the vast majority of privately rented property has been turned into Airbnb, creating a crisis in rural housing. Does the Minister think that the ability of local authorities to levy council tax is sufficiently robust to tackle this problem? If not, what plans do His Majesty’s Government have to legislate to address this problem, which is escalating every day?
Baroness Scott of Bybrook (Con)
I thank the right reverend Prelate. If he looks at the LUR Bill, he will see that we are dealing with this exact problem at the moment. It will probably be debated next week in this Chamber and I look forward to being able to tell him further about what we are going to do.
The Earl of Courtown (Con)
My Lords, I think it is the turn of the Liberal Democrats.
Lord Foster of Bath (LD)
My Lords, during the passage of the Social Housing (Regulation) Bill, your Lordships’ House voted for an amendment that would have reduced energy costs in social housing. In the other place recently, without any explanation or debate, that amendment was removed. Is that not a gross discourtesy to this House? Can the Minister now explain why that amendment was removed?
Baroness Scott of Bybrook (Con)
No, I do not think it is a discourtesy to the House; it is part of the process and we will be discussing it further, I am sure, on Tuesday, when the Commons amendments come back to the House on the Social Housing (Regulation) Bill.
Lord Carlile of Berriew (CB)
Does the noble Baroness agree that, in those cases where the only realistic way of having a house in appalling condition repaired is to sue the landlord, including social landlords, in the county courts, it is completely unconscionable that tenants should have to wait between a year and 18 months for those cases to be heard? What are the Government going to do to deal with the backlog in the county courts?
Baroness Scott of Bybrook (Con)
My Lords, the Social Housing (Regulation) Bill that we were talking about earlier will deal with a lot of that problem, particularly with Awaab’s law that has entered that Bill in the Commons. There will be clear timescales, first, for housing providers to respond to tenants, and, secondly, for any serious safety defects in housing to also be dealt with in a good timescale.
Baroness Warwick of Undercliffe (Lab)
My Lords, I am sure the noble Baroness will agree that housing associations are very keen to do more to regenerate existing housing but are unable to do so without additional government funding. Will she confirm that the Government will look to maximise the use of the existing funding through the affordable homes programme to support housing-led regeneration right across the country?
Baroness Scott of Bybrook (Con)
My Lords, it is the responsibility of social housing providers to maintain their properties, and that includes regeneration, but we have found a £30 million fund to help Greater Manchester and the West Midlands and we will be looking at what more we can do for the sector.
The Lord Speaker (Lord McFall of Alcluith)
My Lords, I apologise to the noble Lord, Lord Kamall, for curtailing the previous Question with seven seconds to go. Hopefully, I will be more benevolent to him in the future.
Defence Spending
(1 year, 9 months ago)
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Lord West of Spithead
To ask His Majesty’s Government, further to their Integrated Review Refresh 2023, published on 13 March, whether they have any plans to increase spending on defence to three per cent of GDP.
The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)
As the Prime Minister said on Monday, we will move away from our baseline commitment of spending at least 2% of GDP on defence to a new aspiration of 2.5% when the fiscal situation allows. There are no plans to change this aspiration to 3%. To ensure that we continue to meet the threats we face, the Chancellor is providing an extra £11 billion over five years to improve the country’s resilience and readiness.
Lord West of Spithead (Lab)
My Lords, everybody knows that our defence forces have been underfunded for some considerable time and are not in the position they should be. One could argue, I think quite reasonably, that that is part of the reason we are in the mess we are with the war in Ukraine. Autocrats such as Putin watch what we do and think, “These people are not taking life seriously”. We also know that the percentage of GDP figure is totemic. It was useful because we were able to put pressure on European allies to increase their spending, but it depends totally on what one’s GDP is. Bearing in mind that we have insufficient money for defence, does the Minister not believe that the Government should now make a clear commitment of going for 3%—let us call it of GDP—but actually attach a figure to it and start that spending now so that murderous people such as Putin see that we mean business?
Baroness Penn (Con)
My Lords, I agree with the noble Lord about the need to increase our spending on defence and start that now. That is why defence received its settlement a year earlier than other departments in the spending review 2020. It is why, alongside the integrated review refresh, we have included an uplift beyond that, including £4.95 billion for defence over the next two years to improve readiness and resilience of the Armed Forces, including bolstering our conventional stockpiles, enabling an early investment for the AUKUS submarine alliance and modernising our nuclear enterprise.
Lord Stirrup (CB)
My Lords, does the Minister recall that as recently as 2010, we were spending 2.6% of GDP on defence? Given the accounting changes that have occurred since then, that probably equates to something more like 2.8% in today’s terms. So the recent announcements putting us on a trajectory to 2.5% really cannot be seen as scaling some new peak, but rather as clawing us a little further out of the hole into which we have sunk. Does she accept that not only is there more to be done but that it needs to be done with urgency, and that saying we aspire to 2.5% when fiscal conditions permit is about the same as Government Front-Bench spokesmen saying they will bring something to this House “in due course”? It is pretty much meaningless.
Baroness Penn (Con)
I would like to reassure noble Lords that there is more money now going into defence. It is the largest sustained increase in defence spending since the end of the Cold War and, in recognition of the changing picture globally, we announced at the Budget money on top of that investment: £4.95 billion over the next two years and an extra £11 billion over the next five years to improve the country’s resilience and readiness.
Lord Robathan (Con)
My Lords, while the money announced yesterday is of course very welcome and we thank the Chancellor for that, it is £11 billion over five years. This is jam tomorrow—we need the money spent today. Has nobody noticed what is happening in Ukraine, and that our bunkers are empty of ammunition? We need to spend the money today. Will my noble friend confirm that, as she speaks, we are still cutting the number of troops, ships and aircraft in the United Kingdom defence budget?
Baroness Penn (Con)
An additional £24 billion is going in now as a result of the spending review 2020. The £11 billion announced at the Spring Budget includes £4.95 billion over the next two years. That does not include the spending on our commitments to Ukraine, which was £2.3 billion last year and will be £2.3 billion in the coming year.
Lord Tunnicliffe (Lab)
My Lords, we have got figures, figures and figures. There is only one crucial question. The Defence Secretary said in February that the Government
“have hollowed out and underfunded our armed forces”.—[Official Report, Commons, 20/2/23; col.65.]
Yesterday, some new funding was announced. Do the Government believe that yesterday really represents a reversal of the Secretary of State’s analysis and, crucially, is sufficient to secure Britain’s national defence for the future?
Baroness Penn (Con)
I think the Secretary of State for Defence has been very positive about the money announced at the Budget and previously, and this Government have overseen the largest investment in defence since the Cold War. The British Armed Forces remain among the best in the world; that is why we are a leading NATO partner. Over the last 10 years, the UK has been NATO’s second largest defence spender, after the US, and we spent almost as much on defence as 20 other NATO members combined. Future Soldier, the Army’s response to the integrated review, will deliver the largest transformation of the British Army in more than 20 years. As the threat changes, we need to change with it, and we have set out a plan to do so.
Lord Swire (Con)
I very much welcome the Prime Minister’s recent announcement about the replacement and refurbishment of the nuclear submarine fleet. Can my noble friend say from which budget that money is coming and, critically, can she confirm that the other political parties have signed up to this, given the long-term impact and programme that it will require?
Baroness Penn (Con)
I will let the other parties speak for themselves, but this is a long-term commitment to investment in our own security. The money we are investing in the defence nuclear enterprise is additional funding; it is not coming from any existing contingency, and I am happy to confirm that to the House.
Lord Campbell of Pittenweem (LD)
My Lords, since the additional money is over five years, and since we are supporting Ukraine to the tune of £2 billion a year, that additional money will all be used up in the support of Ukraine, which invites and encourages me to ask two questions. First, when will the money be made available to replace the ageing armoured vehicle, the Warrior, with a new battlefield vehicle, having regard to the shambles of the Ajax programme? Secondly, when will the Royal Air Force be provided with sufficient F35s to train its pilots to fly that aircraft, never mind taking it into combat?
Baroness Penn (Con)
I am afraid that I will have to write to the noble Lord on those two specific questions, but I should make a very important clarification of the additional funding going into our Armed Forces. Our support for Ukraine is over and above the additional investment I have mentioned, so it will not be drawn on in future years when we continue that support for as long as the conflict lasts.
Lord Anderson of Swansea (Lab)
Does the noble Baroness agree that Poland has been a model in respect of additional expenditure, and does she share the concern about the delay in Germany fulfilling its commitment? She talked about long-term commitments. Does this mean that the new expenditure will be backloaded and there will be some for several years in the future?
Baroness Penn (Con)
We welcome the contribution from all our allies and partners. I think I have been clear that nearly £5 billion of the £11 billion of additional funding is over the next two years. We have provided clarity beyond the existing scorecard period to help facilitate long-term investment in our future defence.
Lord Cormack (Con)
Can my noble friend clarify a statement she made in answering the noble Lord, Lord Campbell of Pittenweem? Did she really say that none of this money is going to be needed to replenish the armaments we have sent to Ukraine? A simple yes or no will do.
Baroness Penn (Con)
I believe I said earlier that one of the things we will be able to do with our funding is bolster our conventional stockpiles. But I want to be clear with noble Lords that the £2.3 billion commitment we made to Ukraine in 2022-23, which we are also matching going into next year, is over and above the money I have set out today.
Lord Reid of Cardowan (Lab)
My Lords, I know the Treasury likes to speak in percentages and aggregate sums, but can we cut to the chase? Will the Minister confirm that, as far as the Treasury knows, over the next few years our Armed Forces will reduce the number of soldiers, ships and planes? She may consult her colleague from the Ministry of Defence if she wishes.
Baroness Penn (Con)
I am very happy to have my noble friend sitting next to me. We constantly review our capabilities, but the vision for the future of our defence as set out in the original integrated review remains the vision for defence in this country. However, additional resource has come in as a result of the integrated review refresh, in order to reflect the new circumstances in which we find ourselves.
Supply and Appropriation (Anticipation and Adjustments) Bill
Thursday 16th March 2023
(1 year, 9 months ago)
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AUKUS Defence Partnership
(1 year, 9 months ago)
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Lord Coaker (Lab)
My Lords, I start by saying that His Majesty’s Opposition fully support the AUKUS defence partnership that has been announced by the Government. It is a multi-decade agreement with two of our closest and strongest allies. It is of immense importance when we look forward to the threats we face now and in the future. It strengthens our strategic security and prosperity in the Indo-Pacific. As such, it should be seen as a national endeavour and a statement of our intent, with our allies and our friends, to stand up for freedom, democracy and human rights across the world.
Can the Minister reassure us, notwithstanding the obvious immediate threat to Ukraine from Russia and the fact that the first of these new submarines is some way off, that we have the surface fleet and the strategic alliances that we need to deal with the threats that we now face in that region? Or is it the case that, if we are to commit to the Indo-Pacific tilt, more resources will be needed in numbers of ships and planes and protection for the carriers?
There will obviously be a welcome boost to defence jobs, with these new submarines being built in Barrow and with nuclear work in Derby, as well as elsewhere across our country. Given the very real current skills shortage, how will the Government work with industry to ensure that we have the necessary skilled workforce to actually do this building? Can the Minister give us some idea of how many jobs are expected to be created? Can she also confirm the number of additional submarines to be built for the UK and what size this will eventually bring the UK’s submarine fleet up to? The first SSN-AUKUS for our UK Navy will commence in the late 2020s and will be operational as early as the late 2030s. What steps are the Government taking to ensure that these costs and timelines will be kept to?
Alongside those issues, I commend the Government on the steps they have taken to work with the International Atomic Energy Agency to alleviate concerns around nuclear proliferation requirements. The agreement involves the transfer to Australia of technology, equipment and a naval nuclear propulsion capability. Can the Minister lay out clearly for the Chamber how this agreement maintains our compliance with the nuclear non-proliferation treaty and what steps the Government have taken or will take to reassure those who may be upset by this agreement? Of course, this must not prevent us taking measures for our security and that of others, but the Government quite rightly have been sensitive to the consequences, not only for countries such as China but as regards what others may think and that those countries may try to use it as a justification to act. Crucially, can the Minister confirm that the director-general of the IAEA has expressed their satisfaction with our engagement and that we will work closely with the IAEA over the coming years?
The UK’s former National Security Adviser, Sir Stephen Lovegrove, said of the pact:
“It is perhaps the most significant capability collaboration anywhere in the world in the past six decades.”
He said that because it is not just about submarines but, as pillar 2 of the agreement describes, about cyber, hypersonics, artificial intelligence and so on. Little detail has been given about this, so could the Minister give us any further updates on the sort of collaboration that may take place under pillar 2?
The integrated review says that £3 billion will be invested across the defence nuclear enterprise. Can the Minister confirm that resources are there to properly fund this pact over its lifetime and that those resources will not lead to cuts in the budget elsewhere? Would not all our defence, including this, be helped by a timescale rather than an aspiration to reach 2.5% of GDP on defence spending? I remind the Minister that that has not been the case since 2010.
Finally, as I said, we can be proud of this endeavour as a country. It will help to ensure that we protect our interests, not only in Europe but beyond in the Indo-Pacific, working with others to support democracy and freedom as we have always done. As such, His Majesty’s Opposition fully support it and wish it well.
Lord Lee of Trafford (LD)
My Lords, we on these Benches very much welcome the AUKUS partnership announcement and Statement for the whole range of fairly obvious reasons that the noble Lord set out. However, has the Minister seen the comments in yesterday’s Times from Rear Admiral Philip Mathias, a former director of nuclear policy and of the Trident value-for-money review? He said:
“The performance of the Submarine Delivery Agency has been abysmal. Astute class submarines are being delivered late by BAE … HMS Vanguard’s refit by Babcock has taken more than seven years; and … The in-service date for HMS Dreadnought”—
originally 2024—now will not come through until the early 2030s. Have the Government done any work at all as regards submarine construction refit on comparing the performance of Barrow and our shipbuilding industry with the performance achieved in the United States and France? That would be a very interesting comparison. In addition, given that we are likely to have an increase in our submarine fleet, which would be very welcome, what plans are there to increase and train the number of submariners who will be needed for those future boats?
The Minister of State, Ministry of Defence (Baroness Goldie) (Con)
My Lords, I am sorry for the delay—I was caught on the hop. I thought that the noble Lord, Lord Lee, might take a little longer but, however brief his contribution, it is welcome.
I first thank the noble Lord, Lord Coaker, for his warm reception of the announcement on AUKUS. I am particularly grateful for his important recognition of the reality of the geopolitical environment in which we all exist today. I think the IR refresh has poignantly delineated that, building on what we identified in 2021 but quite rightly pointing out that events have moved at a pace that we perhaps had not anticipated. We therefore have to be ready to deal with that.
I am very grateful to the noble Lord for particularly recognising the significance of the AUKUS announcement. As a child I lived very near the Clyde, and I can remember when these sorts of events were happening. This is almost on par with the agreement of 1958 between the UK and the United States—it is that sort of seismic milestone. I think the noble Lord recognises that, and I am grateful to him for doing so.
To address the remarks from the noble Lord, Lord Lee, with reference to our preparedness to take this on, I too read the letter in yesterday’s Times and I have great respect for our former senior personnel within our Armed Forces. I think I can say on the challenges that have confronted the MoD over a period of perhaps 10 to 15 years on procurement—I have said before at this Dispatch Box that I do not in any way seek to rewrite history or pretend that these challenges did not exist—that precisely because we encountered them, we have dramatically reformed how we deal with procurement. To be fair, that has been recognised in recent years by both the National Audit Office and the Public Accounts Committee.
Very good progress has now been made on the Astute programme, as the noble Lord is probably aware. We have in the water four of our Astute-class submarines—in fact, it could even be five—but the recent one, “Agincourt” is on sea trials, and then we have one more to go. Therefore, I think we have five in the water and then “Agincourt”, and the seventh one is being completed. Very good progress is being made. I am satisfied that, with the procurement reforms that have been made within the MoD, there is a much greater resilience and a much more robust framework and process, not least because we have had a frank talk with industry, as it has to play its part in this. We are laying out our expectation from industry at a very early stage, so that there are not these extraordinary debates five years down the line about what the MoD thought it was ordering. When we manage the contract for an important procurement delivery, we now have a senior responsible officer, who will not change every five minutes but will be in place for a meaningful period during the conduct of the contract. Therefore, I seek to reassure the noble Lord that, although I absolutely respect the right of the Times letter writer to air his views, we can see tangible change, both in the MoD and in the conduct of industry, and that is bearing fruit.
The noble Lord, Lord Coaker, also asked whether the two aspirations of Euro-Atlantic security and the Indo-Pacific tilt are in some way mutually exclusive. No, they are not; they are two important tandem activities for the UK Government and for defence. As he will be aware, within the integrated review refresh, the primary immediate threat was indeed Euro-Atlantic security and the illegal incursion by Russia into Ukraine. We see that as a short to medium-term threat. However, for the reasons identified in the IR refresh, we regard the Indo-Pacific tilt as now having happened and to be sustained. He will be aware of what the MoD has been doing to sustain that, not least with the carrier strike group 21 and with the permanent deployment of our two vessels, “Tamar” and “Spey”, out in the south-east China seas. They are playing an important role.
The noble Lord asked particularly about jobs, and it is perfectly clear, with the combination of work that will come to Barrow and to Rolls-Royce in Derby, that we anticipate that thousands of jobs will be created in the UK. As he will understand, I hesitate to put a precise number on that, but no one can pretend that this is other than a very positive narrative for defence and for employment in the UK.
He also raised the important issue of skills, which are critical for how we deliver on this trilateral partnership. Two things are happening: our industry partners themselves are being proactive in engaging in initiatives and programmes to encourage the enhancement of skills and retention of skilled personnel, but we have also established within MoD a defence nuclear enterprise, people and skills programme. That is to develop a sustainable and skilled workforce to support the defence nuclear programme. A range of activities is now being undertaken to increase the nuclear sector engagement with young people and to attract talent from a more diverse background. I think I can say that for young, aspiring STEM individuals who seek a really challenging career in a field in which they are interested, this must be near the top of the attraction stakes in what it offers.
The noble Lord raised the number of submarines, and I think I covered that in responding to the noble Lord, Lord Lee. The issue of cost was also raised, and of course costs are relevant. If we take that in a twofold manner, they are, first, the immediate costs that we anticipate will be necessary. We spent £2 billion last year in both Barrow and Derby. As the noble Lord will be aware, the recent announcement intends that part of the announced £5 billion—£3 billion—will be to sustain the nuclear enterprise. The £2 billion will run for a period of three years. That is devoted to the nuclear enterprise as well, excluding Dreadnought, which is of course covered by a separate contingency funding package with the Treasury.
On the International Atomic Energy Agency, the statement the director-general issued on Tuesday was helpful. I am sure the noble Lord has looked at it. It is a very full statement, but what struck me was that it would not have been possible for him to make that statement with its detailed content if there had not been the closest engagement with the trilateral partners in AUKUS. Of course, it is not a matter of saying that we look to the director-general to approve a project or to express support for it. This is an independent testing entity, and the job of the IAEA is objectively, professionally and completely neutrally to assess what we are doing, but it is perfectly clear from the level of engagement that there is a very positive relationship with the IAEA. That will continue. The noble Lord will be aware that its board meets regularly, and the director himself proposes to submit a report to the next session of the board of governors in June 2023.
On the wider issue of non-proliferation, again there is a very good story to tell. In the document—I feel a bit like a stage manager with props here—there is a particularly interesting section at page 33, which outlines Australia’s credentials and credibility in this field. It makes a very positive read. Australia has an extremely good record with the IAEA, which should provide reassurance and comfort. We also anticipate that, as this all progresses, all three partners will be regularly reporting to and engaging with the IAEA.
As to whether this could lead to more countries wanting to acquire nuclear-propelled submarines, it might very well do, but we all recognise the fundamental difference between a mode of propulsion and a nuclear-armed submarine, which is something entirely different. Therefore, all we ask is that, if other countries are minded to pursue that technology for propulsion, they too are vigilant about these important safeguards and criteria and the need to work closely with the IAEA.
The noble Lord also asked about collaboration under pillar 2. That is obviously slightly further into the future, but it is an exceedingly exciting part of the general programme. We anticipate that, as we make progress on pillar 1, which is to build the nuclear-powered submarines, that will remain a trilateral responsibility and will not be broadened out. As we learn from that process and begin to identify in these intricate sciences—whether it is hypersonics, cyber or whatever—we will certainly be open-minded about discussing with other interested parties how we might take these issues and who might be able to make a positive contribution. It is premature to make a more specific comment about that just now, but we can anticipate a very exciting potential for discussion on pillar 2 as we progress with the programme.
The noble Lord, Lord Coaker, and perhaps the noble Lord, Lord Lee, also raised resources and the 2.5% of GDP. I am very clear that that was a welcome announcement by the Chancellor, because I see it as much more than some roseate dream we might hope to deliver in future; I see it as a statement of intent. That is what the Government are minded to do, and it is contingent only on the economy’s ability to sustain it. Because of the manifest recognition by the Prime Minister, the Chancellor and the Government of the world of threat in which we live and the character of the geopolitical complexity that now surrounds us, noble Lords will understand that this is a very potent statement of intent and a very healthy indication that this Government are prepared, even in difficult economic times, to do the heavy lifting when it comes to the security of our country and our ability to contribute to global security through our alliances and partnerships.
I think I have managed to cover the points raised. If I have omitted anything, I undertake to write to noble Lords and have a look at Hansard.
Lord Stirrup (CB)
My Lords, the AUKUS programme, if executed well, will be very good news for this country. If executed badly, it could be a disaster. The Minister has given us some comforting words on reforms to procurement processes and engagement with industry, but it must be said that the performance of BAE Systems Submarines has been pretty woeful in recent years. Of course, it is not for the Government to run private companies, but industrial performance in this programme will be of strategic importance to this country. What long-term mechanisms and processes are in place to monitor and audit industrial performance, and what leverage will the Government have over the industries concerned? Industrial underperformance in this programme will need to be dealt with swiftly and ruthlessly—something that has not happened before.
The Minister said that the senior responsible owner would be in place for a “meaningful period”. What does she mean by a “meaningful period”? With regard to skills, which are a crucial area in this programme, she talked about what the Ministry of Defence is doing, but this is surely a nationwide issue requiring a nationwide effort. If this ambitious programme is to succeed, we will need all sorts of skills and all sorts of different people. Industries across the country are suffering from shortages—they cannot find sufficient welders—so is there not a case for a government-wide approach to ensure we have a sufficient skills base for such ambitious programmes as this?
Baroness Goldie (Con)
The noble and gallant Lord makes a number of important points; let me try to deal with them.
On the management of contracts and the willingness to have teeth and bite where that is necessary, I think the noble and gallant Lord would be encouraged to see the complete difference in approach in the MoD now compared with some years ago. That is partially because the MoD has woken up to the need to be much more effective in how it manages these enormous contracts with vast sums of taxpayers’ money. To be honest, it is also because we felt the bite from teeth—from your Lordships in this Chamber, from our friends in the other place, and from entities such as the National Audit Office and the Public Accounts Committee. These were unpleasant experiences for the MoD but what they signalled was an absolute need to radically reform and revise what we were doing.
In addition to all that, the one word of comfort I can offer to the noble and gallant Lord is this: bear in mind that this is a trilateral arrangement and agreement. There is, therefore, a triumvirate interest in ensuring that nobody is slipping and everybody is keeping up to the mark. That will be an added enhancer to how we monitor and regulate the performance of the contract.
On the important matter of skills, industries are already engaged—I have seen it at first hand—in really imaginative programmes in their communities with young people. I have been hugely encouraged when I have seen how they operate in different parts of the country. They are engaging with both primary and secondary schools. They are making these critical connections with young people, many of whom then make the choice not only to follow a career in technology but to do it with a particular company. That is one very positive way of trying to increase the skills base available to our industry partners.
At government level, particularly in the Department for Education, there is a recognition of the unrelenting need to reappraise constantly how we seek to improve the provision of skills and ensure that education is aligned with what the economy and industry are asking for. I do not have at my fingertips the details of what we have done so far but I would be happy to write to the noble and gallant Lord about that.
Lord Browne of Ladyton (Lab)
My Lords, welcome as this Statement is, there is nothing at all in it about the financial or opportunity costs of this partnership. Is it true that it will cost $245 billion over three decades? How much of that cost will we bear? Which budget will it come out of? In answering a question today posed by the noble Lord, Lord Swire, on the fourth Oral Question, the Minister—the noble Baroness, Lady Penn—indicated that all nuclear capability would be charged from some other part of the budget. I do not understand that to be the case but, if it is the case, it is a change; if it comes with this, it is very welcome. How much is this going to cost, is it going to come from the existing Ministry of Defence budget and what will be the opportunity cost of that if that is correct?
Given that China poses threats in every domain, not just under the water, what assessment have we made of Australia putting so many of its eggs in this exquisite capability basket, given that we will depend on it in all these other domains to be an active ally with capability?
Baroness Goldie (Con)
On cost, the noble Lord will not be surprised that I am unable to give specific figures, for what I think are widely understood reasons. I imagine that differing levels of cost will apply because, for example, the role of the United States is based on it having an established Virginia class of submarine being built; as the noble Lord will be aware, part of the agreement is Australia seeking to buy three of those. There are now huge issues for Australia in creating the infrastructure that it will need to build the submarines, so, again, it is anticipated that its costs will be different from those of either the US or the UK.
For our own part, as is indicated, we in the UK have been investing in our submarine-building infrastructure. Some £2 billion was announced last year to support the Dreadnought class of submarines. The recent integrated review refresh announcement of £5 billion—obviously, I am rounding the figure up for ease of use—will be split into three, spread over two years, to sustain the nuclear enterprise. My understanding is that the additional £6 billion, which will be spread over three years—£2 billion per year—is also allocated to the nuclear enterprise, excluding the Dreadnought enterprise. That is money that we know is going to be there, and we are therefore able to budget appropriately.
It is important to go back to what the Prime Minister and the Chancellor have clearly indicated: that, having regard to the turbulent world in which we live, they see defence as a national primary responsibility and priority. They are prepared to work, even in difficult economic circumstances, to ensure that we do as much as we can to sustain a powerful and effective defence capability.
I turn to the last part of the noble Lord’s question, which was about this perhaps being a unique solution for Australia. Australia must make its own strategic decision about what it seeks and what it wants. Eighteen months ago, it identified that it had a need and that the best way to respond to that need was to seek a nuclear-propelled submarine. It is positive and gratifying that it then looked to the United Kingdom and the United States. As the noble Lord will be aware, we have a long-standing and close relationship on the construction of submarines. Australia has made a perfectly balanced decision that this type of submarine, propelled as it is by nuclear propulsion, offers huge advantages: it is far more effective in itself; it can circumnavigate the globe without coming up; it is difficult to detect; and it is much more efficient to run. For those who, naturally, care about the environment, it produces a cleaner form of emissions than, for example, a diesel-powered submarine.
Australia has looked at this closely and come to its own strategic, sovereign decision about what it wants. We should all feel very proud that it wants the UK to be part of this vital partnership in delivering what it seeks.
Lord Cormack (Con)
My Lords, should we not derive some comfort from the fact that the crucial meetings in the United States took place immediately after a very amicable meeting between the Prime Minister and President Macron? Is it not absolutely crucial that while we pursue AUKUS vigorously we do not neglect the fact that our European allies are extremely important, particularly bearing in mind what is going on at the moment?
Baroness Goldie (Con)
I cannot disagree with one word of what my noble friend says. As I said earlier, the IRR indicated that the primary threat at the moment is Euro-Atlantic security because of Russia illegally invading Ukraine; that is our immediate defence priority in the short to medium term. However, that is without prejudice to our sustainment of the Indo-Pacific tilt.
My noble friend is quite right: our relationship with France on a bilateral basis is strong and good. Although I am not privy to the detail of what the Prime Minister spoke to President Macron about, I am sure that they discussed a huge range of issues, including how we can promote a free and open Indo-Pacific, in which France has a very important role to play.
Lord Fox (LD)
My Lords, a number of noble Lords have mentioned concerns over industrial performance in delivering on this contract. I think I heard the Minister say that, because there are three parties involved, it would be embarrassing if we did not keep up to time. I suspect that that is just one of the things that would be a problem; it would also be extremely expensive. My noble friend asked a specific question about what benchmarking is being done between the industrial complex in this country and that available in both France and the United States. Can the Minister please answer that?
Baroness Goldie (Con)
To be absolutely accurate, I did not use the word “embarrassing”. Nothing on which I represent the MoD on at this Dispatch Box is ever to be embarrassing; it is a privilege to represent the MoD in this Chamber and to do so on such a positive occasion as this one. I do not have details as to how the benchmark will apply, nor an answer on whether there is to be some measurement of appraisal against what other countries do. I undertake to investigate that, and if there is any information that I can share with the noble Lord, I will do so.
Baroness Bennett of Manor Castle (GP)
My Lords, following on from the question asked by the noble Lord, Lord Browne of Ladyton, we are talking about a very high-cost method of military defence, financially and in terms of resources. Are the Government aware of the level of controversy in Australia about the AUKUS project? There are concerns about the secrecy of the initial signing, which the Australian Greens described as reflecting a democratic deficit, concerns about setting off a regional arms race, and concerns about where it will leave Australian sovereignty and control over its Armed Forces. Australia has signed up twice previously to have nuclear-propelled submarines and subsequently withdrawn from those projects. Are the Government taking adequate account of the political risks involved?
Baroness Goldie (Con)
The Government live in the same world as Australia. Australia, the United Kingdom, the United States and many of our partners and allies are very conscious that the level of threat confronting us is virtually unprecedented. We must be equipped to deal with that.
I will not seek to speak on behalf of the Australian Government. They made an analysis of what they required in their defence capability and to enhance their ability to preserve the rule of law and order within that region, and to ensure that international law is upheld by all parties and all countries. I can only conclude that Australia came to the view that this would be a very sensible and valuable addition to its defence capability. Certainly, in so far as addressing the challenges to which I have just referred, this would seem to be a sound decision on the part of the Australian Government. It is not for me to comment on Australian politics, but the Prime Minister of Australia has been very clear, as was evidenced by his presence in America when this announcement was made on Tuesday, that this is a very important development for Australia and a very significant addition to the ability to address any threats or breaches of law that may arise in the region.
Lord West of Spithead (Lab)
My Lords, this is a very brave and bold decision. I am delighted that it has been made. We are in an era when we need that. However, as has already been highlighted, there are problems within our submarine world. The performance by BAE Systems has not been good. The whole Astute programme has been a problem. The Minister says that we are now on top of that. I am delighted that we are, but one of the joys of this new package is that it enables our nuclear enterprise, which creeps along at the very edge of the capability of our nation, technologically, scientifically and in an engineering sense, to get a boost and maybe move up a notch.
On the SRO ensuring that this follows track, the most successful programme that we ran on a large scale in this country was the Polaris programme. That came in one day early and under budget, because one man was put in charge of it with direct access to the Prime Minister. He could chop people’s legs off if they were not doing what they were supposed to do. Will the SRO have that sort of direct line of responsibility to ensure this? If this goes wrong, my goodness me, it will be a disaster.
Baroness Goldie (Con)
If the SRO had these powers, I would be tempted to bring him into this Chamber to address some of the interrogatories.
I indicated to the noble Lord, Lord Lee, that Astute was accompanied by significant problems but, as I said earlier, boat 7—that is “Agamemnon”—will be the final in class. Boat 6 is still at build stage—that is “Agincourt”—but the other five are now operative, so I think we have a perfectly healthy situation.
The noble Lord is right that, as has already been indicated in the Chamber, a very robust assessment will need to be kept on this programme. As I said to the noble Lord, Lord Fox, it is not a question of embarrassment and falling down on the job but that, with three eyes focused on what we are trying to deliver, there is a third leg to the protections of that robust surveillance of the contract. I am sure that the senior responsible owner will be in place for a meaningful period. As the noble Lord, Lord West, is aware, my Secretary of State is very conscious of, and vigilant about, ensuring that where these major procurement projects are under way, he knows first-hand what is happening. He will be watching this like a hawk.
Lord Mountevans (CB)
My Lords, the importance of the sea lanes and underwater cables is widely known, and submarines are very valuable in this domain. It is well acknowledged that the latest generation of Russian submarines are a great deal better than what they have had in the past. Can the Minister say anything about the nature of the co-operation on this occasion and further co-operation with the United States, bringing together all the experience and expertise of the US Navy and the Royal Navy in this domain? How will it affect the design of the new AUKUS submarines?
Baroness Goldie (Con)
I am not an engineer or a naval technical expert on ship build, but I would say that he is quite right. There is now a repository of skills and experience that will contribute greatly to how this type of submarine is designed. It has already been established, because it is now being known as SSN-AUKUS, that it takes us a step further than where we originally thought that we would be with a successor to Astute. Those aggregated skills are very important, and I am sure that they will be put to very valuable effect in determining the final design of the submarine.
Lord Reid of Cardowan (Lab)
My noble friend Admiral Lord West, while welcoming the Statement, said—and I noted this carefully—that it was a very brave decision. If any of my civil servants or military advisers had said, “Minister, this is a very brave decision”, I would probably have avoided it. That has been given substance by the lack of anything concrete in terms of cost. On an enterprise of this size, there must be some idea of the ballpark figures. We already have the example of HS2. I am not going to go down that track—no pun intended—but there is a figure in the public domain, mentioned by my noble friend Lord Browne, of $245 billion over 30 years. That is a substantial amount of money, and it will be even more substantial when inevitably, like all procurement in the Ministry of Defence, it increases over the next 30 years. Can the Minister have a stab at it again and tell us the realm of possibility on which this decision was taken? It cannot have been taken without Ministers having any idea of how much it is going to cost.
Baroness Goldie (Con)
While the noble Lord’s noble friend Lord Coaker has remained positive about this, as his right honourable friend in the other place did, I am slightly disappointed at the rather despondent demeanour of the noble Lord, Lord Reid. This has been universally regarded as one of the most important and exciting announcements for UK defence and our Royal Navy capability that we have seen in decades. This is a hugely important development. I am in no doubt whatsoever that the Government have made the right decision to proceed with this. It is a tribute to the United Kingdom that Australia and the United States thought that we were a valuable and reliable partner to bring into this.
On the cost, I will not stand here uttering figures which I have no foundation to justify, however much the noble Lord might want to tempt me into doing that. We cannot put a precise figure on the cost of building one SSN-AUKUS submarine. It is a decades-long programme. The final figure will depend on a number of factors, and it will include the final design, how many we build and when we build them. We recognise in terms of cost that this is a hugely important commitment, but we also have no hesitation in saying that, for the security of the country and our ability to contribute with Australia and the United States to a more globally secure world, it is absolutely the right decision to take.
Budget Statement
(1 year, 9 months ago)
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Baroness Penn
To move that this House takes note of the Chancellor of the Exchequer’s Spring Budget 2023.
The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)
My Lords, it is a privilege to open this debate on behalf of the Government and set out how we will move our economy on to a path of long-term sustainable growth. I start by welcoming my noble friend Lady Moyo to the House. I look forward to hearing her maiden speech. Given her distinguished career to date, I expect she will hold the Government’s feet firmly to the fire, especially when it comes to economic policy, and help us get our policies right.
In the autumn, we took difficult decisions to deliver stability and sound money. Since then, 10-year gilt rates have fallen, debt servicing costs are down, mortgage rates are lower and inflation has peaked. The Office for Budget Responsibility says that because of lower gas prices and the measures we are taking, together with our measures in the Autumn Statement, the UK will now not enter recession this year. The OBR forecasts that we will meet the Prime Minister's three economic priorities. Inflation is coming down and is on track to be more than halved by the end of the year: it is action that we are taking to help bring it down.
In this Budget, we confirmed that the energy price guarantee will remain at £2,500 for the next three months, saving the typical family a further £160 on top of the support we have already announced. We have ended the premium that 4 million households, often among the poorest, have to pay on their energy bills for having a prepayment meter. We have extended the alcohol duty freeze until August and will increase the generosity of draught relief, introducing a Brexit pubs guarantee. Because inflation remains high, we will maintain the 5p cut on fuel duty and keep it frozen for a further year, saving the average driver £100 next year and £200 since the policy was introduced. Finally, with communities strained by energy prices, we are providing £63 million to keep 275 local authority swimming pools afloat.
I turn to the Prime Minister’s second priority: reducing debt. Again, we are on track. We are meeting our fiscal rules to have debt falling as a percentage of GDP by the fifth year of the forecast, and to have public sector borrowing below 3% of GDP over the same period. In fact, our deficit falls in every single year of the forecast. In the final two years of the forecast, our current budget is in surplus, meaning we borrow only for investment and not day-to-day spending. Day-to-day departmental spending will grow at 1% a year on average in real terms after 2024-25, until the end of the forecast period, and capital plans are maintained at the same level set at the Autumn Statement. At the same time, taken together, today’s measures lead to an overall lower tax burden for the rest of the Parliament, compared to the OBR’s autumn forecast.
I turn to the Prime Minister's third priority and the focus of yesterday’s Budget: growth. Thirteen years ago, we had an economy that had crashed. Since 2010, we have grown more than major countries such as France, Italy and Japan. We have halved unemployment, cut inequality and reduced the number of workless households by 1 million. The World Bank says that, out of all the big European countries, we are the best place to do business. When it comes to the industries of the future, we are world leaders. Over the last 13 years, we have become the third trillion-dollar tech economy, after the US and China. We have the largest life sciences sector in Europe and the creative industries has grown at twice the rate of the rest of the economy. We are a world leader in offshore wind and our advanced manufacturing industries produce around half of the world’s large civil aircraft wings. These strengths make me optimistic for our future growth.
We should note what the OBR forecasts say. The OBR says that, after this year, the UK economy will grow in every single year of the forecast period: by 1.8% in 2024; 2.5% in 2025; 2.1% in 2026; and 1.9% in 2027. The OBR also expects unemployment to rise by less than 1%, to 4.4%, meaning 130,000 fewer people will be out of work compared to their autumn forecast.
On employment, to achieve the dynamic economy we all want, we cannot afford to waste the potential of anyone. That is why we will remove the barriers that stop people who want to work from getting into work. To help those who are sick or disabled back into work, we have published a White Paper on disability benefits reform, the biggest change to our welfare system in a decade. It will abolish the work capability assessment in Great Britain and separate benefit entitlement from an individual’s ability to work. As a result, disabled benefit claimants will always be able to seek work without fear of losing financial support. In England and Wales, we will fund a new programme called universal support. This is a new voluntary employment scheme for disabled people, where the Government will spend up to £4,000 per person to help them find appropriate jobs and put in place the support they need, funding 50,000 places every year. That comes on top of a £400 million plan to increase the availability of mental health and musculoskeletal resources and expand the individual placement and support scheme.
To help children in care enter the workforce when they reach adulthood, we are doubling the qualifying care relief to £18,140, which will increase the take-home pay of a qualifying carer by £450 a year. We will also double the funding we provide to the Staying Close programme, to help more care leavers into employment and support young people with special educational needs and disabilities to transition from education into the workplace, with a £3 million pilot expansion of the Department for Education’s supported internship programme. To encourage the 2 million people on universal credit without a health condition who are looking for work or only working a small number of hours, we will apply sanctions more rigorously to those who fail to meet strict work search requirements or choose not to take up a reasonable job offer. For those working low hours, we will increase the administrative earnings threshold from the equivalent of 15 hours to 18 hours at the national living wage for an individual claimant, meaning anyone who works below this level will receive more work coach support alongside a more intensive conditionality regime.
For those aged 50 to 64, with a wealth of experience we need in our workplaces, we will increase the number of people who will get the best possible financial, health and career guidance, well ahead of retirement, by increasing access to mid-life MoTs. The Department for Work and Pensions will increase fivefold the number of 50-plus universal credit claimants who receive mid-life MoTs, from 8,000 to 40,000. For experienced workers, we will also introduce a new apprenticeship targeted at over-50s, called “returnships”. These will bring together our existing skills programmes to make them more appealing for older workers, focusing on flexibility and previous experience to reduce training length.
We are also fully alive to the fact that many senior NHS clinicians say they are being advised to leave the workforce, just when the NHS needs them most, because of unexpected tax charges on their pensions. The NHS is our biggest employer and we will shortly publish the long-term workforce plan, but to make sure that they and other professions are not deterred from working, we will increase the pensions annual allowance to £60,000. We are abolishing the lifetime allowance altogether, to incentivise our most experienced and productive workers to stay in work across our economy for longer.
These measures will help turn us into a high-skilled, high-wage economy, but we know that one thing that holds people back is the insurmountable obstacle of high childcare costs, especially when their children are young. In 2010 there was barely any free childcare for under-fives. The Government changed that with free childcare for three and four year-olds in England, but we need to complete the job. That is why, in households where all adults are working at least 16 hours, we will introduce 30 hours of free childcare, not just for three and four year-olds but for every single child over the age of nine months. It is a package worth, on average, £6,500 every year for a family with a two year-old using 35 hours of childcare every week.
Because it is such a large reform, we will introduce it in stages to ensure that there is enough supply in the market. Working parents of two year-olds will be able to access 15 hours of free care from April 2024, helping around half a million families. From September 2024, that 15 hours will be extended to all children from nine months up, meaning a total of nearly 1 million families will be eligible. From September 2025, every single working parent of under-fives will have access to 30 hours of free childcare per week where they are eligible.
Ahead of that, we will help the 700,000 parents on universal credit who, until the reforms announced yesterday, had limited requirements to look for work. Many remain out of work because they cannot afford the upfront payment necessary to access subsidised childcare. We will increase the maximum they can claim to £951 for one child and £1,630 for two children—an increase of almost 50%. For any parent who is moving into work and wants to increase their hours, we will also pay their childcare costs up front.
That is the demand side. On the supply side, we will increase the funding paid to nurseries providing free childcare under the 30 hours offer by £204 million from this September, rising to £288 million next year. This is in addition to the funding provided to extend the offer to parents with children from nine months to two years old. To increase flexibility, we will change minimum staff-to-child ratios from 1:4 to 1:5 for two year-olds in England, as happens in Scotland.
To further increase the potential supply of childminders, au pairs and nannies, we will reopen the youth visa scheme unilaterally to anyone under the age of 35 from the United States, France, Spain, Germany, Italy and Holland. This will allow an additional 27,500 young people to come to work in the UK annually for up to two years.
For parents of school-age children, we will fund schools and local authorities to increase supply of wraparound care so that all parents of school-age children can drop their children off between 8 am and 6 pm. Our ambition is that all schools will start to offer wraparound childcare, either on their own or in partnership with other schools, by September 2026.
My right honourable friend the Chancellor also set out the Government’s commitment to continue to level up growth everywhere across the United Kingdom. Yesterday’s Budget announced 12 potential new investment zones, eligible for £80 million of investment, bringing together our leading research institutions with local government to remove barriers to growth in areas that need levelling up.
There is also over £200 million to fund high-quality local regeneration projects and £420 million for new levelling-up partnerships. A second round of the city region sustainable transport settlements, allocating £8.8 billion over the next five-year funding period, has been announced, and a further £200 million next year—bringing the total to £700 million—will be allocated to fix potholes.
For Scotland, Wales and Northern Ireland, this Budget delivers not only a new investment zone in each nation but an additional £320 million for the Scottish Government, £180 million for the Welsh Government and £130 million for the Northern Ireland Executive as a result of Barnett consequentials.
The Government will also consult on transferring responsibilities to support local economic development, currently delivered by local enterprise partnerships, to local authorities from April 2024.
Mayors will be given more financial autonomy with multiyear single settlements for the West Midlands and the Greater Manchester Combined Authority at the next spending review—something we envisage being rolled out to all mayoral areas over time. So that local leaders can continue to grow their own revenues by growing their local economy we have made a long-term commitment, in the next Parliament, that they can retain 100% of their business rates—again something we hope to roll out to other areas over time.
These steps will help us not just to grow but to share the benefits of growth across our country, but we must never forget that it is the private sector that helps drive this growth, so we are lowering business taxes to incentivise investment and tackle the productivity gap. Building on the increase of the annual investment allowance to £1 million, which covers the entire investment made by 99% of businesses, and following the end of the super-deduction, we will introduce a new policy of “full expensing” for the next three years. We will make this permanent as soon as we can responsibly do so. It will mean that, over that period, every single pound a company invests in new buildings, new IT or new machinery can be deducted from their taxable profits. It will mean a corporation tax cut worth £9 billion for every year that it is in place.
To encourage research and development, we are introducing an enhanced credit for small and medium-sized businesses that spend 40% or more of their total expenditure on research and development.
One of the reasons why we have succeeded in the past is our inclination toward innovation—our propensity not just to adapt but to drive change. Having left the EU, there is an opportunity to do so again.
With financial services reforms under way, we are now looking at regulations around life sciences, and we are lucky to have one of the most respected drugs regulators in the world in the MHRA. It will now move to a different model that will allow rapid and often nearly automatic sign-off for medicines already approved by trusted regulators in other countries such as the United States, Europe or Japan. At the same time, from next year it will set up a swift new approval process for the most cutting-edge medicines and devices to ensure the UK becomes a global centre for their development. An extra £10 million of funding over the next two years will put in place a plan to provide the quickest and simplest regulatory approval in the world for companies seeking rapid market access.
To strengthen our position in digital technology, we have accepted all nine of the digital tech recommendations made by Sir Patrick Vallance.
We are also making good on our pledge to direct our innovation toward a green economy by allocating up to £20 billion of support for the early development of carbon capture and storage projects across the UK as we work towards our goals in 2050. This will attract private investment, support up to 50,000 jobs and help capture 20 million to 30 million tonnes of CO2 per year by 2030.
Alongside more public investment in nuclear, we are going to class it as “environmentally sustainable” in our green taxonomy, giving it access to the same investment incentives as renewable energy. This will not only deliver against our climate change goals but afford us energy security too. To support our wider security in a more dangerous world, having announced £5 billion of funding for the Ministry of Defence, the Budget confirmed an additional £11 billion over the next five years. By 2025, we will spend 2.25% of GDP on defence and endeavour to raise it to 2.5% as soon as the fiscal and economic conditions allow.
It has not been possible to condense the entirety of the Budget and its ambition into my opening remarks, but what should be clear is that we are bringing inflation down, debt down, and growth up. We have a plan that says to people: work will pay and pay well. We have a plan that is revolutionising childcare, reforming pensions and supporting disabled people. We have a plan to tear down barriers to growth, unlocking investment, incentivising innovation. It is a credible plan that will deliver economic success, growth and prosperity. I beg to move.
Lord Eatwell (Lab)
My Lords, I am sure the whole House is grateful to the noble Baroness, Lady Penn, for introducing this important debate. We all look forward with interest and, as a professional economist myself, some excitement to the maiden speech of the noble Baroness, Lady Moyo.
The Minister who delivered this Spring Budget in another place bears the title of the Chancellor of the Exchequer, but this title does not adequately reflect Mr Hunt’s role. His real title should be the Minister for mitigating disastrous Tory economic policies. He is “The Mitigator”, a role that becomes ever more important as every parliamentary Session brings forth yet a further Conservative economic blunder.
We all recall Mr Hunt’s noble labours in reversing the appalling damage done to Britain by the Truss/Kwarteng economic regime—damage that still resonates in every mortgage holder’s higher current and/or future monthly interest payments. Now, in this Budget, he is reversing the damaging decision taken by Conservative Chancellor George Osborne in 2012 when he first cut the pension lifetime allowance and then cut it again in 2014—and it was cut again in 2016. The result, as Mr Hunt made clear, has been damaging not just for the NHS but for the availability of skilled, experienced professional expertise throughout the British economy. But, being a good Tory, even The Mitigator could not resist doing his own little bit of wasteful spending. Instead of a balanced increase in the LTA, he abolished it altogether, thus handing up to £1 billion to the wealthiest. The champagne corks were popping in the City. When she sums up, will the Minister tell us the Treasury’s full estimate of the cost of this excessive giveaway, including the cost of consequential losses in inheritance tax revenues?
These blunders are perhaps not the most serious that Mr Hunt has had to contend with. Contrary to the Minister’s rosy scenario, in the first half of 2010 the policies of Chancellor Alistair Darling had resulted in the economy growing at an annual rate of 3%, and the economy was set on the path of sustained recovery from the global financial crisis. In June, the newly elected Conservative Chancellor killed that recovery stone dead. Austerity cut demand, inflicted damage on social services, education and the health service and, by generating an aura of all-pervading economic pessimism, led to cuts in investment and growth in the private sector too. The next time a school or hospital is closed because the roof is unsafe or necessary equipment is lacking, remember Austerity George. It is no wonder that Mr Hunt is so keen to project his personal optimism.
Mr Hunt is also struggling with the consequences of the next huge Tory economic disaster: Brexit. I am well aware that Brexit was not just about the economy, and we can argue about the role of sovereignty in all aspects of our national life and whether there was a price worth paying. But, as an economic policy, Brexit has seriously damaged the country’s economic health. Noble Lords will recall that, after three years of austerity and with a general election on the horizon, economic conditions were eased by Mr Osborne and in 2013 business investment began a significant recovery. Then Brexit dealt business investment to blow from which it has not recovered to this very day. Having grown steadily as a share of GDP from 2013 to 2016, following the Brexit vote business investment fell year on year. Even with the incentive of the superdeduction in place, it is back to the austerity-induced levels of the end of 2012. As the Office for National Statistics has pointed out, the UK has the lowest average private sector investment as a percentage of GDP of any G7 nation. How ironic to hear Mr Sunak congratulating the people of Northern Ireland so enthusiastically on the extraordinary and unique economic advantages they will enjoy as members of the UK market and the EU single market. Perhaps the Minister will tell us when she sums up why what Mr Sunak declares to be so good for Northern Ireland is not good for England, Wales or Scotland.
The Mitigator, Mr Hunt, has correctly identified his task as reversing this sad tale of Tory low investment and consequential low productivity. With the end of the superdeduction cutting business support by £10 billion a year, he has introduced full expensing, which will increase business support by £9 billion. So, while incentives are not up, they are down by only £1 billion a year. Unfortunately, the new incentives are scheduled to last for only three years. As the IFS commented,
“the fact that this change is temporary and only announced now is most definitely not welcome. Today’s announcement is just the latest in a long line of changes and temporary tweaks. There’s no stability, no certainty, and no sense of a wider plan”.
Contrary to what the Minister said about the burden on companies falling, this April sees an increase in corporation tax of around £14 billion a year. When she sums up, will the Minister confirm that, as a result of this Budget, British business is now worse off by a total of around £15 billion a year? There will be no champagne corks in the boardrooms of British industry.
The other flagship scheme, the 12 new investment zones, will be good news for the successful zones but bad news for everywhere else. Long experience demonstrates that such schemes shift investment around the country without any significant impact on the overall figures. They simply shift the deckchairs. Against the new £15 billion burden on industry, the extra £1.8 billion help to
“cutting-edge companies who … are turning Britain into a science superpower”,—[Official Report, Commons, 15/03/23; col 840.]
to quote the Chancellor, welcome as it is, sounds distinctly underpowered.
Creative superpowers are built on a firm foundation of high-quality education and skills, yet where are the measures in this Budget to foster the high-wage, high-skills economy Mr Hunt seeks? What has he done to mitigate the disaster of Tory education policies? School spending per pupil in England fell an average of 9% in real terms between 2009 and 2019. According again to the Institute for Fiscal Studies, the Tory squeeze on educational resource is
“without precedent in post-war UK history”.
The result is that England is today one of the very few OECD countries where the young have worse literacy and numeracy skills than 55 to 65 year-olds. The Government have also cut adult education by half. Against this, the impact of the announced midlife MOTs and returnerships are drops in the ocean. Is it any wonder that this country has such a skills shortage?
However, instead of focusing on skills, The Mitigator focuses on numbers by providing a package of measures aimed at increasing labour market participation. The OBR costs this package at £7.1 billion. It estimates the increase in labour force participation as a result to be 110,000 people: that is, £65,000 for each extra person joining the labour force. At the same time, the OBR forecasts that trend unemployment will rise by more than 130,000. All this is in a labour force of 35 million. There is not much mitigation there. Of course, the investment in childcare is to be heartily welcomed. However, when she sums up, I would be grateful if the Minister would comment on the Sutton Trust’s estimate that, given the way in which the scheme is designed, 80% of the poorest families will be unable to access the childcare they need. Is the Sutton Trust right? In the medium term, once some of the restrictions built into Mr Hunt’s scheme have been removed, the provision of high-quality childcare will indeed herald a welcome advance in British society, extending opportunity, particularly to women, and providing greater security for poor families that need both partners in work in order to get by.
Falling real incomes define today’s economy and falling living standards blight today’s society. As the OBR notes, the 5.7% fall in real household disposable income over the next two financial years will be the largest two-year fall since records began. Even five years hence, in fiscal 2027-28, the OBR states that living standards will still be lower than pre-pandemic levels. This dismal outcome is of course due primarily to the increase in the price of energy and other tradeable goods, but is made even worse by the freezing of tax thresholds by Chancellor Sunak. The Sunak freeze ensures an extra £500 in tax for basic rate taxpayers in 2023-24 and an extra £1,000 in tax for higher-rate taxpayers—and yet more in subsequent years. Once again, matters would be worse if Mr Hunt had not mitigated the costs with the extension of the energy support measures and the commitment to increase social security benefits in April by the rate of inflation.
The problem is that mitigation is not enough when, as the Resolution Foundation pointed out this morning, the Budget leaves many government departments facing 10% real-terms cuts; it is not enough when living standards decline; and it is not enough for the Chancellor to be focused solely on mitigating the mess left by all his Conservative predecessors—with the notable exception of Nadhim Zahawi, who, perhaps fortunately, did nothing.
The chairman of Legal & General commented last week that Britain is a
“low-productivity, low-growth, low-wage economy fraught by political infighting and that has to change”.
He added:
“We need a massive step-up in investment in the UK”.
He was right. He could have added that low growth equals high taxes, even as public services deteriorate.
What was totally absent from the Budget was a medium-term strategy to turn Britain around that did not focus just on tax and spend but embodied fundamental institutional reform to link invention to innovation to investment in the skills and technology of the future. Without that institutional commitment, we will not see the investment in growth that Britain desperately needs. That is what is happening in the United States, but it is not happening here. As the clean technology race between the US, the EU and China hots up, the lack of any substantive UK response is chilling.
The result of 12 years of economic mismanagement has been stagnating productivity, the worst post-pandemic growth in the G7, higher taxes drained from a population suffering record falls in living standards and a shrinking labour force squeezed by the high cost of going to work and by long-term sickness unmitigated by an increasingly desperate NHS. However, accessing his inner Monty Python, Mr Hunt claimed this morning that he is setting out a long-term plan to make us
“one of the most prosperous countries in Europe”.
Always look on the bright side of life.
As a long-serving Conservative Health Secretary, Mr Hunt is accustomed to managing decline with an optimistic smile, always looking out for opportunities to mitigate the pain wherever he can. But mere mitigation is not what Britain needs. Britain is in a hole, and Mr Hunt can claim credit only for having slowed down the digging.
Baroness Brinton (LD) [V]
My Lords, I declare my interest as a vice-president of the Local Government Association and a vice-chair of the All-Party Parliamentary Group on Adult Social Care. It is a pleasure to follow the noble Lord, Lord Eatwell, and I also look forward to hearing the maiden speech of the noble Baroness, Lady Moyo.
The Chancellor says the OBR projection is now that Britain will avoid a “technical recession”, but ONS data shows that the UK is the only major economy in the G7 that is still smaller than it was pre pandemic. The OBR has confirmed that, after yesterday’s Budget, living standards will fall faster than any time since the 1950s, and it is evident that living standards in 2028 will be worse than in pre-pandemic years. This Conservative Government have made the British people poorer.
So, frankly, it was embarrassing yesterday to see the Conservative Government celebrate an economy that has shrunk in size on their watch and is lagging way behind our international competitors. The cost of living crisis is hitting millions of Britain’s families and pensioners, but this Budget has failed them miserably. People are desperate for real help, especially a cut in their energy bills, but all the Chancellor could offer was empty words and more unfair tax hikes—unless you are in the top 1%.
The abolition of the lifetime pension tax allowance may help a number of medical consultants, but the real problem here is that the Conservative Government have failed to act on this for years, and by now the NHS has lost far too many senior staff as a result. While it is welcome that this may encourage NHS consultants to work longer, it does nothing for our heroic nurses and other healthcare staff on low pay, who have been working to exhaustion in crumbling hospitals. That many nurses have had to access food banks should be shameful to this Government.
The Chancellor announced the four pillars of his industrial strategy—economy, enterprise, employment and education—but, within 24 hours, commentators and many people and organisations are raising serious concerns about the proposals. Why, yet again, is there no impact assessment for the Budget, as required under the Equality Act 2010? It is particularly egregious because the Government rightly ask for impact assessments in many other areas that they fund—for example, international development or even their own departments—but will not do it for their own Budget proposals. We note that the Chancellor has spent two-thirds of the windfall from the economic dip not being quite as bad as had been feared on a series of headlines, but he has failed to reduce the cost of living crisis that is hitting millions of Britain’s families and pensioners. This is why we need an impact assessment.
The Chancellor announced a harsher regime on benefits that will affect some of the most vulnerable in our society: those too unwell to work but not classified as disabled; black and ethnic-minority people; young people not in education, employment or training—the NEETs—who are often from a low socioeconomic background; and those in work but on very low pay, who are really struggling at the moment.
From these Benches, we wanted to see household energy bills cut by £500 by taking the energy price guarantee down from £2,500 to below £2,000. We wanted to extend energy support for businesses, especially local businesses, including farmers and rural communities, to keep food prices from rising and to help shops and pubs on our high streets to stay open. We also wanted to put in place a proper windfall tax so that oil and gas giants pay their fair share.
This is because the OBR says we are only half way through this period of severe cost and inflation increases and resulting pressures on the economy. It has confirmed that living standards will fall by 6% over the next two years, and we know from the last year that vulnerable communities will be worst affected. For example, Black Voice notes that 40% of black people have no access to a car, compared with 17% of white people.
Data also shows that bus and rail costs have risen disproportionately compared with fuel duty and vehicle fuel costs over the last five years. We know that bus users in rural areas are paying much higher prices, just as they watch their local bus services disappear because councils cannot afford to support them. Once again, the most vulnerable are affected.
We on these Benches believe that R&D tax credits for business are effective. However, yesterday’s announcement about the 40% intensity threshold for innovation, at a time when all types of businesses are focusing on surviving and coming out of this economic downturn, raises concern. High tech and innovation are vital for business, as I know better than most, but all businesses need to grow.
Four decades ago, I managed the new Cambridge research fund, which was the first UK seed corn investment fund for high-tech companies coming out of universities. In those early days, we learned one key fact: tech businesses are not understood well by mainstream banks and their investors. The lead time to market, and profit, is often slower than for less innovative businesses and far too many do not make it. Those elements still hold true. Can the Minister say how long the Government believe it will take before UK business sees a rate of return on these new, highly strategic R&D tax credits and why they made the decision not to fund those businesses just outside that innovation threshold, because now is also a crucial time for them to invest?
We also know that many businesses across the country are really struggling with their energy costs. Some have already had to close because their costs have gone up by such a large amount. This includes social care providers; as an aside, why was there absolutely no mention of social care in the Budget yesterday? The Government have delayed the reforms they proposed last year. They are vital but there was no news.
Methodist Homes, which has 88 care homes and 69 retirement living schemes, has found that its energy costs have risen from £5 million to £18.6 million in less than two years. Yet the support it received from the Government has reduced this burden only by less than £1 million. Social care settings were not included in the energy and trade-intensive industry support scheme, despite the fact that they run many medical appliances and cannot simply turn the thermostat down. Methodist Homes says:
“We were hoping for support in this Budget and are disappointed that our sector has been overlooked. The scale of the impact of the energy bill hikes should not be underestimated: without significant support on energy bills to the sector, we believe there is a risk of market failure and subsequent reduced provision for older and vulnerable people, with a devastating knock-on effect on peoples’ lives and patient flow in the NHS.”
What advice would the Treasury give to the many social care providers today, and what help can they receive to prevent this possible market failure and the crisis for our elderly in having nowhere to go that closures would create?
The Government’s priority of getting people back into work to really start the economy going again seems logical, at face value, but the details of how this will work are key. With 6.7 million people economically inactive, the Chancellor proposes a number of remedies.
On the childcare and nursery announcement about providing £4 billion to fund an extra 30 hours a week free for one and two year-olds, the Chancellor is also going to relax the ratio of staff to children in nurseries to help address staffing issues. In coalition, the Liberal Democrats pushed the Conservatives to start the investment for three to four year-olds, but we wanted it to go further and cover one to two year-olds too; the Conservatives disagreed. Let us be clear that, despite the Government claiming today the entire credit for the current system, the push inside the coalition for this was from Jo Swinson MP and we always said that it needed to be expanded. Our 2019 manifesto set this out and was derided at the time by the current Government.
There are holes in yesterday’s announcement regarding the proper funding of a scheme that is free to parents and does not penalise nurseries. First, the Government announced some funding, but it is not the full funding that is necessary. Since 2015, this Government have not increased the grant to nurseries in line with their actual costs. That is also why some nurseries are going out of business now.
Secondly, we have always wanted a workforce plan to professionalise and retain nursery staff and to increase the number of staff with a positive recruitment campaign. We know that effective early years free childcare and nursery support pays dividends in later education and employment. If these two issues are not fully supported now, it risks making the problems facing parents and childcare providers even worse, and many parents will find they cannot get access to the nursery places they need. Relaxing staff-to-child ratios simply is not the answer. Children’s safety should be our number one priority, rather than being reduced to a cost-cutting measure. All these key practical issues could be solved if the Government reversed the tax cuts of £4 billion a year that they have given to the big banks, on top of what they are offering now.
The proposal to abolish the work capability assessment and create enhanced universal credit for disabled people sounds attractive in theory. The WCA was—is—a flawed process and disabled people found themselves in the hands of assessors who did not understand, I am afraid sometimes deliberately, the barriers their disability presents to entering the workplace. However, the new system relies entirely on personal independence payments assessments working; they do not.
Assessors often underplay the impact of a person’s disability when they write up their recommendation. Worse, there is considerable evidence that some lie in the face of the evidence. How do we know this? An extraordinarily high percentage of disabled people whose PIP applications are rejected win on appeal, so the system is already failing. The mandatory review stage, internally in DWP, overturns only 12% of PIP cases but at the next stage, external tribunal, applicants have an astonishing 70% success rate. Are the Government planning to reform the PIP assessment process to ensure that these appalling practices cease and that people who generally need PIP support and who will get this new help will win, right at the start? By the way, there is a substantial bill to the state in fighting these appeals, and therefore to the taxpayer. Fighting appeals costs the DWP a shocking £50 million per year and if the PIP process is not sorted out, the new process will not work either.
The Government’s proposal to help those who are ill but not disabled back into work is interesting. But what happens to someone in a village who has a bad back, confirmed by their GP, and is offered a job in a town with no bus service from that village? They cannot get to that job on a bicycle. Can the Minister say if they will be sanctioned, or the doctor’s advice will take priority? DWP’s history on this is not good. We know that sanctions often do not work. There are far too many stories of despair at the draconian rules, and suicide.
Public services and their staff appear to have been almost ignored in the Budget—but then, they do not begin with an E. The Budget plans for an increase of around 1% per annum for public services over the next three years, but with promises already made for the NHS and social care—which, by the way, include the breaking news in the last half-hour of a deal for the nurses and ambulance workers—that is nowhere near what is needed for the NHS, given where inflation is.
It is not the NHS alone. All our councils, as well as police, fire and water, will struggle to deliver their statutory duties, let alone retain staff, if there is virtually no new money to pay for increases. The workforces are all struggling. There are record vacancies, particularly in the NHS and social care. We also saw a total failure to invest in fixing crumbling hospitals and supporting local health services, as well as public health. This shows that the Conservatives do not understand that you cannot get Britain back to work without fixing the real crisis in our NHS and social care.
Some good news over the last couple of months has given the Chancellor a bit of headroom, although economists are arguing that his is a high-risk strategy, given the volatility of the economy and global politics at the moment. Instead of supporting the most vulnerable—including ensuring that our public services can survive on more than 1%—and helping to kickstart the recovery that Britain so badly needs, the Chancellor chose to use the debt and deficit ratios for a number of temporary spending commitments now. The Government believe those will look good on election leaflets. The reality is that the Chancellor has built in a number of future policy liabilities, not just for next year but for the next Parliament. This will ensure that local government, the NHS and government departments all struggle even more to deliver core statutory services. It is not just a shame; it is shameful.
Lord Bridges of Headley (Con)
My Lords, I declare an interest as an adviser to and shareholder in Banco Santander. I start by saying that I very much look forward to my noble friend Lady Moyo’s maiden speech. I know that she will make a very great contribution to this House, given her enormous experience in business and many other fields—so I extend a very warm welcome to her.
The Chancellor has obviously been dealt a tough hand. Some of the challenges he faces are thanks to decisions made by his predecessors. Some of them flow from Brexit, others from the war in Ukraine and from Covid. Whatever the cause, we are in a new era of higher rates, higher inflation and, above all, higher uncertainty. So let me give credit where credit is certainly due. The Prime Minister and Chancellor have stabilised not just the ship of state but the economy. We have avoided recession.
In the Budget, the Chancellor was absolutely right to highlight the strengths of our economy: for example, our tech sector, life sciences and renewables. I support a number of the measures he outlined to help them, for example, nurturing nuclear power and the AI sandbox. In particular, I am glad that the Government have acknowledged the need to address the growth in inactivity that your Lordships’ Economic Affairs Committee reported on back in December. We highlighted, among a number of other points, the rise in the number of 50 year-olds retiring early.
On this, I do question the approach of increasing tax relief on pensions. The OBR states that this will result in employment increasing by just 15,000—maybe my noble friend could correct me if I am wrong. So this measure could cost £80,000 per worker incited back. That is a figure to focus on, but we need also to put the 15,000 figure in context. Some 37,000 50 to 64 year-olds were inactive in March 2020. The figure now—my noble friend can correct me if I am wrong—is 319,000. That is the backdrop to the 15,000. Moreover, as others have been remarking on overnight, this policy could actually encourage people to retire earlier. So I would be very grateful if my noble friend could talk us through the logic behind this policy. If it is aimed purely at stemming the exodus from the NHS, which I think a number of us are worried about, the words “sledgehammer” and “nut” come to mind.
However, let me take a step back and ask whether we are now on the path to the growth that Mr Hunt and all of us want. Will we see productivity rise from its torpor, as the noble Lord, Lord Eatwell, pointed to? Are the measures we heard about yesterday going to help make people better off, which is vital given that we are now experiencing the largest two-year fall in real disposable income in almost 70 years? I very much hope that the Budget will be one for growth; indeed, I have my fingers, my legs and my toes crossed. But it is worth noting that the OBR forecast is wildly more optimistic than that of the Bank of England, and I would be grateful if my noble friend could explain why she thinks there is this divergence. Obviously, these forecasts are bedevilled by uncertainties and risks. Those are clear in the caveats the OBR makes in numerous places in its outlook.
When we read the Budget and the OBR outlook, we can be sure of the parts of our nation that will grow. Here I fear that, while my noble friend in her opening remarks was Tigger, brimming with optimism, I am more Eeyore. Let me start with the state. It will grow, and this is the case in many other nations. It seems that we are in a new era of a bigger state. As a percentage of GDP, spending, which back in 2020 was set to decline, will reach its highest level since the 1970s.
I fully understand that the Government have had to contend with challenges that, for once, actually merit the adjective “unprecedented”. But let us look at some of the areas, other than support for energy bills, which are driving the increase. For example, we are seeing a growth in welfare spending, which will rise by £9 billion over the forecast period. Health and disability spending alone in 2026-27 will be £8 billion more than was forecast only last March. Another reason for the growth in spending is our debt and the cost of servicing it. Our stock of debt has been pushed to a 60-year high and this year we will spend £114 billion on debt interest. That is the amount we spend on education, the Home Office and defence combined. Then there is borrowing, which is £50 billion a year higher on average in the forecast this year, compared with last year’s forecast.
It is hardly surprising that, given these areas of growth, taxes are another area of growth. The tax burden is set to reach an all-time post-war high. We are growing the number of new taxpayers by 3.2 million and the number of higher rate taxpayers by 2.1 million. There is also the impact of IR35—that insidious policy that the Finance Bill Sub-Committee of this House has focused on. The yield on that has grown to £1.5 billion per year, which is double previous estimates.
As to the tax on business, the capital allowances will help compensate for the damage done by the rise in corporation tax. Again, the noble Lord, Lord Eatwell, pointed this out. But I note that, at the end of the forecast period when those new allowances are due to expire, business investment is set to fall. So it is critical that they are kept in place, not least because, as the OBR states, productivity growth settles at a measly 0.25 percentage points in the final two years of the forecast.
This brings me to another area of growth and something that has not been mentioned so far: immigration. Net migration was forecast to be 129,000 in the March 2022 forecast. Now it is forecast to be 245,000 a year and—this is the point—will contribute to 0.5% in output in 2027. Could my noble friend confirm that it is actually immigration, not the other measures announced yesterday, that will be the main driver behind the increase in our workforce?
There are two final areas of growth we can also be sure of. The first is our ageing population; that is set to grow. The population aged over 65 will rise by 1.2 million between now and 2027. That accounts for the bulk of the rise in labour inactivity. Secondly, by the end of the forecast, more than one in 10 of the working-age population will be in receipt of at least one health-related benefit.
I put all this together and, while I applaud the stability the Government have brought and welcome some of the measures in the Budget, I am afraid I do not share the optimism. I question whether we are doing anything like enough to put us on the stable path to growth we need. To do that obviously means more than just chanting “Growth, growth, growth”. Nor can it be done by irresponsible, unfunded tax cuts. From where I stand, I fear we are in danger of slipping into the groupthink that higher spending, higher taxes and a bigger state are the path to prosperity. They are not. They will snuff out the enterprise, innovation and investment we need to power growth.
More fundamentally, they conflict with the basic belief that I thought—or maybe should not think any more—most Conservatives held, that people, not Government, are best placed to spend their money as they see fit, to the benefit of all. Worst of all, far from taking the highway to prosperity, we risk going down a cul-de-sac to weak growth and flatlining productivity where we become submerged by debt. If we are to address this—again, I agree with the noble Lord, Lord Eatwell, but from a very different perspective—we need to have an honest conversation about what we want the state to do.
Let me end by quoting what the OBR highlights, tucked away on page 80 of its outlook. The UK is like many OECD countries, facing the
“growing fiscal pressures associated with ageing populations, higher stocks of debt … energy insecurity and climate change, and growing geopolitical threats. Meeting these pressures while also respecting their own fiscal objectives may require further increases in tax burdens in these countries over the remainder of this decade, unless they are prepared to significantly scale back spending in other areas”.
Some might say that a bigger state is inevitable if we are to pay for the challenges we face. To me, that is the question that overshadows this Budget. It is a very simple one: is it inevitable that the state is set to grow more and more, given the challenges we face? I think not. Others may disagree, but this is the debate that we must have urgently if we are to have the growth we need.
Lord Howarth of Newport (Lab) [V]
My Lords, I think we can all agree that the Chancellor had to maintain a—[Inaudible]—stance and drive towards a—[Inaudible]—configuration of the public finances, while improving—[Inaudible]—and encouraging productivity and investment in a green economy, though we can argue about how—[Inaudible]—his measures may be in achieving those ends.
I suggest that the Chancellor’s analysis of the malaise of our economy fails to identify some crucial features. He is emphatic about the need to improve growth—an objective of my party as well. We should start by asking what sort of growth we want. The noble Lord, Lord Bridges of Headley, just now reflected on various forms of growth, not all of them welcome. The Chancellor said—[Inaudible]—sustainable and healthy growth, but what does that mean? He seems, in the conventional view of the Treasury, to envisage economic success in terms of increases in GDP. Should not the primary objective of economic policy be rather to grow the well-being of every member of our society, especially those who are worst off?
GDP, as a measure of the economy, takes no account of inequality and ignores the basic human needs of security, dignity and respect. The Chancellor alluded vaguely to the need to fund good public services. I am glad that he wants to help children in care and households with pre-payment meters, but he offered nothing in the Budget to give confidence to the great majority that they and their families will be cared for, that they will be helped to adapt their skills and make a good life, that their elderly parents will be supported in their frailty, and that their children will be well educated and in due course decently housed at an affordable cost. The Budget was not devised within a vision of a society that is equitable, humane and in harmony with nature.
The Chancellor preened himself, a little desperately, on achieving a
“slightly lower overall tax burden”
than previously forecast
“for the rest of the Parliament”,—[Official Report, Commons, 15/3/23; col. 836.]
although that will not have gratified his party, frantic for him to lower personal taxation before the election. They might reflect—and this is a consideration also from the noble Lord, Lord Bridges—that economic growth was stronger in the post-war decades, when top rates of personal tax were high and a mixed economy was the orthodoxy, than in the following decades, when policymakers put their faith in the market and sought to roll back the state with privatisation, deregulation and tax cuts for the wealthy.
There is no evidence that low personal taxes inspire people who have advantages to work harder or lead to improvements in efficiency. Low rates of tax on high incomes make it rational to provide grotesquely large remuneration and prioritise shareholder value over investment. They have caused talent to gravitate excessively to finance, narrowing the capacity of the economy and contributing to the dereliction of post-industrial areas. Natural justice requires that the winners from globalisation are taxed so as to compensate its losers. Instead, the proceeds of growth have been almost entirely extracted by the rich.
Mr Hunt’s claim that since 2010 the Government have cut inequality can be based only on the most selective statistics. The Chancellor’s policy on personal taxes is for the rich to be able to accumulate bigger pensions and thereby pay less inheritance tax while many more people on lower incomes are to be dragged into the income tax net and see their disposable income fall. He could at least have introduced tax relief on pension contributions at a flat rate, but he chose not to do so. The Budget will exacerbate inequality and national demoralisation.
Communities blighted by the forces of economic change—new technology and globalisation—need not only generous social security for individuals and their families but substantial resources for place-based regeneration, funded by taxpayers who have benefited from globalisation and administered as far as possible by local communities themselves. I am pleased, therefore, that the Chancellor has seen the need to empower elected local leaders to
“fund and deliver solutions to their own challenges.”—[Official Report, Commons, 15/3/23; col. 838.]
I hope he will move faster than he seems minded to do to extend this freedom beyond the West Midlands and Greater Manchester mayoralties. However, I suspect that his vision of 12 investment zones as “potential Canary Wharfs” will be depressing rather than inspiring for the people who live in those places. Are they to be subjected to the abandonment of properly considered urban planning and the destruction of biodiversity? Growth should not be at the expense of quality of life and life itself.
It is good that the Chancellor will bring forward measures to tackle the promoters of tax avoidance schemes, but his concern seems only to stanch the haemorrhage of tax revenue. He gave no hint that he understands the importance of cleaning up the nexus between the very wealthy and government. When people read reports of the elaborate arrangements, devised by accountants and lawyers, for rich people to avoid even such taxes as they are expected to pay, and when they read about the lobbying of government by big business and the funding of politics by the rich, they conclude that government and politics are corrupt and, to coin a phrase, a conspiracy against the public.
Resentment is intensified when political rhetoric stigmatises the poor as failures and morally defective. This Chancellor is more delicate in his language than his predecessor, George Osborne, but in the Budget yesterday he said the sanctions regime for social security claimants will be applied “more rigorously”. A society in which feelings of injustice are thus incubated will, to say the least, not be optimally productive. This is dangerous for our democracy as well as our economy. Anger, unhappily, will issue in scapegoating of politicians certainly but also of immigrants, who are perceived wrongly to depress wages, steal jobs and have a free ride on public services. If the Chancellor wants more construction workers and childminders to come here from abroad, he had better educate the Home Secretary as to why this is in the interests of our economy and try to persuade her to tone down her language about migrants.
We have no option but to embrace technological change, but we should be aware that it is not certain that we will grow faster or be happier if we become a science superpower—the Prime Minister’s dream. Historically, the technological innovations of electricity and the internal combustion engine indeed engendered high growth in an era when the size of the state and its commitment to public services was also growing hugely. The technological innovations of the digital era, also the era of the cult of the small state and globalisation, have been accompanied by weak growth of productivity, stagnation of wages and widening inequality, as well as the pathologies associated with social media. If to be a science and technology superpower means to accelerate the application of artificial intelligence, as the Chancellor proposes, then we shall need more than ever a protective state. We have to see past the circumstances of today’s tight labour market to recognise that very many livelihoods are at risk from artificial intelligence.
Following technological innovations in the 18th century that heralded the Industrial Revolution in Britain, real wages halved and then stagnated for 50 years. Great technological disruptions may benefit capital but they immiserate labour that is displaced and rejected. In this context, it is perverse for the Chancellor to continue to tax labour at a high rate through national insurance while favouring capital through generous investment allowances. Destruction takes a very long time to become creative and there is no certainty that it will do so. In such an era we need government that willingly embraces responsibility for the well-being of the vulnerable.
I now look forward very much indeed to hearing the maiden speech of the noble Baroness, Lady Moyo.
Baroness Moyo (Con) (Maiden Speech)
My Lords, I am deeply privileged to speak for the first time in your Lordships’ House. It is an honour to take my place on these distinguished Benches. I thank everyone in this august House for the warm welcome that I have received from all sides. I thank the officers and staff I have met for their support on all matters great and small. This includes Black Rod and her staff, the Clerk of the Parliaments’ Office, doorkeepers, police officers and attendants in the Library and dining areas. I also sincerely thank my supporters, the noble Baroness, Lady Baroness Manningham-Buller, and my noble friend Lord Reay.
In preparing for this occasion, I visited the archives of Hansard and read the maiden speeches of several noble Lords past and present with whom I share an interest in the economy: former Chancellors of the Exchequer my noble friends Lord Clarke of Nottingham and Lord Lawson, and the noble Lord, Lord Darling; former Bank of England Governor the noble Lord, Lord King of Lothbury; business leaders and economists my noble friend Lady Lea and the noble Baroness, Lady Fairhead, and the noble Lords, Lord O’Neill and Lord Skidelsky. Their words on the centrality of economic growth underline how much of what I wish to say today has echoed in this Chamber through the decades. Yet the theme of economic growth and its impact on all our lives is as important today as at any other point in living memory—perhaps more so.
I have been fortunate in my career to have worked through the vagaries of the world economy, including the challenges of the global financial crisis, Brexit and navigating the Covid pandemic. The perspective that I bring to this House is born of both public and private sector experiences over the past 30 years: in public policy, at the World Bank and as a non-executive director in His Majesty’s Department for Business and Trade; in finance, in the City of London, having spent nearly a decade at Goldman Sachs; and in business, on the boards of many large, global and complex organisations, including Barclays Bank and the investment committee of the Oxford University endowment.
In my career as an economist, I have long believed that the ability to create and sustain economic growth is the defining challenge of our time. I do not mean growth for growth’s sake or merely for the sake of record-keeping—for example, an economy increasing growth from 3% to 5%—but rather because economic growth is a prerequisite for vital public goods such as the quality of education, reliable healthcare, a clean environment and dependable infrastructure. Economic growth is also a precursor for innovation, improving how we communicate, travel, produce food at scale and solve seemingly intractable challenges such as the energy transition. Importantly, growth is necessary to maintain a healthy democracy. It ensures a wider share of prosperity and supports a stable, plural society. Taken together, with economic growth, we are able to put a dent in poverty and sustain human progress. Without it, lives become smaller and society atrophies.
Such is the mandate of your Lordships’ House, we must and do scrutinise the legislation of the land. Beyond this, the ultimate measure of how well we do our duty rests on how well we incorporate long-term growth consequences into the judgments that we make in our work here. In particular, in debates such as today’s on the Government’s Spring Budget, we are minded to consider the costs and consequences of our decisions on society’s long-term growth trajectory.
According to the OBR, growth projections for the UK peak at 2.5% before falling back below 2% over the next five years. Yet theory tells us that an economy needs to grow by at least 3% per year in order to double per-capita incomes in a generation, which is about 25 years, and, in so doing, make meaningful progress in living standards. From my reading of the Budget, we can see the beginnings of a credible growth plan, although it seems concerning that corporation tax in 2023-24 has been reaffirmed to rise from 19% to 25%. Surely, there is more work to be done to unburden companies from excessive regulation—after all, there is no credible path to strong, sustainable economic growth if the economy is subjected to both high tax and high regulation.
This House has an important role in reinvigorating the British economy and, relatedly, Britain’s standing in the world. Jump starting economic growth must mean multi-decade commitments and investments today in key areas, such as technology, the environment and the energy transition. To accomplish this, we need both public and private investment. In this Spring Budget, I am encouraged to see government pledges to drive investment, including corporation tax relief worth £25 billion to businesses over the next three years and investment in technology R&D worth £1.8 billion. In energy, I am pleased to see a commitment of up to £20 billion in carbon capture projects. Notably, I share the belief that investment in nuclear energy must be part of a green taxonomy; it is crucial to Britain’s energy security.
If the United Kingdom is to remain competitive in the intensifying contest for global private investment, the Government must also continue to telegraph time-consistent policies. These policies reduce economic uncertainty and offer investors confidence that, when they invest in Britain, they can reasonably expect to generate returns above the cost of capital. Crucially, policy-framing must not merely be obsessed with risk mitigation and setting rules for what we cannot and must not do; it must also point towards innovation and investments that catalyse economic growth, as we have seen in this Budget.
The world’s population has now surpassed 8 billion people, with estimates that nearly 90% of the world’s population lives in the developing world. Having been born in Zambia and having spent my formative years in Africa, I am acutely aware of how the rapid shifts and trends emerging from these developing regions—demographics, resource scarcity and geopolitics—are shaping the prospects for growth in Britain and the global economy in its entirety. The fact that I stand here today is a testament that, here too in this Chamber, there is a recognition that the perspectives from these emerging regions must continue to be represented in the important work that we do.
Lord O'Neill of Gatley (CB)
My Lords, it is quite a remarkable pleasure and an honour to welcome the noble Baroness, Lady Moyo, to this House, and to speak immediately after her excellent maiden speech. I am not sure whether the noble Baroness remembers this, but we once shared a nice dinner in Knightsbridge. I would never have imagined that I would be stood here welcoming that particular colleague, or any colleague, to this House, but here we both are—me and the noble Baroness, Lady Moyo of Knightsbridge—and it is a huge delight to do so. As she has beautifully demonstrated, I can assure the House that the noble Baroness will bring some fresh insights into aspects of how the world works, or does not work, to add to the already rich vein that is so present in this place. Because I reached out to inform a couple of our ex-colleagues, I know that many of them will be extremely proud of Dambisa, and, again, I welcome her to this place.
Before I make a few comments about the Budget, which I will return to at the end, I thought I might point out that, yet again, a fiscal event is taking place against the background of quite a bit of chaos in global financial markets. In that sense, much of what I shall reflect on and much of what has been said already, or may follow, might not be as immediately relevant if some of these events are not stabilised by the sharp minds of our global policymakers who are increasingly experienced at these far too frequently reoccurring events.
As to the Budget, first, as was very clearly pointed out by the noble Lord, Lord Eatwell, but also recognised in some ways, to their credit, by the Chancellor and by his immediate predecessor, the now Prime Minister, our weak growth performance is primarily due to a very poor investment performance, as well as, I might add, net trade. Unfortunately, I still do not see much ambition in the Government’s own direct investment plans, as the noble Lord, Lord Eatwell, suggested, to match this important recognition. There is still a persistent belief that the primary way to boost investment is to have the right investments for the private sector, and that this is all that is needed.
As I shall come on to, and as has been touched on by some prominent commentators in today’s media, the Government are still significantly constrained by their own narrow vision of credible fiscal rules. While on the one hand this is not entirely surprising, given the utter fiasco of last autumn, we do need to break out of the same old somewhat tired thinking. I call on this or any future Government to be more imaginative, while retaining credibility with financial markets, in creating a much more sophisticated modern framework to approach government investment spending and fiscal rules. Asking the OBR itself, as well as other independent bodies, as to the most credible path to achieve both of these seems to me to be as inevitable as it is necessary. Perhaps it will require another Government in the future to take these steps.
In this regard, I shall touch on the really important challenges that the noble Lord, Lord Bridges, just suggested for more debate about the kind of growth that we might want to see, and the role of the state. I agree with this challenge, but what I think his excellent idea suggests, and perhaps misses, is the crucial distinction between government investment spending—which, if aimed correctly, would boost future growth—and the Government’s persistent focus on current or maintenance spending. This self-imposed constraint aside, I find myself, a bit surprisingly given how easy I have found it to criticise Budgets of the past few years, welcoming much of the broad flavour of the policies announced yesterday to boost the supply side of the economy.
In particular, although it is with a caveat, I welcome the measures to try to boost investment spending by specifically claiming allowances for genuine investment spending, as opposed to the never-ending, nonsensical obsession with the level of corporation tax that too many retain. This is a sign, in my view, that at least some policymakers are finally living in the real world. Sadly, as the noble Lord, Lord Eatwell, pointed out, the limited duration of this policy, itself constrained by the arbitrary fiscal debt rule, will, along with the fact that there may be a change of Government within two years, limit its otherwise potentially huge positive potential.
Thirdly, noble Lords will not be surprised that I highly welcome the significantly tweaked investment zones. While the analogy to Canary Wharf is in some ways slightly unfortunate, the zones have the potential to be so much more, in my view. The reconcentration on large metropolitan areas is hugely welcome, as is using the strength of our excellent universities as the focal point for this initiative. This is consistent with the broad goals of Northern Gritstone, which I am proud to chair. It also links to the whole journey of devolution, which is a sign of a Government who finally get it—perhaps for the first time in a number of years.
Also in this regard, the detailed framework for a so-called trail-blazer devolution deal, announced for both Greater Manchester and the West Midlands, is a huge step up in the art of the possible for devolution. I truly hope that the Government will genuinely follow through on this, that other electoral mayoral areas around the country develop the same ambition as GM and the West Midlands and that future Governments take this further.
Fourthly, while these initiatives and others, such as those on skills and education, are aimed at boosting productivity, the measures aimed at boosting labour force participation, especially childcare support, are also to be welcomed. It is probably far too early to judge whether the precise numbers chosen are likely to succeed in changing the incentives of those currently outside the labour force, but they are obvious and critical areas that needed attention and I congratulate the Ministers involved for that intent.
Given that, since the financial crisis of 2008, we have experienced extremely weak productivity growth and, since 2019 and Covid, a worrying decline in labour force participation—as others have already pointed out—this is the first Budget in some time that is aimed at genuine supply-side measures, and I hope it has some seriousness attached to it. If we could adopt more ambition, as I touched on at the start, on the fiscal rules framework and the Government’s own long-term investment spending, as well as a more serious plan for the post-Brexit global trade environment—including, as the noble Baroness, Lady Moyo, so beautifully said in her maiden speech, with the big emerging nations—then perhaps the future might not be quite as bleak as it otherwise seemed it would.
In closing, I thank the Government, and the Treasury in particular, and the Bank of England for their speed and awareness in reacting to the sudden chaos that erupted late last week around Silicon Valley Bank. If they had not been so speedy, the discussion that we are having today would have been very different. That needs to be recognised.
Lord Harlech (Con)
My Lords, I suggest that we adjourn the debate on the Motion in the name of my noble friend Lady Penn in order to take the Urgent Question repeat to the Foreign, Commonwealth and Development Office.
Lord Tunnicliffe (Lab)
Could the noble Lord give us a time when we might come back?
Lord Harlech (Con)
The Urgent Question repeat may run up to 10 minutes and then my noble friend the Deputy Chief Whip will adjourn the House for 30 minutes on the conclusion of the Urgent Question, so it will be roughly 40 minutes.
Saudi Arabia: Execution of Hussein Abo al-Kheir
(1 year, 9 months ago)
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The Minister of State, Foreign, Commonwealth and Development Office (Lord Ahmad of Wimbledon) (Con)
My Lords, with the leave of the House I will now repeat in the form of a Statement the Answer given by my honourable friend the Minister for Europe to an Urgent Question in another place on the execution of Hussein Abo al-Kheir. The Statement is as follows:
“Saudi Arabia remains a Foreign, Commonwealth and Development Office human rights priority country, in part because of the continued use of the death penalty. It is long-standing UK policy to oppose the death penalty in all circumstances, in all countries, as a matter of principle. The Saudi Government are well aware of the UK’s opposition to the use of the death penalty. The UK Government have consistently raised the issue of the death penalty, including the case of Jordanian national Mr Hussein Abo al-Kheir, with the Saudi authorities. The Minister for the Middle East and North Africa, and for human rights, Lord Ahmad of Wimbledon, has actively raised concerns about the death penalty and the specific case of Mr al-Kheir with the Saudi authorities on multiple occasions, including with the president of the Saudi Human Rights Commission in December 2022 and when he visited the kingdom in February 2023. Lord Ahmad also raised the case with the Saudi ambassador to the UK, including in November 2022 and in January of this year.
On learning about the imminency of the execution, which took place on Saturday 11 March, Lord Ahmad again spoke to the president of the Saudi HRC, the Saudi vice-Foreign Minister and the Saudi ambassador. Saudi Arabia is committed to an ambitious programme of economic and social reform, through ‘Vision 2030’ ... However, the human rights situation is likely to remain a key issue in our engagement for the foreseeable future. We will continue to discuss human rights and the death penalty, including individual cases of concern, with the Saudi authorities.”
Lord Collins of Highbury (Lab)
I thank the Minister for repeating the response to the Urgent Question, and I am fully aware of all the efforts he has personally made. It is a shocking case. This is a 57 year-old father of eight who did not face a fair trial and who was tortured in jail, so the evidence goes. My right honourable friend Stephen Timms asked in the other place this morning whether the Foreign Secretary had raised this case with the Saudi authorities. The response from Leo Docherty, as we have heard, was a generalised one, saying that the Saudis know our position on the death penalty and that our position is clear. He also confused the issue slightly by saying that the moratorium on the death penalty for drugs cases was about people who were users and not particularly related to this case; he corrected himself later on.
I ask the Minister the specific question that my right honourable friend Stephen Timms asked: did the Foreign Secretary make specific representations to halt the execution and if not, why not? We know that high-level interventions can have an impact. In 2015, when David Cameron and the then Foreign Secretary Philip Hammond publicly called on the Saudi authorities to prevent the execution of Ali al-Nimr, that execution was halted. I respect what the noble Lord has been trying to do as an individual Minister, but I hope he can answer my specific question.
Lord Ahmad of Wimbledon (Con)
I thank the noble Lord for his kind remarks and note the involvement of his honourable friend the Member of Parliament for Enfield, Southgate, who got in touch with me on Saturday evening. I assured him that I was already engaging in this issue.
The noble Lord rightly raises the importance of human rights, which he knows I prioritise in all my engagements. Human rights should be central to our diplomacy and our foreign policy, and in this regard I am sure I speak for my right honourable friend the Foreign Secretary, whom I have known over a number of years. When he was Minister for Middle East and North Africa, he consistently raised human rights issues directly with various authorities in the region, including the Kingdom of Saudi Arabia. Although I am the primary Minister engaging in this issue, in various recent exchanges with the Foreign Minister of Saudi Arabia he has not only discussed a broad range of bilateral issues but has emphasised the importance of human rights as a central plank of our ongoing relationship with the Kingdom.
Lord Purvis of Tweed (LD)
My Lords, I declare that I am vice-chair of the All Party Parliamentary Group on Abolition of the Death Penalty. Saudi Arabia is becoming increasingly isolated as other countries abolish capital punishment for drugs offences. This is a welcome move globally but draws attention to the Kingdom of Saudi Arabia. I too recognise the involvement of the Minister; however, I note the concerns of Conservative MPs who claimed that more could have been done.
My questions relate to the consequences of our relationship with the Kingdom. The Trade Minister, the noble Lord, Lord Johnson, recently confirmed to me that human rights were no longer to be an integral part of discussions on free trade agreements. Are there any human rights activities which would bring into question opening access to UK markets, or is human rights simply a noble aim when it comes to our investment negotiations with Saudi Arabia? Secondly, we know that the Government have had intensive discussions with authorities in the Kingdom of Saudi Arabia to seek infill for development and humanitarian assistance when there are UK cuts. Can the Minister confirm that we have not asked Saudi Arabia to infill cuts to human rights programmes, especially those relating to the use of torture, human rights and legal reform, and that UK cuts will not be infilled by Saudi Arabian Government support?
Lord Ahmad of Wimbledon (Con)
My Lords, I assure the noble Lord that in all agreements, particularly the GCC FTA currently being negotiated, and when I raise trade issues and the bilateral relationship across the Gulf, human rights are central to my thinking. As I said in response to the noble Lord, Lord Collins, in the most recent conversation my right honourable friend the Foreign Secretary had with the Saudi Foreign Minister, he took the opportunity to say that human rights remain a foundation stone of British foreign policy.
The noble Lord is right to say that we are strengthening our work on development with key partners across the Gulf. Indeed, the Saudi Arabian delegation is currently at the Foreign, Commonwealth and Development Office, and I will be leading the plenary and closing sessions with the primary principle of those discussions. From my perspective and understanding of human rights and the rule of law, we are not asking any country to fill gaps; it is about development infrastructure and support. For example, when I visited the Kingdom recently, I saw directly the work that the Kingdom of Saudi Arabia is doing through its development arm in the government-held areas in Yemen. That includes building infrastructure such as schools and hospitals, so they are making a valuable contribution to development. If there are more specifics regarding the issues the noble Lord raised, I will review them and if necessary write to him.
The Lord Bishop of St Albans
My Lords, the whole House acknowledges the contribution the Minister makes in this important area, but there are real concerns as to whether His Majesty’s Government are as intent on addressing these issues. Saudi is part of the Arab Charter on Human Rights 2004, but the problem is enforcement. Even the statute brought in 2014 does not enable enforcement. What representations are His Majesty’s Government making to the wider Arab world to work with colleagues to nudge Saudi in a new direction and stop this extraordinary range of executions, which do not seem to be abating at all?
Lord Ahmad of Wimbledon (Con)
I agree with the right reverend Prelate, and I assure him that I am raising these issues in a very wide context. When, under Islamic jurisprudence, the death penalty was established, it was done with so many caveats, thresholds and hurdles that needed to be overcome that implementation was made extremely remote, because of all the other validations that needed to be put in place. I would not say that we need to nudge the Kingdom of Saudi Arabia—countries in the Islamic world should themselves be harnessing the true principles of this—but I will ensure that this remains part of our diplomatic focus as we continue to express our opposition to the death penalty across the world.
Lord Alton of Liverpool (CB)
My Lords, although I recognise the undoubted role that the Minister plays and his undoubted concern, is not the killing of Hussein Abo al-Kheir just part of a shocking pattern that we have seen in Saudi Arabia? Can the Minister confirm that, between 2010 and 2021, at least 1,243 people were executed in Saudi Arabia; that, in 2022, at least 147 people were executed in one of the bloodiest years on record there; and that, on 12 March last year, 81 people were killed in a single day, some of them charged with things such as deviant beliefs? The executions are usually carried out by beheading with a sword and hanging is often performed in public, with decisions taken behind closed doors and court documents forbidden from being published. It even affects minors: a child of 14 was executed. Is the Minister taking this matter up with the United Nations Human Rights Council and talking to Islamic scholars about challenging things that are done under religious statutes?
Lord Ahmad of Wimbledon (Con)
My Lords, in the interests of time, let me assure the noble Lord that we discuss the death penalty very much in multilateral fora, including the Human Rights Council. As I alluded to the right reverend Prelate, we must also contextualise our approach and make it clear that the extreme nature of this is against our principles—indeed, if they are to exercise the death penalty, we must define what the nature of it should be.
Baroness Blackstone (Lab)
My Lords, following the right reverend Prelate’s intervention, can the Minister tell the House what conversations he is having with our allies—whether in the Commonwealth, in Europe or elsewhere—about the particularly barbarous practice of imprisoning children as young as 14, keeping them in prison until they are 18 then executing them? Surely this is something that the international community needs to take very seriously. Words will not be enough; action needs to be taken on Saudi Arabia in this respect.
Lord Ahmad of Wimbledon (Con)
On the specific issue of Saudi Arabia and child detention, I believe that there is only one live case of someone facing such circumstances at the moment. I assure the noble Baroness that I have made strong representations. Certain adjudications were made in particular cases that were then reviewed and overturned. I assure noble Lords that we watch this issue very carefully; indeed, when such occasions arise, we make direct representations.
As I, the right reverend Prelate and the noble Lord, Lord Alton, have said, there is a real need for countries in the Islamic world, including those in the OIC, to recognise that how they behave or act, particularly when it comes to certain issues and penalties, is not reflective of the notion, principles and intent of that structure of jurisprudence when it was created. It is a sad fact, though, that the death penalty applies not only in that part of the world but quite widely; we will continue to campaign against that. I think I speak for everyone in this House, irrespective of who stands at this Dispatch Box and when, when I say that our principled stand against the death penalty is the right one and that we should continue to advocate across the piece.
Budget Statement
(1 year, 9 months ago)
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Lord Willetts (Con)
My Lords, I was sitting like a coiled spring about to praise the excellent maiden speech from my noble friend Lady Moyo when we had the interruption of the Urgent Question and the brief adjournment, so it is a pleasure and an honour to resume the debate and, although my noble friend is no longer in her seat, to say how excellent her maiden speech was. Her most recent book, Edge of Chaos: Why Democracy is Failing to Deliver Economic Growth, which is a fantastic contribution to economic debate, is very relevant for one of the points that has been made in several interventions already.
I begin by welcoming the Budget and will draw on some of the analysis we have done at the Resolution Foundation, of which I am president. The Chancellor has had some good news, with energy prices not as high as feared, inflation falling more rapidly than was expected and interest rates slightly lower than forecast, not least because of the stabilisation measures that he has introduced during his time as Chancellor. So there was a favourable backdrop to the Budget, shown in the good news that we are going to avoid recession and that he had some fiscal room for manoeuvre.
Nevertheless, I have to say, as president of the Resolution Foundation, that the overall picture on living standards is still very bleak indeed. Wages are not expected to return to their 2011 level in real terms until 2026. That is 18 years before we are back to the level before the financial crash. At the moment, with big falls in household disposable incomes this year and next totalling 5.7%, it is very likely that incomes will actually be lower in real terms at the time of the next election than they were at the last. So there is still a very sombre backdrop against which we have to judge this Budget.
The boldest and most ambitious measures in this Budget focus on improving participation in the labour force. It would be marvellous if the combined effect of the ambitious measures on childcare, helping disabled people and promoting older people returning to work bore fruit. They are more radical than expected and we can all hope that they have a significant effect—30 hours of free childcare and help particularly for people on universal credit. For disabled people, it is very welcome indeed that the work capacity requirement is being scrapped. Regarding older people, the Chancellor got into a little difficulty yesterday in referring to the Deputy Speaker in the other place as an older worker when she was born in 1958. She is a spring chicken in terms of your Lordships’ House, and it should not be a point of observation that someone born in 1958 is old and working.
We must hope that those measures do bring 110,000 extra people into work. It could be more. We have already had several exchanges on this, so I make just a couple of observations. First, it has been said with shock that the cost of the change in pension rules, divided by the increase in the number of people going to work because of that change, is about £80,000 per extra job. These are net extra jobs. When you look at the likely effect of the more ambitious and expensive childcare measures in the Budget on net actual increase in work, they also come in at a cost of £80,000. It looks as if that is about the going rate for creating an extra real job. To be honest, having worked over the years in various ways engaging with welfare-to-work programmes and welfare reform, spending that amount of money for a net effect, while a lot of the effects will be deadweight, does not come as a surprise. Therefore, I hope that in the exchanges across this Chamber we accept that this is the going rate for intervention. We must hope that there are greater impacts than that, but that is what the OBR is forecasting.
Incidentally, in his excellent speech my noble friend Lord Bridges asked about the difference between the OBR forecast and the Bank’s forecast. One of the reasons for it is that the OBR is factoring in a 110,000 increase in workers as a result of the Budget measures, while there is no such estimate in the Bank’s forecast.
Of course, the help with childcare for families with young children is also a more progressive measure than the help on pensions because, as well as getting several tens of thousands of extra people into work, it boosts the incomes of large numbers of low-income families. It also has an even bigger effect on the incomes of some middle-income families. To assess the effect of the pension measure, we must look beyond the immediate benefit for the extra people going into work, and this is clearly a measure to do with NHS activity and NHS employment. Therefore, you would have to factor in the benefits for those people who receive healthcare that they would not otherwise have received were it not for those measures. This is essentially a healthcare recovery measure, but it is being applied more widely because of what we are familiar with as hybridity rules. You cannot have one pensions tax rule specifically for NHS consultants and a different one for everyone else.
I welcome this very ambitious set of measures to boost the workforce and the number of people in work, and hope that they succeed. We could well see an effect greater than 110,000, and I hope that is what we secure.
I will briefly reflect on the fiscal situation. Again, several people, including my noble friend Lord Bridges, have already touched on this. The state is undoubtedly getting bigger. It is not getting bigger because a bunch of socialists have seized control of the levers of government; it is getting bigger for completely different reasons. It is getting bigger partly because we are in a much more dangerous security environment than we were, so there is a pledge to increase defence spending. It is getting bigger because we borrowed a lot of money during Covid and, with interest rates higher, the cost of debt interest has risen by 2% of GDP. It is getting bigger because of demographic changes. Those are the drivers pushing up public spending.
My noble friend Lord Bridges said that we must make offsetting savings elsewhere. We are making offsetting savings elsewhere; in fact, the state is being reshaped under our eyes because the demographic changes plus policy decisions are protecting healthcare and boosting pensions, and other services and benefits for other age groups are being cut. Our estimate at the Resolution Foundation is that the effect of benefit changes is to lower the income of working families by £816 a year below inflation and the effect of the triple lock and other measures is to boost the income of pensioners by £666 on top of inflation. That is a deliberate decision to reshape the state so it is a state for old people. It is a big healthcare, big pension-spend state, cutting back on other services and provisions. Democratic trends are being exacerbated by political decisions, and I have to say I do not like that. I think we should have a state that is fair across the generations, not one which is clearly being structured to benefit that age group.
I have one other comment, having looked at the Budget, on the increasing tendency to have time-limited measures that do not have a long-term effect on behavioural incentives. This important point was made by my noble friend Lady Moyo. The capital allowance for corporation tax, time-limited for three years, will bring forward some capital spending, but it will have no underlying effect on total business investment, when that is a clear problem. The only way it could have that effect is if it were committed to as a long-term permanent policy. That is the way we get a change in behaviour, but if that happened there would be different costings showing the long-term effect on government borrowing, debt or taxes.
I do not wish to go on at great length because I see there are many other people wishing to intervene. I would like briefly to comment on one other strand in the Budget, something which I very much welcome: the focus on growth. That is again an area where there is strong cross-party consensus. The Prime Minister set out in his Mais lecture the framework of investing, innovation and skills, and infrastructure. We have heard in the excellent interventions from the noble Lord, Lord O’Neill, and others about the importance of those three strands, particularly innovation and technology. I strongly support that. There are lots of exciting ideas about how we could promote it, but as we have a Treasury Minister sitting on the Front Bench, I point out that there are some specific things which are directly under the control of the Treasury. I have three suggestions, none of which are the exciting, real technology measures in the Budget—all of which I welcome, and perhaps on occasion I would add to. Our difficulties in innovation are partly shaped by processing and bureaucracies which ultimately can be traced to the Treasury itself, and I shall give three examples.
First, we are celebrating the arrival of ARIA, which will be an advanced research and innovation agency, free from many of the classic constraints that the Treasury imposes on spending departments. There have been previous attempts to give programmes supporting innovation some of the freedoms that ARIA is going to have but which have been withheld by the Treasury. If ARIA is such a good thing, there is absolutely no reason why some of the freedoms which it enjoys should not be available more widely to other bodies also providing public investment in innovation. I declare an interest as someone on the board of UKRI, where of course we comply with all the Treasury rules but it would be nice if we had some of the freedoms that ARIA is going to have, which would enable us to operate with the same flexibility and agility that is expected of ARIA.
Secondly, the Green Book is written around an assumption of conventional public procurement. It is a set of rules designed for people building a road bypass or putting up a new hospital, but they are inappropriate when applied to innovation policy. When you go to America, you see the enormous role that public procurement—particularly but not only led by the Department of Defense—plays in promoting technology and innovation in the US. I have talked to someone who had a new gadget that he was designing and prototyping in the US. I asked him how he was funding it and he answered, “I’ve already sold the first 10,000 to the DoD.” He had not yet made a single one. There they use speculative procurement expenditure to promote innovation. A British department of state could not do that under Green Book rules—you have to already have a product. One of the things that America does so successfully is currently forbidden in the UK by Green Book rules.
Thirdly, the dread words that cause me most concern whenever an innovation programme is proposed appear on page 65 of the Budget Red Book, in the context of an announcement of spending on the future of compute review:
“subject to the usual business case processes”.
The business case processes will take over a year and will involve large numbers of civil servants writing reports which will eventually confirm the decision that was announced yesterday—and this is a Government trying to cut the cost of bureaucracy. All it will mean is that, instead of getting on with the investment in exascale computing which the Chancellor announced yesterday, we will be lucky if anything happens before the election. If the Treasury wants to get on—and the Treasury has put it into its own Red Book—do we really need to waste a year on a business case process not designed to promote innovation? I can tell your Lordships that, around the rest of the world, they do not have an extra year added to every policy decision on innovation so that they can do a massive audit in advance of any spending.
I strongly support the focus of the Chancellor on growth. If it were possible to extend ARIA freedoms more widely, to have more innovative use of procurement for new products and processes, and to simplify the business case process, the Treasury itself would be doing its bit for growth.
Lord Howell of Guildford (Con)
My Lords, it is a pleasure to follow my noble friend Lord Willetts. Like him, I was pleased to hear the maiden speech of the noble Baroness, Lady Moyo. I confess that I am a fan of her books. They move us on from the patronising terms surrounding so-called overseas aid and assistance to the words we should of course use nowadays of “partnership and mutual development co-operation”, and nothing less than that. In fact, a lot of the wording in the whole area of development and the so-called developing world is a leftover from the last century and the original thinking about overseas aid and development from Walt Rostow and the American pioneers and others immediately post the Second World War and in the 1950s.
Effective co-operation and sustaining of links of all kinds in a constant and friendly manner, and with deep mutual respect, with all the countries of Africa, Asia and Latin America, is now the task of every Whitehall department, especially but not only the Foreign, Commonwealth and Development Office. That is why I think it was an error to have had a separate department for overseas development; I know that many do not agree with that, but it is my opinion. Even now, allied with the old FCO, the DfID element is inclined to silo thinking. My own view is that it would probably be best structured along the lines of the Japanese model, through a powerful agency with entrée to every department, or from the Cabinet Office or indeed No. 10 directly. I notice that in the new integrated review refresh, which was published a day or two ago, they say that the Minister should automatically have a seat on the National Security Council, which I suppose half-recognises what I am saying.
Make no mistake: this is no sideshow. This is national strategy of the most intense kind, which will allow us to determine our prosperity and security. As the Chinese and Russians advance their colonisation of the developing world, this leads us to completely new thinking about our friends and networks, and how we use our resources to help them, and it brings forward the Commonwealth network, in particular, in a completely new light. That is a message which I think the new integrated review has not quite grasped.
Coming to the Budget itself, the most notable thing about yesterday’s Budget and indeed the surrounding context in which it was delivered was how many sources and authorities have been so spectacularly wrong about the inflation rate, its real causes and the course it is taking. There is the good old Bank of England: hopelessly wrong initially about how and when it would rise—they got it a year out of date—giving a wild underestimate of the pace at which it would accelerate, and wrong, I suspect, about the pace at which it now comes down. Then there were Goldman Sachs economists going on last August about 18% to 22% inflation in 2023—miles out and really quite silly. Then there were the eager monetarist theorists, determined to prove that it was all domestically caused, ignoring the real causes from the energy side. They said it was mostly caused by quantitative easing, which I agree may have played a part, but not the main part, and all demanded higher interest rates to defeat it. And there were armies of both commentators and high officials telling us that high inflation was here to stay, that recession was inevitable and was the only answer. Now, of course, they are all busily revising their inflation figures for the second half of this year.
One can laugh a little, but the damage has been done. These inaccuracies were not harmless. On the contrary, they caused great harm in two respects. First, they led to wrong remedies being applied then, because the real sources of inflation were not understood or were ignored. It was a very different kind of inflation from that which we have dealt with in the past. Secondly, because they sounded unnecessary alarm bells, they gave militant union leaders great opportunities to set their members marching and revive outdated class war rhetoric—an opportunity which Mick Lynch and his like have eagerly seized—and frightened millions of people about even bigger real wage cuts than they are facing already. No one seemed willing to face the obvious: that the sources were overwhelmingly external and lay in soaring gas and oil prices, both long before and during the Ukraine invasion and Russian obduracy. No one seemed to concentrate on the obvious central solution, which was, and still is, short-term world production of more gas and oil.
I admit that it is always difficult for Governments and officials to say that they have been blown off course by foreign factors. Jim Callaghan, who in my view was one of our best Prime Ministers, tried that, and I agree that we on the Tory side gave him no mercy and allowed no excuses. However, being predictably blamed by the Opposition—that is their role and they will always do it—was and is no excuse for not appreciating and tackling the real root causes of our problems, or for failing to realise that in oil and gas markets, and indeed in energy markets worldwide, what goes up always comes down quickly, whatever the circumstances, and always has, in past oil shocks and in this one too. I remind the House that I was very involved in some of the oil shocks of the last century.
The adjustment to the Russian cut-off and the nastiness since its lawless invasion was bound to be initially painful but has more or less been corrected with full storage tanks—for those who have storage—throughout Europe, plenty of shale gas in America, careful conservation and now the prospect of much more production from all sorts of places around the world. Indeed, the OPEC leaders, after initially being thoroughly unhelpful to consumer nations in the West, are now planning to expand future oil and gas investment unchecked.
The background of global energy transition is of course in the wings all the time, with a steady but very gradual long-term decline in world fossil-fuel demand. However, only fools imagine that we can take undertake the greatest shift in the pattern of world industry of all time in just a few years when it is bound to take decades, and when getting supply out of sync with world demand—incidentally, fossil fuels are still 82% of all energy needs, not just power—guarantees massive volatility, major suffering and political upheaval and reaction, as we have now in this country and in many others.
The missing piece in our national recovery strategy, in both the inflation fight and in our budgetary calculations all along, has been, first, the external side—the role of foreign policy and not enough clever diplomacy in diffusing these vast external measures—and, secondly, the absolute failure to convey into the public mind and debate the acute and continuing seriousness of the situation that we and all like-minded countries now face. Instead of trying to fight every individual grievance and demand, what has been missing overall is a sober and informed reminder of the fact that everyone, for the moment, will have to face hardship. It is the timing of all these widespread demands for real wage repair that is so miserable and unfortunate. Speech after speech, including, I am afraid, from some in this Chamber, demand more for this and more for that, yet this is a time when we have to prepare for more resource to go on what we have already.
If that sounds gloomy, it is, because it is the reality. It is not quite 1940 and we are certainly not under direct attack, but we are, equally certainly, on the edge of a major war, with a mad—actually perhaps he is not mad, but certainly threatening—Putin in Moscow talking about nuclear use against us, and with us still in the recovery ward after the largest pandemic in world history, which it was by far in population terms, and from the impact of the Ukraine horror itself, including a substantial rundown of our entire armoury to help the gallant Ukrainians. There is no end in sight for that, and an invasion of Taiwan is likely just ahead on the horizon. In essence, we are on a war footing, as the noble Lord, Lord Skidelsky, has repeatedly warned this House.
In these circumstances, the message should simply have been that, while inflation is coming down as fast as it went up, there has to be a timeframe for recovery. It should have been clearly and repeatedly explained that, in due course, much better pay for nurses is entirely desirable and the same goes for doctors, junior and senior, ambulance teams and the rest. There is even no objection to train drivers being enriched—although I personally think that bus drivers do a much tougher job—nor young barristers, physiotherapists nor anyone else, nor to ensuring really good and safe pensions for all of them.
However, and this is the core of it, those better conditions that we all want to see must wait for the duration—“the duration” is a phrase that was used during the Second World War. We will and can recover and find the resources to make good for all who deserve it, just as Beveridge in the last, darkest days of the Second World War said we could do, but not yet.
One-off payments for one-year awards, which are being talked about, may be justified in some cases, but only just. We may even come to our senses in all parties that may form a Government and make sure that modern capitalism works for all, and that millions of earners become owners en masse, with the dignity and security of capital to support every family. Meanwhile, for the duration, as in the darker times of war in the past, there are going to be difficulties and problems all around. I would have liked to have seen much more emphasis on that central message in the Budget—indeed, in all the statements by Ministers and opposition leaders as well—than I can detect, because that is the honest truth.
As for more investment, which is of course the key to our future strength and living standards, and to our fully generous support for the weakest in our society, I obviously hope that the Budget measures will enable more growth, investment and innovation. Perhaps the capital allowances will help. One sort of investment we could do without but which, regrettably, the Government seem poised to make is for another large-scale nuclear reactor at Sizewell in Suffolk, based on a replica design called EPR which has an utterly miserable provenance and a dud history. The official estimate for Sizewell is £20 billion, with readiness in about 2035; it is much more likely to be £30 billion and several years after that. Smaller, new-technology reactor sets, which were mentioned in the Budget, could be in place much sooner and with private instead of public money. That is the nuclear way forward, as my noble friend Lady Moyo mentioned in her maiden speech.
That colossal new expenditure, almost secretly sliding through, should be for future debate—very soon and, I hope, in this House. In the meantime, let it be explained honestly, openly and repeatedly to all the most deserving, to the strikers inflicting present misery and smashing the rights of others, and to the millions still suffering from crippling cost of living pressures that rewards and better days will come—but not, as most of the nation in past times understood intuitively, for the duration of the present world crisis that we are in and must, as a priority, overcome.
Lord Davies of Brixton (Lab)
My Lords, it is a pleasure to take part in this important debate and particularly to hear the maiden speech from the noble Baroness, Lady Moyo. I am sure that she will be an asset to the debates in the House, even if I do not necessarily always agree with what she says.
It is no great surprise that I am going to focus on what the Chancellor said about pensions, but I have a couple of more general points. First, it is shocking that there is nothing in the Budget about social care. We were told by the last Prime Minister but one that this Government had an oven-ready plan. Clearly we do not even have the recipe, let alone the ingredients. Secondly, credit was taken in the speech by the Chancellor for past rises in tax thresholds, with the claim that these had lifted 400,000 pensioners out of absolute poverty. Perhaps we should now also be told how many pensioners will be pushed into poverty by the decision to freeze tax allowances for the next five years. You cannot take credit for one without taking the blame for the other. I very much hope that a forthcoming Labour Government will reverse this decision and revert to Rooker-Wise, particularly for the personal allowance.
“Pension” appears 11 times in the speech, once as part of “suspension” and a couple of times when referring to the Department for Work and Pensions. The main references to pensions were about tax allowances, which I will come to in a moment, but the Chancellor returned yet again to the issue of pension fund investment. Lots has been said on this by the Government but very little done. This time, we are promised
“measures to unlock productive investment from defined contribution pension funds and other sources”.—[Official Report, Commons, 15/3/23; col. 841.]
As ever, on this issue the devil is in the detail. I am a sceptic but, until we see concrete proposals, it is just so much hot air. Can the Minister tell us when the Government will actually come up with some firm proposals?
I turn to pension tax allowances. First, I welcome the decision on the aggregation of pension input amounts where employees belong to more than one scheme for the same employment. While it looks like a technical issue, and is not mentioned specifically in the Chancellor’s speech, it is one of the most significant decisions and truly to be welcomed. It is an issue I have raised several times in this House and at a meeting with the Minister for Health, so I am pleased that what seemed obvious has at last been accepted by the Government. Other Members were involved, of course, not least the noble Baroness, Lady Altmann, but I also need to mention that it was an issue of importance to the late and sadly missed Lady Masham.
I do not agree so much with the proposed abolition of the lifetime allowance. I need to mention that I have an interest in the matter, in that I could benefit from the change, but I still think it is wrong, particularly in current circumstances. Clearly, there is a crisis in the NHS—the shortage of doctors—that requires urgent action. It has been widely acknowledged, not least by the Chancellor himself as chair of the Health and Social Care Select Committee, that pensions tax was one of the factors involved and that action is required, but a more targeted approach would be better than the blunderbuss adopted by the Chancellor. I believe that the most immediate problems around retaining doctors in the NHS arise from the annual allowance, not from the lifetime allowance, so to deal with the undoubted problems, it would be better to spend money on reducing the impact of the former rather than the latter and target the problems of the NHS specifically.
Pensions taxation is a complex mess that needs thorough review. We continue to suffer from one-off decisions that increase complexity and unfairness. The Chancellor based the argument for change in the lifetime allowance on the concerns of many senior NHS clinicians, but he went on to say that he realised the issue goes wider than doctors. That was echoed by the Minister in her introduction, but in his interview this morning on the “Today” programme, the Chancellor referred only to doctors. What we do not know from the figures from the Treasury or from the OBR is how many of those being helped by this change are doctors, and how much of the resources being employed to facilitate the change are going specifically to doctors as opposed to other parts of the public service. I accept that doctors are a priority—that is clear—but the point is that it is for not the sake of the doctors but for the sake of people on the waiting lists.
The noble Lord, Lord Willetts, said we could not have a special one-off for the doctors. I am afraid that that is clearly not correct. There is already a special one-off for the judges. We passed an Act last year creating a scheme specifically for the judges that addressed exactly the same problem. I explained this in debates and was told, “There will not be any more special cases”. Well, I think doctors are a special case here, and a more targeted approach could have been adopted. Can the Minister tell us who else will benefit from the change, and why, in the current context, they represent such a priority to spend such an enormous amount of money? How much of the total cost will go to other groups of employees?
There are other more technical points that need to be clarified. Looking at the impact of abolishing the lifetime allowance, the OBR flagged this as a major uncertainty, both in relation to the cost and the numbers involved. Commentators, not least the coalition Government’s long-serving Pensions Minister, have cast considerable doubt on whether this change will actually achieve the stated objective of keeping people at work. On the other hand, I have no doubt that changing the annual allowance will have a direct impact in terms of keeping doctors working.
What research has been undertaken to ascertain the impact of the changes to the tax credits? It is worth noting that, of the total cost over the next five years, £2 billion is being spent on abolishing the lifetime allowance and only £1 billion on adjusting the annual allowance, but to my certain knowledge it is the annual allowance which is the focus of the particular problems that people face.
There are also practical issues. What about those who have agreed to retire over the next three weeks? The change will not come into effect until 6 April, so can they reverse their decision? Those who have retired over the past few years—while the Government were refusing to acknowledge the problem—will have a justified sense of grievance at having paid a substantial amount of tax that the Government now declare they should not really have paid.
Finally, on a slightly more positive note, I welcome the first step in limiting the generosity, and I use the word advisedly, of the
“anomalous but much-loved tax-free lump sum”—[Official Report, Commons, 19/3/85; col. 791.]
the words of Nigel Lawson back in 1985.
Lord Skidelsky (CB)
My Lords, I join other noble Lords in paying tribute to the remarkable maiden speech of the noble Baroness, Lady Moyo. It was very thoughtful and thought provoking, and I very much appreciated her reference to me—she will have a great future here.
The Budget was crafted in the shadow of disruptive world events over which the Chancellor has little or no control, but it is by its effectiveness in tackling or responding to those events that I think this Budget will be judged. The three killer apps—as one might call them—are global finance, technology and geopolitics. The global banking crisis of course caused the depression of 2008-09. The recent collapse of SVB shows, as the noble Lord, Lord Fox, noted in this House on Tuesday, what a huge proportion of our tech industry depends on finance from a single foreign bank whose solvency in turn depends on fluctuations in interest and bond rates. That is one element of huge fragility in our system.
As for technology, it simply speeds up the operation of every single movement in the economy, whether beneficial or destructive. We know about geopolitics, which threatens all our supply chains and the future of the global economy. So those three elements are really beyond the control of a Budget or a Chancellor and, together, they make the world economy more dangerous, more unstable and more uncertain.
The Minister, in introducing the Statement, stuck closely to the forecasts—but how does she explain the ludicrous divergence in the OBR’s forecasts on inflation and growth between October/November 2022 and March 2023, or the divergence in forecasts between the Treasury and the Bank of England? The noble Lord, Lord Willetts, pointed out that these different models factor in different things, but which of the factorings lead to an outcome that we can have faith in? You factor this, you factor that. What is going on is that all the models used are inadequate. They have become inadequate in the face of large structural breaks which have been occurring in the economy as a result of Covid-19 and the war in Ukraine. They are models which are still optimising around some long-forgotten equilibrium.
I am not sure that we have a better model, but it limits the confidence that we can have in these forecasts. They are trotted out almost as truths. The Chancellor said, “We will grow by” X, Y or Z per cent in the next three years, but what he meant was that the OBR model says that those will be the growth rates—and that is not a satisfactory basis for building confidence.
The speed-up of model obsolescence represents a huge break from the past. We were brought up to believe that short-term forecasts were relatively reliable—after all, how much could change in six months?—and that the longer ones were less reliable. Now, however, both are unreliable. It has infected both the short-term and long-term forecasts. The Treasury is not steering the economy—that phrase was the title of one of Sam Brittan’s great books. The economy is being tossed around by the world economy from one place to another, and that is not going away any time soon. These destructive events have wreaked havoc with the macroeconomic rules so laboriously constructed in the 1990s and 2000s, in particular that of the separation of fiscal and monetary policy, which was the architectural triumph of the Blair-Brown years.
What is it like today? What is the state of that separation today? The fact is that it has been fatally undermined. The Bank of England has been stoking up inflation when it was set up to do the exact opposite. It has been given a green mandate that conflicts with its inflation mandate, and no one knows exactly what the relationship is between fiscal and monetary policy. It has become hopelessly fuzzy, as we found out on the Economic Affairs Committee when we interviewed the Governor of the Bank of England. The whole relationship is shrouded in fictions that no one is meant to penetrate. That is not the basis for giving confidence in macroeconomic policy. In fact, the confidence has been withheld.
“Our plan is working”, said the Chancellor. What plan? To reduce inflation? To get growth? To reduce the inactivity rate? To achieve energy security? He must realise that any improvements that have been recorded since he became Chancellor, or in the last two or three months, are not due to anything the Treasury has done but result from what has been going on in the world economy. There have been beneficial developments, particularly what has happened to energy prices.
A remarkable thing about Budget making today is what it says about markets, media and policy networks. If you analyse it, you will find that there is actually very little difference between the Truss-Kwarteng and the Sunak-Hunt Budgets; the first just came at slightly the wrong time, that is all. Now, things have got a bit better. These are Budgets that depend on five-year forecasts; you cannot say that the difference of a month or two in the presentation of a Budget should have caused such panic in the market—unless, of course, no one had any real confidence in the long-term forecasts on which the Budgets were made.
At one time, there were things called “Budget leaks”. You were not meant to reveal what was in the Budget. In fact, the Chancellor of the Exchequer in 1947 resigned because of a Budget leak. Now, Budget leaks are routine; they are sort of trailers in which the Treasury lays out what it is going to do. What about the opportunities for speculation, for example, that that might give rise to? No one thinks about that any more. You have to make the newspaper headlines.
The Chancellor might have taken advantage in his Budget to display the beginnings of a coherent framework. There is one such framework—it is a very old model; no one knows about it any longer—called the balanced budget multiplier. That approach underpins the Biden Administration’s $738 billion Inflation Reduction Act, which was passed into law last year; I do not think that the Chancellor referred to it in his speech. It is based on an intelligent combination of extra investment and higher social spending to be paid for by higher taxes on the rich and the very rich. Split roughly half and half between tax and spending increases, the combined effect is forecast to secure—again, one has to make the point that it is a forecast—a cumulative reduction in the federal fiscal deficit of about $300 billion over five years. It may not happen—it probably will not—but at least there is a mechanism in it which suggests that it could happen. What we do not have in the present enthusiasm for the policy working is any mechanism or theory which gives you confidence that what the Chancellor is doing will achieve what he wants it to do.
I will make two final points—I am sorry that I have gone on a bit—about where we are in the cycle. It is very difficult to assess what is happening in the labour market; the noble Lord, Lord Bridges, talked about this. On the one hand, we have a very high inactivity rate of about 7 million altogether, which is usually connected with a slack labour market. On the other hand, we have unemployment very low at 3.7% and lots of job vacancies, which would suggest a tight labour market. What is the explanation of that puzzle? The truth, I think, is that headline unemployment figures no longer accurately measure the capacity utilisation of an economy; I think that that has been true for some time, but it has been brought to the forefront recently. A shortage of supply in some areas is combined with a general deficiency of demand in the economy. We would expect the latter to be the case, given that the economy has not grown for three years while the population has grown by 1 million and real wages have fallen substantially. Therefore, we would expect a deficiency of aggregate demand, even though there are pockets of shortage of supply. The Budget might have addressed its attention to that.
I wish that the Chancellor had argued in favour of job creation, rather than incentives to people to apply for jobs that do not exist. Gordon Brown and I, two years ago, argued for a public sector job guarantee scheme, which I still think would act as a kind of buffer stock of employment which would oscillate with the oscillations of the cycle. I am sorry that it was not adopted; it would have been—and still would be—a good method of job creation today that would also tie in with the devolution strategy.
My last point is about securing the long-term growth of the economy. Of course, I welcome the incentives that the Chancellor has provided for investment—the creation of 12 new investment zones modelled on becoming potential Canary Wharfs—but I wish he had given a bit more attention to two British institutions for investment, which I do not think that he mentioned: the UK Infrastructure Bank and the British Business Bank, both of which could be developed. As the noble Lord, Lord Eatwell, said, we know that investment has been a problem in the British economy for a long time. We also know that the share of public investment in total investment has dropped dramatically, and it has not been compensated by any increase in private investment. Here is a good opportunity to insert the state into the long-term recovery of the economy and to provide for the energy and security autonomy, which is the aim of the Government and us all.
In short, there are quite a few interesting initiatives, but I do not think that they have been properly joined-up, and we still await a commanding framework for action in a world that is spinning out of control.
Lord Griffiths of Fforestfach (Con)
My Lords, it is a great pleasure to follow my noble friend Lord Skidelsky. He is always amusing and intellectually challenging and we once again benefited from some of the things he said.
Before I start my speech, I have to congratulate my noble friend Lady Moyo on a terrific maiden speech. Some years ago, she and I worked in the same investment bank in the City of London. She came to see me one day out of frustration because they had put restrictions on what she could do and I said to her, “Dambisa, there is only one thing to do: just leave the place and go and do it because your genius will always be rebuked because of the culture of this institution.” I never thought at that time that I would be here congratulating her in your Lordships’ House on that terrific speech. She mentioned her career in her speech. She brings weight to this House which makes this House such an important part of our Parliament.
I am delighted to take part in this debate. One reason is that I think that it is an honest Budget by an honest Chancellor. I say that because on the one hand, the rate of inflation is coming down, the debt-to-income ratio is coming down and the growth rate is going up to 2%. On the other hand, the rate of productivity growth is clearly not what the Chancellor ideally wants, the tax take is up from 33% before Covid to 37.7%, the standard of living has been falling for two years and, as my noble friend Lord Willetts mentioned, it will be 18 years before it gets back to the same level it was. Although we say inflation is coming down, it is still very high. I think the Chancellor had very little room to manoeuvre in this Budget—that is what has come out to me from this debate—but I think he has put the economy in the right direction because he has faced up to reality. There are no unfunded tax cuts here. He is not gambling with public expenditure, the borrowing requirement, the deficit and so on.
There are three reasons why I am excited about the Budget. First, it is a Budget for growth. Never again can people accuse the Prime Minister or the Chancellor of not having some framework for growth. In his speech, the Chancellor said this sentence which I think is very important:
“Not just the growth that comes when you emerge from a downturn, but long-term, sustainable, healthy growth”.—[Official Report, Commons, 15/3/23; col. 833.]
As you look back over the last 50 years in the UK, you see exactly that emergence from a recession, then you have a period of growth but it blows up. That is exactly what happened in the Barber boom in the early 1970s. It happened with Denis Healey in the mid-1970s. It actually happened with Nigel Lawson in the late 1990s, when inflation had got down to 3% after Geoffrey Howe’s tough Budget. When the Prime Minister at the time left government in 1990, the rate of inflation was 9%.
I do not want to go through the litany of things in this Budget—full expensing, new investment zones, nuclear energy, pharma and so on—but I would like to mention, which others have referred to, that getting the over-50s and people suffering from disability and long-term sickness back into work is very important.
One issue I have a slight problem with is childcare. I believe in childcare—we used it when our children were very small—but my noble friend Lord Willetts, for example, referred to these measures as radical. When I listened to the Budget speech, I thought to myself, “Do I want my great-grandchildren to be away from their home and parents from eight o’clock in the morning till 6 o’clock every day, five days a week?” I recognise that there is a demand for it, but the sheer scale of what is being introduced needs thought and debate before we rush headlong into it.
To meet the objection that the noble Lord, Lord Eatwell, made in a powerful speech, there is the embryo of a medium-term financial strategy here.
My second point is about something absolutely crucial that the Chancellor said in his speech and has said on a number of occasions. He is committed to reducing inflation to 2% a year. We know from the cost of living crisis the damage inflation does, especially to the most vulnerable in our society, who have the fewest options when their standard of living is threatened. We have heard of the problems for business—the uncertainty it creates over cost and pricing power; over what the central bank or the Government will do; over what will happen to wages, given the strikes—the resulting distrust in society and, in turn, the social conflict.
Some quite respected academics and commentators have proposed to raise the rate of inflation from 2% to 4%—which, in my judgment, would be a disaster, because as inflation rises so volatility and instability rise with it—or to move from an inflation target to money income because that gives you greater flexibility. Indeed, Andy Haldane has proposed to drop the target completely, as far as I can see. Reducing inflation, with a fixed target of 2%, is actually the bedrock of policy and is very important. One should add that inflation is actually a tax. Therefore, reducing the rate of inflation reduces tax, and this could be considered a tax-cutting Budget. The Chancellor never referred to it as such, but inflation is an onerous tax. It taxes not only people with money holdings but savings and pensioners in the private sector.
Thirdly, I support the Budget but I was always impressed by a maxim that President Reagan used to use when dealing with the Soviets: trust but verify. I raise this issue not because I do not trust the OBR but simply because I am ignorant of exactly what is happening. As I read this Budget, and having listened to the speech and so on, it is intimately bound up with and depends critically on the OBR’s numbers. But we know that OBR forecasts have not worked out. It has made mistakes, some of them pretty bad. What kind of model did it use in arriving at the numbers it generated? Was it the new Keynesian model which others were using, and who predicted that inflation was simply transitory? What about the unforeseen events—pandemics, wars, financial instability—which the noble Lord, Lord O’Neill, referred to? We had our own problems with the LDC and the pension funds, some time ago. At least two significant cryptocurrency operations in the States have gone, as has Silicon Valley Bank. Credit Suisse has had its problems for a long time in terms of compliance and so on, but one gets the feeling that more credit is being expended in the international financial system than one is happy with.
Yet the OBR is very confident. Inflation last October was 11%; it is coming down, in the last quarter of this year, to 2.9%. There is no recession in the UK and unemployment will rise only sightly, to less than 150,000. We need to be able to shed more light on this, and I hope we can do that as the discussion goes on.
I started by saying that I really do have confidence in the Chancellor, and I am sure he is a person of prudence. Frankly, I congratulate him on a good Budget in difficult circumstances, and I hope it will be the first of many.
Lord Lee of Trafford (LD)
My Lords, I have had the privilege of experiencing 30 years of Budgets in both Houses here at Westminster. As the noble Lord, Lord Skidelsky, alluded to earlier, in the old days if there was the slightest leak from a Budget, the security services would be called in. Today, we seem to have a Budget by instalments: a virtual daily leak.
When you are speaker number 13 in a Budget debate, as I am, there is really no point in repeating many of the things that have already been said. I am not even going to say what an excellent maiden speech the noble Baroness, Lady Moyo, made. I am going to focus on a few different areas, and maybe express a few personal ideas and thoughts.
On health and the lifting of the pension cap, I think the jury is out. On the one hand, it might well encourage senior consultants to stay on longer; on the other hand, it could encourage others—maybe not in the health service—to retire early. It is also vital that we increase the number of medical school places, which I am sorry there was no mention of in the Budget. We need to do something to stop the drain of nurses from our health service. We now have approximately 200 health trusts. A lot of consolidation is taking place, and many trusts are very big businesses. Their performances vary greatly, and we need more training for senior management. I suggest that we establish a standalone dedicated health business school, which would I hope bring about a significant increase in the quality of management of these large organisations.
I have asked a number of Questions recently on prescription charges, which are now rising to almost £10 an item. The total revenue the Government get is only about £600 million. Some 60% of the population do not pay, and there is some evidence now that people are forgoing their medicines because of the cost. There have been no prosecutions whatsoever for prescription charge fraud over the last 12 months. Prescription charges are free in Scotland, Wales and Northern Ireland, and I suggest they should be abolished here in England to ease the pressures on so many family budgets.
On housing, we clearly need more owner-occupancy, but we also need many more properties for rent. The rental situation, particularly for young people trying to find accommodation at a reasonable price, is a nightmare. Landlords are selling up and the stock of rental accommodation is drying up. In my view, the Government should act. They could easily reverse the disallowance of interest on landlords’ borrowings. They could abolish the extra stamp duty and perhaps even reduce capital gains tax on disposal of rental properties. If they wanted to, they could transform the rental market.
Tourism and hospitality—I declare an interest as the president of the Association of Leading Visitor Attractions; I was chairman for 30 years—is a major employer at all skill levels. It is probably the number one private sector industry in more parliamentary constituencies than any other single industry. Virtually every business in tourism and hospitality is experiencing recruitment problems. Vacancies are something like 9% nationally and 15% in London. The industry has been heavily hit by Brexit and I believe we have to and should allow more immigration in this area.
Tax-free shopping should also be reintroduced, where visitors can reclaim VAT. High-spending tourists are now deserting the United Kingdom and heading to France, Italy and Germany. Some 70% of tax-free forms validated at Eurostar Gare du Nord were from non-UK visitors—those shopping in Paris and claiming the tax back before visiting the United Kingdom. A survey of 10,000 Chinese travellers planning to visit Europe showed that only 42% were heading to the United Kingdom, whereas in 2019 over 70% headed here.
On defence, after years of neglect and denial obviously I welcome the increase in defence expenditure to 2.25% and maybe up to 2.5%, but we have to go further. In 1984, let us remember that defence expenditure was something like 5.5% of GDP. The head of the Army, General Sir Patrick Sanders, said very recently that we would struggle to mobilise a division of 10,000 troops if forced to fight a European war. Defence Secretary Wallace said very recently that we have hardly enough pilots to fly the F35s. It is commonly agreed the Army has reduced to far too low a number at 73,000. It is also questionable if we can recruit the 30,000 reservists intended to complement our regular forces.
On welfare, I think it is time we start to query the balance between the benefits we give to the old—I declare an interest as someone in his 81st year—and the young. I get free prescriptions, a free travel pass and of course a pension. Most pensioners have paid off their mortgages, whereas the young are more likely to be struggling to find a deposit for a house and have the costs of children’s clothing and childcare, as we know. Normally they are on fairly modest early salaries. I believe it is time we look again at the balance between young and old in terms of benefits.
Finally, I come to financial education—or indeed, the lack of it—in this country. There is hardly any teaching of budgeting, savings or investment in our schools, and it should be of serious concern to the Government. We have a situation where more young people speculate on cryptocurrency than invest through the stock market or in more traditional forms of investment. The Government should consider setting up—I think this is the first time it has been mentioned—what I would term a financial education fund, which would recruit and fund specialist qualified speakers to go into our schools, for the first time, to make a serious attempt to financially educate our young people.
Lord Tugendhat (Con)
My Lords, it gives me great pleasure to begin by congratulating the noble Baroness, Lady Moyo, on her notable maiden speech. The combination of her force and clarity made a great impression upon me and I look forward to hearing her apply those gifts on other subjects in the future.
As far as the Budget is concerned, I welcome it. I welcome its general direction, underlying philosophy and a number of its detailed proposals. However, I am going to deal with only a few. It is an extremely far-reaching speech, and I will just concentrate on a few points that I would particularly like to draw to the House’s attention.
In his speech, the Chancellor referred to something which happened before he stood up, which was the masterminding by the Government of the sale of the British arm of the Silicon Valley Bank to HSBC. It was rather overshadowed in the media by the dispute between Gary Lineker and the BBC, but it is a major coup on the part of the Government. Had the British end of the Silicon Valley Bank gone down, the crisis that would have overtaken the tech sector in this country would, as the noble Lord, Lord O’Neill, said, have created a very different atmosphere for this debate today.
The Government not only prevented a crisis, something for which they deserve a lot of marks, but did so without costing the taxpayer a penny, which has not always been the case in banking crises. The operation and the speed with which it was carried out bear eloquent testimony to what a good place Britain is in which to do business, especially for start-ups and scale-ups in exciting new areas such as tech and life sciences. I hope very much that foreign and British entrepreneurs will take note of that, and that those wondering whether to enlist in London or New York will also bear this event in mind.
Turning to what might be called the Chancellor’s micro-approach to achieving the macro-objective of improving the British economy, in the corporate sector I am sure that he is right to focus on incentivising investment rather than the headline rate of tax. This will do most to encourage established companies, in established areas such as infrastructure, and new companies in new sectors. However, it is important to remember how long projects take. Usually, they take a good deal longer than three years. Therefore, it is vital that the Chancellor fulfils his intention to make full capital expensing a permanent feature, to quote him,
“as soon as we can responsibly do so.”—[Official Report, Commons, 15/3/23; col. 839.]
In the personal sector, I am equally sure that the Chancellor’s pension and childcare measures are at different ends of the wealth and income spectrum, and are the right way to encourage people to stay in work and to return to work. They will have a more direct and targeted impact on the balance sheets of individuals and families than simply a cut in income tax.
I am a supporter of the Budget. I have just one caveat or warning, which refers to defence—a point made by my noble friend Lord Howell. I very much support the Government’s rhetoric and actions regarding Ukraine and China. However, I worry that our rhetoric is in danger of running ahead of our capacity to deliver. We talk a very good talk, but how many troops, ships and aircraft do we actually have at our disposal? I am delighted that we have helped the Ukrainians as much as we have, but how much do we have left? If we are to continue playing the role that we wish to play, defence is likely to cost more and perhaps a very great deal more, and we all know how that will have to be paid for.
Baroness Jones of Moulsecoomb (GP)
My Lords, I have a huge apology to make to the noble Baroness, Lady Moyo, because I was not here for her maiden speech; I am very sorry about that, but I will of course read it in Hansard and congratulate her next week.
Before I start on the Budget—because that was probably the nicest thing I am going to say this afternoon—I would like to give the Leader of the House a couple of tips. First, a speaking limit in this debate might have been a good idea. Secondly, if the heating is going to be switched off before we meet, could blankets or hot water bottles be supplied? After my speech, I am going to go and get my coat, just like the noble Lord, Lord Brooke.
Noble Lords can imagine what I think about the Budget. Quite honestly, this Government do not have a clue about any sort of greening of the economy. It is ludicrous for them to talk about all the green things that they are doing when they are absolutely not green.
The IMF has forecast that the UK will be the worst-performing large advanced economy this year, but Britain’s decline, relative to those of other rich nations, is rooted in problems both old and new. Clearly, this Government have done their absolute best to trash our economy. We have had 13 years of economic mismanagement. We used to say, “Well, the thing about the Tories is that, however awful they are, at least they can manage money and know how to run an economy”. We cannot say that any more; in fact, the opposite is true. They have run our economy into the ground. I understand that Covid did not help but, in a crisis, you look to your best talents—clearly, the Tory Government did not have any. That is why we are in this situation at the moment.
Billions of pounds have been lost in bad decisions and lost investment. Millions more people are in poverty. Children and parents are going hungry. People are living in cold homes, with pensioners dying from hypothermia—and this Government have the cheek to put in their Budget the 1%, or whatever it is, for pension pots. Who is that for? It is for millionaires; it is not for people who are starving and cannot manage to pay their heating bills. It really is time that this Government understood the exact impact of what they are doing.
Today’s Budget announcement falls far short of the strong climate action needed. I have to repeat to the Government that, as Greens often say, green growth is an oxymoron. The minute you grow anything, you have to degrow in a different area. Green growth is possible but not if you do not cut somewhere else. Every time we grow the economy, we take a bite out of the planet’s resources—and it is a bite that will not grow back. Whatever this Government do, they seem to be moving in a way that is even more damaging to climate change.
Speaking to the Dutch Parliament recently, Professor Jason Hickel—his book, Less is More, should be compulsory reading for this Government—debunked the concept of green growth, saying:
“Decarbonization with growth is like trying to run down an escalator that is accelerating upwards”—
you are likely to fall on your face. People have to understand that using a tonne of fossil carbon and then trying to replace it with a tonne of new trees does not work. It is not a fair exchange; it is nowhere near compensation for the fossil fuel used. Carbon offsets will not save us from the worst of climate change; they are just something that make people feel good. They are absolutely ineffective and we have got to stop.
The simplest way to solve the problem of climate change is stopping the extraction and burning of fossil fuels. The Government have not even understood that; they are still mad about digging up coal and using oil. It is incredible that after decades of Greens like me telling the Government how to mitigate climate change, they still do not get it—plus, of course, this Chancellor continued the regressive freeze on fuel duty. That shows no grasp of the situation we are in; neither does his tweaking of the pension pot while not paying nurses and doctors. It is unbelievable stupidity. I know that there is now a deal, thank goodness, but why was there not one weeks ago? Why did we have to go through this pain? Why did patients have to go through it? I simply do not understand.
By the way, nuclear is not green. I cannot tell you how many times I have said that in this Chamber. Nuclear power is not green. It is filthy, it is very expensive and it is going to cause us problems in future. It is not green and it is not sustainable.
Our Green Party MP, Caroline Lucas, said in the other place that the Chancellor could have announced a
“wealth tax on the 1% richest people”,
which
“could raise up to £70 billion”—[Official Report, Commons, 15/3/23; col. 864.]
and fund cheaper public transport, more home insulation and public sector pay rises for millions. He did not do that. He put in a measure that will benefit millionaires.
If you are worried about jobs, why not upscale green initiatives—green growth, if you like? For example, clean, green, abundant and affordable renewables are so much quicker, easier and cheaper than nuclear; with onshore and offshore wind, tidal and solar, we could do it and do it quickly. We must remember that growth is not necessarily prosperity; people seem to conflate the two but it is not true.
Green Alliance was very quick off the mark to give us a rapid review of the Spring Budget. It shows that the Chancellor has taken absolutely no steps on the path to a green economy. While the fiscal situation might be improving, the UK’s economy is still forecast to shrink this year, with falling living standards for households being a primary reason. It is not falling living standards for people such as us—we can manage; it is falling living standards for people who cannot even manage at the moment.
There is one tiny thing the Chancellor did right: alcohol duty will rise in line with RPI from 1 August. That might reduce alcohol harm in the UK while raising perhaps crucial public funds, but it is really so minor as to be almost not worth mentioning.
A Green Party economist, Molly Scott Cato, former MEP, said that a green Chancellor would ensure major investment in a green economy. That means meaningful investment in affordable renewables and a nationwide insulation programme. We have had so many complaints about Insulate Britain, the campaign group that caused so much fuss. In fact, we should have said, “You’re absolutely right: we need to insulate Britain. It is cheap, it is fast and it helps people”. This Government got hung up on the group’s campaigns, and now we are seeing the Public Order Bill, and so on, which are trying to stop people protesting again. Just those two measures—insulation and renewables—would help tackle greenhouse gas emissions and mean that people could afford to be warm in their homes. Is that not a kinder thing to do than to cut living standards?
Other measures would include fair pay for public sector workers and 35 hours a week of free childcare for all. I support the Government’s idea of capping bus fares, although it will not be in every place. The Greens would put a £1 single fare on all bus routes in England.
It really is time this Government were gone, before they cause yet more damage to us, our society and the reputation of the UK, and before they damage the planet any more than they have already.
Lord Moynihan (Con)
My Lords, I add to the much deserved congratulations to my noble friend Lady Moyo on her maiden speech today.
I turn—unsurprisingly to the Minister, I am sure—to the closing part of the first part of her speech: namely, the decision to arrest the closure of public swimming pools in this country. First and foremost, my congratulations go to the Government on responding to the powerful campaign, of which I was a part, for additional Budget funding for swimming pools. Public leisure facilities with swimming pools are a critical component of the strategy to promote the nation’s health and the safety of children, and the £63 million package is indeed a welcome lifeline. I agree that Sport England is best placed to manage the one-year funding package, and local authorities will be able to avoid the wholesale closure of pools predicted in the absence of such support. Too many of our pools face underinvestment and further pressures, including escalating operational and maintenance costs, in the face of unprecedentedly high energy bills.
I suggest to the Minister that, of that £63 million package, the £40 million of the fund which has been allocated to decarbonisation and long-term energy efficiency is a masterstroke and should not be limited to a one-off, one-year policy. Pool operators that use imaginative ways of improving energy efficiency—for example, as the Minister mentioned earlier, capturing the heat generated in data centres—should not be rushed to compete in a one-off, one-year competition. I hope this initiative will be built on in the future as we move towards net zero. I also hope that the initiative taken by the Chancellor, a former Secretary of State at DCMS, will now be adopted in Scotland, Wales and Northern Ireland to support the many council pools that are under threat of closure there.
The backcloth to this announcement is not optimistic. If we look back at the decade which started with the London Olympic and Paralympic Games, in which I declare an interest, since 2010 we have lost nearly 25% of our public pools—we have lost 382 of them. Pools play a vital role in helping communities engage with sport and physical activity. The Covid pandemic and soaring energy costs accelerated the decline in those aquatic facilities at the tail-end of that decade which should have seen the sports legacy from the Olympic Games increase, not decrease, the number of facilities in the UK. More than 85 pools have been closed and not replaced since 2019—a sad decade indeed. That was made worse by the fact that the provision of sport, recreation and leisure activities by local authorities is a discretionary line item, not a mandatory line item as it is, for example, in Scotland. If we really want to address these issues, not just in swimming pools but in leisure and an active lifestyle, we need to recognise and concentrate on putting the right amount of money behind local authorities in particular and making that a mandatory, not a discretionary, line item.
This measure goes further. It recognises that swimming pools play an important role in our communities for all ages and all people. Swimming is more than a recreation; it is a key life skill. Physical inactivity is associated with one in six deaths in the UK and is estimated by the Government to cost the UK £7.4 billion annually. Deloitte has published research which shows that improving the level of physical activity in the workforce would benefit the UK economy by up to £17 billion a year.
As pointed out in the report by your Lordships’ National Plan for Sport and Recreation Committee, which was debated on 9 February this year, it is recognised that the time has come to have a radical rethink of financial incentives and health policies, both within and outside the workforce. Members serving on that committee unanimously called for a national plan for sport, health and well-being. It was pointed out that successive Governments over decades have tried to address stagnating activity levels, with disappointing results. Nearly 40% of all adults are active for fewer than 2.5 hours not a day, but a week, which includes walking to work and the shops. It is not surprising that the noble Lord, Lord Willis, who chaired that committee, reflected:
“How is it possible that the UK is world-leading in elite and professional sports, that 3 billion people across the world watch our Premier League matches in over 187 different countries and that … at Olympics after Olympics … we have failed at grass-roots level to get more people from more diverse backgrounds to be more active, despite all the investment that successive Governments have made?”—[Official Report, 2/2/22; col. 1208.]
With schoolchildren facing growing obesity, with PE marginalised in the school curriculum and no longer inspected by Ofsted, with many primary school teachers getting fewer than three hours’ training in a three-year degree course, it is not surprising that physical literacy in most of our primary schools means nothing. With the closing of swimming pools and leisure facilities, tragically we have become one of the most inactive nations in the world.
When looking for solutions, the Chancellor could do worse than turn to New Zealand, whose strength at elite level is celebrated across the globe for a nation of just 5 million people and whose success lies in a strong emphasis on participation and opportunity for all. There is a pathway for all local communities and all people wherever they live in New Zealand to become engaged in sport, health and well-being activities. From that platform, podium success for the elite is delivered because every child is assessed in order to be able to deliver their potential and every community is offered help for health, well-being and physical activity.
However, the chancellor in New Zealand goes further. The country has a well-being budget that brings health, sport and well-being together into one policy framework, delivered to Parliament by its Finance Minister, who happens to be the Deputy Prime Minister. The only way in which that could be delivered here would be to move responsibility for sport and recreation into the Department of Health, as proposed by your Lordships’ committee. Being embedded in the Department of Health, by moving the 25 civil servants responsible for the sector from the DCMS to the centre of government, would enable the Department of Health and Social Care to live up to its name—not a department of treatment but a department taking an important lead in the area of health promotion, with all the benefits that are so needed in this country today.
The evidence is clear. Systemic reforms to taxation, regulation and policy can allow the fitness, sport and leisure sector to play its fullest role in getting the UK workforce moving more and supporting our national productivity. The time for action is now. A National Plan for Sport, Health and Well-being provides an excellent starting point and, like Sir Patrick Vallance’s first published report into the regulation of emerging digital technologies referred to yesterday, the sport, health and well-being report of your Lordships’ House should have all its recommendations accepted in full.
We desperately need changes in departmental responsibility, budgetary support and enlightened policy thinking if we are to address the steady closures of sport and leisure facilities, increasing levels of inactivity and obesity and the consistent, corrosive decline in participation and active lifestyles that we have witnessed since the wonderful hosting of the Olympic and Paralympic Games here in London, now over a decade ago. Helping to save our swimming pools is very welcome, but facing the wider challenges that I have outlined is long overdue.
Lord Bird (CB)
My Lords, I welcome the noble Baroness, Lady Moyo. I heard her speech and was very impressed, not least by her call for 3% growth in GDP over the coming years—I think she said by 2026. I have a way in which we can achieve that, but you could not achieve it as an economist; you would have to achieve it another way, which I am here to suggest.
About 10 years ago, I wrote a book called The Necessity of Poverty. It was a very simple book that looked at how important poverty has been in the life of the economy. When Chancellors talk about money and the economics of the country, I think to myself: why are they looking at the world in an arsy-versy way? “Arsy-versy” is a polite printing term for when you print something upside down. The Government are arsy-versy because they do not look at the glaring elephant in the room—in fact, I would say it is more than just an elephant; it is an elephant along with its mum, dad and children—and that is poverty.
Here is the thing about poverty. The Government have in the region of £1 trillion a year to spend; with borrowing, I think it is about £1.2 trillion. If you analyse that and look at how much money is spent on pushing the ball of poverty around, you find that the figure is 40%. So you have a Government, a Prime Minister and a Chancellor of the Exchequer all obsessed with avoiding the fact that the largest amount of money spent by government is on the collateral damage done by poverty. That is extraordinary to me.
Why is there not an economics of poverty? Why are we looking at poverty as though it is something that we just have to put up with? Why are we making as many concessions as possible to keep the poor as comfortable as possible without actually getting them out of poverty? I think that what we need is smaller government. We really need small government; there are too many people in this world who are obsessed with big government. I think we need to cut government. And how are we going to cut government? We need to cut the costs of the NHS by half. We have to do it, and we have to do it as soon as possible. So how are we going to do that—how are we going to get the 3%? I will tell you how: we are going to be bright and clever, and look at the fact that 50% of the cost of the NHS is spent on trying to keep the poor as well as possible. So, actually, if you were to grow up, and if we were to move away from the very primitive look at the economy as though the biggest part of it were not poverty, what we would do is make heavy investments in getting people out of poverty. And we are not doing it.
We spend in the region of £50 billion a year on our education system, but we know that our education system is loaded down with the problems caused by poverty. We know that the four or five children in a class who are having all sorts of problems at home, who are not getting the correct food, and whose parents are under all sorts of duress, will cost maybe 70% or 80% of the time spent by the teachers, so the educational quality of other people is hampered. I know this because I was one of them. I was actually a part of the avant-garde; I was banned from school at the age of 14. I cost an enormous amount of money. Actually, when I was put away as a wrongdoing poverty boy at the age of 14 and 15 and 16, I was costing about three times what it cost to put somebody through Eton. The poshest among us had nothing on me; in fact, you could not get into my school or my reformatory unless you did something wrong.
So we have this really weird world. I do not understand where the Government are coming from, because if you were really to do something, you would do something sensible about reducing that and slashing the NHS. Let us slash the cost to the NHS. Let us remove much of the cost of the NHS, by keeping people healthy and by, when you bring them into this world, supporting them and giving them the priority—the Rolls-Royce service—at that stage. Because if you do not, you will be paying Rolls-Royce prices until they die.
Last weekend, I was down in Canvey Island. My eldest brother is 80, he is unwell, and he costs thousands of pounds a year in his health bills. Because he is unwell, he has always lived in poverty and his children have always lived in poverty, because nobody made the investment in him at the beginning. He is in crisis, and all the people around him are in crisis. I was fortunate, as I said, because every time I got nicked, they taught me something—as I have told this House many times.
I do not want to go on too much, but I want to say another thing. We have the crisis of poverty, and we will until the Government and economists grow up and realise that they are getting rid of the largest amount of their money on poverty—40%. Unless we have that change, whether it is this Government or the next Government on the other side, and unless we have a real growing up, we are not going anywhere. All we will be doing is kicking the can of poverty down the road. We will not be making inroads or accepting the fact that, whatever has been done, it has not actually worked.
I now want to talk about the fact that what really worries me about this Government—and maybe the next Government and the last Government—is the problem that we are in now, which will go on for the next five years in some form or another. That is the problem of the terrible emergency that we are in. I can tell your Lordships that 140,000 children and their parents are in temporary housing, in transitional homes such as hostels. Do you know what that is going to do to them? I bet you a pound to a penny that at least a third of them will have all sorts of problems to do with mental well-being. I can tell your Lordships that, when they enter the workforce, those children will have been so atomised by the experience of being homeless that it will affect their ability to operate in the marketplace, to get the kind of jobs that are necessary—the jobs that will produce the 3%.
At the moment we are not addressing ourselves to the emergency but doing a bit here and a bit there and not even waking up in the morning and saying, “What are we going to do about stopping circa 300,000 families falling into poverty?” They are falling because they have been evicted as they could not pay their rent—they lost their jobs and all those sorts of things. I am absolutely frightened of the fact that, because of that, I am going to wake up in a year’s time and 50,000 people will be wanting to sell the Big Issue. At the moment our sales have gone up. Why? Because there are more people who need to sell the Big Issue. They are not homeless but, if we do not work with them, they will become homeless. Our figures went up last year by 10%. We do not know where it is going to go this year. Will it be 15% or 20%? We cannot handle that number of people. We work with about 7,000 to 9,000 people a year.
I am saying that we are in an emergency. I suggest to the Government that they bring that emergency forward, because it will echo down the next 10, 20 or 30 years and we will have the decimation and destruction of people who will be caught in poverty and will not be able to respond to the opportunities that come. I suggest that we need a COBRA. We need what we tried to do during Covid; you wake up in the morning and you get all the Ministers together and all the departments working together and—God bless them all—they get somewhere in the end. We need an emergency COBRA to address the fact that we do not want to condemn the next generation and the bit of the generation that is moving on and push them into poverty. That is the costliest thing to do—the Government will never get their 3% then, because their costs will be up and it will be 50%, but the money will be taken by the problems of poverty.
I am sorry—I am going on a bit. Normally I try to be economical. There are a couple of really wise things. Can we ask the Government to stop no-fault evictions? That would be a useful thing as it would stop hundreds of people falling into homelessness because they have been evicted by their landlord. Can we also look at why we cannot give universal credit so that it matches the requirements of the crisis that people are in at the moment, which is the crisis of inflation? Can it not match that? Otherwise, people will not pay their rent because they will use the money elsewhere, and they will fall further into poverty and be evicted.
The other thing I would like to do is to liberate our local authorities to be able to pay the rent and for central government to give local authorities enough money so that it is the rent that is expected and there is no gap, because if there is a gap between the money that the Government give and the rent, people will be thrown out on the street. Anyway, those are my arguments. Thank you very much and God bless you all.
Lord Horam (Con)
My Lords, I certainly agree with the noble Lord in his disappointment about universal credit. That is one of the achievements of the last period of Conservative government. The noble Lord, Lord Eatwell, mentioned in his scintillating speech the economic progress—or lack of progress, in his view—of the Conservative Governments of the last 13 years, but universal credit is a significant change and improvement. Without it, we would not have got through the Covid period with the success that we did. So I agree with that point of the noble Lord, Lord Bird; he is always interesting to listen to.
I think we will find that it is always interesting to listen to the noble Baroness, Lady Moyo. I congratulate her on her maiden speech, which was excellent. I became a fan of hers when I read How the West Was Lost, which is a scintillating attack on the complacency of the western world and our strength. Much of it has indeed come to pass, although not quite in the way she envisaged, because I think the East has not been quite so successful, but the West is beginning to realise that we have to fight back. I am also glad that she has joined the House of Lords because she is another economist. I am sorry to disagree with the noble Lord, Lord Bird, on this, but I like economists. I am an economist myself, and I think economists should run the world; I really do—economists rather than lawyers. The noble and learned Lord, Lord Brown, is shaking his head—the distinguished lawyer. The interesting thing about the next general election is that it will be a lawyer versus an economist: it will be interesting to see how that pans out. Anyway, I am glad that the noble Baroness, Lady Moyo, is here: I welcome her and what she has to say.
On the Budget itself, I think the FT summed it up pretty well when it said that it is a step in the right direction: it is a step, that is all. With the constraints that were on it, I think that is the right remark. My noble friend Lord Griffiths said that the Chancellor displayed honesty and realism in what he said. I think he also displayed courage, because there was a big move before the Budget to persuade him to reduce corporation tax to 19% from the 25% it will now be. He resisted that, and I think he was right to do so, because the way he is doing it, via incentives for investment, is much more efficient than having a general corporation tax at the level it was presumed to be. As an economist, after I left university and before I came into politics, I eventually set up an economic consultancy and I know from personal experience that corporation tax was not a factor in making decisions: decisions were made on much more elementary facts, such as the quality of your product, the competition and all the rest of it, not on the level of corporation tax. I think he got that right.
The only mistake he made, I think, was to limit it for three years, because I think it should be for ever, more or less—unlimited. I think the reason for the three years is the usual Treasury mistake of rounding up the figures to make everything fit, and therefore three years was all they thought they could afford at the moment. That is the sort of mistake that Treasury officials very often make and it is a pity they feel they have to do that.
The other aspect that corporation tax brings into play is the whole level of taxation in this country, which my noble friend Lord Bridges referred to in his excellent counter to the remarks of the noble Lord, Lord Eatwell. Corporation tax brings in about £18 billion, a huge sum of money, and we have to look at taxation and have a debate about how much tax we want to pay.
Recently, we have tried to get European levels of social welfare on American levels of tax. That is not going to work for very long and people are beginning to see that. Paul Johnson, the director of the Institute for Fiscal Studies, has written a very interesting book, Follow the Money. It is another excellent book and in it, he points out that, given what we want to do in society—what we will have to spend on the NHS in an ageing society, for example, what we are committed to do in defence, what we want to do on social care, poverty, universal credit and all those things—we are going to need a huge amount of public spending. It is no use not facing that fact, so all the calls for less taxation have to deal with that reality. We cannot have responsible levels of social welfare and low taxation, which brings me to the other point about taxation.
We have to have tax efficiency. Much of our taxation system is now inefficient. Take council tax: it is done on valuations from 1991, so a person in a modest house in Darlington can now pay the same level of taxation as someone living in Kensington. That is completely unfair and out of date, and it needs reforming. We need to look at the level of taxation and the efficiency, or otherwise, with which we level it.
Apart from tax, what businesses want more than anything else is stability and continuity, and a sense of strategy coming from government. Recently, there has been far too much politics and far too little government. We have to look at how we can change that balance, so that people feel that a course of action is being followed through in detail—the way that there was during the Thatcher period, when people understood the way that the economy was being handled and, by and large, supported it.
For example, on levelling up we have a plethora of measures to help level up the economy, most of which I welcome, as in some aspects of devolution. But look across the channel at what Germany has done: Germany was faced with similar problems to the ones we were faced with when it looked at the former areas of East Germany, which had been under Nazi rule and then part of the German Democratic Republic. I am thinking of places such as Dresden, Weimar and Rostock. What did Germany do? It put on a solidarity tax, which raised €35 billion a year.
Germany spent that solidarity tax for 30 years—it has just been abolished—and if you now go to those towns and cities in the north of Germany, you will see splendid places attracting tourism, just as we would like to see the places in the north of England and the Midlands rebuilt, while being proud of their architecture and history. That is the way they tackled it: with a consistent policy for 30 years, whereas we have changed policies endlessly. We have been dipping around from one policy to another and got nowhere near as far as Germany has in levelling up the different parts of our country.
Take manpower, which is probably the wrong word to use. Let us say staff questions, which the Chancellor addressed in his Budget with help to improve pensions, so that doctors would stay on longer, and to attract more people into the NHS. Yet at the same time, just before the Budget, the Treasury was objecting to increasing the number of medical schools. It was doing that on the grounds that they were too expensive. It was looking too carefully at the pounds, shillings and pence of it, when the need has been clear for many years. The Chancellor himself produced a report on manpower in the NHS when he was chairman of the Health and Social Care Committee in the House of Commons, so it has been clear for years that we needed a far greater understanding of what staff were required. We simply have not done it. Even now, we do not expect to have a proper understanding of what the NHS’s manpower needs are until next month yet, at the same time, the Treasury was penny-pinching over how many medical schools there should be.
HS2 is another example of short-term thinking. In my view, it probably would have been better for the coalition Government to cancel HS2 when it came in than to allow what is now happening. Inevitably, people are looking at the escalating costs and the benefits which have now been compromised by people working at home, and, as a result, lots of it has been called into question and there is uncertainty. The biggest piece of infrastructure-building in Europe is surrounded by uncertainty, and that is not the right way to run a country.
My view is that we need to come back to a more strategic view, and the Government need to come back to having a clear strategy with clear paths along the way. This is the right first step, but the Government really have to build on it.
Lord Brooke of Alverthorpe (Lab)
My Lords, it seems a long time since the Minister started the debate. I congratulate her, because she took an hour-long speech from the Chancellor, went to the major points and delivered it within about 19 minutes. That was very useful indeed for my noble friend Lord Eatwell, who I congratulate on delivering his usual barnstorming and devastating attacks on the Government’s performance. He picked out the major points and went for it. As I understood it, I thought that the noble Lord, Lord Bridges was, in many respects, giving my noble friend support on a number of the criticisms he was levelling.
I too welcome to the House the noble Baroness, Lady Moyo. I am not an economist—I am a simple old trade unionist—but I came here to learn, and I learned from the economists. I look forward to listening to many similar great speeches from her in the future, and I wish her a very warm welcome indeed.
Coming so far down the speakers’ list, I note that so much has been said already. My noble friend Lord Davies made a wonderful and devasting speech on pensions.
The one thing the Chancellor has done is steady the economy, and for that we must all be grateful, regardless of whichever party we come from. A year or 15 months ago, the country was in a hell of mess, and that was nothing to do with energy. The noble Lord on the Front Bench talked about energy, but it was not energy; it was precipitated by the leadership of the Conservative Party at that time. But we have now been steadied, and for that we should be pleased.
As to whether or not we are going to get ourselves moving to the levels of productivity that we require, I am uncertain. The noble Baroness, Lady Moyo, talked about 3% GDP. We last had that when Lord Darling was the Chancellor of the Exchequer, when Labour was last in power. Let us hope that, if Labour returns to power within the next two years at the outside—I say this to the noble Lord, Lord Bird, in particular—we will really start to see some genuine attention being given to the fundamental problems of the type which he described, and that we can get the economy moving.
I am interested in the reasons why we are short in the workforce. There is a whole range of different analyses being made as to the causes for that. When responding to the Chancellor yesterday in the Commons, my leader, Keir Starmer, said that we were the “sick man of Europe”. In that context, I think he was talking primarily about the economy, because in relative terms we are doing badly on recovery compared with most European countries. We are, and have been for quite some time, the real sick nation of Europe in health terms. I was expecting and hoping that the Chancellor, given his previous long experience of working on health, might have spent a little more time addressing some of the health issues which the country faces by looking for economic solutions, in part, to some of those problems.
Without doubt, one of our fundamental problems is that we drink too much, so some steps have been taken there which I welcome. The draught duty is an innovative approach, and it gives a marker for the future that we can set different levels of taxation within alcohol and we can focus. It is good to see that we now have the freedom to increase taxation within off-sales and supermarkets in a way that we have not done previously; it is at supermarkets where you get the cheap drink, and many people suffer ill health as a consequence. That was a movement in the right direction.
The other area in which we are very poor is the quality of the food that many of our people, including me, consume. There was a case for the Chancellor moving to address that issue and seeing whether we can effect some changes. Some progress was made under Mrs May. We introduced a tax on fizzy drinks, which proved to be effective, yet that has not been applied over a wider front, notwithstanding all the calls for greater taxation on sugar. Why are we not taking the opportunity to look at an extension of the sugar tax, when sugar is at the heart of many of the problems we have with our health in this country? If we looked at the kind of food we produce and at alternatives to sugar, we could find a new industry where British food manufacturers could give a lead in producing new types of food that would not only benefit our country internally but could be exported on a wider basis. If we look at the problems of the world, particularly North America, we see that food and obesity are great issues. Projections in America around the scale of type 2 diabetes are quite worrying. They indicate that it could go up to 90% with that disease. We have to find ways overall.
Let us take our weaknesses and see whether we can convert them into our strengths by addressing the issues. I support what was said by the noble Lord, Lord Moynihan, that health is about food, drink and exercise, and that we perform badly in comparison with what happens elsewhere in Europe. Curriculums in schools in Europe and elsewhere give much more time to sport and exercise than we do in this country. Why can we not change it? There are opportunities for change.
I come back to the issue of the workforce. I have already said that our ill health is one of the reasons why we have seen a decline there. That needs to be addressed.
We need also to look at what people want. There are those who have gone into retirement and not returned to the workforce. They want to stay at home. One of the lessons of Covid was that people do not want to leave their homes in the way they have done in the past. They do not want to go back to the offices, they do not want to go back to the factories—in fact, the number of our factories is now diminishing—and there is a push to stay at home. We should recognise and acknowledge that. Rather than saying, “Come back into the cities and travel”, we must acknowledge that people are not going to do that. Instead, we have to start planning to move more work from offices into the home and for people to work from home. Civil servants are doing it to a degree, and there has been a lot of criticism. It is misplaced. What I think we are seeing there is the lead for what should be happening in many other parts of employment in the clerical and executive sphere. The work should be going home, with people then having opportunities to give attention to their children and to care for those in their family who need it, rather than having to import people in. Rather than chasing and pushing people back to work, work should be moving.
Some of us had the opportunity yesterday to see the new technology that is coming, such as the headsets. It is truly amazing what is just around the corner. Just think back to the early 1990s, when we were holding “bricks” to our ears, and compare that to what we can now do with our mobiles. With these headsets we can create a virtual reality and communicate with people in a quite different way. This is the kind of technology people will be using in their homes in the future. The technology will advance and move beyond just sight: people will be able to smell, taste and touch; and they will work from home.
I know this is long-term stuff, but it will create an entirely different kind of workforce. I hope my party will look ahead to the nature of work in five to 10 years’ time and start preparing for it. Within that time we will have an entirely different idea of work and of the opportunities available to people, particularly in areas with high unemployment. There need not be unemployment, because we can take the work there. We have pressed the Civil Service to decentralise and to move to different parts of the country. Why, as part of equalisation and levelling up, are we not pressing the major companies in London and the City similarly to decentralise and take their work to areas where there are employment opportunities?
There are many opportunities, but they have not been seized in this Budget, I am afraid. We have some stability, but we need far greater ambition. I believe that my party has that ambition to take us forward and to help people.
Baroness Lawlor (Con)
My Lords, I welcome the chance to speak in your Lordships’ House in the debate on the Spring Budget. I particularly welcome my noble friend Lady Moyo and congratulate her on an excellent maiden speech. I am very grateful to all your Lordships who have spoken in this debate. This is a subject dear to my heart, one on which I have worked for decades at my think tank, Politeia, with economists from Britain, Europe and indeed the United States.
I welcome the Chancellor’s determination to focus on tackling inflation, as I do the Budget and OBR forecasts that inflation in the UK is due to fall from 10.7% in the last quarter of last year to 2.9% by the end of 2023. I also welcome his determination to reduce debt as a proportion of GDP, and the forecast—with all the caveats your Lordships have given about forecasts—that the underlying debt to GDP ratio is due to start falling in 2027. However, I am a little concerned that until then, debt is due to rise from 92% of GDP to almost 95%. It is also heartening to hear that borrowing is due to fall each year, from 5.1% of GDP in 2023-24 to 1.7% in this five-year period.
However, I would like to encourage my noble friend the Minister and the Government to focus on a third problem, to which my noble friend Lord Bridges and other noble Lords have referred: the overall levels of UK public spending as a proportion of GDP. Among the G7 countries, the UK’s public spending, at 48% of GDP, may be smaller than that of other European economies, which ranges from 51% for Germany to 59% for France, but it is still more than the US economy, at 44.9%, and Japan, at 44.1%. We should not take comfort from such figures. The evidence is that economies that significantly reduce levels of public spending and debt and return to sound public finances can boost jobs and enhance growth, countering any effects of cuts. They do not necessarily result in lower outcomes for healthcare or education.
Over the last two decades, the evidence from a number of economists has been compelling. Schuknecht and Tanzi, very early in this millennium, identified expenditure-based consolidation, as did Schuknecht in a later study in 2020. It can have positive effects on the real economy and is more likely to lead to higher growth and lower debt. Antonio Alfonso, in a pre-pandemic analysis—albeit in a period when general levels of public spending across the G7 were much lower than now—showed that countries which kept public spending under 40% of GDP had among the best government performance.
Top of Alfonso’s table came countries with public spending at what now seems an almost magical figure of 32% to 33% of GDP: Switzerland and Austria, which performed well above average. Second, with slightly above average performance, came the next rank of countries: Japan, Canada and the US, whose public spending then was 37% to 40% of GDP. Germany belonged in that group in terms of performance, but its spending was slightly higher at 44%. Third came the UK, with below average performance, yet it spent about as much as Germany did at 43% to 44%. We can, however, take comfort from the fact that we still were ahead of the French, both in performance and public spending; their pre-pandemic figure was 55%.
In the same G7 economies, taking account of measures other than overall government performance, we can take heart from the evidence in areas such as economic stability, administrative performance, income distribution and social expenditure, public infrastructure—where Germany is usually top—health performance and education performance. While some countries did better and some less well, the overall message was equally encouraging: higher public spending does not necessarily lead to better performance in these areas.
It is therefore sensible that public spending plans after 2025 remain by and large unchanged, other than being topped up to reflect the defence spending and childcare changes on which your Lordships have commented with some knowledge. We will also see departmental budgets rise by 1% a year in real terms during this period. Sticking to such levels of public expenditure while raising the NHS and defence budgets will mean squeezes in other areas.
There is much to play for in adopting a more active approach to cutting overall levels of public spending. Not only has Britain’s economy prospered when government spending levels as a proportion of GDP have been kept reasonably controlled at approximately 40%; now, post pandemic, post Brexit, it is even more urgent that we encourage higher growth using the surest tool in our armoury: reducing public spending.
The UK is a market economy which benefits from freedom and competition under the rule of law. It does not prosper, as recent decades have shown, with high spending, high taxation and unnecessary regulation: it misses out on that elusive growth which successive Chancellors have chased and which has featured prominently in your Lordships’ debate today.
This economy prospers as a challenger economy into which new entrants and entrepreneurs can come and take pride, being rewarded, not penalised, for success. The high-tax, high-spending economy must be reversed. The Budget, which is to be welcomed as a step in the right direction, should be seen as work in progress. I hope that my noble friend the Minister and the Government will take a lead from the evidence that we must cut overall public spending to the 40% of GDP level, or less, if this country and its people are to use their talents and flourish, and exploit the freedoms they now have.
Lord Bilimoria (CB)
My Lords, this country, along with many others, has gone through hell for the past three years. There was the pandemic, followed by the sad war in Ukraine, which continues. Business and citizens have gone through hell. During the pandemic, when we thought we would bounce back and have a V-shaped recovery, it has been one crisis after another instead: inflation, supply-chain challenges, energy and cost of living crises, political crises including three Prime Ministers in one year. In September, the markets were spooked by the well-intentioned growth plans of Liz Truss and Kwasi Kwarteng, through their irrational exuberance and mini-Budget, with a reduction of 45% to 40% for the top rate of tax—absolutely the right thing to do, but the wrong time to do it—without the OBR to back up and validate their plan.
Since then, the Government have been trying to show calm and stability, quite understandably. Now, at last, six months after September, we have a proper Budget. We have a steady Prime Minister and Chancellor, both individuals from a business background and the Chancellor is a fellow entrepreneur, to boot. Whether an election takes place next year—and that is what the Government’s focus is on—or not, the path to growth and prosperity is crucial.
Earlier this week I was with the Nobel laureate Paul Krugman, the economist from the United States, at Cambridge. He said that we could get inflation down to maybe not the 2% target, but 3%. He said perhaps 3% could be the future target rather than 2%. The OBR has now said it will go down to 2.9%. He also said that unemployment might settle at around 4%; we had unemployment below 4% before the pandemic, and it has been very resilient. Where will interest rates settle down? They will be probably somewhere between 4% and 5%, which is what they used to be before the financial crisis, and thereafter we had over a decade of these near-zero rates which are completely unreal and abnormal.
The noble Baroness, Lady Lawlor, talked about government expenditure; it is now well over 44% of GDP. It should be well under 40%, and she gave evidence of how countries with lower government expenditure in proportion to GDP perform better. Our debt-to-GDP is close to 100%; it is going to be close to 100% five years from now. Had the OBR calculated Liz Truss and Kwasi Kwarteng’s growth plan, what is the bet that, ironically, the debt-to-GDP would not have been that much higher than the current Chancellor’s plans? If you look back to the end of World War II, you will see that our debt to GDP was 250%. In the last three years, we have gone through the biggest global crisis since the Second World War, and we have the lowest debt-to-GDP ratio of any G7 country. It is overprudent to say, “We don’t have the money; we have to be fiscally conservative and have a balanced budget”. What about being bold and going for growth, which will create the employment that will pay down the debt?
India has its Budget one month before ours. In February 2021, India had a Budget in the middle of the pandemic and said that it would not increase taxes because it did not want to stifle the recovery and hamper growth. To date, India has not put up taxes, even in its latest Budget. When I was president of the CBI, I said to Rishi Sunak, who was then Chancellor, “Come on, Rishi, don’t put up taxes. This is what India has said.” What has he done? He has just put up taxes after taxes for the past two years, so we now have the highest tax burden in 70 years. Instead of reducing tax, he announced that he is going to put up corporation tax from 19% to 25%. He countered it with the super-deduction of 130% to incentivise investment, which was fantastic news. The analysis that the CBI carried out said that that super-deduction genuinely has incentivised investment, but we have ended up with the highest tax burden since World War II at 38% of GDP.
If noble Lords remember, Rishi Sunak said that he was going to reduce income tax by 2024, but we spent £400 billion doing the pandemic that we have to recover, and we cannot reduce taxes now because we are in an inflationary environment. We were in a deflationary environment. I argue that inflation has not been demand-led; it was created by the Ukraine war and by energy prices, which are now well off their peak. Energy prices have come down.
Putting up taxes is stifling growth and the recovery. As history has shown, when George Osborne reduced corporation tax from 28% to 20% and then to 19%—he actually wanted to go down to 15%—we actually increased our tax take. Will the Minister acknowledge that? By trying to get £18 billion more a year and putting up corporation tax by almost one-third in one swoop, from 19% to 25%, you are killing the goose that lays the golden egg.
We were worried that we would have a double whammy in this Budget: an increase in corporation tax and a taking away of the super-deduction. Again, I spoke to Rishi when he was Chancellor and said, “Please bring in a replacement for the super-deduction”, and he said, “I will”. The Government have stuck to that and come up with this 100% tax deduction for investment in plant, machinery and technology, which is fantastic and just what we need.
But the point about corporation tax is not the absolute tax rate itself; it affects our perception and our inward investment. Historically, this country has been the second-largest or third-largest recipient of inward investment in the world, but now we have a situation where AstraZeneca, as the latest example, with more than £300 million of investment, is going to Ireland, which has a corporation tax rate of 12.5%. We have a rate that is double that. Arm, a company that we are so proud of, which was founded in Cambridge and whose technology we all have in our mobile phones, has decided to list in New York. Although our Government keep saying that our corporation tax is the lowest in the G7, it is now higher than the OECD average. Image and impression count.
On the positive side in this Budget, the investment zones are great news. They are based on something that I and the CBI have been championing for a long time: clusters based around our world-class universities. This is great news. We need to do more of this. I was in India last month, leading a University of Birmingham delegation as its chancellor. I spoke at the QS World University Rankings annual conference. I was so proud making my keynote speech that Britain, at 1% of the world’s population, has four out of the top 10 universities in the world; America has five and Switzerland has one. We have 17 out of the top 100 universities in the world, of which Birmingham is one. But is there anything in the Budget to help our universities? They have been managing on £9,250 fees that have been frozen. If you take that in real terms, we are now managing at £6,000. How are we meant to carry on being the best in the world when we are underresourced and run on the cheap? This cannot go on for ever.
I was on the Times Education Commission that reported last year. Our private schools cover 7% of our schoolchildren and are some of the best schools in the world by far. The funding for a private school child is three times the funding for a state school child. Where is the education spending in this Budget? Investment in education in the last decade has hardly increased, whereas in areas such as health it has increased hugely. Investing in education is the best investment. It will increase productivity. That is our future.
On SMRs—small modular reactors—this Budget gives another bit of good news: prioritising nuclear and saying that it will be treated as green is spot on. The Government say that they are going to look into SMRs. Why are we “looking into” SMRs? Why are we waiting? Rolls-Royce has the technology. These small modular reactors can give power to 1 million people, and cost one-sixth of a large plant such as Sizewell. They take five years to make, and we have not even started building one. Nuclear has been neglected by every Government, whether Labour, Conservative, or the Liberal and Conservative coalition. Nuclear has been neglected to our peril and I am glad that we are giving it focus.
There was nothing about housebuilding in this Budget. We need more houses desperately.
The shortage occupation list was addressed in the Budget, but just for construction. What about hospitality, agriculture, financial services and technology? Every sector of our economy has shortages. I have said time and again to the Government: why not have a revamped Migration Advisory Committee? As the Monetary Policy Committee sets interest rates each month and the Low Pay Commission sets the minimum wage every year, have the Migration Advisory Committee advise the Government sector by sector on the shortage occupation list. Would the Minister agree that we need to do that?
Here is the point. Immigration is made into this big bogeyman. Net migration is going up, but why? Because international students are included in the figures. We are now beating all records on international students—there are 690,000—and because they stay for a minimum of one year, they are treated under UN rules as immigrants and are counted. They are not immigrants. If you take international students out of those figures, the whole picture changes. Why are the Government making a rod for their own back? Why do they not, like many other countries, report to the UN but domestically exclude international students from the net migration figures? Could the Minister respond on that please?
Let us talk about energy. It is so good that the energy cap is being maintained for consumers, who need the help, but where is the help for businesses? There is no help for businesses, which have been devastated by energy costs.
IR35 reform is needed to help self-employed people but there is nothing in the Budget. The apprenticeship levy needs reforming desperately to help skilling, but there is nothing in the Budget. Our business rates are the most expensive in Europe and need to be reformed—the Government keep saying that they are going to reform this—but there is nothing in the Budget.
Fuel duty being frozen is very welcome, but alcohol duty is increasing. Pub after pub has been closing but the Government go and put up alcohol duty. As the founder and chairman of Cobra Beer, I am very grateful that draught beer duty has been frozen.
Defence expenditure will go up to 2.5% when it can, but it needs to go up to 3% right now. There is a war in Ukraine and we need to be prepared for the worst. At the end of the excellent Ukraine debate that we had recently, I quoted my Cambridge University contemporary and friend, Brigadier Justin Maciejewski, the head of the National Army Museum:
“Armies need might and mass to win. That means good weapons, good people and enough of them to be a credible deterrent. Without effective defence, everything that you treasure is threatened. Defeat in war means you lose everything: no health, no pensions, no education and no safety”.
He ends by saying:
“We need to be prepared, and preparation has a price.”
To conclude, the IFS has just reported on the Budget. It is very gloomy and has said we are stuck in a “lost decade” of falling living standards. The stealth tax of freezing thresholds until 2028 is going to raise over £120 billion. It is going to cost people on the lowest level of tax £500 more per year. On Brexit, the IFS says that the nation’s output will be 4% lower in the long term. We are avoiding a recession thankfully, but look at what is happening on the sidelines. Look at Silicon Valley Bank and Credit Suisse. We have got to be prepared. The noble Lord, Lord O’Neill, said that the Government have a narrow vision of credible fiscal rules.
This country has so much potential. The noble Baroness, Lady Moyo, who we welcome, spoke in her excellent maiden speech about economic growth. We need to grow; we need to reduce taxes; we need to invest. Debt will then fall, and the sixth-largest economy in the world will continue to be one of the top economies in the world. We will show our excellence in combatting climate change, in wind power, and in innovation and creativity. We have to have faith; we have to have belief; and we have to be bold.
Baroness Lea of Lymm (Con)
I was actually encouraged by the Chancellor’s Budget Statement yesterday. To put it in context, how very different it felt from November’s Autumn Statement, which, above all else, aimed for stability after the market chaos of late September and October.
As the OBR commented back in November, the British economy had been badly knocked by the
“global energy … supply shocks emanating from Russia’s invasion of Ukraine”
since March, when the Spring Statement was released. I remember the Bank of England’s extraordinarily pessimistic forecast, released in early November, which forecasted falling GDP in both 2023 and 2024—a two-year recession. My goodness me, how the media jumped on that. The Bank noted that there was a “very challenging” outlook for the UK economy, which struck me as something of an understatement in the circumstances. In contrast, in November, even though the OBR saw GDP falling by 1.4% in 2023, it expected the economy to recover in 2024.
Since November, the economy has proved remarkably resilient, narrowly missing recession in the second half of 2022. Somewhat surprisingly, GDP was flat in the fourth quarter, after falling a marginal amount in the third quarter; doubtless the data will be revised because, believe me—I speak as an ex-government statistician—data are always revised. The OBR now expects the economy to avoid recession, as defined by two consecutive quarters of falling output, this year. However, seemingly paradoxically, it still expects GDP to slip by 0.2% this year compared with last year. Specifically, it has projected a 0.4% fall in this current quarter, with GDP expected to be flat in the second quarter and then to start recovering in the second half of this year. Thus, according to the OBR, the economy will avoid recession.
The OBR was relatively upbeat in its March Economic and Fiscal Outlook. It said:
“The economic and fiscal outlook has brightened somewhat since our previous forecast in November.”
I remind noble Lords that that is only four and a half months ago. It went on:
“The near-term economic downturn is set to be shorter and shallower; medium-term output to be higher; and the budget deficit and public debt to be lower.”
Specifically, it noted that wholesale gas prices were well down and were expected to fall further.
However, the international situation remains concerning. The war in Ukraine appears to be far from resolution and the intensifying US-Chinese tensions have potential serious implications for the global economy. There are also heightened concerns over the international banking system. No one can be complacent.
The improved fiscal situation has enabled the Chancellor to provide a sizeable stimulus to the economy by way of some judicious spending increases and tax cuts, yet according to the OBR, he has still met his self-imposed fiscal targets—they may seem a bit arcane but they are important. These targets are: first, that underlying public sector debt as a share of GDP should fall in the financial year 2027; and, secondly, that public sector borrowing should be less than 3% of GDP in the same financial year. The targets are revised frequently and are somewhat arbitrary; suffice to say, much can go astray with the economy between now and 2027. Forecasting is an imprecise art, as we know, but, as I have said, the targets are important. They provide the markets with some reassurance that, no matter how high debt is now, it is manageable and should fall as a share of GDP in future. The targets are there to avoid a repetition of last September’s chaos, when the OBR was comprehensively cut out of the loop.
What of the Chancellor’s policies? First, he has rightly sought to address the issue of the missing workers with a back-to-work Budget that has the aim of stimulating the labour market and supporting growth. The latest ONS data shows that, in the three months to January, total employment was still more than 230,000 lower than in the three months to February 2020, which was the last quarter before lockdown. The number of the economically inactive—people aged 16 to 64 who are not in work and not looking for work—was nearly 490,000, nearly half a million, higher than in the three months to February 2020. Reasons for the rise in inactivity include increases in the long-term sick and people with family caring responsibilities, and some early retirements.
Suffice it to say that several of the Chancellor’s core Budget policies were geared towards encouraging and enabling people within these groups to move into employment. They included the launch of a new universal support programme for the disabled and long-term sick who want a job, improved childcare provision and, on pensions, increasing the annual allowance and abolishing the lifetime allowance. These are all pretty good moves, and I hasten to add that this is a far from exhaustive list of the Chancellor’s policies on this issue.
Secondly, on enterprise, with the ending of the super-deduction capital allowances scheme in March 2023, the Chancellor rightly announced the new full-expensing capital allowances scheme. This is planned to run for three years initially, and the OBR apparently judges that it should help boost business investment—which we all want boosted—by around 3% a year. But I still regret the planned increase in the main corporation tax rate from 19% to 25%. Granted, this rate may be the lowest in the G7, but, to me, this slightly misses the point. It was widely reported that corporate taxes were a factor in AstraZeneca’s decision to build a new factory in Dublin rather than Cheshire. Ireland’s main corporation tax rate is 12.5%.
Finally, the Chancellor’s cost of living measures were well targeted. They included freezing fuel duty for the 13th consecutive year and extending the energy price guarantee at £2,500 until the end of June.
All in all, it was an encouraging Budget. I suppose there is always more to do—every Chancellor knows that—but let us be aware of the economic circumstances and uncertainties that we still face. We certainly cannot be complacent.
Lord Bellingham (Con)
My Lords, first, I declare my interest as a paid non-exec director of four companies and two public companies. We have heard some exceptional contributions today, and I endorse all the remarks about and all that praise for my noble friend Lady Moyo on her superb maiden speech. It is always a pleasure to follow my noble friend Lady Lea and my old and good friend the noble Lord, Lord Bilimoria, who talks so much good sense.
As tail-end Charlie in this debate, I understand that I am all that stands between noble Lords and what are going to be three superb wind-ups and a very good dinner. I can see the Whip looking at me, because this debate has gone on quite a while and a lot has been said. I want to start by mentioning something about the Silicon Valley Bank crisis, which was referred to by my noble friend Lord Tugendhat and the noble Lord, Lord O’Neill. If this had not been handled in the way that it was, we would have been staring down the barrel of a full-blown tech crisis that would have completely transformed the start of Budget week. What was required was calm, competent government, and that is exactly what we got. I was impressed by a letter to the Chancellor which was signed by 340 founders and chief executives of tech companies employing nearly 20,000 people. It said:
“Thank you to you and your team for understanding the urgency, for appreciating the risk to the UK tech sector and its importance to the UK economy and for working around the clock to find a timely solution”.
That is praise indeed. Ben Marlow, the chief City correspondent on the Telegraph, is an outstanding journalist. He put it this way:
“To pull off something that complex in the space of a weekend is hugely impressive and a reminder that Britain’s most important national institutions still possess the proficiency to rise to the occasion when needed most”.
So we must pay credit to the Prime Minister, the Chancellor, the brilliant City Minister Andrew Griffith, the Bank of England and all those civil servants who worked incredibly hard that weekend to find a solution that will not cost the taxpayer one single penny.
The background to the Budget has been discussed at some length. I always listen very carefully to the noble Lord, Lord Eatwell. He said that we had been through a period of low growth, with GDP expanding by an average of 0.9% per year between 2008 and last year, which was down from a 2.7% average between 1949 and 2007. As he and other noble Lords pointed out, we have seen a period of very weak business investment and poor productivity, and frankly a gradualist decline and what I would call almost a lost decade of growth.
So the exam question is very simple. Will this Budget put in place the building blocks to reverse that? Will it welcome the start of a coherent and credible medium-term growth strategy? At a time when the tax burden will rise to 37.7% of GDP, the highest level since World War II, will the Budget really move the dial? Obviously, there is a huge onus on the Chancellor to maintain stability and above all to go on retaining the confidence of the markets—an agenda that he has worked on tirelessly since his appointment last autumn. So, in addition to his priority for growth, he has rightly made reducing inflation and bringing down debt as a percentage of GDP the other two key priorities.
How does this Budget measure up? There is a lot to like in it. I welcome a number of supply-side reforms that were announced yesterday. I like the childcare package. The 12 investment zones, which the noble Lords, Lord O’Neill and Lord Bilimoria, touched on, will be really important for generating growth and investment for wealth creation. I was very pleased with the announcement on nuclear policy and on carbon capture and storage, which was mentioned in some detail by my noble friend Lord Howell in a typically erudite and impressive speech. I also welcome the announcement of the pension lifetime allowance, which will create incentives for people of my sort of age to go back to work and to stay in work, which must be good for the wider economy.
All that is very positive, and I welcome it enormously. I also welcome the £25 billion business relief package for business investment and, as my noble friend Lady Lea pointed out, the full-expensing arrangements. This will ensure that we have the most generous capital allowance regime in the OECD. Add to this the R&D support package for SMEs, and the extended credit scheme, and that is good news. However, I am still very concerned about the increase in the corporation tax headline rate. I absolutely 100% endorse what the noble Lord, Lord Bilimoria, said a moment ago. Would it not have been better if the £25 billion had been used to prevent this increase from 19% to 25%? The headline rate sends a strong signal. It is about the mood music and whether Britain really is the best place in the world to do business.
Another point that I picked up on yesterday was that, as a result of this, the ratio of corporation tax receipts to GDP will rise to the highest level since its inception in 1965. Bearing in mind that Nigel Lawson reduced corporation tax from 65% to 40%, that shows the impact that this will have on business. As Andrew Neil pointed out today in his article, if as an SME or a business of any size you invest £100 today, you can claim back £130 under the super-deductions before paying 90% corporation tax on profits. From April, if you invest £100 you will be able to deduct £100—which is welcome but not as good as it was before—but you then pay 25% on your profits.
I urge the Minister to recognise the concern about this. Even if the Chancellor cannot change his stance on this immediately, I hope very much that he will revisit it at the earliest possible opportunity. I see the Whip looking at me anxiously, very concerned that I will go on too long. So I will just say that, with that one exception, it was an imaginative and well-crafted Budget. It deserves to succeed, and I have no doubt that it will.
Lord Fox (LD)
My Lords, it is a great pleasure to follow the noble Lord, Lord Bellingham. In fact, compared to many speeches he was very restrained in both time and content.
If I were writing a review of this debate, it would be “an eclectic debate with something for everyone”, and that is what we normally expect from your Lordships. I have to both praise and apologise to the noble Baroness, Lady Moyo: by all accounts hers was a fabulous speech, but unfortunately I was unavoidably hooked out of this Chamber during it. I look forward to reading it but also to being in the Chamber when she participates in future debates.
Yesterday, at the other end of this building, a slew of relatively modest changes, with a couple of larger long-term plans, was announced with what I would call traditional ballyhoo. It is worth putting that into some context: at the same time, across the UK, people were not listening to it because they were busy trying to negotiate the problems and impediments in their own lives. As the Chancellor rose, pensioners glanced at their smart meters and worried; parents juggled problems of childcare and work on a school strike day; a pair of young people looked at the cost of a mortgage and then went back to looking at the possibility of renting accommodation, something that my noble friend Lord Lee emphasised. Elsewhere, local businesses put “situations vacant” notices in their windows with little hope of recruiting anyone; manufacturers in their offices wrestled with paperwork that they now need to send their products to France or Germany; and in our hospitals, the effects of the first ever doctors’ strike caused the cancellation of already-delayed treatments, something that my noble friend Lady Brinton emphasised. Meanwhile, in Ukraine, young soldiers were fighting and dying for their freedom; on the beaches of Calais, refugees were wondering how or indeed if their flight from oppression would end; and around the world the global temperature rose by just a little bit more. That was the news agenda and the personal agenda that were going on as the Chancellor spoke. Nevertheless, he got his day in the sun.
We normally expect a little theatre, a flourish, but there were no rabbits—and no hat. Indeed, the childcare bunny, which had apparently been held back for theatrical purposes, had somehow escaped the night before, so instead the Chancellor had to settle for what was in the end a résumé of his department’s leaks. Still, it is convenient to have all the department’s press releases in one document. That the event held no surprises is something to be celebrated, particularly when we compare it to his immediate predecessor’s version of excitement and surprise.
Of course, as with all Budgets, the real news is not the announcement but the details and the analysis of them that emerges later, and that is just starting now. I have to say that the noble Lord, Lord Skidelsky, has done much to undermine my faith in economics. As a chemist, I have an absolute view of the world, but I fear that that is being eroded.
The first statistics concern inflation and, as we saw, the OBR predicts that that will be 2.9%. Whether or not that turns out to be true, the fact is that over the past year inflation has been running at double-digit levels so, whether or not the rate of increase falls, the place where most families find themselves today is very much higher in price and very much harder to afford than it was a year ago.
We must remember the other fact, rather than projection, is that wage increases are running at well below that rate of inflation that we have experienced: 3% to 4% in the private sector and much less in the public sector. So, as we know, real disposable incomes will continue to be hit further as we go forward.
I turn to growth. Again, the noble Lord, Lord Skidelsky, undermined these numbers, but these are the numbers that the Chancellor used. The Chancellor calls what is in essence around 2% per year over the next four years a Budget for growth. Well, as the noble Lord, Lord Bridges, so eloquently set out, 2% per year is not going to touch the growth in need that is out there, never mind the demographics, the cost of debt and all those things. This 2% per year on average is not the growth that will sustain the challenges we have ahead of us.
One thing I think we can put more stead in from the OBR is the scale of the impact of freezing the income tax thresholds. This freezing will lead to a tax rise of £12 billion in 2023-24. This compares to the cost of £3 billion in the same year of extending the energy price guarantee for three months. The Chancellor gave with one hand, but is taking away a great deal more with the other hand. Over time, this freezing of tax thresholds will lead to a total stealth tax rise of nearly £30 billion by 2027-28, or a total of £120 billion over the coming five years, with 3.2 million people dragged into paying income tax and 2.1 million paying at a higher rate. These compound the Government’s historic place as the party of high tax and more than wipe out the meagre support that families were getting over energy bills. At a time when inflation has put so many people under so much pressure, people’s budgets are being hit again, but in a way that is being sneaked in rather than properly announced. If the Chancellor had announced what I think adds up to a rise of about 4 pence in the pound in income tax, you could imagine the outcry.
Moving on, there is much talk about the UK being a science superpower and I am sure we all share ambitions of leveraging our excellent science and learning understanding in this country. Many of us felt that, after the Windsor Framework, it would clear the way for the UK rejoining the pan-European Horizon R&D programme, which by all expert analysis is something from which the UK takes far more than it puts in. But once again we have heard nothing. I ask the Minister: what is the blockage on this issue? When will a decision be announced?
Another theme that should have run through the Budget is the competitive threat posed by the US Government’s Inflation Reduction Act green subsidy programme. A number of your Lordships mentioned this. I remind your Lordships that the so-called IRA is a $369 billion subsidy package on offer throughout the US and it sits on top of a $280 billion CHIPS and Science Act as well. The IRA completely relaxes state aid rules for green industries and really has changed the global game for green investment. Across the world, big global businesses are relocating or planning to relocate their developments to the US to take advantage of this scheme. The EU has had to respond, and is going to announce its net-zero industry Act; we will see how many hundreds of billions of euros are in this pot. So where in this Budget is the equivalent British response? Well, I cannot find it.
I did hear a promise by Chancellor Hunt of funding of £20 billion over 20 years for the nascent carbon capture sector. But let us face it, set against the US model, £1 billion a year is unlikely to unlock the level of investment in carbon capture, clean energy and hydrogen infrastructure that is required to meet climate targets.
Meanwhile, by changing the taxonomy of nuclear energy, any money that could have been spent on a variety of technologies that would deliver near or medium-term progress is now likely to be diverted into Great British nuclear and SMRs. I have a word of warning on SMRs for enthusiasts: no one has built one yet. We will all be looking at the economics and the timelines—[Interruption.] The noble Lord, Lord Howell, shakes his head from a sedentary position, but there is not even a prototype.
The replacement of the super-deduction with something not quite as good is helpful for large taxpaying businesses, and the enhanced R&D tax credit is a good step towards promoting innovation. However, the large proportion of firms that fall outside the 40% intensity threshold will be left feeling mystified by the change in policy since last autumn. R&D tax credits had been a very effective way to create cutting-edge products and services in the small business community, and their loss is felt. Of course, the company has to be in a position to invest. British Chambers of Commerce highlighted in its recent survey that half of its businesses will be struggling to pay their energy bills in April, so investment or any help they might have with it is a rather theoretical exercise.
There are 5.5 million small businesses and 16 million people who work for them, and if the Chancellor hoped to woo small businesses, the signs are that he failed. Responding to the Budget, the Federation of Small Businesses said that it
“will leave many feeling short-changed. The distinct lack of new support in core areas proves that small firms are overlooked and undervalued.”
It sees support being focused on large companies. It would be interesting to hear the Minister’s view on whether small companies are being helped as much as large companies. Also, there is nothing new yet on business rate reform, so can the Minister tell us when we might see something on that?
The Chancellor announced 12 investment zones across the UK. The Minister praised Docklands as an example. Can the Treasury remember how much public money went into Docklands to make it what it is today, and is it planning to put the same level of public money into all 12 of the new investment zones? If so, where is this money coming from? We are also concerned about the lowering of good regulation for both the environment and workers’ rights. I should appreciate it if the Minister could give some assurance that there will be no dilution of employment or environmental regulations in those zones.
Your Lordships would expect me to say that a major flaw in this announcement is the total lack of an industrial strategy—something I have talked about a lot. Investment zones or freeports are no alternative to that. This hole is huge, and we are missing the overall strategy to develop future green industries such as green hydrogen, offshore wind and e-vehicles. Nothing in this Budget will deliver the gigabattery plants we need.
However, I do welcome an old friend. The £100 million innovation fund announced for Greater Manchester, the West Midlands and Glasgow has now been announced three times—so welcome back. The Chancellor and your Lordships have had a lot to say on getting more people back into the jobs market, and here I agree that there is no silver bullet. There are a lot of different measures in this Budget focusing on health, pensions, welfare and childcare, and many of your Lordships spoke at length on them, so I do not propose to reproduce those comments. In the end, success in all of these will be measured by results, and results come from effective implementation of these policies. Implementation is something many Governments have struggled with over the years.
The health checks may deliver results, but would not putting more money into delivering better primary healthcare be a way of improving the health of our age 50-plus employees? Pensions thresholds are aimed at one very specialised end of the market, and it will be interesting to see whether this achieves what is intended. My feeling is that this is a multidimensional problem that a single £1 billion solution is trying to solve. I think it unlikely that we will get what we want or, indeed, get value for the money we are putting in. However, I understand why the Government are trying.
The welfare changes are complex but should be seen in the context of the huge cuts that are already baked into the welfare system, but which do not kick in until after the end of this Parliament. I suggest that, taken with the increased pressure on people to work, the poorest will suffer the most. That is usually what happens when welfare changes.
The childcare changes are potentially very significant and are welcome, with two provisos. The first is that the services have to be available, staffed and economically viable, which comes down to delivery. Secondly, they will not happen for some time. The nine month-old baby who will benefit from this new policy has not been born.
Finally, I would like to suggest an untapped source of tens of billions of pounds. This does not mean a new tax or require cuts in public spending; it simply requires properly collecting the tax due that has not been paid. In January, the Commons Public Accounts Committee found that an “eye-watering”—its hyperbole, not mine—£42 billion in unpaid taxes are owed to HMRC. Some 5% of owed taxes remain uncollected. There seems to be neither the staff nor the will to collect this cash. I ask the Minister: why not? It is not as if we do not need the money.
The Chancellor, in delivering his speech, said that his plan is working. Others will judge that. The pensioner freezing in a cold house; the family struggling to balance their lives; the chronically ill person awaiting treatment; the business team trying to keep their enterprise afloat: they will be the judges of what is working and what is most definitely not.
Lord Tunnicliffe (Lab)
My Lords, I begin by joining others in congratulating the noble Baroness, Lady Moyo, on her maiden speech. Her wide-ranging experience makes her an excellent addition to your Lordships’ House, and I very much look forward to her participation in future debates.
It is rare for your Lordships’ House to be given the opportunity to debate a Budget so soon after the Statement was made in the other place. With the Chancellor’s speech lasting for more than an hour, perhaps the hope was that colleagues would not have had sufficient time to fully digest his remarks or the Red Book. The Government’s economic plans have generally not held up to scrutiny, although the immediate reaction of many who watched yesterday’s proceedings may well have been: “Was that it?”
I am very grateful to the Minister for her introduction to this debate. Unfortunately, her speech painted a picture that many across this country simply will not recognise. Yes, the Office for Budget Responsibility’s short-term forecasts look better than in November, but growth expectations beyond 2025 have been downgraded and remain low compared to many of our neighbours and economic competitors. Yes, inflation is forecast to fall drastically by the end of this calendar year, but that does nothing to protect low and middle-income households from sharp increases in household bills—not just energy—or food inflation of around 17%.
Yes, there have also been changes to pensions to resolve specific issues faced by doctors and some other public sector workers, but the Treasury has chosen to do this in a way that also provides a handout to the richest 1%. In the words of Paul Johnson, the pension changes amount to using a
“sledgehammer to crack a … nut.”
The measure will cost taxpayers an estimated £70,000 for each person returned to the labour market, with the annual cost of maintaining the changes topping £1 billion by 2026-27. As families face rising bills, higher costs and frozen wages, this pensions bung is, as Rachel Reeves has said,
“the wrong priority, at the wrong time, for the wrong people.”
That is why a Labour Government will reverse this move, unless of course the Chancellor decides to perform yet another U-turn in the coming weeks.
As I just alluded to, life is currently a real struggle for so many across our country. Parts of this Budget may help certain people in limited ways, but the Chancellor’s Statement will have done little to instil that all-important sense of hope—I repeat, hope—for the future. The idea that 2% annual GDP growth is the pinnacle of what this great country can achieve is, frankly, laughable. That is why Labour has set the ambitious but achievable goal of securing the highest sustainable growth in the G7. We want to lead, while the Conservatives seem happy to languish at the bottom of the international league tables.
Despite various initiatives, relaunches and even ministerial reshuffles, our economy remains smaller now than it was prior to the coronavirus pandemic. I have been saying that for a year, so why does it remain true and what is the result? Not only are we the only G7 country which will see negative growth this year, but people across the UK are enduring the largest hit to their living standards, of around 6%, since comparable records begun. British families are now, on average, poorer than their French and German counterparts. Wages in real terms are lower now than 13 years ago. Real weekly wages are likely to remain below their 2008—yes, 2008—levels until 2026.
Meanwhile, the OBR says average interest rates on outstanding mortgages are now twice as high as was forecast back in 2021. A typical household remortgaging faces a Tory mortgage penalty of £1,950. Families and working people are therefore left paying the price of the Conservative Party’s failures.
As if higher mortgage bills were not enough, freezes to tax thresholds from April will mean an extra £500 on income tax for basic-rate taxpayers. The OBR believes that, by 2027-28, the threshold freeze will have brought 3.2 million people into paying basic-rate tax, with 2.1 million moving into the higher-rate bracket. People may accept that if they receive quality public services in return, but 13 years of Conservative control has seen many services sold off or run into the ground. The situation is perhaps best summed up by the Resolution Foundation, which describes Britain’s economy as being
“stuck in a deep funk”.
That respected body also says that even when people are supported into work, they are
“getting poorer, and paying more tax but seeing public services cut.”
That is not what people voted for.
Of course, there are things in this Budget that we welcome—in principle, at least. The promised expansion of childcare should be helpful for many parents. In his initial response to the Budget, Paul Johnson said that he doubted whether it would make “a big difference” to getting mothers back to work. How many people does the Treasury believe this policy will support back into employment?
We also know that childcare ratios will be relaxed, moving from 1:4 to 1:5, a move which the Early Years Alliance believes risks
“severely compromising the safety and quality of care”.
Can the Minister confirm whether this will be kept under review and, if so, how?
In addition, we welcome the decision to scrap higher tariffs for households with prepayment energy meters and to extend the £2,500 energy cap to the end of June. The Labour Party has been calling for these steps for some months, and the Government’s choice to drag this out has caused unnecessary additional anxiety for many. We do not mind the Government availing themselves of our ideas, whether on the price guarantee, the windfall tax or prepayment meters but, with billions of pounds of untaxed energy profits still left on the table, would the Chancellor also like to adopt our proposal to close the remaining holes in his energy levy?
We also endorse the decision to go through with the increase to corporation tax, given that it is accompanied by improved allowances for firms that invest in their UK operations. As outlined previously in relation to income tax, the personal tax burden is at the highest level since the Second World War. It is almost five percentage points higher than at the start of the pandemic, with no sign of the Chancellor finding the fiscal headroom needed to bring personal taxes down. Meanwhile, corporation tax rates in this country have gone up and down like a yo-yo. Not only has that shifted more of the tax burden on to working people, but it has created uncertainty that has made it harder for businesses to plan long term and to invest in this country’s future. Business taxes should not be unduly high, but firms must pay their fair share. Labour has committed to reviewing the business tax system across the board. It is only by adopting a new, fair and long-term framework that we can move past the short-term focus on share buybacks and dividends, towards a system with investment and job creation at its heart.
To conclude, this Budget was the chance for the Government to unlock the enormous promise and potential of Britain. Instead, it merely papered over the cracks of 13 years of Conservative economic failure. Despite the ministerial merry-go-round and policy U-turns of last summer, our economy remains on track to contract overall this year. We may avoid a recession, but the fact that Ministers are celebrating that shows just how low the bar has been set. People’s living standards remain on track to fall by an unprecedented 6% over two years, and the UK will remain towards the bottom of international league tables. The Budget has done nothing to change those facts or to resolve many of the major issues of the day, with many of the difficult decisions left until after the next election. Crucially, it has done nothing to give people a sense of hope for the future. Instead, it appears to be the latest step in our managed decline, as Conservative Britain once again becomes the sick man of Europe.
Baroness Penn (Con)
My Lords, I thank all noble Lords for their contributions to this debate. Given the range of expertise that has been contributed today and the range of topics we have covered, I will spend my time directly answering as many of noble Lords’ comments as possible.
Many noble Lords reflected on the economic circumstances we find ourselves in. The current high levels of inflation we face, with increased costs for households and businesses, have a clear impact on growth. As my noble friend noted, the best tax cut we can give households and businesses is to get inflation back under control, and that is exactly what the OBR forecasts will happen.
My noble friend Lord Bridges asked about the difference between the Bank of England’s forecast and the OBR’s forecast, and the noble Lord, Lord Skidelsky, also spoke about the difficulties of producing forecasts in these times. Specifically on those differences, the Bank of England made its latest forecast in February and it was based on different market determinants from the time. In its economic and fiscal outlook, the OBR reports that the difference is driven by falling energy prices and interest rates since the Bank’s forecast and, as my noble friend Lord Willetts noted, a predicted greater recovery in labour force participation following the measures announced in the Budget.
Inflation will reach 2.9% by the end of the year, but we recognise that the next 12 months will put real pressure on people, particularly when it comes to their energy bills. The noble Baroness, Lady Brinton, said that this Budget did nothing to help with that and I really must correct her. Not only did it extend the energy price guarantee at £2,500 for the next three months, it removed the pre-payment meter premium, which is something that this House has called for many times. It is also important to remember that significant further help announced in the Autumn Statement is still to be delivered to households across the country.
The noble Lord, Lord Bird, asked for universal credit to keep pace with inflation and that is exactly what will happen. Those relying on universal credit, the state pension and other means-tested benefits will see them go up in April by more than 10%, and we have further cost of living support payments worth £900 to be paid over the next year to 8 million households on means-tested benefits. Support payments of £300 will go to more than 8 million pensioner households next winter and £150 will be paid to those on disability benefits. It is very important that people know that further support with the cost of living is on its way. In fact, support to households to help with higher bills is worth £94 billion, or an average of £3,300 per household across this year and next.
The noble Lord, Lord Bilimoria, said that there was no support for businesses with their energy bills. But the energy bills discount scheme will provide all eligible businesses and other non-domestic energy users with a discount on high energy bills until 31 March 2024, following the end of the current energy bill relief scheme. It will also provide businesses in sectors with particularly high levels of energy use and trade intensity with a higher level of support.
The noble Baroness, Lady Brinton, asked why no equality impact assessment had been produced with this Budget. I reassure noble Lords that His Majesty’s Treasury has rigorous processes in place to ensure that we comply with our legal requirements. We go beyond these by publishing a summary of equality impacts for tax measures within the tax information and impact notes alongside the Finance Bill.
When it comes to distributional analysis, that was published in the 2023 Spring Budget and it shows that the typical household at any income level will see a net benefit next year following government decisions made in the Autumn Statement 2022 and onwards. Low-income households will receive the largest benefit in cash terms and as a percentage of income from government decisions. Furthermore, looking across all tax, welfare and spending decisions made since the 2019 spending round, the impact of government action continues to be progressive, with the poorest households receiving the largest benefit both in cash terms and as a percentage of income in 2024.
The noble Lords, Lord Eatwell, Lord Bilimoria and Lord Tunnicliffe, and many others spoke about the impact of the freeze on tax thresholds, announced last spring and extended in the Autumn Statement. It is true that, after a colossal effort to fight Covid, with the Government spending over £370 billion on measures to support the NHS and our economy, we have had to take difficult decisions to get our public finances back on track.
We have frozen tax thresholds and, as we will come to, we have asked businesses to contribute more, through increased corporation tax rates. However, I say to my noble friend Lord Bellingham and others that 70% of businesses will see no change to their corporation tax headline rate, because small businesses are exempted, and only 10% of businesses will pay that top rate of 25%.
When it comes to the personal tax threshold freeze, noble Lords should note that, even after the freezes that we are putting in place, the changes we have put in place since 2010 mean that someone on an average salary will still pay £1,000 less in income tax and national insurance next year than if thresholds had gone up in line with inflation since 2010. Thresholds will be higher at the end of the period of the freeze than if they had been simply increased with inflation since 2010.
We had to take some difficult decisions on the public finances but that does mean—I hope this offers some reassurance to my noble friends Lord Bridges and Lady Lawlor—that we are bearing down on debt and have the deficit falling in every year of the OBR forecast. That means we are projected to meet the Prime Minister’s second pledge: to get debt falling. Indeed, total managed expenditure as a percentage of GDP is forecast to fall in each year of the forecast. We have also launched an efficiency and spending review; as part of the Autumn Statement 2022, departments have been asked to identify further efficiencies, building on the 5% efficiency challenge set at the 2021 spending review.
This brings me to the third pledge from the Prime Minister on our economy: to get it growing. My noble friend Lady Moyo spoke so eloquently about the importance of growth as a prerequisite of good public services, as a precursor to innovation and as a necessity for a healthy democratic society. That is why the Chancellor focused on making this a Budget for growth.
The noble Lord, Lord O’Neill, spoke of his frustration at what he saw as the artificial constraints that the design of fiscal rules has placed on investing in growth. I welcome that debate; although we may have different views on their design, I hope we can both agree on the importance of having a framework in place to maintain fiscal credibility, as was well expressed by my noble friend Lady Lea of Lymm.
I very much agree with noble Lords on the importance of investment. I welcome the point made by the noble Lord, Lord O’Neill, that, when it comes to areas such as corporation tax, we should not focus solely on the headline rate—although that remains the lowest in the G7—but look at how we build incentives into that tax. Full expensing will be a tax cut for businesses investing, worth around £9 billion a year, and I acknowledge that noble Lords would like that to be made permanent. The Chancellor has said he would like that too, when fiscal circumstances allow. However, it is worth noting that the increase in the annual allowance to £1 million is permanent and amounts to full expensing for 99% of businesses in this country.
I reassure the noble Lord, Lord O’Neill, that the Government do not see the solution to investment in this country as something for only the private sector to do. We are continuing to deliver the biggest programme of capital investment in 40 years, and public sector net investment will be 2.5% of GDP on average over the forecast period, delivering more than £600 billion of planned public sector gross investment over the next five years.
My noble friend Lady Moyo spoke of the most effective investment being multidecade in timeframe, and when public and private sources of investment come together. That is exactly what we are seeking to do through our commitment to £20 billion of support to the early deployment of carbon capture, usage and storage, allowing the Government to enter commercial negotiations with successful emitter projects and providing certainty over revenue streams to stimulate private investment.
The noble Lord, Lord Fox, spoke about our response to the US Inflation Reduction Act, and other noble Lords mentioned plans in Europe. Our approach to CCUS shows that we have a plan to stimulate investment in our green industries but in our own way, building on the success that we have had, for example, on contracts for difference with offshore wind, which has led us to be the second-largest producer of offshore wind in the world, behind only China. Further, the launch of Great British Nuclear and the competition for small modular reactors, along with our commitment to Sizewell C, show an ongoing commitment to the UK nuclear industry and to meeting our net-zero targets.
Many noble Lords, including the noble Lord, Lord Bilimoria, welcomed the announcement of investment zones, which will grow clusters in one of our five future growth sectors, partnering great research institutions with local areas. I say to the noble Lord, Lord Fox, that each investment zone will have access to up to £80 million of funding, but this is also about policy flexibility, to allow for greater collaboration and to address the needs of each individual area. He asked about environmental standards in investment zones. I reassure him that the Government are committed to ensuring that investment zones uphold the UK’s high environmental standards and meet our international commitments.
As well as our plans to support investment, many noble Lords focused on the workforce measures that we included in this Budget. The noble Baroness, Lady Brinton, asked about the Government’s planned changes to remove the work capability assessment and whether we will also reform the PIP assessment process. While many people claiming health and disability benefits have a positive experience, we want to improve the overall experience and trust in the benefits system for disabled people. We are doing this by making it easier to communicate and engage with us by improving the accessibility of our services and buildings. We are also testing new initiatives to make it easier to apply for and receive health and disability benefits.
The noble Baroness, Lady Brinton, also asked why there was no mention of social care. She will know that the Government are investing record levels of funding in response to the pressures facing both health and social care services. It was at the Autumn Statement 2022 that we made available up to £6.1 billion for the next year and £8 billion in 2024 in additional funding for the NHS and adult social care.
That brings me on to the pension tax changes made in this Budget, which were remarked on by many noble Lords, including the noble Lord, Lord Davies of Brixton, the noble Baroness, Lady Jones of Moulsecoomb, and my noble friends Lord Bridges and Lord Willetts. I will try to address the different points raised. The aim of our pension tax changes is to incentivise highly skilled and experienced individuals to remain in the labour market, bringing the benefit of their knowledge and experience to the UK labour force. Some noble Lords said that this measure is too expensive. My noble friend Lord Willetts helped me on this in terms of the cost per additional worker in the workforce being similar for this measure compared with childcare measures.
Noble Lords then said that it was poorly targeted because, while the childcare measures have the benefit of helping potentially lower-income households, these measures will be targeted at those people who are relatively better off. Again, my noble friend Lord Willetts helped me by pointing to the benefits of the policy being not only about the recipient of the tax relief but about its wider effect. Here, we are focused on a big change in retaining senior clinicians in our NHS workforce. The noble Lord, Lord Davies of Brixton, was sceptical about the difference that this policy change would make to retaining those clinicians. I have two quotes: the shadow Health Secretary, Wes Streeting, said that the cap on doctors’ pensions was “crazy” and it would “inevitably save lives” to scrap it; and the BMA said that scrapping the lifetime allowance is
“an incredibly important step forward and … potentially transformative for the NHS as senior doctors will no longer be forced to retire early and can continue to work within the NHS, providing vital patient care.”
The BMA went on to say that
“the Chancellor has acted decisively to avert a major workforce crisis”.
The noble Lord, Lord Davies of Brixton, then asked why we did not focus the measure solely on doctors. He gave one of the answers himself, saying that we passed a law to change pension provision for senior judges. We can bring in this tax change by April for the start of the new tax year. Another reason why we have not limited it to one profession, as the noble Lord will also know as he has raised other cases with me in the past, is that these reforms will benefit experienced key workers, including head teachers, police chiefs, senior personnel in the Armed Forces, air traffic controllers and prison governors.
The noble Lord, Lord Eatwell, asked about the interaction with inheritance tax. I reassure him that the costings produced and published at Spring Budget with regard to the lifetime allowance included the inheritance tax impacts for the scorecard period. I further say to him that the primary purpose of a pension is to provide an income in retirement. If someone dies before they get to use it, we think it is right that beneficiaries can inherit those funds, and they are not usually part of someone’s estate for inheritance tax purposes. We are aware that some people may use their pensions to try to reduce their inheritance tax liabilities rather than to provide for their retirement. We do not think that pensions should be used as a vehicle primarily for inheritance tax planning and we will keep all aspects of the tax system under review.
I turn last, but by no means least, to the Government’s plans for childcare. In my enthusiasm for announcing our substantial reforms in this area, I made an error in my speech. I made reference to youth mobility schemes. I need to clarify that those schemes have not been agreed but are something that we would like to explore with international partners over coming months and years. I apologise for inadvertently misleading the House on that matter.
However, I was pleased to hear so many noble Lords welcome the policy on childcare; it will be truly transformative. The noble Baroness, Lady Brinton, asked whether the free hours would be adequately funded. I reassure noble Lords that the Government will provide £4.1 billion of funding by 2027-28 to provide 33 hours for nine months to three years, and we will provide £204 million from September next year to uplift the existing rates for providers. The noble Lord, Lord Tunnicliffe, asked about the changes to ratios. Noble Lords will know that this move is in line with many other comparator countries in Europe and indeed Scotland. The change is optional for providers, but DfE will continue to closely monitor the quality of care in early years settings, including through Ofsted.
The noble Lord, Lord Eatwell, quoted the Sutton Trust. He is right that the aim of the policy is to remove the costs of childcare as a barrier for parents who want to return to work, so the extension of free hours is for working parents. To make that transition even easier, for those who are on universal credit we have increased the amount that they can claim for childcare through universal credit and are paying that amount up front.
The noble Lord, Lord Tunnicliffe, asked what impact the policy would have on employment. The OBR expects that by 2027-28 around 60,000 more people will enter employment, and around 1.5 million mothers will increase the hours they work as a result of this policy. The OBR has further said that the policy has by far the largest impact on potential output in this Budget.
In my speech, I may have been the Tigger to my noble friend Lord Bridges’ Eeyore, but I reassure noble Lords that the Government are under no illusions about the challenges that we face both at home and with the increased threat picture abroad. To my noble friends Lord Howell of Guildford and Lord Tugendhat, I say that that is why in this Budget we have provided an additional £11 billion for defence and national security priorities over the next five years, with nearly £5 billion going in during the next two years to improve the resilience and readiness of our Armed Forces. This is on top of the spending review 2020 cash uplift of £24 billion over the spending review period for defence, which is the largest sustained increased since the end of the Cold War.
What of the Government’s final goal of growth? The Spring Budget made the biggest increase to supply reforms that the OBR has ever scored in its forecast, bringing 110,000 workers into the workforce and increasing GDP by 0.2%. My noble friend Lord Bridges is also correct that population change contributes a further 0.5% to potential output.
The noble Lord, Lord Tunnicliffe, asked about the recovery of our economy since the Covid pandemic. When you look at private sector output, you see that our economy has more than recovered since the pandemic. The picture is different on public sector output, but that makes the figure not very comparable with other international countries as we measure our statistics in a different way.
Overall, supported by policy and underlying conditions, the OBR has revised GDP upwards in every single year of this forecast. With inflation down, debt falling, growth going up, and transformative policies for investment in our growth and in childcare to get people back to work, this is a Budget that I can commend to the House.