House of Commons
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Oral Answers to Questions
(1 year, 9 months ago)
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Philip Davies (Shipley) (Con)
The Chancellor of the Exchequer (Jeremy Hunt)
Like all Conservatives, I believe in reducing the burden of taxation wherever possible, while always demonstrating a responsible approach to public finances.
Philip Davies
While I appreciate that this is largely as a result of the idiotic decision to lock down the country and the economy for the best part of two years, the Chancellor nevertheless finds himself presiding over a high-tax, high-spend, low-growth, quasi-socialist economy. When can those of us who remain Conservatives expect to see some tax cuts and a reduction in the burden of taxation?
Jeremy Hunt
I thank my hon. Friend for the inimitable way in which he asked his question. I hope that he was reassured to some extent by the £9 billion cut in the planned level of corporation tax in the Budget, and, if we make the arrangement for capital allowances permanent, as I should like to, that will give us the best investment incentives anywhere in the OECD.
Peter Grant (Glenrothes) (SNP)
May I be the first to defend the Chancellor, and indeed the shadow Chancellor, against any accusation of socialism?
Can the Chancellor explain why the Cameronbridge distillery in my constituency, which is a major employer in an area of high unemployment, faces an increase of about £350 million in its excise tax bill this year? That is more than the additional amount that the Chancellor claims to be giving to the whole of Scotland. Will he explain why my constituents, and the companies that employ my constituents, are having to contribute additional taxes to pay for his economic failure?
Jeremy Hunt
Let me gently say to the hon. Member that the freeze in alcohol duty which we introduced in the autumn of 2021, and which will continue until August this year, has constituted a £2.7 billion tax cut over four years. We do everything we can to help the vital Scottish whisky industry.
Harriett Baldwin (West Worcestershire) (Con)
There was a significant tax cut in the Budget that has been greatly welcomed by drivers in my constituency and elsewhere, namely the extension of the 5p cut in fuel duty and the freezing of the escalator, but does the Chancellor accept that by postponing that decision until an election year—next year—he is simply continuing the fuel duty fiction that our Committee has highlighted?
Jeremy Hunt
I am delighted that my hon. Friend welcomed the freezing of fuel duty, which means that over the period for which it has been frozen, the average motorist will have saved £200. There is a specific reason why I wanted to continue to freeze it this year: combined with the extension of the energy price guarantee, it will reduce CPI inflation by 0.7% in a year in which headline inflation is still over 10%.
Andrew Gwynne (Denton and Reddish) (Lab)
How is it fair that the Government are picking the pockets of working people through frozen income tax thresholds while at the same time allowing the super-rich non-doms to effectively opt out of paying tax in this country, which is costing us £3.2 billion this year?
Jeremy Hunt
Let me remind the hon. Gentleman what we have done for people on low incomes. Because of the increase in the income tax and national insurance thresholds which was completed last year, those on the average wage of £28,000 pay £1,000 less in tax and national insurance than they would have paid at 2010 levels—that is a tax cut that his party opposed at each and every stage.
David Simmonds (Ruislip, Northwood and Pinner) (Con)
The Chief Secretary to the Treasury (John Glen)
Responsibility for transport and air quality within Greater London is devolved to the Mayor of London and Transport for London via the Greater London Authority Act 1999. It is for the Mayor to assess the economic impact of the proposed expansion of the ULEZ, and to consult properly to ensure that it is not just a tax on the poorest motorists.
David Simmonds
Small business owners and elderly and disabled residents affected by the ULEZ in my constituency are concerned about the fact that the Mayor’s process has not been as independent or robust as it should be. Will my right hon. Friend consider commissioning the Treasury’s own independent assessment of the impact of the ULEZ, so that my constituents and local business owners can really understand how it will affect them?
John Glen
As the Prime Minister said just last week,
“the Mayor of London should listen to the voices of commuters, families”—
including many of my hon. Friend’s constituents—
“and small businesses as he inflicts his…tax on them.”—[Official Report, 15 March 2023; Vol. 729, c. 832.]
As the House has just heard, our Budget last week supported hard-pressed motorists by cancelling the planned increase of about 11p in fuel duty, saving drivers about £5 billion this year.
Robbie Moore (Keighley) (Con)
Julian Sturdy (York Outer) (Con)
Tom Randall (Gedling) (Con)
The Chancellor of the Exchequer (Jeremy Hunt)
The Government have provided unprecedented support to help households and businesses with energy costs, totalling £94 billion for households and £8 billion for businesses. That is more than £100 billion over 2022 and 2023.
Robbie Moore
One of my local foundry businesses based in Keighley, Leach & Thompson, has kindly contacted me to say that British Gas wants to charge it £41.50 a day as a standing charge and that its unit rate has doubled. That is having a dramatic impact on the business. The Government have helped with the unit charge, but will the Chancellor outline what steps he is taking to help support small and medium-sized businesses with the extortionate standing charges being quoted by energy companies?
Jeremy Hunt
I thank my hon. Friend for raising this issue, which I know is shared by many Members across the House. That is why on 9 January I wrote to Ofgem asking it to update me on its investigation into the business market, which is not a regulated market like the consumer market. It has replied saying that it has concerns. It is concerned about significant changes in standing charges, about an increasing number of suppliers asking for security deposits and raising the cost of those deposits, and about potential breaches of the rules of the energy bill relief scheme. It will get back to me with its solutions as soon as possible.
Julian Sturdy
When I was talking to businesses in York on Friday, they stressed to me that energy bills were still a major worry for many of them, especially in the hospitality sector, which is so important to our city. It is clear that the next six months will be critical for many of those businesses, so can the Chancellor provide any more targeted support, especially to the hospitality sector?
Jeremy Hunt
I ask my hon. Friend to keep me updated on what is happening with the hospitality sector in his constituency, but he will know that we have already introduced support for business rates, with a 75% reduction in business rates up to a cap of £110,000, and that the energy bills discount scheme is providing more than £8 billion of support over this year and last. We are doing everything we can.
Tom Randall
Does my right hon. Friend agree that a long-term energy strategy is critical to helping people with the cost of living? Will he outline what steps the Government are taking to enable this through the funding of nuclear energy?
Jeremy Hunt
My hon. Friend is absolutely right to raise this issue, as is my hon. Friend the Member for Ynys Môn (Virginia Crosbie), who does so on every single occasion she can. Nuclear is important because there will be times when the weather does not generate the energy we need from renewable sources. That is why we announced in the Budget that we are going ahead with Great British Nuclear and with the competition for small modular reactors, provided that an investigation this year finds that that is viable, and we will class nuclear power as environmentally sustainable, subject to consultation.
Christine Jardine (Edinburgh West) (LD)
A number of small businesses in my constituency are struggling with their energy costs, and two have recently gone to the wall, but major companies in the whisky sector are also struggling. The Chancellor says that the Government are doing what they can to support them, but does he appreciate that that is not how it feels in Scotland? This major industry, with its high-intensity use of energy in distilling, is facing a 10% increase, which will mean that something like 75% of the price of a bottle of whisky goes to the Exchequer. The industry does not feel like it is being helped. Does he appreciate that it feels like it is being kicked at a very difficult time?
Jeremy Hunt
I recognise the challenges that the distilling industry and many other industries are facing. That is why we are giving more than £100 billion of support to businesses and consumers, but I would say to the hon. Lady that Scotch whisky has received nine cuts or freezes in the last 10 Budgets, so we are doing everything we can.
Alison Thewliss (Glasgow Central) (SNP)
It is all fine and well for the Chancellor to say that he is in correspondence with Ofgem, but the business energy sector remains unregulated and many businesses in my constituency are stuck on very high tariffs because of the increase in prices, which have now to some degree gone down. What will he do about those people who are marooned on higher tariffs? It is costing their businesses dearly and those businesses may not even survive.
Jeremy Hunt
That is exactly why I wrote to Ofgem. Wholesale gas prices are now lower than they were before the Ukraine invasion. The hon. Lady is right to say it is not a regulated market and I want to find out from Ofgem what it thinks should happen to avoid precisely the problem she talks about.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
Many pubs and breweries are locked into energy bill contracts that are staggeringly high, and they are calling for an opportunity to renegotiate them. What further support will Ministers offer the sector with its energy bills, particularly recognising the financial impact that the increase in alcohol duty will have?
Jeremy Hunt
We are doing a great deal. As the hon. Lady will know, we set up a new scheme, the energy bills discount scheme, to help businesses in the coming year. As I mentioned to my hon. Friend the Member for York Outer (Julian Sturdy), we are also giving them 75% relief on their business rates. We will continue to do everything we can for this very important sector.
Henry Smith (Crawley) (Con)
The Chancellor of the Exchequer (Jeremy Hunt)
In addition to extending the energy price guarantee, and to help people further, cost of living payments for vulnerable households will kick in next year. We are also uprating benefits and increasing the national living wage to £10.42 an hour.
Henry Smith
What assessment has my right hon. Friend made of the saving a typical family will achieve as a result of his fuel duty measures announced in last week’s Budget?
Jeremy Hunt
I thank my hon. Friend for saying that. We think the average driver has saved about £200 in total since the 5p cut was introduced, but we are also introducing draught relief for beer drinkers in pubs and 30 hours of free childcare for young parents who are struggling with childcare costs. There are a lot of cost of living measures in the Budget.
Jim Shannon (Strangford) (DUP)
I thank the Chancellor for all he does, and for his hard work. It is more than just beer drinkers, of course. Carers who also work part time are precluded from receiving carer’s allowance if they earn just over the threshold. Will he consider uplifting the carer’s allowance earnings threshold in line with inflation?
Jeremy Hunt
I thank the hon. Gentleman for mentioning carers, who do an amazing job. It is fair to say that our NHS and care systems would fall over without the incredible job carers do. We will always keep under review what we can do to help these very important people.
Martin Vickers (Cleethorpes) (Con)
The Chief Secretary to the Treasury (John Glen)
The Government are committed to creating an environment in which economic growth benefits all. The latest data indicates that productivity in Greater Lincolnshire grew by 8.4% from 2010 to 2020, compared with UK productivity growth of 7.9% over the same period. Coastal communities such as Cleethorpes play a vital role in the economy. I am pleased that, following the announcements on the second levelling-up fund, more than £18 million has been granted for the Cleethorpes masterplan.
Martin Vickers
The county of Lincolnshire has great opportunities for economic development in both rural and urban areas. In particular, the Cleethorpes constituency is a major centre for the renewable energy sector and contains a major port at Immingham. Freeport status has been granted for the Humber freeport, but I understand that we are awaiting final Treasury sign-off. Can the Minister give us an indication of when that will happen?
John Glen
I am pleased to confirm that the full business case for the Humber freeport has now been conditionally approved by the Treasury, with full approval subject to the customs site being designated and the freeport signing a memorandum of understanding with the Department for Levelling Up, Housing and Communities. The Humber freeport is already open for business, supporting the regeneration of the region by creating jobs and attracting new business investment. I am sorry that Treasury processes can sometimes appear tortuous.
Carla Lockhart (Upper Bann) (DUP)
The Chief Secretary to the Treasury (John Glen)
Tax-free childcare provides financial support for working parents with their childcare costs. In addition to tax-free childcare, the Chancellor announced at the spring Budget that all eligible working parents in England will be able to access 30 hours of free childcare a week for 38 weeks of the year, from when their child is nine months old until they start school.
Carla Lockhart
I thank the Minister for his response. When will the Government start to reward the working families of this United Kingdom? We have a Chancellor who is giving tax breaks to the wealthy to top up their pension pots, yet he cannot support working families by increasing the personal allowance or by offering tax-free childcare that supports all families with childcare needs, particularly families with older children. The high-income child benefit charge remains untouched, leaving households that earn much less than others unaffected. Can the Chancellor update us on his plans to reform this deeply unfair practice?
John Glen
I do not accept the overall characterisation that the hon. Lady has given. Just in November last year, 428,000 families and 511,000 children benefited from tax-free childcare. The announcements last week will make a significant contribution, and of course that work will start immediately, with the Department for Education consultation. We have a commitment of £204 million for the coming financial year, and £288 million for the following year, to increase supply so that we can deliver this as quickly as possible.
Dame Andrea Leadsom (South Northamptonshire) (Con)
I congratulate the Treasury team on the excellent new policy of providing much more childcare support to families. Will my right hon. Friend persuade the Chancellor to meet me and a small group of colleagues to talk about the policy in the round and about how we can give more support to all families, providing more flexibility where informal childcare is provided—for example, by grandparents—and ensuring that families who want to look after their children at home are not, in effect, left out and left in poverty as a result of the decisions they make for their family?
John Glen
I thank my right hon. Friend for her question, and I welcomed the chance to discuss this matter at length with her recently. The Chancellor has indicated that he would be happy to meet her, and I would also be happy to meet her again.
Kate Osborne (Jarrow) (Lab)
The Chief Secretary to the Treasury (John Glen)
The Government remain committed to full genuine gender equality and to supporting women. In particular, we are supporting women into work through our new childcare package, which I just mentioned, allowing people to return to work sooner; encouraging business investment through schemes such as the community investment tax relief; and creating new job opportunities with our labour market package. In developing proposals for the spring Budget, the Treasury takes care to consider the equality impacts on those sharing protected characteristics, including gender, in line with our legal obligations and the Government’s strong commitment to promoting fairness.
Kate Osborne
I thank the Minister for his response. Let me help him out. If he had made an adequate assessment, he would have found that the spring Budget failed women. It failed young women, women in work and pensioners. Women are more likely to rely on and work in public services, and this Budget made their lives worse, not better. Most of the UK’s poorest pensioners are single women, and the gender pensions gap needs to be addressed. Will he agree to urgently put forward a compensation package to deal with the injustice faced by 1950s women—the WASPI women?
John Glen
I do not accept that. I think the WASPI issue has been covered many times, by Ministers from the Department for Work and Pensions and elsewhere. We are putting in £4.1 billion by 2027-28 to expand free childcare. This Government have a record to be proud of: we have increased the number of women in full-time work; we introduced shared parental leave; we introduced the Domestic Abuse Act 2021; and we made a range of interventions last week that many women up and down the country will be very pleased with.
Mike Amesbury (Weaver Vale) (Lab)
Andrew Western (Stretford and Urmston) (Lab)
The Economic Secretary to the Treasury (Andrew Griffith)
Mortgage lenders are required to offer a range of tailored support to borrowers in financial difficulty. The Chancellor and I have made clear our expectation that they live up to those responsibilities.
Mike Amesbury
A typical family are now paying up to £2,000 more for their mortgage, partially as a result of the former Prime Minister. First, will the Chancellor apologise to those people, who number about 20,000 in my constituency? Secondly, will he seriously do something about it?
Andrew Griffith
The Government are supporting households with a £94 billion package of support. We have kept the energy price guarantee for an additional three months and we are bearing down—I hope the hon. Gentleman joins us in doing this—on the biggest cost of living challenge faced by families, which is inflation.
Andrew Western
Thirteen years of failed Tory economic policies, alongside last year’s disastrous mini-Budget, have, as my hon. Friend the Member for Weaver Vale (Mike Amesbury) says, left thousands and thousands of mortgage holders subject to high interest rates and sky-high inflation. So I repeat his call: will any member of the Treasury team have the decency to apologise to the very many hard-pressed families who are currently subject to the Tory mortgage penalty?
Andrew Griffith
Interest rates are not only falling but are still below the level at which they peaked under the last Labour Government, despite the fact that we have had a covid pandemic and war in Ukraine. I welcome the news last week from the Office for Budget Responsibility that the country is on track to avoid a recession, and we must never forget the words of the right hon. Member for Birmingham, Hodge Hill (Liam Byrne): there is no money left.
Alun Cairns (Vale of Glamorgan) (Con)
A competitive and viable banking sector is essential to offer competitive mortgages to constituents right across the country. What assessment has my hon. Friend made of the treatment of additional tier 1 bonds in relation to the Credit Suisse takeover, which could well undermine the sector elsewhere, and what assessment has he made of the value of those bonds here in the UK?
Andrew Griffith
I thank my right hon. Friend for his comments. The Government join the Bank of England in welcoming the comprehensive set of actions taken yesterday by the Swiss authorities to ensure financial stability. It would not be for me to talk from the Dispatch Box about the treatment of creditors, but the UK’s bank resolution framework has a clear statutory order in which shareholders and creditors would bear losses in a resolution or insolvency scenario.
Mr Pat McFadden (Wolverhampton South East) (Lab)
The Conservative party wants to pretend that last September’s mini-Budget and its impact on mortgages was all a bad dream, but it is more than a bad dream for the 4 million households who will face a mortgage rise this year on either fixed or variable rates. The average two-year fixed rate deal is now around £2,000 a year more than it cost in August last year. That is real money and real costs. What is the Government’s estimate of the total cost of September’s mini-Budget to UK homeowners?
Andrew Griffith
The hon. Member—[Interruption.] Forgive me, the right hon. Member will be aware that interest rates have been increasing globally. Interest rates in the UK are now lower than the equivalent in the US and are lower than they were last autumn. The Government have a range of measures to help hard-pressed mortgage payers, but above all else, our strong stewardship of the economy is bringing down interest rates and means that we are on track to halve inflation this year.
Andrew Griffith
The OBR has confirmed that the UK economy will avoid a technical recession and was the fastest growing economy in the G7 for the past two years.
Mr McFadden
The Minister either does not know or will not say what the total cost was. Is it not interesting that it is always someone else’s fault? One of the first things that the Prime Minister did when he took office was to give in to his Back Benchers on house building targets. The Home Builders Federation now says that the supply of new housing is likely to fall to its lowest level since the second world war—less than half the Government’s target. How will building fewer homes as a result of a back-stairs deal inside the Conservative party help young people in our constituencies who dream of owning their own home and getting on the property ladder?
Andrew Griffith
We share the aspiration of young people to own their own home, but the best way to help them do that is to have a vibrant, growing economy. We are on the side of doing that. We are taking actions that will restore the economy to growth. Every Labour Government who have ever taken office have left unemployment at a higher rate than when they came in.
Stewart Hosie (Dundee East) (SNP)
Last August, there were 75,000 mortgage approvals. That number halved by December. We are all aware of the reports from late last year of the number of mortgage products that were removed and the troubling reports of mortgage offers being withdrawn. Before we even get to the issue of support for mortgage holders, what is the Treasury doing to ensure the availability of mortgages, a good range of mortgage products and an end to offers being withdrawn unless there is a very, very good reason to do so?
Andrew Griffith
We have recently renewed the mortgage guarantee scheme, which helps the availability of high loan to value ratio mortgages. We are looking very clearly at the mortgage market and at things that we can do to help first-time buyers. The right hon. Member should also know that mortgage arrears, which we monitor very closely, remain low. In fact, they are lower now than they were prior to the pandemic.
Stewart Hosie
Of course, 18 months ago a two-year fixed-rate mortgage with a 5% deposit was under 3%. It is now north of 6%. A two-year fixed-interest mortgage with a 25% deposit, which was 1.25%, is now also north of 6%. How can it possibly be fair that somebody buying an average-priced house in Scotland worth around £190,000, putting down a £50,000 deposit, could face an interest rate that has gone up by 500% in that time?
Andrew Griffith
Interest rates are now falling, something the right hon. Gentleman declined to mention. The best thing we can do to help with those interest rates is to deliver on the Prime Minister’s objective of halving inflation, and I am encouraged that we are on track to do so.
Catherine West (Hornsey and Wood Green) (Lab)
Alex Cunningham (Stockton North) (Lab)
Jeff Smith (Manchester, Withington) (Lab)
Stephen Morgan (Portsmouth South) (Lab)
The Exchequer Secretary to the Treasury (James Cartlidge)
At the spending review 2021, we confirmed that since March 2021 the Government will have committed a total £30 billion of public investment for the green industrial revolution. Since then, the Government have made new announcements to provide long-term certainty on our investment plans, including £6 billion for energy efficiency from 2025 and up to £20 billion for carbon capture, usage and storage. The Government will set out further action shortly to support green industries in the UK and meet our net zero 2050 commitment.
Catherine West
Yesterday, the Intergovernmental Panel on Climate Change published its report on the latest data, warning that the world is fast approaching irreversible levels of global heating. Why is the Treasury still giving energy companies an easy ride through lucrative loopholes in the energy windfall tax? The Treasury should be prioritising investments in renewables so that over time, our bills can come down.
James Cartlidge
This country should be proud of our record, which has seen emissions fall faster in this country than in any country in the G7—down 44% since 1990—but we have to balance that against energy security. Surely, if there is one thing we have learned from what has happened with Ukraine’s invasion by Russia, it is that we need to maximise domestic energy production. The investment allowance in our windfall tax is not a loophole; it is there precisely to incentivise investment so that we maximise domestic energy production.
Alex Cunningham
While the sector would have liked more, I welcome the £20 billion over 20 years for carbon capture, use and storage in the Budget. Will the Minister now confirm that the Teesside-Humber project will go ahead and how additional clusters will be selected through the track-2 process?
James Cartlidge
I pay tribute to the hon. Gentleman for his consistency—he raised this with me on Thursday in my winding-up speech on the Budget debate. As I said then, we will announce further details soon, but I can confirm that I will be meeting the Carbon Capture and Storage Association tomorrow. I look forward to the meeting. This is an incredibly important step forward, because we must remember that carbon capture does not just give us clean energy, but enables heavy industry to decarbonise.
Jeff Smith
Why does the Chancellor not rewire local economies by taking inspiration from President Biden and backing Labour’s policy for a national wealth fund to support half a million new jobs this decade?
James Cartlidge
I am grateful to the hon. Gentleman for raising the Inflation Reduction Act; I hope we all welcome what the United States is doing, because the climate is a global phenomenon and, if we are to make progress, we need the United States and other countries to do their bit. Let me be clear: we should be proud of our record to date and confident in our future, because we have huge competitive advantages on green industry. We have a brilliant record to date, we have the shallow North sea, where we have developed the biggest coastal array of offshore wind in the whole of Europe, we have a brilliant scientific base and, with the City of London and our financial institutions, we should be confident about our green future.
Stephen Morgan
The Institute of Directors has warned that
“the UK will find itself left behind in the accelerating race to lead the green economy.”
After a lacklustre Budget, does the Minister agree?
James Cartlidge
To give just one example of why we should be confident, last year 40% of our electricity came from renewables. The figure in the United States was 20%. We have a very strong record, but we are going to keep building on it. That is why we announced the £20 billion for carbon capture and storage and why we announced Great British Nuclear, because we need that baseload power to go alongside renewables and give us energy security.
Richard Fuller (North East Bedfordshire) (Con)
The truth is that it is under this Conservative Government that the greatest strides have been accomplished in harnessing the British economy to achieve net zero, with the leadership of COP26, the establishment of the Glasgow Financial Alliance for Net Zero, and the introduction of corporate reporting on carbon emissions for our major corporations. Will my hon. Friend work with British business to continue that progress and ensure that we can all move forward successfully to achieve net zero?
James Cartlidge
My hon. Friend speaks with passion, experience and expertise, and he is absolutely right. Of course we work closely with investors and business—one key example is the contracts for difference regime. Last July, we had the largest ever allocation of contracts through the contracts for difference process, contracting about 11 GW of clean power, which is enough clean energy for 12 million homes. That is a huge step forward, and it shows that we are delivering on net zero. As a party, we will balance that with energy security so that we learn the lessons of the last 12 months.
Virginia Crosbie (Ynys Môn) (Con)
Ynys Môn is known as energy island. It has wind, wave, tidal and solar, and will have, I hope, new nuclear at Wylfa. For more than three years, I have campaigned for Anglesey to be a freeport, which would turbocharge the island’s economy and help the Government to deliver net zero. We are due to hear from the Welsh Government and the UK Government by early spring on whether our island’s bid has been successful. It feels like early spring in my Holyhead garden. Does it feel like early spring in the Chancellor’s garden?
James Cartlidge
My hon. Friend’s constituency is an island, and she is its rock—there is no doubt about that; she champions these issues consistently. I am assured that the Chief Secretary to the Treasury is giving careful consideration to her proposition, and that just underlines that she has been a champion for her constituency. By delivering on our green plans, we can generate green jobs and green investment in every part of the United Kingdom, including Wales.
Abena Oppong-Asare (Erith and Thamesmead) (Lab)
As my hon. Friend the Member for Portsmouth South (Stephen Morgan) just said, the Institute of Directors has warned that
“the UK will find itself left behind in the accelerating race to lead the green economy.”
The Confederation of British Industry says that we are investing five times less in green industries than Germany—five times less. Meanwhile, the United Nations issues warnings of a climate disaster. Where is the urgency and action from the Conservatives to decarbonise our economy and win the global race for green jobs?
James Cartlidge
What the IOD actually said about the Budget was that it was “hugely encouraging”, and I strongly agree. We have an extraordinary track record—the fastest-falling emissions in the whole of the G7 and extraordinary success in offshore wind—but we want to go further. That is why we have announced £20 billion for carbon capture and storage, and we will soon announce many more positive measures.
Yasmin Qureshi (Bolton South East) (Lab)
The Chief Secretary to the Treasury (John Glen)
The Government strongly encourage the effective utilisation of brownfield land, whether it was industrial, commercial or residential in its former use. We invest heavily in brownfield remediation programmes, including £1.8 billion at spending review 2021, as well as the levelling-up fund. National planning policy also sets out what planning policies and decisions should give substantial weight to the value of using suitable brownfield land.
Yasmin Qureshi
Bolton town centre is in a parlous state. We lost out in the latest round of levelling-up funding, and the Tory council failed even to send the earlier application for funding. As an ex-industrial town, we have large brownfield mill sites standing derelict and unused, and they are eyesores. We could retrofit them to create affordable social housing to alleviate our housing crisis, develop retail units for new businesses, and support local charities and community groups with such units. With that in mind, what discussion has the Treasury had with Bolton Council and the Department for Levelling Up, Housing and Communities about the merits of such a scheme for the borough?
John Glen
I agree with the hon. Lady that Bolton has great opportunities. Its brownfield register shows that it has more than 100 brownfield sites. Of course, the Government have given the Greater Manchester Combined Authority £150 million—£27 million just last year—to deliver local brownfield remediation. The breadth of the existing funds means that specific land remediation funding is not required, but there is provision in the Greater Manchester area, and I think that she should speak to the metro Mayor about it.
Wendy Morton (Aldridge-Brownhills) (Con)
The west midlands trailblazer devolution deal, launched yesterday, brings further support for regeneration and infrastructure along with £100 million of brownfield funding, which is good news for areas such as mine. Does my right hon. Friend agree that this issue is key to delivering homes and jobs while protecting our precious greenbelt and will he consider that in any impact assessment study that he undertakes?
John Glen
My right hon. Friend makes a very sensible point. This is about finding appropriate development in different communities, and a range of factors will obviously be involved. We have worked closely with local authorities to ensure that we get the right package of measures and legislative changes to enable the development she and her constituents aspire to.
Tommy Sheppard (Edinburgh East) (SNP)
The Financial Secretary to the Treasury (Victoria Atkins)
It remains challenging to separate the effects on the UK economy of Brexit and of wider global trends, such as the invasion of Ukraine by Russia, that add pressures on trade, prices and the wider economy. The Government have been working to take advantage of leaving the EU, including through the Edinburgh reforms, new freeports and the opportunity to shape new trading relationships with the rest of the world.
Tommy Sheppard
It is not that difficult, is it? Last week, the Office for Budget Responsibility published its report and, at the bottom of page 46, it says quite clearly that the OBR predicts that Brexit means that the UK economy will shrink by 4% and trade will go down by 15%. Is it not time to get over this denial phase and actually admit that Brexit has caused irreparable harm to the UK economy? Or is the OBR wrong?
Victoria Atkins
If I may, I will gently point out to the hon. Gentleman that the OBR has previously stated that it is too early to reach definitive conclusions. The Government are focused on seizing the opportunities provided by Brexit, including the world’s biggest zero-tariff, zero-quota trade deal. Indeed, Scotland itself will benefit from 71 new trade deals secured with non-EU countries and control of our fishing waters. I hope that the hon. Gentleman also welcomes the £8.6 million invested in Scotland’s festival economy at the Budget last week.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
Now that the Windsor agreement has been reached, I am sure that the Minister will agree that there is ample opportunity to have a constructive working relationship with the European Union. In light of that, and for the sake of struggling British businesses, may I ask the Minister whether she will finally get behind Labour’s proposals for a bespoke veterinary agreement on the mutual recognition of professional qualifications and for a memorandum of understanding on regulatory co-operation for our financial services?
Victoria Atkins
I am very grateful to the hon. Lady for her question and I urge her to get behind our trade and co-operation agreement. As I say, it is the world’s largest zero-tariff, zero-quota deal. I am delighted to say that the Chief Secretary has just confirmed that we have signed the memorandum.
Rachael Maskell (York Central) (Lab/Co-op)
The Chief Secretary to the Treasury (John Glen)
The Government are committed to delivering social and affordable housing and are investing £115 billion in the affordable homes programme from 2021 to 2026. That is the largest investment in affordable housing in a decade and includes investment in supported housing, social and affordable rent and shared ownership.
Rachael Maskell
The affordable homes programme will deliver just 32,000 homes over five years while 1.2 million households are waiting for social houses, yet there was no mention of new money in the Budget last week, which was a massive disappointment in the light of the scale of the housing crisis. In York, we are seeing a net loss of social housing. Will the Chief Secretary ensure that social housing is prioritised, that money comes forward and that we see a real boost to the affordable homes programme so that York, and places like it, can have the housing they need?
John Glen
That is a top priority of this Government and I continue to work with colleagues across the Department for Levelling Up, Housing and Communities and other Departments to deliver it.
Chloe Smith (Norwich North) (Con)
The Chancellor of the Exchequer (Jeremy Hunt)
If we had the same economic inactivity rate as Holland, there would be 2.7 million more people in work, filling every vacancy in the economy nearly three times over. That is why we focused on the issue in the Budget.
Chloe Smith
I thank my right hon. Friend for that answer, and for the measures he set out in the Budget. I support the fiscal measures he has taken regarding the pensions lifetime allowance, which doctors in Norwich tell me will enable them to deliver more appointments and more operations. Can I go on to ask him, though, what he expects to see in the forthcoming state pension age review?
Jeremy Hunt
I thank my right hon. Friend for asking that question, and for all the work she has done in the Department for Work and Pensions on economic inactivity. As she knows, there is an ongoing statutory Government review of the state pension age, and that review will need to carefully balance important factors, including fiscal sustainability, the economic context, the latest life expectancy data, and fairness to both pensioners and taxpayers.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
One of the key ways to promote economic activity is to make sure that people have a stable, affordable roof over their head. Only last week a constituent visited me who cannot earn enough to be able to afford to rent privately in London, so he is restricted in how much he can work. Surely, if the Chancellor believes in growth, he must see the common sense in investing in social housing?
Jeremy Hunt
I do, but I also point out to the hon. Lady that we took a range of other measures in the Budget that will help such people, including increasing the help that we give them to find appropriate work, and helping those who have a long-term sickness or disability to get the support they need to get back into work. Doing all those things will make a big difference.
Alan Brown (Kilmarnock and Loudoun) (SNP)
The Chancellor of the Exchequer (Jeremy Hunt)
This Conservative Government believe in the virtue of work, and that is why last week’s Budget set out to remove barriers for long-term sick and disabled, for jobseekers, for older people with our pension tax reforms, and for parents with the biggest expansion of childcare in memory.
Alan Brown
With Orbital O2 in Orkney and MeyGen—the largest tidal stream site in the world—Scotland leads the way in tidal stream generation. That industry is at a stage where it needs to expand and scale up, but to do so, it needs a bigger ringfenced budget. In the renewables auction announced last week, the Government propose to halve the budget for tidal stream instead of increasing it. Will the Chancellor meet me to discuss the impact and the opportunities for business?
Jeremy Hunt
We are interested in giving support to all forms of renewable energy, and the Exchequer Secretary to the Treasury is very happy to meet the hon. Gentleman to discuss those issues further.
Gareth Johnson (Dartford) (Con)
The Chief Secretary to the Treasury (John Glen)
I am grateful to my hon. Friend, who has met me on a number of occasions to make the case for the Dartford crossing. Obviously, in the current difficult circumstances with inflationary pressures, we have had to make some tough choices, but I want to be very clear with my hon. Friend: we remain committed to delivering it. This is a two-year delay on construction, not a cancellation, and I will continue to update him in due course.
Rachel Reeves (Leeds West) (Lab)
Confidence has been shaken by the recent bank failures and stock market falls across the world. Is the Chancellor confident that our ringfencing regime is adequate to protect taxpayers and depositors, when we have seen how fast these problems can spread? Can the Chancellor reassure the House that there are no other UK banks or subsidiaries that are vulnerable, and in light of recent developments, is he confident about the Financial Stability Board, or does it need to widen the number of banks regarded as systemically important?
Jeremy Hunt
I thank the shadow Chancellor for her question. The Government recognise that there is some volatility in the market, but we believe the UK financial system is fundamentally strong and UK banks are well capitalised. They now have core capital ratios that are three times higher than before the 2008 global financial crisis, but we continue to monitor the situation carefully.
Rachel Reeves
I thank the Chancellor for that response, and am pleased that he continues to monitor the situation carefully, but the collapse of Silicon Valley Bank UK shows how our vibrant start-up sector—particularly in life sciences and tech—had become reliant on a single financial institution. The impact of these bank failures may be that other banks become more risk averse, restricting lending and raising interest rates, resulting in a credit squeeze, possibly even beyond the start-up sector. That would damage an already weak economy, so how will the Chancellor monitor the situation there and ensure that businesses have access to the long-term capital that they need to grow and to thrive?
Jeremy Hunt
The right hon. Lady is absolutely right to raise that issue. I said in the Budget that I would return with a full solution to those issues in the autumn statement, but ahead of that we will be making announcements on: pension industry reform, because we want to unlock the £5 trillion of assets in the pension industry; reforms to help companies scale up, so that they do not feel they have to move to other countries when they want to list; and, reforms to green finance so that people can access the capital they need. All those things will be a part of a comprehensive solution that we will be announcing shortly.
Gary Sambrook (Birmingham, Northfield) (Con)
The Economic Secretary to the Treasury (Andrew Griffith)
My hon. Friend is absolutely right. The measure will help public servants, hospital consultants, prison governors, headteachers and senior police leaders, which is why I agree with the hon. Member for Ilford North (Wes Streeting) when he said that removing the cap would save lives and that he himself would scrap the “crazy” cap.
Steven Bonnar (Coatbridge, Chryston and Bellshill) (SNP)
Andrew Griffith
I welcome the universal credit reforms we have made, and also the fact that under this Government, by raising the basic income tax threshold, we have taken up to 3 million workers out of income tax altogether.
Mr Robin Walker (Worcester) (Con)
Jeremy Hunt
I thank my hon. Friend for his campaigning on this issue. He has long been a voice for reforms to childcare. He is absolutely right that this is one of the biggest sets of childcare reforms we have ever seen. That is why we are taking two and a half years to scale it up. We want to make sure that parents who want to take advantage of the new free hours offer can get the supply of childcare they need, and we will listen very carefully to what the Select Committee says.
Tonia Antoniazzi (Gower) (Lab)
Jeremy Hunt
It is not just about doctors leaving the profession, but doctors reducing their hours. The Royal College of Surgeons says that 69% of its members have reduced their hours as a result of the way that pension taxes used to work. Doctors themselves have welcomed the Budget warmly and as potentially transformative for the NHS.
Alexander Stafford (Rother Valley) (Con)
John Glen
I hesitate, because my hon. Friend is so effective in campaigning for his constituency. I am glad that we were able to confirm that extra £20 million in the Budget. We will continue to look with a constructive mindset at all the many bids that he brings forward to the Treasury.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
Jeremy Hunt
What the hon. Member forgets is that it is not just doctors or, indeed, millionaires who want to save for a decent pension pot; it is ordinary people, and that is who we are on the side of in this Government. When it comes to reforms to the state pension age, we follow a process that balances the interests of taxpayers and the interests of pensioners, and also looks at life expectancy.
James Wild (North West Norfolk) (Con)
Given that the Chancellor has protected the new hospitals budget, may I express the huge frustration of my constituents at delays in the announcement that the RAAC-ravaged—reinforced autoclaved aerated concrete-ravaged—Queen Elizabeth Hospital in King’s Lynn will be part of the programme and urge that decisions are announced as soon as possible?
John Glen
Given that I answered this question five weeks ago, I admire my hon. Friend’s consistency. I very much regret that we have not been able to make that decision yet. As I think I said last time, it is a matter for the Secretary of State for Health and Social Care, and conversations have developed. We have made a commitment on the quantum of money, and I will leave it for my colleague to make that announcement imminently.
Jeff Smith (Manchester, Withington) (Lab)
Jeremy Hunt
It would be if his comment had not been quoted out of context, as the hon. Gentleman just did, because he also said that he could see in the Budget a growth plan and he strongly welcomed measures such as the childcare reform.
Priti Patel (Witham) (Con)
In the light of the current pressures on the international banking system, can the Chancellor give an assurance about and an update on the actions he will be taking to ensure that credit flows to small and medium-sized enterprises, our rural businesses and, indeed, start-ups, because at the end of the day they should never be penalised for the misdemeanours of large banks?
Andrew Griffith
Yes, I can give my right hon. Friend that assurance. This Government are very keen to make sure that there is a strong flow of credit to the very smallest businesses in society.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Jeremy Hunt
What I say to the hon. Lady, whom I greatly respect, is that we did a lot for public services in the autumn statement, including a £3 billion increase in the annual schools budget and an £8 billion increase in the annual health and care budget. We are always focusing on public services, and we do support a progressive tax system.
Sir Desmond Swayne (New Forest West) (Con)
Will the Chancellor tweak the childcare initiative to enable families in which one parent wants to care for children full-time to have a realistic prospect of being able to afford to do so?
Jeremy Hunt
We think these reforms will make a big difference to all parents. Our priority is parents who want to work and who are prevented from working by the expense of the current system. I would remind my right hon. Friend that we still have a 15-hour free childcare offer for all parents, irrespective of whether they work, for three and four-year-olds.
Deidre Brock (Edinburgh North and Leith) (SNP)
Researchers at Warwick University and the London School of Economics estimate that the non-dom regime denies the Exchequer about £3.2 billion per year. Why did the Chancellor not take steps to abolish that in last week’s Budget, instead of creating more hoops for universal credit claimants to jump through?
The Financial Secretary to the Treasury (Victoria Atkins)
We have looked very carefully at this, because we know that many in the House have been citing this figure. What concerns us about that analysis is that the study does not appear to take into account the behavioural ramifications of changing the current regime or of making it less competitive than that of our international partners. We do have to remind ourselves that non-domiciled taxpayers pay UK tax on their UK earnings to the tune of £7.9 billion.
Anthony Browne (South Cambridgeshire) (Con)
The Leader of the Opposition led his charge against the Budget by saying that the UK was the sick man of Europe, yet the IMF shows that the UK had the fastest-growing economy in the G7 not just last year but the year before, and that since the Conservatives came to power in 2010 the UK has had the fastest-growing economy of the major economies in Europe. Does my right hon. Friend the Chancellor agree that, although there are clearly major economic challenges, there are many reasons—not least the tech sector in South Cambridgeshire—to be confident about the future of the UK economy?
Jeremy Hunt
I completely agree and, thanks to the brilliant efforts of the tech sector in South Cambridgeshire, we have now become the third largest tech sector in the world, after the United States and China, thanks to the Conservative Government.
Dave Doogan (Angus) (SNP)
My constituent Fiona Cooper was seeking to close the national insurance contribution gaps in her pension just before retirement and was frustrated that the advice she got about her missing years from HMRC needed validating by the Department for Work and Pensions. Does the Chancellor agree that one set of numbers is the cornerstone of any enterprise, and is he also frustrated that she has been advised that she will need to close full years before she can close part years?
Victoria Atkins
If the hon. Gentleman would like to write to me about this, I will look into it, but I remind him that I issued a written ministerial statement recently, extending the deadlines precisely to help women in the situation he describes.
Dr Luke Evans (Bosworth) (Con)
The Chancellor and I sat for three years on the Health Committee hearing evidence of just how restrictive the pension rules were for the likes of doctors. The fact that he has now been able to make that change is fantastic. Will he take that approach to dealing with some of the other red tape around retention and recruitment for other professions in the health service because, as the British Medical Association said, it is making a real difference?
Jeremy Hunt
Few people know as much about this issue as my hon. Friend, given his background in the NHS. He is right, and I know that my right hon. Friend the Secretary of State for Health and Social Care is looking closely at the issue of retention, which has an equally important role to play.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
Industry stakeholders have been clear that Ministers must now focus on long-term solutions to support people with ongoing high energy prices through improved home energy efficiency. What steps will Ministers take to support households with the rising costs of energy in the long term?
The Exchequer Secretary to the Treasury (James Cartlidge)
The hon. Lady makes an excellent point. We have put in place a huge amount of support to help people through this immediate challenge with their energy bills, but we do need to think long term. That is why the Chancellor has put in place the 15% target to reduce energy consumption in both domestic and non-domestic buildings, but alongside that, and crucially, we have to increase the supply of UK energy, both renewables and in the North sea.
Saqib Bhatti (Meriden) (Con)
Thanks to the quick thinking and quick moves by the Chancellor, the Prime Minister and the Treasury, the tech sector was saved from almost certain oblivion, and at no cost to the taxpayer. Can my right hon. Friend confirm that he is still ambitious for the tech sector, and can he confirm that the merger with HSBC will ensure that our fantastic tech sector, especially our start-ups, will have access to the funding they need?
Jeremy Hunt
My hon. Friend is right. We have a very good solution to the Silicon Valley bank issue with the HSBC takeover. In the long run, we would like our brilliant tech superstar companies to have more choice about how they finance their expansion, and we will bring forward plans to make sure that happens.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
On a point of order, Mr Speaker. The Minister said to me in her response that the Chief Secretary had just confirmed with her that we had signed the memorandum of understanding on regulatory co-operation with the EU. Could you please advise me whether she meant that both sides had signed and the agreement has been secured with the EU? I cannot find the details anywhere. Can you advise me where MPs are able to see the agreement?
The Chief Secretary to the Treasury (John Glen)
Further to that point of order, Mr Speaker. I can confirm that we have always been ready to sign the MOU, from two years ago—[Interruption.] Well, we have made it very clear to the EU that we are ready to sign. It is a matter for it to come to the table, and we very much hope it will be able to do that. What happened was that as the Financial Secretary came to the Dispatch Box she did not quite hear exactly what I said, and for that I apologise on behalf of the Government. It was my fault.
Metropolitan Police: Casey Review
(1 year, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Mr Speaker
Given the importance of the issues raised by the statement we are about to hear, I am waiving the House’s sub judice resolution. However, I would ask Members to exercise caution and avoid referring to the detail of any cases that are currently or soon to be before the courts, to avoid any risk of prejudicing proceedings, particularly criminal ones. I call the Home Secretary.
The Secretary of State for the Home Department (Suella Braverman)
With permission, Mr Speaker, I would like to make a statement on Baroness Casey’s review of the Metropolitan police. I wish to put on record my thanks to Baroness Casey for undertaking the review on such a difficult and sensitive topic with the utmost professionalism.
The Metropolitan Police Service plays a big role in our country: tackling crime throughout the capital and keeping 9 million Londoners safe; preventing terrorism nationally; and managing significant threats to our capital and country. I back the police. I trust them to put their safety before ours, to step into danger to protect the most vulnerable, and to support all of us at our most fearful, painful and tragic moments. Many of us can never imagine the challenges that regular police officers face every day. That is particularly poignant as tomorrow marks the sixth anniversary of the murder of PC Keith Palmer in the line of duty while he was protecting all of us in this place. For their contribution, I am sure all Members will join me in thanking the police for their work.
But there have been growing concerns around the performance of the Metropolitan police and its ability to command the confidence and trust of Londoners. That follows a series of abhorrent cases of officers who betrayed the public’s trust and hideously abused their powers. In June last year, His Majesty’s inspectorate of constabulary and fire and rescue services announced that the force would be put into an Engage phase. In July, the Government appointed Sir Mark Rowley to the post of Metropolitan Police Commissioner, with the express purpose of turning the organisation around.
Today’s report, commissioned by Sir Mark’s predecessor, makes for very concerning reading. It is clear that there have been serious failures of culture, leadership and standards in the Metropolitan police. That is why Sir Mark Rowley’s top priority since becoming commissioner has been to deliver a plan to turn around the Met and restore confidence in policing in London. Baroness Casey’s report finds: deep-seated cultural issues in the force; persistent poor planning and short-termism; a failure of local accountability; insularity and defensiveness; and a lack of focus on core areas of policing, including public protection. She also highlights the recent decline in trust and confidence in the Met among London’s diverse communities.
The report underlines the fact that the Met faces a long road to recovery. Improvements must be made as swiftly as possible, but some of the huge challenges for the organisation may take years to fully address. Baroness Casey is clear that Sir Mark and deputy commissioner Lynne Owens accept the scale of those challenges. I know that to be true from my own work with them. I will ensure that the Metropolitan police has all the support it needs from central Government to deliver on Sir Mark’s pledge of more trust, less crime and high standards. Every officer in the force needs to be part of making those changes happen.
As I said as soon as I became Home Secretary, I want all forces to focus relentlessly on common sense policing that stops crime and keeps the public safe. The Government are already providing the Metropolitan police with support to do just that. Funding for the force will be up to £3.3 billion in 2023, a cash increase of £178 million compared with 2010, and the force has by far the highest funding per capita in England and Wales. As a result of the Government’s police uplift programme, the Metropolitan police has more officers than ever before—over 35,000 as of December. The Home Office is providing funding to the force to deliver innovative projects to tackle drug misuse and county lines. We are working with police and health partners to roll out a national “right care, right person” model, to free up frontline officers to focus on investigating, fighting crime and ensuring that people in mental health crises get the right care from the right agency at the right time.
It is vital that the law-abiding public do not face a threat from the police themselves. Those who are not fit to wear the uniform must be prevented from doing so. Where they are revealed, they must be driven out of the force and face justice. We have taken steps to ensure that forces tackle weaknesses in their vetting systems. I have listened to Sir Mark and his colleagues; the Home Office is reviewing the police dismissals process to ensure that officers who fall short of expected standards can be quickly dismissed. The findings of Baroness Casey’s review will help to inform the work of Lady Angiolini, whose independent inquiry, established by the Government, will look at broader issues of police standards and culture.
I would like to turn to two particularly concerning aspects of Baroness Casey’s report. First, it addresses questions of racism, misogyny and homophobia within the Metropolitan police. Baroness Casey has identified evidence of discriminatory behaviour among officers. I commend those officers who came forward to share their awful experiences with the review team. Discrimination must be tackled in all its forms, and I welcome Sir Mark’s commitment to do so. I will be holding the Metropolitan police and the Mayor of London to account by measuring their progress. I ask Londoners to judge Sir Mark and the Mayor of London not on their words but on their actions to stamp out racist, misogynistic and homophobic behaviour. Action not words has been something that victims of police misconduct and criminal activity have asked for.
Secondly, officers working in the parliamentary and diplomatic protection command perform a vital function in protecting our embassies and keeping us, as Members of Parliament, safe on the parliamentary estate. Baroness Casey’s report is scathing in its analysis of the command’s culture. The whole House will be acutely aware of two recent cases of officers working in that command committing the most abhorrent crimes. I expect the Metropolitan police to ensure that reforms reflect the gravity of her findings, while ensuring that the command’s critical security functions are maintained. The Home Office and the parliamentary security department will work closely with the Metropolitan police to ensure that that happens.
Although I work closely with the Metropolitan police, primary and political accountability sits with the Mayor of London, as Baroness Casey makes clear. I spoke with the Mayor yesterday; we are united in our support for the new commissioner and his plan to turn around the Met so that Londoners get the police service they deserve. We all depend on the police, who overwhelmingly do a very difficult job bravely and well. It is vital that all officers maintain the very highest standards that the public expect of them. Londoners demand nothing less. I have every confidence that Sir Mark Rowley and his team will deliver that for them. I commend this statement to the House.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
The report published today by Louise Casey, commissioned by the Mayor of London, into standards and culture in the Metropolitan police service is thorough, forensic and truly damning. It finds that consent is broken, management of the force has failed and frontline policing,—especially neighbourhood policing—has been deprioritised and degraded after a decade of austerity in which the Met has ended up with £0.7 billion less than at the beginning of the decade. It finds that the Met is failing women and children, and that predatory and unacceptable behaviour has been allowed to flourish. It finds institutional racism, misogyny and homophobia.
Baroness Casey pays tribute to the work that police officers do and the bravery that they show every day, as we all should, because across the country we depend on the work that police officers do to keep us all safe—catching criminals, protecting the vulnerable and saving lives. We support them in that vital work. But that is what makes it all the more important that the highest standards are maintained and the confidence of those the police serve is sustained, otherwise communities and the vital work that police officers do are let down. We support the work the new Met commissioner is doing now to start turning the Met around. He and his team must now go much further in response to the Casey review, but I am concerned that the Home Secretary’s statement is dangerously complacent. Astonishingly, there is no new action set out in her response, simply words saying that the Met must change. This is a continuation of the hands-off Home Office response that Baroness Casey criticises in her report. Some of the issues raised are particular to the Met because of its size, history and particular culture, where the Home Secretary and Mayor are jointly responsible for oversight and where the commissioner is responsible for delivering, but the report also raises serious wider issues for the Home Office.
The failure to root out officers who have been involved in domestic abuse or sexual assault also applies in other forces. The failure to tackle culture has gone wrong in other forces too, with problems in Gwent, Hampshire, Police Scotland, Sussex, Leicestershire and more. It is a disgrace that there are still not mandatory requirements on vetting and training, underpinned by law, and that misconduct systems are still too weak. I urge the Home Secretary to commit now that anyone under investigation for domestic abuse or sexual assault will be automatically suspended from their role as a police officer, and that anyone with any kind of history of domestic abuse or sexual assault will not be given any chance to become a police officer. We need an urgent overhaul, underpinned by law. Will she give us that commitment today?
The Home Office approach more widely to standards is also failing. Six police forces are in so-called special measures, but it is still too easy for forces to ignore the recommendations from the inspectorate and the intervention processes are too weak. Where is the Home Secretary’s plan to turn that around?
The report is damning about the decimation of frontline policing, but neighbourhood policing has been decimated everywhere, not just in the Met. There are 6,000 fewer police officers in neighbourhood teams and 8,000 fewer police community support officers than just in 2016, and it is worse than that because officers are routinely abstracted for other duties. So where is the plan to restore neighbourhood policing? Labour has set out a plan. We would work with the Government on this, but where is the Government’s plan?
The report is devastating on the lack of proper public protection arrangements for women and children who have been let down, but again we know that across the country prosecutions for rape and domestic abuse have plummeted and serious cases have too often been dismissed. Again, where is the national action plan to improve public protection? Where is the commitment to specialist rape investigation units in every force and specialist domestic abuse experts in 999 control rooms? It is not happening.
The findings on institutional misogyny, racism and homophobia are based on evidence and clear criteria that Baroness Casey has set out for measuring change with recommendations. The Home Secretary rightly says she wants discrimination tackled in all its forms, but she has been telling police forces the opposite in telling them not to focus on those issues. Where is her plan now to turn that around? Where is the Home Office plan in response to this, on standards, on neighbourhood policing, on violence against women and girls, and on systemic or institutional discrimination? Where are those plans?
The British policing model is precious. The Peel principles, which started in London— policing by consent—said
“that the police are the public and that the public are the police”.
They are our guardians, not our guards, but that precious policing model is in peril. The Home Office and the Home Secretary are the custodians of that tradition, but the lack of any plan to restore trust, to stand up for policing or to turn things around is letting everyone down. It is not standing up for the police; it is letting both the police and communities down. It is because we believe in policing and because we believe in those Peel principles that we know standing up for the police also means working with the police to deliver change and to restore the trust, confidence and effective policing that all police officers and communities properly deserve.
Suella Braverman
I must say that I am disappointed by the right hon. Lady’s tone. Today is not a day for crass political point scoring; it is a day for serious and sober consideration of the Met’s shortcomings and how those shortcomings have a devastating impact on people’s lives. The victims have asked for actions, not words, and I, along with the Mayor of London, have every confidence that Sir Mark Rowley and his team will deliver their plan to turn around the Met. Accepting Baroness Casey’s findings is not incompatible with supporting the institution of policing and the vast majority of brave men and women who uphold the highest professional standards. I back the police; I trust them to put their safety before ours.
On the topic of national standards, I am working with chief constables on a programme to drive up standards and improve culture across police forces at a national level. On the topic of institutional racism, I agree with Sir Mark Rowley. It is not a helpful term to use; it is an ambiguous, contested and politically charged term that is much misused and risks making it harder for officers to win back the trust of communities. Sir Mark is committed to rooting out discrimination, in all forms, from the Met. I believe that it is how the Met police respond to the issues that is important, not whether they accept a label.
Trust in the police is fundamental, and I will work to support Sir Mark Rowley in his work to change culture and provide the leadership that the Met needs, but I would point out to the shadow Home Secretary that her crass political attacks really would be more accurately directed at the person with actual and political responsibility for overseeing the performance of the Met: that is the Mayor of London, Labour’s Sadiq Khan. The Labour Mayor has been in charge of the Met for the past seven years. Baroness Casey is unflinching and unequivocal about the dysfunctional relationship between the Mayor’s office and the Met, and her recommendation that the Mayor takes a more hands-on approach. It was frankly shocking to learn that the Labour Mayor does not already chair a quarterly board meeting to exercise accountability over the Met. I trust the shadow Home Secretary will agree that the Mayor accepts Baroness Casey’s recommendation that he do so.
Londoners have been let down by the Met. The shadow Home Secretary knows who is ultimately responsible for that. She should not be looking to score political points today: it is a disappointment, and frankly she should know better.
Sir Peter Bottomley (Worthing West) (Con)
Everyone in the House will back up what the Home Secretary, Baroness Casey and the shadow Home Secretary have said about our reliance on the police and our support for them, but there are times when we have to look at how often the police, the police authority, the Mayor and the Home Secretary have not put things right.
I will give as an example the high-profile case of the Sikh police officer Gurpal Virdi, who 25 years ago was in effect accused of doing something he had not done. We had the Muir report at the end of 2001, which showed what the police ought to do to do things right. We had the report by Sir William Morris, as he then was, in 2004. Before that we had had the Stephen Lawrence inquiry by Sir William Macpherson, advised by the former police officer Tom Cook, by the human rights expert Dr Richard Stone and by John Sentamu, who later became the Archbishop of York. What they recommended has not happened.
Now we have the Casey report. I say to the commissioner of the Met police, to the Mayor and to my right hon. and learned Friend the Home Secretary: have a review into what happened in the Gurpal Virdi case, including his prosecution eight years ago for a non-offence, where the only evidence exonerated him. Until that is done, people will not have confidence in people putting things right. It may be one case, and many other examples will be given in the next few minutes, but Sergeant Gurpal Virdi has been the victim of more injustice from the police, over decades, than I have ever seen in my life.
Suella Braverman
My hon. Friend is absolutely right about the devastating stories of misconduct, inappropriate behaviour, discrimination and poor standards. No one is denying that. Baroness Casey’s review is unequivocal about the failings, cultural and more widespread, within the Met. It is right now that we need to see real change. The Met commissioner has put in place a plan. He is already working and making progress on increasing standards, improving behaviour and ridding the force of those who do not deserve to wear the badge. We should all get behind him in that objective.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
The findings of institutional racism in the Met made 24 years ago, the findings of institutional corruption in the case of Daniel Morgan more recently, the homophobia in the botched Stephen Port investigation, the misogyny, homophobia and racism in the Charing Cross inquiry, the criminal misconduct of police officers in the murders of Bibaa Henry and Nicole Smallman, the strip-searching of Child Q, the numerous Independent Office for Police Conduct investigations and damning HMICFRS reports, the abduction, rape and murder by a serving police officer and the case of the serial sex offender David Carrick were all not enough to provoke real change, so can the Home Secretary say what is now different about this report? Is she confident that the Met can change?
Suella Braverman
It is clear just from the examples to which the right hon. Lady refers and from this report that all the behaviour, including instances of racism, homophobia and misogyny, is completely unacceptable and that standards must improve. Sir Mark has been clear that he is not shying away from the enormity of the challenge. He has a plan in place to ensure that standards are increased, that more rigour is instilled in the Met and that there is a better and more robust response when standards fall short. It is absolutely vital that they rebuild trust and improve standards so that all Londoners have confidence in the Met.
Tim Loughton (East Worthing and Shoreham) (Con)
This is a shocking report, and it is particularly galling for the majority of decent officers who do an outstanding job day in, day out. Whether or not we think the Met is institutionally racist, misogynist or homophobic, it is certainly institutionally incapable of bringing in strong and consistent leadership, although I exclude the new commissioner from that, or of recruiting enough people of sufficient calibre to make good officers. Does the Home Secretary share my concerns that the police’s solutions are still too much about bringing in more police to mark the homework of other police? Has she given thought to bringing in leading people from other disciplines such as the Army or business to provide proper, independent executive scrutiny and promote new ways of working?
Suella Braverman
My hon. Friend is absolutely right that standards need to improve and that doing more of the same is not acceptable. Ultimately, independent scrutiny is provided for by the Mayor of London’s office; those are independent, publicly accountable individuals who bring that outside scrutiny. Baroness Casey’s report is clear that that has not been good enough to date. That is why we all need to get behind the Met to ensure that standards improve.
Dawn Butler (Brent Central) (Lab)
I am struggling to establish the point of the Home Secretary when it comes to the Met. With this hands-off approach, it is as though nothing is the her responsibility. When the Mayor of London got rid of the last commissioner, the Home Secretary continually attacked the Mayor of London’s correct decision. We have heard about all the other reports, including the 1981 Scarman report on the Brixton riots, the 1999 Stephen Lawrence report, the 2021 IOPC report on Nicole Smallman and Bibaa Henry, and the 2021 report on Daniel Morgan, which found that the police were institutionally corrupt. The IOPC report on the Stephen Port murders found that the police were homophobic, and some of them are still working in Barking. Operation Hotton made 15 recommendations; those recommendations have still not been implemented in the Met. Why is the Home Secretary not taking any responsibility in her role in the Met? If she does not want the responsibility, for goodness’ sake, will she just stand down?
Suella Braverman
I am afraid that the hon. Lady needs to direct some of her criticism towards the person who is directly responsible for the performance of the Met: that is, unfortunately, her Labour colleague the Mayor of London. He has been on the receiving end of particular criticism in the report, although I am glad to hear that he is forward-leaning in accepting the recommendations and turning around the way in which he is holding the Met to account. When it comes to changing the law or introducing any frameworks that are necessary, we in the Home Office will do that—we are already consulting on the dismissals process, and we have instituted a regime of better vetting with the College of Policing—but I am afraid that, ultimately, the hon. Lady’s ire should be focused on her colleague in London.
Priti Patel (Witham) (Con)
The sad reality is that, as Opposition Members have just highlighted, over the past 18 months we have seen report after report, and it is now incumbent on us, if we are to secure the whole notion of policing by consent and to elevate public trust and confidence in policing, to see action going forward. The Casey review identifies a range of directions that are required across the board. May I suggest to the Home Secretary, and indeed the Mayor of London, that we should start to see a performance plan for the Metropolitan police to ensure that individuals are held to account? We have strong leaders in the new commissioner and his deputy, and we need to back them, but given the amount of money that goes into the Metropolitan police, I think that that money should bring about the outcomes, such as performance changes, that the British public, and the people of London in particular, desperately want to see.
Suella Braverman
My right hon. Friend is absolutely right, and I pay tribute to her leadership in respect of positive change and improving police standards when she was in this role. I do back Sir Mark and his team: he is the right person to lead the organisation towards reform and improvement. He has set out a turnaround plan and is making progress in realising its objectives, and it is vital that we support him in that.
Andy Slaughter (Hammersmith) (Lab)
Like many London MPs, I deal with constituency cases—from modern slavery to stalking—in which ethnicity, gender or sexuality is a factor, but the victims complain that those factors are not taken seriously by police investigators. What can I tell them that the Home Secretary will do, following this damning report, to give them dignity, respect and, above all, justice?
Suella Braverman
Discriminatory attitudes and homophobic, racist or misogynistic behaviour have no place in policing. All the case studies and references in the report make for shocking reading. The ability of the police to fulfil their duties is essential, but what we have seen is a real impediment preventing chief constables from dismissing and getting rid of officers who are not fit to wear the badge, for a host of reasons. We in the Home Office are currently consulting on the dismissals process, and if necessary I will change the law to empower chief constables to better control the quality of the officers in their ranks.
Kit Malthouse (North West Hampshire) (Con)
For anyone who, like me, has worked with the Metropolitan police over many years, this is a dark if not catastrophic day. While our thoughts are primarily with the many victims who have been let down and failed by the force, obviously we all reserve a huge amount of disappointment for the officers who do a startlingly good job every single day. Many of us who have visited the Met will have seen their work over the years.
I hope the Home Secretary will agree that key to turning the force around is ensuring that this becomes a joint enterprise between City Hall and the Home Office. There has clearly been a failure of local accountability—and I speak as someone who has urged the Mayor, both in public and in private, to lean into the governance of the Metropolitan police during his time in office. On that note, would it be possible for the Policing Minister to sit on the new board that Baroness Casey wants to be convened to supervise changes within the Met, and will the Home Secretary discuss that with the Mayor?
I hope that the Home Secretary will also agree that key to turning around policing in general is the professionalisation of the workforce. She recently decided to cancel the policing education qualifications framework route into policing, although it held out the promise of the kind of continuing professional development that many people believe police officers need during their careers to keep them on the straight and narrow, in terms of values and operational practice. Will she reconsider her decision to cancel that project?
Suella Braverman
My right hon. Friend makes an important point about the quality of accountability. The report identified a dysfunctional relationship between the force and the Mayor’s Office for Policing and Crime, and the Mayor needs to ensure it is reset as a matter of urgency. That local accountability is absolutely critical if we are to see meaningful improvement. My right hon. Friend also referred to leadership training within the ranks, which is something I am very interested in. We are making progress with the College of Policing, in particular, towards rolling out better leadership training in order to create a good cohort of leaders in policing for the future.
Marsha De Cordova (Battersea) (Lab)
Nearly 25 years after the Macpherson report, it is damning that the Casey review has found that the Met remains institutionally racist, and is now misogynistic and homophobic as well. Its actions can seriously undermine policing by consent, and without wholesale reform it will be impossible to rebuild trust and confidence in our communities in London. My constituents in Battersea deserve a force they can trust, so will the Home Secretary end the postcode lottery that exists in place of standards by implementing national standards in relation to vetting, misconduct and training?
Suella Braverman
We are already working with the College of Policing to ensure that there is a statutory code setting out the standards for vetting and recruitment. However, as Baroness Casey makes clear, it is vital that the law-abiding public never face a threat from the police themselves. Those who are not fit to wear the badge should be rooted out, but they should never enter the force in the first place.
Caroline Nokes (Romsey and Southampton North) (Con)
My right hon. Friend is absolutely right to say that every police officer has to be part of the solution, but when a female officer comments to Baroness Casey that she would have been better off suffering in silence, that does not engender confidence in women across the capital—including, importantly, women serving in the Metropolitan Police Service—that they will be empowered to speak out. What specific measures can my right hon. Friend reassure us will be put in place to ensure that those good officers, who we know make up the bulk of the Metropolitan Police Service, are supported when they speak out, and do not see their own careers suffer?
Suella Braverman
The turnaround plan deals specifically with how to institute a better framework so that people who are on the receiving end of unacceptable behaviour can report incidents in the knowledge that they will not be penalised for doing so, and ensuring that those who are perpetrators of, or responsible for, unacceptable behaviour receive meaningful sanction and are no longer permitted to wear the badge.
Munira Wilson (Twickenham) (LD)
While there are many dedicated and decent police officers who serve our capital with integrity and professionalism, Londoners’ confidence in the Met police will be utterly shattered by the horrors and systemic failures revealed in Baroness Casey’s report—and I dare say that the party political point scoring we are hearing from the Dispatch Box will not help. Does the Home Secretary really think that next time I visit a school or college in my constituency, I shall be able to look a young woman or person of colour in the eye and tell them to pick up the phone to the police when they are in danger, or indeed consider a career in the Met?
Suella Braverman
The report is scathing in tracking and describing incidents of misogyny and the way in which confidence has been broken among women and girls, and it is therefore vital that we work with the Met police to restore that confidence. The Soteria programme, to which Baroness Casey expressly refers, must be rolled out and implemented meaningfully when it comes to the investigation and prosecution of rape and serious sexual offences. We are already seeing some improvement in police referrals of rape complaints to the Crown Prosecution Service, but it is clear that, although we are on the right track, more must be done.
Dr Matthew Offord (Hendon) (Con)
The immediate political acceptance of Baroness Casey’s report demonstrates that nothing has changed since the publication of the Macpherson report 24 years ago. Many think that the report in itself is a panacea to change. Does the Home Secretary not agree that it would be more effective to abolish the Metropolitan Police Service, transfer the specialist operations to the remit of the Home Office and establish a police service for London to focus solely on the maintenance of law and order?
Suella Braverman
I do not agree that we must abolish the Metropolitan Police Service. I think we need to institute a wide-ranging programme of profound reform, and that is why I think that Sir Mark is absolutely right in his turnaround plan, which deals specifically with the systemic problems—problems that, unfortunately, are not new but of which we are all aware—that need root-and-branch reform. That is why he is in the right position to effect that change.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
I want to put on record my thanks to Baroness Casey for her report, but it has reached the damning verdict that London’s women and children have been left even further behind. The report states:
“The de-prioritisation and de-specialisation of public protection has put women and children at greater risk than necessary. Despite some outstanding, experienced senior officers, an overworked, inexperienced workforce polices child protection, rape and serious sexual offences.”
Her report recommends specialist units to deal with violence against women and girls, and it is clear that this must happen across the country. Will the Home Secretary today back Labour’s plans to introduce 999 specialist call handlers for domestic abuse and specialist rape units in every police force, or bring forward her own urgent plans to do so?
Suella Braverman
I take violence against women and girls extremely seriously. That is why I added VAWG to the strategic policing requirement, meaning that it is set out as a national threat for forces to deal with specifically. We are funding the first full-time national policing lead for VAWG, DCC Maggie Blyth, who is driving improvements in the police responses. We are also providing up to £3.3 million for domestic abuse matters and consulting on increasing the powers that police have in responding to this heinous crime. There are many measures and initiatives that we have brought in over the years, and I am proud of this Government’s track record on supporting women and girls.
Nickie Aiken (Cities of London and Westminster) (Con)
Baroness Casey’s review makes for grim reading, and I pay tribute to her hard work and forensic gathering of evidence. We must remember that that evidence is available thanks to the many police officers who were brave enough to speak to Baroness Casey for her review. Next month marks the 30th anniversary of Stephen Lawrence’s murder, and we have seen from Baroness Casey’s review that things have not progressed, even though we have had inquiry after inquiry. Does my right hon. Friend the Home Secretary agree that the time has now ended and we must ensure that the Metropolitan Police Service cleans itself up, and that the Mayor of London has a major part to play in ensuring that police officers are held to account?
Suella Braverman
My hon. Friend is right to say that discriminatory attitudes and behaviours, whether racism, misogyny or homophobia, have no place in policing. I was appalled to read the shocking stories in the report. We need to ensure that the police act with the highest levels of honesty and integrity. We have to ensure that standards are improved, that we strengthen vetting, and that there is better police training and a more diverse leadership pipeline. All those measures, supported by the Mayor of London, will bring about real change.
John McDonnell (Hayes and Harlington) (Lab)
I associate myself with the words of the Father of the House about Gurpal Virdi. The relationship between the Metropolitan police and the Asian community, particularly in west London, was damaged by that case and also by the failure of the Met to properly investigate the death of my constituent Ricky Reel 25 years ago. It was subsequently discovered, when Ricky’s family were appealing for more police resources, that police resources were being applied to surveilling the family and the campaign itself.
The new commissioner has launched a new inquiry with a new inquiry team, but we need the assistance of the Home Secretary in releasing the confidential report that was undertaken by the Police Complaints Authority in the late 1990s exposing the failures of the original investigation, as well as the family liaison officer logs that were kept during that period, so that we can again look at what happened to Ricky subsequent to the racial attack that he suffered. The ownership of those documents is with the Home Secretary, not with the Met commissioner. I wrote to the Home Secretary in February about this. Please can I have a positive reply as soon as possible, to reassure the family?
Suella Braverman
It is clear that the Met needs to command the confidence of all communities, including those from black and ethnic groups, in London. That is why Sir Mark’s turnaround plan specifically covers better engagement with communities; it is vital that trust is rebuilt within those communities. There are lots of measures in train and I know that the Met commissioner takes very seriously the relationship and the trust among communities. I will look into the specific issue to which the right hon. Gentleman refers.
Mr Louie French (Old Bexley and Sidcup) (Con)
Today’s findings are very concerning and I know that my right hon. and learned Friend will do what she can to hold the Met and the Labour Mayor—the police and crime commissioner for London—to account after seven years of failure. What assurances can she provide that the thousands of decent and hard-working police officers can continue to focus on fighting crime, which I believe is the best way to restore public trust? Will she please urge the Met to reverse Sadiq Khan’s tri-borough policing policy, which continues to negatively impact policing in Bexley and starve it of resources?
Suella Braverman
Thanks to this Government, the Met now has a record number of police officers—the highest it has ever known in its history. That increase in meaningful resource on the frontline will make a difference to how it effectively polices and safeguards Londoners. We have also seen a cash increase in Met funding since 2010, and that is being put into increased resources. It is vital that we now work with Sir Mark and his team to ensure that there is a proper turnaround.
Catherine West (Hornsey and Wood Green) (Lab)
It is clear that some basic policies and procedures have gone seriously wrong. When an individual is raped, the advice is to keep the specimens in a refrigerator, so how can it be that during a hot spell last summer the refrigerator broke down and there was no back-up plan? How can that be? What is the Home Secretary going to do for every victim whose evidence was in that refrigerator? What is the plan? Is it to go back to those victims, apologise and explain what happens next?
Suella Braverman
The particular incident to which the hon. Lady refers is shocking and unacceptable. It must not happen again. It is absolutely clear that that is true.
Progress has been made. I have emphasised the importance that I attach to VAWG and the investigation and prosecution of rape. It is clear that police forces all around the country need to do better. We are seeing progress on the timeliness of investigations and the number of cases referred to the Crown Prosecution Service for charge; there is an increase in the number of independent sexual violence advisers and independent domestic violence advisers, who significantly increase the chances of a successful prosecution; and we have introduced special measures so that victims of rape and serious sexual offences can give evidence in a better way. There are many measures, but I am clear that I am not going to rest until we really succeed on this problem.
Lee Anderson (Ashfield) (Con)
I met the Met police a few weeks back with the Home Affairs Committee, and I was astounded to learn that officers who have been there for over 20 years are now investigating a culture that is well over 20 years old. Does my right hon. and learned Friend think it would be a good idea for more independent people to come into the Met force to investigate?
Suella Braverman
As Baroness Casey accepted, the vast majority of police officers uphold the highest professional standards, and I pay tribute to them for their everyday bravery in keeping Londoners safe. We must make sure that the Met continues to attract the best and brightest people from all walks of life so that they can bring diversity, expertise, experience and skills to ensure that it is the best force that we can have.
Bell Ribeiro-Addy (Streatham) (Lab)
I represent a constituency in Lambeth, where trust in policing is at the lowest level of anywhere in London. Instead of addressing the abuses of existing police powers, the Government seem to be creating new unaccountable powers. My constituency has sadly seen the death of two young people at the hands of police officers in the past two years alone, with the tragic murder of Sarah Everard in March 2021 and the fatal shooting of Chris Kaba in September 2022. This report is not the first to highlight institutional racism, sexism and homophobia, which the Home Secretary seems unwilling to accept.
We have to undergo a security check, including police checks, to work in this House. How hard is it to ensure that every single officer is run through a similar check? Will the Home Secretary commit today to doing that? I asked the new commissioner who is responsible for suspending officers for misconduct, and he said that, under the law, it is the Home Secretary’s responsibility. In November 2022, a response from the Minister for Crime, Policing and Fire said it was the commissioner’s responsibility. The Home Secretary has said today that there are impediments and that she could potentially change the law to make sure that this happens. Can she please explain who is in charge and exactly what is going on?
Suella Braverman
I have taken action by consulting on the disciplinary process. Vetting standards are set by the College of Policing, via its statutory code of practice and its authorised professional practice guidance on vetting, to ensure that standards are improved. I asked the inspectorate to conduct a rapid review of all forces and their responses to the report’s findings. The Policing Minister has led a lot of work with the College of Policing to strengthen its statutory code of practice for police vetting, making the obligations that all forces must legally follow stricter and clearer. We are doing work in the Home Office, but I am afraid that, ultimately, political accountability lies with the Mayor of London.
Mark Pritchard (The Wrekin) (Con)
I note the Home Secretary’s support for the commissioner, but could it be the case that the future of the Met hangs on one word: “ambiguous”? Not “institutional” but “ambiguous”. Is there anything ambiguous in either the findings, the recommendations or the terminology that the Home Secretary has seen in the Casey report?
Suella Braverman
Baroness Casey is clear that the vast majority of serving police officers in the Met uphold the highest professional and cultural standards. This report is not about them but about the unambiguous systemic failings of culture, management and accountability. I am very keen for us all to learn from this diagnosis, from which reform must grow.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
The Home Secretary is primarily responsible for the funding, which has seesawed, the vetting, which she just touched on, and, critically, the structure of the Metropolitan police. On the latter point, she has talked about the need for reform. Can she tell the House whether she has had any discussions about, or whether she is even considering, breaking up the Metropolitan police to take out counter-terrorism and leave a London police force for Londoners?
Suella Braverman
Even Baroness Casey does not recommend breaking up the Metropolitan police, so I do not support that proposal. The hon. Lady mentions funding, so let me be clear that cash funding for the Met has increased since 2010. The Met gets 57% more funding per capita than the rest of England and Wales, and 24% more than the next highest-funded force, Merseyside, which has a higher level of crime. On all accounts, there is funding for the Met and there should be no reason for a failure to improve.
Simon Fell (Barrow and Furness) (Con)
Baroness Casey’s review makes stark reading: “too little humility”, “denial”, a culture of covering up problems and a lack of emphasis on the issues that matter most to those the Met is meant to serve. That is compounded by, in the report’s words,
“institutional racism, misogyny and homophobia”.
When the Home Affairs Committee has been to meet Sir Mark and his team over recent months, it has been clear that they are working hard to turn around this culture and to root out the officers at the heart of doing so much harm to the public’s view of the force, but the public can wait only so long for this turnaround to happen. Can my right hon. and learned Friend confirm by what time and what metrics she will be looking to see whether the right reforms are taking root?
Suella Braverman
The new Met commissioner has been in place for only six months. From the moment he was appointed, he has been clear and unequivocal about the size of the challenge he faces and what it will take to turn it around, which is why he set out in detail his plan to restore trust and raise standards. He now needs all our support to ensure he can achieve that plan as quickly as possible.
Ruth Cadbury (Brentford and Isleworth) (Lab)
My hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier) specifically asked the Home Secretary about the seesawing, as well as the inadequacy, of funding. The report has a chapter on the inexperience of new officers. Does the Home Secretary now regret her Government’s decision to cut 20,000 officers?
Suella Braverman
As I said earlier, the Met police has done well on recruitment and now has a record number of police officers—higher than at any time under a Labour Administration. The force has a record number of police officers, thanks to this Government’s police uplift programme and our resource to increase and improve frontline policing.
Jackie Doyle-Price (Thurrock) (Con)
I am sure the whole House wants to celebrate the contribution of and thank all the women police officers who, we now learn, have had to deal with daily abuse and sexism from their male colleagues as they try to keep us safe. It is simply unacceptable that such behaviour is normalised in a service that is supposed to keep us safe.
If my right hon. and learned Friend is serious about tackling violence against women and girls, it simply is not adequate to come to this Dispatch Box and say it will take many years to fix the problems in the Met. I ask her to reflect on that and to see what more can be done within the Home Office to spread good cultural practice throughout our police services, because these issues are not restricted to the Met.
Suella Braverman
I agree with my hon. Friend that we need to make progress on improving protection and results for victims of rape and serious sexual offences, which is why we have instituted a programme of reform on the investigation and prosecution of rape. I recently announced the biggest ever package of measures on domestic abuse, in terms of the powers and the funding available for victims. This is a priority, which is why I added violence against women and girls to the strategic policing requirement, meaning it is now set out as a national threat, sending the message to chief constables and forces across the country that this can no longer be dismissed.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
We have to pause for a minute and really think about the fact that our national police service has been declared institutionally racist, sexist and homophobic. I think about all the victims in my Vauxhall constituency who continue to be let down. We have to make this a real turning point.
I have raised with the Home Secretary and the Policing Minister the fact that, over the years, the Met has let down a number of young, vulnerable girls who are being exploited by gang members. Because of the adultification of young black girls, they, and not the gang members, are viewed as the criminals. We are talking about girls as young as 12 years old being forced into sexual exploitation, servitude and abuse. Instead of dealing with their trauma, the police criminalise these young girls. Does the Home Secretary agree that this should be a matter of shame for the Met police? Will she work with me to look at how we can end this exploitation?
Suella Braverman
The exploitation of women and girls is unacceptable, whether by gangs or by individual perpetrators, or whether it is structural misogyny, as we have read in Baroness Casey’s report. Policing leaders need to do all they can to restore confidence among communities and among women and girls. We need to ensure that policing standards are increased, vetting is improved and training is reformed, and that there is a more diverse leadership pipeline. We need more women to come forward to take leadership roles within the police so that we see change.
Laura Farris (Newbury) (Con)
Baroness Casey said that the Sarah Everard case should have been responded to with the seriousness with which
“a plane falling out of the sky”
would be responded to in the aviation sector. Yet some of those now responsible for implementing the fundamental reforms, particularly to vetting and disciplinary procedures, have worked for the Met police for years or even decades, as in the case of the commissioner. Is my right hon. and learned Friend confident that those already imbued with the structures and cultures of the Metropolitan police have the leadership skills to deliver the fundamental change that is now required?
Suella Braverman
My hon. Friend is right to say that we need to see change. Sir Mark Rowley has been in post for six months and he is clear that we need to see change. We have commissioned several independent reports. Baroness Casey’s is one, but we also have the one from Lady Angiolini—she is due to report on standards and culture. These independent voices will be vital in effecting change, but it is also clear that the independent scrutiny brought about by the Mayor’s Office for Policing and Crime and the Mayor of London will be critical in bringing about change.
Jeremy Corbyn (Islington North) (Ind)
Baroness Casey’s report makes it very clear that what campaigners have been saying for years is absolutely true: black Londoners are disproportionately likely to be stopped and searched by the Metropolitan police. It also calls for fundamental change in that whole policy. Will the Home Secretary explain how the Public Order Bill, which gives the police increased powers of stop and search during protests or demonstrations, fits with the recommendations made by Baroness Casey? Will she also suspend the operation of that section of the Public Order Bill until such time as the police have been able to reform their ways on the disproportionate stopping and searching of black Londoners?
Suella Braverman
As Baroness Casey makes clear, the majority of Londoners support the appropriate use of stop and search. As Sir Mark has made clear, stop and search is a vital tool in keeping Londoners safe and saving lives; 350 to 400 knives are seized per month thanks to stop and search. That is why I emphatically support the appropriate use of stop and search as a way to keep everyone safe.
Mary Robinson (Cheadle) (Con)
Baroness Casey’s report makes harrowing reading. We see a police force riddled with misogyny, racism and homophobia; and a place where complainants or whistleblowers, rather than being listened to, are turned on and mistreated, leading to a systemic fear of speaking up. During the UK’s first Whistleblowing Awareness Week, this report shines a light on the failure of organisations where there is a culture of fear and cover-up. Shockingly, the report makes the following clear:
“The culture of not speaking up has become so ingrained that even when senior officers actively seek candid views, there is a reluctance to speak up.”
Clearly, the Government, the Mayor and the Met leadership must act on all of the report’s recommendations. However, may I add another one of my own, by encouraging my right hon. and learned Friend to consider how whistleblowing reform and an office of the whistleblower could play a key part in eradicating toxic cultures across all organisations?
Suella Braverman
My hon. Friend is right to highlight the need for reform of misconduct procedures. There are measures to ensure that there is transparency and rigour in the system, including the Independent Office for Police Conduct. The Government have also introduced other measures, including routinely holding misconduct hearings in public and having independent legally qualified chairs to lead misconduct hearings. But there is a vital need to ensure that provision on dismissals and the process of rooting out inappropriate officers is improved, which is why I have launched a consultation to look at just that.
Clive Efford (Eltham) (Lab)
One of the first things I did as a newly elected MP in 1997 was call for an independent inquiry into the investigation into the murder of Stephen Lawrence. That became the Macpherson report of 1999, and it is a sad indictment that we are back here again with the Metropolitan police being called institutionally racist. People such as Carrick and Couzens are the tip of the iceberg. In order for them to get away with what they got away with, hundreds of other officers have had to turn a blind eye. That is an indictment of the culture that exists within the Metropolitan police and other police forces, and those who want to do the right thing are held back because there is not a disciplinary process to deal with the people who do bad things. So what is the Home Secretary going to do, not just with the Met—do not blame the Mayor—but about our national police force to ensure that a proper disciplinary process is in place that allows the good people to do their jobs properly?
Suella Braverman
What I am already doing is running a review of the dismissals process. On the issues that the hon. Gentleman raises, this is why the Met commissioner’s establishment of a new anti-corruption and abuse command, with a wider and more proactive remit, is absolutely essential. That will raise internal standards and internal accountability, and it will facilitate and empower people to come forward, challenge and report bad behaviour.
Janet Daby (Lewisham East) (Lab)
The Casey review is truly damning; there is institutional racism, institutional misogyny and institutional homophobia in the Met. On child protection, the review recommends creating a new children’s strategy. Does the Home Secretary support that? If so, what is the top issue on child protection and safeguarding that she wants this strategy to address?
Suella Braverman
I was disturbed by Baroness Casey’s findings on the issues relating to the work on public protection and safeguarding. That is why that has been expressly dealt with in the turnaround plan set out by the Met commissioner; there are key interventions to invest in the safeguarding teams and achieve national best practice standards. The police want to ensure that there is better data and technology to target perpetrators and protect victims. We want to ensure that there are positive criminal justice outcomes for public protection cases and that safeguarding and the people who work in it are properly supported.
Sam Tarry (Ilford South) (Lab)
I represent the most diverse constituency in the whole of the UK. Over the past three years, we have faced stabbings and homicides far too frequently. Recently, we have had the awful and avoidable tragedy of the murder of Zara Aleena. Those in my local community want to be able to trust the thin blue line to look after and protect them. Unfortunately, as is set out in the Casey report and in the conversations I have day to day in Ilford, it is clear that people do believe that the Met police is institutionally racist and institutionally misogynistic. I want to be able to go back to them today having heard from the Home Secretary about what she is going to do. I do not want her to pass the buck; I want her to make sure that my constituents can trust the police; that they will not be raped or murdered by people who are police officers; that they can call 999 and know that help will be on the way; and that they will be protected in the way that they should be.
Suella Braverman
Baroness Casey is clear that the failings in relationships with communities are serious. That is why it is paramount that public trust in the Met is restored. I am going to continue to hold the Met commissioner to account, as well as the Mayor of London, because he has an important role to play here. But it is clear that we need to ensure that the Met has the resources it needs, which is why I am pleased that it now has the record number of police officers in its history on the frontline, working to keep Londoners safe. It has also made significant progress already in achieving some of the stated goals in its turnaround plan.
Stella Creasy (Walthamstow) (Lab/Co-op)
Recognising that the Met has been decreed to be institutionally misogynistic, homophobic and racist is not just about a label; it is about the lived experience of the communities that many of us have served and worked in for generations, and the message we had been trying to get across to the Home Secretary and her predecessors, as well as the Met leadership, for many years. All of us have a role to play in restoring confidence for our communities, but the Home Secretary will know that as of today there are still more than 100 serving officers in the Met being investigated for sexual misconduct and domestic violence. She could do something about that today. Let us be clear: if she wants to bring forward emergency legislation to deal with the issues stopping those officers being dismissed, she will have our support. Will she do it?
Suella Braverman
I am very proud that a Conservative Government brought in landmark legislation—the Domestic Abuse Act 2021—that, for the first time, increased the powers relating to and the status and seriousness of domestic abuse. We have announced our intention to bring in legislation at the earliest opportunity to ensure that offenders convicted of coercive and controlling behaviour are automatically managed in the same way as violent offenders. We have also run an important measure and are consulting on a lot of investment to support victims of domestic abuse, and I am very proud of this Government’s track record on empowering the police to better support victims of domestic abuse.
Ms Karen Buck (Westminster North) (Lab)
Neither the long-standing concerns about police culture identified in the Casey report nor the individual instances of racism, misogyny and homophobia in the police can be laid at the door of the cuts to the police budget over the early part of the last decade and the see-saw funding since then; that would allow those responsible to escape that responsibility. However, does the Home Secretary accept that the collapse of neighbourhood policing, not just in London but across the country, has fundamentally changed the relationship between the public and the police? Will she ensure that the police across Britain—not just in London—rebuild their neighbourhood policing? How will she hold police forces to account in restoring that vital function?
Suella Braverman
I am very glad that the Met has an increased, record number of police officers. Many of them will be deployed on the frontline to neighbourhood policing teams, so we will have an increase in response. The turnaround plan specifically addresses how the Met will improve its neighbourhood policing response through better powers and quicker responses from the response team, ensuring that antisocial behaviour is dealt with. That is a priority for both the Met and myself.
Helen Hayes (Dulwich and West Norwood) (Lab)
For many of my constituents, reading Baroness Casey’s report will be the first time that their experiences of policing have been validated and vindicated. The same cannot be said for the Home Secretary’s response. It is hard to overstate the frustration and betrayal that so many Londoners have felt when they have raised concerns with the police and have been met with a stone wall of defensiveness, excuses and denial. Among many, many issues that Baroness Casey highlights are serious problems with transparency and accountability. My experience in raising complaints about two very serious matters of police conduct is that there is no accountability because the IOPC will refer complaints back to the Met to be investigated, and internal investigations simply cannot deliver. What will the Home Secretary do to resolve the situation in which the police mark their own homework and there is no accountability or change?
Suella Braverman
As Baroness Casey’s report made clear, primary accountability sits with the Mayor of London. It is for the Mayor, rather than the inspectorate or any other body, to hold the commissioner directly to account for taking the rigorous action needed to address concerns. It was frankly shocking to read that the Mayor has not chaired a board for several years. I am very glad that he has now agreed to start discharging his role appropriately, but it is clear that governance and accountability need to improve. That is why that constituted a significant element of the report.
Fleur Anderson (Putney) (Lab)
Putney constituents will find the report shocking but not surprising in many ways. Cuts have consequences. A major culture change is essential, but the Casey report lays out that the cuts resulted in the culture problem increasing. The Home Secretary said that funding for the force will be up to £3.3 billion, but in 2011, the funding was £3.7 billion, so there is a real-terms cash cut. Along the way, there has been £1 billion of cuts, and the funding for the Met is now 18% lower in real terms than it was in 2011, which is equivalent to 9,600 police officers. We see in the report that police officers have been taken away from our streets, that the number of senior police officers has been cut, which reduces accountability, and that there were cuts to rape investigation units. Does the Home Secretary accept her part in that and in the report’s findings about national cuts? Will she fund the reforms that are needed to win back trust?
Suella Braverman
In 2023-24, the Met police will receive up to £3.34 billion in funding. That is an increase of up to £97.6 million on the previous year and £177.8 million compared with 2010. The average funding per head of population for the Metropolitan police is higher than for any other force. In terms of funding, resources and police numbers, which I mentioned, there is no reason why the Met cannot succeed in turning this around.
Carol Monaghan (Glasgow North West) (SNP)
The Casey review shines a damning light on racism, misogyny and homophobia in the Met police, but that is not isolated. There are other organisations where such behaviour goes unpunished. The hon. Member for Wrexham (Sarah Atherton) published her report on the experiences of women in the armed forces, which was similarly damning. What discussions has the Home Secretary had with Cabinet colleagues about shining further light on major organisations—such as the armed forces—in which the public should have absolute trust?
Suella Braverman
I only have responsibility for the police. That is why earlier this year, I asked for all forces to go through their data, wash it and check for cases where police officers should not be serving on the frontline or, indeed, in the force at all. Forces are coming forward with that information and that will be a good thing to ensure that the police force nationally rids itself of those who are unfit to wear the badge.
Liz Kendall (Leicester West) (Lab)
I thank Louise Casey for her report and service to the country. Like her, I am fundamentally pro-policing and appalled at the findings. To give an example, sexual offences units kept rape kits in broken fridges next to lunchboxes, which may have included swabs taken from victims—an absolutely appalling thing to have to go through—and armed police units wasted money on spurious kit such as night vision goggles and camouflage clothes. My constituents will want to understand whether there are wider implications. What assessment has the Home Secretary made of the degree to which these appalling failings are happening in other forces? What action will she take to ensure that my constituents and those across the country get the decent, safe policing that they deserve?
Suella Braverman
I expect every report of rape to be treated seriously from the point of disclosure. Every victim needs to be treated with dignity and every investigation needs to be conducted thoroughly and professionally. The rape review took a hard and honest look at how the entire criminal justice system deals with rape, and in too many instances, it has not been good enough. That is why there is a whole programme of work afoot—including Operation Soteria, of which I am a big supporter—to improve the investigation of rape, reduce the time that it takes to get a prosecution going, and, ultimately, to improve outcomes for victims of rape.
Wendy Chamberlain (North East Fife) (LD)
As a former police officer, I would like to say that I was shocked to read Baroness Casey’s excellent report, but to be honest, I am pretty inured by now to some of what we have heard. I will make two points. First, in my view, the most important rank in the police service, particularly if we want to change the culture, is police sergeant, but the report told us that the training for police sergeants amounted to a 23-slide PowerPoint. Will the Home Secretary task the College of Policing to ensure, and make an assessment, that that is not the case in other forces, and to directly support the Met in that regard? Secondly, as a Scottish MP—not a police officer any more—let me say that the Met’s performance impacts my constituents, too, through its national priorities. The Casey report said that it did not recommend dismantling the Met at this point but that that may be recommended in future. How will that assessment be made and who will make that decision?
Suella Braverman
The hon. Lady is right to talk about leadership training; that is why I work closely with the College of Policing to ensure we have a better programme of preparation for the next generation of police leaders. That must start early on in a policing career. The existing training is frankly not good enough, and that is why there will be a programme of reform announced soon.
Charlotte Nichols (Warrington North) (Lab)
Among the most harrowing parts of Baroness Casey’s report, she quotes a serving police officer who says of rape,
“you may as well say it’s legal in London.”
However, that is not just an issue for London or the Metropolitan Police. This Government have allowed the national charge rate for rape to drop to an abysmal, historic low of 1.6%. Does the Home Secretary accept that this is a national problem, and that it is her responsibility to fix it so that victims can expect justice from our justice system?
Suella Braverman
It is exactly because we accept that there have been problems with the investigation and prosecution of rape that the Government commissioned the end-to-end rape review, which looked rigorously at how we can improve the investigation and prosecution of rape. The Metropolitan police is part of Operation Soteria, a pioneering new way of delivering better outcomes for victims. In the last year, the number of charges for adult rape offences increased by 79%. That is progress and movement in the right direction, and we need to ensure that it continues.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
The Casey review’s conclusion that the Met is institutionally broken is damning, but this is not just about the Met. Looked at from Wales, the Westminster model of policing is failing. If we want policing in Wales to reflect the values of the people of Wales, strategy and scrutiny must be made in Wales. When will the Home Secretary acknowledge that reality and devolve policing to our Parliament?
Suella Braverman
I do not support devolving policing to Wales. We have a national oversight role for all forces in England and Wales, and I am very glad that the forces in Wales have responded well to my call for all chiefs to look at their data and vetting and to improve their vetting standards.
Jon Trickett (Hemsworth) (Lab)
A mature woman constituent who came to see me had been abused as a child by her father. The police simply did not address the matter for years and years until, through that struggle, we eventually managed to get a prosecution and the father ended up in jail. He is still there now. This is not simply a problem of the Met. What is the Home Secretary doing? Is it not reckless to hand over new police powers, such as stop and search, without suspicion of any crime being committed, to a racist, homophobic and misogynist police force? What guarantee can she give that those very police officers who are not acceptable will not use those powers to pursue their evil ways?
Suella Braverman
On improving standards, I have launched a review of the dismissals process. We wait for that to conclude, and on the back of that we will take action, legislative if necessary, to change the standards and the process by which chief constables and senior leaders in policing apply those standards in recruitment. It is important that we look at the evidence from that consultation, and we will be announcing measures in due course.
Neale Hanvey (Kirkcaldy and Cowdenbeath) (Alba)
Institutional racism, misogyny and homophobia are bad enough, but the deliberate operational decision to deprioritise women’s safety and child protection is serious and unforgivable. I asked the Home Secretary about safeguarding in response to her statement on David Carrick, and on 9 February I wrote to the Prime Minister asking him to look at establishing an independent safeguarding regulator, because this is a much bigger problem than the police. We have policy capture by proponents of queer theory that undermines the very activities that are of concern: women’s safety and child protection. Is it not time that we had an independent regulator that, as the hon. Member for Glasgow North West (Carol Monaghan) suggested, can tackle those problems across all public bodies?
Suella Braverman
It is precisely because I take violence against women and girls seriously that I added it to the strategic policing requirement, so that it is set out as a national threat for forces to respond to alongside the other threats listed there. I am very proud of the range of tools and powers that the Government have introduced, such as stalking prevention orders, sexual harm and sexual risk orders, and forced marriage and female genital mutilation protection orders—a whole range of legislative measures that are empowering the police to respond more robustly to victims of abuse and domestic abuse.
Tonia Antoniazzi (Gower) (Lab)
Baroness Casey’s finding of a “boys’ club” is sadly not a surprise to many of us—and let us not pretend that that culture is purely confined to WhatsApp groups in the Metropolitan Police. The report has shown the urgent need for action to make policing and police forces more transparent. When public trust in policing is at its lowest, it is unfathomable that serving police officers are not obliged to declare their affiliations with and memberships of societies such as the Freemasons. I urge the Home Secretary to bring in legislation to address that lack of transparency.
Suella Braverman
Vetting standards are set by the College of Policing via its statutory code of practice on vetting, and the inspectorate has looked in depth at whether those standards are being properly applied. We are strengthening the statutory code of practice for police vetting and making the vetting obligations on all forces stricter and clearer. That is action that we are taking, but of course we need chief constables to take the requisite action at their end.
Geraint Davies (Swansea West) (Lab/Co-op)
Baroness Casey’s report underlines the fact that the Met is systematically dysfunctional and discriminatory. That is manifested on a day-to-day basis when women and minority officers seek support in their workplace and are simply bullied and intimidated. When they complain, gangs of sergeants troop up to ridicule, abuse and coercively control them. Will the Home Secretary change that by introducing civilian management resources and independent accountability to empower and empathise with women and minority officers, with a view to increasing performance, welfare and retention in place of misogyny, racism and homophobia? Then we can get rid of the toxicity and have forces that we can all be proud of, both in the Met and across the land.
Suella Braverman
Baroness Casey’s review makes clear that there is a need for some regulatory change. We are currently undertaking a review of the process for police officer dismissals, due to conclude in May, which will cover some of those issues, but we need to consider all the outcomes of the review before determining next steps.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State for her statement. Baroness Casey’s report is not simply uncomfortable, but devastating in the detail and the extent of problems and difficulties. It seems clear that nothing short of a complete overhaul of the force will engender the restoration of public trust. However, does the Secretary of State agree that the thousands of good Met officers cannot be tarred with the same brush? What steps will she take to support those members of staff and ensure they do not face unfair accusations at this time?
Suella Braverman
The hon. Gentleman is absolutely right to pay tribute to the vast majority of serving police officers in the Met and throughout the country who do a good job, who are honest, decent and brave and who uphold the highest standards. Many of us will never see the crime prevented, the victims protected or the justice secured thanks to their everyday bravery. It is to that majority of officers that I appeal for their commitment. We cannot change this situation without them. They are part of the solution, and they need to step up and step forward if that much-needed change is to happen. We need to back the leadership and our brave police officers so that together we can create a Met that is fit for purpose.
Andrew Gwynne (Denton and Reddish) (Lab)
The Casey review is damning and makes difficult reading for those of us who support the police and the concept of policing by consent. Of course, these issues are pertinent not just to the Metropolitan police but to police forces across the country. I was reassured to receive an email today from Chief Superintendent John Webster, the district commander for Stockport in Greater Manchester police, in which he said:
“I’m sure you’ll agree with me that there will be some parallels that we can draw from this report. On standards of professional behaviour, it goes without saying that these are non-negotiable, and as your District Commander, it is important for you to know that I will never bend outside of our rules. I expect you all to have the same view.”
What is the Home Secretary doing to ensure that the words of Chief Superintendent Webster are communicated not just to his police officers in the Stockport division, but to police officers across the whole country?
Suella Braverman
If that is the last question, perhaps it is inspiring for us to end this session with reference to Greater Manchester police, because under the powerful leadership of Chief Constable Stephen Watson, that force has turned around. In a relatively short time, it has gone from being a failing force with severe, chronic and systemic problems to a force that is succeeding and winning in the fight against crime. That is thanks in large part to the strong leadership of Stephen Watson, upholding the highest standards, holding his officers to account and ensuring that the needs of the public come first and foremost in policing. That is a great example of what is possible for the Met.
Bill Presented
Elections Bill
Presentation and First Reading (Standing Order No. 57)
Cat Smith, supported by Wendy Chamberlain, Caroline Lucas, Stephen Farry, Liz Saville Roberts, Clive Lewis, David Linden and Helen Morgan, presented a Bill to introduce a system of proportional representation for local authority elections in England and for parliamentary general elections; to alter the methods used for electing the Mayor of London, for electing other directly-elected mayors in England and for electing police and crime commissioners in England and Wales; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 24 March, and to be printed (Bill 275).
Same Sex Marriage (Church of England)
Tuesday 21st March 2023
(1 year, 9 months ago)
Commons ChamberRead Full debate Same Sex Marriage (Church of England) Bill 2022-23 View all Same Sex Marriage (Church of England) Bill 2022-23 Debates Read Hansard Text Watch Debate
A Ten Minute Rule Bill is a First Reading of a Private Members Bill, but with the sponsor permitted to make a ten minute speech outlining the reasons for the proposed legislation.
There is little chance of the Bill proceeding further unless there is unanimous consent for the Bill or the Government elects to support the Bill directly.
For more information see: Ten Minute Bills
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr Ben Bradshaw (Exeter) (Lab)
I beg to move,
That leave be given to bring in a Bill to enable clergy of the Church of England to conduct same sex marriages on Church of England premises in certain circumstances; and for connected purposes.
As I am sure colleagues are aware, the Church of England has grappled with the issue of human sexuality for many years. It has been nearly 18 years since the passing of the Civil Partnership Act 2004 and 10 years since the passing of the Marriage (Same Sex Couples) Act 2013, or equal marriage Act. The Church of England opposed both reforms at the time. It has since changed its mind on civil partnerships, but it still opposes equal marriage, will not allow same-sex weddings in church, and requires its own clergy in same-sex relationships to be celibate. The Methodist Church and the United Reformed Church in England conduct same-sex weddings, as do the Anglican—or Episcopal—Church in Scotland, the established Church of Scotland, and several other provinces of the global Anglican communion.
The most recent opinion poll commissioned by The Times and conducted by YouGov in February found that a majority of the public, and a majority of Anglicans, support marrying same-sex couples in church. People who know the private views of the bishops better than I do believe that a majority of them also support treating lesbian and gay members equally. But in January, after six years of formal discussions in the Church, through a process called “Living in Love and Faith”, the bishops recommended to the Church of England’s General Synod that there be no significant change to the current rules. Instead, they recommended allowing some limited prayers of blessing for people in same-sex relationships—although not a blessing of the relationship itself—and they promised to review the current rules regarding the clergy.
That was a bitter disappointment to many Anglicans and their families and friends. I will quote just one of the emails I have had about my Bill. Susannah wrote:
“I am a lesbian Christian who has worked in prisons and as a teacher and a registered nurse for 40 years. I have tried to lead a decent and caring life, but my church has refused to marry my wife and myself and I find that deeply demeaning. I have engaged with over 50 bishops trying to get them to allow freedom of conscience on this at local church level. The recent decision (to continue the ban) was devastating, and my wife no longer wants to be part of an organisation that discriminates in this way. We are so grateful for your support in introducing this Bill.”
The House might ask why this is a matter for MPs and for Parliament. Well, the Church of England is not just some sect; it is the established Church in England. It was established by Parliament and still has its Church or canon laws approved by Parliament.
The monarch is its Supreme Governor; its bishops are appointed by the monarch on the advice of the Prime Minister and sit in the other place; it runs thousands of schools across England. With those privileges of establishment comes a duty to serve the whole nation—to be there for all citizens.
As constituency MPs, we have all had experience of the special role played by the Church of England in our nation’s life. In times of tragedy and celebration, the Church’s doors are open to all in our communities. Personally, I value that role, and I believe that most Anglicans and parliamentarians do, too. But when the practice of the Church in how it treats its lesbian and gay members persists in being so out of step with the country as a whole, that established status is bound to be questioned.
Sir Tony Baldry, the former Conservative MP and Second Church Estates Commissioner, recently called for a Bill just like this one to be introduced in Parliament. He noted that when Parliament relinquished most of the responsibility for Church legislation in 1919, it was not envisaged that there would be a major issue of doctrine or practice on which Church and state would diverge. But during the 20th century, as society and attitudes inside the Church changed, differences emerged over the treatment of divorcees, for example, or the role of women in the Church.
On each of those subjects, the Church eventually adjusted to the new reality, but not without a gentle nudge from Parliament. We did that most recently over the decision to allow women bishops when, at the first time of asking, the Synod failed to approve the change. Parliament, through the Second Church Estates Commissioner, made it quite clear to the bishops that that was an unacceptable state of affairs. The following Synod approved the measure, and Parliament legislated to fast-track women bishops into the other place.
Parliament nudged the Church then, and a gentle nudge is what this Bill is intended to give now. It would allow, in certain circumstances, priests and parishes that wish to conduct same sex weddings to do so—a solution similar to the one governing the remarriage of divorcees or whether a parish should be forced to have a woman priest. I have seen some conservative evangelicals and other opponents of equality claim in recent days that the Bill amounts to an attack on religious freedom or to Parliament legislating on doctrine. It is neither. The Bill is deliberately drafted as permissive, so as to allow those who wish to move forward to do so “in certain circumstances”. Such circumstances could include prior approval by the Synod.
Many would like Parliament to go further, including my local priest, a traditionalist who nevertheless said to me after mass—following the heated debates in Synod in February—that, “Parliament should just get on with it.” Parliament could get on with it, but that is not the intention or necessary consequence of my Bill. My preference—and, I imagine, that of most colleagues—would be for the Church to do this itself. A vote at February’s Synod to allow same-sex weddings was very close among the clergy and laity. It is quite possible that, once blessings are allowed and the world does not fall in, things could move rapidly in the next few years. Yet even if the Church of England wanted to conduct same-sex weddings, it is currently prevented from doing so by the so-called quadruple lock to the equal marriage Act. This Bill could, should Parliament wish, simply remove that lock, meaning that the Church would not have to come back to Parliament again as and when it decided to change its doctrine and practice.
Of course, discussion about the potential impact of the Bill is somewhat academic, given that it has no chance of becoming law. The main motivation in introducing it is to encourage the bishops to stick to the commitments and timetable agreed by February’s Synod and resist any delay or backsliding at the next Synod in July. There has been sustained pressure from a vocal minority inside the Church against the very modest proposals on the table.
Some conservative provinces in the global Anglican communion have disowned the Archbishop of Canterbury, and a small number of homophobic parishes here have stopped paying their diocesan contributions in protest. There is a small minority in the Church of England who will never be reconciled to treating gay and lesbian people equally. They are holding the majority back. The Church leadership should stop indulging them and focus on their primary mission to the majority of Anglicans here. That might also make it easier for them to focus on the many important things the Church has to say and offer about the 21st century.
I am immensely grateful for and humbled by the range and quality of the co-sponsors of this Bill. They include the right hon. Member for Romsey and Southampton North (Caroline Nokes), the right hon. and learned Member for South Swindon (Sir Robert Buckland), my right hon. Friends the Members for Derby South (Margaret Beckett), for Kingston upon Hull North (Dame Diana Johnson) and for Leeds Central (Hilary Benn), the hon. Members for Milton Keynes South (Iain Stewart), for Brighton, Pavilion (Caroline Lucas) and for St Albans (Daisy Cooper), my hon. Friend the Member for Rhondda (Sir Chris Bryant) and both the Mother and Father of the House. I apologise to those who wanted to be sponsors but did not make the list, but I am only allowed 11.
I hope the Bill serves, if nothing else, to give hope to those still waiting for change, like Susannah and her wife, and sends a clear message to the Church of England leadership about where Parliament stands on these matters. I commend it to the House.
The Second Church Estates Commissioner (Andrew Selous)
I do not intend to divide the House, but it is necessary to respond to the Bill in my capacity as Second Church Estates Commissioner because it seeks to usurp the role of the democratically elected General Synod of the Church of England, as well as to remove the freedom of the Church of England to decide its own doctrine, a freedom that members from all parts of this House champion for religions and beliefs all over the world and one that we should therefore apply equally to the Church of England.
There are passionately held and differing views about same-sex marriage on both sides of the House and I am also acutely aware of the personal pain and hurt that the issue causes for so many people, but it is for the democratically elected assembly of the Church of England, the General Synod, to decide matters of doctrine rather than Parliament. That has been the settled convention for nearly 50 years, since the 1974 worship and doctrine Measure was approved by Parliament.
At the General Synod last month, it was agreed that the prayers of love and faith proposed by the bishops would be finalised, that the pastoral guidance for clergy would be produced and that a welcoming culture towards LGBTQI+ people would be embedded throughout the church. It was also agreed not to change the doctrine of marriage and that motion was passed by a clear majority in all three Houses of the Synod. Amendments to require the bishops to bring forward proposals for same-sex marriage to the next meeting of the Synod and to revisit the issue within the next two years were rejected by the House of Bishops, the House of Clergy and the House of Laity.
The Bill proposed by the right hon. Member for Exeter (Mr Bradshaw) proposes that the decision of the Synod, arrived at prayerfully and democratically, should simply be set aside. In this House, we do not all agree with each other, but we respect everyone’s right to be here because we have all been given our mandate through the same black boxes on election night. I ask that members of this democratically elected House to show the same respect to the democratically elected members of the General Synod.
Directing the Church of England on doctrine is not the job of Parliament. It would infringe on settled principles of religious freedom, for which we argue for our sisters and brothers overseas, and it would also call into question the rights and protections of conscience for other denominations and faiths. Several Catholic members of this House came up to me after the urgent question on 24 January and told me how grateful they were that Parliament was not telling their Church what to do.
The Bill is also unnecessary, as should the Synod decide to change the doctrine of marriage in the future, it could do so. It would produce a Measure that would come before Parliament and amend the Marriage (Same Sex Couples) Act 2013. There is no need, therefore, for Parliament to act independently to change the Act.
Although the Bill is intended to be permissive and not to compel any member of the clergy to solemnise same-sex marriage, it is just not possible to leave it to individual clergy to choose to do things that are clearly contrary to the doctrine of the Church. Doctrine is not determined by local decision varying by parish or diocese, but is decided centrally, not by a small group of bishops, but through the prayerful deliberation and decision of the democratically elected Synod. If the Church lost its ability to require compliance with its doctrine, that would be a breach of the human rights convention as it would be contrary to article 9 read with article 11 for the state to interfere with a religious organisation’s ability to require compliance with its own doctrine. The Bill’s attempt to give individual freedom and choice would be unworkable and would breach the long-standing convention that Parliament does not legislate for the internal affairs of the Church of England without its consent.
I honoured my commitment to tell the General Synod the views of Parliament as expressed in the urgent question on 24 January. I know that the General Synod will continue to listen carefully and respectfully to the views of this House, just as I would ask Parliament to be respectful to the views of the Synod.
Question put (Standing Order No. 23) and agreed to.
Ordered,
That Mr Ben Bradshaw, Margaret Beckett, Hilary Benn, Sir Peter Bottomley, Sir Chris Bryant, Sir Robert Buckland, Daisy Cooper, Ms Harriet Harman, Dame Diana Johnson, Caroline Lucas, Caroline Nokes and Iain Stewart present the Bill.
Mr Ben Bradshaw accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 24 November, and to be printed (Bill 274).
Ways and Means
Budget Resolutions and Economic Situation
(1 year, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Levelling Up, Housing and Communities (Michael Gove)
It is a pleasure to open this final day of the Budget debate. It is a particular pleasure to be opposite my old friend, the right hon. Member for Doncaster North (Edward Miliband). It is a pleasure that both of us now—I think I can fairly say as elder statesmen of our respective parties—have a chance to be taken around the parade ring one more time in front of everyone. There is a difference, however, between me and the right hon. Gentleman. I went from rising hope to elder statesman without an intervening period of achievement, whereas he was a very distinguished Energy Secretary and Leader of the Opposition. It is a pleasure to see him in his place.
The fact that we are both in the Chamber today also demonstrates the wisdom of one of the Budget measures. In the Budget, the Chancellor of the Exchequer made it clear that he wanted to bring people who had been dropped from the frontline of the workforce back into the frontline if they still had something to contribute. It is welcome to see not just both of us here, but, within days of the Budget, someone of real talent who had been retired from the frontline coming back: I am referring, of course, to the news that broke just an hour ago that Roy Hodgson has returned as manager of Crystal Palace.
I am conscious that this is not the most significant political or parliamentary event this week. All of us will this week be thinking of another political figure—a blond titan who divides opinion, a figure of undoubted achievement who defied the then Prime Minister over Europe but whose passion for Britain and especially for overlooked and undervalued communities cannot be denied. I am referring, of course, to the former Member for Henley, Lord Heseltine of Thenford, who is 90 today. I hope I speak for the whole House in wishing Lord Heseltine many happy returns. He is a personal hero of mine, although we do disagree on some things. He is that rare thing—a Conservative who has been given the freedom of the city of Liverpool—
Michael Gove
He was against Brexit, that is true. We all have our flaws, myself included. I am pleased to say that many people were in favour of Brexit, including well over 70% of the members of the constituency of the right hon. Member for Doncaster North. Brexit has been delivered by this Government, Brexit is a settled fact and we are all committed across this House to making Brexit work.
Lord Heseltine set an example of leadership: pro-enterprise, compassionate and inclusive in the best traditions of one nation conservatism, which are being carried on by my right hon. Friends the Prime Minister and the Chancellor of the Exchequer. Look at what the Prime Minister has already achieved this year. In the early weeks of this year, he issued a section 35 notice with the Secretary of State for Scotland in order to uphold the principle that the Equality Act 2010 should be a shield and not a sword. As a result, women’s rights were protected across the United Kingdom. Shortly after that, he concluded the Windsor framework, which further strengthened our United Kingdom and ensures a closer and more effective relationship, not just within these islands but with our neighbours and friends in the European Union. He then concluded the next stage of the AUKUS defence pact, which means that the waters of the Pacific will be patrolled and democracy will be defended by submarines built here, in Barrow-in-Furness on the shores of the Irish sea, securing jobs and investment for thousands of talented young people for decades to come.
Shortly after that, we had legislation to control illegal migration and a concordat with President Macron, with money being spent in order to ensure that the French police are supported in making sure that illegal people smugglers are dealt with effectively. After that, we had steps to ensure that tech firms were protected in this country from Chinese takeover, and we also had the rescue of the UK branch of Silicon Valley Bank. We also had the establishment of a new Government Department, the Department for Science, Innovation and Technology. That innovation was called for by William Hague and by Tony Blair—remember him?—and it reflects what every world-leading jurisdiction is doing, ensuring that more research and development investment is directed to where we need it.
All this time, as the Prime Minister and the Chancellor were recording those achievements, what has the Leader of the Opposition, the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), done? Well, he has been energetic in expressing profound concern about the presenter rota on “Match of the Day”. While our Prime Minister has been a new statesman, I am afraid that the Leader of the Opposition has been a mere spectator. While our Prime Minister has been shaping global events, the Leader of the Opposition has been furiously scrolling through his Twitter feed. While our Prime Minister has been halving inflation, reducing debt, growing the economy, cutting waiting lists and stopping the boats, I am afraid that the Leader of the Opposition has been reduced to an irrelevance on the bench. We in this Government are delivering impactful, progressive government, while Labour can only look on in consternation and admiration.
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
Before the right hon. Gentleman gets too excited, the Office for Budget Responsibility’s report provides a rather sobering analysis about economic stagnation for the duration of the forecasting period. That is predominantly down to the same old problems, including low productivity—according to the OBR, productivity has halved since 2010. Business investment has stagnated since 2016. Why have successive Governments and Chancellors failed to get a grip on these issues?
Michael Gove
The hon. Gentleman raises an important point, which goes to the heart of what the Budget addresses. It is the case that there is a productivity challenge that has bedevilled Governments of different colours for years now in this country. Whether Labour Governments, coalition Governments or Conservative Governments, we have all in different ways recognised that productivity has been too low in too many parts of the economy, particularly the overlooked and undervalued communities of the north, the midlands, and indeed south Wales.
But that is what this Budget addresses directly, through a series of labour market and supply-side interventions that are explicitly designed to raise the trend rate of growth of the British economy. We have welfare reform to support those who have been disengaged from the labour market. My right hon. Friend the Secretary of State for Work and Pensions has introduced a groundbreaking White Paper to help those people—they may be struggling with mental health or other difficulties—who need to be re-engaged with care and thought, so that they can again contribute to the economy and enjoy pride and purpose in their lives, as well as contribute to growth.
It is also the case that my right hon. Friend the Secretary of State for Education and the Minister for Children and Families, my hon. Friend the Member for East Surrey (Claire Coutinho), have brought in groundbreaking childcare reforms. These reforms are a win-win-win. They ensure that men and women can return to the workforce at an earlier stage to contribute economically, they ensure that children can have the best care and support, so that they can arrive at school ready to learn, and they contribute to making sure that we are both family-friendly and pro-growth. These are exactly the sort of supply-side interventions that will contribute to not just a growing economy, but a fairer society.
Tim Farron (Westmorland and Lonsdale) (LD)
Like the two gentlemen on the Front Benches, I was also the future once. The point that the Secretary of State makes about labour market reforms is extremely important; in the lakes and dales of Cumbria, 63% of our employers are operating below capacity because there are not enough workers in the area. The big problem for us, which I know the Secretary of State is seeking to tackle, is the collapse of the long-term private rented sector into Airbnb. Could he give me some assurance of when this Government will change planning law to allow communities such as mine to control our housing stock, so that there are enough homes affordable and available for local families and local workers?
Michael Gove
The hon. Gentleman makes a very good point: whatever our other disagreements, he is absolutely right to focus on that issue, as so many others have done. Of course we want to have a labour market that works, and of course we want to have a tourism sector that works, but there is a problem in the private rented sector, particularly in beautiful parts of our country such as those he represents, where homes are being turned into Airbnbs and holiday lets in a way that impedes the capacity of young workers to find a place where they can stay in the locale that they love and contribute to the economy of which they wish to be part. We will be bringing forward some planning changes to the Levelling-up and Regeneration Bill, which are intended to ensure that we have restrictions on the way in which dwelling homes can be turned into Airbnbs. I look forward to working with the hon. Gentleman and other colleagues, including my hon. Friends the Members for North Cornwall (Scott Mann) and for North Devon (Selaine Saxby), to make sure that those reforms will work.
Barbara Keeley (Worsley and Eccles South) (Lab)
The Secretary of State talks about childcare measures, but when it comes to people with caring responsibilities, childcare measures are not enough in themselves. Some 1.7 million people are economically inactive because of caring responsibilities, and there was no support for unpaid family carers in the Budget. Caring responsibilities are a major reason for people not being able to work or having to cut back their hours, and this Budget was a massive disappointment to those people.
Michael Gove
I appreciate the point that the hon. Lady makes, and she is right to draw attention to and thank those who exercise caring responsibilities. The family is the foundation of our welfare society, even before the creation of the welfare state, and we need to work in partnership with carers everywhere. I know that she and others—including, if I may say so, the leader of the Liberal Democrats, the right hon. Member for Kingston and Surbiton (Ed Davey)—have come forward with proposals to ensure that we can better support carers. It is the mission of the Secretaries of State at the DWP and the Department of Health and Social Care to see what more can be done, particularly in the wake of the covid pandemic, which has placed particular pressures on some of the most vulnerable in our society.
Sir Desmond Swayne (New Forest West) (Con)
Where families make a choice that one parent will remain at home for full-time childcare, their tax treatment is much, much less eligible than for couples where both parents work. If we are to have true freedom of choice in childcare arrangements, there is an agenda on taxation that we need to address.
Michael Gove
I know that my right hon. Friend and other Members of this House, including my hon. Friend the Member for Penistone and Stocksbridge (Miriam Cates), have raised interesting questions about how we can better support families overall. Both the Prime Minister and the Chancellor of the Exchequer are absolutely determined to explore what more we can do, but tax changes are, and always have been, above my pay grade. They are a matter for the Chancellor of the Exchequer in consultation with the Chief Secretary to the Treasury, and I know better—particularly after recent weeks—than to try to guide their hands.
Jeremy Corbyn (Islington North) (Ind)
Will the Secretary of State give way?
Mr Deputy Speaker (Sir Roger Gale)
Order. The right hon. Gentleman is giving way. That is his prerogative, but it has not escaped the notice of the Chair that the right hon. Member for Islington North came in late.
Jeremy Corbyn
I missed the first two minutes of the speech, and I apologise. Following on from the point that was raised by the hon. Member for Westmorland and Lonsdale (Tim Farron), the issue of the private rented sector is devastating in inner-city areas such as mine, where private rents are now going up—the worst I have heard is an 80% increase—because of the end of restrictions on them. Will the Secretary of State take some action to bring about a rent freeze in the private rented sector? It is devastating, particularly for young people looking for flats in London, to try to find anywhere to live. They are spending a vast proportion of their income on rent, which is simply wrong and not fair. We need rent control in the private rented sector.
Michael Gove
I am very grateful to the right hon. Gentleman for his intervention. No one can doubt the sincerity of his concern and care for people, both in the private and the social rented sector—standing up for them has been a consistent theme of his time in this House—but I respectfully disagree with him. I think there are legislative changes that we can make in order to help those in the private rented sector, including the abolition of section 21, but if we want to ensure that there is a pipeline of affordable private rented homes for people, there are two things that we need to do. First, we need to improve supply, particularly in London, and to do so in partnership with the Mayor of London, who has not always been as energetic as his predecessor in bringing forward new homes. The other thing we need to do is make sure there is fairness in the tax treatment of landlords and others. I look forward to working with the right hon. Gentleman and others on that. A rent freeze, while often attractive, has the effect, as we have unfortunately seen in Scotland, of reducing the supply of rented homes. Although I know his heart is in the right place on this issue, the methods he proposes run counter to what we both want to see.
I was talking about supply-side reforms earlier, and I briefly mentioned pension reforms. It is important we recognise that the pension reforms unveiled earlier in the debate by my right hon. Friend the Chancellor of the Exchequer have been widely welcomed, including by the British Medical Association, the Royal College of Surgeons, the leaders of police and crime commissioners everywhere and, most conspicuously, the hon. Member for Ilford North (Wes Streeting), the shadow Secretary of State for Health and Social Care. He called some time ago for a change. He said that he recognised it may not be “progressive”, but that it was “pragmatic” to introduce a pension change that will see more doctors coming out of retirement and on to the frontline, ensuring that more patients are treated more quickly, that fewer people are in pain and that our NHS is there for those who need it.
This wholly welcome change to pensions was addressed in Treasury questions earlier. Labour Members had an opportunity to express their dissatisfaction with that change, but not a single Labour Back Bencher did so. I know that the measure is a source of synthetic and confected rage from elements of the Labour Front-Bench team, but this initiative will cut waiting lists, has been welcomed everywhere—from the shadow Health Secretary to Labour Back Benchers, and from the BMA to the Royal College of Surgeons—is progressive and is in the country’s best interests.
Other changes made in the Budget also contribute to economic growth and social justice. The full expensing of capital receipts is a way of ensuring that our companies address what is, as the right hon. Member for Islington North (Jeremy Corbyn) rightly pointed out, one of the long-term property problems in this country. We have not always had the level of business investment—this runs across Governments of all colours—that we need to ensure we have high-paying jobs and the capital required to take advantage of the technological changes of the future. The full expensing proposals, amounting to a tax cut of some £9 billion, are a pro-business tax cut, and they also mean we maintain not just one of the most competitive corporation tax regimes, but the most competitive business environment in the G7.
Alan Brown (Kilmarnock and Loudoun) (SNP)
The right hon. Gentleman must know by now that the measures taken on the annual allowance and all the rest of it were a sledgehammer to crack a nut. It did not need to be a full £4 billion package. In terms of growing the workforce, when he was having his cross-party summit to discuss Brexit problems, did they discuss the problems that ending freedom of movement has caused in the health and social care, hospitality and agricultural sectors? If they did not, why not?
Michael Gove
The hon. Gentleman makes an important point about freedom of movement. If we want to have the benefits of freedom of movement within the United Kingdom, and if we want to ensure that talented people across the United Kingdom can go to the jobs where they are needed, the one thing we need to avoid is a divisive debate focused on separatism, which he and his party have been leading. There is no more expensive and harmful intervention to the economy of this country and that of Scotland than a perpetuation of an obsession with independence.
I am grateful to the Member of the Scottish Parliament for Skye, Lochaber and Badenoch for how she has made it clear that the SNP needs to address its mediocre record in government, get rid of politically correct obsessions and focus once more on partnership with the UK Government in order to generate economic growth. If the hon. Lady wins, I hope we can work together in the interests of everyone in Scotland. If it is one of the other candidates, I am afraid that the SNP will continue on the vortex of decline, which I know will be a source of sadness to the hon. Member for Kilmarnock and Loudoun (Alan Brown) but a relief to many of the rest of us.
The other key changes that I want to mention in the context of improving productivity were the changes on regulation, particularly of the Medicines and Healthcare products Regulatory Agency. Those are coming about as a result of Sir Patrick Vallance’s review of how we can better regulate the science and tech sector outside the European Union. Then there is the investment in energy. I know that we are not going as far as the right hon. Member for Doncaster North wants—indeed, he is not even being allowed to go as far as he would want by the shadow Chancellor, the right hon. Member for Leeds West (Rachel Reeves)—but with our investment in Great British Nuclear and carbon capture and storage, we are ensuring that we move towards net zero in an environmentally and economically sustainable way.
One key point of distinction between those on the Government Benches and those on the Opposition Benches is that this is the Government who legislated for net zero and who introduced the 25-year environment plan. We have been the greenest Government ever. We are also the Government who believe in moving to net zero in a sustainable way. If we are to do that, it is vital that we continue to have the means, through oil and gas from the North sea, to have a just transition. Jobs in the north-east of Scotland need to be protected, as do jobs in Middlesborough, Tyneside and Humberside. It is those on this side of the House who believe that we can have sustainable and prudent new exploration and new drilling. The message from those on the Opposition Benches, whether SNP, Liberal Democrat or Labour, to the north-east of Scotland and to workers in Aberdeen, Middlesbrough, Tyneside and Humberside is, “We put our ideology ahead of your jobs and growth.” Those of us on the Government Benches will not stand for it.
Several hon. Members rose—
Michael Gove
I look forward to the intervention from the hon. Gentleman who represents the energy-intensive steel town of Port Talbot.
Stephen Kinnock (Aberavon) (Lab)
I thank the Secretary of State for giving way; he is being very generous. He talks about the importance of jobs and energy-intensive industries. Is he aware that Labour has committed to a steel renewal fund, which will facilitate the transition from blast furnace technology to electric arc furnace technology, which is vital for the future of the Port Talbot steelworks in my constituency? Can he set out whether his Government have anything like that sort of plan? Is he aware of the fact that Tata Steel has said that if the Government do not make up their mind as to whether they will support our steel industry by July, it will close down one of the blast furnaces?
Michael Gove
First, the hon. Gentleman is a fantastic advocate for his constituency and the steel sector. Secondly, as far as I know, the Labour proposals that have been put forward, which we welcome, are not funded. [Interruption.] No, I do not believe they are. Thirdly, it is the case that if we are to have a sustainable steel industry, we need to move towards its decarbonisation and a bigger role for hydrogen, but no scientist and no one in the steel industry thinks that will be an answer tomorrow.
As has been pointed out, we will need, alongside the development of those technologies, to ensure diversity of supply of the different types of energy needed in steel production. That is why the independent planning inspector said to the Government that we should go ahead with a new coalmine producing coking coal in Cumbria, and it is why the Opposition, without even having read the planning inspector’s report, once again put ideology before jobs and growth in rejecting it. I will always listen to the hon. Gentleman when it comes to the steel industry, but I will not take lectures from Opposition Front Benchers when they set their face against precisely the type of jobs that will help sustain steel for the future.
Several hon. Members rose—
Michael Gove
I will give way to the hon. Lady, and then I will try to make a little progress.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Does the Secretary of State want to comment on the CBI report on climate change and the relative investment of different countries, including the UK? It puts us below Germany, France, the US, the EU and the World Bank for investment through public spending on climate change.
Michael Gove
It is the case that this Government have seen a massive uptick in solar power—I think more than 90% of the increase in solar panels and solar power generation in this country has occurred under this Government. It is also the case that this country is the world’s favourite destination for offshore wind investment. It is also the case that with our investment in carbon capture and storage and in nuclear power, as I have mentioned, we have exactly the diversity of supply required.
Could this Government do more? Could any Government do more? Yes, but it has to be paid for. I am afraid that Labour’s position, with the commitment to spend £28 billion on a green new deal, is unfunded. Not a penny has been allocated by the shadow Chancellor to pay for that. Do not just take it from me. Take it from the former shadow Chancellor, Ed Balls, who pointed out on Channel 4 that we have to make sure, if we are governing the economy well, that debt as a proportion of GDP reduces every year. He pointed out explicitly that the unfunded £28 billion green new deal was only going to be funded, and could only be funded, by borrowing. He explicitly pointed out that if the plan put forward by the right hon. Member for Doncaster North for unfunded, borrowing-financed investment goes ahead, he runs exactly the same risk as others have in the past of tanking the economy, pushing up interest rates and having the bond markets catch fright. It was not a voice of reaction making that point, but the man who the right hon. Gentleman thought should be Chancellor of the Exchequer.
Mr John Baron (Basildon and Billericay) (Con)
We should also remember that no Labour Government have left office without unemployment being higher than when they came to power. Does my right hon. Friend accept that small and medium-sized enterprises employ by far the largest number in the private sector, and that in order to help them we perhaps need to take a fresh look at the amount of regulation they have to abide by? It needs to match the complexity and size of the company in question. Perhaps we should place greater emphasis on, say, a small firms regime that actually addresses this point head-on.
Michael Gove
My hon. Friend makes an important point. People will know—particularly readers of the Investors’ Chronicle, in which he writes a regular column—that there are few keener students of exactly how we can make changes to the supply side in the labour market in order to drive growth. The point he makes about SMEs and, indeed, microbusinesses is one that I know the Chancellor of the Exchequer, as a former small businessman and entrepreneur himself, takes very seriously, so I am grateful to my hon. Friend for making that point.
Anna McMorrin (Cardiff North) (Lab)
Yesterday, the Intergovernmental Panel on Climate Change issued its most damning report yet. This Government go around the world telling other Governments not to open coalmines, yet that is exactly what this Government are doing. They are also issuing new oil and gas licences, yet not investing in the most efficient and cheapest renewable energy of all, which is onshore wind. Will the Secretary of State at least admit that this Government are not doing anything to commit to ensuring that our next generation has a future linked to the economy, and a more sustainable future at that?
Michael Gove
I am very grateful to the hon. Lady, who is a brilliant advocate for the environment. Some of the arguments she has made in this place have weighed with me, and she has helpfully corrected me in the past when I have been in the wrong, but on this occasion I have respectfully to disagree with her. I cannot see how we can have an effective and just transition to a net zero future—not a total zero future, but a net zero future—without oil and gas playing a diminishing but significant and strategic part.
If there are people in this House—and there are on the Front Benches of almost every other party—who believe that we should get rid of oil and gas like that tomorrow or overnight, let them say so. If there are people who think that there should be no further exploration or drilling of our own domestic oil and gas resources, let them go to Aberdeen, Middlesbrough or Grimsby and say so, but I do not think they will receive a warm welcome from the voters there or from the investors. On the point about the coalmine, again I am restricted in what I can say because I have merely followed the advice of the planning inspector. The planning inspector was very clear that both the net zero and downstream emissions as a result of this change would actually contribute to a stronger environmental posture for the UK, not a weaker one.
I want to turn to the area of renewable energy, which the hon. Member for Cardiff North (Anna McMorrin) mentioned. She, like me, is a fan and an advocate of renewables. Let me take her on a journey—a journey to Teesside. I would invite her to join me in visiting Teesport, in the constituency of my hon. Friend the Member for Redcar (Jacob Young). I would like her, and indeed everyone in the House, to join me in seeing what Ben Houchen and the Tees Valley Combined Authority have done there; to see the way in which turbines are assembled there; and to see the way in which the investment secured through the freeport there is providing high-quality, high-paying jobs in green technology, at the cutting-edge of the future, alongside hydrogen work.
I am sure the hon. Lady would want to applaud what Ben Houchen has done, because she is an enlightened and thoughtful Member of this House, but I have to tell her that not every member of the Labour party has been supporting Ben Houchen in bringing high-quality green jobs to working class areas in Teesside. Recently, when the Mayor of Teesside was creating a new development corporation to bring new jobs and new investment into renewables, Middlesbrough Labour councillors voted against it. When the freeport was being debated recently, Labour activists sought to undermine the efforts of Ben Houchen in bringing jobs into that area. The economic policies of those on the Opposition Front Bench that would undermine what is being done.
Teesside has been transformed thanks to Conservative leadership, and in the Budget most recently, Eston—which for 20 years Labour had promised it would invest in, but where it never spent a penny—secured £20 million to see that community at last given the money it needs, so that people’s pride in that place can be supported by central Government. For decades, Teesside was neglected and overlooked by Labour, and it is still being undermined and attacked by Labour, but it depends on Conservatives for its future. That is levelling up in action.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
I would be delighted if the Secretary of State could demonstrate that his Department knows where the places are that he is talking about. Is he aware of Government advertising boasting about levelling-up funding for the Grainger market in Newcastle that was advertised in Newcastle-upon-Lyme?
Michael Gove
I think it is Newcastle-under-Lyme, not Newcastle-upon-Lyme, but as someone who lived in Gosforth for five happy months, I am always happy to talk about Newcastle with the hon. Lady.
Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)
Will the Secretary of State give way?
Michael Gove
However, I am even happier to give way to my right hon. Friend.
Mr Clarke
My right hon. Friend is exactly right in what he says about the recent vote at Middlesbrough Council. Does he agree that effective devolution to the structures of local government, which can deliver change most effectively—including, in Middlesbrough’s case, a development corporation led by the Mayor, but with full democratic accountability ensured by its membership—is the right way to make sure that left-behind communities in towns such as Middlesbrough are not ignored and forgotten, as they were for far too long?
Michael Gove
My right hon. Friend is absolutely right. All the communities of Teesside—Redcar, Normanby, Eston, Middlesbrough, Stockton, Darlington—are benefiting as a result of Conservative leadership, but in particular, the development corporation that the Mayor is bringing forward is the right thing to do.
I must draw my remarks to a close in a minute, but before I do, because I think it is always right to offer praise to members of other parties who have done the right thing, I want to thank all those across local government who have contributed to the extension of devolution that we saw in the Chancellor’s statement. I have known the Chancellor since we both entered the House of Commons in 2005, and he has long been a champion of devolution, decentralisation and empowering local government. It was thanks to his leadership and the support of the Chief Secretary to the Treasury and the Prime Minister that we were able to secure two significant trailblazer deals with the Mayors of the West Midlands and of Greater Manchester. We hope to emulate that by having further powers devolved to Mayors in mayoral combined authorities across the United Kingdom.
Of course, the Chancellor of the Exchequer is underpinning that investment with the money that he has secured for innovation accelerators in Glasgow, Manchester and Birmingham, and through the eight investment zones designated for England and the four in other parts of the United Kingdom. However, today I want to thank the Mayor of Greater Manchester, Andy Burnham, who has signed a devolution deal—a new trailblazer deal. Mayor Burnham says that this deal marks
“a new era for English devolution”.
I know that some Conservatives will not always necessarily want to hear praise for Mayor Burnham, but I think it is important that all of us across the House recognise that, if we want to see our country operate in a way that gives us truly sustainable growth, we need to empower local leaders. We need to have central Government investing in science and technology, in changes to the labour market and in our children’s future, as with the changes to childcare, education and skills that this Budget brings.
I opened my remarks by reminding us how much we owe to Lord Heseltine of Thenford. His determination to work across party boundaries and across the United Kingdom to raise the hopes and the ambitions of people in areas that had been overlooked and undervalued contributed to an economic renaissance from Liverpool to Canary Wharf. It is a similar spirit that animates our Prime Minister and our Chancellor in this Budget, and I commend it to the House.
Several hon. Members rose—
Mr Deputy Speaker (Sir Roger Gale)
Order. Looking around the Chamber, it is obvious that more than 50 Members wish to speak in this debate. I will therefore put down a marker now that with effect after the Front-Bench speeches there will be a fixed time limit of five minutes, which may well drop to four minutes in the course of the afternoon. I call Ed Miliband.
Edward Miliband (Doncaster North) (Lab)
May I return the compliment to the Secretary of State for Levelling Up, Housing and Communities and say what a pleasure it is to face him? That was a typically eloquent and entertaining speech, and he has a very happy future in opposition on the Tory rubber chicken fundraising circuit.
The defining questions at the heart of the Budget are these. Does it show a proper understanding of what is really going on in the country? Does it have the right priorities in facing that reality? Does it have a long-term plan that can tackle the deep-seated challenges the country faces?
I want to start with the alternate reality that the Chancellor described six days ago. He told us that “the plan is working.” Many will have heard that and thought to themselves, as they struggle to pay their bills and as their wages stagnate, “What planet are these people living on?” They are right to think that. The Office for Budget Responsibility says that we are in the midst of the biggest fall in living standards on record. Not a mention of that in the Chancellor’s pantomime speech. That record goes back 70 years. How can that be a plan that is working?
The Budget came a week after Which? said that one in seven people in our country are skipping meals because they cannot afford to eat, and six in 10 are cutting back on essentials, selling items or dipping into savings. How can that be a plan that is working? The OBR says that even by 2028 we will not get back to the living standards we had before the pandemic. How can that be a plan that is working?
Finally, and most damningly, the Resolution Foundation shows that even by 2024 wages will still be lower than they were in 2010. Let us just take in the scale of that failure. For all the boasts, all the promises and all the hype we have heard from the Government Benches at multiple Budgets over the last decade or more, people will be worse off at the next election than they were when the Tories came to power 13 long years ago. Because I am a bit of a nerd—[Hon. Members: “Hear, hear.”] Only a bit, thank you very much. I asked the Library when it last happened that a party in power had wages lower at the end of its time in office—
Edward Miliband
The hon. Gentleman is wrong. If he can be patient, I will give him the answer. First, the Library staff told me, “Well, certainly not under any Government since the second world war.” I asked them to go back further, and they went back to the first world war, but they said, “No, not since the first world war.” They had to go all the way back to 1855 to find that happening—before the foundation of the Labour party, I say to the hon. Gentleman. For all the enormous challenges that Governments have faced over 168 years, this Government stand out for their failure to deliver what I think all sides can agree the British people have the right to expect—rising standards of living. Throw in the highest tax burden since the 1950s, public services that are crumbling in so many areas and debt that is up, and it is no wonder that the British people are asking what they have to show for 13 years of this lot. They are being paid less and taxed more for worse quality services. Conservative Members may not like it, but it is the truth—it is their record, it is their legacy.
That takes me to the second part of my speech. Why has this happened? It is because the Government have had the wrong priorities and they have failed on growth. Let us talk about the priorities in this Budget. I welcome the fact that the Government followed our plan to stop energy bills rising even further. But let us be clear—I think this feeling is shared on both sides of the House—that £2,500 energy bills are not a cause for celebration. They are double what they were 18 months ago. The energy bills crisis is absolutely not over for families and businesses up and down this country.
Of course, when we proposed the windfall tax the Government resisted it tooth and nail. Then they were dragged kicking and screaming to do it. But here’s the thing: as they did so, they introduced a massive tax break for the very fossil fuel companies whose windfalls of war they were supposed to be taxing. It was not mentioned in the Budget, it was not even in the published OBR documents—it was in an annex—that the total cost of that loophole is £11.4 billion over the coming years. That is a tax break for companies making record profits and paying out record amounts in dividends and share buy-backs—a tax break not available to any other sector of the economy, including renewables. Think how those billions of pounds could have helped to tackle the cost of living crisis. By the Government’s choices we know their priorities, and it is not the British people.
Let us take the issue of the abolition of the pension tax relief lifetime allowance, on which we will force a vote this evening. It may interest the House to hear what a former Chancellor said about why we have a lifetime allowance. He said that
“we must demonstrate that we are all in this together. When looking for savings, I think that it is fair to look at the tax relief that we give to the top 1%.”—[Official Report, 5 December 2012; Vol. 554, c. 878.]
Who was that? Not Gordon Brown. Not Alistair Darling. It was George Osborne, in the autumn statement of 2012. Remember him? But we do not need to go back that far. I have been doing my research. What about the Budget of March 2021? I wonder who was Chancellor then—he might have gone on to higher things. The then Chancellor froze the lifetime pensions allowance for five years and said:
“It is a tax policy that is progressive and fair”.—[Official Report, 3 March 2021; Vol. 690, c. 256.]
That was the current Prime Minister. Let me explain why he said that. The reason we have a lifetime limit on tax-free pension saving is to provide some cap on the amount of pensions tax relief for the most wealthy in our society. The average pension pot in this country is £60,000. The change the Chancellor is making to abolish the lifetime limit of over £1 million is therefore about people with a pension pot 17 times the average. The Minister nods from a sedentary position—[Interruption.] He says it is all surgeons: I will come to that in a moment.
According to the Resolution Foundation, this change will give a benefit of almost £250,000 to someone with a £2 million pension. If Members vote for this Budget measure tonight, they will be voting for a tax cut of almost £250,000 for people with a £2 million pension pot. That might be the right priority for the Government: it is not the right priority for us.
The Minister for Health and Secondary Care claims, and the Chancellor says, that they are doing this for the doctors. But according to the Resolution Foundation, five in six people with the largest pension pots, who will benefit from this change, are not doctors. They are not in medicine at all. In fact—get this—one in five of the people who will benefit are in banking and finance and nothing to do with the medical profession. There could have been a bespoke scheme at a fraction of the cost, just like there is for the judges.
We have been told by Treasury Ministers that this is the “politics of envy”. No, it is not, it is about fairness. Even George Osborne agrees with that, and when you are beaten by George Osborne on fairness, you know you are losing the argument. The other argument that Government Members have been making is that Labour is somehow creating problems by opposing this measure. Let us get this straight: the Government come along with a £1 billion tax cut for the very richest in our society when everyone is struggling and they blame us! The truth is that it says so much about them, because here’s the thing: they did not even get that it would be controversial. That is how out of touch they are.
There should have been different tax choices in the Budget to fund our schools, cut NHS waiting lists and level up our country. The Government could have ended non-dom status, but they will not do that. They could have ended the tax breaks for private schools to help fund our state schools, but they will not do that either. In preparing for this debate, Mr Deputy Speaker, I came across a brilliant article for that proposal set out in 2017 in The Times, entitled “Put VAT on school fees”. It was written by a participant in today’s debate and I think it is worth quoting. The author said this:
“to my continuing surprise, we still consider the education of the children of plutocrats and oligarchs to be a charitable activity.”
I am not sure that we on the Opposition Front Bench would go that far, but there you go. [Laughter.] He went on to say:
“The prime minister, quite rightly, wants to end burning injustice...We could scarcely find a better way of doing that than ending tax advantages for the global super-rich and instead extending them to the vulnerable and voiceless. What better way to make next month’s budget a budget for social justice?”
Now, the House may be wondering who wrote that article. It was none other than the Levelling Up Secretary! I am a generous person, so I will give way to him and he can tell us whether he still believes what he wrote six years ago. Does he agree with himself? Why so uncharacteristically bashful? Why this sudden bout of monastic silence? It is so uncharacteristic. I would love for him to tell us: did he make the argument in Government in the run-up to the Budget, or did he just not bother to make the argument because he did not think he had a hope of persuading the people in charge? I think it is probably the latter, because, let us be honest, there is zero evidence that this Government will make the necessary choices. He knows it and the country knows it. The Government have the wrong priorities, which is why people are sick and tired of them.
Let us talk about the third part of the Budget, because it does not just have the wrong priorities for now, but for the future too. I want to come on to the energy transformation that the country needs. If we want to get energy bills down, there is a simple answer: going all in on a green energy sprint. We know that wind and solar are many times cheaper than fossil fuels, but the problem is that we have a Government who do not get it. The Levelling Up Secretary is a case in point. When he should be blocking coalmines he waves them through, as he has done in Cumbria. By the way, it will interest the House to know that he said it is carbon neutral, good for the climate and good for the environment. People may wonder. We have been going around the world lecturing people about getting off coal, so how have we suddenly got a coalmine that is good for the environment? Well, the answer is that in the calculations he made, he does not count the burning of the coal, just the mining of it. That is like saying tobacco does not damage your health if you do not take into account the smoking of it. He can correct me if I am wrong, but that is correct, isn’t it? Yes, it is correct.
The Levelling Up Secretary should support onshore wind, but he blocks it. The onshore wind ban is very important. It is symbolic. The Government have their fifth energy re-set coming next week, I believe, so I look forward to that. It is the fifth one in two and a half years—a sure sign that the policy is not going well. The onshore wind ban brought in by David Cameron raised bills—this is really important—by £160 for every family in the country. It did seem like good news, because the Levelling Up Secretary made some positive noises and promised things would change in December, but all the evidence is that yet again the Government will resile from taking the right position. This month, RenewableUK expressed its bitter disappointment, saying that
“Ministers are doing almost nothing to lift the draconian ban”.
The Energy Secretary, who is not here, calls onshore wind an “eyesore”. It makes me nostalgic, believe it or not, for the brief period when the right hon. Member for North East Somerset (Mr Rees-Mogg) was Business Secretary. He was an unlikely climate warrior but his proposal to bring onshore wind rules in line with other infrastructure was better than the position under the current Government. It is harder today to build an onshore wind farm—a unique category in the planning system in England, whereby, basically, if one person objects, it cannot be built—than it is to build an incinerator. That does not make any sense. Why not go for the proposal from the right hon. Member for North East Somerset? That is my injunction to the Secretary of State.
The Government have failed not just on onshore wind, but on energy efficiency. In 2010 there were 1.7 million home upgrades. Last year there were 128,000, and there was no new money in the Budget. At that rate, it will take a century to bring all homes up to an energy performance certificate C rating.
But the biggest long-term failure of the Budget is the lack of a coherent plan to compete with President Biden’s Inflation Reduction Act. This is really serious. Talk to any business today and they will say that this is a massive competitive challenge for the UK. On offshore wind, we are doing well on generation—lots of people say that it was started by the last Labour Government—but not on delivering the jobs in offshore wind. Denmark has three times as many jobs in wind energy as us, with about a tenth of the population. Then look at other areas. My hon. Friend the Member for Aberavon (Stephen Kinnock) spoke eloquently about steel: there are already 23 clean steel demonstration plants across Europe. How many are there in the UK? None. Across Europe, 40 gigafactories are expected to open by 2030. In the UK only one is certain. Alarmingly—this is the consequence of the onshore wind policy—the number of jobs in solar and onshore wind has actually fallen over the last five years in Britain because of the blockages in the system. That is why the Institute of Directors said just days before the Budget:
“The UK deserves nothing less than its own version of the Inflation Reduction Act”.
And the CBI pointed out our failure on spending.
I was very disappointed by the Budget. It was the moment to turn it around. It turns out there was no new money for carbon capture, but the promise of £1 billion some time in the future. I am old enough to remember when there was a £1 billion carbon capture and storage plan. It was announced 15 years ago by the last Labour Government, but was cancelled by this Government. The other boast was a reheated announcement of a competition for small modular reactors. We are in favour of new nuclear, but a reannouncement from 2015 will not make it happen.
There was warm praise for Lord Heseltine, which I agree with. I remember Lord Heseltine saying he would intervene before breakfast, lunch and dinner, and then wake up the next morning and intervene again before breakfast. That is not the character of this Government. What was the Government’s reaction to President Biden’s Inflation Reduction Act? The Energy Secretary called it “dangerous”, the Business Secretary said it was “protectionist”, and the Chancellor did not support it. As if crying foul is going to stop the race. It will not stop the race; it will leave us behind. I do not believe that the Government get what a modern industrial policy looks like. We needed a new national wealth fund to invest in the industries of the future. We needed GB Energy, a proper publicly owned energy generation company, to invest in all forms of low carbon generation. We need a sprint for zero-carbon power by 2030. We need a plan to insulate 19 million cold, draughty homes. We got none of that from this Budget, but that is what a Labour Government would do.
In their failure to grasp the future, the Government show why it is high time they were consigned to the past. After 13 years of their failure, the last thing we need is another five years. They have the wrong priorities. They have no proper plan for the future. They cannot provide the leadership the country needs. It is time for change.
Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)
The shadow Secretary of State, the right hon. Member for Doncaster North (Edward Miliband), said in his speech that by their choices you will know their priorities. He was absolutely right. The Chancellor showed last week that his priorities are the priorities of Teesside. The Secretary of State for Levelling Up, Housing and Communities, my right hon. Friend the Member for Surrey Heath (Michael Gove) said in his speech that he would take anyone who wanted on a tour of Teesside to see our freeport and the fantastic progress being made there. Many Opposition Members would benefit from such a tour, because they would see the transformative impact of the carbon capture and storage investment that the Chancellor reaffirmed last week.
Contrary to what the shadow Secretary of State said in his closing remarks, Net Zero Teesside is a reality. It is going up as we speak, backed by Shell, Equinor and BP—real companies investing in a real project that is transformational not just for the industries of the future, but our existing industrial base in steel, chemicals, plastics and all those industries which emit carbon dioxide as an intrinsic part of their production, not just in terms of the emissions released as part of energy generation, but as a by-product. That is why carbon capture is so vital. That is why it was so welcome that it was backed strongly in the Budget last week. We had a welcome decision on new nuclear and its classification as a sustainable technology, which is absolutely right and vital for the future. I welcome warmly the position to keep Hartlepool nuclear power station producing for two more years.
Critically, there was direct investment in our communities—£20 million secured by my hon. Friend the Member for Redcar (Jacob Young) for Eston Square, which my right hon. Friend the Secretary of State rightly celebrated in his remarks. That follows the £15 million for Guisborough in my constituency, the £6 million for Loftus and the £36 million for the Middlesbrough town deal. That is investment in the economic drivers of growth and in the communities that need it. By the time we go to the polls in 2024, the Government’s levelling up plan will have transformed people’s lives—that is a good sign.
There was much else to welcome in the Budget including, critically, the announcements on childcare—something that the group Next Gen Tories has been campaigning hard for. We all know across this House that the cost of childcare is unsustainably high and deeply unfair. The campaign group Pregnant Then Screwed has reported that for two thirds of families, childcare costs are as much as their mortgage. That is totally unjust and clearly an obstacle not just for the economy but for our having the children we need as a society. It is right that the Chancellor has taken bold action to address it.
I also welcome the abolition of the lifetime allowance on pensions, which will have a major impact on our retaining the doctors we need. The response of the British Medical Association says a lot more than that of shadow Front Benchers, who we have seen in complete chaos, with the shadow Chancellor and the shadow Health Secretary utterly at odds about this important measure.
As we heard from my right hon. Friend the Secretary of State, there is bold action on worklessness. The OBR estimates that 110,000 more people will be supported into the workplace by 2027-28. That is exactly what we need—the combination of challenge and support that people across the country want from the welfare state and our excellent jobcentres. It is an absolute scandal that too many people have their lives written off as economically inactive owing to health conditions, when they could work. There is all the support and ingenuity that can be deployed available to help with that vital process. All that was to be welcomed in the Budget.
There were some aspects of the Budget that I wish had been different. I have made no secret of my deep concern about the decisions surrounding the future of our corporation tax increase. I think that we have seen the consequences already with the decision of AstraZeneca to choose the Republic of Ireland over the UK for its next investment. I welcome the offsetting benefits of the full expensing that the Chancellor announced. If that is to work, it is vital that it is a permanent decision rather than simply a temporary relief, otherwise it will have a distorting effect on business investment. I very much hope that the Chancellor will make that permanent if the headroom is there to enable it, as he said he would. That will be vital to ensure that the measure is a success.
It will not surprise Members across the House that I believe that we need to do more on the generators of growth more generally. I point out the importance of housing, which my right hon. Friend the Secretary of State mentioned. In the end, the only sustainable way to improve our economic activity in this space—and the social justice of our housing debate—is to build more homes, addressing the challenges of nimbyism and nutrient neutrality. I hope and believe that there will be more progress on that in the months ahead.
Mr Deputy Speaker (Sir Roger Gale)
I call the Scottish National party spokesperson. No time limit.
Alan Brown (Kilmarnock and Loudoun) (SNP)
This Budget follows on from the autumn statement, when the introduction of the energy profits levy and the electricity generator levy provided an additional £75 billion of predicted income to the Treasury. That money mostly arose from Scotland’s energy sector. In this Budget, the Government chose to increase the tax rate on whisky by 10%. What does Scotland get in the Budget? Acorn was overlooked once again, but we are expected to be grateful for £320 million of Barnett consequentials over a two-year period. Only the Scottish Tories can think that is a fair return.
One thing is for sure: this Budget is not about the Tories trying to help grow the Scottish economy. We have the highest energy bills in the UK, but we do have our fair share of the biggest cut in living standards since the 1950s and of Brexit’s 4% cut to GDP. Are we supposed to be grateful for being part of the broad shoulders of the UK when that is what being part of the sharing process looks like? There is £65 billion of additional income from oil and gas revenues, yet the UK Government will not even match the Scottish Government’s £500 million just transition fund, even though the Secretary of State was talking about the need for a just transition in the oil and gas sector.
Nothing sums up Tory pork barrel politics more than the fact that three out of the five community projects in Scotland have gone to the constituency of the leader of the Scottish Tories. That, plus £1.5 million for a bridge to be repaired that the local Tory council thought was too low a priority for them to bother with. What the Treasury does not say is that the whisky distillers in Speyside alone will be handing over more additional duty to the Treasury than the pennies that it is giving back in community projects. Where is the Scottish Tory leader on standing up for the whisky industry against the 10% duty rise? Is he pointing out the fact that 75% of the cost of a bottle of whisky is now tax to the UK Exchequer, or that draught beer, wine and cider are to be subsidised while 99% of spirits are excluded from the scheme? Let us not forget that distillers are excluded from the energy intensive industries support scheme, while other alcohol producers receive support. Instead of trying to grow the whisky industry, it is clear that the UK Government are treating it unfairly within the overall alcohol production sector.
When it comes to energy considerations, it seems that the intention is to sabotage the good work that has gone on in the renewable energy sector. While the United States has the Inflation Reduction Act, the Tories have given us the energy generator levy, but with no corresponding renewable investment allowance to encourage reinvestment. We had an announcement of £20 billion in funding for carbon capture and storage, but Acorn did not even get a mention in either the Budget book or the speech. That is shameful given the history of pulling funding from Peterhead.
Paragraph 4.99 of the Budget document mentions track 1 expansion later this year. Is that a realistic prospect for Acorn? If not, what is the timescale for announcing the track 2 processes? Not only is Acorn the most advanced cluster and the easiest to deliver, its progress is needed to address greenhouse gas emissions from Scotland’s two biggest polluters. It is the only way that Scotland can meet its 2030 commitments. The next time that Scottish Tories complain about Scotland possibly missing emission targets, they had better look in before they look out, and question the decisions made down here.
On storage, we have well-established pumped storage hydro technology, which is suited to complementing renewable energy. It uses spare energy to pump fill reservoirs and can generate electricity when there is peak demand. Coire Glas has been consented since 2020. SSE has £1.5 billion of capital available to invest in it. Just today, it has announced a £100-million commitment for site investigation and advance design works. It would be the first pumped hydro storage scheme to be constructed in the UK in 40 years, and would double the capacity of pumped storage in the UK while creating 500 construction jobs in the highlands. It will be able to power 3 million homes continuously for 24 hours. No subsidy is required; it is not looking for a regulated asset base model or even for taxpayers to share the risk. All that industry is asking for is a cap and floor mechanism to stabilise the price received for electricity generation.
I have raised this issue countless times over the years. The previous Secretary of State for Business, Energy and Industrial Strategy let his guard down by calling it a Scottish technology. That really does show the motives for the UK Government not to move forward with it, but they really need to revisit it. On the possibilities for pumped storage hydro, Drax has submitted a planning application to more than double the capacity at Cruachan dam, to take it up to 1 GW of generation capacity. Those are exactly the type of schemes that should complement intermittent renewables and take us towards the construction of a stable, low-carbon, truly renewable system. In contrast, National Grid ESO spent £4 billion to turn off wind turbines due to grid constraints. We need a better way of managing the grid system though a whole system approach, otherwise we are throwing money away.
If we are looking at a truly green system, the Budget document is notable for not using the phrase “green hydrogen” once. Are the UK Government now content to fall behind other countries? What is the real scale of their ambition? The day after the Budget, we had the updated allocations for the next renewable energy auction for assessment report 5. So despite rampant inflation and despite some projects struggling against the strike rates agreed for allocation round 4, the Government have decided to cut the overall budget by 30%. It is madness, and that needs to be revisited urgently.
Then we have tidal stream. Scotland is genuinely leading the world. MeyGen in the Pentland Firth is the largest consented tidal stream site in the world. It has generated 75% of the world’s tidal stream energy to date, but has seen a 50% cost increase since securing its allocation round 4 contracts for difference because of external inflation factors. The project can still go on and deliver against that, but only if it secures enough money going forward to be able to scale up. Instead of increasing the ringfenced budget for the tidal scheme, the UK Government have halved it, which puts the project and that technology at risk. Again, I ask the Government to revisit how they are doing this, because the project is an opportunity to grow our technology with a UK-based supply chain and then export that knowledge and technology around the world.
We have come to one of my hobby-horses: the UK Government have absolutely no problem with throwing money and promises at nuclear energy, with a £700 million stake in Sizewell C and the creation of Great British Nuclear, which is an oxymoron if there ever was one. The simple facts are that there is not yet a successful EPR nuclear project anywhere in the world. The only EPR station generating electricity to the grid is Taishan in China, but even that had one reactor offline for a year with damaged fuel rods, which is a possible inherent design flaw in EPR design. Olkiluoto 3 in Finland is 14 years late. It connected to the grid last March, but a year on it is still only in trial operation mode. The EPR in Flamanville, France, is four times over its original budget and a mere 10 years behind schedule.
“Now but,” they tell us, “all the lessons have been learned from these projects in time for Hinkley Point C.” However, Hinkley Point C was estimated to cost £18 billion in 2016, but it is now estimated to cost £33 billion, and guess what? It is running years late. Yet the collective madness from the Tory Front Bench, encouraged by the Labour Front Bench, says, “Let’s not worry. We will sort out the problems and we will learn the lessons for Sizewell C. What could go wrong?”
Even if they believe Sizewell C will cost less in relative terms than Hinkley Point C, given that Hinkley Point C is already estimated to cost £33 billion and that construction inflation and material costs are increasing all the time, Sizewell C will cost upwards of £35 billion, without any shadow of doubt. How can they talk about reducing debt when they want to put a further £35 billion of debt on our energy bills? It makes no sense.
And then we have the insult of passing that as a green technology. If we look at the costs of the existing nuclear waste legacy we see that the Nuclear Decommissioning Authority estimates it is going to cost us £235 billion to clean up. There is no solution yet for dealing with radioactive waste other than burying it for thousands of years, so why do we want to pass that as a green renewable energy system?
I am sure others will touch on this, but we have one other great hope for nuclear: small modular reactors. The reality is that there is not even a regulator-approved design in the UK for an SMR yet, but somehow Rolls-Royce says it could have them operational by 2029. It is the same rhetoric and the same mistakes, over and over again. In reality, each SMR will cost roughly £2 billion, so they are hardly a cheap alternative source of energy generation. If SMRs are so attractive, why is the taxpayer being asked to pay half the cost of a prototype and then sign up to a 35-year extortionate deal in terms of strike rates? It makes no sense, if it was so commercially viable.
In reality, nuclear means billions of pounds of increased debt added to our energy bills and future generations paying for decommissioning and handling of waste, no matter the pretence that that is somehow included in upfront estimates. It means years of further delays, when that money could and should be invested in renewable energy, storage, green hydrogen and, of course, in energy efficiency upgrades.
When people talk about the job creation that comes from nuclear, well of course spending £35 billion will create some jobs. The important thing is the cost-benefit ratio in terms of job creation, which can be done much better through alternatives.
It is clear that within the UK, Scotland has a drag on its economy and energy policy. We might be expected to doff our caps because of the £320 million of Barnett consequentials we are getting over two years, but I would argue that that, in the words of the Chancellor, is the very epitome of dependence, rather than independence, and I look forward to working with the Chancellor to secure the latter.
Kit Malthouse (North West Hampshire) (Con)
I draw attention to my entry in the Register of Members’ Financial Interests.
It was a good Budget, a fine Budget, filled with lots of delights, with something in there for everybody. In deference to the Opposition Front Bench, it had Osbornian overtones, filled with smart, clever tactical manoeuvres to fan the flicker of growth that there is in the economy, hopefully into a flame.
There are three areas that I want to raise with the Minister in my five minutes. While we have made some progress, we need to go further and do some thinking before the autumn, and indeed the Budget next year.
First, on childcare, in my brief time at the Department for Education, I was pleased to put together some options that were going to form what we were calling “a childcare big bang”. I was happy to see a number of those appear in the Budget, not least the expansion of the provision of free hours of care for under twos. However, I am sure the Chief Secretary to the Treasury, my right hon. Friend the Member for Salisbury (John Glen), recognises that the system is still very complicated and still has a number of anomalies in it, not least the £100,000 threshold, which keeps a lot of highly productive women out of the workforce who are punished for going back by having their free hours withdrawn.
In addition, there are seven different ways for childminders to receive payment for the care they give. Given that the Government are putting lots of money in at the front-end of the equation, they need to think carefully about supply. I urge my right hon. Friend to look at what more we can do to expand childminder agencies in particular across the country as they are the only proactive tool we have for recruiting childminders. I also urge him to think more flexibly about what we can do to allow families to choose for themselves what kind of care they want to give.
I urge my right hon. Friend to consider conflating the childminding budget, which now rises to about £9 billion, with the child benefit budget, which is now £12 billion although that is falling, and other ancillary budgets, into one huge budget that would allow us to think carefully about what reform we could put in place to support families, not just in looking after children but encouraging them to have more children. As my right hon. Friend will know, we are not replacing ourselves in this country. We have a demographic problem and we have to encourage those who want to have children to do so. More thinking in that area would be great.
The second area that I wish to raise is corporation tax. I concur with my hon. Friend the Member for Stockton South (Matt Vickers) in wanting corporation tax to be lower, not least because I believe in the Laffer curve; I do not believe that we will necessarily raise that much more by raising corporation tax rates. It raises a question in my mind about how we tax companies and why we continue to chase them for corporation tax when we know that the international and online nature of business makes it very difficult to tax such organisations.
When he was the Chancellor, the Prime Minister put us into an international cabal of minimum corporation tax chargers across the world in an attempt to track all these companies down and tax all their profits, but if we went for a sales tax—if we focused on consumption and on those businesses’ sales—their domicile would be irrelevant, because the tax would relate to where their transactions had taken place. The huge international businesses that operate online and that we are currently chasing around the world would come into our taxation envelope, and we would find it easier to collect tax from them.
The third big area is, in many ways, the missed strategic move in the Budget. It did not address one of the fundamental problems with the operation of our economy, which is the nature, spread and dynamism of capital within it. Happily, the Government have talked expansively about science, technology and innovation; they obviously recognise that we are on the threshold of the fourth great advance in human understanding and ingenuity. Our country caught the first two advances—the industrial revolution and the industrialisation at the turn of the 20th century—but we broadly missed the advance that took place in the 1960s and ’70s. That was largely because our economy was sclerotic, but, critically, it was also because we had forgotten a basic tenet of capitalism: if we want the private sector to weigh in behind science, technology and advancement, we have to let capital rip. We have to deregulate it. We have to make sure that profit can be made from taking risk.
Critically, we also have to allow capital to spread into as many hands as possible. We talk a lot about housing in this country, and about putting houses in the hands of young people, but we never talk about putting shares in the hands of young people and encouraging them to own shares in the businesses for which they work and to participate in a capitalist economy.
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. To fit everybody in, I am going to reduce the time limit to four minutes after the next speaker.
Valerie Vaz (Walsall South) (Lab)
Thank you, Madam Deputy Speaker. It is a pleasure to follow the right hon. Member for North West Hampshire (Kit Malthouse).
We have had plenty of Budget debates, but this Budget has not fixed anything. The Chancellor stood here, in the middle of the strikes and the collapse of the Silicon Valley Bank, and said nothing about those events in his speech—just like an avatar Chancellor. For months, the unions asked to meet, but the Government refused, hoping to break them. The unions were not moved, except to make a concession, but, like President Zelensky, their cause was right. Worst of all, as a former Secretary of State for Health, the Chancellor knows the cause of the junior doctors, because he picked a fight with them, allowing a few senior doctors to top up their pension while denying the many junior doctors a decent pay rise. We need to be able to recruit and retain our brilliant staff who take care of the country when we need it most: the public servants, like the late Ruth Perry.
I agree with the Chancellor on something—getting rid of local enterprise partnerships, which are totally unaccountable—but he is placing his faith in the Mayor, who is so far removed from my constituents. There was a press release in my inbox at 8.30 am on 14 March, the day before the Budget, crowing about the west midlands being an investment zone. I thought we had to hear about it here in the House first.
The Chancellor set out his Es. We know what happens to people who have too many Es, but this Budget was not hyperactive. It fixed nothing, not even the economic injustice of non-dom status. Nor did it impose a further windfall tax on the huge profits of energy companies while people need support with their heating bills. There is £10.4 billion on the table.
There was nothing about the problems that local authorities have faced over the years. In Conservative-controlled Walsall, we have an abandoned town hall with no one there. The former police station on Green Lane is a pile of rubble. Nothing has changed. Jack Lowe, who was 18, Bailey Atkinson and Akeem Francis-Kerr were murdered in and around the town centre. On Milton Street, there are prostitutes and drug dealing—shopkeepers are saying they are tired of seeing young people with money in their pockets. I thank the Police and Crime Commissioner Simon Foster and Chief Superintendent Phil Dolby for meeting me on Friday to discuss the situation.
Our Sure Starts, an important focus for families, are gone. Palfrey Sure Start was rated outstanding. There is a lack of health visitors to support families. There is no investment in schools; Blue Coat Church of England Academy is still waiting for money to fix its heating. There is no direct support for children or for those who have been excluded from school. The Chancellor talks about childcare, but his policy will not come into effect until 2024. And what about social care? There is nothing. This Budget fixes nothing. It does not invest in people.
The Chancellor wants to get people with disabilities back into work, but we cannot even get a lift to help people with disabilities or parents with pushchairs to access Bescot Stadium station. I wrote to the Minister, who told me to write to the Mayor; the Mayor told me to write to the Minister again. He said that there was no money, but he has £70 million of unspent Commonwealth games legacy funding. My constituents cannot wait until 2029 for access.
The Chancellor said that he wants us to be the best place to do business and work and the best place for research and development, but what about other research? It cannot all be about digital and computers. He truly is an avatar Chancellor. There was no explanation for the return to the Treasury of £1.6 billion that should have been allocated to Horizon Europe. Is that what is holding us back from joining Horizon? Will the Chief Secretary to the Treasury please ensure that it is paid over so our scientists can collaborate on their research?
There is a democratic deficit. I have outlined the stuff of life that keeps people in our communities going. The Chancellor missed out an E—E for excuses—but so far the country has given him an F for failure. He is failing our constituents, our communities and the country. There is an alternative. It is time for change, and only Labour can bring that change.
Anthony Browne (South Cambridgeshire) (Con)
Thank you, Madam Deputy Speaker—and thank you, colleagues. So much to say, so little time to say it.
I agreed with the opening comments of the shadow Secretary of State, the right hon. Member for Doncaster North (Edward Miliband): we do have a problem with economic growth in the UK. Economic growth is incredibly important—it creates more jobs, it creates better-paid jobs, it helps with the cost of living crisis, and it helps to raise the taxes that we need to pay for public services—but it has been too slow over the 15 years that have elapsed since the financial crisis. What he failed to point out, however, is that this has been a problem across the developed world, and is not unique to the UK. The global economy has been hit by the triple whammy of the financial crisis, the covid pandemic, and the cost of living crisis that has resulted from the invasion of Ukraine. It has been like being hit by a hurricane, a tornado and an earthquake back to back, and it is not surprising that the entire world economy is feeling battered.
If the right hon. Gentleman wants to pin the blame on the Conservatives, which is what he was trying to do, what matters is how the UK has performed in comparison with the rest of the world. As I have said in the Chamber before, according to the International Monetary Fund, we had the fastest-growing economy in the G7 last year and the year before, but what is our record since 2010, when the Conservatives were elected? According to the IMF, the UK economy has grown by 21% during that period, which, although too low, compares extremely well internationally. In fact, the UK has had the fastest-growing major economy in Europe. Since 2010, we have grown faster than Germany, France, Italy, Spain and almost every other euro area country apart from the fast-growing economies of eastern Europe, and we have grown far faster than Japan. We have a track record that really holds its head up, and criticisms of Conservative Government policy really do not bear examination.
Anthony Browne
Absolutely. Our unemployment has gone down dramatically, and has halved since 2010. This has been an astonishing performance. Given the economic troubles that we have experienced since the pandemic, it is amazing that unemployment has not risen more than it has. Our unemployment rates compare very well with those in most other countries. This illustrates dramatically the point that we keep making about the Labour party: every time it has been in power, it has left office with unemployment higher than when it arrived, whereas with us it is the other way round.
So how do we achieve economic growth? That is the key challenge. There are two main steps that we need to take. First, we need to increase the participation rate of workers and, secondly, we need to increase business investment to improve productivity. Many of the measures in the Budget, which I highly commend, will increase the participation rate of workers—notably the childcare reforms, which many others have mentioned, and the abolition of the lifetime allowance for pension contributions, which the Backbench Treasury Committee, which I chair, recommended to the Government. The allowance is clearly a hindrance that prevents a great many people in a great many sectors from continuing to work, given the punitive tax penalty that they incur when their pension pot reaches £1 million. The Labour party has tried to bring the politics of envy into play, saying that it is a tax for the rich, but about half those involved work in the public sector—they are not just doctors, but senior civil servants, senior police officers, senior military personnel, air traffic controllers, Government scientists and so forth. Are all those the unacceptable 1%? It is a very ill-informed attack from Labour. This measure also constitutes a dramatic simplification of the system, which means that many more people can understand it and gauge what is best for their pensions.
As for increased business investment, that too was proposed by our committee, although we never dreamt that the Government would be courageous enough to go the whole way. Full expensing is far the most generous tax relief for business investment in any developed country. There was a tax penalty for business investment, but it is now the other way round. I would prefer not to see corporation tax rise to 25%, but that is still the most competitive rate in the G7, and full expensing goes a long way towards reversing its effect.
Given all these different policies—and I will not go through them all—I think that this is a powerful Budget which should go a long way towards promoting economic growth, and the Office for Budget Responsibility, in its analysis, has raised its economic growth forecast as a result of it. I strongly commend it to the House.
Several hon. Members rose—
Madam Deputy Speaker
Order. There is absolutely nothing wrong with interventions, but we are so pressed for time that speakers should bear in mind that if they accept an intervention, I would appreciate it if they nevertheless stuck to the time limit. Those who intervene on others and who are still trying to catch my eye will move further down the list, because they will have had one chance already, and it means that someone else loses a minute, if not more.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I will be very brief, Madam Deputy Speaker. According to the British social attitudes survey, what most people want to see is fairness in our society. They want to see fairness in rewarding hard work, in how our policies and laws are applied and in the dignity and respect that we show our vulnerable citizens, whether that is older people, sick and disabled people or people who become destitute, of whom we increasingly see too many. So, in relation to the Budget, fairness for me is about reducing the structural inequalities in income, wealth and power that saw us have one of the highest death rates in the developed world during the pandemic and that, in particular, have driven the largest fall in life expectancy since world war two. As my right hon. Friend the Member for Doncaster North (Edward Miliband) said, fairness is at the heart of what we are about and what our constituents are about.
In relation to the Budget, though, we see that the OBR is still forecasting historically large reductions in living standards this year after adjusting for inflation. If we look at the fairness aspect of that, although we see direct taxes particularly affecting high-income groups, indirect taxes are having a really detrimental effect on groups on lower incomes. On public spending, it looks good when we consider the end of this financial year, but there is no real-terms investment in public services, as my right hon. Friend the Member for Walsall South (Valerie Vaz) said. We are seeing this in our constituency casework in relation to social care, and that is going to be the case for the next two years, with no real-terms investment in public services.
On social security, I was deeply disappointed to see the emerging rhetoric from the Chancellor in the Budget concerning the reasons we have seen a dip in economic activity. He and others have started to assert that the reason there are fewer people in work at the moment is that it is too comfortable on social security, hinting at the workshy and the shirkers and scroungers narrative that we have heard in the last 10 years. There is absolutely no evidence to support that. First, if those people are economically inactive, they are not claiming social security. There are myriad reasons that they are not in work, including sickness. We have 2 million people who are still living with long covid, for example, and an army of family carers is needed to look after them.
I was pleased to see the changes to our childcare system, which has been so poorly funded, but it has taken 13 years. This should have happened before. And what about elder care? What about flexible care from work? The Government should look at those problems and stop scapegoating sick and disabled people and those people who are claiming social security. I worry about those who are not well and who are barely clinging on. All this talk about a tougher sanctions regime will send people over the edge. So I would like to ask the Minister what assessment he has undertaken of the deaths of vulnerable claimants as a result of increasingly punitive sanctions.
Andrew Jones (Harrogate and Knaresborough) (Con)
In the many forecasts that we receive in the Budget, there was one that particularly pleased me. That was the projected fall in inflation to 2.9% by the end of this year. Tackling inflation means tackling its underlying causes, and that means boosting supply in a way that does not drive inflation. I believe that improving productivity is central to this—a point that was made eloquently by my hon. Friend the Member for South Cambridgeshire (Anthony Browne).
When we discuss productivity, we must be clear about what we mean and what we do not mean. It does not mean working harder; rather, it means working smarter so that there is more output for the same input. I therefore strongly welcome the Budget change in capital allowances, which will mean that companies can get up to 100% tax relief on investments in plant and machinery and on upgrades to IT equipment and production lines. The OBR suggests that this measure will increase business investment by 3% per year. The Treasury forecasts suggest that that measure is expensive, costing up to £25 billion, but it is also critical for international competitiveness. This decision makes the UK the only major European economy with full expensing and gives us, jointly, the most generous regime of any advanced economy.
Other measures in the Budget boost supply, but the supply of people and skills are critical in building capacity and longer-term growth. Recruitment challenges are the challenges most frequently raised with me by businesses in Harrogate and Knaresborough, which echo the comments of businesses I meet through the all-party parliamentary group on infrastructure, which I chair, and are backed by the data on the number of vacancies in the economy. I am pleased to see the measures to boost work participation: reforming universal credit, expanding childcare and abolishing work capability assessments. Each is to be welcomed.
One measure I particularly welcome has already received some comment, and that is the measure on pensions. I recently had a conversation with a doctor in my constituency who told me that he is leaving the NHS due to pension issues, as he would literally have to pay to go to work, which is a ridiculous position. He is a senior brain surgeon in his early 50s, doing important work that he loves. Our conversation was one of sadness and regret. The lifetime allowance change makes his problem disappear, and I hope this most expert and most pleasant constituent will now reconsider his life plans. People know there is a problem to solve on pensions, particularly in the health service and the public sector, and they want it tackled. It is good policy to encourage people to make provision for their future, and it is good policy to make things simple and transparent.
This Budget, as a whole, is about getting the wiring of our economy right and solving problems. In a different, post-pandemic world, it is about making the UK a better place to do business and supporting people through difficult times. The Budget is not showy, but it addresses long-term competitiveness and productivity issues, the fruits of which will address growth, inflation and debt in the longer term. I am particularly pleased to see supply-side reforms across a number of sectors.
The energy market will be a future area for attention. New technologies and new opportunities require new Government and regulatory responses, but this is future work. The Budget shows the direction of travel and where work should be focused. With its much more encouraging forecasts, this Budget shows that the plan is working, and it puts in place the framework for future progress. I commend my Treasury colleagues for all they have achieved.
Douglas Chapman (Dunfermline and West Fife) (SNP)
“Growth” is fast becoming a word with no meaning in relation to our economy, thanks to the ever-increasing financial and fiscal fiascos racked up by this UK Government. Just as the Chancellor delivered his Budget last week, the OECD announced that Britain will be the only economy to contract this year. It will be an outlier, the worst performer among the wealthiest countries. Is this the good news the Chancellor wanted from his four E’s mantra of “enterprise, education, employment and everywhere”? You can fool some of the people some of the time, but you cannot fool all of the people all of the time.
Hard-working families and individuals cannot make it to their next pay cheque without visiting the multitude of food banks that have popped up throughout the country after 13 years of Tory austerity and mis-management. Levelling up is yet another misleading and meaningless mantra to add to the list.
The Chancellor has admitted that there are quite a few other E’s, and these need to be examined more closely if we are to find the truth of this Budget. One of them is “eating,” because extraordinary levels of inflation have pushed grocery bills well above record highs, affecting families’ ability to afford adequate food.
There is another E to add to this sorry tale of fiscal mismanagement, and that is for “extreme poverty.” It is not even five years since the UN special rapporteur on extreme poverty, Professor Philip Alston, described the “systematic immiseration” of the British people through Tory austerity, creating “workhouse” conditions for the working poor and the destitute.
What about that big E—“Europe”? The Resolution Foundation has pointed out that our household incomes are falling even further behind those of our European neighbours. Ours are a grand total of £4,000 less than those of our German counterparts, and we are a staggering £11,000 worse off thanks to Brexit and other pay cuts. The Resolution Foundation also reported that the wage stagnation we are experiencing in the UK is “unprecedented”. It says we have
“a toxic combination of low growth and high inequality”
and that that
“is what failure looks like.”
The E there would be the “epic failure” that has built up over these successive disastrous Tory Governments. That is not an E anybody would want to boast about. When a Government are failing on this scale, it is time to do some soul searching, but that can be done only if big truths are faced, however uncomfortable.
The truth is that Brexit remains the big E in the room; it is a continuing kamikaze catastrophe for citizens and businesses alike. It is hard to grow an economy when you have cut yourself off from your largest market, and other countries across the world seem none too fussed about partnering up with a splendidly isolated old Blighty.
To make matters worse, this Chancellor has thought it wise to slap a hefty tax burden on our biggest export—another E. I am referring to Scotch whisky, an export that was previously so badly wanted in the UK that the Union Jack was even stuck on all the packaging.
Finally, let me say that there is one E we can agree with the Chancellor on, and that is the “expression” he used during his Budget speech: “independence is far better than dependence”. That may have been the only true E muttered by a Tory Minister in the past 13 years, and the sooner that Scotland is independent, the better it will be for everyone.
Jack Lopresti (Filton and Bradley Stoke) (Con)
I will focus my brief remarks on supporting the announcements made in the Budget relating to the Government’s commitments on defence spending, and on how the Budget also underpins the UK’s place in the world and supports our veterans.
Defence of the realm and the security of our people is the first responsibility of any Government. However, as the Chancellor has stated,
“our return to growth has direct”—
positive—
“consequences for our role on the global stage.”—[Official Report, 15 March 2023; Vol. 729, c. 844.]
The £11 billion increase in our defence budget over the next five years is a significant investment to ensure the protection of our values of freedom, democracy and an international rules-based order. That £11 billion comes on top of the record £24 billion increase announced in 2020, which was the largest increase since the cold war. This funding will enable us to continue to modernise our military and help ensure that our armed forces have the resources they need to meet the evolving threats we face today. The package of funding for the Ministry of Defence includes an additional £2 billion next year and £3 billion the year after. This funding will also help to replenish and bolster vital ammunition stocks, modernise the UK’s nuclear enterprise and fund the next phase of the AUKUS submarine programme.
Although I am delighted with the increase in defence spending, I join some of my colleagues in urging the Government to commit to spending even more on defence in due course. I understand the budgetary constraints, especially after the support we gave during the pandemic and the help we have given to deal with the rise in energy costs, but I saw for myself only a few weeks ago in Ukraine some of the destruction inflicted by the Russians, so I can say that deterrent is cheaper than conflict and then reconstruction.
I am pleased to see our Government leading Europe in supporting Ukraine with military aid, with at least £2.3 billion this year, at least matching what we spent last year. We are providing more military support to Ukraine than any other country in Europe, and this is support that Ukraine desperately needs. The UK remains the second largest spender on defence in NATO, after the United States, and we were the first large European country to commit to spending 2% of GDP on defence. The proposed increase to 2.5% shows our continued commitment to being a leading defender of democracy and providing help to people who are standing up to those who threaten it.
I welcome the package of £30 million to increase the capacity of the Office for Veterans’ Affairs, which will help veterans with injuries returning from their service and increase the availability of housing for veterans. It will help to ensure that our veterans receive the support they need to transition back into civilian life and live their lives to the fullest.
The impact of all this investment on the broader economy is huge. The commitment to increase defence spending will create much more certainty for the 390,000 defence jobs across the UK, many of which are high paying and highly skilled, in places such as my constituency. The MOD is the largest provider of apprenticeships in the country. It supports more than 90,000 apprenticeships in subjects as diverse as cyber, engineering and healthcare. I support the introduction of a new kind of apprenticeship known as a “returnership”, targeted at the over-50s who want to return to work. Returnerships will operate alongside skills boot camps and sector-based work academies. They will be incredibly useful for those who wish to change career and in encouraging some of our over-50s back to the workplace.
The Budget not only increases our ability to defend ourselves, sustaining our credibility and our place in the world; it will also help to create many more high-tech, high-skilled jobs, so that we can continue to preserve and enhance our sovereign defence manufacturing capability as well as defending ourselves.
Barbara Keeley (Worsley and Eccles South) (Lab)
In the Budget, the Government missed an important opportunity to support unpaid carers. There was also no mention of social care and there were no measures to fix the current crisis, which is increasing the workload of unpaid carers.
On Budget day, which was also Young Carers Action Day, members of the all-party parliamentary group on young carers and young adult carers met to hear from young carers. One was Rochelle, who has been a carer since the age of 12. She told us that her mother had bipolar disorder—type 2—and was sectioned. Rochelle said that she had no interaction with the mental health professionals who supported her mother despite the fact that she saved her mother’s life twice through her knowledge of first aid. Rochelle’s mother lost £20,000 of her savings through fraud by someone who befriended her. Rochelle told her teachers at school about that, but they did nothing to help.
Rochelle got no help as a young carer until she went to Kingston University through the KU Cares programme. The good news is that she is now studying law part time while working as a full-time member of staff at the university on work to recognise and address the unique challenges and structural disadvantages that some groups of students face. Rochelle won an award for charity and third sector work presented at the House of Lords in December 2018, and she shared her story with the charity Our Time to encourage other young carers.
There are 800,000 young carers like Rochelle who need better support. One young carer told the Carers Trust that:
“Being a young carer feels like we have been forgotten. There is not enough support to help us.”
A recent survey by the Carers Trust showed that the situation for young carers is getting worse. The majority of young carers now spend more of their time caring than they did last year, and around half of young carers care for more people. In a Budget that claimed to be about getting people back to work, there were no significant measures to help the many unpaid carers who cannot work or have to reduce their hours due to caring.
The Work and Pensions Secretary referred briefly to carers in his speech, when he said that
“we know that 1.7 million people say they are economically inactive because they have caring responsibilities.”—[Official Report, 16 March 2023; Vol. 729, c. 1015.]
He went on to talk about childcare but said nothing about support for carers.
Worse still, the Health Service Journal has reported that the Government are set to cut planned spending on the adult social care workforce and on reform and integration by at least £500 million. The workforce funding announced in December 2021 would have invested in
“knowledge, skills, health and wellbeing and recruitment policies”
in social care. That money is sorely needed in a sector with a 10% vacancy rate, but it is now expected to be halved. The same reports suggest that the already miserly funding pot of up to £25 million in funding for carers will be cut to nothing, as will £300 million earmarked
“to integrate housing into local health and care strategies”
to improve supported living. Leaders across the sector have rightly criticised those cuts, because this is no time to cut social care or, even worse, to cut the existing pitiful level of Government funding of support for carers.
The Budget missed the opportunity to do something about the crisis in social care, but the Government cannot keep ignoring it. The system has already eroded to a level that fails patients, staff, families and unpaid carers, and the impact of that failure will be serious and far-reaching for both social care and the NHS.
Simon Fell (Barrow and Furness) (Con)
I will speak briefly because I know that many Members want to speak. There is much to like about the Budget, which is focused on growth, getting people into work, incentivising investment, driving down inflation, and providing people with security on energy costs and the future of their energy needs. I will touch on three areas that I think are the most important: energy support, energy security and the environment.
The illegal invasion of Ukraine has layered stresses on a global economy already weakened by covid. Food and fuel shortages have led to global inflation and the pressures we all face now. Two ways to resolve that are support in the here and now, and planning for the future so that we are not exposed next time round. The £94 billion cost of living package, one of the most generous in Europe, is a remarkable intervention by the Government and will continue to shield families while the market stabilises. Continuing the energy price guarantee, freezing fuel duty and ending the premium on prepayment meters are interventions that will make a genuine difference to people’s lives, and I support them wholeheartedly.
The other side of the coin is energy security. I particularly welcome two measures announced in the Budget, categorising nuclear as environmentally sustainable and launching Great British Nuclear. Crucially, changing how nuclear is categorised means that pension funds and asset managers under pressure to make green investments are now in a position to do so. Great British Nuclear and small modular reactors are also crucial to unlocking the UK’s potential in capacity and resilience, and offer huge opportunities for the Cumbrian coast at Sellafield and Moorside.
It is worth noting that those SMRs, in which the Government have already invested £210 million, power an existing nuclear fleet as the engines of our submarines. One reason such programmes are costly and fragile is the infrequency of their production; not having a common nuclear energy fleet layers complexity and cost on the roll-out of nuclear power. However, given the security in the submarine programme through Astute, Dreadnought and SSN-AUKUS, the drumbeat of production and the progress of the submersible ship nuclear replacement programme, that symbiotic relationship should bolster the defence of our realm and our energy security.
The Government’s commitment to carbon capture and storage in the Budget is a welcome push for that industry and will inspire confidence in market participants that the Government are serious about achieving their target of storing 20 to 30 megatonnes of sequestered carbon by 2030. I declare an interest, because in Morecambe bay we have a cluster with the potential to store a gigatonne of CO2 and will provide long-term decarbon-isation solutions to businesses across the whole UK, creating thousands of jobs in industrial heartlands. My right hon. Friends on the Front Bench are welcome to visit at any point.
I welcome this Budget for the clear emphasis it places on growth and delivering against the people’s priorities of halving inflation, growing the economy and reducing debt, all in aid of creating better-paid jobs and opportunities across the UK and in constituencies such as mine in Barrow and Furness.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
This year has been one of profound difficulty and hardship for many of my constituents, and in many areas the Budget will fail to allay their fears.
I want to cover a few issues, starting with small and medium-sized businesses. While the Chancellor could have used last week’s Budget as a means to rebalance the scales in favour of the small businesses that form the backbone of the Welsh and UK economies, many SMEs will feel that instead they have been short-changed and overlooked. My constituency, like many others, is filled with dynamic, vibrant and resilient small businesses, which are integral to this country’s recovery from the pandemic, to the economic growth that appears to have eluded seven Tory Chancellors, and to the long-term prosperity of our country. I recently met many local SMEs with my constituency colleague, the Minister for the Economy of Wales Vaughan Gething, and they raised many issues with me, from energy costs to recruitment and skills and the importance of infrastructure.
However, the Government’s priorities in no way reflect that picture. I agree with the criticism from the Federation of Small Businesses that small business owners,
“will be wondering why the choice has been made to overlook them.”
We have seen £27 billion directed at big business, with small and medium businesses being told that their role is insignificant in comparison. On the Opposition side of the House, we know the value of small business: we would cut business rates for small firms, give grants to go green and tackle late payments from big businesses.
The Chancellor also brushed over the contribution the co-operative sector makes to our economy—here I declare an interest as a Co-operative MP and draw the House’s attention to my past interests. There are currently 7,000 co-operatives in the UK and this critical sector contributes £40 billion to the economy each year. Co-operatives are ambitious, with 61% expressing ambitions to grow compared with 53% of small businesses generally, but co-ops and mutuals are struggling under this Government. The recent crisis at John Lewis, which faces the prospect of having to dilute more than 70 years of a tradition of collective ownership, is a symptom of the Government’s refusal to make sensible changes, such as introducing permanent capital to enable mutuals to access new funding without having to change their status.
The creative industries are absolutely critical in my constituency. They are worth £115.9 billion in gross value added, and make up 6% of the economy, employing 2.3 million people, including many of my constituents. Although we welcome the audio-visual expenditure credits, which are replacing the tax relief, they stand in contrast to the cuts that could be made to the BBC orchestra and singers. Indeed, my constituents have raised with me not only the cuts to those organisations but the impact of energy costs on grassroots music venues—one is closing every week across the UK, but the Chancellor has failed to heed the evidence submitted by the Music Venue Trust and others about the crisis that they are facing.
Steel and green steel, which have been raised by other hon. Members, are absolutely critical in my constituency and crucial for our construction industry and many key infrastructure projects, but the Government have lacked a clear industrial strategy on steel. The Labour party would invest in green steel and have a steel renewal fund. The UK public are with us on that: 70% said in a recent poll that the Government should intervene to provide competitively priced electricity to the UK steel industry.
Pensions have been a core issue. Although the Government have been happy to provide support for the pension pots of the richest 1%, constituents of mine who lost their Allied Steel and Wire pensions, and who were part of the financial assistance scheme, are still being short-changed. Indeed, some are now receiving 40% less than they should because of a lack of index linking and a lack of action. We met the former Pensions Minister, the hon. Member for Hexham (Guy Opperman) back in 2021, but two years on, I have yet to hear what answers he has to the serious questions that those pensioners are raising. There is not a lot of joy in this Budget, and there are some serious questions for the Government.
Elliot Colburn (Carshalton and Wallington) (Con)
I congratulate the Chancellor of the Exchequer and the Treasury team on delivering a Budget that tackles cost of living pressures, takes steps to continue our economic recovery and, ultimately, places our constituents at the heart of the Government’s priorities.
We should be under no illusion that high inflation, spurred on by the illegal invasion of Ukraine and the economic fallout of the pandemic, is the greatest threat to the prosperity of the UK right now. My Carshalton and Wallington constituents come to me to share their stories. Parents—particularly women—are forgoing employment because childcare is unaffordable, elderly people are worried about energy prices, businesses are struggling because their customers are tightening their belts, and pretty much everyone in between is affected. High inflation spares no one. That is why I am so pleased that the OBR forecast states that we will more than meet the Government’s pledge to halve inflation this year. The Budget also builds on the work that the Government have already undertaken to cut inflation, and takes decisive action to support the people who are currently impacted by inflation.
I will touch on a few key measures, particularly the introduction of 30 hours’ free childcare per week for children aged nine months to four years old. I pay tribute to my hon. Friend the Member for Stroud (Siobhan Baillie) for her doughty campaign in that incredibly important space. I cannot begin to tell the House how many young parents—again, particularly women—have met me to discuss the cost of childcare. I am grateful that the Minister for Social Mobility, Youth and Progression, my hon. Friend the Member for Mid Sussex (Mims Davies), came to my constituency last week to visit Bright Horizons nursery and pre-school, where we discussed some of those priorities. Not only are the measures good for the wider economy, good for enabling new parents to return to work and good for those parents’ personal budgets, but they will give back to many of the young mothers whom I have met an important part of their lives: the opportunity for independence and professional aspiration.
I am also glad about the other actions that the Government are taking to support all people facing cost of living pressures, particularly by extending the energy price cap and ending the premium paid by the more than 4 million households that use prepayment meters, ensuring that energy bills become fairer across the board. Of course, there is always more work to be done, and I would like the Government to spend more time looking into the impact on people whose homes are heated by district energy networks, such as those who live in New Mill Quarter in Hackbridge. It is not entirely clear what the energy bills discount scheme means for them. Indeed, that extends to local businesses as well. I thank the Minister without Portfolio, my right hon. Friend the Member for Chelsea and Fulham (Greg Hands), for coming to Carshalton last week to visit businesses, particularly Village Bakers, to discuss their energy bills.
Shortness of time prevents me mentioning many other measures, such as the frozen fuel duty, so I will wrap up by highlighting the major advance in healthcare. I welcome the move on pensions: as chair of the all-party parliamentary group on cancer, I know that much of the cancer workforce was leaving because of that issue, so I am grateful for the change. I never forgo an opportunity to mention the upgrade to St Helier hospital in the London Borough of Sutton, so I thank the Government for reaffirming those pledges. I commend the measures in this Budget.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
It is an honour to follow the hon. Member for Carshalton and Wallington (Elliot Colburn), a fellow member of the Petitions Committee. After the chaos of the past few years, the Budget was the Government’s chance to show that they would govern for everyone and end the divisive rhetoric and politics that hold our country back. Sadly, it was an opportunity missed, because although some of the biggest challenges—the need to reform childcare and get Britain working again—were acknowledged, the Government have proved incapable of fixing them.
Across the north-east, 38% of babies, children and young people are growing up in poverty, overwhelmingly in working families. In Newcastle, that figure is 42%. It is only set to get worse, with 1 million more children expected to live in poverty in the next year. That is the reality: more children growing up in households without the very basics, whether that is food in their stomachs, heating in their homes, clothing on their backs or something as fundamental as a bed.
In December, as chair of the Petitions Committee, I led a debate on child bed poverty. I can scarcely believe that bed poverty is a real problem in 21st century Britain, but it is, yet we only saw complacency in the Budget. The squeeze on living standards has left working people £104 a month poorer and wages are set to remain below 2008 levels until 2026. That is not growth. Everyone is running faster but they are slipping backwards. People are still paying more for their mortgages after the kamikaze budget, but, against that backdrop, the Chancellor’s choice was to give a tax cut to the richest 1%. That is the wrong priority at the wrong time.
Since 2019, the Petitions Committee has received many childcare petitions, signed by more than half a million people, on extending free childcare, on the childcare ratios and calling for an independent review of the childcare sector. I am heartened that the Chancellor has started to listen to those concerns, but the solutions will not meet the challenge. Increasing the number of children entitled to free childcare places while continuing to supply inadequate funding will mean that childcare providers will increasingly be forced out of the market. They have made that very clear.
The Government have also neglected to follow the evidence on ratios. It was presented very clearly to us in a powerful petition led by Zoe and Lewis Steeper, who sadly lost their son in a tragic accident at nursery. The Early Years Alliance describes relaxing ratios as a
“ludicrous, pointless and potentially dangerous policy”.
It just will not work. Some 70% of childcare providers have said that the Government consultation will not make them review their provision. Pregnant Then Screwed warn that such a change will be “detrimental to staff retention”, with a survey showing that 75% are likely to leave if ratios are relaxed. We are asking these very low-paid workers to do more with even less, and that will exacerbate existing problems. It is not just about safety. We know that smaller numbers mean better quality childcare, and that matters to our families, our children, our childcare workers and our economy.
I could have talked about so many issues today—our crumbling transport infrastructure, our wavering commitment to international aid, defence spending or the failure of the Government’s so-called levelling-up agenda—but time simply does not allow it. What worries me is that this Budget is an attempt to paper over the cracks of 13 years of failure, and we cannot afford any more precarious growth. The Budget is a deafening wake-up call to the British people that unfortunately this Government are out of ideas, out of road and need to make way for a Government who will take the country forward.
Siobhan Baillie (Stroud) (Con)
Small businesses and families are the “force” in workforce. It is fantastic that the Chancellor of the Exchequer has recognised that, and it is also not rocket science to know that the country’s finances are going to be stretched at a time when we have spent £400 billion on the pandemic and are dealing with a war. However, Stroud people can see that the Budget is making sensible and realistic changes to help with fuel and transport, energy costs and pensions; to ease recruitment pressures for businesses; and to take action on beer duty, potholes and leisure centres.
We have had a huge team effort on this side of the House to make the case for putting parents and the early years workforce front and centre in the Budget. I am not sure that the Chancellor or the Prime Minister has had a breakfast or a meeting recently without that issue being mentioned, and they have definitely listened. Reforming and stimulating the early years and childcare sector is not just some fluffy woman’s issue: it helps the country threefold. It gets parents back into work and working at full tilt; it gives businesses the workers that they desperately need at the moment; and the childcare and early years sector is a skilled workforce in itself. These people are looking after the most precious things in our lives, and it is really hard graft. I come to work for a rest from my kids; I could not do what those workers do. We have to value them, train them, and pay them more. It is well known in this place that I think there is more work to do on hourly rates for the childcare sector, but we have made massive strides in the Budget.
The Budget is also a good reminder to the country that the free hours are not free. They are paid for by the taxpayer, and we need to use them judiciously: we need to think through who are the best people to use them. I think there should be changes, but again, I think we are getting there. I met some Stroud childminders recently, which reaffirmed to me how special these entrepreneurial businesspeople—mainly women, but businesspeople—are. They can do an awful lot for families, but they can also do a lot for families with children with special educational needs and disabilities, and I think we should lean on them more.
I do want to make a political point now: I think the Chancellor of the Exchequer has blown the Labour party out of the water on childcare. Labour Members have gone on and on about this—I have been shouted down—but they have not come up with a plan. We have had speech after speech; we have had flying around the world, using lots of air miles and upsetting the environment, but they have not come up with a plan. They have misled parents and mismanaged expectations. They have talked about universal free childcare; they have talked about having a new system like the rebirth of the NHS, as per the article in The Times, but behind the scenes, they have realised that that is not affordable, realistic, or sustainable for the country. I do not accept that they could not come up with a plan because they are waiting for the elections and want to get all the good stuff out then.
Siobhan Baillie
No, we are not taking interventions, but I would love a conversation about this, because I would have liked to see the ideas. Unfortunately, that plan has not been forthcoming, but other plans have been. We have seen ideas about cars from the Opposition, but not about childcare and not for families. The Government have made childcare and the early years sector not just about infrastructure, which Opposition parties have been asking for. They have recognised parents and the early years workforce as key to growing the country—key to the economy. That is absolutely integral to making the families of this country feel valued and part of getting involved in this country’s success. I am very grateful for that.
In my final seconds, what I would say to the people who are worried about there being too much focus on getting parents into work is, “I hear you.” It is right that we should have parental choice, but given the financial constraints on this country and the current workforce issues, it is also right that the Chancellor has done what he has with the Budget.
Carolyn Harris (Swansea East) (Lab)
While the Chancellor seemed to think that last week’s Budget was an opportunity to celebrate the fact that the country had narrowly avoided entering recession, the fact remains that the UK will be the weakest economy in the G7 this year, and the only country that will see negative growth. True to form, when the Government came to choose who to give additional support to, it was the richest 1% and their pension pots when they abolished the £1 million cap on how much an individual can build up in their private pension before they pay additional tax. If, as the Chancellor suggested, the reason behind doing so was to keep doctors in work to boost our struggling NHS, that clearly could have been done through a tailor-made amendment to pension rules.
While the Government are helping the rich to get richer, there are people in my constituency and right across the country who cannot even dream of paying into a pension, let alone saving on the money they have to pay on it. We have families who cannot afford to put food on the table, working people queueing at food banks and children going to school with empty bellies, yet the Government’s response was to bolster the pensions of those who already have more than they will ever need. That is very wrong.
We all want to keep people in work, but to do that we need to help them by offering them the support they need, rather than just offering financial incentives to a tiny elite group. There are women who have worked all their lives, mostly on salaries, where a £1 million pension pot will never trouble them. They hit the perimenopause, and they become engulfed in self-doubt and in need of some minor adjustments to their working conditions, but at the moment, even though we have started to see a breakthrough, not enough businesses have that support in place. Some 10% of menopausal women are leaving jobs. One in four is reducing hours and thousands more are avoiding promotion.
Women are claiming benefits for the first time in their lives simply because nothing was done to help them remain in work, but by leaving work earlier than planned, their national insurance contributions may not reach the threshold for the full state pension, so they may well end up claiming pension credit. There are employers that have taken that on board and implemented changes that have been instrumental in retaining staff, and I welcome the development of a new standard on menopause in the workplace that will be launched by the British Standards Institution later this year. I am absolutely delighted that the Opposition have committed to improving menopause workforce support when we have a Labour Government, because we understand that it is the millions we need to be helping, not the millionaires.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
This is an excellent and very important Budget for people in Runnymede and Weybridge and across the country. There is lots to talk about in it, but I want to focus on a couple of key points that are maximally important in tackling the challenges we have today—the need to halve inflation, grow the economy and reduce debt—and some of the interventions that this Budget makes to drive that forward.
The first thing I want to talk about—No. 1—are our reforms and improvements to childcare. I have an interest of sorts to declare, as I am a recipient of 30 hours of subsidised childcare and a user of the tax-free childcare scheme. Childcare is one of the biggest issues that comes up on the doorstep in my constituency. It is clearly a barrier to parents—mums and dads—returning to work, and the interventions we are making to increase the number of hours and improve the rate and the supply-side reforms will make a big difference. I have had meetings with many of my early years providers and nurseries, and they have raised just how challenging it is and how challenging the rates are in particular. These reforms and changes will make a huge difference. There is also a recognition in the measures being brought forward that supply-side provision will be difficult. In bringing the policy forward, there will be challenges in growing the workforce, and that is why it is being introduced in a sensible, staged way.
My second point is the investment in science. In Runnymede and Weybridge, we are proud to have the SuperFab quantum lab at Royal Holloway. I have visited it, and it is absolutely brilliant. It is an awesome high-tech research lab. The quantum strategy we have announced, with £2.5 billion going into it and a 10-year plan going forward, is critical for UK science. It will help the quantum ecosystem and it will continue to consolidate our position as world leaders in science, which is so important for the medium to long-term ambitions of our economy as we move more towards a high-skill, high-tech economy. We very much see that in Runnymede and Weybridge and the businesses we have locally.
I speak to businesses all the time, and I say, “Why did you set up originally in Runnymede and Weybridge?” They talk about proximity to an international airport—Heathrow—and to motorways, the commute time into London and of course being in Surrey, a wonderful place to live and work. Through that, we have a whole host of big life science and high-tech companies located in my constituency. I am working to drive forward further investment to consolidate us as a world-class location in which to invest. So I say to those watching at home, “If you’ve got a company that is in the tech and life science sector and you want to invest in Runnymede, come on over.” We are a fantastic place to set up, and the Government’s reforms will help consolidate that even further.
While I am on a roll, in my last 30 seconds I am going to talk about the Animal and Plant Health Agency, which is in my constituency. In the first Budget I was at as a new MP, the Government committed £1.4 billion towards it, and I am looking forward to seeing that being delivered as we go forward. It is critical for our security in defence against zoonotic diseases and for our trade. It underpins the Northern Ireland framework, or what I would like to be called the Runnymede agreement, as it was actually signed in my constituency, and on that, I will finish.
Angela Crawley (Lanark and Hamilton East) (SNP)
The cost of living crisis is far from over and, sadly, this Budget offers very little to the people in Lanark and Hamilton East. Energy bills remain high, mortgage rates remain high and child poverty remains high, so if this is the best that the Chancellor can offer during a financial crisis of his own Government’s making, it demonstrates how perfectly out of touch Westminster is with the needs of Scotland.
The Chancellor spoke of ramping up welfare conditionality. This will only force more people into insecure work, offering no stability for future planning, and it is not enough to lift them out of poverty. The reality is that this has resulted in a series of punitive sanctions in relation to the administrative earnings threshold on universal credit. Does the Chancellor really believe that the solution to bringing about growth is to hammer down on sanctions?
The gender pay gap is still very much apparent, and this Budget will do nothing to address it. I fear that women are bearing the brunt of the cost of living crisis, and this is fundamentally unacceptable in 2023. Calls to reintroduce gender pay gap reporting and to include ethnicity and disability pay gap reporting have all but been ignored. So can the Chancellor really claim that this will achieve economic growth and be truly inclusive, as the Conservative Government appear to believe it will?
While I welcome an increase in the national minimum wage, it is not a real living wage. It will not be enough to cover the cost of living, and it will not be enough to lift people out of poverty. It will not be enough to give people financial freedom to meaningfully contribute to the economy. When will the Chancellor listen to the overwhelming calls from stakeholders to completely commit to fully implementing a real living wage?
The one policy I will welcome is on childcare. We all accept and understand that good-quality, well-funded childcare is imperative to drive the economy, to get women and parents back into work, and ensure that those who are in work stay in work, as well as to tackle things such as pregnancy and maternity discrimination and the bias against women within the workplace who are assumed to bear the brunt of childcare, but this is simply not good enough. I recognise that it enables parents, particularly mothers, to contribute to the economy, but lip service to childcare is not good enough. This could be a truly transformative policy: it could achieve real economic change, reduce discrimination, reduce in-work disparity and level the playing field for the gender pay gap, but this policy does not go far enough. I hope the Government will consider that it is a great policy, and let us drive it further.
I want to make a final point about the Government’s record in the last 13 years. Their dogmatic commitment to Brexit has cut Scotland off from our largest international trading partner. It has cut us off from access to the EU labour force, and businesses in Scotland can no longer afford the labour shortages they have been hit with in the last 12 months. The reality is that the cost of living crisis is not over. I am calling on this Government to listen to the SNP, accept the Migration Advisory Committee’s recommendations for a rural visa pilot, and allow those who want to come here to work and contribute to our economy to do so.
The reality is that this Budget has only further deepened the isolation that people feel. It has pushed low-income households into further poverty, created hardship even for those in well-paying jobs and forced people to sacrifice their basic needs to stay afloat. It has exacerbated the mental health crisis and pushed businesses to the brink of collapse. It has encouraged people into debt and forced pensioners to turn their heating and electricity off in the depths of winter. I know that this is the reality for many of my constituents across Lanark and Hamilton East and across the UK, and I am calling on the Chancellor to make—
Mr John Baron (Basildon and Billericay) (Con)
I refer Members to my declarations in the Register of Members’ Financial Interests.
I very much support this Budget, which has many commendable aspects: the expansion of free childcare, the extension of the energy price guarantee, the increased expenditure on defence, the continued fuel duty freeze and the extension of the 5p cut are all welcome. But I want to take the opportunity to bend the ear of Ministers on a couple of issues that may have been overlooked and may even threaten the long-term potential growth of the economy. They may not have been adequately addressed in the Budget.
The Chancellor rightly focused on five key growth areas, and one of them is financial services. The City of London generates more than 10% of the UK’s GDP, but I suggest to Ministers that that is under threat, and I am not convinced that the full scope of the Edinburgh reforms go far enough to address the problem. Many people pooh-bah the stock market, but it is only part of the Square Mile and it acts as a gateway to many other financial services, such as derivatives, trading, insurance, legal services and so on. A healthy stock market is therefore essential, but it is ailing. We just have to look at the computer chip designer Arm and the building materials giant CRH shunning the City for US listings. Those two companies in aggregate account for £80 billion of market worth.
A key problem is that the reaction after the financial crisis—and the Government were involved in this—was to encourage pension fund investors, some of the big beasts in the City, to adopt a more risk-averse approach to investment. Over the long term—and pension funds are about long-term investment—a more risk-averse approach means lower returns. Some pension funds have reduced their allocations to UK equities by up to 90%. The Government need to think outside the box to reverse that trend. They should consider tax incentives to encourage longer-term investment to foster investment in our technology companies, and ending tax penalties associated with equity financing. The Hill review, which is now two years old, has still hardly been properly addressed and it should be revisited.
We should ask ourselves why so many rising stars among our SMEs, especially in the technology sector and the green space, are banking with a Californian bank, Silicon Valley Bank, which needed rescuing over the weekend. It points to a wider issue.
My second point, in the minute left, is about investment and productivity. There is a severe risk that we will be squeezed between the US’s Inflation Reduction Act, worth £300 billion, and the EU’s green deal industrial plan, worth £200 billion. Subsidies and investment incentives do work: we need only look at our renewable energy sector. I suggest to Ministers that we need to follow this closely. I welcome the investment proposals in the Budget, and they will go a long way, but we need to monitor this continually, otherwise we risk losing our lead in so many areas in the green technology space. There is simply no room for complacency.
Naz Shah (Bradford West) (Lab)
Last week’s Budget was another example of sticking-plaster politics, in which once again working people paid the price. The OBR confirmed that the hit to living standards in the UK has been the highest since records began. Data from the Joseph Rowntree Foundation shows that one in five people in the UK are now in poverty. In my constituency, families are struggling to make ends meet. Over half of the children are in poverty and 22.3% of households are in fuel poverty, compared with 13.2% in the country as a whole.
The Tories will attribute their failure to the pandemic and the war, but the contrast between our economy and those of the other countries in the G7 is stark. The UK will be the only country that will see negative growth—no other G20 economy, other than Russia, is forecast to shrink this year.
The Government have neglected small businesses. There have been no plans to support them with their energy bills through this crisis, putting them and their workers’ jobs in a precarious position. I welcome the reform to childcare support, which is a significant expense to many families, but the policy does not come into place until 2025. The only permanent tax cut in the Budget, for the very top earners, might come as a shock, but it is certainly no surprise that the Conservative party remains true to its priorities: safeguarding the interests of the rich over the interests of ordinary people.
The Budget was another missed opportunity to provide support for struggling families in Bradford West and across the country. Once again, it fell short on delivering for the working people—another Tory failure to add to a pattern of 13 years of Tory economic failure. The UK and Bradford West need a Labour Government who will put working people first, promote growth and ensure that Britain unlocks its potential.
The Tory party, with no plan of its own, once again rehashes Labour’s policies, extending Labour’s plans for a windfall tax on oil and gas companies, Labour’s plans to cap energy bills for households, Labour’s plans for welfare reform, Labour’s plans to scrap extra charges for those on prepayment energy meters and Labour’s plans to scrap the rise in fuel duty. The Tory party should also consider adopting Labour’s plan for a national wealth fund. In fact, I reckon the Tories are ready for a Labour Government who deliver on Labour policies.
In conclusion, this is not a back-to-work Budget; this is the same old Tory Budget that fails my constituents and the rest of the country.
Alexander Stafford (Rother Valley) (Con)
I rise to celebrate the Budget. Madam Deputy Speaker, as a fellow South Yorkshire MP, you will know that there was joy, singing and the happy ringing of bells in Dinnington on the news that the Budget provided £12 million, under the capital regeneration project, out of a pot of £20 million given to Rotherham, to rejuvenate and revitalise our high streets.
As I am sure the House will know, the regeneration of Dinnington high street is something I have spoken about for years. Unfortunately, the Labour-led Rotherham Metropolitan Borough Council bid for levelling-up funds for Dinnington failed twice. We got £11 million, with £4.5 million for Maltby, but Dinnington was failed and let down. Our bid should never have been put in with the library in Wath; it is not the same project.
When I found out that our bid for the high street had failed, I went to the Levelling Up Secretary, the Chancellor and even the Prime Minister himself to say that Dinnington needs this money. The Prime Minister visited Dinnington last June when he was the Chancellor of the Exchequer. He saw at first hand where the money would go, the need to take out the burnt out building, and the need to revitalise the high street and open up the markets. The Government have delivered for the people of Rother Valley and the people of Dinnington.
Why could we deliver? We could deliver because of a combination of work: work by me, but also by ward councillors and other groups, such as the Dinnington St John’s Town Council, led by Councillor Dave Smith, and the Dinnington Land Trust, with David Dixon and Dave Johnston, who combined to put together a neighbourhood plan for Dinnington, so that the high street project could be looked on favourably by the Government. The reason we had not had the investment for Dinnington high street and other areas in Rother Valley for so long was that there were no masterplans for Dinnington, no masterplans for Maltby, no masterplans for Thurcroft and no masterplans for Swallownest. We were waiting and waiting and waiting for them from Rotherham Metropolitan Borough Council, but we did not get them, so we took the matter into our own hands. It was because of that that we could get the money for our high streets. When I was elected in 2019, I made a promise that I would get the money for Dinnington high street. This Budget has delivered for the people of Dinnington.
The £12 million for Dinnington is just the start. There is so much more to do on Dinnington high street—for example, reopening a police station on the high street—but we need further plans for places such as Maltby, Thurcroft and Swallownest. I want the Government to work with me to get more money for our high streets across the area, because we clearly cannot let this situation continue. We cannot rely on Labour-led Rotherham Metropolitan Borough Council to provide the plans for these areas, because it has not done them. That is why, when I had my meetings with the Chancellor, the Prime Minister and the Levelling Up Secretary, I said again and again that we needed this money for Dinnington. This Conservative-led Government have delivered for the people of Dinnington and that is so important in this Budget.
The Budget is so important for the people of Dinnington and Rother Valley. At last we have hope that our high street—the beating heart of Rother Valley—will be revitalised. It will be a long battle to get the planning permissions, the possible compulsory purchases and all the consultations. I want the Government to work with me to ensure that, now the £12 million is in Rotherham’s bank, it is spent fully on Dinnington high street and its people to truly level up, as this Government promised and are delivering.
Mohammad Yasin (Bedford) (Lab)
Like many of my constituents in Bedford and Kempston, I listened intently to the Chancellor’s Budget announcement last week. It was an opportunity for the Government to unleash Britain’s potential and realise the nation’s economic promise. Once again, the Tory Budget failed to deliver.
We should not be fooled by avoiding recession on a technicality. There is no room for boasts and bluster when we face being the only country in the G7 that will see negative growth this period. For all the bravado that surrounded the extension of the energy price cap scheme, have the Government reflected on how we got to a position where such a guarantee was necessary for struggling households across the country?
My constituents are worried about the state of the NHS, the number of police on the streets and the progress of infrastructure projects that will change the physical, social and economic landscape of our towns—issues that were all but ignored in the Budget. The Chancellor may have fudged this Budget, but he has had a long parliamentary career. Given his previous incarnation as Health Secretary, he must acknowledge the importance of health for boosting the economy. This is about not just physical health—the impact of mental health is incredibly significant. In my constituency, we are waiting for the delivery of a new mental health unit, comprising vital services and beds for both adults and young people. The project has spent years in the long grass. The site is approved, the funding is ready and there is a wealth of local support, yet we wait. Progress is blocked by the current Tory Government, who cannot resolve a bureaucratic technicality that limits capital investment, delaying a scheme that will change lives. Why will the Government not take mental health seriously?
Bedfordshire MPs from both sides of the House have raised concerns about policing in the region and how an unfair formula funds us as if we were a rural force—ignoring the many urban areas across the county, including an international airport. Our police force faces major challenges arising from this misclassification and, as a result, so do our constituents. Why did the Government think that policing was not important enough to focus on last week?
The Government have pledged up to £15 million in local capacity funding to support local authorities along the East West Rail route, which runs through Bedford and Kempston. We are told to expect a route announcement from the Department for Transport in May—one that may or may not bring an end to the years of uncertainty for residents whose homes are blighted by a current proposal that lacks any detail or clarity about alignment or scale. If the project had been a road one, residents in a similar position may already have been eligible for payouts under blight and compulsory purchase. Instead, my constituents—many of whom have a genuine need to sell—are fighting for acknowledgement from EWR and, by extension, the DFT. They were promised consultations and payout schemes that have not materialised.
There is a better way. The Government should support Labour’s plans to empower our communities, invest in our economy and fix our public services.
Simon Baynes (Clwyd South) (Con)
I warmly welcome this Budget, and I am pleased that it sets out measures to support the Government’s aim of halving inflation, growing the economy and getting debt falling. According to the OBR’s analysis, the Government will meet those targets in the medium term, which is vital for my constituency and the rest of the UK, to ensure long-term economic health.
Inflation is forecast to fall to 2.9% by the end of 2023—a figure that perhaps has not been drawn out so much from the Budget—and to fall to 0.9% in 2024, before rising again to around 2% for the remainder of the forecast period. Debt is forecast to start falling as a percentage of GDP in the medium term and the Government’s other fiscal target—for public sector net borrowing to total less than 3% of GDP by 2027-28—will also be met.
Given the massive economic turmoil that we have seen around the world, caused by the covid pandemic and Putin’s illegal war in Ukraine, these forecasts represent an impressive stabilisation and improvement in our economic prospects. That stabilisation rests, in great part, on the strong base with which the UK economy entered the covid pandemic. My hon. Friend the Member for South Cambridgeshire (Anthony Browne) has drawn out the figures about how the UK economy was 21% bigger in 2022 than in 2010, when the Conservatives came to power. I want to add to that statistic that since 2010 the UK has grown a quarter faster than Germany, nearly 50% faster than France, more than twice as fast as Spain, three times faster than Japan and 19 times faster than Italy, so this is a strong economic base.
I strongly support the broader policies outlined in the Budget. As a Welsh MP, I hope very much that the Welsh Government will match the Chancellor’s policy to extend 30 hours of childcare a week to working parents of children aged nine months to four years. I also warmly welcome the introduction of reforms to the childcare sector, including changes to the staff-to-child ratio for two-year-olds, from 1:4 to 1:5. Likewise, I hope that measure is adopted by the Welsh Government.
I believe the Chancellor got the balance right in focusing help for business by introducing a £25 billion three-year tax cut for business investment through expensing, rather than maintaining lower corporation tax rates. I speak as the Member of Parliament for Clwyd South, where the many small and medium-sized companies make up the vast majority of the business sector of my constituency. This measure to encourage investment in business will help to improve productivity, which is a key aim within the British economy. I strongly support that measure for the benefit of the economy in Clwyd South.
I also strongly support the measures to help people get back to work, particularly the more vulnerable in our society, ranging from establishing a new universal support programme for disabled people and the long-term sick, to abolishing the work capability assessment and increasing the administrative earnings threshold to 18 hours. These are vital reforms that will help many people in my constituency.
In conclusion, this is a bold and imaginative Budget that will help people across the length and breadth of the UK, and provide strength and stability for the economy after a period of great turbulence and uncertainty. Therefore, the Budget commands my full support.
Neale Hanvey (Kirkcaldy and Cowdenbeath) (Alba)
“Lettuce” not forget that the chaos we are experiencing, which the Government are trying to correct, is a consequence of the short shelf-life PM who left office recently. It is the cost of chaos and the cost of greed.
Constituents who are dealing with the financial crisis come into my office daily, and the Government are simply not providing support for them. An elderly lady, who came to my constituency office last week, is rationing her energy. She has worked all her life but she is rationing her energy to a few short hours across the day, so that she can at least stay marginally warm—that is in energy rich Scotland, where we have a number of fuel-poor Scots.
This Budget barely gives Scots crumbs from the table. In Scotland we have 2.4 million homes. In a parliamentary written answer, the Minister for Energy Security and Net Zero, the right hon. Member for Beverley and Holderness (Graham Stuart), confirmed to my hon. Friend the Member for East Lothian (Kenny MacAskill) that Scotland generated and sent south 35 TWh of electricity—equivalent to 35 billion kW—in 2021. In only eight years’ time, that will have increased to 124 TWh—enough electricity to power tens of millions of homes—yet no revenue and no jobs are coming to Scotland.
The Chancellor spoke about
“enterprise, employment, education and everywhere.”—[Official Report, 15 March 2023; Vol. 729, c. 837.]
None of those opportunities is coming to Scotland. There are no jobs in construction, no jobs in the service industry for renewable technologies, and no jobs in the supply chain. The energy is cabled south by an undersea connect; it is just taken from Scotland. My constituency has Mossmorran petrochemical plant, which processes various gas components piped down from St Fergus in the north-east of Scotland. It is a strategically important place because it is an ideal test bed for Exxon, Shell and Avanti to use their carbon capture technologies, but this Government do not support carbon capture in Scotland. They do not support the Acorn project in the north-east of Scotland.
The Levelling Up Secretary harped on today about how important jobs in the north-east of Scotland are to the Scottish people. They are important, and the industry should be supported—we in Alba take a very different view of the North sea oil and gas industry—but that is not enough. It is simply unacceptable that Scotland is continually robbed of its energy resources while our people are cold and hungry. This Government will never prioritise their needs.
This Budget is yet another Budget of robbery. The exploitation of Scotland and its people must end. I absolutely oppose this Budget, top to bottom.
Laura Farris (Newbury) (Con)
Because of the restrictions on time, I will confine my comments to childcare. The main thing I want to say is thank you to the Chancellor for listening to the concerns that colleagues on both sides of the House have raised about affordability.
The shadow Energy Secretary, the right hon. Member for Doncaster North (Edward Miliband), said that we should judge this Budget according to three tests. I accept his challenge and will confine my remarks on childcare to the tests that he set.
The first test was whether the Budget shows a proper understanding of what is really going on in this country. Well, it was not the most headline-grabbing element, but the childcare announcement included half a billion pounds over the next two years to fund the free hours—more correctly, the subsidised hours—that apply currently to three and four-year-olds. I know from nurseries in my constituency, such as Ladybirds in Newbury and Hungerford Nursery School, that that provision has been under-subsidised and they have been under serious financial pressure. The amount that they are getting is equivalent to a 30% increase per hour. Most importantly, it is the sum that the sector requested from the Treasury. I think that shows that the Chancellor has the right priorities.
The Treasury has also understood that childcare costs, which have climbed by 20% in the past five years, are affecting women’s participation in the labour market. In my constituency, the cost of a two-year-old’s full-time place in a nursery is £15,000. Last year, the Centre for Progressive Policy reported that half of all mums are struggling to access suitable childcare. Of them, half again said that they were prevented from taking on more hours at work; a third said that they were prevented from taking on a new job, that it was completely out of the question or that they had had to reduce their hours; and one in seven said that the cost of childcare had forced them out of the labour market altogether. Let us be clear: women’s employment was being severely affected.
The second question that the shadow Energy Secretary asked was whether we are showing the right priorities. Let us be clear about what this is. It is tantamount to universal free childcare from the end of the protected statutory maternity period to the start of school, and then an extension of wraparound care. It has been called for, in one form or another, by the Fawcett Society, Pregnant Then Screwed, the think-tank Onward, the Women’s Budget Group—I could go on. They all seem to think it is the right priority. It helps the poorest by accelerating the payment of universal credit. It helps the mothers of older children with wraparound care. Most importantly, it puts women in a position in which they do not have to say no to that promotion, to that job or to increasing their hours because of childcare limitations. It is fundamental to ameliorating the stubborn inequalities that persist in relation to pay, promotion opportunities, pension saving and leadership in the workplace. I respectfully invite the Opposition to say why that is not the right priority.
Several hon. Members rose—
Laura Farris
I have not finished.
Finally, is the Budget a good way of meeting the long-term challenges? Obviously, it is good for growth and not just for meeting short-term labour market challenges, but it enables businesses to harness expertise with the labour market and gives them a greater chance to grow. The Women’s Budget Group has estimated that the lost working hours that women spend providing childcare have cost the economy £28 billion in lost economic output every year. I therefore respectfully suggest that the Budget meets the third test in addressing the long-term challenge.
I feel genuinely sorry for the Opposition. I feel sorry for the shadow education team, who spent so much time making noises about childcare, saying—as was pointed out by my hon. Friend the Member for Stroud (Siobhan Baillie)—that what they were proposing would be like the rebirth of the NHS. I have dug around to see exactly what meat there is on those bones, but all I have been able to find is the introduction of a breakfast club. If that is the best the Opposition can do, I am genuinely sorry for them, and I congratulate the Government on making such an important announcement in this year’s Budget.
Marsha De Cordova (Battersea) (Lab)
Thank you for calling me, Mr Deputy Speaker. It is good to see you this afternoon.
This country is experiencing the biggest fall in household living standards since records began, with weak growth, low pay and a workforce shortage. Last week’s Budget should have been an opportunity for the Government to try to unlock the potential of our great country, but, after 13 years of Tory rule, it has just shown how out of touch and out of ideas they really are. They have no long-term plan for growth, yet they still want to champion the virtues of Brexit. Wages are now lower in real terms than they were in 2010, and people will be paying more tax—but who will not be paying more tax? Yes, the richest 1%, following those pension changes.
There was nothing for small businesses such as those in my constituency: they were given no hope. There was no new investment for London, with nothing provided for housing or transport infrastructure. When will the Government understand that when London does well, the country will also do well?
Ahead of the Budget, I wrote to the Chancellor about childcare reforms, urging him to fix the broken system. There were some announcements, but it is glaringly obvious that full implementation of all the policies will not happen until 2025, so those who will benefit have not yet even been born.
The Chancellor also placed a great deal of emphasis on getting people back to work, including the ill and disabled. We know that the changes proposed in the health and disability White Paper will have a significant impact on millions of disabled people. The Chancellor ramped up his rhetoric about conditionality and more sanctions, but all the evidence shows that sanctions do not work. It is important for the Government to heed that point and follow the ruling from the Information Commissioner, who said that they must publish the results of their research on sanctions. The ruling came last week, so when will the Government publish that report?
As I said in my urgent question last week, no one is going to argue with the scrapping of the work capability assessment—it was cruel, it was inhumane, and it caused harm to people’s lives. However, relying solely on the personal independence payment assessment—another assessment that is cruel and inhumane, but whose function and purpose are totally different from those applying to someone receiving an income replacement benefit—will not work, because PIP is intended to cover the extra costs of living with a disability. It is also flawed, as is truly evident from the success rate of the appeals, which is between 70 and 80%.
I believe that when it comes to getting more people back to work, the Government must focus on some of the barriers that those people face, such as an inaccessible transport network and discrimination in the workplace. They should invest more in the Access to Work programme, which I consider to be the best form of employment support. If they do that, they will finally begin to start reducing the disability employment gap, which has remained stubbornly at 30% for more than 10 years. Investment in Access to Work is vital, as is reducing the backlog, given that more than 10,000 people are waiting for their assessments and support.
Finally, let me point out that yet again the Government have failed to publish an equality impact assessment, thus failing in their responsibilities under the public sector equality duty. It is vital that they do so now.
Selaine Saxby (North Devon) (Con)
I warmly welcome the many good things in the Budget to help cut debt and inflation, but given the time constraint I will focus on what did not make it into this Budget, as it is never too early to lobby for the next one.
My right hon. Friend the Secretary of State for Levelling Up, Housing and Communities mentioned affordable housing many times, and it is probably the biggest issue in my constituency. It impacts on our productivity, puts pressure on household budgets and makes moving into the region for work increasingly unaffordable. Some challenges of the housing situation on the south-west peninsula rest with the Department for Levelling Up, Housing and Communities and the Department for Culture, Media and Sport; others are a direct result of taxation policy and could be alleviated by changes to it. We need to level the playing field between long-term and short-term rentals within the taxation system. Both are businesses, but one enables people to live and work in an area and the other is a tourism business. The current tax system encourages short-term lets over long-term lets and needs at least levelling up or possibly even reversing.
Cornwall Council’s own data shows that more than 1,000 people in Cornwall were made homeless in 2021 as a result of landlords changing their properties into more profitable holiday lets. Many of those households are now on Cornwall’s housing wait list, which now numbers more than 20,000. Devon’s is in excess of 16,000. The situation on the peninsula is so severe that businesses are unable to open fully, which is reducing their profitability, and public services cannot recruit because there is simply no affordable housing. Long-term rentals have also collapsed, with a drop of 67% in my constituency in the past two years, making it very hard for people to move into the area. I have already written to the Levelling Up Secretary about this, but he said that he did not want to tinker with the taxation system, so I am very much hoping that the Treasury team will find an opportunity to delve into the housing market. I recognise that this might seem niche and just for tourist parts of the country, but it is now impacting hugely across almost all of Devon and Cornwall and having an impact on our workforce.
While we look to drive up productivity across the south-west, I have another small ask for the Treasury team. Will they revisit the VAT threshold? Every year in Ilfracombe, in my constituency, swathes of businesses close down for the winter rather than go through the £85,000 tax threshold. Having put a small business through that tax threshold myself, I know how challenging it is, but I hope that we can fire the ambition of those small business owners by alleviating that small threshold. I recognise that it does not raise large sums for the Treasury, so I completely understand why it was not included, but this would be an opportunity for those businesses to level up with their bigger competitors in the constituency and hopefully keep that town open and thriving throughout the entire year.
There is so much in this Budget that I warmly welcome, and I thank the Treasury team for all their engagement, and particularly for their help for potholes in Devon, but can we look at what more we can do to level up our coastal communities?
Munira Wilson (Twickenham) (LD)
Like the Chancellor, I regard education as an investment in our country’s future growth. The focus that the Budget puts on childcare is therefore long overdue, but sadly, the small print does not stand up to scrutiny. Many disadvantaged children will be left behind as the 30-hours offer is restricted to working parents. Any offer for children aged two to four should be universal. Increasing the child to adult ratios will not bring down costs, and it will put children’s safety, as well as quality of delivery, at risk. And providers will struggle. The Women’s Budget Group says that the Chancellor has underfunded the existing childcare offer by £1.82 billion, let alone this new one. Parents will not congratulate the Chancellor on continuing to do childcare on the cheap. They expect high-quality early years education that is fully funded and where staff are fully qualified.
The Chancellor boasted about last year’s spending on schools, but this has been eaten up by soaring energy bills and last year’s unfunded teacher pay rise. One school in Twickenham has told me that its energy bills are set to quadruple to over £80,000 this year. From April it will receive a Government discount of just £1,600. The Liberal Democrats would extend the existing energy bill relief scheme for another six months so that schools are not forced to slash support staff and school trips, as many already are.
The Budget also confirms that capital spending on education will be cut to £6.1 billion in 2024-25. When schools are skipping routine maintenance to balance the books, cutting capital funding shows that this Government have the wrong priorities. At least 39 schools have partly or fully shut since the last election because their buildings were unsafe for pupils, and we now know, thanks to an important investigation by ITV News, that at least 68 schools contain reinforced autoclaved aerated concrete, which is likened to an Aero chocolate bar and can collapse suddenly without warning. These schools include Priory School in Surrey and Braunton Academy in Devon, whose plans to remove RAAC have been held up by a lack of funding. Responding to a freedom of information request by ITV News, St James Primary School in Kent said that it is completely beyond the scope of the school to consider replacing its affected roof.
These schools, along with at least 20 hospitals that also contain life-expired concrete, stand as concrete signs of years of Government neglect of our public services. Ministers should visit each of these schools to witness for themselves the potential danger in which our children and school staff are putting themselves.
Finally, 800,000 children in poverty continue to miss out on a free school meal. The Secretary of State for Levelling Up, Housing and Communities, who opened today’s debate, said at the Conservative party conference last September that he agrees with the Liberal Democrats, and many celebrities, that free school meals should be extended to all families on universal credit. He said
“given the scale of the challenge we face and the benefits it brings, this is a more than worthwhile intervention.”
Well, I am afraid the Chancellor did not listen and the Budget has failed those hungry children.
Several hon. Members rose—
Mr Deputy Speaker (Mr Nigel Evans)
Order. I remind everyone that those who have contributed to the debate will be expected to attend the wind-ups, which will begin no later than 20 minutes to 7.
Jerome Mayhew (Broadland) (Con)
Thank you, Mr Deputy Speaker.
Although there are plenty of measures to help with the cost of living, which I welcome, the Budget’s real impact is much more profound. It seeks to tackle some of the structural weaknesses that have bedevilled our economy for decades, holding back growth. Page 7 of the OBR’s accompanying economic and fiscal outlook sets out a number of those factors: reduced business investment, reduced labour market participation and the conundrum of low productivity. It is through that prism that we should address this Budget.
I do not have time to address all those factors, so I will focus on business investment. Budgets do not come in isolation. They are part of a Government’s raft of sensible economic management. If we look at the reasons behind the lack of business investment, according to the OBR, one is obviously the pandemic—we hope we have put that behind us. The second is the energy crisis, and we are dealing with that, including through the continuing measures for businesses with high energy use. The third is uncertainty on EU relations, which is an area that the Government have been addressing week in, week out. Whether it is the Windsor framework, the very positive French summit a couple of weeks ago, the restarting of talks on our involvement in Horizon or increased co-operation with the French on stopping the small boats and hosting migrant detention centres in mainland France, each is slowly increasing business confidence in the future of UK trade, even as global exports expand through the Australia and New Zealand free trade agreements and, hopefully, soon the CPTPP.
Although I accept and regret that corporation tax is going up to 25% for the biggest 10% of corporations, this is more than offset by the 100% capital allowance—full expensing—within the first 12 months, which provides an incentive for businesses to invest rather than pay dividends. A host of other tech sector improvements were set out in pages 94 and 95 of the Red Book: innovation accelerators in Glasgow, Manchester and the west midlands; £900 million for the exascale supercomputer to assist with artificial intelligence research; £2.5 billion for the quantum strategy; the implementation in full of the Patrick Vallance digital tech regulations, to improve the speed at which that sector can develop; and faster approval processes for new medicines. This is the Government being on the side of fast growth and the new economy.
This is not just about tackling business investment, as we are also addressing labour market participation. We are dealing with the unexpected reduction of the workforce by some 520,000 after the pandemic. I do not have time to deal with that, but I can say that the Budget builds on what is increasingly being described to me on doorsteps in my constituency as the “Sunak effect”. It is not flashy and there are no eye-catching initiatives so beloved of the Labour party, but instead we are getting competent, serious tackling of the big issues, one after another. It is no surprise that the economics of this country are improving, as shown in the composite PMI— purchasing managers’ index—for February 2023 of 53.1; more than 50 means economic growth. This Budget was detailed, considered and responsible and it speaks to what is behind this Government; they are not flashy and they let the work do the talking.
Alex Sobel (Leeds North West) (Lab/Co-op)
Leeds is a vibrant, rapidly developing city. We are a hub for business, finance, law, technology, and education. Major corporations have their headquarters in Leeds, and we have many universities. However, we still face significant difficulties, not least our outdated transport system, a severe lack of affordable housing and steadily rising poverty rates. Our six levelling-up bids were all rejected by this Government. The Conservative manifesto promised Leeds a mass transit system. We are the largest city in Europe without one. Mayor Brabin and our councils met that challenge and a comprehensive metro tram system has been designed, which will cost £2 billion—that is equivalent to two Northern line extensions. However, five Tory Chancellors have managed to find just £200 million for the scheme; we get the crumbs off the table, although all credit to the Mayor for pressing on with the pittance we have received.
This Budget contains no new comprehensive funding settlement for Leeds, which means that local authorities will be forced to make further cuts or spend their reserves to make up the shortfall. Indeed, the latest report from the Local Government Information Unit found that only 14% of local government officials expressed confidence in the long-term viability of their council’s finances. With no end in sight to the budget cuts, councils will continue to face impossible decisions about which essential services to reduce or eliminate altogether. The cumulative effects of austerity pose a serious threat to communities up and down the country. Rather than investing in the public services so crucial to citizens’ wellbeing, the Government’s austerity agenda rolls on, with no real plan to help cities such as Leeds, and it exacerbates the already very real impacts of the cost of living crisis. The small amount allocated for road improvements and select regeneration projects will do little to alleviate the challenges facing Leeds.
By the Government’s own admission, Leeds has a well-run council, which has been given responsibility for helping to improve other local authorities’ failing children’s services. It has also been steadfast in not cutting frontline adult and children’s services, which are needed now more than ever thanks to a cost of living crisis, exacerbated by Government policies. The council runs on low reserves, forcing all available cash to the frontline services, yet it continues to innovate on climate and infrastructure projects, showing exemplary leadership in that area. The Government, however, push that prudent and forward-looking leadership model to the brink with more and more cuts.
In his Budget, the Chancellor failed to outline any ambition for the co-operative sector, which contributes £40 billion to the economy. Businesses whose customers, employees and members have a genuine stake and say in the performance of the business are well placed to improve the UK economy. We should be supporting that, but growth will not happen by chance, and we have 288 co-ops, employing 5,000 people in West Yorkshire.
I put on record my support for the progress made in devolving powers through the trailblazer deals, which is a positive step. In West Yorkshire, we have seen the positive impact of devolution at first hand. Mayor Tracy Brabin has been doing an exceptional job in getting people back into work, creating and bringing in thousands of good, well-paid jobs to the region. I therefore urge the Chancellor to consider extending trailblazer deals to other areas in the country, particularly in West Yorkshire. That would provide a much-needed boost to the local economy.
Even when the Government do bring new initiatives to Leeds, they cannot leave London behind. We are told by the Government that the new green UK Infrastructure Bank is headquartered in Leeds. In November, I asked the Government how many staff were actually in Leeds, and was told that only 40% of staff are based there. When will the Government ensure that the vast majority of the staff are in Leeds?
Leeds has a population of over 800,000 people and contributes over £60 billion to the national economy. Investing in Leeds is investing in the future of the north of England and the country. When Leeds succeeds, it boosts the economy, creates more opportunities and helps the region to reach its potential. We have the ambition and drive to become an even more prosperous and sustainable city, but we cannot do it alone. We need the Chancellor to step up and fund our city and our region.
Paul Bristow (Peterborough) (Con)
I rise to support the Budget, because there is much in it to get excited about. Yes, it is important that we boost growth and reduce inflation, but the thing that I am most excited about is the direction of travel when it comes to levelling up and investing in parts of the country that have perhaps not had the investment that they deserve in years gone by. Peterborough is a place that provides evidence of that. In a cynical age when people are cynical about MPs and Governments, we often hear, “What have the Government done for me? What have the Government done for Peterborough? What has the MP for Peterborough done for the city?” But in a short walk from the station to the other side of our city centre, I can point to £100 million-worth of investment in Peterborough.
We will start at our university. We have £34 million to build a new engineering, technical and manufacturing university. That will create the high-skilled, high-wage economy that my city so desperately needs. It will transform the life chances of so many young people in my constituency. When they reach the age of 18, a lot of young people do what I did: they leave Peterborough. I came back, but because of this investment, so many young people will not have to leave our city. They can go on to university, get good jobs, transform their life chances and transform our local hospitality and entertainment sector. This will be a game-changer.
But guess what, Mr Deputy Speaker? There is more, because we can talk about the £23 million from our towns fund to regenerate our city centre and bring old buildings back into use, drawing people back into our city centre and creating the sort of local economy that we need.
But guess what, Mr Deputy Speaker? There is more, because we have millions to build a new pedestrian bridge across the River Nene, linking Fletton Quays with the Embankment, bringing that green and open space into better public use.
But guess what, Mr Deputy Speaker? There is more, because we are investing in our NHS in Peterborough. We are building a brand-new NHS community diagnostic centre. That is 67,000 extra tests, checks and scans each and every year.
But guess what, Mr Deputy Speaker? There is more: we have £48 million to regenerate our station quarter and to create new access, new retail and new opportunities, and to create a gateway not just to Peterborough, but to the east of England. These millions and millions of capital investment in our city are transforming the life chances of the people of my city.
So when people ask, “What has your MP done for you?”, lots of Opposition Members cannot answer that, but Government Members can talk about £100 million of capital investment in Peterborough, a place with potential. That is before—[Interruption.] They don’t like it, do they, Mr Deputy Speaker? But this is evidence of investment in a place like Peterborough. That is before I mention the changes to childcare, which will benefit so many people in my city. I declare an interest as the father of a three-year-old who is currently at nursery. Support for our pubs, through the new draught relief, will help many struggling pubs. Of course, we will make sure that we invest in places with potential, and Peterborough is at the very top of that list.
Yasmin Qureshi (Bolton South East) (Lab)
Despite all the Chancellor’s claims, the OBR downgraded the long-term growth forecasts, with downgrades in all the last three years of the forecast period. Labour’s mission is to seek economic growth. To do that, we will implement a green prosperity plan alongside a coherent industrial strategy, which is lacking from the Government, including building more homes.
As a member of Labour’s shadow Women and Equalities team and MP for a deeply deprived town within Greater Manchester, I took a special interest in the Budget to see what the Government were doing to tackle the issue of structural barriers. How many mentions of inequality or poverty were in there? Guess what? The answer is zero—there was just one reference to regional inequality.
I want to speak about a particular issue that affects my constituents, which many colleagues have already spoken about, and that is people struggling to get on in life because they are bound by their childcare and unpaid caring commitments and held back by exorbitant costs that act as a barrier. We need a national conversation on that. Can hon. Members imagine the increase in economic productivity if we had widespread and affordable childcare? The Chancellor’s childcare provision does not come in until after the next general election and the policy itself will just create a huge surge in demand without addressing the underlying issue of supply.
That brings us to nursery prices. In the north-west, our childcare prices are the lowest of any area; hon. Members might think that that would be cause for celebration, but it is not, because even the cheapest region for childcare still demands 60% of people’s weekly pay, about £400 a week. Can we just take a step back and reflect on the fact that families in Bolton, the 19th most deprived local authority and a town in economic decline according to the latest figures—I am sorry that we have not had £100 million of investment, but that could be because we are not a marginal, unlike Peterborough—are spending almost £2,000 a month on their childcare? It is truly unbelievable, and the Government’s approach is short-termist and unambitious.
Some 4,000 childcare providers have closed since this Government have been in power. The reality is that successive childcare policies have made the situation worse for parents and children since 2020, including the cut to Sure Start and the cut to the education maintenance allowance, which was a lifeline for young teens trying to get on in life.
The Chancellor has shamelessly stolen Labour’s wraparound childcare offer, supporting children with before and after-school clubs to support working parents, but has made it worse. Pathfinder care is not enough for parents—they need real support. That act of desperation by the Government shows that they are devoid of ideas and unable to implement the policy we need. It is Labour that has the solution, Labour that has the winning argument on childcare and Labour that is leading the way to answering the serious problems we face as a society.
Anna Firth (Southend West) (Con)
It is wonderful to be called so early in this debate. I rise to pay tribute to the Chancellor and the whole Treasury team for delivering a serious Budget for serious times.
This Budget will inject international confidence, credibility and stability into our economy. It lays out a plan for sustainable growth while not forgetting my hard-working families in Southend West, who are struggling with the cost of living in the here and now. It is in the here and now that I welcome the £94 billion of support, or £3,300 for every household across Southend West.
We have heard a lot of criticism that we are not helping the vulnerable and that we are not doing enough, but we are helping with fuel, with energy and with childcare. We are helping with £3,300 for every household last year and this year, which is one of the best packages in Europe. I welcome it, and my constituents in Southend welcome it too.
However, the real stand-out wins in this Budget are the predictions that we will return to growth next year and get inflation down to 2.9% by the end of the year; that is a fall of over two thirds, and we have heard that it will be into single figures after that. Conservative Members absolutely recognise that inflation is the enemy of growth and prosperity. It destroys jobs and savings, it erodes the money in our pocket, and it affects in particular the poorest and the retired—those who do not have the wriggle room to cope with it—so I welcome the Government’s laser focus on bringing down inflation.
The other problem with inflation that we do not often talk about is, of course, its effect on the power of government spending. If we allow inflation to rage at 10% per year, we will have to increase public spending by 10% every year just to keep our public sector services as they are today, and that is just not sustainable. I am very pleased that the Government are showing restraint and resisting calls for inflation-busting pay.
I do not want to go down a political rabbit hole, but this is just a fact: if we were to give in to the unions that want 35% inflation-busting pay rises for junior doctors, that money would have to come from somewhere. It would have to come from my hard-working tax-paying Southend West constituents, who are themselves struggling with mortgages, food and utilities. Giving in to every one of those pay demands would cost £28 billion a year—an extra £1,000 in income tax from each of my hard-working constituents—so I am very pleased that the Government are showing restraint and a commitment to getting back to sound money.
In the time I have left, I will rattle through and welcome the Budget’s incentives for growth. Community pharmacies, such as the brilliant Belfairs pharmacy in my constituency, will benefit from the changes in the VAT system. Nurseries in my constituency will benefit from the uplift in hourly funding. Our world-leading national theatres will benefit from increased support and higher rates of tax relief for a further two years. Our brilliant charitable sector will also benefit.
So many measures in the Budget will bring more jobs, more growth and more prosperity not just for Southend and Essex, but for the whole of the UK.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
Like a number of hon. Members, including the hon. Member for Peterborough (Paul Bristow), I benefited from the 30 hours’ free childcare when my children were in nursery. Although that is a big support for a number of working parents, I hope that those on the Treasury Bench will consider the issues that have been raised by a number of childcare providers, which are worried that there is still a big funding gap. Some 5,000 nurseries are said to have closed this year alone. It is important that the Government get childcare providers on side, otherwise the policy will not work at all.
I rise to speak on behalf of my resilient, dynamic, ambitious and diverse constituency of Vauxhall. It is a constituency filled with businesses that are deeply rooted in their community, and it has given rise to an array of nationally and globally recognised landmarks and institutions that all work happily alongside the small enterprises that make Vauxhall so unique. Having grown up in my constituency, I know that we have a lot to showcase. The constituency spans parts of London’s best known areas, including Brixton Clapham, Waterloo, the south bank, Kennington and many more. My constituents are proud of where they are from, but they have been held far back by 13 years of Tory austerity and economic stagnation.
This Budget was a missed chance to change course and empower our communities and small businesses. Instead, we are seeing widening inequality across the country, falling living standards, wages divorced from growth and too many people struggling to make ends meet in the world’s sixth richest economy. The Chancellor must rebuild a more productive and resilient economy; create decent, sustainable jobs; hardwire fairness in our community, and ensure that all the rewards are shared equitably. I am a proud Labour/Co-op MP, and our co-op values mean that we are committed to providing that—co-operation is key. Employees, consumers and communities should all be able to enjoy the profits, which are reinvested back into the community, and employees should have real influence. Productivity would increase, and wealth and power would be shared.
It was therefore disappointing that the Chancellor failed to outline a plan to support the contribution of the co-operative movement in helping our economy to grow. Co-operatives are a significant part of our economy, with around 7,000 co-ops contributing nearly £40 billion each year. We should be doing much more to support them and the Chancellor’s failed ambition for co-op growth is a missed opportunity.
One of the easiest ways to support small businesses and households would be to cut their energy bills, which are unfortunately crippling so many people. One of the main reasons that Britain has been exposed to the energy crisis is 13 years of failed Conservative energy policy. The Conservatives have banned onshore wind, scrapped home insulation and shut out gas storage facilities. All those things increase our reliance on volatile import prices. Labour would make Britain’s energy secure, with a plan for clean energy by 2030. I have just one question for those on the Treasury Front Bench. Will they support our ambition to get Britain back on track and to grow a green Britain so that everyone can thrive?
Anna McMorrin (Cardiff North) (Lab)
This is a Budget for decline and could not be further from growth. Every day, I hear from constituents in Cardiff North who are hungry, cold, in debt and fearful for the future. There is nothing in this Budget that will reassure them even a little. They have no shield from the cost of living crisis, no measures to kick-start the economy and no green agenda to build a better future. This Government continue to deny the enormity of the climate challenge. There was nothing on investing in cheap onshore solar and wind power and there was a failure to invest in green tech. The windfall tax loopholes for oil and gas companies were left wide open.
Just yesterday, the Intergovernmental Panel on Climate Change released its most damning report yet, a final warning on the climate crisis. The IPCC warned that only swift and drastic action can avert what is predicted, and I think we can all agree that this Budget is neither swift nor drastic. Without making that link between the climate and the economy, we will never be able to face the challenges ahead. Our children will remember the failing political choices of this Government.
Despite the Chancellor’s misleading claims about growth, the UK will be the weakest economy in the G7 this year and the only country that will see negative growth. It has the weakest recovery from the pandemic; the economy is smaller now than it was pre-covid. The Office for Budget Responsibility has predicted the largest fall in living standards since records began, a bleak legacy for the Tory Government. Is it surprising that one of the new policies benefits only the richest 1% and their pension pots, costing the taxpayer £1.3 billion? That is the wrong priority at the wrong time.
On fuel poverty, Friends of the Earth has just released data showing that at least 5 million households, or one in every five, are now in fuel poverty in England and Wales. My constituents are paying double in energy bills what they were paying a year ago. My constituent Lauren and her partner are both disabled and were told by Shell Energy, without warning, that they are in debt by £5,000. They are both trying to remain positive, but this has really pushed them over the edge. How many more testimonies like that must we hear before the Government develop a conscience and introduce meaningful change?
Instead, we are faced with a Government who are repairing the colossal cracks in our society with paper mâché. Meanwhile, Samaritans figures show that this January saw the highest percentage of first-time callers concerned about finances or unemployment. There is a direct correlation between increased poverty and domestic abuse, and support services are reporting increased demands on their helplines from desperate victims. Now would be a great time for the Government to introduce the long-awaited victims Bill, but, as always, we continue to wait.
This Budget fails on every level. I have constituents who have told me that they would rather die than pay the energy bills that they cannot afford, food banks in Cardiff are reporting that their users are eating dog food to survive, and the Chancellor has increased the Welsh Government’s budget by only £180 million over the next two years. This Budget is not fit for purpose. To echo the words of our Welsh First Minister, Mark Drakeford, this is a
“less than bare minimum Budget.”
Sam Tarry (Ilford South) (Lab)
This Budget follows successive Conservative and coalition Governments that have overseen the worst growth in GDP per head since records began, a sustained decline in living standards, and a disintegration of our vital public services. Worse still, a recent forecast by the IMF has said that we are going to be languishing behind even the Russian economy in terms of economic growth. That is the result of 13 years of stagnant wages and rapid inflation—what the TUC has called the worst pay crisis “since Napoleonic times”. Real income is still below the levels of 2010, the last time that we had a Labour Government. The recent collapses of Silicon Valley Bank and Credit Suisse have shown how fragile global financial regulatory frameworks are. SVB took unnecessary risks and triggered a run on its assets, while Credit Suisse accrued fine after fine, as well as the involvement of Greensill, a former Prime Minister’s employer, in damaging its capital.
Yet every time, it is my constituents in Ilford who have borne the brunt of this economic chaos. My inbox is full of desperate cries for help from people being forced into debt and even further below the poverty line. This Budget, unfortunately, was a Budget for the select few, totally divorced from the reality that so many constituents face every day. Rather than supporting ordinary people struggling to make ends meet, the Chancellor is handing billions to the wealthiest 1% through tax cuts for corporations and abolishing the lifetime pensions allowance at huge taxpayer cost. What is most bizarre is that, on the day that the Budget statement took place, 400,000 teachers, doctors, rail workers and civil servants took industrial action for better pay and conditions, yet the Budget made just one cursory reference to wages.
In the past year, public sector pay has fallen by £185 a month, with real pay being lower now than in 2008 and not expected to go back above 2008 levels until 2027. It is no wonder that, in almost every sector of the economy, workers are taking industrial action. The New Economics Foundation has warned that we are now on the precipice of the
“greatest living standards crisis on…record.”
Colleagues will undoubtedly have seen the OBR forecast that predicts a staggering 5.7% fall in real income per capita over the next two years, after what has already been a decade of decline. What that means for the lived experiences of families, especially those already on a low income, is utterly grim. By December 2024, based on estimates from the Joseph Rowntree Foundation, 43% of households will be unable to afford a decent standard of living. On average, those falling below the threshold for a decent standard of living will be short by £10,000 a year—10 grand, Mr Deputy Speaker.
Let us be clear: low pay is the cause of thousands of unfilled vacancies in key professions such as nursing and teaching. Until wages grow in real terms, there will be no long-term solution to the recruitment and retention crisis. James Meadway and Costas Lapavitsas have just launched a new book on the cost of living crisis. The language of pay restraint urged by some Government Members is out of kilter with the economic reality for so many, because there is no wage-price spiral. It is nonsense—it is economically illiterate and untrue—to say that putting people’s wages up is going to lead to inflation rises. If the Government are serious about tackling this crisis, they must provide public sector workers with the inflationary pay rise that they sorely deserve. The Government were perfectly capable of spending billions in taxpayer money to protect private enterprises during the pandemic and to bail out banks. This needs to be extended to ordinary working people.
Jeremy Corbyn (Islington North) (Ind)
I just want to set out a few points very quickly in this debate. The number of children in food poverty in this country has doubled in the past year to 4 million; the NHS is on its knees; and the richest 1% are taking home more than ever, and own 230 times the wealth of the poorest 10% in our society. Does this Budget do anything to deal with those issues? I think everyone knows the answer to that.
I will just put forward five points, if I may, the first of which is on pay. The Chancellor handed out tax breaks to the 1%. Some 700,000 workers were on strike last Wednesday. Public sector pay has risen by 2.2% on average over the past year, when inflation is running at 10%. At the very least, the Government should commit to above-inflation pay rises for health workers, teachers and public service workers, implement a £15 an hour minimum wage, and ban zero-hours contracts and all the insecurity that goes with them. The Government are not going to grow the economy if they keep so many people living in desperation and poverty. Public sector workers did not cause this inflation—inflation has been caused by greed in the private sector and profiteering.
That brings me to my second point, which is that the energy companies are making enormous profits and have done so for a very long time. There is no argument other than to take them into public ownership, so that we can control energy prices. It also means recognising the need to do far more to bring about a green sustainable economy. The United Nations report was damning yesterday—damning on increasing global warming and damning on its implications. It made the case that there has to be real investment in alternative green energy sources. That does not mean just relabelling things as green; it means actually doing it. While we have a privately run energy system, that is not likely to happen.
The third issue is one that I feel strongly about in terms of my constituency: we need an immediate rent freeze for those living in the private rented sector. Constituents are telling me that their rent has gone up by between 50% and 80% in one year as the greed and profit taking by some private sector landlords continues unabated. Young people are forced out of inner-city areas because they cannot afford to stay there, and councils have insufficient funding to build the council houses that are so necessary. If we are to deal with the housing crisis, it means rent control and investment in council housing.
The fourth area I want to mention is a wealth tax, which would help us to fully fund the national health service. Billionaire wealth in the UK has gone up by 1,000% in the past 30 years. We could save the NHS from its disastrous privatisation by taxing profits and wealth. Increasing tax on the top 1% of earners to 50% would raise £5 billion, as an example.
The last point I want to make is on the Government’s appalling strategy of divide and rule against the poorest and most vulnerable people on this planet. The national health service does all it can and public sector workers do all they can, and this Government spend their time scapegoating desperate people, such as refugees, and forcing them to Rwanda or somewhere else. These are people who want to contribute to our society. They are victims of war and oppression. Let them work, and let them make their contribution to our society as part of our common good.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
It is a pleasure to follow the right hon. Member for Islington North (Jeremy Corbyn). One policy proposal in the Chancellor’s statement leapt out at me. It was yet another one praising the efforts of small independent northern neighbours. Just before announcing a range of measures to increase childcare, the Chancellor said:
“Our female participation rate is higher than average for OECD economies, but we trail top performers, such as Denmark and the Netherlands. If we matched Dutch levels of participation, there would be more than 1 million additional women working.”—[Official Report, 15 March 2023; Vol. 729, c. 845.]
On the announcement of universal childcare for one and two-year-olds, we could say that imitation is the sincerest form of flattery, since my preferred candidate to be Scotland’s First Minister, Humza Yousaf, had already announced his intention to implement that policy in Scotland, based on our Government’s scheme—also copied by the UK Government—for three and four-year-olds. However, it was the choice of countries that the Chancellor used, and being able to delve a little into the reality behind the headline statistic, that intrigued me.
While the Netherlands and Denmark have higher female participation rates, the consequences of both are quite different. While the Dutch Government policy has encouraged more women into working, it has done a very poor job of allowing flexibility within the workplace and with childcare, resulting in the unfortunate scenario whereby Dutch women’s outstanding participation in the labour market paradoxically contrasts with them working the fewest hours of women in any developed country. The University of Utrecht calls that phenomenon the part-time trap, as women seeking to balance childcare and household commitments are forced into working fewer hours. That has a consequence for the economy as a whole, with representation for Dutch women in senior positions lagging behind that in similar states, and the resultant gender pay gap costs the country €10.8 billion annually. On a personal and social level, it means that only 64% of Dutch women are financially independent, compared with 81% of men.
It will be no surprise to those who know my politics to hear me say that increased female participation in the labour market could best be achieved by following the social democratic principles that underpin the Danish childcare system, with the Dutch system—underpinned by the same imperfect patchwork of primarily private providers—rivalling the UK for its cost to families. In Denmark, this system is underpinned by local authorities helping parents to find provision, with central Government helping to subsidise costs. Of course, we all know that the real leader seems to be Finland, which provides universal, local authority-led provision from birth to six years.
The key for me is the local authority-led aspect of this. This increase in Government-funded provision will be of little tangible use if it is fed through a majority of less accountable private providers that have less bargaining power with central Government and will therefore be more vulnerable to the inevitable future squeezes in the per-place fee, passing it on to parents through other costs and making it a less attractive option for those parents who can least afford it.
However, the biggest barrier to public sector involvement in provision for one and two-year-olds will be capital expenditure for new facilities, especially as they face their own pressures—investment that I am willing to bet will not be forthcoming from a Government who are always intent on doing things on the cheap.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
Let us be clear: the message from this Budget is that long-term growth is being downgraded, household incomes are falling, public services are on their knees and families are facing the biggest hit to living standards since records began. In fact, the only surprise was a massive handout to the richest 1% of pension savers. Once again, ordinary families and businesses across the country have featured at the back of the Chancellor’s queue. The very legitimate questions that those in ordinary families will be asking themselves after 13 years of Conservative Government are: are my family and I better off, and are our public services working any better? Clearly, the emphatic answer to those questions is no.
I am pleased that my right hon. Friend the shadow Chancellor has announced that Labour will reverse the changes to tax-free pension allowances. As has been said often this afternoon, this is the wrong priority, at the wrong time, for the wrong people. The OBR tells us that the Government still have £10.4 billion left on the table from the windfall tax last year and this year. We also know that plans for a windfall tax on oil and tax producers were announced by the Labour party in January 2022, while the Government announced their policy in May of the same year. A plan to cap energy bills was announced by Labour in August, and adopted by the Tories on 8 September. The Conservatives announced Budget plans recently to scrap extra charges for those on prepayment energy meters, but Labour first called for that in August 2022. The Government have taken a number of policies from the Labour party, so why not take this one? Put a proper windfall tax in place to ease the burden on families in Merthyr Tydfil and Rhymney and across the UK who are suffering under crippling energy costs.
In my limited time, I want to highlight that this Budget will do very little to tackle child poverty. For the past 13 years, we have seen how the Conservatives have cut, cut and cut, and finally crashed our economy with a kamikaze Budget in September 2022. As Gordon Brown once said:
“Child poverty is the scar that demeans Britain. When we allow just one life to be degraded or derailed by early poverty, it represents a cost that can never be fully counted. What difference could that child have made? What song will not be written, what flourishing business will not be founded, what classroom will miss out on a teacher who can awaken aspiration?”
At Prime Minister’s questions recently, I highlighted the 800,000 children taken out of poverty by Labour Governments between 1997 and 2010, and contrasted that with the half a million children plunged into poverty since the Tories took office 13 long years ago. When I gave the Prime Minister the chance to apologise for his party’s failure, he could have jumped at the chance, but instead he gave us bluff and bluster. Compare this with the last Labour Government, who delivered Sure Start, record funding for schools, tax credits, increasing child benefit, child trust funds and introducing the UK’s first ever national minimum wage. These did not happen by accident; they happened because the people of Britain voted for a Labour Government, and those Labour Governments made eradicating child poverty a key priority, in stark contrast to what we have now.
I am also proud that the Welsh Labour Government are continuing to tackle child poverty in Wales through Flying Start, free school breakfasts, free school lunches, the pupil deprivation grant, Jobs Growth Wales and, of course, the groundbreaking Well-being of Future Generations (Wales) Act 2015. The Senedd is using the tools available to help mitigate child poverty in Wales, but to tackle child poverty in Wales and right across the UK we desperately need a UK Labour Government to get our economy back on track and give tackling child poverty the attention it so needs and deserves. So the next general election simply cannot come soon enough.
Janet Daby (Lewisham East) (Lab)
I have spoken in every Budget debate since I entered this place, and the fiscal statement under the Government of the right hon. Member for South West Norfolk (Elizabeth Truss) was the absolute worst. Thirteen years of Tory Government have brought us to a place where every public institution in our country is in crisis. We see that in strike action from civil servants to teachers and ambulance drivers—the list goes on. It tells us that the Government are consistent at failure.
Although there are some positives in this Budget, it comes across as a Tory manifesto launch that borrows much Labour policy. The Government should be concerned about the low growth of our economy. The OBR downgraded the UK’s long-term growth forecasts, and forecasts by the OECD suggest that we could be the only G7 economy to be in recession this year. In response, the Conservatives gave a £1 billion tax cut to the richest 1% of earners through changes to pension allowances.
Staying on the subject of low growth, it is undeniable that the Government’s Brexit deal has also contributed to this. The food on our shelves has become scarce, while food prices have rocketed. Work and research opportunities are under threat.
Like the Brexit deal, our immigration and asylum system is failing. The Government treat refugees and asylum seekers with contempt. The huge expense of that lies at the Government’s doorstep because they have failed to get a European returns agreement and to process asylum applications. There is still no safe route for asylum seekers.
On the subject of children and young people and the Budget, I am pleased that the Government have listened to Labour’s call for investment in childcare. However, the real test for the policies will be whether childcare is more affordable and more available, and whether they deliver the economic growth that our country desperately needs. Many headline measures will only be fully rolled out after the next election, and some not until 2026, if at all. It was also disappointing that the Government did not listen to the call for more money for school buildings. Neither did they focus on the real increases in the cost of school meals.
The Government have lacked in investment in green jobs, such as wind energy, and that is greatly disappointing. Neither have they tackled high private rents and mortgage costs, or the cost of living crisis. I look forward to the Minister’s response to the issues raised today.
Ben Lake (Ceredigion) (PC)
It is a pleasure to follow the hon. Member for Lewisham East (Janet Daby).
With living standards falling at a record rate and incomes in real terms set to remain below pre-pandemic levels until 2028, it is impossible to deny that the Budget is set against severe economic headwinds. But given the impact that rising living costs are having on households across the UK, it is disappointing that the Budget failed to take advantage of the opportunity to ease the burden of higher fuel costs. Four in 10 homes in Wales are thought to be switching off their heating because of the cost, and typical energy bills are expected to remain at historically high levels for some time to come. Additional support could be delivered immediately by extending the energy bills support scheme and guaranteeing off-grid homes an additional round of the alternative fuels payment.
It is staggering that small businesses have been left without additional support for their energy costs. I am worried that many will be forced to close when support is reduced in April if the parameters of the energy bills discount scheme are not expanded. Off-grid businesses have had to endure the rise in alternative fuel costs with paltry Government support. I should like to know how the Government justify the comparative lack of support for off-grid businesses, many of which are located in rural parts of the country such as Ceredigion. Their omission from meaningful support schemes has placed them at a competitive disadvantage to those companies located in more urban areas, which surely goes against the levelling-up agenda, about which we have heard so much from the Government.
If we are concerned about addressing the productivity problems of this country, we need to look at some of the structural issues in the way the UK economy has operated for some decades. There is no better way, in the short term at least, to address some of those structural problems and the productivity issue in rural areas than by investing in digital connectivity improvements.
Gigabit connectivity in Ceredigion stands at 27% of premises, compared with the UK average of 68%. Far too many places in my constituency, and in rural areas in general, suffer from poor connectivity and that hampers their economic development. As the Digital, Culture, Media and Sport Committee noted, the decision to allocate only 25% of the funding for Project Gigabit so far risks undermining the ambition to improve the connectivity of hard-to-reach premises in a timely manner and prevent them from falling even further behind other parts of the UK. I would therefore like the Minister, in summing up, to explain when the UK Government will release the rest of the funding. Will they commit to accelerating the timescales for the roll-out of gigabit broadband in very hard-to-reach areas, many of which often lack both fast broadband and 4G signal?
On HS2, the Chancellor could also have used the Budget to release the £1 billion or so owed to Wales in consequential funding from the £20 billion expenditure already allocated to HS2. Over the project’s lifetime, Wales could receive up to £5 billion in consequential funding to spend on improving our creaking public transport infrastructure. That sum could be transformational for areas in rural mid-Wales such as Ceredigion. Sadly, it does not seem to be coming our way.
The success of any Budget is measured in the way it addresses the immediate challenges facing the economy and whether it paves the way for future prosperity. For rural areas, this Budget sadly falls short on both counts.
John McDonnell (Hayes and Harlington) (Lab)
Often what will happen between a Budget being announced and its final debate is that the world can move on, so I have two warnings and a plea, if I have time.
The first warning is that we are making the Budget in the middle of a banking crisis and we need to recognise that. It has moved from Silicon Valley Bank to Credit Suisse to First Republic Bank. For those not in the House 15 years ago when we debated the start of the banking crisis, it started with Northern Rock. A lot of the signs that underlined the crisis then are evident now: failure of regulation, mismanagement and speculative gambling all leading to a crisis of confidence among customers and investors. It spreads very quickly, like wildfire. I hope it is not on the scale of 2008, but I just warn the House that it can rapidly get out of hand. Often what will occur is a lull and then it comes back with a vengeance.
The role of this House is to ensure that the Bank of England and the Financial Conduct Authority are not found asleep at the wheel during the crisis. I urge the Bank of England to again undertake stress tests on all the banks and financial institutions within its remit, and a stress test on the overall regulatory system, and to publish those tests. The Financial Services and Markets Bill introduces an element of further deregulation. I urge the Government to pause. Now is not the time to prioritise the deregulation of our financial system. To the Bank of England, I say that this is not the time to increase interest rates, particularly at this moment.
The other warning is on pay. The Government are seeking a settlement to the NHS dispute and the National Union of Rail, Maritime and Transport Workers has already settled with Network Rail, but they should not consider that the issue of pay is in any way going away. That is a complete misreading of the situation. Major disputes are still happening: the Public and Commercial Services Union in the civil service, the junior doctors, the universities with the University and College Union, and education with the National Education Union. In the private sector in my constituency, Unite the union is representing the lowest paid security workers at Heathrow. The Government should not underestimate in any way the strength of feeling that workers have about the pay freezes and cuts of the last 13 years. Pay settlements of 5% or 6% still mean people will be struggling to pay the rent and feed their family. The Government should not fail to understand the anger and resentment at the grotesque levels of inequality in our society.
It is interesting that on the picket lines are young people struggling with low pay. They are unable to get on the housing ladder. In addition, they are burdened with debt from qualifications obtained through higher education. These young people have had enough. I think they will increasingly react to the injustices they see in our society and I warn the Government that that ferocity of concern has not disappeared.
My final plea is to follow up on what my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) said about unpaid carers. They are living in poverty and endure hardship, and many are exhausted because of the lack of social care and financial support. They need an income to reflect the care that they provide—a real living wage—or at least a first step by increasing carer’s allowance to maternity allowance levels. Carers are saying clearly that this Government should stop taking them for granted, given the essential role that they play in our society.
Stephen Kinnock (Aberavon) (Lab)
The United Kingdom was the cradle of the first industrial revolution. The opportunity for us to be the cradle of the green industrial revolution is there for the taking. But there is absolutely nothing in this Budget that supports that goal. Labour’s game-changing green prosperity plan is the ultimate example of a policy that will deliver on that opportunity, and will pay for itself in the long term by driving growth and creating good jobs, thereby expanding the tax base. We will double onshore wind, triple solar power and quadruple offshore wind. We will launch Great British Energy, making Britain energy secure and creating as many as 1 million good jobs across the UK in the process. We will insulate 19 million homes and invest in a £3 billion transition for green steel.
The Labour party knows that every leading economy has a strong and healthy steel industry, so it is deeply concerning that of the leading economies, only Britain has a declining steel industry. It is deeply troubling that there is nothing for steel in this Budget. We know that more steel will be required in the net zero economies of the future than there is today. That creates a huge market opportunity for British steelmakers across the globe. We know that UK steel companies employ 35,000 in good, well-paid jobs well above regional pay averages, and 45,000 more in our supply chains. We know that steel underpins our defence sector and our nation’s economic resilience, in an age of turbulence where authoritarian regimes are a threat to our supply chains and our democratic values. We know that if the Government continue to sit on their hands, tens of thousands of jobs could be lost and our country’s resilience will be in tatters.
We on the Labour Benches recognise the scale of the challenge. Steel companies in Canada, Germany and Spain are receiving up to £1 billion per plant to decarbonise, yet the British Government’s offer to our steelmakers is a fraction of that. It is therefore unsurprising that Tata Steel, owners of the biggest steelworks in the UK in my constituency, has reportedly given the Government until July to approve its investment offer, due to growing concerns that competitors in mainland Europe are getting ahead of us in the drive towards green steel. If the Government continue to dither and delay, we could see the closing down of one of the blast furnaces, which would be truly a hammer blow for our Port Talbot steelworks.
Labour’s message to Tata is clear: the cavalry is coming. A Labour Government will deliver on the clean steel fund. Perhaps there is not time to wait. Our message to the Conservative Government is also unambiguous: we need action now. They must not once again betray industrial communities such as the one in my constituency. They must step up to the mark, deliver for green steel and make up their mind. Do they believe that the UK should have a steel industry, or do they not?
We need a growing economy that can deliver good jobs that people can raise a family on. We need a single-minded commitment to investing for growth and a proper industrial strategy that will enable us to stand as a country more firmly on our own two feet, rather than being over-reliant on authoritarian regimes and dictators across the world. That is how Labour’s mission-driven Government will deliver. No more sticking-plaster solutions. Our steelworkers, who make the best steel that money can buy, are just asking for a level playing field. The Government need to step up to the plate and do the right thing.
Andrew Gwynne (Denton and Reddish) (Lab)
The Chancellor closed his Budget last week proclaiming that “the plan is working”. But as has been pointed out time and again, the OECD has confirmed that the UK will be the weakest economy in the G7 this year. Living standards have taken the biggest hit since comparable records began, and the average French family are now a tenth richer than their British counterparts. None of those figures scream to me that the plan is working. Instead, they speak of a sad truth: the Tories have mismanaged our economy and have catastrophically failed to level up and invest in our communities.
I will not pretend that the new devolution deal for Greater Manchester is not welcome. The Greater Manchester Combined Authority and the Mayor’s office have been working around the clock to secure the deal, and I am pleased that they have negotiated a settlement that will assist the ongoing work in the region. I am particularly pleased to see support for the integration of the Bee Network. Transport connectivity is key to growing the economy—something the Government would do well to consider before handing another six-month contract to the failing rail operator Avanti.
While positive, the devolution deal does not absolve the Government of their failure to level up. After all, the deals for Greater Manchester and the West Midlands only grant extra powers to 9% of the population. The other 91% remain tied to the economic disaster of successive Tory Governments in Westminster.
Let us take a moment to assess whether the levelling-up plan is working. Bloomberg’s 2023 levelling-up scorecard shows that since 2019 people across Denton and Reddish have seen their salaries, access to affordable housing, life expectancy and broadband coverage all fall or remain the same. The report also shows that overall Government spending has declined in my local area. The Government can talk about growing the economy until they are blue in the face, but those words feel particularly hollow to the people I represent and the communities in my constituency. They have less money in their pockets and they are struggling to put food on the table and heat their homes.
Those words also feel hollow to me. I have tried countless times to secure levelling-up investment both for Denton and for Reddish. Most recently, I backed Tameside Council’s levelling-up fund bid to transform Denton town centre. It would have enabled Tameside Council to significantly improve Denton Festival Hall, with a new neighbourhood hub for children’s services and new NHS primary care services. As with the earlier Stockport bid for Reddish, the Denton bid was rejected. That is just not good enough, not least because my town is plastered full of levelling-up posters with nothing to show for it.
It does not need to be that way. I want to see rapid investment in good jobs for the future, and better salaries and working conditions for the people I represent. I want to see more powers handed to local communities, an end to “The Hunger Games”-style bidding process and an investment that benefits working people instead. Labour is the party that has a plan to deliver that. The Tory Budget was nowhere near bold enough. Sadly, economic growth is just another slogan for this Government.
Beth Winter (Cynon Valley) (Lab)
Last week, what we needed was a transformative Budget designed to lift incomes and living standards, deliver fair funding to level up our poorer nations and regions, and build an economy fit for future generations. We did not get that. Instead, we got the views of a multimillionaire Downing Street that is completely out of touch with the lives of people who are struggling in the horrendous cost of living crisis, including people in my constituency of Cynon Valley.
The OBR confirms the hit to living standards over the past two years is the largest since comparable records began in the 1950s. Wages are lower now in real terms than they were 13 years ago. That is why workers are being forced—yes, forced—to take industrial action, including 700,000 last week, and why it was so crucial for us to hear something concrete on pay in the Budget. However, there was complete and utter silence.
For those who are reliant on social security benefits, increasing the use of sanctions is a real concern: it will mean the demonisation of some of the most vulnerable groups and will force people further into poverty. Meanwhile, millionaires will benefit from the Chancellor’s pension allowance change, which benefits only the 1% with the biggest pension pots. Some high earners are getting a tax cut of up to £275,000. In the funding of public services, we can see the continuation of austerity: analysis by the New Economics Foundation shows a further £21.6 billion in unannounced cuts. That is not levelling up; it is trickle-up economics.
Wales is yet again being starved of funds. The Welsh Government’s budget is worth up to £3 billion less over the three-year spending review period than when it was originally announced. Wales faces a £1.1 billion shortfall in funding as a result of structural fund changes. So much for “not a penny less, not a power lost”! The problems with the structural funds will put 1,000 academic jobs at risk in Wales’s higher education sector; I worked in the sector for 10 years, and a lot of my former colleagues are at risk. I urge the Government to address that now.
The UK Government continue to benefit unduly from their share of the national mineworkers’ pension scheme. That is money they should be paying to former mineworkers and their families, many of whom live in my constituency. It is a shame on this Government that they have failed to fund the £600 million legacy costs of making the coal tips safe in Wales.
Ian Lavery (Wansbeck) (Lab)
I declare an interest as a member of the mineworkers’ pension scheme. Does my hon. Friend agree that we are seeing double standards at the highest level? The Government are refusing to allocate the £2 billion surplus to some of the poorest pensioners, but at the same time they are giving an extra £1.2 billion-plus to some of the richest pensioners in the country. How is that levelling up?
Beth Winter
I could not agree more. This was clearly a Budget for the 1%, not the 99%. Mineworkers in my constituency created the wealth of this country: they put their lives at risk over many, many years, and the wealth was extracted. Surely the Government owe them the money that they created for this country. Shame on this Government.
The UK Government also continue the lie of designating not only HS2 but now Northern Powerhouse Rail as “England and Wales” projects, which should result in a total of £6 billion for the Welsh economy. The Welsh Government are striving to chart a different path. The programme for government in Wales is a commitment to a progressive agenda: from free school meals to the universal basic income pilot, from a publicly owned energy company to tackling the climate crisis in order to secure prosperous and fulfilling lives for current and future generations.
This Budget shows how urgently we need a change of Government in the UK and a different economic approach that delivers a new funding settlement for public services and fully funded, inflation-proofed pay rises. We need the wealthiest in society to finally pay their fair share in tax. We must not only abolish non-dom status, but equalise capital gains tax rates with income tax. We need to tax the windfall gains of oil and gas giants at a higher rate and remove the loopholes that allow businesses to avoid paying their fair share.
I welcome the Secretary of State’s comments about devolving decision making and finance to the English regions. I implore the UK Government to do the same for Wales, to provide us with fair, needs-based funding and to stop riding roughshod over the devolution settlement. Diolch yn fawr.
Richard Burgon (Leeds East) (Lab)
Last Wednesday, as the Chancellor stood up to deliver his Budget, millions of people around the country will have been hoping for real action on the biggest cost of living crisis in living memory. They were disappointed. In the theatre of Parliament, with the jokes, the backslapping and the irrelevant asides, it seemed that we had very rarely been as far removed from what was going on outside. We would never have guessed from listening to the Chancellor that there is a cost of living crisis out there and that people are using food banks, are having to choose between heating and eating and are struggling to pay the bills. One would never think that it was about to get worse, with the worst fall in incomes since the 1950s. It seemed from the Budget that the Conservatives just did not think that that was a big deal. The Budget did not say enough. The Budget did not really do anything for the millions of people out there who are struggling to make ends meet.
We hear a great deal about the cost of living crisis, but it is not true across the board. Some people are doing very well indeed at the moment. British billionaires are increasing their wealth by £220 million a day, profits at the biggest UK companies are up by 34%, bankers’ bonuses are up by 28%, top bosses’ pay is up by 23%, and we even have a Prime Minister on the rich list—the richest Prime Minister in history.
The Government had a choice, and the Government failed to do what was right for the people out there. When the hon. Member for Southend West (Anna Firth) was explaining why public sector workers should not get the pay rise that they deserve, she said, “The money has to come from somewhere.” Of course the money has to come from somewhere, but the money is there; the Government just choose not to take it. Let me explain that by identifying just two policies that the Government could have adopted—two taxes on wealth that would have raised £30 billion. When I mention that sum, Members should reflect on the fact that free school meals for every child would cost £1 billion, as would an inflation-matching pay rise for all nurses, and an inflation-matching pay rise for all public sector workers would cost about £12 billion.
The first of those two policies is a 1.5% annual tax on any wealth amounting to more than £10 million, which would raise up to £15 billion a year and would affect only 0.04% of the population: the richest 20,000 individuals. The Government do not have the guts to do that, because they would be doing it to their wealthy friends. The second policy is very simple: equalise capital gains tax rates with income tax to raise up to £17 billion a year. Why should bus drivers, for example, pay a higher rate of tax on their incomes than those living on income from their wealth? It is about time taxation on wealth was equal with taxation on income, because any other system is unjust and unfair.
The results of a new poll show that the vast majority of people back those policies, but instead of making the choices that they should have made, the Government have completely failed to tackle the emergency, now. That is what they should have done, but they chose not to do it.
Helen Morgan (North Shropshire) (LD)
Let me begin by declaring an interest as a vice-president of the Local Government Authority.
Overall, this was a disappointing Budget for North Shropshire and for rural communities across the country. Instead of allocating levelling-up funding on the basis of need, councils will once again be forced to spend thousands in consultant and officer time, competing against each other for small pots of money which, ultimately, they may not win. Surely it is time to assess the needs of each area objectively and invest accordingly. Personally, I would not consider a marginal seat to be an indication of need, but Wednesday’s statement shamelessly funnelled funding into marginal seats, largely ignoring the urgent need in rural Britain for investment in public transport and key infrastructure.
I would welcome clarity from the Chief Secretary to the Treasury on the proposals for local enterprise partnerships. The LEP in the Marches covers a number of local authority areas, and has been a driver of public and private sector investment. How will its activities be effectively absorbed across a number of different overstretched councils?
The rest of the Budget was largely taking with one hand and giving away with the other. Money to repair potholes is welcome, but the entire national potholes budget would probably not be enough to repair the badly neglected roads of Shropshire, while the active travel fund, which might have brought real benefits to all areas, has been cut. The £63 million to keep swimming pools open is welcome, but it involves another largely competitive bidding process for capital investment and energy efficiency measures. Community Leisure UK still predicts that many pools will be unable to reopen without additional funding to help with the soaring energy bills that forced them to close in the first place.
The Chancellor claimed that 100% capital allowances for businesses investing in plant and machinery would offset their corporation tax rise, but those businesses have to have the cash to invest and they need to be turning a profit to offset those capital allowances against. Rural businesses in North Shropshire have told me that the astronomical cost of energy means that they are struggling to stay afloat, not turning a comfortable profit or generating cash to invest.
Wendy Chamberlain (North East Fife) (LD)
A very easy way to help small businesses to grow is to do something about the VAT tax threshold, which has not increased in line with inflation since 2017. Does my hon. Friend agree that this is preventing businesses from growing further and that the Government could have done that instead of stealth-taxing small businesses?
Helen Morgan
I thank my hon. Friend for her intervention, and I agree.
Duty on draught beer has been cut, and that is obviously welcome for the pubs that sit at the heart of the communities in our towns and villages, but many small businesses were locked into gas and electricity contracts last year in a period of soaring prices as a result of the terrible invasion of Ukraine. Just this morning, I was contacted by a popular village pub to say that it was facing closure—despite always being too busy to fit me in for a table. It is facing a fourfold increase in its energy costs, but this Budget has cut the support that it is going to be offered, even while wholesale prices fall and it costs the Government less.
We all want to get people back into work, but there has been a real-terms cut to the public health budget, with nothing more for adult and children’s social care at a time when illness and caring responsibilities have placed enormous pressure on the workforce across every sector. Staff shortages underpin the crises in social care, the health service and the wider rural economy, and we feel them strongly in North Shropshire. In summary, this is a missed opportunity for North Shropshire and for rural communities across Britain.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
Welcome measures in the Budget include enhanced tax relief rates for some life sciences research and development-focused SMEs, to help incentivise investment in R&D, and the extension of the reduced fuel duty rate has been welcomed by the logistics and haulage industries. Among the not-so-welcome measures is the 10.1% tax hike on Scotch whisky, meaning that on the sale of an average £15.22 bottle, £11.40 will be taken to the Treasury through tax. This is an enormous blow for the spirits industry, significantly reducing its already tight profit margins in a move that the Scotch Whisky Association has noted breaks previous ministerial commitments to review alcohol duty to ensure that the tax system supports Scottish whisky.
In a post-Brexit context, protecting businesses and positioning them in the best possible way is of vital importance when it comes to successful trade deals. We need trade deals that will allow UK industries to prosper and thrive for the benefit of the economy and the public, but that cannot happen if domestic policies are strangling industries. On that note, I welcome the addition of several new sectors to the shortage occupation list, which will help with managing labour shortages in those areas, but reform is still needed to the scheme if it is to be as effective as we need it to be. The hospitality sector, for example, is crying out for support and it needs to be included in the scheme.
For my constituents, though, the cost of living remains the No. 1 concern. The Chancellor’s fiscal policies are still not going far enough to provide households with the support they so desperately need. While he is extending the price cap guarantee, the actual practical financial support is being withdrawn. That means that average households will see a £400 a year increase in their energy costs, which is an increase that many cannot afford. Nationally, around 30% of households could not afford to put the heating on over the winter months; in my constituency it was 45%. Someone who has not lived in poverty and faced these struggles daily cannot truly understand what that means day to day, or what worrying about how they will pay the bills, feed their children and put a roof over their heads does to a person. Statistics cannot paint the picture entirely, but they give a flavour. Nationally, 41% of people said that their mental health had worsened as a result of the cost of living crisis, and in my constituency it was much higher at 55%.
Pensioners, too, were left behind in this Budget. What is essentially a hefty tax cut for a very small number of very wealthy retirees is not enough. Although the state pension is being uprated in line with inflation, it is still not keeping up with living costs. Our main concern, though, is that the Government are considering increasing the state pension age again. Against the backdrop of all this, life expectancy is stagnating, and even falling in deprived communities. We are still waiting for justice for the Women Against State Pension Inequality Campaign, which is a perfect example of why now is not the right time to be making this change, as I hope Ministers will recognise.
We all know there is not an unlimited pot of money to finance everything we would like the Chancellor to announce in an ideal world. However, with living standards so low and with so many households struggling across Scotland and the UK, the Budget could have done more to support the public this Government serve.
Mr Deputy Speaker (Mr Nigel Evans)
We are down to our last two Back-Bench contributions, so those watching in their offices who participated in this debate should now come back to the Chamber in anticipation of the wind-ups.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
Last week should have seen a Budget that embraces the idea that moving to net zero and decarbonising our economy and society is an opportunity to rebalance our economy and recognise that the old platitudes and ideologies no longer work. Instead, we saw the same mistakes, the same retrenchment and the same failures that have dragged the UK ever closer to the bottom of the pile, and the same determination to continue down a path that is disastrous not only for our society but for our planet.
Last week, England’s active travel budget was slashed to the bone. Active Travel England is being neutered before it has even begun. This financial year will see active travel spending in Scotland reach a transformational £30 per person. In contrast, England, outside Greater London, will receive less than £1 per person per year. For those sitting on the Treasury Bench who are not too good at arithmetic, that is 30 times less than in Scotland. The priorities are clear: inertia from the UK Government or investment in our communities by the Scottish Government.
Meanwhile, the UK Government pledged to drop billions into the black hole of nuclear power, surely the least sustainable energy there is. Despite the potential of fuels such as green hydrogen and tidal to reduce our dependence on fossil fuels, alongside the known quantities of hydro and wind, we will see another wave of massively subsidised nuclear power stations, all presumably to be cleaned up by our children and grandchildren. In trying to justify not giving free school meals to those in need, or slashing transport funding outside London, the Tories claim they do not want future generations to pay the price for our financial profligacy, but they are more than happy to bequeath to those same future generations the cost and danger of dealing with our toxic waste.
The Government’s desperation to cling to the past is not limited to energy, as is apparent from their attitude to the railway and the failure of their free-market doctrine, with another six-month extension for Avanti, a train operator that can barely run a train. There are five state-supported rail operators in Scotland, and two of them—ScotRail and London North Eastern Railway—are run by the state for public benefit. One more will join them in June, when the Caledonian sleeper returns to public ownership. Only Avanti and TransPennine Express, two of the worst train operators in these isles, will remain as contracted operators.
If we are serious about sustainable economic growth, we need public transport and transport infrastructure fit for the 21st century, not the 19th century. There has been a sea change in rail in Scotland since devolution, driven by Governments of all political colours, except the Tories, of course. We have seen electrification and decarbonisation right across the country, and Scotland’s rail network will be fully decarbonised by 2035, which is some achievement for a rail network that was ignored by this place for decades. In contrast, the last decade of rail investment south of the border has been a sorry tale of delay, incompetence and hard political ideology, which has meant virtually zero progress on modernising the network anywhere outside the M25.
Public charge points are being rolled out by the UK Government at a glacial pace, in a scheme ironically called Project Rapid, which has seen the Government fall 200,000 short of their 300,000 target by 2030. That target is utterly imperative. Scotland has ordered 11 times more zero-emission buses per head than England. I could go on.
Did we see any new funding or action in the Budget to show any sign that the Chancellor and his colleagues understand the gravity of the situation? Not a sniff. This Budget was another missed opportunity, following the last 13 years of torpor and decline. It shows zero understanding of the fundamental and, to be blunt, existential challenges our society faces. The transition to net zero is a golden opportunity to revitalise communities and our economy. The UK and its failed economic strategy should get out of the way of Scotland’s aspirations to be a net zero nation and a world leader in decarbonisation. It is clearer than ever that those aspirations will be met only through independence.
Margaret Greenwood (Wirral West) (Lab)
The Chancellor has given a tax break to some of the wealthiest people in society by scrapping the £1.07 million lifetime pensions allowance. We need to retain people in the NHS, but there are other ways of doing that. Let us see what he has done for the rest of society. At the same time, he has frozen personal income tax thresholds until 2028. The OBR has said that as a result wage growth over the next five years will force 3.2 million people into paying tax for the first time and put 2.1 million people into the higher rate tax band. The IFS has said that the freeze would cost most basic rate taxpayers £500 from April and most higher rate payers £1,000.
It is difficult to see how that will not have an impact on child poverty. Alison Garnham, the chief executive of the Child Poverty Action Group, has pointed out that the Budget contained
“no mention of the UK’s 4 million children in poverty”.
She called on the Government to
“expand free school meals eligibility, remove the two-child limit and benefit cap and increase child benefit. Any less and the effects of poverty will stalk millions of children from cradle to grave.”
While giving tax breaks for the very wealthy, the Chancellor announced that sanctions in the social security system would be
“applied more rigorously to those who fail to meet strict work search requirements or choose not to take up a reasonable job offer.”—[Official Report, 15 March 2023; Vol. 729, c. 844.]
So people who struggle to read and write will be punished, because for them a work search is a difficult business. Furthermore, that announcement came just a day after it was reported that the Department for Work and Pensions had been ordered to release sensitive research into whether fining benefit claimants is effective in getting them to take a job or work more hours. There is overwhelming evidence in academic research, through the welfare conditionality project, to show that benefit sanctions are ineffective at getting people who do not have jobs into work and that they are more likely to reduce those affected to poverty, ill health or even survival crime.
Speaking of those who struggle to read and write, once gain the Government have failed to provide the urgent support that is needed to the 7.1 million adults in England who are deemed functionally illiterate and who face immense barriers in life. They make up more than 16% of the adult population, yet it seems that this Government have abandoned them. The Chancellor announced the introduction of returnerships and I will be interested to see the content of those. However, they are specifically vocational and, for many people who are functionally illiterate, the idea of going straight to a vocational course can be daunting; and, of course, illiteracy is not only about barriers to work.
Over 13 years of Conservative Government, we have seen public services cut to the bone, and public sector workers and the public they serve bearing the brunt of that ill-conceived austerity. Headteachers in Wirral whom I met earlier in the year spoke of the acute financial challenges they are facing in terms of paying staff, buying resources and heating their buildings. We also know that, according to the Government, across the country, the risk of collapse in one or more blocks in some schools built between 1945 and 1970 is now very likely. All this reminds me very much of the final years of the Thatcher Government, when public services were left in ruin.
In conclusion, this Budget sidestepped the most pressing issues, including the cost of living crisis that is causing misery to millions; the running down of public services; and the failure to support more than 16% of the adult population by providing them with much-needed support to read and write.
Mr Pat McFadden (Wolverhampton South East) (Lab)
Let me begin by paying tribute to all the right hon. and hon. Members who have taken part in this Budget debate, not only today, but throughout its four days. Today, many Members from across the House, including my right hon. Friend the Member for Walsall South (Valerie Vaz), and my hon. Friends the Members for Newcastle upon Tyne North (Catherine McKinnell), for Ilford South (Sam Tarry), for Bolton South East (Yasmin Qureshi) and for Leeds East (Richard Burgon), have raised the issue of the cost of living crisis. Other Members have spoken about individual measures in the Budget, such as investment allowances and devolution deals.
Some Members, such as my hon. Friend the Member for Vauxhall (Florence Eshalomi), called this Budget a missed chance, whereas others, such as my hon. Friend the Member for Merthyr Tydfil and Rhymney (Gerald Jones), talked about the number of Labour policies adopted by the Government in the Budget. My hon. Friend the Member for Lewisham East (Janet Daby) and the hon. Member for Newbury (Laura Farris) talked about childcare. The hon. Member for Basildon and Billericay (Mr Baron) rightly warned the Government against being left behind by the measures being taken in the US and the EU to ensure the green transition.
The right hon. Member for North West Hampshire (Kit Malthouse) urged us all to have more children. Perhaps when all other growth plans have failed, that is all that is left.
The Budget is a critical part of our economic and political framework, and I congratulate the Chancellor on surviving long enough in his post to deliver one. Here we are a few days later and he is still in his post. That is a rare achievement among Conservative Chancellors of modern times.
Outside this House—indeed, on the day that the Chancellor spoke—there is significant turbulence in the financial system. Even though we debate these measures, it is imperative that the Treasury and the regulators are alive to the risks elsewhere in the system and to what other risks may be there.
The Budget was billed by the Chancellor as a Budget for growth. He opened his statement last week by asking us to give thanks that, this year, the economy is expected to shrink, but just not by quite as much as was previously thought. A flatlining economy is now defined by the Government as success.
Stephen Kinnock
My right hon. Friend is making an excellent speech. The Secretary of State for Levelling Up, Housing and Communities said earlier that this was a Budget for growth and that it would deliver more economic prosperity, but the reality is that the OBR said that we will not see a rise in living standards for another decade. Does my right hon. Friend agree that the Government have had their chance?
Mr McFadden
My hon. Friend is absolutely right. After 13 years, there really is nowhere left to hide.
Despite the Budget being billed as a Budget for growth, the UK is still experiencing the slowest recovery from covid in the G7. All the countries that make up this group had to cope with the pandemic. All of them have suffered the consequences of Russia’s invasion of Ukraine, yet Britain’s recovery is the slowest.
What is it about Conservative stewardship of the United Kingdom that makes us stand out in this way? Is it the political chaos inflicted on the country by the Conservative party, which makes a Chancellor who gets to deliver a Budget such a rarity? Is it the fact that, since 2010, our productivity growth has been the second lowest in the G7? Is it the disastrous Tory mini-Budget last year, which they would like to bury under 10 feet of concrete, but which people will not forget? It caused borrowing costs to soar, put our pension system on life support and rocked international confidence in the UK economy. Is it the former Prime Minister’s Brexit deal, which was supposed to give us global Britain but instead gave us the problem of how to send a sandwich to Belfast?
It could be all those things, but whatever the reasons, the overriding fact for our constituents is that they are still living through the biggest fall in living standards in living memory. Their money goes less far, their incomes have been squeezed and they are living in a country that is poorer than it was four years ago.
Alan Brown
The right hon. Member mentioned Brexit. Are not some of the issues related to Brexit associated with leaving the single market, leaving the customs union and not being part of freedom of movement? That has a big detrimental impact on the economy and Labour will not change any of that.
Mr McFadden
I understand why people regret the result. What I do not understand is why the response to that should be to erect even more trading barriers inside the United Kingdom, as the hon. Member wants to do.
Even if the fall in living standards is at its most severe this year and next, it is not just a short-term dip, because since the Government took office, real-terms wages have not risen and are not expected to get to their pre-2010 levels until 2026. That is what people feel in their lives—that year after year, it gets harder to make ends meet and harder to pay the bills. The question that people are asking themselves is the one that has been posed by the shadow Chancellor, my right hon. Friend the Member for Leeds West (Rachel Reeves). Are my family and I better off? The answer is no. Are our public services in better shape now than when the Tories took office in 2010? Time after time, once again, the answer is no.
When he made his statement last week, I thought there was one significant thing about the way the Chancellor spoke: he was happy to own the whole 13 years that his party have been in office.
Mr McFadden
He confirms that now—he is proud of it. He obviously did not get the memo that says every time the Tories ditch a leader, they are supposed to pretend it is year zero. Not for him the pretence that this is a brand-new Government. Not for him the pretence that whatever was inflicted by his predecessors had nothing to do with him.
I welcome the Chancellor’s honesty about that, because that means the Tories can own the annual tax rises faced by every taxpayer over the coming years. They can own the 24 tax rises they have imposed in the last few years. They can own the NHS waiting lists of 7 million people. They can own the biggest drop in living standards on record. They can own all the waste and all the fraud. They can own the mortgage rate rises faced by hard-working families this year and next, which were driven up by their own reckless economic irresponsibility. They can own the whole cycle of low growth, increasing taxes, declining living standards and creaking public services. I am grateful to the Chancellor for his honesty and candour in embracing his party’s 13 years in power. That is a rare thing in politics these days and he deserves credit for it.
There were measures in this Budget that we liked and supported—those were the Labour bits. The extension of the energy price cap, the freeze in fuel duty, the investment allowances for industry and more help for childcare were all called for by Labour. Of course we welcome them, and we knew they were coming because most of the Budget was leaked in advance.
Several hon. Members rose—
Mr McFadden
I am not going to give way; I am going to proceed.
One thing was not leaked, however, and that was the Chancellor’s plan to abolish the pensions lifetime allowance—a £1.2 billion policy that will benefit those with the biggest 1% of pension pots. Let us be clear: there is a problem facing doctors, and it has existed for years. In the run-up to the Budget, my hon. Friend the Member for Ilford North (Wes Streeting), the shadow Health Secretary, called for a special scheme to deal with the issue facing doctors, which is forcing some of them to retire early. That call was supported by the Chancellor when he was Chair of the Health and Social Care Committee. His report said:
“The government must act swiftly to reform the NHS pension scheme to prevent senior staff from reducing their hours and retiring early from the NHS.”
That is exactly what the shadow Health Secretary proposed.
Mr McFadden
I am going to proceed.
Such a scheme already exists for judges, but when the shadow Health Secretary made that call, he was attacked by the Tories, who said it was financial profligacy and unaffordable—and let us remember that that was only a scheme directed at the NHS. A Conservative spokesman said:
“Now they announce an expensive pensions policy without pointing to how they would fund it”,
adding that the shadow Health Secretary should think about the impact on the public finances. And what did the Tories do then? They said, “Wes, hold my beer.” Just days later, having denounced a smaller NHS scheme as being completely unaffordable, they proposed to abolish the entire lifetime allowance for everyone. According to the Tory argument, it is completely unaffordable for doctors alone, so we are going to propose it for everyone.
However, that was not always the Tories’ view. They used to think that,
“we must demonstrate that we are all in this together. When looking for savings, I think that it is fair to look at the tax relief that we give to the top 1%.”—[Official Report, 5 December 2012; Vol. 554, c. 878.]
Who was the ideologically suspect pinko who said that? Who was that anti-aspirational enemy of enterprise? It was, of course, George Osborne. That is how far they have moved. They used at least to claim we are were all in this together; now they do not even pretend.
Growth is the essential challenge facing the country. We need better growth to make the country more prosperous and its people better off. Right now, in the United States, growth is being driven by the Inflation Reduction Act sucking in investment in new technologies and the green transition, and creating jobs right across the country. Europe is responding with incentives of its own. What is the Government’s position? It is that this is “dangerous”, as the previous Business Secretary said. Other countries are on the pitch; they are using the power of government to crowd in private investment. That is exactly what we should be doing. This is not about the state doing it all; it is about setting a clear, long-term direction, and asking business and employees to be partners in making that work.
Those investments will happen somewhere. The question we pose is: why not in Britain? Why not in Britain when we have some of the best researchers in the world? Why not in Britain when we have a tradition of innovation and creativity that is second to none? Why not in Britain? Because we lack a Government with the ambition to make it happen. In the end, that is what was missing from this Budget.
The Chancellor and the Prime Minister want to project themselves as the adults in the room, but with the challenges that the country faces, that is not enough. It is not enough just not to be reckless and ideological; it is not enough just not to subject the country to another giant juvenile experiment with real-world consequences; it is not enough just not to degrade the idea of public office itself; it is not enough for them not to be their disastrous predecessors. The country deserves a lot more than that. It needs a Government who will break with, not continue, the last 13 years, and who will break with the whole pattern of low growth, high tax and creaking public services. That is what we need, and that is what we did not get from the Budget last week.
The Chief Secretary to the Treasury (John Glen)
What a privilege it is to close this four-day Budget debate on behalf of the Government. I thank the right hon. Member for Wolverhampton South East (Mr McFadden) for his remarks—for someone who moved from being the high disciple of Tony Blair to sitting in a Cabinet where there was “no money left”, I think there was a lot of cheek in his remarks.
This Budget takes our collective potential and unleashes it to deliver sustainable long-term growth. We are now able to direct our attention to the future because of the difficult decisions that we took in the autumn, when we cemented stability and the prudent management of the nation’s finances, taking responsible, necessary decisions for the good of the economy—for the vulnerable, for families and for communities up and down this country. Since then, debt-servicing costs are down, mortgage rates are lower and inflation has peaked. We are heading in the right direction. The OBR’s clear assessment is that because of the action taken in the autumn, combined with the actions announced by the Chancellor last week, we are on track to meet all the Prime Minister’s economic pledges.
As has been famously said before, inflation is taxation without legislation. It makes us all poorer. That is why we said that we will halve it this year. Indeed, the OBR says that we will do more than that.
John Glen
No, I will not.
Inflation in the UK will fall from 10.7% in the final quarter of last year to 2.9% by the end of 2023. If debt is left unchecked, it acts as a ceiling on our economic potential. That is why we are bringing it down. Under this Government, we will pay our own way.
On growth—the focus of the Budget—there were those who said that we would fall into recession in 2023, but last week the OBR said that we will not enter a recession this year. Instead, after this year, the UK economy will grow in every single year of the forecast period, including by 2.5% in 2025. As we look to the future, we are now rolling out the biggest employment package ever, we are overhauling incentives to get businesses growing, and we are unleashing our green energy sector while supporting families and businesses with bills in the short term. But, contrary to the characterisation in many Opposition speeches today, there is no complacency from this Government. There will be no let-up in our relentless focus on enabling growth.
The subject of today’s debate is halving inflation, reducing debt and growing the economy. During the course of the debate, we have heard some excellent speeches from right hon. and hon. Members on both sides of the House, and I would like to respond to some of them now. I will respond first to my right hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke), one of my predecessors. Although he welcomed many measures in the Budget, he drew attention to the question of corporation tax. Let me draw his attention to the remarks of the Chancellor, who expressed his determination that the full expensing measure will be a permanent intervention of this Government.
I thank my right hon. Friend the Member for North West Hampshire (Kit Malthouse), my parliamentary neighbour, for his constructive suggestions about the simplification of childcare. I also draw his attention to the fact that this Government have committed £492 million over this year and next to ease the supply for those who will provide our child support.
I also want to refer to the speech from my hon. Friend the Member for South Cambridgeshire (Anthony Browne), who gave us a helpful contextualisation of the world economy and pointed out the fact that, contrary to what we heard in many Opposition speeches, since the Conservatives came to power in 2010 we have grown more than major countries such as France, Italy or Japan, and about the same as Europe’s largest economy, Germany. We have halved unemployment, cut inequality and reduced the number of workless households by 1 million. I also want to refer to my hon. Friend’s remarks on the pensions intervention. That was called for by many in the medical profession over many months, but our pension reforms benefit other experienced key workers as well as doctors, including headteachers, police chiefs, armed forces clinicians, senior armed forces personnel, air traffic controllers, prison governors, senior Government scientists, Government-employed vets and, yes, even senior people in the private sector who create jobs, sustaining growth across the economy.
I also thank my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones), who had a characteristically clear understanding of how economic challenges will be met. He also mentioned the support of his local brain surgeon. Many more people working in the NHS are realising that within two weeks they will be able to continue working, knowing that their pensions are safe.
I thank my hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti) for his remarks on defence expenditure. I suspect that there will never be enough money for him on defence, but he shows a clear understanding of the extra commitment the Chancellor has made in the Budget to invest in continuing to support our efforts in Ukraine.
There were many other worthwhile contributions from Members on both sides of the House, and I think it is important that we recognise that one of the major themes of this Budget was levelling up across the whole United Kingdom. I welcome the contribution from my hon. Friend the Member for Barrow and Furness (Simon Fell), who drew attention to the value of the announcements on nuclear, particularly Great British Nuclear, and the transformation that will bring to his economy and to the country as a whole.
Alan Brown
On nuclear, and the fact that the Minister is talking about reducing debt, why does he think it is a good thing to sign bill payers up to £35 billion of debt for Sizewell C through the regulated asset model? Surely that is just a burden on all future generations.
John Glen
What is important is that this country knows that we have a Government who will take long-term decisions about energy security for this country.
I would like to address a number of significant themes of this afternoon’s discussions on the cost of living. Support for households with higher bills has been worth £94 billion—on average, £3,300 per household—across 2022-23 and 2023-24. That means that in this coming year more than 8 million households on means-tested benefits will receive three cost of living payments totalling £900; more than 8 million pensioner households will receive a cost of living payment of £300; and more than 6 million people on disability benefits will receive a cost of living payment of £150. Since this Conservative Government came to power in 2010, we have grown more than major countries such as France, Italy or Japan, and we are now on track.
I want to address public sector pay, which was also raised by a number of Opposition Members. Through the efficiency and savings review, Departments have reprioritised and identified further efficiencies, building on the 5% efficiency challenge set at the 2021 spending review.
We have faced a global energy crisis. We have had high global inflation. There has been a global economic downturn. We needed to bring about stability—we did. We needed sound money—we have it. We now need long-term, sustainable, healthy growth—this Budget delivers it. Many Opposition Members have asked who this Budget was for. It was for the families struggling with energy bills, the left-behind communities that will receive record investment, and the entrepreneurs who drive growth. The OBR’s forecasts show that this Budget will deliver improvements in growth and inflation, but this Government will continue to do everything we can to beat those forecasts. It is with humility, focus and determination that we tackle the challenges facing this country. We will deliver a stronger, cleaner economy for the whole of the United Kingdom, and I commend this Budget to the House.
Question put and agreed to.
Resolved,
That income tax is charged for the tax year 2023-24.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
The Deputy Speaker put forthwith the Questions necessary to dispose of the motions made in the name of the Chancellor of the Exchequer (Standing Order No. 51(3)).
2. Income tax (main rates)
3. Income tax (default and savings rate)
4. Income tax (starting rate limit for savings)
5. Corporation tax (charge and main rate for financial year 2024)
6. Corporation tax (standard small profits rate and fraction for financial year 2024)
7. Capital allowances (temporary full expensing etc)
8. Annual investment allowance
9. Capital allowances (electric vehicle charge points)
10. Corporation tax relief (research and development)
11. Corporation tax relief (profits from patents etc)
12. Energy (oil and gas) profits levy (de-carbonisation allowance)
13. Museums and galleries exhibition tax relief (extension of sunset date)
14. Creative reliefs (extension of period for temporary increase in credits)
15. Seed enterprise investment scheme (amount on which relief may be claimed etc)
16. Company share option plans
17. Enterprise management incentives
18. Pensions (lifetime allowance charge and annual allowance)
18:58 - The House divided: - Ayes: 330 / Noes: 233 - Question accordingly agreed to.
19. Pensions (collective money purchase benefits)
20. Pensions (relief relating to net pay arrangements)
21. Social security payments
22. Qualifying care relief
23. Estates in administration and trusts
24. Basic life assurance and general annuity business
25. Insurers in difficulties
26. Corporate interest restriction
27. Investment vehicles
28. Share exchanges
29. Records relating to transfer pricing
30. Double taxation relief (extended time limit claims)
31. Chargeable gains (payments to farmers)
32. Chargeable gains (assessment periods)
33. Chargeable gains (separated spouses and civil partners)
34. Chargeable gains (election to treat gains as accruing)
35. Chargeable gains (relief on disposal of joint interests in land)
36. Alcohol duty
19:15 - The House divided: - Ayes: 321 / Noes: 64 - Question accordingly agreed to.
37. OECD Pillar Two
38. Electricity generator levy
39. Stamp duty land tax (transaction funded with the assistance of a subsidy)
40. Value added tax (deposit schemes)
41. Import duty (dumping, subsidisation and safeguarding remedies)
42. Import duty (rulings as to methods of valuation of goods)
43. Import duty (discharging goods from free circulation procedure)
44. Fuel duties (excepted machines)
45. Fuel duties (definition of “HO%” and “BD%”)
46. Rates of tobacco products duty
1 Cigarettes | An amount equal to the higher of— (a) 16.5% of the retail price plus £294.72 per thousand cigarettes, or (b) £393.45 per thousand cigarettes. |
2 Cigars | £367.61 per kilogram |
3 Hand-rolling tobacco | £351.03 per kilogram |
4 Other smoking tobacco and chewing tobacco | £161.62 per kilogram |
5 Tobacco for heating | £302.93 per kilogram” |
47. Soft drinks industry levy (flavour concentrates)
48. Air passenger duty (bands and rates)
Afghanistan | Cuba | Kyrgyzstan | Senegal |
Angola | Curacao | Lebanon | Seychelles |
Anguilla | Djibouti | Liberia | Sierra Leone |
Antigua and Barbuda | Dominica | Macau | Sint Eustatius |
Armenia | Dominican Republic | Malawi | Sint Maarten |
Aruba | Egypt | Maldives | Somalia |
Azerbaijan | El Salvador | Mali | South Korea |
Bahrain | Equatorial Guinea | Martinique | South Sudan |
Bangladesh | Eritrea | Mauritania | Sri Lanka |
Barbados | Ethiopia | Mayotte | St Helena, Ascension and Tristan da Cunha |
Belize | French Guiana | Mongolia | St Kitts and Nevis |
Benin | Gabon | Montserrat | Sudan |
Bermuda | Georgia | Namibia | Suriname |
Bhutan | Ghana | Nepal | Syria |
Bonaire | Grenada | Nicaragua | Tajikistan |
Botswana | Guadeloupe | Niger | Tanzania |
Brazil | Guatemala | Nigeria | The Bahamas |
British Virgin Islands | Guinea | North Korea | The Gambia |
Burkina Faso | Guinea-Bissau | Oman | Togo |
Burundi | Guyana | Pakistan | Trinidad and Tobago |
Cameroon | Haiti | Panama | Turkmenistan |
Canada | Honduras | Qatar | Turks and Caicos Islands |
Cape Verde | India | Russian Federation, east of the Ural Mountains | Uganda |
Cayman Islands | Iran | Rwanda | United Arab Emirates |
Central African Republic | Iraq | Saba | United States (including Puerto Rico and U.S. Virgin Islands |
Chad | Israel | Saint Barthélemy | Uzbekistan |
China | Ivory Coast | Saint Lucia | Venezuela |
Colombia | Jamacia | Saint Martin | Yemen |
Comoros | Jordan | Saint Pierre and Miquelon | Zambia |
Congo | Kazakhstan | Saint Vincent and the Grenadines | Zimbabwe |
Congo (Democratic Republic) | Kenya | Sao Tome and Principe | |
Costa Rica | Kuwait | Saudi Arabia |
49. Rates of vehicle excise duty
“CO2 Emissions Figure | Rate | ||
|---|---|---|---|
(1) | (2) | (3) | (4) |
Exceeding | Not exceeding | Reduced rate | Standard Rate |
g/km | g/km | £ | £ |
100 | 110 | 10 | 20 |
110 | 120 | 25 | 35 |
120 | 130 | 140 | 150 |
130 | 140 | 170 | 180 |
140 | 150 | 190 | 200 |
150 | 165 | 230 | 240 |
165 | 175 | 280 | 290 |
175 | 185 | 310 | 320 |
185 | 200 | 355 | 365 |
200 | 225 | 385 | 395 |
225 | 255 | 665 | 675 |
255 | — | 685 | 695 |
CO2 Emissions Figure | Rate | ||
|---|---|---|---|
(1) | (2) | (3) | (4) |
Exceeding | Not exceeding | Reduced rate | Standard Rate |
g/km | g/km | £ | £ |
0 | 50 | 0 | 10 |
50 | 75 | 20 | 30 |
75 | 90 | 120 | 130 |
90 | 100 | 155 | 165 |
100 | 110 | 175 | 185 |
110 | 130 | 200 | 210 |
130 | 150 | 245 | 255 |
150 | 170 | 635 | 645 |
170 | 190 | 1030 | 1040 |
190 | 225 | 1555 | 1565 |
225 | 255 | 2210 | 2220 |
255 | - | 2595 | 2605 |
CO2 Emissions Figure | Rate | |
|---|---|---|
(1) | (2) | (3) |
Exceeding | Not Exceeding | Rate |
g/km | g/km | £ |
0 | 50 | 30 |
50 | 75 | 130 |
75 | 90 | 165 |
90 | 100 | 185 |
100 | 110 | 210 |
110 | 130 | 255 |
130 | 150 | 645 |
150 | 170 | 1040 |
170 | 190 | 1565 |
190 | 225 | 2220 |
225 | 255 | 2605 |
255 | - | 2605 |
50. HGV road user levy
Band | Daily rate | Weekly rate | Monthly rate | Half-yearly rate | Yearly rate |
A | £3.00 | £7.50 | £15.00 | £90.00 | £150.00 |
B | £7.20 | £18.00 | £36.00 | 216.00 | £360.00 |
C | £90.00 | £28.80 | £57.60 | £345.60 | £576.00 |
Band | Daily rate | Weekly rate | Monthly rate | Half-yearly rate | Yearly rate |
A | £3.90 | £9.75 | £19.50 | £117.00 | £195.00 |
B | £9.36 | £23.40 | £46.80 | £280.80 | £468.00 |
C | £10.00 | £37.45 | £74.90 | £449.40 | £749.00 |
Revenue weight of vehicle | Band |
More than 11,999kgs but not more than 31,000kgs | A |
More than 31,000kgs but not more than 38,000kgs | B |
More than 38,000kgs | C |
51. Rates of landfill tax
52. Rates of climate change levy (future years)
53. Rate of plastic packaging tax
54. Aggregates levy (exemptions and exploitation)
55. Freeports and investment zones
56. Rights to repayment of income tax
57. Late payment interest (value added tax)
58. Penalties (value added tax)
59. VAT credits (repayment interest due where evidence not provided)
60. Insurance premium tax (notifications)
61. Plastic packaging tax (penalties for late payments)
62. Management of customs and excise (approval of aerodromes)
63. Management of customs and excise (temporary approvals)
64. Licensing authorities (requirements to give or obtain tax information)
65. Charities (value added tax etc)
66. Charities (stamp duty)
67. Charities (other taxes)
68. Community amateur sports clubs
69. Homes for Ukraine Sponsorship scheme
70. Office of Tax Simplification
71. Dormant assets scheme
72. International arrangements for exchanging information
73. Payment of unclaimed money in court into the Consolidated Fund
74. Financial sanctions regulations
75. Incidental or consequential provision
FINANCE Bill (MONEY)
Business without Debate
Mr Deputy Speaker (Mr Nigel Evans)
With the leave of the House, we shall take motions 3 to 6 together.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Treasure
That the draft Treasure (Designation) (Amendment) Order 2023, which was laid before this House on 20 February, be approved.
That the draft Treasure Act 1996: Code of Practice (3rd Revision), which was laid before this House on 23 February, be approved.
Electricity
That the draft Electricity Supplier Obligations (Excluded Electricity) (Amendment) Regulations 2023, which were laid before this House on 20 February, be approved.
National Health Service
That the draft Health Education England (Transfer of Functions, Abolition and Transitional Provisions) Regulations 2023, which were laid before this House on 20 February, be approved.—(Andrew Stephenson.)
Question agreed to.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Criminal Law
That the draft Criminal Justice Act 2003 (Home Detention Curfew) Order 2023, which was laid before this House on 8 February, be approved.—(Andrew Stephenson.)
The Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until tomorrow (Standing Order No. 41A).
Adjournment (Easter, Coronation and Whitsun Recess)
Motion made, and Question put forthwith (Standing Order No. 25),
That this House, at its rising on Thursday 30 March 2023, do adjourn until Monday 17 April 2023; at its rising on Thursday 27 April 2023, do adjourn until Tuesday 2 May 2023; at its rising on Wednesday 3 May 2023, do adjourn until Tuesday 9 May 2023; and, at its rising on Thursday 25 May 2023, do adjourn until Monday 5 June 2023.—(Andrew Stephenson.)
Question agreed to.
Dangerous driving
Preet Kaur Gill (Birmingham, Edgbaston) (Lab/Co-op)
I rise on behalf of the residents of Osmaston Road in Harborne in my constituency to present a petition about dangerous driving. I want to give special thanks to Michael Thompson and Terence Lester, the chief petitioners. The 84 names that they collected for the previous iteration of this petition show the strength of feeling among residents on the road.
The petition states:
The petition of residents of Osmaston Road, Harborne, Birmingham,
Declares that there are serious concerns surrounding speeding on Osmaston Road; further declares that illegally modified motor cars, Quad Bikes, Motor Bikes and Commercial Vans travel on this road at a high speed, which is deeply frightening for residents of the road; notes that the petitioners have repeatedly attempted to engage with the Council on this issue and have not received a response.
The petitioners therefore request that the House of Commons urge the Government to work with Birmingham City Council Highways Department and West Midlands Police to address the concerns of the residents of Osmaston Road to prevent dangerous speeding.
And the petitioners remain, etc.
[P002816]
Large Solar Farms
(1 year, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Nigel Adams (Selby and Ainsty) (Con)
I very much welcome the opportunity that this evening’s debate gives me to raise the matter of large-scale solar farms. There have been previous debates on the subject in Westminster Hall, and I know that many right hon. and hon. Members have raised concerns about the loss of food production and the planning process. I note that there are one or two colleagues in the Chamber this evening who may want to chip in.
Food security and energy security are competing requirements in our economy, and we must recognise that. No doubt someone listening to this debate—it is usually some sort of blogger on some eco-site—will report that we are all anti-renewable energy, which, of course, is not what the debate is about and could not be further from the truth; it is, in fact, quite the opposite.
Let me start by saying that electricity generation from solar has been a major success, and has come a long way in the last 12 years. Last Sunday at noon, 5.74 GW out of a total of 33.1 GW delivered by the national grid was from solar. Total solar generating capacity is now about 14.6 GW, and the energy strategy objective is to increase that fivefold to 70 GW by 2035. I understand that, by the end of January 2023, there were 1,360 operational solar farms covering about 100,000 acres. It is estimated that a further 160 solar farms have been approved and there are several hundred more planning applications in the pipeline, including at least seven nationally significant infrastructure planning applications which are over 50 MW. That planning and construction pipeline could be equivalent to a further 150,000 acres of solar panels, the majority of which would be ground-mounted on farmland.
To date, this solar expansion has received a good level of public support. In my constituency, the first applications, in 2015, were approved with the benefit of public support. They were typically 5 MW, and located near industrial estates. By 2018, 20 MW applications were coming forward, and by 2020, typical applications were just under 50 MW—the maximum under which the local planning authority was responsible for deciding the applications. Now there is public concern about the increasing number of applications, and the more than tenfold increase in the size of some of them.
Matt Hancock (West Suffolk) (Ind)
As a supporter of solar energy, I think the central point is that, if there is no local support for projects because they are in the wrong place, that will undermine support for renewable energy. In my constituency, I have supported many solar projects and continue to support them now, but the Sunnica project goes right round villages and destroys local amenity. The consultation has been woeful, and both county and local councils are against the project, as is the Secretary of State for Culture, Media and Sport, whose constituency it also covers. Is not the point that those who support solar should support it in the right place, and not get people’s backs up with terrible consultation and projects that should be sent back to the drawing board?
Nigel Adams
My right hon. Friend is correct. I know how seriously he takes solar energy in his own constituency, because we have talked about this before. The public must be on board, and it is important for there to be clarity for them in the planning process. I will say more about some of the points he has raised later in my speech.
Robert Courts (Witney) (Con)
My right hon. Friend has made some excellent points which will certainly have been heard by my constituents in West Oxfordshire who are subject to the Botley West proposal, or, as it has been called locally, the Blenheim power station. He has referred to large-scale solar farms. The one proposed in my constituency is to be the size of Heathrow—the biggest, if allowed, in Europe, and the biggest ever allowed on farmland—and 76% of it will be on green belt land. What he has just said about public support is entirely right. We all support solar energy, but when projects are this size and when they have an irreversible impact on local areas, that will subtract from public support. Does he agree that, as well as protecting power, we must ensure that we protect amenity, farmland, food security and the character of rural areas?
Nigel Adams
My hon. Friend is right: we must do all those things and, especially given the conflicts that are taking place around the world, we must ensure that our food security is protected. In my constituency, there are a number of large breweries, which depend heavily on local growers for their supply chains. My hon. Friend has made a brilliant point. He also referred to farmland. As the size of these proposed solar farm increases, so does the amount of productive farmland—
Nigel Adams
It would be rude if I did not give way to my very hon. Friend the Member for Strangford (Jim Shannon).
Jim Shannon
I thank the right hon. Gentleman for bringing this forward. Where there is agreement with the community, yes we can do this, but where there is not agreement with the community, we should not be doing it. The hon. Member for Witney (Robert Courts) mentioned productive farmland. That is important because at some stage we want to become self-sufficient, but we can only become self-sufficient if we keep the good land for productive purposes. Does the right hon. Gentleman agree that solar farms must be on unproductive land, and not on the productive land that can help us to be self-sufficient and not have to import from the rest of the world?
Nigel Adams
My hon. Friend is absolutely spot on.
As I said, as these solar farms increase in size, so will the amount of productive farmland being taken up by them. The description “best and most versatile” farmland is often included in these proposals. I understand that the National Farmers Union says that solar farms should avoid agricultural land of classification 1, 2 and 3A, which is the “best and most versatile” land. The NFU advises that that land should be avoided where practical. It is also my understanding that the new national planning policy framework guidelines may explicitly state that land used for food production gains additional protection in the planning system. I think that is something that many Members here today would like to see, and so would our constituents. That would also offer absolute clarity for local planning authorities. This is a key question that my constituents and landowners want answers to. So my question to the Minister—there will be one or two more—is, when can we have clear guidance? I appreciate that this might not be a matter for her Department, but it would be most welcome if she could tell us when we are going to get that guidance and the changes to the NPPF.
Developers often state that land under and around solar panels can be used to graze animals. The last time I looked, grass for grazing required sunlight to grow, but the objective of a solar farm is obviously to capture as much sunlight as possible, so I would argue that the grass under solar panels is therefore of very low quality and that the proposition lacks credibility. Also, the requirement for security fencing and CCTV surveillance has increased, because solar farms have suffered thefts of panels and ancillary agreement. In 2021, 220 solar panels were stolen from a farm in Lincolnshire.
The need to locate solar farms as close as possible to a grid connection is leading to clusters of solar farm proposals. In July 2022, a 50 MW solar farm was approved close to Camblesforth, which happens to be the village I grew up and went to school in. It is very close to the Drax power station. The application received only two objections and was supported by the parish council. The same developer has since applied for another 50 MW solar farm to the south of the village, and another developer, Helios, is preparing an application for a 250 MW, 1,850 acre solar farm to the west of the village. Then, just to the east, Boom Power is consulting on a fourth solar farm of 400 MW, which would cover nearly 3,000 acres in the constituency of my right hon. Friend the Member for Haltemprice and Howden (Mr Davis).
Mr David Davis (Haltemprice and Howden) (Con)
I agree with everything that has been said so far, but it is not just about preserving productive land; it is also about preserving amenity. This 3,000-acre proposal will surround a number of villages in what is currently a beautiful piece of rural English countryside, and the proposal is essentially anti-democratic because it will not be decided by the local council—it will eventually go to the chief inspector. I have asked for the views of all the residents of those villages, and so far 50% have come back, with 78% of them wanting the proposal stopped. However, as it stands, there is no mechanism to do so.
Nigel Adams
I agree with my right hon. Friend and neighbour. We need Ministers from, I suspect, several Departments to provide absolute clarity to right hon. and hon. Members on both sides of the House, and to local planning authorities, given the cumulative impact of these large-scale solar farms. My right hon. Friend has a village that, if all these planning applications go ahead, is likely to be surrounded by solar farms, as could the village of Camblesforth. By the way, Camblesforth has approved a solar farm close by, but the cumulative impact of huge solar farms causes understandable concern for residents.
All four solar farms include containers full of batteries on farmland. The land to be used for the proposed Helios farm is almost all “best and most versatile”—category 2 and 3a—land that currently grows cereals and root crops. About 60% of the land in the Boom Power proposal is best and most versatile, as is 58% of the land in the Wade House Lane proposal. In contrast, the three applications submitted in 2015 were all on category 3b land, and therefore not within this classification, hence they did not receive the number of objections that these large-scale proposals have received. With these four solar farms, we are talking about a total of 5,500 acres, or nearly 9 square miles, with a large percentage of it being best and most versatile agricultural land.
John Howell (Henley) (Con)
The concern of my constituents is precisely that the solar farm described by my hon. Friend the Member for Witney (Robert Courts) is just the tip of the iceberg, and that Oxford colleges will look to have a huge network of solar farms that will blight the Oxfordshire countryside for years to come.
Nigel Adams
My hon. Friend makes a good point, as have most colleagues this evening. It would be interesting to know how many people who work at those colleges, which I guess are the developers, would be prepared to live in the middle of the site.
I also note that there is a changing public response to solar farm proposals. There has definitely been an abrupt change in public opinion from support to opposition. There were only two objections to the first solar farm near Camblesforth, but the residents group I met a few weeks ago that opposes the latest proposal has almost 500 members. The most common objection to the project concerns the loss of productive farmland. They say the land for the Helios proposal could grow more than 4,000 tonnes of wheat a year, or 10,000 tonnes of root crops such as carrots or parsnips. They point to brownfield sites, of which there are several in the Selby district, or the roofs of buildings. Crikey, we have a number of ex-coalmine sites in the Selby district, and some large farm buildings have already been fitted with solar panels, which has the added advantage of providing power for energy-intensive operations such as grain drying.
I appreciate that we have only half an hour and the Minister needs to respond, but residents have lots of other considerations when they raise objections to large-scale solar, including the loss of residential amenities, especially where homes are going to be surrounded by solar farms. There are concerns about safety in the light of fires and explosions at large battery storage units.
There is also the fact that applications receive temporary approval. It was initially 25 years, but I understand it is now 40 years. I remember when the Selby coalfield was given approval. That land was supposed to be returned back to farmland when mining stopped but, guess what, that has not happened.
People have these concerns I am outlining. They are concerned about the noise from the switchgear; the visual impact of the fences and the cameras; and the low credibility of some of the biodiversity net gain proposals. I could go on, but I will not, because I know that the Minister is itching to get to her feet to tell us when we are going to have answers to some of the questions colleagues have raised.
Solar power has reached the point where it makes a significant contribution to our power generation, and it can continue to do so, but we have to make sure it is done sensitively. This is not just about using words; we need clear guidance. I am encouraged by some of the noises made about what could be in the revised wording of the national planning policy framework, but the proposals for solar that are coming forward now are much larger than we have previously seen. We are seeing an increasing level of opposition to them; we do not normally get this many colleagues in the House for an Adjournment debate. If that opposition from communities and Members of Parliament continues, this will impede our progress in getting towards net zero. The points I have raised need to be addressed by the Minister, and I appreciate that input may also be required from Ministers in other Departments.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)
I thank my right hon. Friend the Member for Selby and Ainsty (Nigel Adams) for securing this important debate on large solar farms. Let me say in advance that if I am unable to answer any of his questions, I will get back to him at a later stage. I also wish to acknowledge all the other contributions from right hon. and hon. Members on this important subject.
Decarbonising and securing the UK’s energy supply is one of the biggest challenges facing us today. Two years ago, the Government adopted their sixth carbon budget: the world’s most ambitious climate change goal of reducing emissions by 77% by 2035 compared with 1990 levels. Of course, 2035 is not that far away—the clock is ticking—which is why in our net zero strategy the Government committed to securing and fully decarbonising the UK’s electricity supply. That will require a sustained increase in deploying low-carbon technologies such as solar, alongside wind, new nuclear, battery storage, and carbon capture utilisation and storage.
The dramatic rise in global energy prices following the covid-19 pandemic and Russia’s invasion of Ukraine has only served to emphasise the urgency here and demonstrate how crucial it is that we build a strong, home-grown renewable energy sector to further reduce our reliance on fossil fuels and limit consumer bills. In the British energy security strategy, the Government committed to enabling a fivefold increase in solar deployment of up to 70 GW in capacity by 2035, which will require a step change in deployment. Large-scale solar farms and smaller-scale commercial and domestic rooftop installations are all essential to meeting that commitment.
Solar is a safe, mature, resilient and versatile technology that can be quickly deployed in a range of locations. Its carbon footprint is much lower than that of coal or gas. Solar is key to the Government’s strategy to decarbonise the UK’s energy supply at low cost. Large-scale solar is one of the UK’s cheapest electricity generating technologies. The Government recognise that deploying large solar projects, as with any new infrastructure, will have local impacts. Although Government surveys indicate that solar is one of the most popular renewable energy sources, we fully appreciate that people living in the vicinity of proposed developments may be concerned about the effects on their local amenity. That point was eloquently explained by my right hon. Friend and it is why solar developments of all sizes are subject to robust planning controls to protect local communities and the environment.
My right hon. Friend will understand that given the Department’s statutory responsibility for determining individual planning applications for energy projects, Ministers are unable to comment on the specifics of individual applications. I can set out, however, how the planning controls work for solar in general terms.
Planning applications for projects up to 50 MW capacity in England are determined by local planning authorities. Most solar projects in England fall into that category. Local authorities will consider a range of factors when assessing applications, including environmental impacts. Projects up to 350 MW in Wales are devolved and decisions are made either by local authorities or the Welsh Government. Planning in Scotland and Northern Ireland is fully devolved.
For projects over 50 MW in England and over 350 MW in Wales, planning decisions are made by the Secretary of State for Energy Security and Net Zero through the NSIP—nationally significant infrastructure project—regime, which allows for rigorous scrutiny of such projects.
The planning system sets out how decision makers should consider the impacts on local communities and amenities, particularly where a number of solar projects are deployed in close proximity. If designed carefully, the visual impact of a well-planned and well-screened solar project can be properly addressed within the landscape. Under local and NSIP planning systems, developers must complete considerable community engagement as part of the application process. Members of the public can submit their views to the planning authorities and significant concerns will be taken into account as part of the local decision-making process.
Mr David Davis
My hon. Friend used the phrase “if designed carefully”. It is not possible to design carefully a 3,000-acre site that surrounds four or five villages. By definition, that will cause a massive assault on the amenity of individuals living in that area.
Amanda Solloway
I thank my right hon. Friend for his intervention; I have taken note of it and will report it back to the relevant Minister.
For NSIP projects, communities can participate in the formal examination process run by the Planning Inspectorate. That gives communities the opportunity to make their views known on and influence projects before decisions are taken.
All large solar developers must complete an environmental statement for any application—
Matt Hancock
I am grateful. Does that mean that if a solar farm project is not well designed, it will not be passed? The Sunnica proposal in my West Suffolk constituency is very badly designed. It looks completely nuts from first principles because it is all over the place and around these villages. It damages the amenity of Newmarket and its globally significant racing industry. Nobody could argue that it is well designed, so will she confirm that that should be at the forefront of the Minister’s mind when the statutory decision is taken?
Amanda Solloway
I thank my right hon. Friend for the question. He will understand that I do not know the “nuts” project that he is talking about, but again, I will pass that on to the relevant Minister.
All large solar developments must complete an environmental statement, as I was saying. Decision makers will consider a range of factors, such as whether the project proposal allows for continued agricultural use where relevant or encourages biodiversity improvements around the proposed site. Solar farms are temporary in nature and most solar panel components and equipment can be recycled.
Robert Courts
I will be quick. The Minister says solar farms are designed to be temporary in nature, but in the case of the Botley West solar farm, the proposal is for about 40 years. That is not temporary but long term, and is it not the case that those areas will never be the same again?
Amanda Solloway
Again, with my hon. Friend’s permission, I will take that point back to the relevant Minister and get back to him with an answer. I am aware that I only have a few minutes left, so with your permission, Mr Deputy Speaker, I will continue.
Solar projects and agricultural practice can co-exist. Many solar projects are designed to enable continued livestock grazing. There is also a science of agrivoltaics developing, in which solar is integrated with arable farming in innovative ways. Solar energy can be an important way for farmers to increase their revenue from land less suited to higher-value crop production. There is also evidence that solar can improve biodiversity where it is installed on agricultural land.
Protecting our environment, backing British farmers and delivering long-term energy security with more low-carbon energy are all at the heart of His Majesty’s Government’s manifesto. It is possible to maintain and increase our food production in a more sustainable way in some areas, and to see land use change occur in others.
Striking the right balance between different land uses is a challenging task and will involve trade-offs. There are many uses of our land that we need to anticipate for the future, such as growing food, hosting low-carbon energy projects, planting trees, building homes, natural habitats, land for infrastructure, and leisure and recreation. In the Government’s food strategy we committed to publish a land use framework for England in 2023, which will help to inform how we manage those trade-offs. In terms of the safety of these systems, when installed, maintained and decommissioned correctly, electricity storage poses minimal risks.
To conclude, solar is a UK success story. Over 99% of the UK’s solar capacity has been deployed since 2010. The technology’s flexibility, low costs and rapid deployment can help us to reach our challenging net zero targets, strengthen our energy security, and bring new green jobs and economic growth. It is clear that that growth must be sustained and enabled by a robust planning system that balances those wider benefits against the local impacts.
Question put and agreed to.
Draft Economic Crime (Anti-Money Laundering) Levy (Amendment) Regulations 2023
(1 year, 9 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Economic Secretary to the Treasury (Andrew Griffith)
I beg to move,
That the Committee has considered the draft Economic Crime (Anti-money Laundering) Levy (Amendment) Regulations 2023.
It is a pleasure to serve under your chairmanship, Ms Elliott.
The risk posed by economic crime is severe, and threatens the UK’s security, prosperity and resilience. Our openness and our status as a global financial centre is vital to our nation’s success. However, that great strength also exposes us to a range of economic crimes and to those who wish to harm UK businesses and individuals. In that context, there can be few objectives more critical than delivering a comprehensive response to economic crime.
That is especially important as we bear down on the Russian war machine in the wake of Putin’s illegal invasion of our ally, Ukraine. That is why the Government expedited the Economic Crime (Transparency and Enforcement) Act 2022, which introduced key reforms to crack down on dirty money and hostile actors. We have gone further still by introducing the Economic Crime (Transparency and Enforcement) Act 2022, which built on the earlier Act to bear down further on kleptocrats, criminals and terrorists.
The instrument we are considering today is the final step in implementing the economic crime (anti-money laundering) levy, which is a core component of the Government’s comprehensive and continuing response to economic crime. Announced at Budget 2020, the new levy aims to raise approximately £100 million a year to help ensure a sustainable funding model for action to tackle money laundering. The levy supplements approximately £200 million of additional Government investment to tackle economic crime over the 2021 spending review period. The funding will help to ensure a step change in our response by supporting the delivery of critical economic crime reforms, including commitments set out in the economic crime plan.
It is right that those sectors that give rise to money-laundering risk help contribute to countering that risk. That is why the levy will be paid by firms subject to the money laundering regulations only. I take this opportunity to thank the sector for their engagement throughout the levy-design process. The Government have worked closely with the industry and the levy collectors, including through policy and technical consultations. In doing so, we have ensured that the levy meets its objectives while aligning as far as possible with the core levy-design principles set out at consultation, including proportionality, predictability, simplicity and cost-effectiveness. The Government have delivered on those principles by ensuring proportionate levy fees, with no business expected to contribute more than a tenth of a per cent. of their UK revenue; by implementing a carve-out for businesses whose annual revenue falls below £10.2 million so that smaller businesses, who make up the vast majority of all those otherwise in scope, are exempt; and by aligning levy policy across the three collectors as far as possible, while adhering to existing collector processes in places for the sake of simplicity.
This instrument makes provisions for assessments and calculations of levy due, levy enforcement through financial penalties, information provision and record preservation obligations, overpayments, reviews and appeals. It has been designed with close regard to the core levy-design principles, including proportionality. It is my hope that stakeholders will welcome the clarity this instrument provides on remaining areas of levy policy and implementation. I assure the Committee that each levy collector will shortly publish information that outlines how in-scope entities should engage with these processes and pay the levy.
Peter Grant (Glenrothes) (SNP)
Could the Minister explain why all these amendments are being made now? Why were they not made when the original regulations were made last year?
Andrew Griffith
Last year’s Act was the primary legislation that enabled the levy. Subsequently, there has been extensive consultation with stakeholders about the way in which we should proceed with that levy. We are considering the detail of those procedures today.
In the consultation, stakeholders emphasised the importance of clarity and transparency throughout the development and implementation of the levy. The Government share that view, and that is one of the reasons why we are dealing with this in stages. We are committed to delivering annual reports on the operation of the levy, including a breakdown of how the levy is being spent, and a comprehensive review by the end of 2027.
The new levy represents an integral part of the Government’s comprehensive programme of work to ensure that economic crime finds no home in the United Kingdom, preserving this country’s security, resilience and prosperity. I commend the regulations to the Committee.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
It is a pleasure to serve under your chairmanship, Ms Elliott. The Labour party is completely committed to tackling economic crime. We welcomed the economic crime levy when it was first announced and we will support the regulations today. I want to raise a few questions and concerns with the Minister; they relate to the scope, effectiveness and transparency of the levy.
First, while the increase in funding provided by the levy is welcome, is the Minister confident that it will generate the necessary step change in economic crime enforcement? For example, as Spotlight on Corruption has highlighted, although it is called the economic crime levy, in reality it only covers money laundering. That means that the funds will not be invested in fighting other forms of economic crime such as corruption, fraud and sanctions evasion.
As the Minister may have seen, Transparency International has proposed that the Treasury re-invest the money recovered in the fight against economic crime, such as money seized by the Serious Fraud Office through its deferred prosecution agreement fines, back into enforcement to tackle fraud, corruption and money laundering. What assessment has the Minister made of that recommendation?
On accountability and transparency, the Government have failed to publish any information on what proportion of the funds will be assigned to law enforcement and how the effectiveness of the levy will be measured against enforcement outcomes. I hope the Minister can shed some light on that today. I would also be grateful if he provided clarity on how the Treasury will ensure full accountability of how the levy is used, and how decisions on resource allocation will be made.
Peter Grant
The SNP certainly supports these measures; our concern is that they could have been in place a lot sooner. In some cases, they possibly do not go far enough.
According to the note from the Select Committee on Statutory instruments, of which I am now a member, two of the amendments are required because of previous defective drafting. I am becoming increasingly concerned about how often we see SIs being revised and revised—in at least one case, revised for a third time—because the attempts to draft them accurately had not been successful. That is not a criticism of those who do the drafting; it is simply the environment that the Government have created for them, with potentially 4,000-plus SIs having to be revised before the end of this year. It is certainly not possible to get them all right, all the time. Sometimes, the consequences of getting the drafting wrong can be quite serious.
These regulations could have been brought forward, and would have been welcomed, a long time ago. In effect, on money laundering, as with a lot of other problems with financial crime, the Government are playing catch up. They have been asleep at the wheel for far too long; for far too long, Russian dirty money could flood into the United Kingdom. It was not exactly welcomed by those in positions of power, but they certainly did not do very much to try to prevent it. The Government are now choosing to do something about it. They could have chosen to do something about it in 2014, and perhaps Putin might not have felt quite as invincible as he clearly does now.
London is recognised by almost everyone as a global capital for fraud and other forms of financial crime, as the hon. Member for Hampstead and Kilburn referred to. There is a lot in these regulations about a levy to combat money laundering. There are other forms of financial crime, particularly fraud against individual members of the public, which is now a billion-pound industry, and where we do not have the same arrangements to anything like the same extent. I would appreciate some kind of indication of when there will be a much more general compensation scheme for the innocent victims of investment fraud, pensions fraud and other forms of fraud, which are very much growing industries in Britain.
My final concern is not so much about the involvement of the Gambling Commission but about how effective it will be. Anybody who has looked at the problem of severe addictive gambling in the United Kingdom, which is becoming a health crisis almost as severe as covid, knows that that the Gambling Commission has proven to be absolutely toothless—whether because of a lack of interest, funding, resources or legislative powers—in its current main job, which is to regulate the industry and make sure it is not dragging people into problem gambling against their will. Will the Minister indicate what additional resources it will be given to ensure it is resourced for the additional responsibilities it will have through these regulations? Its resources, which are already inadequate for dealing with problem gambling, must not be spread even thinner because its members of staff have to administer additional levies.
The amendments to the regulations are about three times as long as the regulations themselves—always a sign that the regulations may have been either rushed through or not adequately thought about when they were first presented. I hope that neither I nor anybody else will have to be on a Delegated Legislation Committee in six to 12 months to agree further amendments to the regulations because we still have not got the drafting right. That is not a criticism of the people doing the drafting. They do a good job, but they are only human, and they have only 24 hours in a day and seven days in a week. They have been given far too much work and far too little time to complete it.
Andrew Griffith
I do not want to detain the Committee any longer than necessary, but I ought to respond to one or two of the points raised by the hon. Member for Glenrothes. I am slightly at a loss: are we moving too fast or too slowly? One person’s revised SI is another person’s reflection of consultation that results from listening to the industry and a desire to get things right. I accept that this was not his intent, but there was some implied criticism of the hard-working officials who are doing their best to reconcile the needs of transparency with this House and the desires of the sector.
Peter Grant
For clarification, the people drafting the legislation are having to do it at pace because they have been lumbered with 4,500 bits of legislation that they would not have had to revise were it not for the Government’s political dogma.
Andrew Griffith
We will let that matter rest. On one level, I share the hon. Gentleman’s desire for a smaller state and less legislation, but defending our country from money launderers is perhaps not the best place to start that deregulatory zeal. We can come back to that.
From his work on the Financial Services and Markets Bill, the hon. Gentleman is aware that the Government are introducing measures to protect customers and the victims of push payment fraud, which is very concerning. The quicker that Bill completes its journey in the upper House, the quicker we can get it on the statute book. The £1 billion that he referred to concerns all of us on both sides of the House.
I am not aware of the Gambling Commission having expressed concern. It has been consulted throughout, and collecting levies is within its core purpose. I will of course be open to advisement on that. That is one of the reasons why a review is baked into the regulations. It is a piece of good, proportionate best practice that in 2027 there will be a formal review. I undertake today that the outcome of that review will be brought to the attention of the House.
It is always a pleasure to respond to the hon. Member for Hampstead and Kilburn. She raised the important work of Transparency International. Although this is the final piece of this particular set of economic crime legislation, it is of course not the whole of our anti-fraud strategy. My hon. Friend the Security Minister has told the House that that will come to this place very shortly. I ask all parties to look at that and consider the strategy in the round, together with the Government’s anti-fraud strategy.
The hon. Lady asked me to publish how the levy will be used. Of course, the point of the levy is to build a fund to enhance the overall level of resources available to crime fighters. That could be for a range of purposes, including more intelligence, better reporting infrastructure and more personnel devoted to this area. It will only be in due course that we are able to see where that money is spent. I undertake to the Committee that we will publish an annual report on how the levy is spent. The hon. Lady is right that it should attract proper scrutiny. As she understands, it is only one part of the resources available to our police, anti-fraud initiatives and crime fighters.
Question put and agreed to.
Draft Service Police (Complaints etc.) Regulations 2023
(1 year, 9 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Defence People, Veterans and Service Families (Dr Andrew Murrison)
I beg to move,
That the Committee has considered the draft Service Police (Complaints etc.) Regulations 2023.
What a pleasure it is to serve under your chairmanship, Mr Twigg. We last met to discuss this sort of matter in November, in connection with the defence serious crime unit. I hope it will be evident to those who were involved in that Committee that there is a common theme running through this package of measures, which has to do with trying, as far as we can in the service context, to replicate in the military practice relating to justice in the civilian world. I hope also that hon. Members see in this measure the effects of the Police Reform Act 2002 and the Armed Forces Act 2006, and more pertinently, given time elapsed, the consequences of the various reviews of service policing and service justice, in particular those attributed to Lyons, Murphy and Henriques.
The draft regulations bring the process pretty much full circle. Hon. Members will be aware of the appointment of Margaret Obi, whom I met last week, as the Service Police Complaints Commissioner. Her appointment will allow servicemen, servicewomen and members of the public to have the same facility in relation to service justice as they do in that dispensed by Home Office police. The statutory instrument contains the regulations that are required to establish the service police complaints system, which will be overseen by the newly appointed Service Police Complaints Commissioner. It also contains the regulations required to establish the super-complaints regime for the service police.
The establishment of the independent commissioner with these regulations implements recommendation 44 of the service justice system review—the Lyons review—relating to complaints. Lyons found that a degree of independent oversight was missing in comparison with civilian police forces, which have statutory complaints systems, and recommended that a new niche defence body be created to deliver this. The review considered the options for establishing independent oversight, which helped to inform the approach taken by the Ministry of Defence.
The review suggested a small niche unit led by an appointed individual, possibly from a judicial background, operating to the same remit as the Independent Office for Police Conduct and its director general. As such, during 2022, the MoD ran a recruitment campaign for the Service Police Complaints Commissioner in accordance with the 2016 public appointments governance code. Ms Margaret Obi was appointed by His Majesty the King on the recommendation of the Secretary of State, and her appointment was publicly announced in February. Ms Obi brings a wealth of experience and enthusiasm to this role, and her appointment ensures that there will be a more robust, independent process for service police complaints.
In line with the Lyons review recommendation, the commissioner will have functions similar to those conferred on the director general of the IOPC. The main responsibilities of the commission will be: to secure the confidence of persons subject to service law and service discipline, as well as the wider public, in the service police complaints system; to secure, maintain and review arrangements in respect of the procedures that deal with complaints, conduct, and death or serious injury matters; and to make recommendations and provide advice on those arrangements—for example, training or procedures where the commissioner believes that these may improve policing practice. The commissioner will independently investigate the most serious and sensitive cases and act as the review body for certain cases specified in regulations. She will report annually to Parliament via the Secretary of State for Defence on the delivery of the commissioner’s functions.
Also in line with the review, the commissioner will be responsible for deciding how the more serious complaints and other matters should be investigated—whether they should be referred back to the service police for a local investigation, or whether there should be a directed or independent investigation. Independent investigations are carried out by the commissioner into the most serious complaints and other matters. The commissioner will be able to call on a pool of experienced investigators to lead those investigations. The investigators will be able to exercise service police powers, similar to the way investigators appointed by the director general of the IOPC exercise police powers. These investigations will be independent of the service police and of the Ministry of Defence.
The review recognised that probably very few independent investigations would be required, and our analysis confirms this. Based on service police data for the 2018 to 2022 period, we estimate an average of 62 formal complaints annually, with 18 cases referred to the commissioner under the mandatory criteria for referral, although not all referrals would lead to an independent investigation. By way of comparison, over 36,000 formal complaints were recorded in the year 2020-21 by civilian police forces across England and Wales.
The draft regulations are quite technical and complex, and run to over 80 pages. As they largely mirror the legislation already in place for the IOPC and civilian police, I do not intend to go through each one in turn. Instead, I shall set out the main differences between this system and the civilian police complaints system, which I have interrogated. Secondly, I will touch on the responsibilities of the commissioner in relation to determining the appropriate type of investigation to be conducted.
As indicated in the explanatory memorandum to the regulations, there are some minor differences between the systems, to reflect the service context. In relation to complaints, the commissioner will only be able to make a recommendation on whether administrative action procedures should be initiated against someone in the service police, whereas the director general, who has a formal role in the equivalent police disciplinary procedure, can also direct that these procedures should be brought.
The College of Policing has no functions in relation to the service police, so has no role in relation to the super-complaints procedure. We have yet to designate any super-complaints bodies, as we need to set up the statutory criteria for designation before any decision can be made. The criteria broadly mirror those set out in the Police Super-complaints (Criteria for the Making and Revocation of Designations) Regulations 2018, with only minor modifications. Under both regimes, the decision whether a body meets the designation criteria is for the Secretary of State to make; we therefore decided that it was unnecessary for the Secretary of State to make further regulations formally to designate bodies, unlike in the civilian system. To ensure the public know which bodies have been designated, we have included a new duty on the MOD to publish this information.
The new complaints regime will apply only to matters relating to the service police that occur on or after the date on which these regulations come into force; that is, the service police complaints system will not, initially at least, deal with historical matters. The regulations recognise that, unlike civilian police, members of the service police are also members of the armed forces and can be deployed in another capacity. The complaints system is not designed to deal with non-police matters; as such, it will not be possible to make a complaint about service police personnel when they are performing duties in another capacity, although the regime will apply when they are off-duty, as the IOPC regime does to civilian police.
Samantha Dixon (City of Chester) (Lab)
I note that paragraph 4.1 of the explanatory memorandum states that Gibraltar is excluded from the territorial extent of the instrument. Will the Minister explain why that is, given that a constituent of mine may go to Gibraltar and experience a problem with service police? The regulations would not cover such a case.
Dr Murrison
I think we covered this last time. I know that hon. Members are interested in the status of Gibraltar. The difficulty is that the draft SI is made under primary legislation, notably the Armed Forces Act 2006, which covers Gibraltar in a different way. Therefore, we cannot easily include Gibraltar in the scope of this statutory instrument. I am sorry if that is a slightly unsatisfactory response for the hon. Lady, but the 2006 Act passed under the last Government dealt with the matter in that way. Of course, service personnel still have the ability to go through the existing system. Such matters will be kept under review, not least in the quinquennial reviews. It could be that at some future date and with the benefit of a future Armed Forces Bill, we might be able to amend the matter. I hope that is satisfactory to her.
The different options for investigation by the Service Police Complaints Commissioner are pretty much identical to those in the civilian system. I will briefly run through those options. First, there is the possibility of a local investigation, where the service police force do the investigation themselves. Secondly, there can be a directed investigation, where a member of a service police force is appointed as the investigator, but the investigation is under the direction of the commissioner. Finally, there can be an independent investigation, where the commissioner carries out an investigation personally or designates an investigating officer to carry it out.
As well as complaints, the new system will cover conduct matters and death or serious injury matters. In layman’s terms, those are cases where no complaint has been made, but misconduct is suspected or a death or serious injury has occurred after contact with the service police. Again, we expect only a small number of conduct matters to be referred to the commissioner that would require investigation, and DSI matters are even more rare. Between 2018 and 2022, no DSI-type matters were recorded.
We expect relatively few independent investigations, but an effective independent service police complaints system is vital. The way in which complaints, conduct matters and DSI matters are dealt with has a huge impact on confidence in the service police. Where matters are dealt with badly, confidence in the service police and the wider service justice system can be damaged. Where matters are dealt with in a way that is efficient and effective, and is seen to be independent, trust can be restored and bring about improvements in policing.
Most important, the new system will help to ensure that when something goes wrong, the circumstances are thoroughly investigated, appropriate action is taken and lessons are not just identified, but learned. I am conscious that today of all days is a time to reflect on how we can increase the effectiveness and transparency of all police services, and I certainly include service police. I commend the draft regulations.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
I thank the Minister for his thorough introduction of this draft SI. The Opposition do not intend to divide the Committee, but I have a number of questions to pose to him.
All in Committee agree that our service personnel embody the very best of British. They exemplify the highest standards in our society, and we rightly expect our service police to uphold those same values, but when complaints are made against the service police, considerable flaws in the service police complaints process become apparent. As highlighted by the Lyons review, the current process lacks independence from the Ministry of Defence and its scope is too narrow.
Our armed forces personnel need to feel confident that, in return for carrying out their duty to keep our nation safe, they will in turn be looked after by the service police force that is there to protect them and to uphold high standards. Our service personnel also need to know that when service police officers fall short of that mark, a strong system is in place to investigate properly officers who are the subject of a complaint, and that they will be held to account if they have failed in their duties.
Broadly, therefore, we welcome the implementation of a new independent service police complaints process, and Labour will support today’s draft legislation, but clarification is needed and I have a number of questions. Will the new body be adequately resourced to carry out its functions? The Minister says that he is not expecting too many cases to cross its desk, but I would be grateful if he set out whether sufficient resourcing is allocated, or whether the resources will come from existing budgets. There are also wider concerns about whether the new complaints process is wide enough in scope, and whether it will inherit some of the issues afflicting the current civilian police complaints system.
Labour welcomes the appointment of Ms Margaret Obi as the Service Police Complaints Commissioner, but the Government must provide assurances that the new independent niche body she oversees will be sufficiently resourced. We know that it will be funded by the MOD, but since there is to be a £2 billion real-terms cut in day-to-day spending for 2024-25, and since the extra money secured in last week’s Budget applies only to the nuclear programme and replenishing stockpiles, can the Minister say what the new body’s annual budget will be?
Will the funding for the new complaints system come out of the MOD’s existing budget, and existing service police costs, or will additional resources be applied? Will staff in the new complaints system be permanently working in the new unit, or will they be on secondment, as we discussed in a previous statutory instrument on policing in our armed forces? Will staff need additional resources to carry out the independent body’s functions? I am particularly looking at the training requirement to learn the necessary lessons, especially if we are to move service police complaints to the same level as complaints relating to civilian police forces. When is the new service police complaints process due to come into force? The SI mentions a date in June; will the Minister confirm that?
The Lyons review suggested that, even with a new independent body,
“investigations of serious crime and wrongdoing may not even reach double figures.”
It also stated that the caseload will depend on the scope of the system, who can access it, and what time limits are placed on it. New independent oversight of the service police is welcome but there are serious questions about service police misconduct when dealing with complaints in the armed forces. I hope those can be addressed through this new system. Also, from discussing a similar issue in a statutory instrument Committee a few months ago, we know of concerns that if cases remain very low in number, there will not be a sufficient volume going through the system for officers dealing with those cases to be adequately trained and familiar with the procedures. As the Minister is expecting only a very small number of cases, especially death and serious injury matters, will he set out how those working in that space will deal with a sufficient volume of cases to be trained to and to perform at a high standard? There were questions about whether that was appropriate the last time we met to discuss a related measure.
We also know that, in recent years, an epidemic of bullying and sexual harassment in our armed forces has been allowed to fester, with service police investigations into sexual offences increasing by a third since 2019. Although there are wider questions about the effectiveness of the military court martial system—the Minister will be aware that Labour has repeatedly called for the most serious crimes to be tried in civilian courts to improve access to justice for service personnel—it is crucial that service police officers and the service police force as a whole take more responsibility for creating a culture that roots out bad behaviour, and that they are held to account if they do not do so.
Given the statement that the Home Secretary has just made in the Commons regarding the Casey review, what steps is the Minister taking, as the Minister with oversight of policing in our armed forces, to see what lessons can be applied? Although that report looks at the Metropolitan police, I do not believe the Metropolitan police are alone in having these issues. I would be grateful if the Minister set out his plan to review the Casey report and apply any learnings to the MOD.
In the guidance on today’s statutory instrument, the Minister says that the draft regulations provide for a complaints system similar to the system applied to the civilian police in England and Wales. I draw his attention to concerns about failings in the civilian police complaints system, which we cannot afford to transfer to the service police system. For example, Labour is clear that officers of any kind who are accused of rape and domestic abuse should be suspended while their case is investigated. I realise that that deals with the appeal against the investigating officers, but it is important to put that on the record.
Regulation 19 deals with withdrawn complaints. With the aim of ensuring high levels of probity, if a complaint is made against a service police officer and subsequently withdrawn, can that be one of the items that is reported to Parliament? There is concern that an organisation with a high level of hierarchy and orders to be followed may place barriers in the way of people seeking justice who have been failed by the chain of command or the justice system. If there is a point where complaints are made and subsequently withdrawn, may we have an understanding of how many cases are involved? I do not expect to see signs of a conspiracy, but we need to make sure that there are no barriers in the system, and the culture that goes along with it, to someone coming forward with a complaint about their experiences.
Last year, the Home Affairs Committee looked into police complaints procedures and concluded that there are still serious concerns about delays to investigations due to the complexity of language and processes. The Minister said that he has mapped the civilian language over to this SI. How will the application of the same processes and language apply in an armed forces context compared with the civilian context? We do not want to arrive at a place where we are unable to effectively hold service police to account because of unwarranted bureaucratic language and processes, which have been cited as holding back justice in civilian police forces.
Will the Minister provide some much-needed detail about the differences between the civilian complaints regime and the new service police complaints system? He briefly touched on that point in his remarks. Paragraph 7.7 of the explanatory memorandum states that the key difference will be
“the lack of accelerated procedures for members of the Armed Forces”
in internal disciplinary procedures, to reflect the service context. We all understand that service life is different from civilian life, but will the Minister set out what is meant by a lack of accelerated procedures for members of the armed forces? Surely there is merit in having complaints dealt with swiftly. If the issue is personnel who are involved being deployed, I would be grateful if the Minister set that out.
I have had quite a lot of dealings with the Independent Office for Police Conduct in relation to the Keyham shooting in the patch I represent, and I have been impressed by the IOPC’s working. If the Minister’s intends to carry over a similar type of work to service policing, that is a good move. It is a really important sign that we need to move military justice to the same thresholds and standards that we expect in civilian justice.
On that basis, Labour will not oppose the regulations, but I want to pick up on the Minister’s comments about the super-complaints body. When that is assessed, will there be a consultation, or will the process just be applied and a decision made by Ministers? Does it need to be approved through a statutory instrument process? Could he set that out clearly?
The Minister said that historical matters will not initially be dealt with. I understand the importance of drawing a clear line between what cases are dealt with and what are not, but I am not certain about the “not initially” part of what he said. Will he clarify whether that will be a task for the new commissioner in due course, or whether that is a decision for Ministers?
My hon. Friend the Member for City of Chester raised a very fair point about the application of this legislation to Gibraltar. As the Minister knows, I often raise questions about territorial extent. Unlike many SIs that we have dealt with recently, it is good to see that overseas territories and some Crown dependencies are included in these draft regulations. However, if we continue to miss out Gibraltar, we are creating a situation where UK service personnel in Gibraltar—not just the Gibraltar regiment, but UK service personnel based in Gibraltar—have a sub-optimal level of justice and application of modern legislation. Is there a piece of work under way in the MOD to collate all the pieces of legislation where Gibraltar has been excluded so that we can make sure to use the opportunity of the next Armed Forces Bill, whenever that may come, to correct a growing level of disservice to armed forces personnel who are based in Gibraltar?
Dr Murrison
I thank the hon. Gentleman for his typically incisive and comprehensive list of questions, which I will do my best to answer.
On resourcing, I absolutely understand where the hon. Gentleman is coming from. In giving him an indication of the scale of dedicated resources, I come back to my point about our anticipated level of demand; set against the context of Home Office policing, it is really very small indeed. Margaret Obi will be employed for 2.5 days a week. She is a deputy High Court judge, so this is a part-time job for her, although this is pretty much maximum part time, and clearly, that will be reviewed. I will be interested to see what her annual report to the Secretary of State and Parliament says about the amount of work she feels she has, and whether it increases over time as service personnel develop confidence in the system, and potentially increase the demands on her and her staff. She will have three members of staff—the costs will be borne internally by the Ministry of Defence—and £250,000 has been identified annually for independent investigators.
It is likely that the investigators will mainly be ex-policemen, and their qualifications will be determined by the Service Police Complaints Commissioner. The hon. Gentleman is probably aware of an organisation that acts as an agency for those kinds of people—indeed, I think we have discussed that in the past in Committee—so there is a way of recruiting people with sufficient experience to do this work. Again, I expect the commissioner to be able to feed back on that when she delivers her report, and I certainly expect us to review it at the quinquennial review, which we will conduct as a matter of course.
Moving on to the DSCU, which obviously has the expertise, it will continue to do its work under the direction of the Service Police Complaints Commissioner. However, it is possible, given that she will be hiring independent investigators, that some of the demands on the unit will be moderated. These are quite complicated matters and they suck up quite a lot of officer time, so I expect there to be a gain, as it were, for service justice as a result of what we are discussing today.
I can confirm that the date given in regulation 1(1) is correct. Although the vesting date is in June, I have already met Margaret Obi to discuss her appointment, and she pretty much has things up and running.
On training, the hon. Gentleman’s point is well made. The independent investigators will be trained and experienced police officers, but I take the point about the importance of training. I expect the commissioner to undertake a training role herself in respect of police conduct, and I would expect that to become a significant part of her role over time.
Turning to the super-complaints mechanism, I wrote to my own chief constable this morning following Louise Casey’s review because, as the hon. Gentleman points out, the issues are not confined to the Metropolitan police. This is a good point in time for all constabularies to examine themselves, their procedures and their attitudes, and to take restorative action where appropriate. That includes service police. The setting up of a super-complaints procedure is an important part of this SI. In other words, were an issue such as stop and search—the most obvious example—to arise in a service context, I would expect the Service Police Complaints Commissioner to pick that up and run with it, as has been the case in the civilian context.
The hon. Gentleman made a good point about the withdrawal of complaints. I hope that Margaret Obi will study our proceedings today, as that would be a reasonable thing for her to cover in her annual report. I should emphasise that it is her report, not mine, but if it were not included when the report is presented to Parliament, it would be legitimate to ask questions. On oversight, I hope that parliamentarians will take a close interest, including, of course, those on the House of Commons Defence Committee. It would be perfectly open to that Committee to interrogate the annual report, and I expect the MOD will do its own internal quinquennial review when it comes.
The hon. Gentleman is right about delays. Again, I prayed this in aid the last time we met in a similar forum to justify service justice, because in general the level of delays in the service justice system is enviable compared with that in civilian justice. Justice delayed is justice denied.
I take the point about bureaucratic language and the need to explain things to laypeople in simple terms. I think that point is very well made indeed.
On the accelerated procedures, I have interrogated my officials because I did not quite understand the explanatory notes. They are, in a rather techie way, part of the police disciplinary procedures that are laid out in statute. That is not what we are dealing with here. We are ultimately dealing with stuff that is laid out in King’s regulations, and in a rather techie way—apropos my previous remark—the two are quite separate. We cannot, therefore, translate directly one from the other in this particular case. I suppose it comes back to the point about Gibraltar, where we are of course tied by previous legislation. In the absence of changes to primary legislation, in this case through an Armed Force Bill, it would be extremely difficult to replicate the situation precisely. I think the intent is the same, however, and I have been insistent that what we do by means of this SI replicates, for practical purposes, what we have in civilian life. I am absolutely attached to that as an important principle.
On historical complaints, I am pleased that the hon. Gentleman pulled out the phrase “not initially” because I was also interested in this. The truth of the matter is that we must be realistic about the burden on Margaret Obi. We are going to let this run for a bit; we will review it internally after 18 months, we will have the quinquennial review, and we will have her annual report. As and when it becomes possible to look at historical complaints, the door is open to that, but I am not prepared to commit to it right now, because I want to ensure that complaints are handled contemporaneously. That must be the priority. Others will of course be dealt with through the existing service complaints procedure, but we recognise that this is the gold standard, not that, since this replicates what happens in civilian life. I hope that that is satisfactory for the hon. Gentleman.
I think I have pretty much got through all the hon. Gentleman’s questions. I will, as ever, sieve through what he put to me and write to him if I have missed something.
Question put and agreed to.
Resolved,
That the Cttee has considered the draft Service Police (Complaints etc.) Regulations 2023.
Ministerial Corrections
(1 year, 9 months ago)
Ministerial CorrectionsRead Full debate Read Hansard Text
Business and Trade
(1 year, 9 months ago)
Ministerial CorrectionsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Kevin Hollinrake
The Government have continued to take action to fulfil their manifesto commitment to enhance the rights of workers and support people to stay in work. We are backing six private Members’ Bills in this Session to deliver on our commitments. Once passed, those measures will ensure that all tips, gratuities and service charges are allocated to workers; create a statutory entitlement to neonatal care leave for workers with caring responsibilities; protect workers from redundancy during or after maternity; and grant workers the right to request flexible working from day one.
[Official Report, Second Delegated Legislation Committee, 6 March 2023, Vol. 729, c. 4.]
Letter of correction from the Under-Secretary of State for Business and Trade, the hon. Member for Thirsk and Malton (Kevin Hollinrake).
An error has been identified in my speech.
The correct information should have been:
Kevin Hollinrake
The Government have continued to take action to fulfil their manifesto commitment to enhance the rights of workers and support people to stay in work. We are backing six private Members’ Bills in this Session to deliver on our commitments. Once passed, those measures will ensure that all tips, gratuities and service charges are allocated to workers; create a statutory entitlement to leave and pay for employees with responsibility for children receiving neonatal care; protect workers from redundancy during or after maternity, adoption and shared parental leave; and grant workers the right to request flexible working from day one.
The following is an extract from the winding-up speech by the Under-Secretary of State for Business and Trade, the hon. Member for Thirsk and Malton (Kevin Hollinrake), in the debate on the draft National Minimum Wage (Amendment) Regulations 2023 in the Second Delegated Legislation Committee on Monday 6 March 2023.
Kevin Hollinrake
Only 3% of the population is on a zero-hours contract. Sixty-four per cent. of those people do not want more hours, so the contracts kind of work for both sides, but we recognise that there is an issue with exploitation in some situations and we are trying to create the conditions for a conversation between employers and employees while not putting too great a burden on employers. That is why we are legislating for a right to request predictable hours.
[Official Report, Second Delegated Legislation Committee, 6 March 2023, Vol. 729, c. 13.]
Letter of correction from the Under-Secretary of State for Business and Trade, the hon. Member for Thirsk and Malton (Kevin Hollinrake).
An error has been identified in my speech.
The correct information should have been:
Kevin Hollinrake
Only 3% of the population is on a zero-hours contract. Sixty-four per cent. of those people do not want more hours, so the contracts kind of work for both sides, but we recognise that there is an issue with exploitation in some situations and we are trying to create the conditions for a conversation between employers and employees while not putting too great a burden on employers. That is why we are legislating for a right to request a predictable working pattern.
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Pitch Fees for Park Homes
Lifelong Learning (Higher Education Fee Limits) Bill (First sitting)
Tuesday 21st March 2023
(1 year, 9 months ago)
Public Bill CommitteesRead Full debate Lifelong Learning (Higher Education Fee Limits) Act 2023 View all Lifelong Learning (Higher Education Fee Limits) Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 21 March 2023 - (21 Mar 2023)
The Chair
We are now sitting in public, and the proceedings are being broadcast. I have a few preliminary announcements. As per usual, Hansard colleagues would be grateful if Members emailed their speaking notes to hansardnotes@parliament.uk. Please switch phones and electronic devices to silent. Tea and coffee are not allowed during sittings. Date Time Witness Tuesday 21 March Until no later than 9.50 am Universities UK Tuesday 21 March Until no later than 10.25 am Liz Bromley, Newcastle and Stafford Colleges Group; Alun Francis, Oldham College; Ellen Thinnesen, Sunderland College Tuesday 21 March Until no later than 10.55 am Julie Charge, University of Salford; Professor Sir Edward Peck, Nottingham Trent University Tuesday 21 March Until no later than 11.25 am Professor Sir David Bell KCB DL, University of Sunderland; Rachel Sandby-Thomas, University of Warwick Tuesday 21 March Until no later than 2.30 pm Confederation of British Industry; Association of Employment and Learning Providers Tuesday 21 March Until no later than 2.45 pm Sir Philip Augar Tuesday 21 March Until no later than 3.00 pm Association of Colleges Tuesday 21 March Until no later than 3.00 pm Dr Elizabeth Norton, Coventry University; Professor Sue Rigby, Bath Spa University
We will first consider the programme motion on the amendment paper. We will then consider a motion to enable the reporting of written evidence for publication, and a motion to allow us to deliberate in private about our questions before the oral evidence session. In view of the time available, I hope that we can deal with those matters formally without debate. The programme motion, standing in the Minister’s name, was discussed yesterday by the Programming Sub-Committee for the Bill.
Ordered,
That—
1. the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 21 March) meet
(a) at 2.00 pm on Tuesday 21 March;
(b) at 11.30 am and 2.00 pm on Thursday 23 March;
(c) at 9.25 am and 2.00 pm on Tuesday 28 March;
2. the Committee shall hear oral evidence in accordance with the following Table:
3. the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Tuesday 28 March.—(Robert Halfon.)
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Robert Halfon.)
Resolved,
That, at this and any subsequent meeting at which oral evidence is to be heard, the Committee shall sit in private until the witnesses are admitted.—(Robert Halfon.)
The Chair
Before we hear from the witness, do Members wish to make any declarations of interest in connection with the Bill?
David Simmonds (Ruislip, Northwood and Pinner) (Con)
I am an honorary fellow of Birkbeck, University of London.
Andy McDonald (Middlesbrough) (Lab)
I am an honorary governor of Middlesbrough College.
The Chair
We will now hear oral evidence from Professor Malcolm Press CBE, chair of University UK’s advisory group on the lifelong loan entitlement and vice-chancellor of Manchester Metropolitan University. Professor Press is appearing by Zoom. I remind Members that questions should be limited to matters within the scope of the Bill, and we must stick to the timings in the programme order that the Committee has agreed. We have until 9.50 am for this panel. Professor Press, could you please introduce yourself for the record?
Professor Press: My name is Professor Malcolm Press, and I am here in my capacity as chair of Universities UK’s group working on the lifelong loan entitlement. I am also vice-chancellor of Manchester Metropolitan University.
The Chair
You are very welcome, and thank you for your time. I am Judith Cummins, a Member of Parliament and Chair of this Bill Committee. We will take a series of questions from MPs. We start with our Minister.
The Minister for Skills, Apprenticeships and Higher Education (Robert Halfon)
Q
“A more flexible approach to higher education funding is right for learners, right for employers and right for providers.”
In what ways would greater flexibility in the student finance system be beneficial to students? How do you think the lifelong loan entitlement will encourage more part-time students to take up learning?
Professor Press: The flexibility is welcome. It will help people to align their study with the other demands on their life, both their personal life and their professional career journey. It will make a big difference. For part-time learners in particular, the maintenance elements are very welcome, and the removal of the ELQ—the equivalent or lower qualification—rule will also be helpful, since for some people that has been a barrier to learning, particularly later on in life.
Robert Halfon
Q
Professor Press: The response of universities is not just dependent on level 6 being introduced; it is dependent on programmes that are not HTQs—higher technical qualifications—being opened up. That will be the key thing. At the moment, you will find that universities that want to offer HTQs will do so, and we very much welcome that, but the majority of students at the majority of universities are not doing HTQs, so the long-term success of this will depend on opening up flexibility for regular degree programmes. That is where the big transformation will come.
Robert Halfon
Q
Professor Press: There will have to be, otherwise people will leave just with a series of certificates. The challenge is that employers will find it difficult to understand what those things mean. The lifelong loan entitlement provides an opportunity to build up micro-credentials and to stack them into qualifications, and that really matters. That will require collaboration between institutions, whether they are further education or higher education.
Matt Western (Warwick and Leamington) (Lab)
Q
Professor Press: I think the LLE will open up opportunities for part-time learners, and that is to be welcomed enormously. The unit of resource is fixed, as we know. You might come on to ask me about this, but the bit I find most difficult to understand is the difference between the credit-based and the fixed-mechanism methods of calculating the fee cap. I hope you will ask me a question about that; I think that needs a bit of clarification. However, the sector will continue to face challenges when it comes to delivering at quality, given that the fee cap is frozen. Nevertheless, the opportunity to open up learning to new groups of students is welcome, and will be beneficial to business and the country.
Matt Western
Q
Professor Press: As I understand it—forgive me if I have got this wrong—it is up to the Secretary of State to decide which method will apply. My understanding of what the Bill is trying to do is this: in a sense, we should enable any credit to be costed at a credit fee’s cost, and it should be up to the providers to assess whether there is demand and supply—a demand for the learning at credit level—and whether, if that is opened up, businesses and employers will want to recognise the value of that. At the moment, it feels like a slightly false divide, and it leaves the decision as to what can and cannot be offered in a modular way to the Secretary of State. That is how I have understood it, but if I have got that wrong, I apologise.
Matt Western
Q
Professor Press: For modular learning that is purely attendance-based, yes, I think you are right. I think it will be easier to operationalise in places such as Greater Manchester, and I suppose part of the learning that we will get as the LLE is phased in is an understanding of the obstacles that might exist. Then perhaps we can work out ways of addressing those in areas where there is not a large cluster of HE and FE providers. Of course, the largest university in the country is the Open University, and I think we have to think more flexibly about either blended or digital learning. There may be opportunities for institutions that are not clustered in the way that they are here in Manchester to take full advantage of partnerships.
Matt Western
Q
Professor Press: I would, because I think we should focus on the outcomes for learners, rather than the inputs to the learning.
Sir David Evennett (Bexleyheath and Crayford) (Con)
Q
Professor Press: Those are great questions. I really do think it is exciting, because it provides learners with the opportunity to study in a different way, and the more we can do to encourage people to focus on their professional development, the better it will be for our businesses and employers across the country.
The key challenge, I think, will be around the information, advice and guidance that people get about what the opportunity is, particularly for adult learners, who may not be in institutions that are used to providing that sort of careers guidance. That will be a particular challenge for any institution. Who is responsible for doing all of that? There will be many partners responsible for doing that, and that really does matter.
The challenges for my university—I am answering as vice-chancellor, rather than as a UUK representative—will be the mechanics of how we do all this. We are used to recruiting, admitting, onboarding, educating and supporting with pastoral care students who come mostly for three or four-year programmes. We will have to evolve ways of doing that for students who come for 30-credit—or multiple 30-credit—modules. There will be an additional cost of doing that, so we will need to work out what we can offer that can be delivered sustainably, given the cost base. That means that there will need to be a sufficient supply of students wanting to take a particular module, and a demand from the workplace for those students to achieve a successful outcome. We will look very carefully at what we offer. This gives us a chance to tailor our provision to local demand from employers. It is not without its challenges, but it is an exciting prospect.
Sir David Evennett
Q
Professor Press: That is exactly right. I will not digress too much, but in Manchester we have an organisation called the Oxford Road Corridor, which is the businesses and employers on the Oxford Road; they include my university and the University of Manchester. We are already looking at what Manchester Met and the University of Manchester can offer together to support the other members of the corridor, which are the Manchester University NHS Foundation Trust, Manchester City Council and some private businesses, and to encourage local people to upskill. We are already trying to work together, and this makes it easier because it provides a mechanism and a funding stream that can assist with that.
Mr Toby Perkins (Chesterfield) (Lab)
Q
Professor Press: Our university does not offer higher technical qualifications, and we do not validate providers that deliver HTQs. At the moment, the provision is targeted at a particular group of learners. Once it opens up in 2027-28, it will provide significant opportunities for both new and current learners who might want to space out their learning in a different way. My understanding—again, forgive me if I have misunderstood—is that this will develop slowly while we work out how we can operationalise it, and then there is a point at which it can open out and support many additional new learners.
Mr Perkins
Q
Professor Press: While local employers will not provide the courses, there is not much point in us putting on modular learning if there is not a demand for the students who have gained that learning. We are a large and accessible provider of degree apprenticeships, and we work with over 500 employers in thinking about what sort of apprenticeships to run. I will be thinking about extending engagement with our apprentice employers, so that we can have the same sorts of conversations about putting on modular learning. It is through the providers that the employers will have the opportunity.
Dan Jarvis (Barnsley Central) (Lab)
Q
Professor Press: In Greater Manchester, we have a civic university agreement between the five higher education providers and the Greater Manchester Combined Authority. We work very closely together. The proposed legislation gives us the opportunity to align much more closely what we can provide and the sorts of skills that the combined authority wishes to deliver, because of the benefit there will be to local businesses and employers. I am very positive about working with the combined authority. The key thing to note is that the relationships are good, the conversations take place and people know one another. That builds trust and confidence and enables us to have the right sorts of conversations that deliver positive outcomes.
Matt Western
Q
Professor Press: I have not done the modelling and am not sure whether anyone else has yet, but there will be an additional cost from doing this. It is clear that that is bound to be the case. If people are taking, for instance, four 30-credit modules rather than one level 4 or 5 programme, there will be onboarding and exiting costs associated with the student four times over compared with just once. As you will appreciate, Matt, universities spend a lot of time, effort and money on inducting, familiarising, briefing and onboarding students. We would have to do that every time a new student came to study a 30-credit module.
There will also be the costs and complexities associated with the production of the certificates, and if credit transfers were to take place with other organisations. It is going to be costly. I do not know what the exact costs are, so I am sorry but I am unable to answer your question in a quantitative way.
Matt Western
Q
Professor Press: It would depend on whether a student is a returning student or in a new body of students, and on their particular needs. Some students will benefit from this. Thinking particularly about our local context, something like half our students here at Manchester Met are the first in their family to come to university, about a third of them come from families with parental incomes of below £25,000, and about a third are from black, Asian or minority ethnic communities where they had other responsibilities, such as working or care.
We put a lot of effort into supporting these students. We put millions into our student hardship fund to help these students. There are all sorts of other complexities in addition to the technical aspects, including onboarding and those types of things that cost universities money. We invest in our students because we believe in their futures. It is much more complicated than a simple “three times” or “two times” kind of numerical argument. I am going to have to go away and do some work on that.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
Q
I am interested in what you were touching on in respect of the wraparound pastoral care that you offer students. I studied my masters over three years, part time at the University of Sussex, but I was a student throughout the whole of it, so the university was able to offer that wraparound care. In a modular system, in which people pay for modules and may come back in a year or two, how will you be able to offer that continuing care? Even if they have breaks of only a few months, they might still need some kind of care as a student. Have you considered how you would organise that?
Professor Press: Every university will have a different answer to that. My university provides close care—
The Chair
Professor Press, I am sorry but, given the constraints of time and the fact that we have many other witnesses, I am afraid I have to end your session there. I thank you immensely for taking the time to give evidence to our Committee.
Examination of Witnesses
The Chair
Q
Ellen Thinnesen: Hello everyone. My name is Ellen Thinnesen and I am chief exec of Education Partnership North East, which includes City of Sunderland College, Northumberland College and Hartlepool Sixth Form.
Alun Francis: My name is Alun Francis and I am the principal and chief exec at Oldham College.
Robert Halfon
Q
Alun Francis: I am really sorry; I cannot hear the question. The sound is really poor.
The Chair
We will pause while the sound is sorted. I am very sorry. Alun, can you rejoin on Zoom? Apparently that will get rid of the glitches.
Robert Halfon
Q
Ellen Thinnesen: Ideally, if this works and drives forward a cultural change, it would certainly allow greater upskilling and retraining. For example, I know a young student who left the forces and wanted to get into the renewable energy sector. He was not able to gain any higher technical qualification experience and balance the demands of his job at the same time.
On the one hand, this will bring great benefit to students, whether they are from a disadvantaged background or not, but I am concerned about the ability about some of the students my college teaches and supports—64% are from disadvantaged backgrounds—who will need substantial careers advice and guidance to understand, for example, how you would stack credits in order to achieve a full qualification.
We also need to understand how employers will respond to this. Over a number of years there has been a significant decline in employer investment in delivery. I am concerned about how employers will be held to account to ensure that they do not continue to pass that cost on to employees who, through a credit-based system, would be entitled to their loan. I hope that helps.
Robert Halfon
Q
Ellen Thinnesen: I think there is a significant amount of benefit to having what will essentially be a portal for students to log on to and see what their account is showing, and for them to be able to utilise that account over the years they have available. Some thought needs to be given to quite a significant number of people who do not have easy access to the internet, phones and IT equipment. Therefore, I take you back to the importance of strong, comprehensive investment in careers advice and guidance.
Robert Halfon
Q
Do you not think that good employers will welcome this? We know that there is often not as much investment in training as they would like, but now students will be able to access short courses and modules, rather than having to do long courses. As you know, they will also have 12 entry points, rather than just four, throughout the year, which will make a difference. It may actually be that employers think this is a good idea and that a lot more employees are trained and retrained in the skills that employers need.
Ellen Thinnesen: I agree with you, actually. I think, from both an employer perspective and a further education college perspective, that it will allow greater agility to be able to meet the changing skills needs that are required. In Sunderland College, for example, we are evolving quite rapidly into electrification, but it is currently incredibly difficult to respond with agility and at pace in relation to the technical skills training needs that are required.
I do think we should be very careful, because the devil is always in the detail. We know that the Learning and Work Institute reported that employer investment in skills has fallen by 28% in real terms since 2005. We need to be really careful, as we culturally drive this change, that factors such as that are taken into account.
Matt Western
Q
Ellen Thinnesen: That is a big question, and there are a number of answers to it. First, being very clear about what a credit is and what a student can expect to receive in that module—that credit—of learning is incredibly important. We know that the current system sets out the direct learning per credit that a student can expect to receive, as well as the demands on their indirect study time. We know that in the current system, as a student, you can go to two different but similar higher education providers that are delivering very similar modules. What you get in direct and indirect learning can vary considerably within that offer. So in the first instance, the publication of clear information for students about credits and what they can expect to receive in that module in teaching and learning is really important.
A significant amount of work needs to happen in colleges on the continued quality assurance of modulised study. For example, in a college, if we are to quality assure the teaching and learning, we will pay a visit to that programme to assess how well academic standards are being delivered. The quality of that provision to students becomes incredibly difficult and the logistics increase significantly when modules are happening across a year at any given time.
Matt Western
Q
Ellen Thinnesen: My personal and professional opinion is that it should. If we are defining fee limits attached to credits, it is really important to communicate to a student what a credit means. Essentially, a student wants to know a number of things. First, how much is this going to cost me? Secondly, what will I have to expend in effort and energy to complete this module? Thirdly, what will I get for that module and those credits from the institution that I am choosing to go to? So transparency about the relationship of credit to fees, and of credit to module content and what is expected within that, is very important.
The Chair
Q
Alun Francis: Apologies, everyone, for the technical hitch. I am Alun Francis, the principal and chief executive of Oldham College.
The Chair
Again, you are very welcome. Liz, are you on mute?
Liz Bromley: My apologies—technical glitches endlessly. Apologies, too, for being late, which was another technical hitch. I am Liz Bromley, the chief executive of NCG, which is a conglomeration of seven colleges spread out across the country. I am sorry to have delayed you.
Brendan Clarke-Smith (Bassetlaw) (Con)
Q
Alun Francis: I think all these things will take a little getting used to. The FE sector, certainly, is a very flexible, agile sector, and I think people will get used to it. The more important questions will be about the standardisation of the credits, which Ellen has already talked about, so that learners know what they are getting and paying for. That needs to be absolutely transparent.
It is also important to say that in these technical areas there is a big difference between what learners pay for here and in a traditional degree, because some degrees are positional goods—they are paying for the credential as much as the content—but in these qualifications they are paying for the content. Learners therefore need to be clear that what they are getting is what it says on the tin. The other aspects, I think, we will just get used to.
Liz Bromley: I think it is going to be tricky. You will all be aware of industrial workforce relations at the moment, and one of the biggest gripes of the University and College Union is about workload. While we in management and leadership roles might say, “This is something that we can work through—we can make it work and we can make it student first,” I think there will be significant resistance from some elements of the workforce, who see the downtime in the summer as part of their right, dare I say.
Yes, technically, it absolutely can be done. Universities in the country are offering multiple entry points during the year and delivering them perfectly effectively, but I think there will have to be a cultural transformation which, given that further education has been reclassified, may well be more of a hill to climb than we might wish.
Brendan Clarke-Smith
Q
Ellen Thinnesen: You may be aware that colleges currently submit their data via something called the ILR—the individualised learner record—which is a piece of software that we use across the sector. That software allows us to submit data returns in an academic year. Obviously, with the implementation of credits, and a course year, that would require a change. The college systems will enable that to happen because we are able to adjust the years of start and end dates within our academic year returns.
The consequence of that, around the course year, will be in relation to the greater requirement regarding data management and monitoring, which is quite substantial. There will be hundreds and thousands more entries for students studying on credit-based provision on a college’s ILR data return.
Matt Western
Q
Liz Bromley: I think that employers are learning that they have a much more proactive role to play with the further education sector now, as we have moved towards local skills improvement plans and working with employers to deliver the right qualifications to deliver the skills that they need. I think that that is another conversation as part of this journey.
I am a great supporter of the principles of this Bill in its entirety. Flexibility for the learner, lifelong learning and smaller bites of learning? Absolutely. However, as I think you would expect, I am almost always focused on, “Well, where is this going to be difficult to implement?”
I suppose that my nervousness is about employer engagement. The good employers will see it as a real opportunity to enable their workforce to better themselves educationally, to give them time off to help them do that, and perhaps to co-fund some elements of the module. It will be great. They will work with the colleges and the universities, and it will fly. Where you have less scrupulous employers, I can see this as a really good opportunity to shift the burden of paying for continuing professional development from the employer on to employees, who may wish to better themselves and therefore take out a loan.
Again, it goes back to giving IAG—information, advice and guidance—to the student but also to the employer, to ensure that nobody is exploited and the qualifications that come onstream in the pilot phase will demonstrably have an impact for the employer and for employees who are developing themselves while working and learning.
Robert Halfon
Q
Alun Francis: Thank you, and thank you for coming to visit us; it was a very enjoyable visit. We see this as part of a package of reforms. Just to give the context, Oldham is an extremely deprived area. Nearly 80% of our learners come from the bottom 20% of deprived boroughs. The level of English and maths on entry is one of the lowest in the country. We do not have a big private sector economy. That all sets the context in which we work, and different colleges will have different contexts. It is important to say that.
I think that we see this as part of a set of reforms that help to rebuild the opportunities for those who do not want to, or cannot, follow the route to university at 18 or 19, which has almost become the default route for higher skills. What we have seen is the collapse in that period of part-time learning and the old HNC/HND route. These are all parts of the process of rebuilding that.
There are issues. The point was made very well about where the balance will lie in whether the learner or the employer will pay for higher skills, but we see this as an important way of opening up people’s choice when coming back into learning. There is an issue about the balance between these routes and the workplace routes of apprenticeships and the levy—for SMEs funded through other means. We believe that a significant number of adults want the choice to come back into learning—perhaps after having a family or other gap, or having done some low-skilled work and now wanting to improve their skills—and traditionally we have offered them foundation degrees or degrees. This allows us to offer them a wider variety of choices, and we think there is demand for that.
It will take time for the market to grow. It is not a quick hit. It needs good information, advice and guidance. People need to know with confidence that what they are paying for is worth the loan. That is why sorting out the credits and engaging employers, so they know they are getting qualifications that are worth it, is of absolute importance. Addressing those three issues will make this work best, but I do think there is demand. We have a significant number of adults who do not want to or cannot go back to university for the full three years. Without this approach, opportunities will not be open to them. It is much more difficult than we imagine. While this approach will not solve the whole problem, it will help to solve a considerable part of it.
Robert Halfon
Q
The Chair
Given the pressures on time, may I ask questioners and witnesses to be brief?
Ellen Thinnesen: I think it will make a substantial difference to disadvantaged students. For example, many of our disadvantaged students have caring responsibilities or are single parents, so to be able to attend education and study flexibly, on a credit, modularised basis, will make a significant difference. Removing the equivalent level qualification regulation is really important, because many of our disadvantaged students have progressed into higher education but, unfortunately, have obtained HE qualifications that are not relevant to the technical careers that they want to go into. This measure allows those students to go back and retrain, upskill and relearn.
Liz Bromley: I endorse everything my colleagues have said. One of the greatest disadvantages that disadvantaged students have is lack of confidence—you know, they say, “Families like ours don’t go to university.” This is a wonderful opportunity to build up confidence that they can access the system and understand how it works. It helps them manage this notion of terrible debt because they can do it on a much small scale. While concurring absolutely with everything my colleagues say, I think this is just as important for young people as for those who are reskilling or coming back later in life. The phasing is really important, because it is part of getting their confidence built up at levels 4 and 5. It is a great way to enter the HTQ market, and that is the basis on which young people, as well as reskillers, can think, “I’ve done this. I could top up and get a full degree. I am in one of those families who can achieve.” I think that is terrific.
Lloyd Russell-Moyle
Q
Liz Bromley: One of the biggest challenges that my colleagues and I face is that we have a finite amount of resource and it has to be split between pay costs and non-pay costs. I think in the implementation of the system we will incur significant non-pay costs in terms of our systems and administration, to get all the points that Ellen referred to about the ILR and the data collection correct. That will have a knock-on effect on our ability to raise pay.
We already have a real challenge in attracting people from industry—the industry experts—to come and teach, because they can earn so much more in industry. What would be wonderful—I would say this, wouldn’t I?—would be an injection of funding to see this through so that we can improve pay and address the workload issues. I think that would cause the workforce to embrace this far more willingly.
Lloyd Russell-Moyle
Q
I wonder about the modulisation discussion we have been having, and employers. I am supportive of the measures, as I have heard you are, but is there a danger that employers push staff members to use their credits, and then when staff members actually want to make a career change their credits have all been used up because the employer has forced them to do modules that, really, they should have paid for? Should there be some provisions in the Bill to make it clear that credits are personal and should not be used for in-work professional development? Is that possible?
Ellen Thinnesen: This is one of the areas that I am concerned about, knowing a number of employers that I work with, the constraints they are under and what they have done with their own professional development budgets. I would need to go away and think about that, but in the same sense I encourage you to think about it and explore the problem in a little more detail, because I do think it needs some consideration.
Lloyd Russell-Moyle
Q
Alun Francis: I am with Ellen on this: I have not thought it through sufficiently to give a really punchy answer to your question, but I do think it is a concern. It is about the balance of who should pay for training. It feels like there is the potential for it to skew perhaps too much towards the employer encouraging learners to pay for training that the employer could pay for. How we police that, I do not know. There is a variety of things that we might explore in more detail, but I cannot give you a really clear sense of how we would solve that problem right now.
Sir David Evennett
Q
Secondly, you highlighted how hard you have worked, Ellen, to reach the disadvantaged, and I am sure that your two colleagues are doing the same. How are you doing outreach to those who are in employment to let them know what you offer?
Ellen Thinnesen: In terms of the work we do with employers to help them to understand what is available, which I think is what the question was about, in a college such as mine, and I know in many other colleges, we employ business development teams—essentially employer liaison personnel—whose entire job is to work with employers and help them to understand how they can translate their workforce development needs into workforce solutions and upskill and reskill their workforce. That is easier for larger colleges such as mine; I can flex funding and use it in creative and different ways. We go back to the underfunded nature of colleges and the impact on smaller colleges, where it is incredibly difficult to do that.
On outreach, we employ a significant number of school liaison personnel, who are out working on a daily and weekly basis in schools giving careers information, advice and guidance, and delivering training to school teachers and staff. Again, I am able to do that, as I am sure Liz is in Newcastle College Group, because we are large enough to be able to reconfigure our budget to invest in resources such as that. Again, for smaller colleges, that is not always possible.
For example, my college merged with a sixth form in 2017, which now benefits from that service. Prior to the merger, it would never have been able to deliver that type of infrastructure to enable employers to understand what they need to do and what is available, and to enhance outreach.
Sir David Evennett
Q
Ellen Thinnesen: For example, at Sunderland College, we have established a partnership with Sunderland City Council and the DWP, and we co-locate with the DWP. When a service user comes in to job-seek, the college is sitting side by side with the DWP and is able to provide that line of sight to educational routes. Similarly, we are working with employers and the workforce. We do a lot of workforce analysis.
Sir David Evennett
Q
Alun Francis: indicated assent.
Liz Bromley: indicated assent.
Sir David Evennett
Q
Liz Bromley: FE colleges are absolutely part of the community. We have so many ways to engage with everybody in the community, from refugees to 16-year-olds and 60-years-olds who are looking for a change of career. We are absolutely embedded in our communities in ways that sometimes universities are not because they have a more global outlook. We have to be very fleet of foot. We have to use digital media, paper-based media, posters and, most of all, the art of engagement through conversation, which we do very well.
Alun Francis: I absolutely endorse what Liz just said. I will just add a couple of very quick observations. First, the way colleges work with employers to design and deliver curriculums is one of the most misunderstood parts of our job. We need to have more investment in doing that better. Under devolution, the Mayor’s role can be very strong around convening powers, but the key to getting the skill system working well is the partnership between employers and providers, and FE colleges are key to that.
I will give you a very good example, which relates to the question that one of your colleagues asked a few moments ago about phasing. We endorsed phasing because it allows us to grow the capacity to do this well. In Greater Manchester, all 10 FE colleges have been collaborating for over 18 months, supported by the skills development fund, to develop the new higher technical qualifications in digital, and we are now moving on to the structure. That is a really good example of how colleges have worked together, and engaged employers to come up with a product that we think will be very attractive for learners. We have collectively built our skillset, and we have supported that with marketing and so on. As you described, we will make that qualification work really well. That is a methodology that I think other colleges will emulate and copy.
Investment in the capacity of colleges to work with employers and the workforce issue are the two big challenges around this curriculum reform. Those are the two that we find hardest.
Andy McDonald
Q
Liz Bromley: I think there will be a significant administrative burden. There is every time you change. For me, the big one will be the change of the academic year to a course year. Every time you change something that changes the way we collect and report our data, the way we admit our students, the way we provide the support that they need on their journey to education, you increase the administrative burden. It sounds like a constant whinge, but in practicality I have worked in both universities and colleges, and it is always the infrastructure that supports the delivery of the core product of education that costs the money and takes the time. So yes, there will be an additional administrative burden that will be expensive, but we will get there.
Andy McDonald
Q
Alun Francis: I think it depends on how big the administrative burden grows, because the bigger it gets, the more that might be a challenge. For me, it is difficult to say what that will look like now. There will be a change. I can also see some positives, though, in some of the changes around the course year. Some staff will prefer not to have an academic year—our apprenticeship teams already do not have an academic year. There will be pluses and minuses on that side. For me, the model—
The Chair
Order. I am afraid that that brings us to the end of the time allocated for the Committee to ask questions. Before we move on to the next panel, may I thank our witnesses on behalf of the Committee for your evidence. Thank you ever so much.
Examination of Witnesses
The Chair
We will now hear oral evidence from Julie Charge, chief executive and director of finance at the University of Salford, and Professor Edward Peck, vice-chancellor and president of Nottingham Trent University. The witnesses are appearing by Zoom, but Sir Edward Peck is not yet with us, so please bear with us and we will interrupt proceedings as we did previously. We have until five to 11 for this panel. Could you please introduce yourself for the record, Julie?
Julie Charge: Good morning everyone. My name is Julie Charge. I am the director of finance and the deputy chief director for the University of Salford.
Robert Halfon
Q
Julie Charge: The terminology of credit is something that is familiar to students in terms of understanding credits, but there is probably more work that we would need to do to link credits to what they might see as an overall course. Generally, when students are thinking about their degree, they are thinking about a period of time and the content of it, and not necessarily the link between the work effort and the credits themselves.
Robert Halfon
Q
Julie Charge: It is the connectivity. Students will be familiar with modules as part of something that, when they are applying, they see described to them in a range of different ways. There is therefore some work that we as a university would need to do to make it easy for them to understand the relationship between the module of the course that they want to participate in and the credits.
I think there is another aspect here, which is that, again, as a university, we link hours to credits. If we can link all those things in a way that gives much more clarity for a student, by saying, “This is the undertaking in hours, which equates to number of credits, which is therefore part of a module, and the module then builds up your course,” that clarity will help with that sort of common understanding.
Mr Perkins
Q
Julie Charge: Probably a combination of both. We did the pilot on short courses. It was a very small sample size in terms of the take-up, but 40% of the applicants and those who went on to do the short course were in the 26 to 30 age group—and it was a combination of retraining after some initial work or an initial degree, and some initial training. Then we saw a different group: the other big group, who were retraining and upskilling, was aged 36 to 40. Of that group, some were continuing their studies, but the majority were external and returning to do that training. I cannot comment on whether there was unemployment, but there were certainly two big groups, in terms of age profile, that were returning to do the pilot course with us.
Mr Perkins
Q
Julie Charge: No—of the people who took part and were recruited to that course, 50% took up the lifelong learning loan entitlement.
Mr Perkins
Q
Julie Charge: I think there is some way to go to understand how that transfer will work in practice. Having a commonality of modules and credits per module helps with that level of understanding, but in terms of the qualifications that go alongside that and the end result, that is unclear at this stage. Further work would be needed to work out things like who the awarding power would be for a course set up in such a way.
There are also some other points regarding the outcome of the course. I will just reflect on what we have at the moment with a three-year course. As you work through your levels—through levels 4, 5 and 6—the complexity obviously builds, in terms of your learning and understanding. Therefore, when we work through this, we would need to be assured of the level of work and the level of learning that is occurring through those years, in order to be assured that at the end the student can be awarded at the right level, and we can maintain that quality.
Mr Perkins
Q
Julie Charge: This could absolutely play into an apprenticeship arrangement. Again, if we as an institution can think a bit more creatively about how we could do that, it would align quite nicely with the degree apprenticeships that already exist. It would need a bit of work, but that could sit alongside. Again, it is really important to reflect on trying to make it as easy as possible for students to understand their options and the outcomes—what this leads to for them; it will be important to join some of the dots, with a wide range of skills routes they can take. This is about making it easy, having clarity, and students understanding their outcomes.
Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)
Q
Julie Charge: If I go back to the experience that we had of trialling the short courses, it is possible to set this up. The administration is slightly more complex. It does not sit comfortably within an individual module or modules, because that is not how universities work. We have a three-year degree; a number of costs are included to support students during that period, and some modules are more expensive than others. There is some work here.
One of the learnings was not so much about the marketing, but about the understanding of what was available and ensuring there was enough knowledge in the marketplace for people to understand what they were coming into. In terms of cost, it is possible to do that, but there is something about the messaging of what is on offer, and making that clear for prospective students.
Gill Furniss
Q
Julie Charge: Again, speaking for my institution, we do an awful lot of work with industry, so we are very linked to industry. Going back to the trial, this was very welcomed among employers—that constant reskilling. That is particularly because a lot of the jobs that we are training and upskilling our students for do not exist yet. We are trying to give them the skills for those future jobs. Therefore, it is really important to have those skills going across industry, and to provide that constant ability to learn—be that through credit bearing or non-credit bearing.
The Chair
Q
Professor Peck: Yes, sorry about that slight technical challenge. My name is Professor Edward Peck; I have not yet been knighted—but, of course, you live in hope.
Robert Halfon
Q
Professor Peck: Yes; thank you. I am happy to do that, Minister. The short course is only in its first year so far. It was trying to do something relatively quickly and it did not get as many students registering as you might have hoped, but I think it is premature to judge what might happen in years two and three of that pilot. There are other things we are trying to learn from that pilot about the regulatory regime and the capacity of the Student Loans Company to deal with a new form of loan for modules. There is a lot of learning coming out of the pilot.
In terms of demand, if you look at the stabilisation of foundation degrees—the two-year degrees—the demand for HNCs, HNDs or HTQs, and the number of advanced learner loan level 4 and 5 courses being run, there is a lot of evidence for sub full-degree level technical and vocational education. What the LLE will do is open up a whole new range of people who either want to do a particular module of that provision, or want to do it in bitesize chunks rather than commit to the whole programme at the outset. I think the numbers at levels 4 and 5 are already significant, and the LLE will increase those numbers even more.
Robert Halfon
Q
Professor Peck: Yes, about 9,000 to 10,000 students each year are doing the advanced learner loans. There are programmes such as the diploma in social care and the diploma in construction site management, which are level 4 or 5 programmes. You will be able to take modules of those on the lifelong loan entitlement. There are some technical questions about how you work out the credit arrangements for advanced learner loans, but I know that the DfE is doing a lot more thinking about that. There will be further guidance and consultation on how advanced learner loans are integrated into the LLE in due course. I understand that is work in progress.
Robert Halfon
Q
Professor Peck: We have a very close relationship, whereby we do all the training and education for level 4 and above for the people of Mansfield and Ashfield and the college does level 3 and below. That means we can design the programmes in the college to have really easy pathways of progression from level 3 to level 4 and, in future, we will start promoting the options around modular provision in the programmes we already run at Mansfield, in things like computing, construction management and those sorts of areas, where there is a real demand for skills.
If I can give you one example, we are seeing really high uptake in a level 4 course we are running in retrofit green construction. There is a massive demand. Eighty per cent. of the houses that we will live in in 2050 are already built, and the challenge is to retrofit them to be greener and more energy efficient. We do not have a workforce to do that. We now have a level 4 course in Mansfield where you can study that particular skill and, in future, you will be able to study it on a modular basis, which will open it up to a greater range of people who do not want to study that particular course full-time.
Matt Western
Q
Professor Peck: It is a challenge we faced on the Augar review, when we considered what the credit basis should be of a lifelong loan entitlement. Thirty credits hits a compromise between having a level of granularity where the Student Loans Company can give and administer loans for both fees and maintenance, and the bitesize learning that people are going to want to do. Thirty credits is notionally 300 hours of learning. I think it is the best compromise to start off with between those two different pressures that drive in different directions—the SLC to make it bigger, and maybe some of the requirements of learners for more bitesized learning to make it smaller. I think it is one of those things where we should just see how it rolls out as we implement and then change it if it seems like we have not quite got the balance right.
Matt Western
Q
Professor Peck: Yes. You can bundle them, actually, can’t you? You can sign up for three 10-credit modules. It is slightly clunkier than the Canadian system, but again, I think it will give people a chance to do smaller bitesize modules without having to take a loan out for every 10 credits, which I think would stretch the capacity of the Student Loans Company. I heard my colleague talking about transaction costs. If you start to get down to 10 credits per module, the transaction costs of recruiting the student, inducting them and so on gets quite large in relation to the fee you might get, so there is an economy of scale for providers around 30 credits as well.
Matt Western
Q
Professor Peck: Yes; I do think many employers will make use of the modular learning that the lifelong loan entitlement will promote. I think many employers will pay for their staff to do some of this upskilling and reskilling as part of investment in their training more broadly, which takes place outside the levy. I think there are some challenges at the moment about the levy and its size, aren’t there? We might be getting to a point where much of the levy is now being committed around apprenticeships, which is a real success. The question is: how do we keep apprenticeships growing over the next five to 10 years? That is for a very different group of staff. Apprenticeships often are for new starters or people completely changing their career with an employer, whereas the LLE is about modules enabling people to upskill and reskill when they are already in the workforce and established in the workforce.
Lloyd Russell-Moyle
Q
Professor Peck: It is a really mixed picture. Some are paid for by employers and some will be paid for by individuals who have the means to do so. Those are the two major sources that we currently accept.
Lloyd Russell-Moyle
Q
Professor Peck: At NTU, the vast majority of UK undergraduate students are paid for by the Student Loans Company loans. We have some students undertaking short courses, which are professional qualifications and paid for by their employers, and about 2,000 apprentices who are, again, paid for by their employers. At the moment, it is heavily weighted towards full-time undergraduates, and I think that is the challenge that the LLE is trying to unlock.
Lloyd Russell-Moyle
Q
Professor Peck: It is a really interesting challenge. One of the things that the short course pilot should tell us, even if they are relatively small numbers, is how many trainers are paying for themselves through taking out a loan with the SLC and how many are coming in through employers. There is a suggestion that there are bigger numbers doing those modular programmes but actually they are being paid for by employers. I have not seen the data on that yet, but I am trying to get those data to see if that is the case.
I think most employers would see it as part of their responsibility to pay for training their current employees. Indeed, they might want to do that in a different way from doing it employee by employee. In sufficient numbers, you would commission your own training; that happens already. It is important to ensure that we are not transferring the cost from employers to the individual employee. I think how you do that is a really interesting question, which probably bears more consideration, but there may be ways of ensuring that that does not happen.
Katherine Fletcher (South Ribble) (Con)
Q
Julie Charge: The main one we are seeing is around computer science; that is definitely top of the agenda. The other ones for us in terms of all the range of skills are things like the artificial intelligence and robotics space, and absolutely sustainability. That understanding of sustainability actually touches a lot of subjects, whether that is housing through the retrofit or others. Those are the three areas that are definitely at the top at the moment.
Katherine Fletcher
Q
Professor Peck: We have not colluded, but I agree entirely with my colleague: we are seeing construction, digital manufacturing, digital engineering and computer science, particularly coding.
The Chair
If there are no further questions from Members, I thank the witnesses for their evidence, and we will move on to the next panel.
Examination of Witnesses
Sir David Bell and Rachel Sandby-Thomas gave evidence.
The Chair
We will now hear oral evidence from Sir David Bell KCB DL, vice-chancellor and chief executive of the University of Sunderland, and Rachel Sandby-Thomas, registrar at the University of Warwick. Sir David will be appearing via Zoom, and we have Rachel with us in person. For the record, could the witnesses please introduce themselves?
Rachel Sandby-Thomas: Good morning, everybody. I am Rachel Sandby-Thomas, and I am the registrar at the University of Warwick.
Sir David Bell: Good morning. I am David Bell, the vice-chancellor and chief executive at the University of Sunderland.
Robert Halfon
Q
Rachel Sandby-Thomas: They could be. I think this measure is very helpful; we welcome it and the flexibility it introduces. I absolutely understand the rationale behind the Bill, which is to make sure that, financially, students will not be disadvantaged by adopting a modular approach.
Robert Halfon
Q
Rachel Sandby-Thomas: I think it is really sensible, because we want to get this right. I welcome the fact that there has been a pilot, and I heard from a previous witness that lessons are already being learned from that, which is great. It is very sensible. Levels 4 and 5 lend themselves well to the modular and flexible approach, and then we can learn the lessons for level 6. At Warwick, we are very keen for it to be extended to level 7 at some stage, because we think that the postgraduate year could easily be subject to a modular approach too.
Robert Halfon
Q
Rachel Sandby-Thomas: We tend not to; we tend to offer levels 6 and 7. In conjunction with Jaguar Land Rover, we have done some apprenticeships where we do not do the level 4 and level 5, but we are the end of a pathway with one of our local college groups.
Sir David Bell: There are two good reasons for doing this in a phased way. One is to do with technical matters—I think we all accept that there is quite a bit of technical work to be done to get us to the point of implementation in the higher education sector in particular.
The second goes to your point about behaviours and trying to inform people about a new system. I know from my experience, and I am sure you know from yours, that people do not always behave the way that policymakers and Ministers would like them to behave. There will be quite a big communications job here. Others have already commented on the need for high-quality careers information, advice and guidance support, particularly for those who might be beyond school and college at the age of 18, are thinking of coming back into education, and want to understand how this opportunity sits alongside others.
Mr Perkins
Q
Sir David Bell: I should probably remind the Committee that my experience of the Department is now long out of date, so I am not really in a position to comment on the current DFE. What I would say, however, is that the Department and the civil service more generally have always been used to managing these complex kinds of changes, so I have confidence there. I also know—this is an important part of the whole process—that the Student Loans Company is busily engaged in making all the preparations necessary to make the Bill a success. Looking in from the outside, I am confident that this will happen. Going back to the previous point, I think the time this will take is a good thing. Sometimes I am impatient about a slower pace of change, but in this case it is a very sensible and pragmatic approach.
Mr Perkins
Q
Rachel Sandby-Thomas: I am glad you raised that because I think there are obstacles. I am not saying this to obstruct the policy; I am actually trying to be constructive. It will introduce a lot more complexity into the higher education system, both for the students and for the institutions, and at lots of levels. It will kick off with uploading the courses on to the UCAS site. That might not seem complex, but the modules, how they all fit together and how they potentially fit with other institutions’ modules will actually be complex. Then, it is about how we market that clearly, because as was said, rightly, communicating clearly with prospective students is key to the success of the system.
There will need to be a lot of advice and guidance given to prospective students, who will want to know whether their prior learning will be taken into account and whether what they have done before and are proposing to do will actually form a coherent structural programme that will be recognised. You will then have the admissions. We hope that there will be a greater volume of admissions, but each of those admissions will have to be looked at very carefully on an individual basis, because of the matters of recognising prior learning and so on.
Data is another big and complex area. At the moment, the Data Futures programme is trying to get rid of the need to return data on modules, whereas this will obviously need the return of data on modules. There is a tension there that needs to be resolved. I could easily see it going into an extra framework of data returns, so that will be an issue. There is a big issue with the student information technical services, called SITS—I was going to say “fondly called”, except it is not—which is very much programmed on a system’s architecture, which is based on programmes that comprise modules, but is at that programme level. That will have to be completely refigured, which will be timely and costly.
Of course, you then have the issue of services and all the wraparound support services that we offer students, which will see an increase in volume. There are also tricky issues about how long students will have access to them. Do we know when they leave the university; how do we know when they go elsewhere for university; and do they have some sort of associated student status for a while? None of us knows the answers, but they are all things that need to be worked out. I say this because there is little by way of incentive for a business case at the moment. While I completely understand—going back to the first question—not wanting to provide a disincentive for students to do a modular course, there is a business disincentive in terms of the cost to the higher education institutions, unless they are already doing lots of modular provision.
Matt Western
Rachel, I am keen to understand how you see this fitting within the current regulatory landscape for higher education, particularly in the light of what it is fair to describe as an increased regulatory burden on the sector in recent years.
Rachel Sandby-Thomas: I think there will have to be differentiation between the two systems. There are quite a lot of concepts in the current OfS regulatory system that sit unhappily with this new system. For example, the concept of the completion of an award is key to the current system, but of course a student might not be completing an award as such when they are doing a module at one’s institution, so that needs to be changed. In the current degree system, there is quite an emphasis, for perfectly understandable reasons, on continuation and the importance of having a student continue for a year from the beginning of the course. Quite a lot of judgment is implied in that continuation being a good thing, whereas actually whether or not a student completes a module within or outside a year is a neutral thing, judgment-wise, in a modularised approach.
We also have the question of who will “own” the student in terms of graduate outcomes. Who can claim success, or to whom can success be attributed? I am reminded of that lovely quote of how success has many fathers, but failure is an orphan. I think there might well be many fathers for these students. Again, none of these things is insurmountable by any means, but they all need to be thought about in an intelligent manner.
Matt Western
Q
Rachel Sandby-Thomas: I do not think it should necessarily be the OfS, because that is not its area of expertise. This is really tricky. An institution can do some advice and guidance, and obviously, if a student is going to do all of the modules within an institution, that is comparatively simple. It is trickier when it is inter-institutional, which is the purpose and intention behind this.
On an individual basis, when a prospective student comes, there will be quite a lot of work for the university looking at what that student has already got and their prior learning, recognising it, and seeing how it might fit into one of their degrees or whatever. However, in a way that does not help the student very much at the beginning of the journey, because they might well have embarked on a kind of pick and mix, which might not amount to something that will end with a degree, if that is what the student wants. I do think that there is a sector-wide gap in terms of information, advice and guidance, and I think it is completely key to get that right for the success of this policy.
Matt Western
Q
Sir David Bell: Rachel has articulated very clearly some of the additional costs that will come to the sector. There is also a question, going back to the issue of demand, about this kind of course. Some of the questions that we always ask ourselves at institutional level when we are asked to put on new programmes are: what is the demand, what are the costs of implementation, and what is the likely return? We have to think in that way. I think this is why the focus on careers information, guidance, pathways and so on will be very important, because if I might use a Scottish-ism here, I think the case for demand is not proven.
Matt Western
Q
Sir David Bell: The risk is, of course, that you pilot and you pilot and you pilot, and you never get there; you never get to the destination, as it were. We are part of the Department’s pilot on a higher technical qualification, and that will be one of those courses presumably that would be subsumed in the period between, say, 2024-25 up to 2027. So it will be quite interesting to see how that works.
The problem we have, and I think that goes back to something that Rachel said, is that we will be operating this at considerable scale, because if we are going to do that modularisation and upload it all and make it all available, that is a really big job. It is a big technical job, but I am also worried, ironically, about choice. I am slightly concerned that people are overwhelmed by choice of modules and other kinds of study.
We also know from our previous experience—one might say our current experience—that asking careers or guidance professionals to be absolutely up to speed with new qualifications or new routes to qualifications is quite a task, and therefore there is a big training and development opportunity requirement for people who are going to be advising those who might want to follow this more modular route.
Matt Western
Q
Sir David Bell: I am not sure whether I am required to declare an interest in this matter as well. [Laughter.]
Matt Western
As much as me!
Sir David Bell: It is a really interesting question, and I must say that that is one of the things that slightly surprised me about the cut-off. There has been a lot of debate recently about trying to encourage more people back into the workplace post 50. And I would have thought that the opportunities afforded by the LLE would be ideal for people who might have trained in one area and then, later in life, decided they want to do something else. A module would be absolutely the right size of qualification for them, so I wonder whether that is something that could be thought about.
I mean, it’s that old cliché that 70 is the new 50, as it were. So I think there is probably some consideration worth giving to that 60-to-70 age range, because I think we will see more and more people, for one reason or another, continuing in employment. And if they continue in employment, presumably they will want to continue to upskill and enhance their qualifications.
Katherine Fletcher
Q
I am interested in what you will do to engage with employers, so that rather than people being overwhelmed by choice there are pathways that kind of say: “If you get to this level”—is that something that can be set out in advance? Also, are you set up to then track outcomes? That is, this suggested pathway has taken 20 people through it, and 20 people have gone on to work with Jaguar Land Rover, even when they were not employees, having gained this qualification. Is that something that you are set up to do—almost to narrow the choice of modularisation to aid industry?
Rachel Sandby-Thomas: We do a lot of work with employers, and we work with them a lot on degree apprenticeships, as you would expect, but, especially in our business school and in our Warwick Manufacturing Group, we work with employers to design courses that will be good for them. That would just be a variation on that. We would track the learning outcomes, as we call them. Again, that sits slightly oddly with this modularisation, but again, it should be able to be worked through. Those learning outcomes pertain to the student and the student’s progression. We do track the students, partly because they are our alumni and partly because of graduate outcomes and what they are doing. What we might not do, although we would probably measure it by repeat business, so to speak, is track how the employer thinks that it has helped the student.
Katherine Fletcher
Q
Rachel Sandby-Thomas: Because we tend to do this with specific employers, it is easier to do it within that employer. What we can say to them is, “Well, this employer did this.” That would suggest that if you do it with a similar type of employer, it should help, but without a specific conversation with that employer, you can use it only by way of analogy.
Katherine Fletcher
Q
Sir KCB Bell—I always start with flattery; I find it safer. Would you track outcomes to help people make informed choices to narrow down that modularisation overwhelm?
Sir David Bell: Yes, and I think we probably need to draw a distinction, don’t we, between the individual making a choice under LLE to follow a particular route or pathway of study and the employer working with the employee to put together a programme that is very much designed to support the employer’s business objectives. In both cases, you would be able to say either to the individual or to the employer, “If you put together this little package of modules, that would meet your needs.”
One of the benefits is that the LLE will not be the only show in town, if I can put it that way, because there will be employers who continue to say, rightly, that they want to offer the apprenticeships route and employers who say, “Actually, we want something that is more of a short-course opportunity, rather than more formal and modularised at 30 credits.” This is part of a suite of opportunities. Therefore, maybe it only emphasises the point even more that we have to provide good guidance to people so that they can understand the best way through.
Katherine Fletcher
Q
Sir David Bell: Absolutely, and I suspect that part of the regulatory regime will require us to do that. It is entirely appropriate, isn’t it, that we will have to demonstrate that. However, I think Rachel made an interesting point earlier about there being perhaps a number of players involved. Let us take the example of credit transfer arrangements; we can make that work. Someone might start a module in one institution, such as a further education college, and might then go to a university and go on to another university. That needs to be sorted out, but I would have thought from the point of view of the public purse—never mind what institutions want to be able to demonstrate—you would have to have a mechanism for tracking outcomes and successful outcomes.
Andy McDonald
Q
Rachel Sandby-Thomas: It would be another source of funding if the levy were expanded outside apprenticeships, because currently it is only for apprenticeships. If that were to be amended to have wider training involved, that would be another source of funding. I do not really think it helps the university very much, because obviously the purpose of this legislation is to prescribe how much it can charge, but it could help the prospective student if the employer used the levy to contribute in order to reduce the size of the loan that the prospective student takes out.
Andy McDonald
Sir David, any thoughts?
Sir David Bell: That is a policy choice about the allocation of apprenticeship levy funding, but I would have thought that one of the tasks for policy makers is to try to ensure that we have a coherent system of funding that supports all the different routes, including apprenticeships, those who would want to study under the LLE and so on. That is important, but I do not really think it is for us to comment on the allocation of apprenticeship levy funding.
Andy McDonald
Q
Sir David Bell: I do think it gets a bit more complicated, and we are in the process of trying to work out how we can address those complexities. I would go back to the point that Rachel made. I have not had the chance to say it, but I too want to say that this is a really positive development if it is giving people more opportunities to undertake additional education at different stages of life. That is a very good thing. We want to make it work, and if it is a bit more complicated than perhaps the system has been up until now, there is an onus on all of us to ensure that we provide the right kind of guidance and support. There are all kinds of players in that regard. Reference was made to the work in Sunderland through DWP, which is a really good source of advice. There is the university or college itself, and independent advice and careers guidance. All of that has to connect, so that people get the right advice in what I think will be a slightly more complicated system under this reform.
Lloyd Russell-Moyle
Q
Rachel Sandby-Thomas: That is a really good question. Let me do the first part first, because that is a slightly easier question. I do not want to appear as if I am putting out a begging bowl and saying, “Yes, please—more money,” but I do think it would help. There are certain one-off costs, such as the reconfiguration of SITS. Seed funding happens quite a lot. Little pilots are started, and a little bit of money is given to get a bit of resource in. Everybody gets used to the fact that it is there, and then they just keep it. Universities are very good at responding to that initial incentive, absorbing it and making it part of their resource base as they move forward, so I think that that would be welcome. If we want this policy to take hold, which we do, it would be money well spent.
The second part of your question is really tricky. I know that policy makers very often go to the most nefarious possible outcome: the wily student who might have mental health problems and thinks, “Aha! I can get a far better service if I do a 1,000 module at Warwick. I’ll just stay on for ages and ages, and get great-value mental health services that are not publicly or privately available for that money.” That would not be a good outcome. However, I am a firm believer that most people are not nefarious, and we should be regulating for the majority of players with good intent rather than evil intent.
There has to be a cut-off at some point, otherwise somebody could do one module but be able to access the library and take up library space forever and ever. On whether somebody should hold things in between, I do not quite know who that would be. There probably needs to be a bit of a time-bound associated status. You do not want to just chuck somebody out the door as soon as they have finished a course. That is not what universities want—universities want stickiness with their graduates and students—but nor do we want loads of library space blocking. There should be a bit of a time-bound lapse.
Robert Halfon
Q
Rachel Sandby-Thomas: As you rightly say, we do credit transfer sometimes, but it tends to be in the minority of students. The 2+2 course is a good example of that—generally students will do two years at a college and come to us for the final two years—but we know that college well, we know what they are teaching and we know the standards the students get to at the end of their two years at college, and that makes for an easy progression to us. That makes it much easier. There will be a lot more work if this really takes off, because we will have to get to know, assess and understand that prior learning in order to be able to recognise it. It would be a short-sighted kindness to allow a student who is not properly prepared to come on to a module if they have not reached the standard needed for that module. It might seem a kindness, but it does them no favours at all.
Sir David Bell: Making credit transfer work is a very important requirement if the lifelong loan entitlement is to work, because people will want to move between institutions. If we hold the mirror up to ourselves, I think universities also have to be a bit more liberal in this regard; we can at times be a bit sniffy when it comes to the qualifications that have been accrued in another institution. As Rachel said, there are a lot of good examples of this happening where you know your partner institutions. As a sector, we have to show that we are engaged in this by having better credit transfer arrangements without putting enormous bureaucratic hurdles in the way of students, who think, “Why can’t I transfer from this place to that place?”
Matt Western
Q
Rachel Sandby-Thomas: The T-levels example is an interesting one. The take-up has been disappointing, but most people I talk to do not really know what T-levels are. It is all about communication and understanding. There needs to be a massive, well-planned communications campaign. It will be trickier with this policy, because it is more complex than T-levels. There have to be lots of lessons learnt from T-levels and the fact that take-up has been disappointing, and those lessons can be applied to this. It will be about communication, communication, communication—and, just when you think you have drenched people, communicate a bit more. We know what needs to be done, but sometimes it is a bit hard to do it.
Sir David Bell: We have had experience before with things such as accelerated degrees, where everyone thought, “Oh, there will be massive demand,” but that really did not materialise, so perhaps the lessons to learn—
The Chair
Order. I am afraid that that brings us to the end of the time allocated to the Committee to ask questions, and indeed the end of this morning’s sitting. On behalf of the Committee, I thank our witnesses for their evidence.
Lifelong Learning (Higher Education Fee Limits) Bill (Second sitting)
Tuesday 21st March 2023
(1 year, 9 months ago)
Public Bill CommitteesRead Full debate Lifelong Learning (Higher Education Fee Limits) Act 2023 View all Lifelong Learning (Higher Education Fee Limits) Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 21 March 2023 - (21 Mar 2023)
The Chair
We now proceed, as this morning, with our witnesses to the Committee. We are sitting in public and proceedings are being broadcast. We will hear oral evidence from Matthew Percival, programme director of skills and inclusion at the Confederation of British Industry, and—on video—Simon Ashworth, who is director of policy at the Association of Employment and Learning Providers. Will you say who you are for the record, starting with Simon?
Simon Ashworth: I am Simon Ashworth, director of policy at the Association of Employment and Learning Providers—AELP for short.
Matthew Percival: I am Matthew Percival of the CBI.
The Minister for Skills, Apprenticeships and Higher Education (Robert Halfon)
Q
Matthew Percival: We are obviously in a situation that is very well documented at the moment—the extent of skills shortages combined with labour shortages in the economy. The topic is right up there in terms of the labour market as a business issue. One reason we have been strongly supportive of the principles that are looking to be embedded into the LLE is that they go with the grain of a number of the changes we see in the economy—in the nature of learning, in who learners are and what their needs are.
The way we see technology changing jobs now is more often evolving a job rather than replacing a job. The stock of learning needs in our economy is increasingly adults rather than just young people, and it is increasingly about incremental changes in a role rather than a fundamental retraining to shift occupation. There will still be people who fall into that category, but an element that we are particularly welcoming in the approach of the LLE is that it is taking a broader understanding of what quality is—that it is not just about whole qualifications but can be about keeping your learning topped up as well.
You asked about how employers will respond. We have a lot of work to do to improve employer awareness about the scheme. When we surveyed on it last year, 80% of businesses said that they were not aware of it. There is an extent to which that is not so surprising because it is largely a policy that considers the interaction between the state and the individual learner, rather than the employer being an integral component. We are all thinking about how we design the policy—not what is on the face of the Bill, but the policy—to minimise the risk that this becomes a transfer of things that employers used to pay for and now get funded through the LLE. We then need to have a positive vision for how this can leverage more business investment.
I would love to see adopted as an objective for the policy that we measure success also by the extent to which it leverages additional business investment. I am not sure that is an objective at the moment. This could have a really positive impact. Our last estimate work with McKinsey said that one in six people will need to retrain by 2030, but in only 25% of those instances of retraining will there be a return on investment for an individual employer to pay to get the learner from where they are today to where they need to be to make that transition. We either respond by saying the state or the individual has to step in and fund the entire gap to get somebody ready for the job, or we can be a bit more flexible, which is what I hope the LLE will allow us to do. How do we get somebody ready enough, to the point where there is now a return on investment more often for employers, and then get the employer to step in, and where we expect more of the employer—to step in and hire people with training involved?
Robert Halfon
Q
Matthew Percival: A couple of things could go on in parallel. We could see a situation where somebody is employed full-time by their current employer, but they want to be able to switch careers. It would be unusual to expect their current employer either to be funding time off to train, or to be funding the cost of their training, so that person will be able to leave the employer and go somewhere else. But you can see how some people could use the LLE in that kind of way to help them navigate through the labour market while having a job, and that more flexible approach helps them to do it. Personally, I do not see the LLE as a massive tool for employers to upskill and evolve their current workforce for the jobs they are already doing. Normally, that is where you would be trying to create a skills environment where you could leverage the business investment into that already, rather than the LLE doing it. We are talking about quite a small amount of a large amount of investment, but, in terms of the grand cost across somebody’s lifetime—what their total training cost is likely to be—this will be a smaller element of it. You could use three quarters of it in a single undergraduate degree here.
Robert Halfon
Q
Simon Ashworth: As you say, we are broadly in favour of the principles. We need a better mix between employer, state and individual investment in skills. For our members in the FE space, I guess awareness of the LLE is still underdeveloped. Probably the biggest impact for a lot of our members will be on those who already did not deliver advanced learner loan provision. That is a programme source that has diminished over the past few years as a result of the challenges around cost of living, and the free courses for jobs offer negating the need to take out a loan. We were particularly excited to see the move to offer a third pathway for regulation through the Office for Students. That is a really important move to ensure that our members are part of the landscape, and this does not just include an HE-provider dominated landscape; it is a true mix of FE and HE providers. Obviously, there is more work to do on what that registration process looks like, and to move more of our members to be recognised and regulated by the OfS outside the full degree-awarding powers piece.
Matt Western (Warwick and Leamington) (Lab)
Q
Matthew Percival: We are certainly not meeting anybody’s growth ambitions. It is a difficult economic position. Added to that, we are seeing some squeezing of training budgets, but there are two factors to that. It is not just the traditional case of, “If there is a slowdown in the economy, do we see some cutbacks there?”—often it is about protecting jobs in those sorts of recessionary situations. The current one is a lot of pressure being put on employers’ budgets by things such as trying to do everything they possibly can to support employees with basic pay. I know a number of employers who have squeezed their training budgets and other discretionary costs like that in order to do everything they possibly can to support with a higher basic pay settlement at the moment.
From our own indications, the same survey I mentioned on our measurement of the extent of skills shortages still reports more businesses saying they intend to increase their spend on training than saying they would decrease it, and significantly so. But there is a weaker balance than the year before. The one bit of context I would add is that last year we saw a big spike to record levels of intent to increase, because the 12 months people were referring to previously was the heavily-disrupted period of the pandemic, and therefore that was a big increase.
Now we are back to levels in our surveys of similar intent as previous years, but I also note that our survey tends to end up being more optimistic of employers telling us their intentions for the following 12 months than official measures of skills spend would show. It feels like we are in a similar environment to the five years before the pandemic rather than a different position at the moment.
Matt Western
Q
Matthew Percival: There is an important link between productivity and skills, more so in individual productivity than in a macro sense. I tend to think that the ways in which we do jobs, and the ways in which technology supports us to do jobs, create the productive potential of a job. Our skills are the extent to which we manage to realise that potential in any individual job. There is always a risk that sometimes we train somebody to do a job but do not consider how to change the job itself. We make a worker more productive, but not the jobs in the stock of our economy.
I do not see that, though, as the principal objective of the LLE, because it feels like the LLE is more about how we help individuals to navigate their path through the labour market, rather than that in-role piece. If an employer adopts a new piece of technology or a new way of working that requires a skills investment to get the benefit of it from their workforce, I would expect to see that being picked up more by the employers rather than through the LLE.
Matt Western
Q
Simon Ashworth: That is a really good question. You can look back in history at the individual skills accounts and some of the challenges. We have moved forward significantly and have some learnings, including ensuring that we have regulated providers who are delivering from a regulated list of qualifications. Some online platforms now negate some of the challenges we had historically around a paper-based system, which was probably a little bit of its time. There are key principles there around the controls and the providers.
As I said, the Office for Students regulates the provider base. I think we have moved on significantly from where we were previously in terms of access to providers and how the system can and does work. The whole concept of empowering learners and giving them an individual lifelong learning account is a really exciting move. It gives them much more control over where they access their provision, who they choose and when they choose it. I think it is a real game-changer for the individual. I would be less worried about some of the challenges we saw 20 years ago when we moved to a similar approach.
Mr Toby Perkins (Chesterfield) (Lab)
Q
Matthew Percival: There is an interesting dynamic at play, particularly at the moment, around labour shortages. Given the extent of the skills and labour shortages, there is a stronger incentive and a stronger need than ever to be able to meet your skills needs, yet, at the same time, there are forces pulling in the opposite direction. I mentioned that in this environment, we have had a lot of job-to-job moves within our labour market. People have been able to move into different roles for more money, and there is pressure around salaries on hiring and salaries for retention. If you do not do something on retention salaries, you incentivise everybody to move more and to swap employers, so you get that element of the squeezing of budgets.
There are other things that we see going on in relation to the current shortage environment. There can be an element of the off-the-job opportunity cost of a worker going off to do training. When you are already short on the frontline, it is even harder to free somebody up to go and put the time into the training, and we see a number of the providers in our membership—we have a mix; as well as the plcs that we are most synonymous with, there are universities, colleges and independent providers in our membership—particularly the colleges feeling the pinch when there are these shortages. They also have their own workforce challenges, which often make it so much more difficult to be able to provide the training where the employer is willing to do so. It is more important than ever to be able to address the skills gaps, but it is also more difficult to be able to deliver that at the same time, rather than a universally positive driver towards unlocking more investment than we have.
I think we miss a trick in terms of policy to be able to think about the question of what it would take to create an environment to unlock higher levels of business investment in skills. A lot of our political debate around skills often gets focused on what the state will buy for the individual, rather than on how the state could play a role in creating an environment for higher levels of business investment. An imperative for us would be to have more of that conversation.
Mr Perkins
Q
Simon Ashworth: I think there is a real possibility of that risk materialising. As you say, one of the big challenges for SMEs is the complexity of accessing and funding the system. We know that large employers have a significant influence, certainly on institutions, around course development and course design, so we could see some of the challenges that you have articulated replicated here in terms of the provision and some of the accessibility arrangements. As you say, on the apprenticeship side, the role of providers to support SMEs is pivotal, because SMEs and small employers tend to be time poor as well—I am thinking about their engaging with the system. But I would absolutely echo the challenges with the LLE that we have seen in apprenticeships.
Sir David Evennett (Bexleyheath and Crayford) (Con)
Q
Secondly, one of the things we find when going around the country in various roles is that businesses complain that they are not getting people trained to have the skills they require. Do you think that the Bill will encourage more businesses to get more involved with universities and colleges, so that they can work together to make sure that they are encouraging colleges and universities to have the courses to fill the skills shortages? Subsequently, the firms will be able to participate in the upskilling, as well as individuals, or the Government.
Matthew Percival: I completely agree with the sentiment and the objective of how we get employers more involved in the system; I am not sure this is the mechanism we are pinning our hopes on for that. You would expect more of that objective to be achieved through a reform like the local skills improvement plans, which try to get that employer voice out to provide us with that bit more, rather than this being the specific mechanism for it.
To your earlier comment about employer engagement with programmes, the job we really have to do is not just to say, “Let’s make employers aware of the LLE”, but to ask whether we actually have a coherent story to take to employers and say to them, “This is what is valuable for you about engaging in this process and why you should do it.” If we have that story to tell, we can be a lot more effective in helping to engage people.
Often the way it comes across to employers is that there is a whole plethora of initiatives and they will say, “I am confused as to which one”. I know part of my job, as a representative employer, is to hold a bit of that challenge back to them and say, “Well, you can’t say both that you need it to be dead simple and there to be only one option, and when there is only one option say, ‘There isn’t an option that works for me.’”
We need a plurality of different initiatives and options, but we also need to challenge and support employers to navigate that environment. Rather than just saying, “Let’s try to raise awareness” and getting them to tick the box that says, “I’ve heard of the LLE”, because they might have heard about it as individuals rather than as employers, it is about how much we can get to the objective of them giving us quite a consistent message that, “This is the value in it for me, and I am confident that I know that element of it”, rather than just brand awareness.
Simon Ashworth: We refer to our members—providers —as the sales force. I think there is absolutely a role for Government to do with engaging employers. Our members—independent training providers, colleges and universities—deal with employers all the time. It is important to harness their links with industry and employers around awareness of the LLE. Ultimately, the LLE and the entitlement is about the individual as well. There is the employer demand and the employer support, but there is also the individual because, at the end of the day, it will be the individual who takes out the loan entitlement. There is a role for organisations such as UCAS to help promote that.
I would certainly encourage the Government to work with stakeholders and providers, which could do some of the heavy lifting around awareness. I do not think it is just the Government’s role to try to reach a million employers. I think they need to pull on all the different stakeholders that can promote the programme and make it a success.
Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)
Q
My other question is probably to Simon. I started work in the ’90s, and we definitely had a skills shortage then. It seems that we have always had a skills shortage, so why is that? What have we learned or not learned from it? What is wrong with the current system? How will this solve the problem?
Matthew Percival: I will answer both. On the way businesses are thinking about the LSIPs programme, the best model is if it is adding an employer voice into the system for those employers that are currently struggling to have a voice. A lot of employers that feel they are confident with their existing provider relationship—they are understood and are getting what they want—are taking a backseat from LSIPs, because LSIPs are not a skills plan for the area with the totality of all skills needs. It is an extra source of information to try to give a voice to the businesses that are struggling most for a voice at the moment.
If that was to feed into the LLE through a consideration of how we make that information available to learners to make informed choices—I spoke about the LLE being less about someone who is in a job already and how they progress with the current employer, and more about how they navigate the labour market—and we were able to say, “Actually, there is a demand in the local area,” it is the LSIPs that would help work out what the job opportunities are.
What LSIPs will not be able to do, and where there would need to be some extra support in the LLE system, would be giving advice on what training someone would buy that would get them to the point of readiness for an employer to hire them with training, rather than their being fully competent. That is an element to add. That would be the interaction between LSIPs and the LLE for me.
Simon Ashworth: On local skills improvement plans, we have been fortunate to be involved in some of the pilots. Some of the findings for us were that employers are just keen to get individuals with really good basic skills—maths and English—and who turn up on time. They are quite happy to support them with the technical skills. There is almost an acceptance now of getting people in and being willing to invest in them and train them. We should not lose sight, certainly on the local skills improvement plans, of some of those key employability skills.
The question on skills shortages is key. Some of it is a lack of coherence around the skills system—a lack of progression. Apprenticeships are a really good example, where the reforms started with the development of high-level programmes, and lower-level programmes tended to come later. Having progression pathways is important. We also rely too much on imported labour. We have seen that coming back again in the imported skills in construction announced recently.
We see a lack of synergy between some of the Government Departments—the Departments for Work and Pensions, for Education, for Business and Trade—and some conflicting programmes. They are very complex for employers to understand and for learners to access, whether it is the Skills Bootcamp or the Restart programme. They just operate in silos. We need a much more integrated system that does not overlap, which is less complex for employers, and a lack of reliance on foreign labour; those are some of the challenges that we would say are holding things back, as well as having those skills shortages.
Andy McDonald (Middlesbrough) (Lab)
Q
Clearly, we want employers to invest in training as best we can. If SMEs are being excluded, should we be considering, in addition to these measures, some fiscal settlement for SMEs to give them an advantage over the larger employers?
Matthew Percival: You mean outside of the consideration of the LLE—a broader question around skills investment?
Andy McDonald
Yes. You said the LLE was not necessarily the silver bullet.
Matthew Percival: Okay. There a couple of things going on there. Yes, I would agree with you, and it links into my point about having a stronger conversation about what it means to create the environment for every business to invest in their skills. SMEs will find different challenges and are in a different environment to larger firms.
One point that is sometimes misunderstood when we think about size is that a big business can be a small business in a place, and the skills conversations are all happening in different places. A number of larger businesses nationally, which have multiple sites, will tell us that they have got excellent provider relationships in one area because their business happens to go with the grain of the sector in that area and it is really prominent, like food manufacturing in Shropshire, and therefore they have got loads of providers available to them.
The same company in a different bit of the country tries to take the same approach and cannot, because there is not the same critical mass of similar businesses in the area to make it economic for the providers to offer to the same extent. Size can be the business’s size to the local economy, rather than the business’s size as a business individually. Both of those factors are at play here.
Mr Perkins
Q
The Chair
Thank you to both Simon and Matthew. If you have anything else to say, you can always do so in writing.
Matthew Percival: Happy to follow up.
Examination of Witness
Sir Philip Augar gave evidence.
The Chair
Q
Sir Philip Augar: I am Philip Augar. I chaired the post-18 panel, which sat between 2018 and 2019 and was convened by the May Government. The panel disbanded about four years ago, almost to the month, and therefore I speak this afternoon in a private capacity.
Robert Halfon
Q
Sir Philip Augar: Thank you, Minister. I am not actually the architect. The panel that I convened were very much as one on this, and we built on the work of the Sainsbury review and the review of skills and vocational education written by Professor Alison Wolf, who was a member of the panel. I think, however, that all of us involved would indeed be very happy with the progress that has been made. There is clearly a lot of work to do to make this happen, but it has the potential to be a game changer and to address a lot of the issues raised by the previous witness and others.
Robert Halfon
Q
Sir Philip Augar: The approach looks sensible. It is clearly important to establish a mechanism whereby learners taking modules do not end up overpaying, and this Bill sets in place the framework to ensure that a fair price is set.
Robert Halfon
Q
Sir Philip Augar: I think this has to be an incremental approach. It would be a bad thing if this got off on the wrong foot. We have seen that with previous attempts to address the skills gap. I am very much in favour of starting small and rolling out. This may take several years to really kick in, but by the end of this decade, when the demography—the number of 18-year-olds—starts to fall away, there will be an incentive for providers to step up to the plate. By then, I think the awareness on the part of learners, schools, colleges and, indeed, employers ought to be much greater. I think we could have a real flier then.
Matt Western
Q
Sir Philip Augar: I missed a word there. Is your question about the impact on institutions?
Matt Western
Yes.
Sir Philip Augar: I think, potentially, this could be very significant. It is a significant opportunity for independent providers. It is a significant opportunity for FE colleges, which could really see them enter the mainstream. I will be interested to see how the universities respond. For the next few years, there will be pressure on places, as the population of 18-year-olds increases. When that turns down in 2030, there might well be places at universities that require filling, and this modular approach could be a really good way to do that. I think there are positives, actually, for all types of institutions.
Matt Western
Q
Sir Philip Augar: The panel that I chaired recommended that the total unit of resource—the amount allocated to each student—should remain frozen until 2025. We recommended a slight variation in the mix between the loan and a direct grant, but we felt that, by 2025, there would be a case for having another look at whether the unit of resource was right. That will be at £9,250.
Since then, we have had a period of substantial inflation. That would be the right moment to have another look at this to find out whether providers are spending the money wisely and frugally in the public interest. Without carrying out that piece of work, I would not really like to say what the fee should be 10 years out, but, clearly, one would expect that inflation would have been reflected in it to some degree
Matt Western
Q
Sir Philip Augar: That seems a pretty reasonable assumption, given where we are with inflation.
Matt Western
Q
Sir Philip Augar: That is a really good question. For this to work, we need a number of parties to respond to the opportunity. We clearly need providers to respond. We need them to understand the needs of the economy—the national and local economies—and to put on modularised courses. We need schools and colleges, in the form of their careers advice—the information and guidance that they give—to actually broaden that advice from what is currently; it is not just about universities.
We also need employers to step up to the plate. The local skills improvement plans are—and potentially could be even greater—a forum where employers can understand the needs of their local area. FE colleges are now obliged to take that into consideration, so we potentially have a joined-up system in place here. I think all that needs to happen before learners—and I suppose parents—can make a balanced judgment of the next, best step to take.
Mr Perkins
Q
Sir Philip Augar: That is a question that I ask myself quite a lot, Mr Perkins. It is hard to come up with a definitive answer. Obviously, for the independent providers and FE colleges, this is a massive opportunity. This is a chance to completely expand their market, and I would have thought that they are already on to it. For the universities, I am not so sure, because there is considerable demand from domestic and overseas students for the full three-year degrees.
I would hope that the forward-thinking institutions are looking at that demographic downturn in 2030 and thinking that it is not far away. This will come by very quickly. The cohort that starts in 2025 will have its three years and then we are into it. I hope that the forward-thinking institutions—the type that will be interested and able to offer modularised, credit-based lifelong learning—will be thinking about this: if not now, then pretty quickly.
Mr Perkins
Q
Sir Philip Augar: That is clearly a risk, but a lot depends on how lifelong learning is portrayed by the schools and colleges that are speaking to young people and parents. Not everyone is suited to an academic route. That does not make someone who pursues a vocational route a less worthy person; it just makes them different. I very much hope that we can get away from thinking it is university or bust. It is absolutely not, and this is an important way to get us there.
Andy McDonald
Q
Sir Philip Augar: It is a very good point, and the panel did engage directly with employers and representative organisations. We had a number of roundtable meetings and invited them all along. The response varied, frankly. Some representative bodies and some employers absolutely got it. There is possibly a sense in other quarters of, “Look, this really isn’t our problem. We can’t get the staff, you know.” Actually, that is your problem. I am a big fan of the LSIPs. The engagement between local business, local education providers, chambers of commerce and the rest has the potential to close the gap that you identify, and I agree with you.
Andy McDonald
Q
Sir Philip Augar: I am not so sure that it is actually in the curriculum, but it is a close adjunct to the curriculum in terms of professional, carefully considered, disciplined provision of information and guidance about career opportunities and further and higher education opportunities—not just when you are leaving a place but throughout your life. It is a core part of the rounded function of a good school and college.
The Chair
We are coming to the last couple of minutes. A brief question from Matt Western.
Matt Western
Q
Sir Philip Augar: If I were thinking of a lifelong loan, I am afraid I would be excluded by that barrier. We live in the real world. It would be great to extend it right through for much longer than that, but if these loans are not repaid, they are picked up by the general taxpayer. We have to be realistic about that, and 60 seems to me to be a reasonable number. It could be a little higher, but it seems a reasonable number.
The Chair
Thank you very much, Sir Philip.
Examination of Witness
David Hughes gave evidence.
The Chair
Q
David Hughes: Good afternoon. I am David Hughes, and I am the chief executive of the Association of Colleges.
Robert Halfon
Q
David Hughes: I was listening to Philip, and I agree with everything he said. I think it is an opportunity for colleges, but you will not be surprised to hear me say that more needs to be done. The LLE can be a real game-changer as part of a suite of changes that are needed. We need to understand what the LLE is for. It goes back to Philip Augar’s report, which said that we have a tale of two halves: half of young people are going into higher education by the age of 30, and half are not. It seems to me that the LLE is about particularly trying to help the other half who have not been into HE to have a higher education experience. That, almost always, will need to be local, will need to be flexible and will need to be affordable. The LLE helps enormously with that, and colleges should be at the forefront of delivering particularly modules at levels 4 and 5 and sometimes level 6 and beyond. We need to think about what is happening below level 4 and the investment needed to get more adults to level 3, because about 62% of 25-year-olds have a level 3, but we need more of the ones who have not to be able to get a level 3 as an adult in order to use the LLE.
Robert Halfon
Q
David Hughes: I hope so. The Nottingham Trent and West Nottinghamshire College example is a really good one. There are others—London South Bank University has some really good work going on, and Derby University has. Around the country there are good examples, but sadly, there are also examples of colleges and universities not collaborating effectively, and there are not really the incentives to do so. I would like to see more work carried out to try to get better links, particularly to give young people the option of doing one or two years in a college, getting their level 4 and maybe their level 5 without having to go residentially to get their bachelor’s degree, but perhaps topping up with an extra year or two at university. We need to help colleges and universities to collaborate better. The system needs to help, and we need to look at the regulation and the metrics of achievement, because some of it militates against that collaboration.
Robert Halfon
Q
David Hughes: Again, I think it will depend a lot on their relationships with universities in particular. There is a lot of potential for young people and adults to do some of their higher education in their local college and perhaps transfer that credit to a university somewhere else, if that is what works well for them, but that needs individual relationships to be good. In some parts of the country we will definitely see that. It would be great—wouldn’t it?—if there was a much more open sector in which those options of credit transfer became quite normal and part of what we offered to every adult of every age, but I think it will take some time to get there.
Matt Western
Q
David Hughes: The problem colleges have is that they do not have any of what the private sector might call risk capital: they cannot set up new courses unless they are absolutely certain that those courses will be successful. I think that will make them cautious, and when you are trying to introduce a very different type of higher education, caution is a real barrier. I would love to see the Department for Education supporting colleges to share some of the risk and to pilot courses.
One of the things that colleges do really well is work very closely with local employers. It would be lovely to see some more work, in specific sectors of the economy where there are skills shortages, to pilot colleges and employers working together to develop modules that are attractive to individuals and that help them to get into those skills-shortage jobs. To imagine that will happen just by chance is stretching reality; I do not think it will require tens or hundreds of millions of pounds, but it will need investment to make sure the risk is shared. If we do that, we could really get the ball rolling and show it works, and then more organisations—more colleges and employers—would engage. It is incumbent on the DFE to really start with that investment and risk sharing.
Matt Western
Q
David Hughes: The investment in adult education has plummeted over the past 12 years, so there are fewer opportunities now than there were in 2010. That is a major problem. The funding rate for colleges has not changed for 10 years. That is a major problem. We need more investment in colleges just so that they can recruit the skilled staff to be able to deliver.
There is an investment question, then, but there is a pathway issue as well. We need to make it much more straightforward for people to understand how they can get from wherever they are—whatever level—through to the sort of skills acquisition that really works in the labour market. Adults with children, mortgages, car loans and whatever other responsibilities need to see a return on their investment. The LLE is a fantastic opportunity, but it is not going to be taken unless it is super clear that getting that level 2, level 3, level 4 or level 5 will actually make a difference to a person’s chances in the labour market and, let’s face it, to their income to help with the cost of living crisis.
Gill Furniss
Q
David Hughes: I completely agree, and it looks as though it might get worse in the short term. The Government are negotiating with the teachers’ unions at the moment; if teachers get a better settlement, the gap between schoolteacher pay and college lecturer pay will get wider. It will get even more difficult. I know that the Minister is aware of that; I have talked to him about it. It is a difficult one, but we absolutely need college staff to be paid the right wage to attract and retain them.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
Q
David Hughes: I think it is happening now. It happens as part of the system. We have a system in which if you have good level 3 and good A-level results or BTEC results, you get into a university. If you are an adult and you have not got quite the same simple set of results, it is much harder to get into a university, and colleges open their arms to that group of people. So we already have that schism between a university sector that does not include those people and a college sector that does. It might get worse. A lot of adults need to build their confidence and learn how to learn, and colleges are very good at doing that. Often universities are not as good at doing that. They can teach someone a subject and can teach the research. Colleges are experts at teaching and universities are experts at research. Somehow we need to accept that and applaud it and use it to deliver to the right people.
Lloyd Russell-Moyle
Q
David Hughes: Yes, I think that is absolutely right. If you think about the extra learner needs and the high number of young people and adults in FE colleges with additional learning needs and disabilities, it is enormous—much higher than in any other sector. That learning support needs to be fully invested in. Students tend to come from poorer backgrounds as well, so bursaries and support with their finances are equally important.
Lloyd Russell-Moyle
Q
David Hughes: I think employers in this country generally pay less than in other OECD countries, so we are not doing very well on employer investment. Some employers are brilliant; many are not. I think there are massive dangers. We need to make sure that universities, colleges and private providers do not allow that to happen, because I am absolutely certain that some employers will want to do that. In my 32 years’ experience of working with employers and skills, we know that some will want to game the system, so we absolutely need to be alert to that. It will be a small number, but it could be significant. We must think about how to drive that out of the system. The providers need to make sure they are not playing that game as well.
The Chair
I am afraid we have run out of time, so there is no time for further questions. Thank you very much for your contribution to the Committee this afternoon, David Hughes.
Examination of Witnesses
Dr Elizabeth Norton and Professor Sue Rigby gave evidence.
The Chair
We now hear evidence from Dr Elizabeth Norton, policy adviser from Coventry University, and Professor Sue Rigby, Vice-Chancellor of Bath Spa University. Please can you start by introducing yourselves?
Dr Norton: Hi. My name is Dr Elizabeth Norton. I am a policy adviser at Coventry University and I specialise in Office for Students regulation.
Professor Rigby: I am Sue Rigby. I run Bath Spa University. As a member of the board of the Quality Assurance Agency for Higher Education, I rewrote the credit framework in 2021.
Robert Halfon
Q
Professor Rigby: In theory, it makes lots of sense. Nearly every university uses credits, with the exception of Oxford, Cambridge and medical schools. The exceptions in the Bill allow for that. I am worried about unintended consequences, and they focus on students who may fail a course or who may need to resit.
At the moment, the failure and the resitting is bound up within the fees for a year. We have clarity from the Department for Education that, in the provisions in this Bill, students would be responsible for paying for both the course they have failed and for the resit course.
The premise of the LLE is that the minimum fee quantum will be 30 credits. Most students will fail subsets of that—we run 10s, 15s, 20s. I think there may be some unintended consequences to explore to make sure that students are not disadvantaged.
Intellectually and theoretically, this measure will work beautifully, but in practice, I would love to see a risk analysis on unintended consequences for my students.
Robert Halfon
Q
Dr Norton: It is absolutely right that there will be a third category of registration—if a new entrant to the OfS provider system is only doing modular provision, it will need to be regulated separately—but the OfS will need to consult the sector widely on how it integrates monitoring student outcomes, progression and completion of modules to really ensure that standards, in terms of access, student experience and value for money, are maintained.
Robert Halfon
Q
Dr Norton: I think a lot of FE providers have already joined the OfS register. I cannot speak for them entirely—we are a university—but I think the main barrier for them, from my point of view, might be that there is a lot to be done to keep up with OfS regulation and to keep up with compliance. I worry about the amount of bandwidth that FE colleges have to do that—it is its own little cottage industry. That would be my main concern: do they have the capacity to integrate these new regulation challenges?
Robert Halfon
Q
Professor Rigby: Probably, in this Bill, the solution resides in that course year. If one could identify a course year with a loose allocation of credit—let’s say, plus or minus 20 or 25—that would not break the intent of the lifelong loan entitlement being a 30-credit minimum, but it allows 18-year-olds to fall over once or twice during a year and to be picked up in-year, rather than getting another £3,000 taken off their lifelong loan entitlement.
Mr Perkins
Q
Dr Norton: Coventry has multiple start dates throughout the year already—we have six, I believe—so the volume of applications may increase throughout the year, which would cause some capacity issues, but overall I think it is a positive.
Professor Rigby: Most universities currently have multiple start dates, even the research-intensive ones, mainly because a lot of international students start their master’s courses in January. In the Bill as written, this is a technical realignment, which means that instead of someone starting partway through a year and their fees running through four years if they are on a three-year course, their fees will run over three years but in practice they will start and end in the same month. It is a technical change.
Throughout the Bill, I have identified a multitude of technical changes that will affect the provision of probably a couple of million existing students in order that, in ’27-28, we will start to see the roll-out of the LLE. Intuitively, I wonder why form does not follow function, in that we should design the LLE and then make sure that the funding system will permit it, rather than changing the funding system ahead and precluding some of the design opportunities that would otherwise reside in the LLE.
Mr Perkins
Q
Professor Rigby: All undergraduate degrees tend to be 4, 5, 6. We currently accept top-ups into 5 and into 6, but there is limited demand at the moment for that provision. The real opportunity here exists in growing this ecosystem almost organically, and colleges working with their cognate universities—we are federated with Bath College, for example, and New City College in London. We are developing novel provision in that space, assuming that the funding will permit it. There is little that the funding will not permit; it is just not so obvious to the person in receipt of it. There is little in terms of top-up, one-year, short courses that we cannot do currently, but we sometimes have to look for something from commercial entities, rather than individuals taking out loans.
Matt Western
Q
Professor Rigby: As I read the Bill as written, nothing gives me direct cause for concern, but it does give permissions for things to happen down the line that are not part of what is conceptualised at the moment in the lifelong learning entitlement. For example, nothing in the Bill would stop the Secretary of State in future refusing to fund a module or course in a particular discipline. Universities are worried about that, because we have seen the removal of extra funding for courses such as archaeology and design over the past few years. It makes us conscious that the Bill, while not designed for that function, gives permission to the Secretary of State to set fees at whatever level they might want for a degree that they might like, or to refuse funds at any level for a degree that they do not like. All of us around the table might worry about archaeology—notwithstanding that you did it; people do move on later—but most of us would see that design is something that is broadly useful to the economy.
Matt Western
Q
Professor Rigby: The geek in me would say that all modules have currency because they count for credit. We already have transfer schemes between colleges and universities and between universities—one with another—that will accept aliquots of credit at a particular level and allow that to stand in lieu of partial learning. So I could take half a year’s work, I could get entry into a different university and I could be let off that half-year of study, despite the fact that the curriculum might be slightly different.
To an extent, any 30-credit module taken under the lifelong loan entitlement will have currency. It would be useful to badge or brand them with a series of designations that would make a lot of sense. If I turn up and say I have a 30-credit module at level 6, you are probably not that impressed, but it is about the same amount of effort as an A-level, for example, and at a higher level of intellectual demand. It would be useful to badge and brand these things so that they made sense to everybody. However, in their raw form, as long as they carry credit, that will make sense not just here but internationally, so you can go through the four nations and into Europe with that attribution of credit.
Matt Western
Q
Dr Norton: I was just going to say that the LLE consultation response document says that there are plans for transcripts to be standardised. If that could be integrated into the LLE gateway system, along with advice and guidance, it would give a lot more clarity to students and employers. There is a real issue of brand recognition, I think, in the value of modules, especially to employers, who might view 30 credits differently to how we in the sector do.
Matt Western
Q
Dr Norton: We in Coventry have an open-framework approach to certain areas of provision. The one that springs to mind is a professional development course that ends up in a BA or BSc for professional athletes. Through that approach, all the different campuses within our group structure are open to students, who can take modules from across the spectrum of what we deliver: sports science, business management, and exercise and life sciences. Students can complete over six years, allowing them to continue their sporting career, because obviously time is important to athletes in terms of completing their career. It is more about having standardised processes.
There is administrative burden, but it is more in terms of curriculum transformation. Adaptations will also have to be made again in advance of the LLE, once the Secretary of State has made decisions about which subjects are to be prioritised and things like that. The main burden I am worried about is financial forecasting and the behaviour of students towards admissions. We do not really know yet how popular this offer is going to be. At the moment, we run on five-year financial forecasting and have largely three-year cycles. It becomes extremely difficult to plan if you are only taking modules. So we do not have an idea of learner demand fully yet. Although we are at the vanguard of LLE provision, as you kindly say, it is only a small part of our portfolio at the moment.
Matt Western
Q
Dr Norton: I am afraid that I would have to come back to the Committee with actual student figures on that. I do not have access to them here, but I would be happy to submit them as evidence.
Professor Rigby: Can I briefly come back on those questions? In terms of the regulatory burden, it is significant. I would estimate that the cost of regulation to my university over the last year has been in excess of half a million pounds. We might have been lucky or unlucky—I do not think that data is collected across the sector.
Once we break that down into subject areas—I run around 80 different subject areas—we amplify that level of bureaucratic oversight potentially by 80. Breaking that down into modules means that every one of my degrees, which at the moment are a unitary entity, is broken down into 12 pieces, any one of which could be the focus of oversight by the Office for Students. You are amplifying my administrative or overhead burden of regulation by 80 times 12, which is significant, given that it is not cheap.
Everybody wants to be well regulated. No university is trying to escape its burden, but I think that that burden is worth considering because the metrics on which the risk assessment is based for universities will not operate for a module. I cannot come here and pretend that one 30-credit module will change someone’s entire career. I cannot assume that the progression for a module will be as high as it would be for an entire degree, mainly because the demographic of students taking a single module will be very different to the demographic of students taking a full degree. We are in different regulatory risk metrics; the risk is that those metrics will then be less broadbrush than they currently are, and there will be another amplification of the regulatory burden. So it is something that is worth considering, even if you fillet out from that the natural excesses of a vice-chancellor getting regulated.
Katherine Fletcher (South Ribble) (Con)
Q
Is there an argument that says we start small, by introducing it only for level 4 and 5, with level 6 to come, and that we focus on the more technical, easy-to-define areas of study at levels 4 and 5? They also have the happy coincidence of being in demand in the job market. Is it possible that we could go some way without having to modularise, for example, archaeology? I love archaeology, but you know what I mean. Can you help me understand what I have got wrong in that sentence?
Professor Rigby: Modularising a degree is easy. We did it at Bath Spa just for fun, to see what the answer to your question would be. We took it right through the formal processes. We have a fully stackable, modularised degree on our books, where every module has individual value. The solution to your problem is that in any degree, there are core modules that you have to do, and optional modules that you choose to do. You make sure that your core modules are, for example, your black box AI at levels 4, 5 and 6, and then your options can change over time and keep current. If ChatGPT was not part of your degree four years ago, you can do a module on it now. You can slot that in at the right academic level, and when you have enough tokens, you automatically get the next qualification, whether that is a year of study, a diploma of higher education, a certificate of education or a degree. That is easy. It is also easy to modularise every degree that is not taught by Oxford, Cambridge or a medical school, because they all bear credit, so they are already modular. What we cannot pretend is that some of our later modules have standalone value irrespective of earlier-level modules. You cannot just drop in to a third-year module on advanced ecology unless you have done it in second and first year. That is where we need to be clever, because if people are taking time out of the workforce, they cannot necessarily come back in.
You are absolutely right. The easiest thing is to start with the equivalent of first year at university—level 4—and then develop on, but you can do it through a series of generic technical qualifications from now. You can devise a degree in health or computing or business. Those things are amenable to immediately meeting all the LLE requirements. It is just a matter of good design in the background. If we can do it, so can any university.
Katherine Fletcher
Q
Professor Rigby: Imagine doing a computing degree over 10 years. If I described the degree to you now, it would be completely irrelevant in a decade, because the things you would need to know would have changed dramatically. With archaeology—and palaeontology, which is my subject—you can go 100 years and not have to redesign your degree an awful lot.
Katherine Fletcher
So the Elrathia trilobites that we probably both have at home are still 500 million years old.
Professor Rigby: The beauty of this is that you could design a degree that has a core that is significantly generic.
Katherine Fletcher
Q
Professor Rigby: Six is still fine. The opportunity is to put in those optional modules that are current and not prescribed by the degree description.
Katherine Fletcher
Q
Professor Rigby: I do not think there is any reason why level 6 is structurally different. At the moment, if I made an offer to you to read a degree, I would need to specify for data protection issues exactly what you would learn through the duration of the degree, right up to the last module you would do in your third year. The LLE degrees will have to be different from that, because the subjects move too quickly. If you take a degree over 15 or 20 years, for me to specify at the beginning exactly what the content is at the end—
Katherine Fletcher
I would agree with that. I started off coding visual basic C, and I can code ABAP 4 and VBA. You would get quite close to a computing degree—that is 20 years’ worth of technology.
Professor Rigby: All you need is to define your module as coding and they will stick into it what you need. I don’t think modularisation is a problem. I don’t think level 3, going below degree level, or 4, 5 and 6 are a problem. I think what you probably want to do is bespeak some qualifications that fit that, rather than just modularising everything that we offer and hoping that somebody wants to do research methods in the third year of their archaeology degree.
Katherine Fletcher
Fine—now I understand you. Ecology might not be top of the list—I am a biologist who did a lot of ecology so I can say it—and that is a bit like archaeology. The initial stuff at level 4, 5 and, ideally, 6 could be more granular in detail and perhaps more obviously tied to a job—moving satellites around in space or whatever. Thank you very much for putting up with my questions.
Lloyd Russell-Moyle
Q
Professor Rigby: I do not think we can avoid that risk. If we imagine that the lifelong loan entitlement will be drawn down from 18 to 50, that is 30 years of continuity, and we have not had 30 years of continuity in higher education in the last century. It is quite possible that an organisation or, indeed, a subject area would cease to exist during that time. You are working from the premise that people would start an LLE in a modular form always intending to get a degree as an outcome, and I am not sure that they would not then just do a degree, because they could do that at any age. The commitment of time might stop them, but I doubt that many people over 30 years would have their eyes set exactly on a particular degree outcome; they would surely be moving in and out of the workplace, revisiting their own choices of modularity. It would be lovely if those modules stacked so that they end up as a generic degree, but I would have thought that the risk is only if we over-specify what that degree would be on graduation. If we say it is a geology degree, that is fine. If we say it is a palaeontology degree on vertebrates that can only be delivered by the University of Bristol, we would have to be assuming that it would have continuity of delivery through 40 years. It probably could, but others might not.
Lloyd Russell-Moyle
Q
Professor Rigby: It is complicated. It would be adorable, but universities will always have the right to reject people. My son went for an interview at Oxford, and he did not get in. His qualifications were recognised; he just was not quite over the line. Universities will always have the capacity to be selective, and that means that any qualification may be insufficient for entry. I suspect that for the bulk of people, the reason for their not being admitted would be something other than the status of the qualification they have brought through the LLE.
Lloyd Russell-Moyle
Q
Dr Norton: That is where the OfS can step in. The student protection directions under the OfS have needed a review for quite a long time, but they are certainly not capable of dealing with the level of consumer protection that the LLE will demand. As Professor Rigby said, we cannot have a totally pick-and-mix approach; there would need to be certain pathways followed and competencies gained as someone bundles together, so that they can learn in the proper order. The OfS can step in and provide advice and guidance. It already has Discover Uni, which contains a lot of information regarding student outcomes, and that could be added to one of its websites.
Lloyd Russell-Moyle
Q
The Chair
It will have to be a short answer.
Professor Rigby: Any institution will have a vested interest in giving that advice, because having put all the effort into recruiting somebody and training them and realising they can learn with us, we will not want to lose them later on. The risk is that it will be partial advice, not impartial advice. The assumption has to be that the lifelong loan entitlement will be something that someone takes through mature adulthood, so they can temper to an extent their own expectations with an increasing degree of curatorial ability as they move through a career. In a sense, we are presupposing that people will remain ignorant of this system, whereas actually, they will quickly work out what works in it and what works less well, and those mores will guide someone through a career. It is not like they will do it all immediately and with the open-mindedness that we are presupposing before it starts, I suspect.
The Chair
We have come to the end of the session. Thank you very much for your evidence. There have been some interesting comments. The Committee will meet again on Thursday at 11.30 am for line-by-line consideration of the Bill.
Westminster Hall
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Commonwealth Day
(1 year, 9 months ago)
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Sir James Duddridge (Rochford and Southend East) (Con)
I beg to move,
That this House has considered Commonwealth Day.
It is a privilege and it gives me extreme pleasure to serve under your esteemed and excellent chairmanship, Mr Gray; I know you will appreciate the sincerity of my words.
I apologise for being here today, not only because of the content of my speech but because you were expecting my right hon. Friend the Member for Basingstoke (Dame Maria Miller), who sadly cannot be here due to a more recent commitment going into her diary urgently. I want to facilitate a wide debate on the Commonwealth while particularly concentrating on the Commonwealth Parliamentary Association’s international branch and some technical issues around the branch’s status that we are making progress on.
I should not have to remind the House that the second Monday in March is Commonwealth Day—a day of great celebration and a second birthday for parliamentarians across a third of the world. I am pleased to see the Minister in her rightful place; it is a pleasure to work with her in yet another format.
I looked back on previous debates on Commonwealth Day, conscious of vague memories of participating in them as a Back Bencher, as chair of the Commonwealth Parliamentary Association and, in 2021, as the Minister responding to the debate. I started by reading the first paragraph of the 2021 debate in Hansard, which was taken up entirely not with Commonwealth matters but with matters to do with covid, including how we were to behave and rules on virtual participation; how far we have moved forward since then. I skipped to the back, which is always the most interesting place, where my hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger) was summarising his comments, and something leapt out at me. Not only was there a reference to Emilia Lifaka, who at the time was chair of the Commonwealth Parliamentary Association and Deputy Speaker in Cameroon and has since sadly passed away; there was also a glancing reference to the late Sir David Amess, my parliamentary neighbour. My hon. Friend the Member for Bridgwater and West Somerset, in characteristic form, was praiseful; he said that Sir David made a lot of “good points”. He somewhat undermined that, however, by going on to say that he did not understand a word of what they were.
I leapt forward, ignoring my studies of the Commonwealth to reminisce about Sir David, who rightly started by saying to the Chair:
“Today, I will not be calling for city status for Southend, because I know that will happen in any case, but I will be celebrating with others Commonwealth Day”—[Official Report, 16 March 2021; Vol. 691, c. 65WH.]
and he did, drawing on great experience of visits and a relationship with two Commonwealth countries that are slightly off the beaten track. He made very specific points and demonstrated some of the best assets of Members of Parliament getting involved with Commonwealth countries.
While it was sad to see the trees being replaced in Portcullis House last week, it was a pleasure to see the fluttering of 56 flags of the new Commonwealth. It is always a sign that spring is coming and a chance to reflect on our relationships around the world. Of course, the Commonwealth is not a new thing; it has evolved over time. The modern Commonwealth started in 1949, when its head was the King, although the role is not hereditary; it does not move from monarch to monarch. It moved to Her late Majesty the Queen and then to the current King when he was Prince of Wales. He took up the mantle having visited 45 of the 56 Commonwealth countries, and Her Majesty visited 54. I am lagging behind enormously but hope to visit Togo in the next 24 months, having visited Gabon only a few weeks ago with my hon. Friend the Member for South West Hertfordshire (Mr Mohindra)—despite not having my glasses, I think I recognise him sitting at the Parliamentary Private Secretary desk. It was an excellent visit in which we welcomed Gabon’s application. In all candour, we were a little uncertain as to whether it would be successful that time around, but we were pleasantly surprised that both it and Tonga were successful. The meeting was interesting.
Reflecting again on what Members of Parliament do when they go out to countries, I can say that this was a particularly good visit, because we and other parliamentarians went out into the forest, where there is a big issue of carbon sinks, and saw the detail of how illegal and legal logging was being monitored. In fact, we got into canoes in Gabon. That was perhaps one of my parliamentary low points: I was almost eaten by an hippopotamus. However, the hippopotamus’s loss is Parliament’s gain, as I am still here, Mr Gray.
The Commonwealth accounts for a third of the global population—around 2.5 billion—60% of whom are under the age of 30, which is a particular issue for the Commonwealth. The Commonwealth works across human rights issues. There is also the sports of the Commonwealth. Sadly, in some countries, the Commonwealth is more related to sports than to the broader Commonwealth relationship, thus demonstrating that we have still more work to do.
LGBT issues are always quite prominent in any discussion, as are freedom of expression and the promotion of democracy more generally. However, having elections alone is not enough to provide democracy; it goes much deeper than that. Trade is an increasing issue: 9% of UK trade is with the Commonwealth, but for some Commonwealth members the trade with other Commonwealth countries is even more important. It is very tricky to do a trade deal with Eswatini, where I was a banker, and do that same trade deal with India, which a massive percentage have said to block.
It is great to have welcomed the Francophonie. In fact, Rwanda has headed up both the Francophonie seat and the Commonwealth Heads of Government meeting within the past 12 months, which shows that we can work through French groupings and English-speaking groupings. Indeed, as well as Rwanda, Togo and Gabon, there is the Lusophone country of Mozambique within the Commonwealth, thus demonstrating that the Commonwealth is growing. There were originally eight members in 1949. By the 1970s, that number had risen to 31, and by 1990, it was 50. I predict that, in another five years, the number will not be 56, but nearer 60, as people want to come together in different ways to work.
We also see the Commonwealth in the City of London. The City of London Corporation is very active through the Commonwealth Enterprise and Investment Council. I praise its work in investment and also in its facilitation of work with the Commonwealth parliamentarians both here in this Parliament and when we have incoming delegations.
As hon. Members know, the CPA UK branch is very active. There have been some excellent chairs, including my right hon. Friend the Member for Basingstoke, my hon. Friend the Member for Bridgwater and West Somerset, and Lord Haselhurst, who also went on to serve internationally. Recently, it held the 71st seminar here in the UK. It has done post-election work in Grenada. Next week, we are sending a delegation to South Africa. Colleagues are going to visit our partners in Canada. There has been work on violence against women and girls, an awful lot of work on modern slavery, working with the Foreign, Commonwealth and Development Office, and also work on the issues around overseas territories, which is a particular passion of mine. There have been election-observing missions in places such as the British Virgin Islands—good work if you can get it, Mr Gray. There is quite a lot of detailed work, particularly on public accounts committees, which are new forms of committees and new ways of working. More recently, I have been involved in trade and scrutiny work.
I said that I wanted to turn to the CPA’s international branch, which forms the core of my asks for the Minister today. I spoke this morning to Stephen Twigg, late of this parish, who, I think, was just on the way to bed. He is in Tonga at the moment doing a post-election seminar. He wanted me to thank the Department for its work on the issues of CPA status. The CPA international branch is currently based in the UK, but it has charitable status. That charitable status causes some countries around the world a problem because to a poor, small-island state or a state that is receiving money, giving moneys to a UK charity seems somewhat incongruous. However, there is a massive benefit in the CPA being located here under some such auspice, and it is good that we are working closely with the Foreign, Commonwealth and Development Office around those issues.
I was pleased to see the Bill introduced by my right hon. Friend the Member for Basingstoke being debated on Second Reading. Sadly, it did not go through, but it did provide a place setter. I praise Lord Goldsmith for his engagement on the issue, alongside the Minister. Having been involved in these issues over a number of years—I hate to think how many—let me say that it is quite exceptional for any Foreign Secretary to engage in such detail. Therefore, it was pleasing to see the recent letter from the Foreign Secretary saying that he wanted to help and to resolve the situation to the satisfaction of both CPA international and the FCDO, and it was amazing to read that he had secured Government time for that. I would appreciate the Minister confirming that that is not just a promise from the Foreign Secretary, but something that is being worked through via the normal channels, so that if we need legislation, the time for it is there.
Time is indeed pressing because the issue is outstanding and because it has caused friction in some countries. A number of countries are looking at the 17 April meeting in Gibraltar of the CPA international executive as a pinch point for a decision. The Foreign Secretary’s letter mentions an officials’ meeting. May I ask the Minister to commit herself to holding those meetings of officials as soon as she can so we can get the best possible product on 17 April and ensure that CPA international stays in the UK? That presence is of great benefit to the CPA and to UK plc more generally.
I think we have the right people in place. I was pleased to see Jo Lomas of the Foreign Office, whom I worked with a number of times years back. I picked up the phone to her and received in response an international warble. I decided that I had probably phoned her old Burundi or Rwanda mobile and hung up immediately, not wanting to speak to the new Minister, only to find it might have been her current mobile, as she is in Fiji. I am sure that, on her return, this issue will be high up in her in-tray and the in-trays of a number of others. I am sure the work of Jon Davies—again, formerly of the FCDO—will be called upon. No doubt he will be reading Hansard closely following the debate. Jon is an excellent individual who has served CPA UK very well, and who is well disposed to help Stephen Twigg and the international branch.
As punishment—in the unlikely event of my right hon. Friend the Member for Basingstoke and my hon. Friend the Member for Bridgwater and West Somerset not being available, although I can promise anything on their behalf, including their dropping everything and cancelling their holidays to attend whatever meeting is needed—I stand ready to serve.
Navendu Mishra (Stockport) (Lab)
It is a pleasure to serve under your chairship, Mr Gray. Last year, I finished taking part in the armed forces parliamentary scheme. I know you do a lot with the scheme, and I want to draw the attention of the House to the links between people from the Commonwealth and the British armed forces. When I took part in the Royal Air Force segment of the scheme, I saw those links and had the privilege of meeting some of those people.
I thank the hon. Member for Rochford and Southend East (Sir James Duddridge) and the members of the Backbench Business Committee for securing this important debate. I wish there were more speakers from both sides of the House, but I guess I could argue that it is quality rather than quantity that counts.
One of the primary aims of the Commonwealth is to increase trade within the membership, and I understand that we are looking at $20 trillion of trade among those nations by 2030. The target is ambitious, and our Government should support and work towards it. I get a large amount of constituency correspondence regarding the environment and climate change, and one outcome of the previous Commonwealth Heads of Government meeting, which took place in 2022, was commitments regarding climate change and biodiversity. Those commitments reaffirmed commitments to the Commonwealth Blue Charter to help to address ocean pollution and to protect marine environments. The combined population of the 56 member nations is about 2.5 billion, so taking action on climate change and protecting our environment would go a long way. In the context of global population, Commonwealth nations have a large footprint, so those are positive developments.
The Commonwealth is not just about trade; it is also about fostering closer cultural and educational links between nations and people. Let us be honest: there is always more to be done. I represent the constituency of Stockport in Greater Manchester, and one of the great things that the Commonwealth organises is the Commonwealth games. The great city of Manchester hosted the Commonwealth games in 2002, which is not that long ago, and they were a massive success. The invitation remains open to Commonwealth delegates to come back to my constituency in Stockport and to the Greater Manchester city region. There is so much more to be done not just on sports, but on cultural and language ties and, of course, food.
I have already mentioned that the organisation has 56 member states and a population of about 2.5 billion people. Of those 2.5 billion, approximately 1.4 billion are Indian nationals—people from the Republic of India—so India makes up a large chunk. The hon. Member for Rochford and Southend East has referred to the trade deal that Britain is negotiating with India, so I take this opportunity to highlight that I have been campaigning for a long time for a direct air service between Manchester airport, which is the third largest airport in Britain, and key cities in India, particularly Mumbai and New Delhi. I mention that because we have tens of thousands of people of Indian heritage in Greater Manchester and the north-west region. Manchester airport is also quite close to Yorkshire, which also has a large community of Indian heritage, so having direct air services between Manchester airport and Mumbai, which is the economic hub of India, and New Delhi, which is the political capital, would be helpful.
It would be helpful not just for trade, but for cultural and educational links. My understanding is that Indian students now make up the largest segment of international students in the UK. It used to be Chinese nationals, but in the past two years, or at least 18 months, Indians have made up the largest segment of international students in the UK. Having that direct flight from Manchester airport to Mumbai and to New Delhi would benefit not only trade, but jobs at Manchester airport, the economy in Greater Manchester and organisations and businesses in the north-west region, and in Yorkshire as well, so I wanted to take the opportunity to highlight that.
I will end on the fact that the Commonwealth is a force for good—it does a lot of good. Of course, there are several issues that need to be addressed in member nations when it comes to equality and, in particular, LGBT+ rights and democratic systems. There are lots of issues that need to be addressed. I welcome this debate and once again thank the hon. Member for Rochford and Southend East for securing it and the Backbench Business Committee for allocating time for it. I hope the Government take forward the work on environmental issues, but also thank our serving soldiers and veterans who come from Commonwealth nations. That is an important issue. I hope the Minister will use her good office to push forward the flights issue from Manchester airport.
Marion Fellows (Motherwell and Wishaw) (SNP)
It is a pleasure to serve under your chairmanship, Mr Gray, and to follow the hon. Member for Stockport (Navendu Mishra). I do miss the right hon. Member for Basingstoke (Dame Maria Miller), but the hon. Member for Rochford and Southend East (Sir James Duddridge) has stepped admirably into her shoes. I hope they were flat ones.
This year, Commonwealth Day took place on Monday last week. It marked a week of activities and celebrations around the theme of forging a sustainable and peaceful common future, serving as a reminder of the deep ties and shared goals between Commonwealth nations. I think we can all agree with that. The Commonwealth still has a long way to go in adapting to a more socially conscious and multipolar world; however, that must be done in the spirit of equality and mutual benefit.
The Commonwealth must make progress on the charter adopted in 2013. It was full of aspirations for justice, democracy and human rights, and we all want to see those things. The UK Government should formally acknowledge complicity in and make amends for the UK’s role in the slave trade and the legacy of colonial atrocities around the world. Scotland is doing that. Work is going on in schools, but more needs to be done across the UK.
There are many deep ties between the UK and the Commonwealth. Despite that, 90% of pensioners affected by the frozen pensions policy live in Commonwealth countries. I am using this debate as an opportunity to highlight the unfair treatment of British pensioners, including veterans and former public servants, and Commonwealth citizens who have contributed to this country, only to be abandoned and forgotten as they face financial hardship. I am grateful to endfrozenpensions.org and the all-party parliamentary group on frozen British pensions for the briefing that I received. I have been talking about this matter since I arrived in Parliament in 2015, and I will continue to do so at every opportunity.
An example of a pensioner affected by the frozen pensions scandal is Anne Puckridge, a 98-year-old world war two veteran who receives a state pension of just £72.50 a week after moving to Canada to be closer to her family. In the coming months, she will be excluded once again from the annual uprating, bringing the total she has lost during her retirement to £41,000. Research by the APPG on frozen British pensions found that half of frozen pensioners receive £65 per week or less, and more than 50% struggle financially because of their frozen pension.
The UK owes a debt of gratitude to the Windrush generation, but the story of Monica Philip, who moved to the UK from Antigua, tells a different story. She worked for 37 years in the UK, including as a civil servant for the City of London social services and the Ministry of Defence. She returned to Antigua to care for her ailing mother and, as a result, receives a frozen UK state pension of just £74 per week.
Reverend Maxwell left for England from Antigua in 1957. He worked in the UK on the railways. Eunice Hughes worked as an NHS Nurse. The couple moved to Jamaica following a pastoral calling, and the UK Government encouraged the Reverend Maxwell to top up his British pension voluntarily by £3,000 to ensure he had made the full contribution. When they lived in Jamaica, the couple received their full pension uprating every year. However, they have since moved to Antigua, where their pensions are now frozen.
Commonwealth countries such as Canada are ready and willing to work with the UK Government to end this injustice. The Canadian Government’s most recent request to negotiate a new reciprocal social security agreement was just last year—the fourth time since 2013—yet the UK Government continually refuse to engage on the issue, leaving nearly half a million British pensioners to face a retirement of poverty.
All UK pensioners with national insurance contributions are entitled to a British state pension regardless of where they live. However, nearly half a million UK pensioners overseas are excluded from annual payment upratings because they live in the wrong country. That means their pension is frozen at the level it was at when they left the UK or first withdrew their pension, and it is falling in real value year on year. Government inaction to address the issue is a stark failure to protect our most vulnerable and is leaving our own citizens in poverty. All it takes to end this injustice—
James Gray (in the Chair)
Order. I am reluctant to interrupt the hon. Lady. She is making a most interesting speech, but it is quite wide of the subject we are discussing, which is Commonwealth Day. The Minister might find it difficult to reply on a matter that is not her responsibility. The hon. Lady might like to return to the subject of Commonwealth Day and the role of the Commonwealth.
Marion Fellows
Mr Gray, if I tell you that 90% of people with frozen pensions live in the Commonwealth, may I continue from that point?
James Gray (in the Chair)
The subject of the debate is Commonwealth Day and the role of the Commonwealth, rather than people who happen to live in a Commonwealth country. It might be sensible to return to the main topic under discussion.
Marion Fellows
I respect your advice as Chair, Mr Gray. I will not continue on this; I believe I have made my point forcefully. I ask the Minister to listen carefully to what I said, because this is an injustice that must end.
Jim Shannon (Strangford) (DUP)
It is a pleasure to participate in today’s debate on Commonwealth Day, and I thank all hon. Members who have made contributions with salient points, as we reflect, celebrate, remember and enjoy the day.
I have great pride in this nation; I love this United Kingdom of Great Britain and Northern Ireland, as we all do. We rejoice in the role it has played in bringing together four nations in this Commonwealth as one. As we look to the coronation of King Charles, it inevitably brings to mind the life and legacy of Elizabeth, the great and faithful. One of her greatest achievements was not only her faith in action that honoured God and inspired nations, but the Commonwealth of nations, which was her pride and ours.
The Commonwealth is a cultural, historical and family organisation, which we love. It is like a gathering of the clans, if that is the right terminology to use, whenever the Commonwealth comes together. What joy it brings to us all that, from this nation of the United Kingdom of Great Britain and Northern Ireland, the Commonwealth grew. The tenets of democracy, liberty, freedom and faith have been espoused by the Commonwealth across the world.
We have heard recent attacks on the legacy of the Commonwealth from sources who should know better, and that wilful misdirection must be challenged. I thank the hon. Member for Rochford and Southend East (Sir James Duddridge) for raising the subject and allowing the opportunity to debate the truth, rather than the devious innuendo that platforms seem able to stream with no impugnment or accountability. I want to put on record the full nature of Her Majesty, who said, when she talked of her duty:
“My whole life, whether it be long or short, shall be devoted to your service and the service of our great imperial family to which we all belong.”
The great family to which she referred was the Commonwealth of nations—a group of 53 distinct and unique nations, whose common ground enabled the fostering of trust and the building of a relationship from which we all benefit.
A glance at the basic Commonwealth statistics online quickly outlines the many benefits. Some are financial benefits, but they are important and maintain the stability of nations. Of the 53 Commonwealth members, 31 are small states, mostly with populations of well under 2 million. Member countries have successfully obtained more than 1.8 million square kilometres of seabed through the United Nations, with our assistance, and more is still to be claimed.
More than 60 countries, including 15 non-Commonwealth countries, have benefited from our debt management programme. Our software helps to manage more than $2.5 trillion of debt globally. The combined gross domestic product of Commonwealth member countries was estimated to be $14 trillion by 2020. Trade in goods and services between Commonwealth members is estimated to be more than $680 billion, and it is predicted to surpass $1 trillion. The trade, economic ties and benefits from trade and cultural exchanges are important for countries’ future.
Commonwealth members’ combined exports of goods and services are valued at $3.4 trillion, which is about 15% of the world’s total exports. Intra-Commonwealth flows of remittances are estimated to be $45 billion, of which $42 billion went to developing countries. The most innovative economies in sub-Saharan Africa —eight of the top 10—are Commonwealth member countries. Those are all indications of the importance of Commonwealth trading to world exports and trade. Five of the best performing 15 countries in the youth development index are Commonwealth members. It is about that interconnection, that acknowledgment of each other and the fairness that arises from trade within the Commonwealth. That speaks to me not of a boys’ club, but of a community engaged in mutually beneficial sharing of information, training and trading. We should be incredibly grateful to Her Majesty for that, and for everything that she did over the years.
The Commonwealth games offer countries such as Northern Ireland, with 1.9 million people, an opportunity to contribute to the Commonwealth medal tally. At the last games, we did so in sports including boxing, bowls and swimming, and some of the winners were people from my constituency. I am thinking of Barry McClements, who won the bronze. That wee boy, who was disabled as a child when he lost his leg from the knee down, managed to achieve a bronze medal in the Paralympics. That has made that young man, and his interaction with other Commonwealth countries is something we cannot ignore. By their very nature, the Commonwealth games bring us together to participate. We are united through the Commonwealth and a love of sport, but the games also give smaller countries, such as mine, the chance to excel—and, boy, did we excel last time, like never before.
Every Commonwealth nation has the ability to leave as they determine; we do not operate like the EU, with rules and penalties for daring to step aside. Yet the fact is that each nation is content. Just as Scripture says that two is better than one, it follows that 53 must be even better.
Deidre Brock (Edinburgh North and Leith) (SNP)
It is a great pleasure to serve under your chairmanship, Sir James.
James Gray (in the Chair)
It is certainly not Sir James—[Hon. Members: “Not yet!”] Just Mr Gray will be fine.
Deidre Brock
Forgive me, Mr Gray. I am sure I have just highlighted something that is missing but will arrive eventually.
First, I pay tribute to the right hon. Member for Basingstoke (Dame Maria Miller) and the hon. Member for Rochford and Southend East (Sir James Duddridge) for securing this debate about Commonwealth Day. This year marked a significant milestone for the Commonwealth and the UK’s international relationships, and a new phase for the UK’s diplomacy and soft power. As we recognise the first Commonwealth Day since Queen Elizabeth’s passing, we have an opportunity to reflect on the impact of the Commonwealth, to acknowledge the damage of British colonial history and, I hope, to begin to forge a path to more conscious, thoughtful and honest relationships with Commonwealth countries.
I want to dwell a little on some of the contributions that have been made. The hon. Member for Rochford and Southend East spoke of the work of Commonwealth Parliamentary Association branches in areas such as election observation and on issues relating to women and girls. The hon. Member for Stockport (Navendu Mishra) highlighted how the Commonwealth can foster closer cultural links, language ties and economic opportunities—and, indeed, transport links between Manchester and Mumbai in the future. He also touched on some of the concerns that I will focus on in my contribution.
My hon. Friend the Member for Motherwell and Wishaw (Marion Fellows) spoke eloquently of the injustice of frozen pensions, which affect many people from Commonwealth countries. She has pursued that matter for some years, and I am sure those people are grateful to her for bringing it up today. The hon. Member for Strangford (Jim Shannon) described the Commonwealth as a family—indeed, as a “gathering of the clans”. He welcomed the fact that this debate allows us to debate the truth, highlighting the economic and trade benefits. He also mentioned the positivity of the Commonwealth games in bringing nations together in their love of sport, and I very much agree with him. The Commonwealth games in Glasgow were a tremendous occasion for us all in Scotland.
We have witnessed some historic changes across the Commonwealth in the last few years. Barbados became a republic in 2021, and Jamaica has served notice that it intends to do likewise by 2025. In Australia, the arrival of the new young Queen in the ’50s seemed to herald a new start, and the Commonwealth of Nations was a very appealing concept after the misery of two world wars, but the gloss of those early days has faded. Republican voices in Australia, New Zealand and Canada have strengthened, particularly following the increase in the knowledge and understanding of the effects of colonisation on indigenous people. The Jamaican Government have announced plans to seek compensation for an estimated 600,000 Africans who were shipped to the island for the financial benefit of British slaveholders.
There are many now who feel that this reckoning with history should be embraced, paving a new way forward for the Commonwealth based on respect and a real acknowledgement of the past. The SNP’s policy is to join the Commonwealth once Scotland is independent again, because we want to co-operate with the rest of the world, not be apart from it. At the same time, we sincerely wish the Commonwealth to meet this moment of reflection and change positively and constructively.
Although one welcomes the royal family’s attempts to address Britain’s bloody imperial past—King Charles, when he was prince, attended a ceremony in Barbados in 2021 and spoke of the appalling atrocity of slavery, which forever stains British history, and Prince William spoke out against the injustice of the Windrush scandal—there is still a very long way to go to improve relationships and outcomes with Commonwealth countries.
Navendu Mishra
The hon. Lady is making an excellent speech and raising important points. On atrocities, the Jallianwala Bagh massacre, which took place in 1919 in Punjab, impacted a lot of people at the time, and there is a justice campaign in this country and India. Does she agree that there should be a formal apology?
Deidre Brock
I am not familiar with the complete details of that situation, but those are exactly the sorts of issues that Commonwealth countries should be discussing among themselves. If a country is involved in something that it needs to apologise for, it should absolutely do so.
The UK Government could start by acknowledging Britain’s complicity in historical crimes, and by seeking to make amends for its role in the slave trade and its frankly shameful legacy of many colonial atrocities around the world. The SNP is aware that the UK and Scotland must do more to address our colonial past. We all need to have an open and honest conversation about goods acquired via colonialism, as well as about the systematic and structural issues that perpetuate ongoing inequality.
Ignoring the crimes of the past undermines our leadership and our ability in the present to ensure the Commonwealth lives up to what are perceived to be shared values. As my hon. Friend the Member for Motherwell and Wishaw said, 10 years ago the Commonwealth adopted a charter full of laudable aspirations—justice, democracy and human rights—but it has much to do to ensure adherence to those principles. For example, in 2013, President Mahinda Rajapaksa of Sri Lanka hosted a Commonwealth summit at a time when his Government stood accused of presiding over war crimes.
The human rights picture across the Commonwealth varies greatly. Most Commonwealth states—32 out of the 56—criminalise same-sex acts between consenting adults. Many such laws were introduced in the colonial era. As of September 2020, only 70% of girls in the Commonwealth attended school. That is a shocking figure, and we must do much more to address it. I hope the hon. Member for Rochford and Southend East will touch on that in his closing remarks. He mentioned the CPA’s involvement in that, and I would be interested to hear more about that. Only 20% of parliamentarians across the Commonwealth were female in 2018. Of course, the figure is just 34% in this place, so we do not have much to brag about.
Something else that we cannot brag about is the fact that, regrettably, as Commonwealth chair-in-office between 2018 and 2022, the UK Government wasted a key opportunity to recentre human rights and respect for international law. They refused to make covid-19 vaccines more readily available for the global south by protecting intellectual property barriers, they concluded that there was no evidence of institutional racism in the UK via the Sewell report, and they cut international development spending by at least £4 billion in 2021-22. It seems to me that a nation that genuinely cared about the Commonwealth in the truest sense of the word—the commonweal; the happiness, health and safety of all the people of a community or nation or, in this case, nations—would immediately reverse the damaging cuts, including those inflicted on people living in extreme poverty in Commonwealth countries.
Last year, the UK handed over the Commonwealth chair-in-office role, as I think has been mentioned, to Rwanda, despite some very grave concerns about Rwanda’s human rights record, governance structures, reports that the Rwandan Government are arming the M23 militia group—the March 23 Movement—in the Democratic Republic of the Congo, and widespread gender-based violence in those countries. The UK Government introduced the immoral and illegal Rwanda scheme. The SNP opposed the Immigration Bill when it went through Parliament and also opposed the anti-refugee Nationality and Borders Bill, as well as the damaging Rwanda proposal that the Bill would enable. We will do the same with the Illegal Migration Bill. Criminalising people is not the answer. Such policies have no place in a tolerant society that respects international law, particularly one that frequently proclaims itself to be a shining example of such qualities.
The UK Government could follow the lead of the Scottish Government and establish a comprehensive loss and damage policy, prioritising vulnerable regions in the Commonwealth that are already suffering devastating effects from the climate crisis. It is vital to ensure much greater investment in renewables and to avoid any new fossil fuel projects, which threaten our path to net zero—the precarity is underlined by the fact that 49 out of the 56 Commonwealth countries border the sea. That would demonstrate genuine commitment to the theme of Commonwealth Day 2023, which is to forge
“a sustainable and peaceful common future…especially through climate action”.
Just days ago, the Intergovernmental Panel on Climate Change delivered a “final warning” on the climate emergency with the publication of the final part of its sixth assessment report. A significant proportion of the 3 billion people whom the IPCC says are highly vulnerable to climate breakdown are based in Commonwealth countries. The report shows that the 1.5° limit is still achievable—just—but only if action to address the crisis is fast-tracked by every country and on every timeframe. We need to go further and faster, and the UK needs to take much more of a lead.
King Charles’s Commonwealth Day message highlighted the Commonwealth’s
“opportunity, and responsibility, to create a…durable future…in harmony with Nature”
to
“secure our unique and only planet for generations to come.”
The IPCC report is a stark reminder—as if one were needed—that this window of opportunity is rapidly closing. I am aware that climate change was on the agenda last week in London at the Commonwealth Foreign Affairs Ministers meeting, with an emphasis on building on the outcomes of COP27, but we know that 1.5° will not be met under the final agreement with no deal on reducing fossil fuel usage. Therefore I urge the UK and the Commonwealth to now recognise the opportunity and responsibility that King Charles mentioned, before it is too late.
Preet Kaur Gill (Birmingham, Edgbaston) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Gray. I thank the right hon. Member for Basingstoke (Dame Maria Miller) for securing the debate and I am sorry that she could not be here. She has been a strong advocate for women and girls around the world, and we hope that the UK and all Commonwealth nations can live up to those aspirations.
We have heard much today about the power of the Commonwealth—its strength, size, diversity and vitality. We have also heard great examples, from the hon. Member for Rochford and Southend East (Sir James Duddridge), my hon. Friend the Member for Stockport (Navendu Mishra) and the hon. Member for Strangford (Jim Shannon), of the work and collaboration that the Commonwealth fosters through the Commonwealth Parliamentary Association. Members have made significant contributions on topics including promoting democracy across our Commonwealth nations, economic prosperity, human rights, and connectivity. It is wonderful that my friend the hon. Member for Strangford even mentioned the Commonwealth games.
However, the past year has been another of great disruption and loss. I must start by remarking on the sad death of Her Majesty Queen Elizabeth II. This year has been the first in 70 years that she has not been the Head of the Commonwealth. During those remarkable 70 years, the Commonwealth has changed beyond all recognition. Then, it was made of only seven members; today, there are 56 members, representing more than 2.5 billion people. Her Majesty will be remembered as a symbol of the links between our many nations. As she put it,
“the Commonwealth is an example of multilateralism at work”.
That is a poignant reminder of the significance of today’s debate. This is not a cosy members’ club, but an important vehicle for global co-operation and change, and that work is not yet done. I take this opportunity to express my welcome to His Majesty the King taking his seat as the new chair of the Commonwealth. I am sure he will carry on his mother’s legacy with distinction.
I consider myself a child of the Commonwealth. To me, nothing serves as a greater reminder of our place in a global community of nations than my own family story and home. Birmingham is a Commonwealth city; the diverse heritage of my constituents span from Pakistan to Sri Lanka and Somalia to India, from where my family came. There are Brummies who can trace their roots to every corner of the Commonwealth. As a city, our diversity is our greatest strength, and that shone through in every moment of the Commonwealth games last summer.
The Birmingham 2022 Commonwealth games were Britain’s most successful ever, beating our previous record medals total in Glasgow 2014 by two. They were also the most streamed games ever, outstripping the previous record sixfold, and represented the character and diversity of our country and Commonwealth tremendously. Our city was proud to have hosted and celebrated a games worthy of Her Majesty. We should not play down the powerful message of inclusion and diversity that the games sent to the millions watching around the world, nor the hundreds of millions in investment they brought to some of the most deprived patches of Birmingham, and the deepened and renewed connections across borders that we helped to forge. It is a great example of the benefits that Commonwealth membership can bring.
This year, Commonwealth Day marks the 10th anniversary of its charter, which gives expression to its defining values: peace and justice; tolerance, respect and solidarity; care for our environment, and for the most vulnerable among us. His Majesty summarised those values perfectly last week, saying:
“In this we are blessed with the ingenuity and imagination of a third of the world’s population”,
and that our shared humanity contains an immensely precious
“diversity of thought, culture, tradition and experience. By listening to each other, we will find so many of the solutions that we seek.”
Nowhere is this more urgent or relevant than in our environment. As I am sure all Members present know from our own constituencies, young people are demanding action on climate change. Across the Commonwealth, the futures of 1.5 billion people under the age of 30 will be defined by this issue. Yesterday, the Intergovernmental Panel on Climate Change issued its synthesis report, which was a warning shot: we can still achieve 1.5° this decade, but humanity is on thin ice. Our sovereign has been a committed advocate for action on climate change for many years, and Labour shares that sense of mission and common purpose. That is why we have committed to our green prosperity plan to decarbonise electricity by 2030, phase out dirty imported energy and legislate to ensure that climate flows into every aspect of UK development policy and spending, just as gender does. We recognise that this issue that will define this century, and we have only seven short years to take the action needed.
To their credit, the Government reaffirmed their commitment to the 1.5° Paris agreement goals and nationally determined contributions at the Heads of Government meeting last year. However, it is now a matter of delivering. Can the Minister therefore update Members on the progress made to develop an implementation plan for the call to action on living lands that was promised in Kigali last year? Can she update the House on the progress she has made towards delivering the £11.6 billion of international climate finance that the Government have promised? Does she see a greater role for networks such as the Association of Commonwealth Universities in catalysing innovation and collaboration to tackle shared global challenges? I had the pleasure of meeting the ACU last year. With 500 member universities across 50 countries, it is uniquely placed to develop international policy at scale and pace. We have great institutions; we must not forget to nurture and make use of them.
It was fitting that, in Her Majesty’s jubilee year, the Heads of Government meeting was hosted in Africa—the very continent where she became Queen 70 years ago. I was delighted to see Gabon and Togo join the Commonwealth of nations, and Labour welcomes our newest Commonwealth siblings. Their participation shows that our association is based on not only our shared history, but our shared aspirations for a better future. They are both remarkable countries. Gabon is one of the few countries on earth that absorbs more carbon than it emits, owing to its rich ecosystem. The future of Gabon and Togo can be bright, and Commonwealth membership could help in shaping a positive path. Will the Minister say what efforts she is making to support Togo, along with our other Commonwealth partners such as Ghana and Nigeria, in addressing the increasing threats they are facing from instability in the Sahel?
It is a cause for celebration that the Commonwealth continues to grow, because we hold dear its values of human rights, democracy and inclusion. The eligibility criteria for Commonwealth membership states, among other things, that:
“an applicant country must demonstrate commitment to: democracy and democratic processes, including free and fair elections and representative legislatures; the rule of law and independence of the judiciary; good governance, including a well-trained public service and transparent public accounts; and protection of human rights, freedom of expression, and equality of opportunity”.
We hope that Zimbabwe can turn a new page in its history and evidence the progress on the requirements needed to rejoin the Commonwealth soon. I would be grateful if the Minister provided an update on its progress and the role that the UK is playing to support that.
I am sure that Members will join me in celebrating the progress made by Commonwealth countries. In recent years, India has passed legislation on maternity leave, to the benefit of over 600 million women. Last year, four of our fellow members—Antigua and Barbuda, Saint Kitts and Nevis, Barbados and Singapore—repealed anti-LGBT legislation. The UK must acknowledge the legacy of discrimination and laws it helped to create in some of those countries. We must do more to support member states wanting to lead reform.
As we see the sad roll-back of rights and norms in many countries around the world, the Commonwealth can provide a leading example. As every member agreed in the joint statement issued before the Human Rights Council in Geneva in 2020,
“the full social, economic and political participation of all…is essential for democracy and sustainable development to thrive.”
Continued progress and practice in support of human rights, democracy and inclusion is a core Commonwealth principle—something that we must all strive to achieve.
I will end with a few remarks on the future of the Commonwealth and the UK’s role within it. Our country’s ties of history, kinship and commerce with many of the other member states goes very deep. For countries in the global south, many in Africa, the past few years have been an onslaught—covid, climate, conflict and the cost of living. It is essential that the UK plays its full part in supporting them. It is in Britain’s interests to support a safer, more stable world. That is why developed countries have been rightly united in opposition to Russia’s brutal war on Ukraine; the war has drawn many countries in the west closer together as a result.
At the same time as the world’s poorest countries struggle, this Government have given the global south the cold shoulder. Many in the world’s poorest countries look at Britain and are losing faith in us as a partner that they can work with and rely on. There has been a damaging departmental merger, as well as promises made and repeatedly not kept, and successive cuts to aid programmes, as the Government divert money to firefight crises of their own making. We ignore the global south at our own cost. Many of those countries have rapidly growing economies, and will be increasingly important in a post-Brexit, multipolar geopolitical era. Together, they are geographically, culturally and economically diverse; the Commonwealth could be one of our most important multilateral institutions, as Her Majesty the Queen said.
Does the Minister think that it right that the Commonwealth received only two passing mentions in the integrated review refresh? Has she given any thought to improving Commonwealth operations out of London, to improve and better reflect the institution’s diversity and global representation? Does she agree that the UK should be playing an active and ambitious role in the shared agenda agreed in Kigali last year? Does she share my concern about the disproportionate impact of the aid cuts on Commonwealth partners in the last few years?
There is so much to be proud of in our Commonwealth membership and relationships. It is crucial to our mutual interests in relation to development, trade, security, climate change, human rights and democracy. It is a great institution that has, at times, been neglected when it needed to be nurtured. The past few years is a prime example of that. I hope the Government will act to correct their course; Labour certainly would.
The Minister of State, Foreign, Commonwealth and Development Office (Anne-Marie Trevelyan)
I am grateful to my hon. Friend the Member for Rochford and Southend East (Sir James Duddridge) for leading the debate, and for his dedication to the Commonwealth, including as a Minister and former chair of the Commonwealth Parliamentary Association. I also thank colleagues for their contributions. Where there are questions that are not within the FCDO purview and for which I am unable to provide a response—some of which you highlighted, Mr Gray—I will ensure that the correct Minister does so in a timely manner.
The Commonwealth is a vibrant and diverse family of nations. It makes up a third of the world’s population and around 30% of the votes on the UN, and has a collective GDP of over $14 trillion. It plays an important role in supporting an open and resilient international order, bringing together states with an interest in promoting democracy, sustaining individual freedoms, driving sustainable development and enabling cross-border trade. In an increasingly turbulent world, where autocracy is on the rise, the Foreign Secretary has renewed the UK’s commitment to what he calls “this extraordinary organisation”.
This is an important year for the Commonwealth. On Commonwealth Day, we celebrated the 10th anniversary of the Commonwealth charter, which enshrines our shared values of freedom, peace and democracy. We will also celebrate the coronation of His Majesty the King, the new Head of the Commonwealth, on 6 May. Last week, His Majesty the King and Her Majesty the Queen Consort joined Commonwealth representatives at Westminster Abbey for a service that paid tribute to Her late Majesty the Queen for her tireless dedication to the Commonwealth. I think the hon. Member for Birmingham, Edgbaston (Preet Kaur Gill) speaks for all of us in highlighting how sad we were to lose her last year. However, I think the Queen would have been so pleased that 2023 is also the Commonwealth Year of Youth. Over 60% of the Commonwealth’s population is under 30. As the previous Commonwealth chair-in-office, we championed the voice of young people, who will drive future prosperity across some of the world’s fastest growing economies.
The UK’s commitment to the Commonwealth is unwavering. We provide significant bilateral aid to Commonwealth countries, totalling over £1 billion in 2021, and we fund and support a wide range of Commonwealth initiatives and programmes. As we look towards the Commonwealth Heads of Government meeting in Samoa next year, the UK will work with partner nations to deliver tangible benefits in our three priority areas: trade, climate and values.
First, we need to boost trade and investment between Commonwealth countries. Encompassing over 2.5 billion consumers, the Commonwealth makes an important contribution to the global market network. Our shared language and shared institutions create what we refer to as the Commonwealth advantage, reducing the average cost of trade between members by 21% compared with trade with the rest of the world.
Building on that advantage, the UK has secured trade agreements with 33 Commonwealth countries, including economic partnership agreements covering 27 Commonwealth African, Caribbean and Pacific nations. However, we need to go further to make sure that all members feel the full benefits of Commonwealth membership, so the UK is working with partners to reduce barriers to intra-Commonwealth trade and to help developing members to attract sustainable inward investment.
The hon. Member for Stockport (Navendu Mishra) raised an important point about flights between the UK and India. He is absolutely right to say that they are a tool that could open up both family and trade opportunities. The UK’s airline network is privately owned; different countries run their airlines in different ways. However, I am happy to discuss this issue with him and with colleagues in the Department for Business and Trade, to see how we can encourage the opening of new routes. I have dealt with this issue in relation to other countries, and I am happy to take it up with colleagues.
Secondly, the Commonwealth can drive enhanced action on climate change and the environment, particularly to support its more vulnerable members, including 25 small island developing states. I have had the great privilege personally, both in former ministerial roles and currently as Minister with responsibility for the Indo-Pacific, to visit nearly two dozen of our Commonwealth family countries, and in every one the challenge of climate change—the impact of more extensive and extreme weather events—is a real and present danger to the lives and livelihoods of so many people, their families and their businesses, and to the healthcare and education needs of women and young people most especially.
The UK has committed £11.6 billion to international climate finance, of which £3 billion is being invested in climate change solutions that protect and restore, and provide sustainable solutions to manage nature. The UK will continue to lead globally on this matter, harnessing all our talents, including—as the hon. Member for Birmingham, Edgbaston highlighted—the ACU, in order to help to find long-term solutions. The UK is also committed to supporting Commonwealth members to access climate finance through our funding of the Commonwealth climate finance access hub. Our investment of around £500,000 in the hub has already helped to mobilise $38 million of climate finance in three Caribbean states. At the last Heads of Government meeting in 2022, the Prime Minister announced further funding, through the new £36 million sustainable blue economies programme, to support small island states to develop sustainable ocean economies.
As Members have noted, the continued commitment by Lord Goldsmith, my FCDO ministerial colleague, has helped to deliver the 30by30 oceans commitment that was announced just a couple of weeks ago, which will afford opportunities to many of our most climate-vulnerable Commonwealth countries and others to support and sustain their ocean economies and protect their livelihoods. These are really important areas of development.
Thirdly, the Commonwealth has the potential to deliver much more on democracy, good governance, human rights and the rule of law. All Commonwealth member states have committed to upholding those shared values enshrined in the Commonwealth charter. The UK has worked with national human rights institutions across the Commonwealth to strengthen human rights and has supported human rights advisers to help small states engage with the Human Rights Council in Geneva.
We are ensuring that more girls are in school, pledging £217 million to support girls’ education across the Commonwealth at CHOGM 2022. The funding supports global education data gathering, teacher training in Rwanda and programmes to get girls and vulnerable children into school in Pakistan.
We have also delivered programmes for the promotion and protection of LGBT rights across the Commonwealth. Some £2.7 million of funding will continue to support grassroots organisations, such as the Commonwealth Equality Network, to defend human rights and equality for LGBT+ people. However, much more needs to be done, and we will encourage Commonwealth countries to go further to ensure the full and equal participation of all people in society.
The UK values the work of the Commonwealth Parliamentary Association to strengthen parliamentary oversight and accountability in the Commonwealth, and the FCDO looks forward to continuing to work closely with the association. I thank my hon. Friend the Member for Rochford and Southend East and my right hon. Friend the Member for Basingstoke (Dame Maria Miller) for their consistent and passionate voices on the legal status of the CPA. They will be pleased to know that the Foreign Secretary has tasked FCDO officials with working with the CPA secretariat to find an acceptable solution by legislative means if necessary.
Sir James Duddridge
Will the Minister confirm that, as well as the pledge from the Foreign Secretary, normal channels have agreed that time will be found, if needed, for legislation? Secondly, could those meetings with officials happen as soon as possible, so that there is something a little firmer to go back with to individuals at the Commonwealth Parliamentary Association international executive committee meeting on 17 April in Gibraltar?
Anne-Marie Trevelyan
I absolutely note my hon. Friend’s comment on the need for timeliness in those discussions so that it becomes clear exactly what the right route will be. I will ensure that the Foreign Secretary and his team are fully cognisant of that time pressure so that, whatever the solution is, we can ensure that colleagues on the write-round are able to support it. The Foreign Secretary is clear in his commitment to move forward, but I note that the clock is ticking as regards that meeting.
To drive our three-pronged agenda of trade, climate and values, our mantra needs to be the continuous improvement of Commonwealth institutions, building on the reforms agreed by Heads of Government in Kigali. We will work with the Commonwealth secretariat and members to ensure quick progress ahead of CHOGM 24. In the words of His Majesty the King,
“Let ours be a Commonwealth that not only stands together, but strives together, in restless and practical pursuit of the global common good.”
We will do all we can to meet the challenge he has set us, to strengthen the Commonwealth and to ensure that it delivers clear purpose and value for all its members, whether large or small.
Sir James Duddridge
What a wonderful flourish to end on—I am only sorry that I have to spoil it with my final comments. It is great that the Minister quoted his Majesty who, as I mentioned, has visited 45 countries, which is a little better than the two dozen visited by the Minister—not that I have been wasting my time over the weekend, but it is 32 for me, if you are asking, Mr Gray.
However, it has been a great tour de force from the Minister, particularly on small island states, and that is much appreciated by all. I ask her to pass on our collective thanks to the Foreign Secretary, for what is being done and, more generally, for the work he and Lord Goldsmith are doing, which has been exceptional. Getting that commitment on parliamentary time if it is needed, and knowing that the whole Department—from the Foreign Secretary down to the people who do the real work—knows there is that 17 April deadline is absolutely superb. So I thank the Minister for that.
I thank the hon. Member for Stockport (Navendu Mishra) for his comments. I look forward to the Mumbai-Manchester route. I am happy to support that very visibly and vocally if he supports the Manchester-Southend route connecting up with it. The hon. Member for Birmingham, Edgbaston (Preet Kaur Gill) spoke about the impact on constituencies. The Commonwealth games are really passionate, and a lot of people, such as my constituents in Southend, held events involving, for example, children celebrating the Commonwealth. In Southend, the mayor, Kevin Robinson, took part in the celebrations. There is more we can do to celebrate in our constituencies.
The hon. Member for Motherwell and Wishaw (Marion Fellows) spoke passionately about pensions—perhaps stretching your patience with the detail, Mr Gray, although attention to detail is always admirable—and questions were raised about what type of heels I was wearing. I can reassure the House that I will be leaving my feet under the table so as not to embarrass anybody. The hon. Member for Strangford (Jim Shannon), who is always present for debates in this place, made an excellent contribution, particularly on the youth development index, and went through some of the nitty-gritty detail, which we sometimes brush over.
The hon. Member for Edinburgh North and Leith (Deidre Brock) touched on a few subjects on which I disagree with her, although we agree on others. I was present for a debate in the Chamber during which you, Mr Gray, disagreed with Members being allowed to use devices to look at Wikipedia. However, had I not spent a little time googling, I would not know that the hon. Lady is a product of the Commonwealth and of Australia. I suspect that, while I was at university, I watched her on “Home and Away”. The only characters I can remember are Charlene—for obvious reasons—from the garage, a dog called Bouncer and someone who went on to appear in “Joseph and the Amazing Technicolor Dreamcoat”, whose name I cannot remember.
The hon. Lady urged me to talk about schools. We have done a lot of work on girls’ education through the Department—sorry, the Government have. I am mixing up my roles. She also mentioned COVAX, which was rather curious. She should look back on her comments, because I think she will find that it was my right hon. Friend the Minister who brought in a £420 million facility for covid, called COVAX, before the vaccine even came into place, so we had that funding ready to distribute when a vaccine came forward. At the time, I was a Minister, and I spent hours, which I cannot get back, in covid committees looking at operationalising the vaccine and getting it out to different countries, which was somewhat problematic in a number of cases.
The hon. Member for Birmingham, Edgbaston made an excellent speech, drawing on her constituency experiences. I mused on whether there is a constituency out there containing representatives of all 56 Commonwealth countries, and Birmingham could probably muster those people. Perhaps we could all get together to celebrate the 56 nations. I fully support what was said about LGBT issues. We can both be embarrassed about how we have legislated across the Commonwealth against those communities, but we should also be proud of the progress that has been made, while acknowledging that further progress needs to be made.
There were calls for Zimbabwe to come back to the Commonwealth. Brilliant. Bring it on, Mnangagwa. We are ready for you. You just need to do the right thing. The hon. Member for Birmingham, Edgbaston also discussed whether we make enough of the Commonwealth. We make a lot of it, but we certainly do not make enough of it. It is good to know that not only His Majesty’s Government, but His Majesty’s official Opposition, want to do more with this multilateral institution.
Question put and agreed to.
Resolved,
That this House has considered Commonwealth Day.
Energy Charter Treaty
(1 year, 9 months ago)
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Chris Skidmore (Kingswood) (Con)
I beg to move,
That this house has considered the Energy Charter Treaty.
It is a pleasure to serve under your chairmanship, Mr Gray. I am grateful to the Minister responding today. I know he is currently very busy, preparing the finishing touches to the Government’s response to the net zero review, which I submitted as the review’s independent chair. I hope he will excuse me taking this chance to place on his ministerial desk another precious opportunity for the UK to demonstrate clear and decisive climate leadership.
I know that the Minister is all too aware of the opportunity that net zero and green growth present to the UK: new industries, new jobs and a wall of inward investment ready to be deployed into the UK if we are prepared to take the net zero pathway, rather than taking the risk of not zero and turning our backs on the economic opportunity of this decade, if not the century, that net zero provides.
The new economic narrative for net zero that the “Mission Zero” report outlines clearly demonstrates that the choices that the Minister and the Government will make this month—March 2023—over our future net zero investments and policy certainty will potentially define his place in climate and clean-energy history, if he acts now. The rest of the world is watching and waiting to see whether the UK will continue to show international leadership on climate policy.
I suggest that there is another opportunity to deliver international leadership on climate, which is achievable today, that the Minister and the Government can seize while the rest of the world watches and waits to see whether the UK will demonstrate international leadership. The UK Government can make a clear and public commitment to withdraw from the energy charter treaty. That treaty is an investment agreement dating back to the mid-1990s, when the focus was on access to oil and gas reserves in former Soviet countries, and when work to tackle climate change, and recognition of the opportunities of clean and renewable energy, was negligible. Today, the energy charter treaty acts as a millstone around the necks of all signatories who wish to take their climate obligations seriously.
Jim Shannon (Strangford) (DUP)
The right hon. Gentleman’s interest in Northern Ireland is always significant. When I ask a question, I am always aware he probably knows the answer, for which I thank him. The aim of the energy charter treaty is to promote energy security through open and competitive markets. Although that is great for the English mainland, in Northern Ireland it is restricted to providers, and the competition is diminished. Does the right hon. Gentleman agree that competitive markets must be available across all of the United Kingdom of Great Britain and Northern Ireland so that we can all get the benefit? I know he is saying we should withdraw, but Northern Ireland is already behind the eight ball, as it is.
Chris Skidmore
If the hon. Gentleman looks at the details of the treaty, which I will come to, he will see that it does not create a level playing field for competition. It is weighted in favour of fossil fuel interests. He knows full well, given his interest in clean energy, how Northern Ireland could become a future green energy powerhouse. It wants to ensure that it can continue to build onshore wind turbines, with a huge opportunity for providing green hydrogen. The challenge the energy charter treaty provides to the UK, and Northern Ireland as a proud member of the UK, is that it takes those potential clean and renewable investments and weights them disproportionately against existing fossil fuel commitments that no other country wishes to make. That is a challenge that we need to deal with.
The charter is a relic from a bygone age, which should have long been recognised as serving an obsolete purpose that still places its dead hand across all states that signed it three decades ago, preventing climate investments and, worse, prioritising inexcusable investments in oil and gas, even when the countries themselves do not wish to make them. The energy charter treaty has effectively become a Magna Carta for fossil fuels, and it is being weaponised by fossil fuel companies to sue Governments for introducing climate policies.
Recently, Italy was sued for its ban on offshore oil drilling. The Netherlands has been sued for its coal phase-out law. Several companies have taken the Dutch Government to court for their decision to phase out fossil fuels by 2030, claiming damages of €3.5 billion. Slovenia has also been sued for its fracking ban
Caroline Lucas (Brighton, Pavilion) (Green)
Does the right hon. Gentleman agree that there is a danger of complacency in the Government’s current approach? When I have asked questions on this issue of the investor-state dispute settlement mechanism, the Minister has replied, “Well, there has never been a case against the UK, so it is not a problem.” The examples the right hon. Gentleman has just given show why it is such a problem. In the Italian case, the Government were sued for six times the amount the oil company ever invested in the project. Does he agree that there are real risks here and that we should not be complacent just because we have not yet had a UK case?
Chris Skidmore
Absolutely. The other risk, which I will come on to in a moment, is the chilling effect. We do not know, or are unable to quantify, the investments that could be coming to the UK but for the fear that the energy charter treaty will again place its dead hand on those investments. Withdrawal from the energy charter treaty provides the certainty, clarity, continuity and consistency—the four Cs—that the net zero review outlined as part of a mission-based approach to long-term certainty. We cannot have long-term certainty for investment in future renewable projects or take decisions potentially shutting our fossil fuel investments unless the energy charter treaty is removed. It is critical that we provide that future certainty if we want those additional investments and the opportunities offered by that inward wall of capital that is waiting to be spent. As the hon. Lady mentioned, an oil company winning £210 million from the Italian Government over their restriction on offshore oil drilling is a perfect example of the risk to which this outdated treaty now exposes the UK. She mentioned that the company won six times the amount it had ever spent on the project, and those winnings are now likely to be fed back into financing new oil exploration.
Most worrying are the continued binds that the energy charter treaty places on signatory countries to prioritise and protect private foreign investments ahead of the democratic rights of elected Governments. Through investor-state dispute settlements, Governments who wish to do the right thing by the citizens who elected them and to tackle climate change to meet their net zero commitments are having their hands shackled by the energy charter treaty, imprisoning what should be free nations and leaving them bound by undemocratic regulations that are fought over by fossil fuel lawyers in courts. At a time when the UK should be taking back its sovereignty, and when it is seeking to demonstrate its energy sovereignty, the energy charter treaty, with its use of these unacceptable ISDSs, should be a prime example of legislation that we must recognise as being at the top of any lists of Brexit freedoms. Surely the UK Government should, can and must take action now to restore our energy freedoms.
Christina Rees (Neath) (Ind)
If the UK follows the International Energy Agency’s recommendation and cancels oil and gas projects, it could face legal claims under the ECT of up to £9.4 billion. The most recent Intergovernmental Panel on Climate Change report warns of the risk of regulatory chill—which the right hon. Member has mentioned—causing the UK to delay or to decide against climate action for fear of being sued by large fossil fuel companies using the ISDS mechanism.
Chris Skidmore
The hon. Lady is absolutely right. Far more impressive legal minds than mine—who have been working at ClientEarth, Global Justice Now and Green Alliance—have demonstrated that there is a way for us out of this treaty and that we can, potentially, work with our European partners to create an exemption regime for some of the historic investment cases in relation to which we might be under treaty obligations.
Dame Nia Griffith (Llanelli) (Lab)
I heartily congratulate the right hon. Gentleman on securing this important debate. Does he agree that, given that there could be a 20-year timeframe in which we would still be liable for action and penalties, the sooner we get out of this treaty the better? Moreover, what indications has he had that it may be possible to negotiate and mitigate down those 20 years, especially given the huge interest from other European countries?
Chris Skidmore
The hon. Lady is absolutely right: the sooner we get out, the sooner we are not under the cosh. However, when it comes to looking at the mitigation circumstances for the 20-year rule, France, Germany, Italy and the Netherlands have all signalled their intention to withdraw from the energy charter treaty. As I will explain later, the EU as a bloc will now potentially decide to withdraw from the energy charter treaty, although it will obviously take time to gather agreement and the UK can therefore lead on making a concerted effort to get all the countries to withdraw. If they do, that potentially creates a mechanism by which some of the disputes are unable to be taken forward in certain areas, such as the wider European area; there could be an opportunity to demonstrate how the overall potential liability can be cut by over 60%.
As the hon. Member for Llanelli (Dame Nia Griffith) has made clear, the risks of the status quo could hold the UK open to future challenge. The status quo cannot continue, because continued membership of the energy charter treaty risks having a chilling effect if Governments back away from new policies in order to avoid being sued—a danger that UN climate experts specifically warned about in the IPCC report. The UK Government have already recognised the problem, with the then Energy Minister, my right hon. Friend the Member for Chelsea and Fulham, saying:
“The UK cannot support an outdated treaty which holds back investment in clean energy and puts British taxpayers at increased risk from costly legal challenges.”
I hope to see the same clarity from the new Department for Energy Security and Net Zero, as well as from the new, beefed-up Department for Business and Trade.
Selaine Saxby (North Devon) (Con)
I thank my right hon. Friend for securing today’s debate on such an important topic. Does he agree that the creation of a new Department gives us the opportunity to expedite the decisions that we desperately need to take, particularly in the light of yesterday’s IPCC report and his own excellent report? We have to work towards net zero; otherwise, we will hit “not zero”.
Chris Skidmore
Absolutely. The UK has demonstrated continued leadership time and again, and I was the first Energy Minister to sign net zero into law. We became the first G7 country to do so, beating France by one day. We must collaborate, and I am proud that we have now seen a huge number of countries commit to net zero. I think we are the first country globally to ensure that we have a Department for net zero, which must also be welcomed. I thank the Government for demonstrating leadership on this issue, but let us extend that leadership by not just changing the words on a plaque on a wall in a Department; let us ensure that the new Department can boldly show leadership by coming out and demonstrating to other countries that it is willing to act. Then others will follow.
There are now serious moves, both here in the UK and elsewhere across Europe, to leave the energy charter treaty as a matter of political priority. It is clear that any chance of reforming the treaty is over. The modernisation talks proposed last year have failed, because several European countries, including Germany, France, Spain and the Netherlands, have decided to leave the treaty due to reforms not going far enough to bring it in line with the Paris agreement. Even the European Commission, which previously led the modernisation process, has announced plans for a full EU withdrawal from the treaty.
Without support from the UK’s traditional allies in favour of the continuation of the reform process, it will be impossible for the UK to push through reforms on its own against the remaining, less climate-ambitious energy charter treaty countries. The UK’s previous position of supporting modernisation is therefore no longer credible. Instead, the UK needs to reach out to like-minded partner countries, such as Germany, France and the Netherlands, to begin the process of co-leading an orderly withdrawal from the treaty.
In February, a group of experts wrote to the Energy and Net Zero Secretary, calling on the UK to quit the energy charter treaty. Today, 15 Members of Parliament from the all-party parliamentary group for the environment—I see a number of those colleagues in the room, representing four different parties—have written to the Minister for Energy Security and Net Zero, my right hon. Friend the Member for Beverley and Holderness (Graham Stuart), to make it clear that withdrawal from the ECT is now the best option for the UK in the future. The letter states that there is now an overwhelming case for taking action to leave the treaty unilaterally, especially given that many European countries have left and the EU as a bloc has publicly announced its withdrawal.
First, the letter makes it clear that
“The ECT is undermining efforts to achieve net zero due to costly legal action from fossil fuel companies, and the so-called “regulatory chill” effect, which causes governments to refrain from adopting climate policies. This view is supported by the Intergovernmental Panel on Climate Change”.
Secondly,
“The ECT makes the UK less attractive for clean energy investments as instead of serving the interest of clean energy and sustainable technology companies, it creates a policy landscape that is tilted against clean energy, and which exposes UK finances to huge litigation risk.”
Thirdly,
“The Treaty modernisation process has failed, with major signatories like Italy, Germany, and France preferring to leave the Treaty.”
And fourthly,
“The UK can regain control by co-leading a coordinated Treaty exit by working with like-minded partners such as Germany and France. This would help put the UK at the centre of decision-making on the next phase of ECT discussions, rather than waiting for an EU-led strategy to re-emerge.”
Not only is the letter signed by Members from across the House, but the wider principle of leaving the energy charter treaty is backed by climate and clean energy non-governmental organisations. I have already mentioned a number of them, including the Green Alliance, Global Justice Now and ClientEarth. There is also the Aldersgate Group, chaired by the former Prime Minister, my right hon. Friend the Member for Maidenhead (Mrs May).
As the former Energy Minister who signed the UK’s legal commitment to achieve net zero by 2050 into law, I know too well the challenges that the Minister faces, having sat in his position in the past. Politics has always been about priorities, and no doubt he will be told that there are other priorities that the Government must face. Some will seek to delay; others will claim that it is just too difficult. It was no different when I was seeking to persuade other Departments to agree to net zero. History judges us all on the priorities that we make and the future that we seek to create. Sometimes that future is unknown and unknowable, but that should not prevent us from taking action now to achieve it.
If someone had told me back in 2019 that 90% of the world’s GDP would have signed up to a net zero target just three years on, I simply would not have believed it. Change comes at us fast sometimes, and there is no faster change than climate change. I know of no one serious about achieving net zero who would back the UK’s remaining in the energy charter treaty. Indeed, the reality is that continued membership of the ECT and continued commitment to net zero are not compatible. We face a choice between defending our fossil fuel commitments of the past or delivering our net zero commitments for the future. Our continued membership of the energy charter treaty is not only unsustainable, but simply indefensible. The time has come to pick a side. I urge the Minister to choose net zero and commit to the UK’s withdrawal from the energy charter treaty.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Andrew Bowie)
It is a pleasure to serve under your chairmanship, Mr Gray, and to respond to my right hon. Friend the Member for Kingswood (Chris Skidmore) on such an important and pertinent topic. Thanks to his work in passing net zero legislation into law, and through his work on the review, the UK is committed to tackling climate change at home and internationally through our ambitious net zero targets and our international climate agreements, including the Paris agreement. I want to assure him of my personal commitment to achieving those goals, which I hope he knows already.
In an earlier intervention, the hon. Member for Strangford (Jim Shannon) raised energy security in Northern Ireland. I urge him to hotfoot it back to this Chamber at 2.30 this afternoon when the hon. Member for Upper Bann (Carla Lockhart) has a debate very much focused on Northern Ireland and energy security for farmers. I look forward to seeing him there and we can continue our discussion.
The energy charter treaty was signed in 1994. It was originally designed to provide stability and certainty for those participating in cross-border trade and investment in the energy sector, particularly for investors operating in states with a less stable rule of law. It currently applies to more than 50 contracting parties. As my right hon. Friend the Member for Kingswood rightly says, the world and the energy sector have changed significantly since 1994, and there is wide recognition that the energy charter treaty has not kept pace.
Britain has long accepted that to remain relevant the energy charter treaty needs to be updated to reflect the current energy landscape. In its unmodernised form, it is focused on trade and investment in fossil fuels. Although renewables are in scope, it does not cover modern energy technologies such as hydrogen or carbon capture and storage. That is exactly why His Majesty’s Government have been such keen supporters of modernising the treaty; I dispute the characterisation from the hon. Member for Brighton, Pavilion (Caroline Lucas) that we are in any way complacent.
We have spent two years negotiating to align the treaty with today’s changing energy priorities and investment treaty practices, as well as international climate commitments, such as the Paris agreement. We took a leading role in pushing for additional safeguards for the sovereign right to introduce measures such as net zero and a flexible mechanism to allow parties to phase out investment protection for fossil fuels. To be clear, there were challenges to overcome in the renegotiation. It is a multilateral treaty across more than 50 states, each with different priorities on energy and climate. The UK was able to secure coverage for modern technologies, and provisions to ensure a stronger environmental, labour and climate focus.
Chris Skidmore
This is a factual question: who is the Minister going to negotiate with in a modernisation programme, when none of the European countries, including Germany, France, Spain, the Netherlands and Italy, will be in the room? Logically, there is no opportunity to discuss modernisation, because no one wants to discuss it. The Minister’s speech may have been written before the decisions taken by the EU last week or the week before were made public, but it is simply not logically possible to follow the pathway that the Minister is suggesting. It might have been possible last year, but it is certainly not anymore.
Andrew Bowie
I was not suggesting a pathway forward; I was giving a brief history of how we have got to the stage we are at. If my right hon. Friend hangs fire for two seconds, I will explain where we are going next.
Despite efforts to update the treaty, which the EU had supported us on, when it came to the final moment the European Union and its member states were unable to endorse adoption of the modernisation at the energy charter conference in November. That was unexpected and a great disappointment to those, including member states and the UK, that were championing modernisation. As such, several EU member states have now announced their intention to withdraw. We expect a decision on modernisation to be rescheduled when enough contracting parties are in a position for a vote to take place.
We must carefully assess the impact of the evolving situation to understand how best to take forward our priorities in relation to the treaty. Since the conference in November, the Government have monitored the public positions of other contracting parties, engaged with official-level negotiators from those parties, conducted further assessment and considered the views from stakeholders across business, civil society and Parliament. We are building all that information, engagement and analysis into an assessment, underway right now, of how the UK should respond to the current situation in the energy charter treaty. We will keep the House informed of any relevant developments as soon as we are able.
Whatever the final decision on our membership or the future of the treaty, the UK remains committed to addressing the urgent need for climate action at home and abroad. As such, I sincerely thank my right hon. Friend the Member for Kingswood for raising the issue.
Caroline Lucas
I wonder whether the Minister recognises that there is an urgency to this. I appreciate that he is listening to lots of different voices, but if we are left on our own because all like-minded countries have left, we risk becoming stranded and unable to leave with the protection that would have come from a co-ordinated departure with our EU colleagues. Will the Minister consider that as he plots the way forward?
Andrew Bowie
I thank the hon. Lady for her intervention; of course, that is being considered. As I said, an assessment of the UK’s position in regard to the treaty is being undertaken right now, and as soon as a decision has been taken we will update the House. The issue is important and pertinent, and I thank my right hon. Friend the Member for Kingswood for bringing it to the Chamber today.
Question put and agreed to.
Energy Support for Farms
(1 year, 9 months ago)
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Mr Laurence Robertson (in the Chair)
I remind hon. Members that they need to stand and catch my eye if they wish to speak.
Carla Lockhart (Upper Bann) (DUP)
I beg to move,
That this House has considered energy support for farms.
As a matter of openness and transparency, I declare an interest: I come from a small, family-run farm. Thank you for chairing the debate, Mr Robertson; it is a pleasure to serve under your chairmanship. I thank the Minister for being here and for his prior engagement on the topic. I thank hon. Members from across the House for giving their time to attend this debate on this important issue.
In the constituency that I represent, the agriculture sector is vital to our economic wellbeing. In the wise words of my grandfather, if the farmer is not doing well, no other industry is or will; such is the importance of our agrifood industry. Across the wider Armagh, Banbridge and Craigavon area, we have 3,431 farms. They contribute approximately £376 million in goods value and farm support payments into the local economy. They provide employment in the agriculture sector and in the 265 local agrifood sector businesses that the industry supports. In Northern Ireland, we have 26,000 farming families. The agrifood sector is worth more than £5 billion to the economy, and we feed more than 10 million people with our top-quality produce.
As has been the case for all households and businesses, energy costs on these farms have spiralled since the outbreak of the war in Ukraine. Many farms are unavoidably energy intensive. Take dairy, for instance. Farmers who needed to renew their energy contract last autumn experienced increases of more than 400%. With an electricity price of 37p per kWh, the annual cost to an average-size dairy farm is now approximately £105 per cow. For a 250 cow herd, that adds up to £46,000 a year, which is up by £26,000.
Wendy Chamberlain (North East Fife) (LD)
I congratulate the hon. Lady on securing this important debate. I absolutely agree with her and want to give my own example. I represent a local seed potato farmer whose costs have increased from £10,000 to £30,000. He has a generator and thinks he may have to come off the grid entirely. He faces an increase not only in energy costs, but in standing charges. Does the hon. Lady agree that farmers face a cliff edge at the end of this month and are disappointed that the Government did not do more to support them through the Budget?
Carla Lockhart
I think the hon. Member has been reading my speech. A cliff edge certainly is coming for this important industry, which is the backbone of our economy.
Another example is poultry. There has been an increase of approximately £87 a day, which equates to about £32,000 a year. That is a phenomenal amount, and only so much of that can be passed on.
Ahead of the Chancellor’s spring statement last week, our farming unions, alongside Members from across the House, had been lobbying to bring about a change in mindset from the Government in relation to support for farmers with energy costs. The Government must recognise the key role of the agriculture sector in feeding the nation. The industry needs support in the face of energy price pressures.
The current support from the energy bill relief scheme is due to expire at the end of March. It will be replaced by the energy bills discount scheme, which will run for 12 months. That scheme offers far less protection and support to businesses, with the removal of the price cap and its being replaced by a token discount. A pre-defined selection of industries has been identified for additional support under the energy and trade-intensive industries scheme. However, farming sectors have been left off this scheme, leaving them literally out in the cold without support. In the face of that cliff edge, the ask of the Government was straightforward. Our farming unions, on behalf of their members, sought the extension of the energy and trade-intensive industry scheme to include energy-intensive sectors, such as horticulture, poultry and pig production. That was a reasonable ask that the Government should have listened to.
Poultry businesses are reliant on gas and electricity to rear poultry and store fresh produce safely. Without sufficient support, there is no doubt that those farmers will struggle to absorb the huge hikes in energy prices that they will face. The same can be said for pig producers.
Mr Gregory Campbell (East Londonderry) (DUP)
I congratulate my hon. Friend on securing the debate. As I am sure is the case across the UK, small farm holdings in Northern Ireland have shown great adaptability and diversification over recent years, as times and legislation have changed. Does she agree that the campaign and the pressure she is applying to the Government, to which I hope they will respond positively, needs to get them over the hump of the next 12 months, after which we hope things will improve regarding prices and the war in Ukraine, so that a more normalised structure can return?
Carla Lockhart
I absolutely agree with my hon. Friend. The point is well made that there needs to be a short-term injection for those farmers, so that they can continue to produce at the same levels. We will see farming families and farms going out of business, which will not help the overall industry or the nation’s requirement for food produced locally.
Horticulture’s exposure is significantly greater not just for gas for glasshouse heating but for electricity used for lighting, chilling and storage. Without sufficient support, that sector will be under huge strain to remain viable. Yet the evidence-based appeal was ignored by the Chancellor. That reasonable ask of the farming community to extend the ETII scheme was ignored. There was no extension of ETII to support energy-intensive farms. A range of other industries continue to receive support. High-level energy relief continues to several sectors, including food processing and manufacturing, but the primary producer is forgotten. The Government once more ask the farmer to do more with less, and that is simply not possible.
Wendy Chamberlain
I thank the hon. Lady for giving way again. Wholesale energy prices are already falling. The Government have not spent the amount of money that they had expected to spend on their energy-relief schemes. Does she agree that the Government have the headroom to go over and above what they announced in the Budget and to date? They could use those additional funds to support our farmers.
Carla Lockhart
I absolutely agree with the hon. Lady. There is the headroom and available money. I encourage the Government to do the right thing by the industry and to support those farmers at this time of need. This decision will have consequences; the cliff edge will be too much for some farmers. They will exit the industry and others will reduce output, unable to absorb the cost of maintaining their current output. Consequently, UK food production will fall, processors and manufacturers in the supply chain will be impacted, food inflation may well increase, and consumers ultimately will end up paying more.
No one wins from this decision. I believe it is still in the interests of the Treasury and the Government as whole, the agrifood industry and consumers that this decision is revisited. I ask the Minister to undertake to explore this comprehensive case once more, and to step up with the support these farms need to face the challenge and conditions they find themselves in. I also invite him to visit my constituency in his ministerial capacity to witness at first hand the value that these farms add to our economy and the pressure that they are currently feeling.
We need to back British farming. The Government demand the highest standards of our farmers and must repay their endeavours to produce world-class produce to the best animal welfare, environmental and sustainability standards with sufficient levels of support to enable them to do just that.
Jim Shannon (Strangford) (DUP)
It is indeed a pleasure to serve under your chairmanship, Mr Robertson, and an even greater pleasure to support my hon. Friend the Member for Upper Bann (Carla Lockhart). She has outlined very clearly the problems that her constituents in Upper Bann are having, and I want to reflect on those problems as well.
It is also a pleasure to see the Minister in his place. He reminded me at 11 o’clock that this debate was on— I was already going to come, by the way. It is a real pleasure to be here. I think that he has already told me that whatever I ask for, he will respond in a positive fashion. I am not quite sure how that will work out, but perhaps my hon. Friend the Member for Upper Bann could give me a list of things to ask for. I say that in jest, by the way, but I know that the Minister will reply in a very positive fashion and I appreciate that.
My hon. Friend the Member for Upper Bann is truly an advocate, in every sense of the word, for her constituents. She is also—I say this respectfully—a credit to her constituency and to us as her colleagues. We are very pleased to have her here alongside us today and we are equally pleased to support her.
I declare an interest as a landowner and a farmer, and a member of the Ulster Farmers’ Union. As my hon. Friend and I both hail from rural constituencies, we are often of one mind and one voice. Everyone else present is also of that one voice because the issue raised by my hon. Friend affects many constituencies across this whole United Kingdom of Great Britain and Northern Ireland.
It is hard to know what more can be added to the comprehensive case that my hon. Friend has made today, but I will certainly do my best to contribute to this debate in a positive fashion. Farmers and farm businesses are heading towards crisis, which will not be a matter of a few “Closed” signs and a closed door; instead, it is a matter of food security, which is of the utmost importance to this House.
I chair the all-party parliamentary group on eggs, pigs and poultry. There is no better APPG to chair, by the way; I love telling people about it. Everybody says, “Well, you’ll have a good breakfast every morning”, and I probably do. I always have two eggs every morning; I do not always have bacon or sausages, but I always have my eggs.
In my constituency of Strangford, the eggs, pigs and poultry sectors have intensive businesses with high energy usage. They have been encouraged to produce more food over the years, and to invest to do so. They have done that. The old saying, “You need to speculate to accumulate”, only really works if someone can speculate in a way whereby they know they will get a return. The problem is that with energy costs being so high, that speculation is now looking rather doubtful for many farmers, which is why we worry.
In my constituency of Strangford, we have the world-famous Comber spud. There is no spud like it; there are no potatoes like it in the whole world. By the way, Europe recognised that and I have to say that I had a small role to play in getting the Comber spud recognised by Europe. My colleague at that time was Simon Hamilton. He and I pursued that objective and the Comber potato is now highly recognised and valued, not only right across the whole of the United Kingdom of Great Britain and Northern Ireland, but as far away as Europe.
The very famous Comber potato is produced by farmers in my area. They are immensely proud of that product, as they rightly should be. In my constituency of Strangford, we are blessed with precisely the right climate to be able to produce three crops of potatoes per year instead of the standard two. As I say, that is due to the climate, but it is also down to the soil. I would say, without fear of being contradicted, that there is no better soil in Northern Ireland to do that. And what a joy it is to represent that constituency, which has, as I say, the best soil there is.
The difficulty for the businesses in my constituency is that the cost of production has risen but the cost to the agrifood industry of converting potatoes into mash pots—which is where nearly all potatoes seem to go now—or whatever form they take, means that they cannot provide as much food as they potentially could. That is due to the rising energy costs.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
I am grateful to the hon. Gentleman for giving way and I remind the House of my entry in the Register of Members’ Financial Interests. He touches on the most important part of the debate. The issue is not just that farmers face increased energy costs, but that that is part of the overall package. They have labour shortages and are under the cosh in just about every way imaginable. Consequently, if they are not able to meet the demand, other food sources will come through trade deals, and once they fill that gap in the market, we will never get them out.
Jim Shannon
The right hon. Gentleman is absolutely right. I will refer to that shortly and give an example. There are many issues with workforce and the supply of products as well. We have had problems over the last year, before and after Christmas, and I wish to refer to them as well.
Over the years, Government have encouraged farms to diversify and modernise, providing grants for new equipment and technology. However, Government have not taken into account the fact that costs have quadrupled in the space of a year for many farmers, and grants and subsidies certainly do not meet those rising costs. When I speak to farmers in my constituency about the possibilities for renewable energy—there are quite a few who are trying to do it—I learn that, unfortunately, they have heard too many stories of fields being used for solar energy with only £100 being saved on the electricity bill. They would be better off renting out their field for a birthday party bouncy castle, which would bring in more revenue than £100. The numbers do not seem to add up for many and that is why we must now step in and sow solutions into the problem. Hopefully, the Minister will give us some ideas about what can be done to assist and help.
The lifeblood of this nation lies in self-sustainability. The right hon. Member for Orkney and Shetland (Mr Carmichael) referred to that. The UK does not produce enough fruit and vegetables for its population to get the recommended five portions a day. Even without taking waste into account, the United Kingdom would need to produce or import 9% more fruit and veg for everyone to be able to eat the recommended amount. That is not possible while farmers do not have the ability to produce and process in profit.
The recent debacle with the fruit and vegetable shortage highlighted a pertinent point: the UK depends on Morocco and Spain for vegetables during the winter. It does not have the workforce to sustain and gather all the fruit and veg in the summer. There are opportunities to do that better and to work ahead. Because of heavy rains and floods, suppliers have been hit by the problem of ferry cancellations, which has, in turn, affected lorry transport. At one stage, the Secretary of State for Environment, Food and Rural Affairs had to reply in the House as to why food was so scarce. To be fair, it was not the Secretary of State’s fault, but ultimately the need to find a solution fell at her feet.
Supermarkets have also had shortages of broccoli and citrus fruits and we were left with rationing. I am not an avocado man, but my wife mentioned that they were in short supply as well. We never eat them, by the way, so I do not know why she told me that. I could not figure it out because it did not really make that much difference. However, farmers know they could fill the breach with other seasonable vegetables if they had the capacity to do so in a profit-making venture. If it comes to speculating, to accumulate we need to encourage the farmers to do just that.
Generations of farmers are prepared to carry on with the family farm and the back-breaking, morale-destroying and socially isolating nature of their work. We may not give farmers enough credit for all they do. They work away. I have always lived in the countryside, so I am aware of that from friends I went to school with and others I know quite well. Also, I live on a farm and my neighbours are all intensive farmers. But they cannot do this without support and the recent payment does not even make a dent in what is needed.
I back my hon. Friend the Member for Upper Bann in her calls for meaningful support. This is not only a matter of saving a job; this is about saving the nation’s ability to survive alone, and that is worth any investment in my eyes and hopefully in those of the Minister.
Patricia Gibson (North Ayrshire and Arran) (SNP)
I too congratulate and thank the hon. Member for Upper Bann (Carla Lockhart) for securing this debate, in which I am pleased to be participating. It is important that the challenges facing our farming sector are properly aired, and it is a little disappointing that the debate has not attracted more interest from across the House.
Farming that uses more energy—for example, the horticultural and poultry sectors—is not included in the UK Government’s definition of energy and trade intensive industries. There will therefore be a reduction in the energy cost support for farms, which has caused understandable and great disquiet.
The omission of horticulture is particularly frustrating. The question posed by the National Farmers Union, to which we would all like an answer, is: why are botanical gardens included in the scheme, but not food grown in greenhouses? That is not to take anything away from botanical gardens, but it seems quite out of kilter and bewildering. European farmers have been supported with a €500 million package to help with production costs, but farmers in Scotland and across the UK feel that the support they have been asking for has not been forthcoming.
As the Minister is aware, it was very much hoped that the Chancellor, in his Budget last week, would extend the definition of energy and trade intensive industries. It is extremely frustrating that that did not happen. As production costs soar, many farmers and food producers face a cliff edge of support. “Cliff edge” is an expression that every speaker in the debate has used. Many producers simply do not know how they will be able to keep going. Where in the Government’s priorities does domestic food production come? Unless the definition is extended, there may well be a reduction in production, which will risk longer-running food price inflation for consumers and could negatively impact the thousands of supply chain companies sustained by the farming sector.
Recent weeks have demonstrated how important domestic food production is, but it is energy intensive. We only have to think back to the recent tomato shortage as a prime example of what can go wrong if the farming sector is not supported. The vast majority of UK tomatoes are grown in greenhouses, which is clearly energy intensive. That, alongside the soaring cost of fertiliser, has given farmers cause to review what food they can actually afford to grown. Indeed, many have opted not to grow vegetables this winter, since there is a genuine lack of confidence that they would be able to cover the costs associated with energy-intensive crops. Cucumbers, which are also energy intensive, are expected to be another casualty. More generally, a shortage of domestic produce right across the board is now expected next year. Farmers cannot be expected to grow produce when they cannot even cover their costs. The reality is that it is simply not viable to grow under glass unless farming is recognised to be an energy-intensive business.
The only way to ensure that we have fresh domestic produce on our shelves is for the UK Government to understand what everyone else understands: that food production is energy intensive. It is bewildering that that argument has to be made. If that is not recognised, a shortage of fresh domestic produce on supermarkets shelves will become a familiar sight. The disruption of international supply chains means that we cannot even have imported fresh produce, as we saw recently with tomatoes. It will not be because of rain in Spain or Moroccan weather changes, as we were told recently when tomatoes became like hens’ teeth; it will be because of inaction from this Government.
There can be no doubt that Brexit has posed huge challenges for domestic food production. Farmers were promised a Brexit bonanza, but the reality is that they have been left paying the price for the damage caused by the Brexit adventure. Some people may think, “Well she would say that, wouldn’t she?” but the chair of Save British Food has also observed:
“I keep hearing that Spain is being blamed for the food shortages in Britain and this is absolute nonsense. The reason we have food shortages in Britain—and they don’t have food shortages in Spain or anywhere else in the EU—is because of Brexit and because of this disastrous Conservative government that have no interest in food production or farming or even food supply. That’s why we are in this mess. The Conservatives with their Brexit have messed up our trade and made that very difficult. This has also impacted the labour supply as it ended freedom of movement. It has also removed the cap and food subsidies, then add on top of that the Ukraine war and Covid and all of the inflation. All of this was predicted and predictable.”
Those are not my words; they are the words of the chair of Save British Food, who I suspect knows a thing or two about British food. She is now part of a growing chorus of people who have concluded that the only way to fix the problem is to
“get back into the single market and customs union”.
The woes are not hard to find; they are piling up for farmers at an alarming rate. The Public Accounts Committee criticised the Department for Environment, Food and Rural Affairs for its “blind optimism” over the implementation of the UK Government’s alternative to the EU’s common agricultural policy funds, with a lack of detail as to how alternative funding will provide the help needed.
Mr Laurence Robertson (in the Chair)
Order. I gently remind the hon. Member that the debate is on energy support for farms. It is quite a narrow title.
Patricia Gibson
Mr Robertson, you intervened at the right moment. I was setting out the general context for farmers. I have talked about energy support, but I am putting it in the context of the bigger challenges our farming sector faces. I take your point about the title of the debate.
We can barely imagine the sense of betrayal and abandonment that farmers feel when they look at their EU counterparts, who have a £500 million support package to help with production costs. That is a lump sum to farmers and agrifood businesses affected by the significant increase in input costs, such as energy, fertiliser and animal feed. All that UK farmers are asking for is similar support. Energy costs are the obstacle that is going to hit domestic food production across the UK—there is no debate about that. On top of energy costs, farmers have to deal with chronic labour shortages, with £22 million of fruit having rotted in the fields because of the labour shortage caused by the end of freedom of movement.
The Scottish Government are doing what they can with their limited powers to support farmers. The Minister does not need me to tell him that energy support is reserved to the UK Government. It is to the UK Government that our farmers are looking and hoping; they are asking and lobbying them to take note of the devastating impact that we will see on the farming sector and domestic food production if farming is not rightly recognised as an energy-intensive business—that should be no surprise to anybody.
When we get down to it, this debate is really about whether domestic food production matters. If it does not matter, then the Government can tell us about that position. I believe, as do many others, that it does matter, and that it requires the support that has been called for today. I hope the Minister will listen, and then go back to his colleagues to make the strong, robust case to include horticulture and poultry in the energy and trade intensive industries scheme. Otherwise, the damage to our farming sector and to domestic food production will be nothing short of catastrophic.
Dr Alan Whitehead (Southampton, Test) (Lab)
I congratulate the hon. Member for Upper Bann (Carla Lockhart) on securing the debate. It is on an important and usually forgotten part of our current energy debates. We talk generally about domestic customers and industry and commerce and what they get in the various energy bill support schemes and discount schemes and so on, but we very rarely talk about farming or agriculture.
We tend to think that there is not much energy going into these rural buildings. We completely overlook just how much energy is used by farms, particularly in intensive industries such as poultry farming and horticulture where an enormous amount of energy is used in many parts of the process. It is rather hidden behind the seemingly low-cost, low-energy appearance of the rural environment.
It is important to concentrate on the farming sector’s problems with energy costs and what they mean for the ability of such businesses to sustain themselves. We must also think about what that means for the on-costs for everybody else, such as effects on the cost of food production. Many farms are pushed between the prices they are going to get for their end products from further up the chain and their own costs coming in. We must consider how they are going to make a living between those two points.
The hon. Member for Upper Bann gave examples of just how much energy costs have gone up for relatively small farms in her area. Those costs are, of course, replicated across the United Kingdom. She made a strong case for the question of energy support for farms to be looked at with a far wider lens that encompasses not just the small contributions that have been made to farms through the energy bill support scheme and others—though I know Northern Ireland has a slightly different scheme from the rest of the UK, where the payments are lumped together. There has been a considerable debate in Northern Ireland about the extent to which farms that are both domestic properties and farms get the full amount of payment through the scheme. Indeed, I have discussed with Ministers in Delegated Legislation Committee proceedings the rather complicated nature of that process.
The hon. Member for Upper Bann put forward the case that, notwithstanding Northern Ireland’s scheme, farms ought to be treated as part of an energy-intensive industry. I am sure hon. Members will be interested to know what actually is classed as an energy-intensive industry. The starting point for being treated as an energy- intensive sector is to fall in the 80th percentile for energy intensity—meaning it must fall in the top 20% for energy intensity across the UK—and the 60th percentile for trade intensity. So there is a formula as to what gets on the list of energy-intensive industries and can then receive additional support from the EBRS and be substantially exempted from environmental levies on the whole industry. The exemption has been 85% for quite a while, and there are discussions about whether it should be increased to 100% in the not-too-distant future. Categorisation as an energy-intensive industry is important, in a number of ways, to getting support with energy.
It is curious that poultry processing, for example, is on the list of energy-intensive sectors, but poultry production is not, and that things relating to ornamental plants are on the list, but horticulture is not. I suspect that may be because of the NACE—nomenclature of economic activities—classes, which define sectors. It may be that what look to us like sectors—poultry and horticulture, for example—are lost in the wider definition of a class such as agriculture and farming.
The Government should review fairly urgently how sectors are defined for energy intensity purposes. Seventy-one sectors come under the definition of energy-intensive industries. Is farming simply losing out because, as the sector is defined, its relatively lower-carbon elements dilute the elements with greater energy intensity? Such a review is well overdue. If the sectors were drawn a bit more closely, I think farming—or at least substantial elements of it, in the way that the hon. Member for Upper Bann described—would come under the definition.
Curiously, coalmining is defined as an energy-intensive industry and therefore 85% exempt from environmental levies, when we might think that that activity has something to do with the raising of those levies in the first place. There may be a wider case for redefining what counts as an energy-intensive industry.
This is a very important issue, and the Government could do something about it, not simply by providing a larger cash amount to farms, but by defining much more clearly what it is to run a farm and how energy use affects such definitions. The Government can look again at those definitions, and I hope that the Minister will commit to doing just that.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Andrew Bowie)
It is an absolute pleasure to serve under your chairmanship, Mr Robertson. I thank all hon. Members for joining us in Westminster Hall for this debate. All of us—especially those of us who represent rural constituencies—are aware of the challenges that farmers are facing at the minute. I wish to express my gratitude to the hon. Member for Upper Bann (Carla Lockhart) for bringing forward this debate and for her dedicated campaign to back British farming.
The Government have implemented several comprehensive support schemes across the UK to assist farmers in coping with energy costs. In particular, I wish to address the support being provided in Northern Ireland, given the vital contribution of farming and agriculture to the economy there.
I understand how fundamental agriculture and the wider agrifood industry is to Northern Ireland, employing more than 50,000 people across 26,000 farms. Northern Ireland is renowned at home for the quality of its produce. Farms are at the heart of the agrifood industry, which contributes £4.5 billion in turnover every year, helping to deliver a stronger, more secure economy in Northern Ireland. Before I go any further, let me say that I would be delighted to take the hon. Lady up on her invitation to visit Upper Bann and see farms operating in her constituency.
Given the industry’s importance, it is right that the Government’s energy schemes have offered much-needed support to farmers over the winter in the face of high and rising energy costs. On 1 October, we introduced the energy bill relief scheme, which will continue to run until the end of this month. It provides a discount on the wholesale component of gas and electricity bills and has provided protection to farmers from excessively high energy costs over the winter period. Support offered by this package is worth £7.3 billion and it is available across the entire United Kingdom.
Although energy prices are coming down, and it is right that we balance continued support with energy costs with our duty to the taxpayer, we also recognise that prices remain far above historical levels. For that reason, although the energy bill relief scheme is coming to an end, we have pledged to provide further support to non-domestic customers, including our farming industry, from April onwards through the energy bills discount scheme. The EBDS will continue to provide support to eligible non-domestic customers with their energy bills from April this year until the end of March 2024.
It is true that the EBDS baseline support is significantly reduced compared with that of the current energy bill relief scheme. That is to reflect the welcome reduction in wholesale energy prices. The Government make no apology for ensuring that the taxpayer is protected; we need to focus our support where it is most needed. Under the support package, energy and trade-intensive industries will receive a higher level of support than the baseline element. That is essential if those industries are to maintain their competitive edge against their international counterparts as they are less able to pass on increased costs to their consumers.
Before I move on, I wish to address the specific points that were raised. It is a great pleasure to see the hon. Member for Strangford (Jim Shannon) back in the Chamber for the second time today. I am delighted to address his points, although I take issue with his assertion that the Comber spud is the greatest potato in the world. I think a tattie howked from the Howe o’ the Mearns is the far superior potato when it comes to international comparisons. None the less, I do take on board all of what he said. I know that, as a diligent Member of Parliament for an incredibly rural constituency, like me, he speaks from his heart when he talks about representing his farming constituents. I associate myself entirely with his comments on the socially isolated nature of farming in the 21st century. We must do all that we can to support farmers in the incredibly important work that they do to support this country and, indeed, to export great British produce around the world.
The shadow Minister, the hon. Member for Southampton, Test (Dr Whitehead), raised eminently sensible and pertinent points. I commit to looking at the definition of an energy-intensive industry, and specifically at his point about how the less carbon-intensive elements of farming may reduce the overall burden of carbon intensity.
Let me turn to the hon. Member for North Ayrshire and Arran (Patricia Gibson), the spokesperson for the Scottish National party. I will not take any lectures from the SNP on supporting Scottish farmers. It is not the Conservative Government, but the SNP Government who have been accused by the National Farmers Union Scotland of leaving farmers to operate in an information void, given the lack of progress on the Scottish post-Brexit farming Bill.
If the hon. Lady really is as passionate as she says she is about supporting domestic food production in Scotland, perhaps she will make the case within the SNP Government that they should get on board and extend the Genetic Technology (Precision Breeding) Bill to Scotland, just as the NFUS has asked them to. That could be a great fillip and a great boost for Scottish farming, given that so much of the technology in that field is being developed in Scotland. Other than that, the hon. Lady did make some important points regarding supporting Scottish farmers, which, of course, I take on board.
I thank the hon. Member for Upper Bann for raising the issue of farms not being eligible for the additional targeted support of the energy and trade-intensive industries scheme. I am aware that the National Farmers Union and the Ulster Farmers Union have raised similar concerns. I want to stress that the energy and trade-intensive industries eligible sectors list is targeted and comprehensive. It was developed to support sectors in the top 20th percentile for energy intensity and the top 40th percentile for trade intensity in the UK, notwithstanding what I said in reply to the hon. Member for Southampton, Test about the carbon intensity of some elements of farming.
Sadly, the farming sector does not meet the ETII eligibility criteria at the minute and is therefore not eligible to receive the targeted support. Although I recognise that the hon. Member for Upper Bann would wish us to go further, I hope she will understand that we have sought to be fair in applying the criteria rigorously and objectively. We do not have plans to extend the scope of eligible sectors to include farms, as confirmed by the Chancellor at the Budget. However, the non-domestic alternative fuel payment offers one-time support of £150 to approximately 76,000 customers in Northern Ireland and 315,000 non-domestic customers without access to mains gas, including some farms, throughout Great Britain. High users of heating oil can apply for a top-up payment based on their usage over the past year.
It is essential that we look at energy bills support for farms and farmers in the round. Although farms will benefit from the EBDS at its base support level, rather than at the enhanced level for energy and trade-intensive industries, they will also benefit from funding available to domestic customers. That includes the energy price guarantee, the alternative fuel payment and the energy bills support scheme. The energy price guarantee reduces electricity and gas costs for domestic customers, aiming to lower annual bills, combat fuel poverty and maintain supplier market stability. The scheme covers approximately 29 million households.
In Northern Ireland, all households are receiving a combined payment of £400 from the energy bills support scheme and a £200 alternative fuel payment, regardless of whether they use alternative fuels or mains gas to heat their homes. That payment has been provided by electricity suppliers to all households with a domestic meter and a contract. That will include farmhouses with a domestic meter. Farms in Northern Ireland with a combined meter are covered by the alternative funding, to which I will turn shortly. Suppliers began making payments on 16 January and have confirmed that all first attempts to reach all customers have been made. Efforts are now ongoing to reach those who encountered challenges in the first pass, such as vouchers addressed to the wrong individual or failed bank transfers. Those who have not yet received their vouchers or a payment into their bank account should immediately contact their electricity supplier.
In Great Britain, the energy bills support scheme is being delivered as a discount on energy bills and provided by suppliers in monthly instalments from October 2022 to March 2023. As we are now approaching the end of the scheme’s final month, I urge all hon. Members to join the Government in highlighting to their constituents who use traditional prepayment meters the importance of acting now to redeem their energy bills support scheme vouchers.
Jim Shannon
Over the weekend, it was indicated in a newspaper that 20,000 households in Northern Ireland have not received their benefit. Is there any way that the Minister can ascertain who those 20,000 households are? Are some of them farmers? We suspect that they are. There was certainly an issue early on, with some farmhouses not receiving the benefit. Would the Minister be so generous as to find out the answer to that question?
Andrew Bowie
Across the entire United Kingdom, 1.9 million vouchers remain unused, which is why I ask all hon. Members to encourage people who have not received their vouchers, or who are not receiving the discount that they should be, to contact their electricity supplier, either directly or through their Member of Parliament. I will find out the fuller answer to the hon. Gentleman’s specific question on where those people are.
For those without a domestic energy supply, who were not eligible for automatic support, we have introduced the energy bills support scheme alternative funding in Great Britain and its Northern Ireland counterpart, the energy bills support scheme alternative funding for Northern Ireland. They offer one-off, non-repayable payments of £400 and £600 respectively. In Northern Ireland, applications are processed by our contracted delivery partner, with Government support. The £600 payment in Northern Ireland comprises £400 for energy bills, as in Great Britain, and £200 for alternative fuels, mirroring the payments under the main energy bills support scheme in Northern Ireland.
The Government are committed to providing assistance to farmers, households and businesses affected by high energy costs. The comprehensive schemes that I have outlined have been designed to offer support when it is most needed and alleviate the burden on our citizens and businesses during these challenging times.
I congratulate the hon. Member for Upper Bann on securing this debate on a subject of great importance to many farms, businesses and households. I commit to taking away all that she and others have raised about the high intensity of those businesses. I would be delighted not just to visit her constituency but to work further with her if my Department can provide further assistance to ensure that support reaches all those who need it as swiftly as possible.
Carla Lockhart
I thank everyone who participated in the debate. Farming is clearly the backbone of our economy, and it was important to highlight this issue. I thank my hon. Friend the Member for Strangford (Jim Shannon) for raising food security. His constituency always gets a mention. No one is in any doubt about the importance of Comber spuds.
I thank the right hon. Member for Orkney and Shetland (Mr Carmichael) for highlighting not just the energy issue, but labour shortages and the effect of the increase in production on feed and so on. That was an important point.
I thank the hon. Member for North Ayrshire and Arran (Patricia Gibson) for highlighting the lack of support and raising the need to prioritise domestic food production. She digressed slightly with some of her views on Brexit, but her overall point about energy and the need for more support for our farming families was well made.
I thank the shadow Minister, the hon. Member for Southampton, Test (Dr Whitehead), for his contribution. He made the important point that the Government need to look at the definition, and the Minister said he would do just that. The shadow Minister asked whether the definition is being diluted; we need to look at that important point.
I thank the Minister for his comments in this important debate. He highlighted that lots of support has been given out, but it really is a drop in the open. He will understand why I say that I do not believe it goes far enough. I encourage him to look again at the definition and include farming in the intensive industries list. It is intensive, and it needs more support or farming families will be diminished across the United Kingdom. We do not want to see that; we want more food to be produced in this United Kingdom. We want to serve our communities and produce high-class, quality produce for all to feed on.
Question put and agreed to.
Resolved,
That this House has considered energy support for farms.
Altitude Sickness: Travel Advice
(1 year, 9 months ago)
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Mr Laurence Robertson (in the Chair)
I will call Rob Roberts to move the motion in a moment and then the Minister to respond. As is the convention for 30-minute debates, there will be no opportunity for the Member to make a winding-up speech.
Rob Roberts (Delyn) (Ind)
I beg to move,
That this House has considered the matter of travel advice on altitude sickness.
It is a pleasure to serve under your chairmanship once again, Mr Robertson. Altitude sickness is somewhat of a blanket term covering a variety of ailments that range from acute mountain sickness to high-altitude pulmonary oedema and high-altitude cerebral oedema. These conditions can be life-threatening, as many people find out each year and, sadly, as my own family recently discovered. I apologise and beg the indulgence of the Chair as some of the comments I will make may be distressing to hear, but it is important to convey the seriousness of the situation.
Altitude sickness is brought on by ascending to a high altitude too quickly or remaining at extreme altitudes for too long. To start with, the common and normal reaction to being at high altitude resembles that of a hangover—something I am sure we have all experienced at least once. It is not pleasant, with a headache being the most reported and common symptom. A few days on, if the headache is still occurring, someone with altitude sickness has what are referred to as category 1 symptoms, which include being out of breath when active, having difficulty sleeping and having a higher than normal heart rate. It is worth mentioning that if people are travelling to places of high altitude and do not know their normal heart rates, both at rest and during activity, they should definitely seek out advice in advance and find them out so that they can judge whether they rise.
The headache and other category 1 symptoms would be annoying or a minor irritation. They may affect the first couple of days of that person’s well-earned holiday but will normally be overlooked as just an annoyance. Those early warning signs, which would normally just mean “Drink more water” and “Take it easy on a Sunday morning”, should be treated very differently if experienced in unfamiliar conditions, especially at high altitude.
We then have what are deemed category 2 symptoms, which occur predominately when no action is taken to relieve the category 1 symptoms. They indicate that something much more significant may be happening and that individuals should seek immediate medical advice. The symptoms may include loss of appetite or nausea, weakness, dizziness or light-headedness, and ongoing fatigue. Category 3 symptoms are the most severe of all and are deemed immediately life-threatening when the aforementioned aliments start to occur.
High-altitude pulmonary oedema is just a fancy way of saying that someone has fluid on their lungs. It is often identified by symptoms such as persistently coughing or bringing up a white frothy liquid that may be tinged with blood. A person with high-altitude pulmonary oedema is deemed to be drowning from the inside, with their chest congesting, and they make abnormal sounds. They will likely experience extreme confusion, slurred vision and a cold, clammy skin. They should not lie down as that can make the situation worse, as I will discuss later.
High-altitude cerebral oedema is a fancy way of saying that someone has fluid and swelling on the brain. Cerebral oedema can be immediately recognised in someone being extremely confused, having blurred vision, being sensitive to light, having the inability to co-ordinate, walk or talk, and if their skin is turning grey.
Altitude sickness typically occurs only above 2,500 metres, or 8,000 feet, although some people are affected at lower altitudes. Risk factors include a prior episode of altitude sickness, a high degree of activity or a rapid increase in elevation. Acute mountain sickness, cerebral oedema and pulmonary oedema are all diagnosed based on clinical findings, and their severity is determined subjectively by the intensity of the symptoms that the individual reports.
Altitude sickness occurs in around 20% of people after rapidly going to 2,500 metres and in 40% of people going to 3,000 metres. Although AMS and cerebral oedema occur equally frequently in both males and females, pulmonary oedema seems to occur more often in males. Being physically fit does not decrease the risk.
Ascending slowly is the best way to avoid altitude sickness. Avoiding strenuous activity such as skiing or hiking in the first 24 hours at high altitude may reduce symptoms. Alcohol and sleeping pills are respiratory depressants—they slow down the acclimatisation process—so should be avoided. Alcohol also tends to cause dehydration and exacerbate AMS, so the avoidance of alcohol consumption in the first 24 to 48 hours at a higher altitude is optimal.
Travel to high-altitude regions and mountainous areas has become increasingly popular for tourism, recreation, adventure activities and sometimes rescue missions. One study in America in 2018 estimated that 30 million people each year travel to mountainous regions of the western United States. That is just one part of one country.
Let me touch on pulmonary oedema in more detail. As I mentioned, my family and I have come to experience this condition at first hand. My sister-in-law, Lorraine Roberts, recently died from pulmonary oedema while on her dream holiday with her partner, visiting Machu Picchu in Peru. It had been on her bucket list for years. She followed the guidance of gradual ascent. She had rest days and did everything that she thought was right, but she was not feeling great. It was nothing too serious: she just felt generally under the weather and a bit sick, with almost hangover-type symptoms. It was nothing that would normally stop anybody who was on their holiday of a lifetime.
On the evening of 31 August, seven days before just her 52nd birthday, Lorraine went to bed at the end of an amazing day, and never woke up. Her symptoms were a sign of altitude sickness which, left untreated, turned into pulmonary oedema as she slept. It was nobody’s fault. The devasting news that took away Gill and Pete’s daughter, Dawn and Gareth’s sister, and Hannah and Joe’s mum, was a complete accident.
A similar fate befell legendary Wales rugby No. 8, and then journalist and commentator, Eddie Butler. He died in his sleep at altitude in Peru on 15 September last year, as he was taking part in one of his many fundraising efforts for the cancer charity Prostate Cymru. He was 65 years old. The condolences of the House go out to his wife and children for their loss.
Despite years of careful research, the exact causes of high-altitude pulmonary oedema remain relatively poorly understood. As I mentioned, fluid has been shown to fill up in the air pockets in the lungs, preventing oxygen from getting into the blood and causing the vicious circle of events that can kill people. As with many biological processes, many factors play a role in the disease. There is good evidence to support several theories about how the fluid gets there, but that is not the purpose of today’s debate or my remarks.
Let me move on to my call to action. On the gov.uk website, each country has travel advice, which is published and provided by the Foreign, Commonwealth and Development Office. There is a section on health for them all. On the Peru page, a number of things are listed. Regarding altitude sickness, it simply says:
“Altitude sickness is a risk in parts of Peru (including Cusco, Puno, the Colca Canyon and Kuelap).”
Then there is a link to another website for more information. It is the 11th link on the Peru health section.
It is my belief that that one line, with a link to another site, simply does not give sufficient prominence to the dangers of altitude sickness, which can prove fatal if left untreated. Plenty of studies show that the number of people who click on links on websites is nowhere even close to 100%, especially when the link in question is the 11th on a particular page. It is highly likely that the reader will have lost patience, given up clicking links or been taken off in some other direction well before that point.
I do not ask a lot of the Government—perhaps for a little more consideration with levelling-up fund bids, or a new train station in my constituency—but this request has to be one of the simplest of all for the Minister to grant. Will he please look at all the countries for which travel advice exists and make the wording much stronger for all those where there is the potential for altitude sickness, thereby giving people a much greater warning about the dangers of this condition without their having to click on a link? Tell them, in the body of the FCDO travel advice, that altitude sickness can prove fatal if untreated. Put it in capital letters.
I am not asking for a massive awareness campaign or a big marketing budget; it is of zero cost to the Government just to add a couple of lines of strongly worded text to a website. That is the only thing that I am asking for. If one person takes that advice and is saved from suffering the same wholly avoidable fate, Lorraine’s legacy will be secured.
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (David Rutley)
It is a pleasure to serve with you in the Chair, Mr Robertson.
I congratulate my hon. Friend the Member for Delyn (Rob Roberts) on securing this debate on altitude sickness travel advice. His constituency is beautiful: I see the Clwydian hills from Macclesfield on the other side of the Cheshire plain and have spent great times there. It is stunning and helps to remind us of the beauty of mountains, and how they attract us to their presence and make us want to spend time in them. However, he is also right to highlight concerns around altitude sickness. I hope he will recognise the sincere condolences that I extend to him and his family for the sad and tragic death of his sister-in-law Lorraine, which he spoke about so powerfully today. I am sure his family will be proud of what he has said and the request that he has made of the Government.
I also extend my condolences to other families who have been bereaved through altitude sickness, including the family of Eddie Butler, who was well known in Wales and will be sorely missed, not least, of course, by his family. Having spent time in some mountains at high altitude, I know that this is a really serious issue.
Supporting British nationals overseas remains the Foreign, Commonwealth and Development Office’s central public service. Since 1990, that service has included our travel advice on 226 countries and territories globally. Millions of people access the advice every year. We regularly review and improve our travel advice to ensure that it helps British people who are living or travelling abroad to take responsibility for their safety. The content reflects our latest assessment of risks to British people—“risks” being the important word there.
FCDO travel advice aims to help UK nationals to make better-informed decisions about international travel and to avoid trouble. The safety of British nationals is our overriding concern and our travel advice is based on an objective assessment of the risks. Multiple sources of information feed into that travel advice, including information from British embassies and high commissions around the world, from foreign Governments, from our expert staff in London and, where relevant, from the intelligence services as well.
All travel advice includes information on entry requirements such as passports and visas, and we also provide relevant information and advice on risks. The risks include safety and security matters, such as protests and demonstrations, or natural disasters, such as in areas susceptible to tropical cyclones, earthquakes and flooding. In compiling our travel advice, we work closely with our closest international partners in Australia, Canada, New Zealand and the United States.
The FCDO has a long-standing approach to travel advice about health risks that has been tried and tested in recent outbreaks of diseases such as Ebola, Zika and, of course, covid-19. We provide health information that is up to date and that draws on specialist medical expertise, including advice from the FCDO’s chief medical officer, and it includes directing British people towards reliable sources of expert information and advice.
All our travel advice pages provide links to expert health guidance and country-specific information from the National Travel Health Network and Centre, the acronym for which—NaTHNaC—is sometimes difficult to say. The centre is commissioned by the UK Health Security Agency to provide travel health advice to the British public and the health professionals who advise them. That health advice complements our FCDO travel advice for each country.
Individuals can visit NaTHNaC’s TravelHealthPro website for information on vaccine recommendations, current health risks and outbreaks, and factsheets about staying healthy abroad. Rightly, it is for individuals to decide whether to travel. Health risks vary considerably, depending on an individual’s personal circumstances. Some people may be at greater health risk in certain locations if they have a pre-existing health condition.
Members will appreciate that the Government cannot, and should not, make decisions about travel for individuals. We encourage British people to check relevant travel information for their destination at least two months before they travel. That gives them the time to make any preparations needed for their trip. Some travellers might want to consult their doctor or pharmacy on advice for preventing illness or managing a health condition overseas.
Rob Roberts
I thank the Minister for his thorough answer. I have no doubt that the TravelHealthPro website from the organisation with the complicated acronym is very good—I have read through it in great detail with regard to this issue—but my fundamental point is that the route to get there is more convoluted than necessary. Even if someone needs to follow that route, we need to highlight it.
Rather than the FCDO website just saying that altitude sickness might be an issue, people need to be told why it might be an issue and how dangerous it might be, in order to force them down that route. Obviously, there is a lot of information and it cannot all fit on the FCDO website, but let us make more of a drive for people to click that link, which is way down the page, to force them towards that information and ensure that they do not miss anything.
David Rutley
I understand the point my hon. Friend makes and will come to address specific points on that, if he can bear with me. I want to highlight the broader context, because there will be others listening to this debate, but he can be assured that I will get to his specific points.
As I said, it is important to seek advice from doctors or pharmacies. Alongside that, whatever their health preparations, all travellers should ensure that they have adequate health and travel insurance, to ensure that if they have a health emergency while travelling, that they receive the right treatment and support.
Rob Roberts
I am very grateful. Does the Minister agree with me, as someone who used to work in financial advice, on how important it is, when filling out applications for health insurance, to disclose all previous medical conditions? People complain about insurances all the time, but one of the biggest reasons for not being able to claim is not putting down pre-existing conditions and things that might make a claim fall out. That is an aside to the issue at hand, which is the importance of disclosing everything in one’s medical history in an insurance form.
David Rutley
I completely agree that disclosure is vital to ensure that the cover is valid. To build on what my hon. Friend said, as someone who enjoys outdoor recreation when I travel, it is important for me to check that the activity is covered by the policy. People should make clear pre-existing conditions and also be clear about activities to ensure that they have the proper cover. That particularly relates to altitude, because not every travel insurance policy covers that. I am sure my hon. Friend will agree with that.
We apply the same logic to Government advice on altitude sickness. We know that travelling to high altitudes can have health impacts. In the worst and most extreme cases, such as that of my hon. Friend’s sister-in-law Lorraine, altitude sickness may tragically result in an individual’s death. For countries where altitude sickness may present a particularly high risk—Nepal, Ecuador or China, for example—we include that information in our travel advice. We may point to specific regions that are higher in altitude, particularly if we know that they are a popular tourist or travel destination. For instance, our travel advice for Nepal mentions the risk of altitude sickness on Annapurna, Langtang and Everest base camp treks. As my hon. Friend pointed out, in our advice on Peru, we flag Cusco, Puno, the Colca canyon and Kuélap. In most cases, we point readers to NaTHNaC’s factsheet on altitude sickness. This resource lays out the key facts and symptoms, and gives advice on how travellers can reduce the risk of altitude sickness, and on what they can do if they develop symptoms.
The House will be aware that ultimately, travel advice is just that: advice. Only travellers can decide whether to travel. It is their responsibility to plan for a safe trip, and to take sensible precautions, including when it comes to their health. The Government’s travel advice is intended to be just one source of information that can help British people to make informed decisions about where and how to travel. My hon. Friend has made a powerful argument for more information about altitude sickness in travel advice. I have listened to his concerns, both outside this Chamber and in his powerful speech today. I understand his desire to ensure that British people are better informed of the risks of high-altitude travel. I also recognise and appreciate, as I am sure he will, the desire for an ever-greater number of risks to be clearly outlined in the FCDO travel advice. I assure colleagues that we will always consider these arguments on their merits. However, we must make judgments and consider all risks in proportion. When other organisations have the necessary expertise, it is right to point British nationals in the direction of their detailed advice; in this case, we point them to NaTHNaC.
I remind the House that there is lots of information already available, through links and other sources, on our travel advice pages. I strongly encourage those travelling to click through, and to take the time to absorb all the relevant information available to them. I assure my hon. Friend that I will come the point that he raised; I ask him to bear with me.
We are always looking to improve our consular services, including our travel advice. We welcome any and all feedback, including the feedback that he has provided today, and we use it to improve our services and the information that we provide. Following a surge in demand for clear travel advice during the pandemic, and in line with our commitment to providing accessible, easy to use digital services, FCDO reviewed its approach to travel advice, design and content. Our aim is to improve the presentation and format of our travel advice pages, so that it is easier for the public to find the information that they need when travelling.
I recognise the strength of feeling from my hon. Friend—and others, no doubt—on the issue. We will consider his proposal very carefully. Officials have already updated the Peru travel advice to better highlight the risk of altitude sickness, which my hon. Friend set out today. Previously, the Peru travel advice stated that Peru had areas of high altitude; now we highlight the risk of altitude sickness. That is a step on. I have also asked officials responsible for travel advice to review the advice on other countries where altitude sickness is a risk, to ensure that we are clear about the risk that it presents. We will review opportunities to state more clearly what we are linking to, as that is best practice, and will redouble efforts to proactively encourage people to seek expert advice from NaTHNaC as an essential part of preparing for any trip.
I would be pleased to discuss the matter more fully with my hon. Friend in due course. We are on a journey. He has highlighted a key issue, and I am keen to ensure that we take further steps in making the risks more readily identifiable to people on the FCDO travel advice pages. However, when we highlight a risk, there is a responsibility on the individual to take the extra step of looking to the bodies that can provide detailed advice and information on how to prepare if they are not used to being at altitude.
Rob Roberts
I thank the Minister for giving way again, and I appreciate everything he has said. People do not know what they do not know. The words that I am particularly interested in inserting in the FCDO guidance are: “can prove fatal if left untreated.” It is as simple as that. That would be an extra incentive for people to click the link. It would be saying, “I know there are a lot of links on the page, but you should really click this one, because it is important.” It would highlight the gravity of this issue.
David Rutley
I have noted my hon. Friend’s request. He made it at the beginning of his speech and has reiterated it. I understand the points he has made. As I say, we have taken a step forward today. The key thing is to highlight not just the fact that places are at high altitude, but that there is a risk of altitude sickness. Then we can look at the other points. I am more than willing to meet once we have had a chance to review our travel advice across multiple countries, because this matter affects not just Peru, but other areas in the world. He has highlighted an important point, and I hope he recognises that we will review the matter in more detail.
In conclusion, I reiterate our commitment to providing clear, accessible and up-to-date travel advice that highlights key risks. We keep it under constant review and ensure that it reflects the latest assessment of the risks to British nationals. I welcome my hon. Friend’s suggestions for improving our advice on the risks of altitude sickness. I share his interest—both personally and as a Government Minister—in ensuring that our travel advice helps British nationals to make more informed decisions, particularly in high-altitude areas.
Question put and agreed to.
Social Mobility
(1 year, 9 months ago)
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Mr Laurence Robertson (in the Chair)
As the mover of the motion and the Minister are present, we can start slightly earlier. We can run on until the end of the debate’s allotted time. I call Sir David Evennett.
Sir David Evennett (Bexleyheath and Crayford) (Con)
I beg to move,
That this House has considered social mobility.
It is a pleasure to serve under your chairmanship, Mr Robertson, and to be able to raise the important issue of social mobility. I am absolutely delighted to see that the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Mid Sussex (Mims Davies), will respond to the debate.
This matter has interested and concerned me for many years. Having been so fortunate as to be a product of social mobility, as are my family, I am keen to see it advanced. My family originated in the east end of London, in Bow and Poplar. Through education, hard work, opportunity, determination and good fortune, my grandfather, Thomas Evennett, and my father, Norman Evennett, were able to progress during their lives. I too have had many opportunities to work in careers that I have loved so much, including as Member of Parliament for Bexleyheath and Crayford, and before that, for Erith and Crayford.
Social mobility is about every single person having the opportunity to succeed. It is the link between our starting point in life and where we end up. If where we begin strongly determines where we end up, mobility is low, but if everyone has a good chance of achieving any outcome, regardless of their background, mobility is high, and that is what all of us here want. The Conservative Government are determined to ensure that work is a route out of poverty and into a future where individuals can achieve their ambitions, irrespective of their situation or origin.
Social mobility is one of the key reasons why Britain has been so successful in channelling the talents of all sections of our country, to their own benefit and that of the whole nation. Social mobility is good not just from a moral perspective; it has a huge impact economically. By ensuring talent is harvested from across the whole social spectrum, we can boost productivity and our GDP.
The Social Mobility Commission notes:
“the popular narrative of worsening mobility prospects for young people in the UK is not supported when we take a careful look at a range of outcomes across education and employment.”
That is positive news, because although talent in Britain is spread evenly across the country, regrettably, opportunity is not always. Every individual should have a fair chance of reaching their full potential, so we must ensure that everyone has the opportunity to build a good life for themselves, irrespective of their background.
In the latest “State of the Nation” report from June 2022, almost every gap in the intermediate outcomes between young people from higher and lower socioeconomic backgrounds has narrowed in the past decade. However, there are still disparities, but there has been progress across all measures. Intermediate outcomes in education and work have been trending in a positive direction. Educational attainment gaps between people from higher and lower socioeconomic backgrounds have narrowed, especially at key stages 2 and 4.
The gaps between those from professional and working-class backgrounds for both university participation and degree attainment have also narrowed, although I only have figures from the Sutton Trust, which are rather out of date now. However, there is still a long way to go. On early careers, the gap between people from professional and working-class backgrounds has decreased for most of the occupational and economic outcomes since 2014. However, it is noted that the full effects of the covid-19 pandemic are still unlikely to be shown in any data.
Although positive progress has been made, research undertaken by Professor Steve Strand from the University of Oxford found that there are still vast inequalities in educational achievement at the age of 16. I am particularly concerned about the fact that British white and British black Caribbean male attainment falls well below the average for all students of that age, and scores the lowest across all socioeconomic groups, particularly for the working class.
The variations in attainment are particularly pronounced in the lowest socioeconomic groups, with black Caribbean males achieving an average score of -0.77, and British white males achieving a score of -0.68, compared with Bangladeshi boys achieving a score of 0.07 and those in other Asian male groups scoring -0.11. There are also significant disparities between the attainment of boys and girls in these groups. White British girls and girls of black Caribbean origin score significantly higher across the socioeconomic levels than their male counterparts. Girls from black Caribbean origins from an average socio-economic group scored 0.01, whereas boys scored -0.41. British white girls from the same socioeconomic group scored 0.09, while British white boys scored -0.22.
This data is concerning as educational achievement has such a significant impact on socioeconomic attainment in later life. Our priority must be to create an even playing field, so that everyone has the opportunity to excel and achieve, wherever their ambitions take them. Even before the pandemic started in 2020, there were already many challenges facing our country, but the past three years have added many global challenges outside of the Government’s control—not just the devastating pandemic, but the ongoing war in Europe and the rise in the cost of living. These have all had an impact on social mobility. That is why it is more important than ever that the Government’s levelling-up agenda should remain at the heart of all that we do. The Government have an important role to play—they can lead—but others need to take up the issue and give it support, be they businesses, professions, families or communities.
The covid-19 pandemic was hopefully a once-in-a-generation crisis. It will have an impact on the world’s social mobility for years to come. It was entirely out of the Government’s control. It is important to remember that the historic vaccination programme enabled us to be one of the first western democracies to restore people’s freedoms and open our economy. The Government also delivered more than £400 billion-worth of unprecedented support during the pandemic. It was one of the most generous economic support packages anywhere in the world. It supported more than 14.5 million jobs and provided almost £80 billion in business grants and loans. However, the covid-19 pandemic has impacted particularly harshly on young people from poorer backgrounds. It is likely to have long-term consequences, in education and work, for that cohort. In the short term, we can expect there to be an adverse effect on social mobility, particularly for young people entering the labour market.
It is more important than ever that we provide support that can lift everyone, irrespective of who they are, where they live and where they come from. We cannot accept a country where people have different ladders to climb. People must be encouraged to engage with education and understand its long-term benefits. The recovery programmes that have been introduced, such as the recovery premium and the national tutoring programme, are vital in helping the most disadvantaged. I also welcome the Lifelong Learning (Higher Education Fee Limits) Bill, which is proceeding through Parliament. It will enable people to get education and training throughout their life, so that they can skill and upskill, from school age up to the age of 60. That is a really positive movement.
Jim Shannon (Strangford) (DUP)
I commend the right hon. Gentleman for what he says. I am very aware that those with educational attainment can move on to employment that reflects that. People move from one job to another, but not every person can achieve educational attainment. I am not decrying anybody, by the way; it is just a fact of life. For those who cannot achieve educational attainment, their jobs may be on a building site or a farm, but we should never decry them. The right hon. Gentleman has mentioned opportunity three or four times. Does he agree that we need to make sure that a young boy or girl who is trying to achieve something moves in the direction that they need to?
Sir David Evennett
The hon. Gentleman is absolutely right. Of course, the whole thing about the Lifelong Learning (Higher Education Fee Limits) Bill is that it offers skills, training and opportunities. If people did not succeed at school, they can come back and get skills, training or qualifications later. That is a really positive thing that the Government are doing.
I have worked as a college lecturer, teaching women returners to the workplace after career breaks, the unemployed and those who needed additional qualifications to advance in their careers, or to change career. Unfortunately, too much of the education in colleges and universities has been for young people only, but I taught people who are older—those who would benefit from what the Government are doing with the lifelong loan entitlement. It will improve access to education and training, and accelerate the Government’s levelling-up agenda.
Providing people with opportunities to acquire skills will help them to obtain work, or to advance their careers. That is particularly important in the technological age we live in, where the need to learn new skills never stops. All of us are always learning. Lifelong learning has become a reality, as I am sure you will agree, Mr Robertson. Education played a vital part in my life, and I am grateful to teachers, employers and my family for support and encouragement. We should accentuate the positives and say thanks to the teachers and lecturers at colleges and universities, as well as businesses and industries that invest in their staff and help them to advance in their careers.
I recognise that education alone will not be enough to transform social mobility; nor are the Government’s actions alone. As we continue our recovery from covid, the Government are spending record sums on apprenticeships, which play a key role in boosting social mobility, improving people’s skills, and increasing earnings and opportunities.
Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)
I congratulate my right hon. Friend on securing the debate. He rightly highlighted the challenges faced in raising educational attainment for white working-class boys and Caribbean boys. Under the coalition Government, many of the initiatives that he outlined were started, and they are beginning to bear fruit. There was also a Cabinet Sub-Committee, chaired by Deputy Prime Minister Nick Clegg, focusing on social mobility and how we could target groups who had fallen behind. Would my right hon. Friend recommend that to the Minister as something that could be taken forward? If we want to get real impetus behind improving social mobility, there needs to be much more focus centrally, and a Cabinet Sub-Committee is a good way of doing that.
Sir David Evennett
My hon. Friend makes a very good point, which I know the Minister will have noted. This focus is so important. We had it, but we have slightly stalled, which is why I sought this debate.
We need to see even more young people from disadvantaged backgrounds accessing higher and degree level apprenticeships, and to ensure that all young people have an understanding of the many and varied options available to them. Careers advice in schools, colleges and universities is vital to let individuals know what is out there and what their potential could lead them to. Additional funding is being provided to employers and training providers who take on apprentices aged 16 to 18, and apprentices aged 19 to 24 who have an education, health and care plan or have been in care. This targeted support incentivises employers to provide high-quality apprenticeships across all sections in disadvantaged areas. However, according to the latest figures, the share of apprenticeships in the most deprived areas has fallen from 26% in 2015 to 20% in 2020. That is why it is vital that everyone—in our constituencies, across Government and so forth—publicises the excellent opportunities that are available.
I have long advocated for more collaboration between businesses and education. Businesses should look to partner schools or colleges in their local area to provide more careers advice, work experience and support to pupils from disadvantaged backgrounds. This would improve social mobility and help to ensure that pupils obtain the skills necessary to succeed in the world of work. All children must be nurtured, valued, enthused and inspired by their schools, and although all children should study the basic curriculum, there should be the opportunity to have a curriculum with more relevance to their future life chances; there needs to be more focus on career opportunities, and it is important that students are shown the full range of opportunities that they may be able to pursue. Successive Governments have tried to improve the careers advice on offer, but unfortunately it still varies widely across the country, which is why the involvement of businesses is vital, as is the provision of advice and role models. Role models are so good to give people an idea of what they could become via training, skills and education.
A particular campaign that I have been very supportive of and promoted is the Social Mobility Pledge, which was founded by my friend, former parliamentary colleague and former Education Secretary, the right hon. Justine Greening, alongside entrepreneur David Harrison, who are both passionate about improving opportunities for all. Some 700 organisations have made the social mobility pledge, with 5 million employees and 2 million students covered by it globally. It encourages organisations to be a force for good by putting social mobility at the heart of their purpose. The pledge recognises that it is more important than ever for organisations to take steps to boost opportunity and social mobility, as we face the challenges of a growing opportunity gap post covid.
We all want Britain to be a country where all can get on in life, regardless of our background. Talent is spread across our country, and businesses, with the prosperity and careers they create for people, are key to improving social mobility locally and nationally. There are three parts to the pledge. The first is getting businesses to partner directly with schools or colleges
“to provide coaching through quality careers advice, enrichment experience and mentoring to people from disadvantaged backgrounds or circumstances.”
The second is access:
“providing structured work, experience and apprenticeship opportunities to people from disadvantaged backgrounds”.
The third is the adoption of more
“open employee recruitment practices which promote a level playing field for people from disadvantaged backgrounds or circumstances”,
with things like “name blind” and contextual recruitment. Businesses that are prepared to take those simple steps show their commitment to levelling the playing field of opportunity for everyone.
I was delighted that the Chancellor’s Budget last week recognised the need for further investment in removing barriers to work—in particular, by investing £485 million in support for unemployed people and those on universal credit working part-time. Assigning a work coach to those people will support them in obtaining full-time work. Supporting people into work is important, but we should also strive to support people into higher-paying jobs, as that is critical for social mobility. The Government’s job support initiative provides more than 120,000 low-income workers with tailored support and guidance so they can earn more and progress their careers. The Government’s various skills initiatives provide excellent opportunities to gain key skills such as numeracy and digital, but it is more important than ever—essential, in fact—that everyone is encouraged to take up those opportunities.
Our defining challenge in Britain is to level up opportunity and make sure everyone gets the chance to go as far as their talents or ambitions take them. Ultimately, it is about delivering generational change. That means looking right across people’s lives from childhood to adulthood. We cannot afford to leave any section of our population behind; otherwise, there will be discontent and disillusionment, which is terrible for individuals and frankly very bad for our nation. Aspiration, opportunity and achievement are the goals that we should be aiming for. In so many fields, we have entrepreneurs with business success, scientists, lawyers, clinicians—high achievers, all of whom need to be role models. The Government have a mission, but employers need to raise their own game and rise to the challenge. Britain remains a great country, but with a more skilled, enthused and aspirational workforce that is socially mobile, I believe we can be an even better one.
Several hon. Members rose—
Mr Laurence Robertson (in the Chair)
Order. A number of Members are trying to get in. If they can limit themselves to roughly five minutes or so each, we should be able to manage that.
Jon Trickett (Hemsworth) (Lab)
It is a pleasure to serve under your chairmanship, Mr Robertson. It was interesting to listen to the speech of the right hon. Member for Bexleyheath and Crayford (Sir David Evennett). He is right to emphasise social mobility, and I was very interested to hear him describe his background.
It is probably worth referring to my background. I was more or less told to leave school when I was 15. I left with no meaningful qualifications and I went to work as a manual worker in the building industry. I was encouraged by my grandfather to try to understand why the system had failed me or why I had failed the system. I became very curious about it, and eventually I went to a further education college. The right hon. Gentleman said he had been a college teacher, so no doubt he helped many people in my position. I eventually finished up at university.
My first reflection is this: the stepping stones that were available to me are no longer available to the same extent to the current generation. Further education has been cut to the bone and is simply not available at the scale that it was when I was younger, when I basically left school in some disgrace. The university system is now really a commodified form of education. I voted against the original idea to charge student fees—it was a mistake. I did it because I was thinking about people from my background. My grandad said to me, “The system doesn’t work for people like us.” That is a profound thing to have said, and I have spent almost all my life trying to understand what it is about “people like us” and why the system is not working properly for them.
The right hon. Gentleman has an optimistic view of social mobility in our society, perhaps because his constituency is the 51st most socially mobile in the whole country. There are 533 constituencies in England, and mine is the 529th most socially mobile, so he and I inhabit almost two different worlds. He is right to be passionate about this subject, but the truth of the matter is that the Conservative idea that there is real social mobility available for all who are able to make use of it is simply an ideological myth designed to gloss over the fact that our social structures are ossified and it is almost impossible to break though.
The right hon. Gentleman mentioned the Sutton Trust. The trust identified, out of the 60-odd million of us in this country, 6,000 people who run it; and two fifths of them went to public school, which is five times as many as average. I accept the right hon. Member did not go to public school; I do not know why I am looking at him—I will draw my attention elsewhere. The people who run this country, including this Parliament, tend to come from very privileged backgrounds. Not so many years ago, there were 100 manual workers in Parliament; now there are only seven of us left. There are 200 people with a business background in the House of Commons. If we look at almost every power structure in our society, the same thing applies—other than in professional sports, where more people from working-class backgrounds have access.
I will cut to the chase. There are 440,000 children living in poverty, despite that fact that their parents are working full-time, and yet Government Members and Ministers continually tell us that work is the way to opportunity in life. I believe in work. I am a member of a party called Labour; the Labour party is about work. We believe in work and want people to be at work. But do not tell me or my constituents that work is a route out of poverty. It is a route into poverty as much as any other system in our country.
In my constituency, there has been a 50% increase in the number of children in poverty since 2015. That is in one constituency. My constituency is also in the lowest 20% for young people’s educational attainment. Given the low levels of social mobility, and the levels of poverty and education in my constituency, it is impossible to imagine, how—without dramatic social and economic change—a child born there today can expect to do anything other than die younger than normal and in poverty. The whole idea of social mobility is a myth, unless it is combined with massive structural and transformative change. With that, I will take the hint that I have had my five minutes.
David Johnston (Wantage) (Con)
It is a pleasure to serve under your chairmanship, Mr Robertson. I congratulate my right hon. Friend the Member for Bexleyheath and Crayford (Sir David Evennett) on securing the debate. I have heard him talk many times about how important social mobility is to him, and we have had conversations about it. He is right that we have slightly lost focus on the issue in recent years.
Social mobility has been very important to my own personal and professional life. I ran three charities for disadvantaged young people, the last of which was called the Social Mobility Foundation. I was on the original Social Mobility and Child Poverty Commission, when Alan Milburn was the chair. I chair the social mobility all-party parliamentary group. The two words “social mobility” have been very important in both my personal and professional life.
If there is one key point in what I will say, it is that it is everybody’s responsibility to make social mobility happen. On the commission, we used to say that we can get into a situation where employers blame universities, which blame schools, which blame families—and everybody blames the Government—and that, actually, if at each stage of people’s life cycles things were done slightly differently, obstacles that are in the way of social mobility would be removed.
Starting with the early years is very important, but it should not be an obsession. It does not necessarily provide what Geoffrey Canada of Harlem Children’s Zone calls the escape velocity that will take someone through the rest of their life—even though we might hope it does. Some academics would say that about 80% of our outcomes are about what happens in the home rather than in school. We focus on school in this place. That is why things like family hubs are so important; every parent wants to be able to do the right thing, but they do not necessarily get the right advice and guidance about what to do. Being school-ready at age five is so important to how children then access school as they move through their lives. That is one big area that is not within the Government’s control, but it is important that we encourage the right things.
Then there is school. The Prime Minister said that education is the closest thing to a silver bullet that we have for social mobility.
Dr Poulter
Before my hon. Friend moves on to school-age children, there are things the Government can do to support disadvantaged and vulnerable children at an early age to improve not only educational attainment, but many aspects of their lives. We can look at longitudinal studies of schemes like the Family Nurse Partnership, which targets vulnerable and poorer families, provides targeted support for new mums and dads, and helps children be school-ready. Will he briefly comment on that, because that is something the Government could put money towards?
David Johnston
My hon. Friend is absolutely right. We have to talk more about this because too often in politics people on the left fear they will demonise parents and on the right they fear they will appear to be the nanny state if they talk about it, but politicians and commentators who say those things are doing exactly the right things for their children. He is absolutely right about the Family Nurse Partnership and a whole range of other things, including family hubs.
The schools system is the easiest lever for politicians to pull, and we have seen huge increases in attainment through academies, free schools and various other initiatives. We have seen London state schools go from being the worst to the best, but we still have parts of the country where the standard of education is not good enough. We have a gender gap in education where girls do better than boys, and an ethnicity gap where certain ethnic groups do better than others, but the biggest gap in education is between children who have free school meals and those who do not. Although we have been making progress—albeit slow—covid has made that situation a lot worse, and has destroyed a lot of the progress we have made. As my right hon. Friend the Member for Bexleyheath and Crayford says, the national tutoring programme is important, but we have to do more to focus on that.
Let me quickly canter through some other areas. This is about further education colleges and ensuring that the courses they provide will help people in the employment market, which is what we were trying to get to with the Skills and Post-16 Education Act 2022. When it comes to universities, the success they often trumpet about the percentage of state school students they have masks the fact that a huge proportion of them went to selective state schools—grammar schools—and that the proportion of comprehensive school entry pupils is still low. There is more for them to do, particularly at the most elite universities.
Finally, on professions, Members will have heard me say previously that someone is 24 times more likely to become a doctor if their parent is a doctor; only 6% of doctors are from a working-class background. Again, that is not in the Government’s control. Employers have to do something about that. Some people will say that social mobility is not about people leaving their home area, going to a Russell Group university and getting a middle-class job, but show me someone who says that, and nine times out of 10 they will have done exactly that in their own life. That does not invalidate the point—we need to have both, and to move jobs and investment to those areas—but do not tell me that we should not be trying to get more people into those universities and professions, because they are controlling the country. If we are to get to a position where talent and opportunity is everywhere, everybody has to play their part.
Mr Laurence Robertson (in the Chair)
I have to ask Members to please stick to four minutes now.
Stephanie Peacock (Barnsley East) (Lab)
It is a pleasure to speak under your chairmanship, Mr Robertson. I congratulate the right hon. Member for Bexleyheath and Crayford (Sir David Evennett) on securing and leading this important debate. A gap between aspiration and opportunity exists in some parts of the country, and that should not be the case. I am in a similar position to my hon. Friend the Member for Hemsworth (Jon Trickett); if we look at the list of constituencies and the ranking of social mobility, Barnsley East is 430 out of 533 constituencies in England. That is different from constituencies of—not exclusively, but generally—Conservative MPs.
Former coalfields like Barnsley East tend to have fewer good jobs, which obviously has a knock-on effect on the number of schools and transport infrastructure in the area. Among other factors, this has led to a significant geographical divide between the north and the south. For example, life expectancy in Barnsley for both men and women is approximately two years less than the national average and five years less than more affluent areas of Surrey. More than 6,300 children across Barnsley East alone—that is just my constituency, not the borough of Barnsley—live in child poverty. A third of Barnsley residents now live in fuel poverty, and the Office for National Statistics found that 12.4% of those eligible to work in Barnsley do not have any qualifications. That is in stark contrast with London, where the number of people with no qualifications sits at just 6.6%.
All these factors obviously have an impact on children’s and young people’s life chances. Accessible vocational education is an important part of overcoming disadvantage, giving young people the tools and employment experience to get on in life. My constituency of Barnsley East does not have a sixth form college, so when students finish their GCSEs at one of the secondary schools, they have to travel into the town centre and go to Barnsley College. That is not to take away from the fantastic work that the college does; it is an excellent college and it really supports people. I know from being a teacher that for some children and young people, not having to take that step of leaving their supportive school environment would encourage them to stay on and think about further education.
We need long-term, sustained investment in our schools. Investment has been cut over the last decade. We also need investment in industry so that young people and children have as much chance to succeed as they would in other parts of the country. We need to think about young people’s experience at school. As a former teacher, I have seen at first hand that if they turn up to school hungry, it affects their ability to learn and to do well.
We must also think about young people’s access to extracurricular and cultural activities. Parents may be doing the best they can, but, as my hon. Friend the Member for Hemsworth said, being in work does not necessarily mean they are not in poverty. A good example of encouraging kids to do a cultural activity is the fantastic, world-class Barnsley Youth Choir, which provides choral training regardless of financial or social background. It is an amazing programme that has done so much for Barnsley, and I am pleased to support it.
My final point on education relates to the point that the previous speaker, the hon. Member for Wantage (David Johnston), made about the impact of covid. There was a huge disparity between the learning experiences of working-class kids and middle-class kids during the pandemic. Using predicted grades for people’s A-level results also had a hugely disproportionate effect on areas such as Barnsley, and that will have a huge impact going forward.
Social mobility is really about this generation doing better than the generation before, and we are falling behind on that. The Government can, and should, do better to support working-class communities such as Barnsley, by investing in both people and local economies. I am sure that the Labour spokesperson, my hon. Friend the Member for Wirral South (Alison McGovern), will touch on some of this, but a future Labour Government have pledged to do just that.
We will invest in the skills of our workforce, including a shift of resources to local communities to help people back into work. We will help more people into high-skilled and better-paid jobs, and implement a new taskforce—Skills England—to link local people with local businesses to grow skills and the economy across the whole country. It is about ensuring that kids have the best education, and that they can get qualifications and good jobs. Where someone is born should not limit their opportunities or their chances. It currently does, and that must change.
Peter Gibson (Darlington) (Con)
It is a pleasure to serve under your chairmanship, Mr Robertson. I congratulate my right hon. Friend the Member for Bexleyheath and Crayford (Sir David Evennett) on securing this important debate, and I am delighted to see the Minister for Social Mobility, Youth and Progression responding to it.
Levelling up is not just about dishing out money to parts of the north that have been ignored by Governments of all colours. Righting that wrong is part of my motivation for being here, and it is about delivering on the core missions of the levelling-up agenda. Social mobility goes to the heart of those missions, particularly education and skills. We all know that there are only two real- terms solutions to solving poverty—work and education. Providing opportunity, aspiration and inspiration to the next generation is critical to delivering social mobility. We all have a part to play in that.
For the record, Darlington is ranked 120 out of 533 English constituencies on the social mobility index, so Conservative Members are representing every type of constituency out there. There is already a vast swathe of new opportunities for local people in Darlington, which will enable them to fully reach their potential and find good, well-paid and secure employment into the future. Just this weekend, the brand new engineering block, the Ingenium Centre, opened at Darlington College. The centre has been delivered with £2.96 million from the towns fund, and it will house the college’s T-level students.
I commend the Government for introducing T-levels, and for providing an innovative educational route for people to gain the skills they need to prosper and fully meet their potential. I simply do not recognise the picture painted by the hon. Member for Hemsworth (Jon Trickett).
Literacy and reading is a great ladder for opportunity, and we know that wider reading broadens aspirations. I take this opportunity to highlight and pay tribute to Skerne Park Academy and its reading lobster scheme, which was introduced after the children said they did not have someone to read aloud to at home. They now each have their own reading lobster, a buddy for life to listen to their stories. The scheme is proving hugely successful and is promoting a lifelong love of reading in these children. Indeed, Seb, my own lobster, has met Mr Speaker, the Prime Minister and the Chancellor. The scheme is going down very well in Skerne Park in Darlington. We know that children who read for pleasure go further in life, and I ask the Minister what the Government are doing to ensure that we encourage wider reading.
This debate seemed a perfect opportunity to highlight the work of the Purpose Coalition and the Social Mobility Pledge, but my right hon. Friend the Member for Bexleyheath and Crayford has already done that, so I want to put on record my thanks to Justine Greening and David Harrison for their incredible work on the Social Mobility Pledge. Through the Harrison Foundation, which David heads up, the Social Mobility Pledge has contributed over £50,000 to First Stop Darlington, which is helping people get on in life.
In conclusion, the investment that Darlington has received from the Government has helped to galvanise organisations that work with local people to ensure their true potential is not wasted. But we can go further, and I urge the Minister to do so. Many of us in this place can be examples to our communities of what can be achieved. I am thinking in particular about those of us who went to state schools and were the first in our families to go to university, or indeed did not go at all.
Justin Madders (Ellesmere Port and Neston) (Lab)
Social mobility ought to concern us all. I am not comfortable living in a country where the chances of success are heavily influenced by where someone is born and who they are to. The Sutton Trust’s report “Elites in the UK: Pulling Away?” found that one in five men in professional occupations who were born between 1955 and 1961 became socially mobile, but the figure drops to one in eight for those born between 1975 and 1981. In other words, as generations go by, we are becoming a less mobile nation.
When I was chair of the all-party parliamentary group on social mobility, we did a report on access to professions, including medicine, law, politics, media and art. Those are the areas where the lack of opportunity is most prevalent. Three quarters of senior judges, more than half the top 100 news journalists, more than half the Cabinet and two thirds of British Oscar winners are privately educated. We have already heard the statistic that someone is 24 times more likely to be in medicine if their parents are already in it.
Our report is six years old but just as relevant today. I would really like to see some of the practical recommendations in it implemented, such as a ban on unpaid internships, which really take the ladder away from many who are trying to get on the first rung. Exploitation is taking place at entry level.
Drama is one area where opportunities are limited. I should point out, for the record, that my son is an aspiring actor and uses some of the services I am about to mention. I mention them because they are a new way of exploiting young people’s ambitions. Most acting jobs now are hidden behind paywalls, costing anywhere from £15 and £19 a month to access. What kind of world do we live in where someone has to pay a subscription just to see whether there are any jobs they might want to apply for?
There are three companies that seem to operate in this way: Spotlight, Mandy and StarNow, which I see regularly advertising on social media. I say three companies advisedly, because Backstage and StarNow seem to have almost identical websites, and Mandy and StarNow have the same registered office and similar directors. Perhaps I am missing something about why I need to have three separate subscriptions. In their defence, they say:
“Having memberships to the multiple platforms will give you access to the most job opportunities and increase your visibility to casting”.
That sounds reasonable enough, but I suggest it would also be reasonable to put all the jobs on one site and not charge at all. We can debate the morality of this business model another time, but I wonder whether the Minister thinks it is right for a profession that is notoriously difficult to access to be exploiting people and charging them just to look at what jobs are available.
I conclude by asking the Minister another question about where social mobility lies in the Government’s list of priorities. As we have heard, if social mobility is to be tackled properly, we need to tackle more than just access to work. It is about tax, welfare, housing, transport and health. At the very least, it should not be the remit of just one Minister in one Department; it should be a central mission across all Departments. If the Government are serious about tackling injustice and widening opportunity, it must be driven from the very top.
Marion Fellows (Motherwell and Wishaw) (SNP)
It is a pleasure to serve under your chairmanship, Mr Robertson. I congratulate the right hon. Member for Bexleyheath and Crayford (Sir David Evennett), but I also want to chastise him because he has taken some of my best lines.
I, too, am a product of social mobility. My father was a co-operative milkman and my mother was a cleaner. They both left school at 14, but they were determined to give me the chances that they never had. I was the first in my entire family to go to university in the days when many folk considered educating girls to be just a waste of time—she would only get married and have weans. I did both, and now I am here.
I also taught in further education. I know that times have changed, but social mobility is a real issue. Those in poverty cannot be socially mobile. Those who are hungry cannot learn. When fees are a barrier, many cannot access higher education. That is why children in Scotland are lucky. The Scottish Government take their duties to the next generation seriously, and they have introduced many measures to tackle child poverty. The latest iteration is “Best Start, Bright Futures”, which looks at long-term parental employment support, increased social security and measures to reduce household costs. The recent Institute for Fiscal Studies analysis of Scottish tax and benefit reform found that the lowest-income families in Scotland are significantly better off as a result of the Scottish Government’s tax regime.
Among the poorest 30% of households, those with children will see their incomes boosted by a sizeable £2,000 a year on average, driven by higher benefits for families with children. Perhaps the Minister would consider that in relation to the UK. The Scottish child payment has recently been increased immensely. It is now up to £25 a week—the Scottish Government are providing an extra £2.6 million this year—and it is being extended to children up to the age of 16.
Other small independent countries do much better on social mobility. I am thinking of Nordic countries, such as Denmark. According to OECD figures, it takes two generations to increase social mobility in Denmark, but it takes five generations in the United Kingdom. We must look at that.
I do not want to, and cannot, mention everyone, but the hon. Member for Hemsworth (Jon Trickett) caught my attention when he talked about Conservative Members saying that the only way out of poverty is work. That is not the case for those on a zero-hours contract and minimum wage. The living wage, as it is described by the Tory Government, is not enough to live on. That is why many working parents are still getting universal credit. There is something wrong with a system where both parents are working and children, who are our future, will never be able to be socially mobile. They will not know how, because they are being held back by poverty. Will the Minister also look at introducing a minimum support payment for the Child Maintenance Service if parents refuse to pay? I have already spoken to her about this.
Social mobility is important. Social mobility actually works. Social mobility means that we will prosper, right across the UK. Countries, such as Norway, which give their citizens high social benefits, are not poor countries. They make people’s lives better and therefore increase social mobility. I will sit down now, because I am really interested in what the Minister and the Opposition have to say.
Mr Laurence Robertson (in the Chair)
I call Alison McGovern, who also has five minutes.
Alison McGovern (Wirral South) (Lab)
Thank you for calling me to speak, Mr Robertson. I will try to be swift.
I obviously thank the right hon. Member for Bexleyheath and Crayford (Sir David Evennett) for securing this timely debate, and I thank all the Members who have spoken. The right hon. Member began by mentioning the 2022 report of the Social Mobility Commission. However, since its publication the chair of the commission has given up her role and it is unclear what the future holds.
I am here on behalf of the shadow Department for Work and Pensions team, and the Minister is here representing DWP. Responsibility for social mobility has been passed from Education to Equalities and now to DWP. Over the past couple of years, that has suggested that it is an unloved policy area for which nobody really wants to take responsibility.
The Parliamentary Under-Secretary of State for Work and Pensions (Mims Davies)
I really wanted it!
Alison McGovern
I am sure the Minister did. But what exactly is going on? Part 1 of the Equalities Act 2010, which Parliament passed all those years ago, set out a public sector duty regarding socioeconomic inequalities that would have tackled, in a cross-cutting way, as ably described by my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders), all the issues that Members have mentioned today. That is its objective. Amazingly, the Conservative-Lib Dem Government and subsequent Conservative Governments have never brought that duty into force. We are left asking why.
However, as we are here with a DWP Minister and her shadow, I will just raise some points about the Department’s own policy areas. If it had that overarching duty to tackle socioeconomic inequality, it might not have adopted, as it has done for many years now, the policy of any job, better job, career. That policy has shaped the Department’s approach and has resulted in people being told to get any job, as if that was a route up or a route out of poverty. As we have heard from Member after Member today, it is simply no longer the case that work, by definition, provides a route out of poverty. It is also true, and the Government themselves know this from their own pay progression report, that getting any job is not a route to better pay.
We need new principles and new policies, not least because of the geographical impact of this issue. We know from the House of Commons Library’s analysis of the Social Mobility Commission’s previous rankings that 77% of constituencies in London are in the top 20% of social mobility constituencies by metric, whereas the corresponding figure for the west midlands falls to 14%, for the east midlands 9%, for the north-west 8%, for Yorkshire and the Humber 7%, and for the south-west just 2%. Of the top-ranking areas for social mobility, 77% are London constituencies and just 2% are in the south-west. Geography is at the heart of this.
Exactly what steps is DWP going to take to clarify the role of the Social Mobility Commission? What data will be made available to this House and when on the current state of social mobility in this country? Precisely what targets are the Government now setting? What is the future for the commission’s metrics—it seems to have veered between different ones—and its report? And what action will DWP take immediately to stop forcing people to take jobs that, as several Members have said, are likely to make them struggle with social mobility and not achieve their ambitions?
Social mobility cannot just be a talking point for us politicians; it has to be about genuine hard work to shift the opportunities in our countries. I am afraid that the Tories and the Lib Dems saw this as a way out in 2011: they wanted to end the child poverty goal and to put something fluffy about social mobility in its place. But passing a non-specific goal from Department to Department is kidology—it will never work. We need a real effort for change. My hon. Friend the Member for Ellesmere Port and Neston has already said how the Labour party will do that. The first thing that we will do is to enact part 1 of the Equalities Act 2010 and take real action against class discrimination and put in place policies to bring it to an end.
The Parliamentary Under-Secretary of State for Work and Pensions (Mims Davies)
I start by congratulating my right hon. Friend the Member for Bexleyheath and Crayford (Sir David Evennett) on securing this important debate and on his excellent, thoughtful and wide-ranging speech on social mobility. It has also been a pleasure to serve under your chairmanship, Mr Robertson, and I thank all Members who have contributed to this excellent debate.
I reassure Members of all parties that as the Minister for Social Mobility, Youth and Progression in the Department for Work and Pensions, this is a topic that I am particularly passionate about. In response to my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter), I am absolutely committed to working across Government and keeping a focus on this issue. I absolutely agree with the point about role models: you simply can’t be it if you can’t see it.
On Single Parents’ Day, and as a single mum, it is an honour and still a surprise to serve in this House. I was the first uni student in my family, with many of my relatives still thriving in trades as manual workers with a farming background. My father left school at 14 with no qualifications and a substantial dyslexia challenge, so our family is absolutely a product of social mobility. I understand the strong views expressed by the hon. Member for Hemsworth (Jon Trickett). I take a different view, but I am very proud and pleased that we all share our own experiences in this House, and how we learn from our experiences helps with the role model piece.
I agree with my right hon. Friend the Member for Bexleyheath and Crayford and many colleagues about the commitments that we make in this House by continuing through, and this is a great opportunity to move the levelling-up conversation into the social mobility conversation. Social mobility is absolutely about every single person having the chance and opportunity to succeed, no matter their background or postcode.
Peter Gibson
The Minister may not be aware that Darlington is home to one of the largest settled Gypsy, Roma and Traveller communities in the country. I am particularly keen to hear her views—if not today, by following up in writing—on what the Government are doing specifically in respect of them.
Mims Davies
The support for all groups, no matter their background or where they are, is exemplified by hon. Friend pointing out that particular group. I am happy to come forward with further information on that, including cross-Government work.
The Government remain committed to all aspects of life, from education to work and later life, and to having a comprehensive suite of measures in place to achieve social mobility. The challenges laid down today are very welcome, because we have heard about different experiences in the different corners of Britain. Yesterday I visited Sandwell, West Bromwich, Wolverhampton and central Birmingham to discuss how our DWP support, youth offer and work with the third sector and local partnerships is making a difference in our communities.
I do not agree with the hon. Member for Wirral South (Alison McGovern) on the ABC—any job, better job, career—approach. Throughout the engagement that I had yesterday, it was consistently said to me that the skills, confidence and network that that gives people are transformative. As we have all spoken about today, you have to start somewhere.
Alison McGovern
It is great to hear the Minister’s contribution, and I know she cares deeply about this issue. If she has evidence of the efficacy of that policy approach, will she place it in the Library of the House of Commons?
Mims Davies
We are doing some work on the impact of the kickstart scheme and how getting a job and progressing is leading young people to stay in work. There will be further information coming, and I will always share that with the hon. Lady.
In my conversations yesterday, I heard how adverse childhood experiences such as bereavement, poor attainment at school and other issues have impacted on young people’s confidence and opportunities, and on their experiences in adulthood. It demonstrates the critical point made in the Chamber this afternoon about the importance of getting education right and, above all, getting the Government’s lifetime skills guarantee right. As my right hon. Friend the Member for Bexleyheath and Crayford rightly said, education and skills have a massive impact. I absolutely agree that local colleges are among the most socially mobile and able connectors in terms of what they achieve, and I applaud the work that goes on in colleges. Spreading opportunity for every child and young person is a top priority, because their talent should contribute to where they end up.
I am concerned by the point made by the hon. Member for Ellesmere Port and Neston (Justin Madders) about job opportunities being hidden behind paywalls. As the former Employment Minister, and as the Minister for Youth, I worry about those opportunities. I thank him for raising that point. I ask those sectors that often approach the Government about being more socially mobile and more open to look at themselves. This is not a finger-pointing exercise, but those that continue to recruit in the same way often end up with the same people around the table. If that is excluding people, let us look at those recruitment basics.
The Government are investing in 55 education investment areas where outcomes in literacy and numeracy are the poorest, including £86 million in trust capacity funding to support and expand areas of improvement. That will help my hon. Friend the Member for Darlington (Peter Gibson) in terms of his reading ask. I will meet my parliamentary neighbour, the Minister for Children, Families and Wellbeing, my hon. Friend the Member for East Surrey (Claire Coutinho), shortly and will raise the issue of reading confidence. I was delighted to hear my hon. Friend the Member for Darlington use the O-word—opportunities. We are absolutely trying to spread opportunities.
The Department for Education is delivering a clearer skills system that is employer focused, high quality and fit for the future, which is what my right hon. Friend the Member for Bexleyheath and Crayford, who set up the debate so well, asked for. If only we had had time for a longer debate. We should get this subject into the main Chamber and spend more time on it. I would be very happy to respond to it—that is another commitment from me today.
The Social Mobility Commission has said that apprenticeships are among the best mechanisms to help employers build that diverse, talented, wide-ranging workforce, as well as to tackle the skills shortage. Many apprentices earn more than graduates five years after completion. Average graduate earnings five years after graduation are £28,200, compared with £30,900 for level 4 apprentices five years after completion. That is a lesson to us all to promote filling the skills gaps with apprenticeships.
DWP has progression leads in our jobcentres to help people. I recognise that some people work all the hours God sends but still find it difficult to make ends meet. Our progression leads work with our claimants, partner organisations, local authorities, local employers and small and medium-sized enterprises, to make sure that people are able to progress in work.
I had a very engaging meeting with leading employers during the week of International Women’s Day, to talk about the barriers and to focus on interventions. I will meet the Social Mobility Pledge team, including our former parliamentary colleague, Justine Greening, to discuss her mission. She is doing a brilliant job. DWP also has the social mobility commitment, pledge and consortium, of which 60 employers are a part.
It has been such a pleasure to respond to today’s debate, because this week is the DWP’s inaugural social mobility week—a week of action and engagement in our Department, with colleagues across the country working out how to tackle any barriers and to focus on social mobility. That includes being a national employer and giving our customers aspirations and goals. We are looking at things such as caring responsibilities, and I will host a session on Thursday. We are also looking at subjects such as accent bias and recruitment bias. I hope that reassures the hon. Member for Wirral South.
Throughout the debate, we have seen that social mobility is a key priority and I hope I have shown my passion for it. We will break down the barriers. No matter what someone’s background is, we can cater for every single circumstance. Everybody, like us, should have the opportunities to succeed.
Sir David Evennett
I thank the Minister for her response and thank everyone who has participated. We should be working together as much as we can. I do not agree with the hon. Member for Hemsworth (Jon Trickett), but I hope we can have a chat over a cup of tea.
This is a very important issue. We have had a very constructive debate. We have lots of ideas and we want to make progress. Those of us who come from very ordinary backgrounds want other people to be able to do the same and make something of their lives—I think we can all agree on that. This is a very important issue. I do not want to make it party political, because I think it is much bigger than that. There should be a national approach to get the very best for all of our people, so that they can progress to what they want to and really can be.
Question put and agreed to.
Resolved,
That this House has considered social mobility.
Written Statements
(1 year, 9 months ago)
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Fraud Landscape Report 2020-21
(1 year, 9 months ago)
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The Minister for the Cabinet Office and Paymaster General (Jeremy Quin)
Today the Government are publishing the 2020-21 fraud landscape report. This follows the establishment of the new Public Sector Fraud Authority (PSFA) in August last year to raise the Government’s ambition across the public sector in understanding risks and reducing fraud.
The report continues to push the Government’s transparency agenda by publishing data on the level of detected and estimated fraud and error in the public sector. The report estimates fraud and error losses for central Government—excluding those relating to tax and welfare, which are published separately by His Majesty’s Revenue and Customs and the Department for Work and Pensions.
In 2020-21, fraud detection figures grew by 7% on the previous year, with Departments and public bodies detecting £243 million of fraud, in line with the Government’s objective of continuing to focus on identifying and reducing fraud. These figures include fraud related to schemes in support of the pandemic.
The report shows how the Government adjusted the counter-fraud function to focus on fraud around the covid-19 schemes. This was achieved by establishing a covid-19 intelligence hotline, utilising data analytics and assessing the levels of fraud in all covid-19 schemes, so that the centre of expertise was able to co-ordinate a unified approach to countering fraud.
The Government have continued to develop their capability to take action on fraud. There are now 7,011 individuals, from 35 organisations, who are members of the world’s first counter-fraud profession meeting our target.
In 2020-21, an additional 99 counter-fraud colleagues from across Government were trained in the new discipline of fraud risk assessment. This has helped us to better understand fraud at the commencement of Government initiatives—a particularly helpful skill in the wake of the pandemic.
This Government attach importance to transparency and the improvements they can bring in fraud detection and prevention right across the public sector. While efforts to support Departments and public bodies during the pandemic delayed work on this report, the PSFA intends to publish a bulletin with the data from 2021-22 in the first half of 2023.
[HCWS657]
Procurement Exclusion Update: Bain & Company
(1 year, 9 months ago)
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The Minister for the Cabinet Office and Paymaster General (Jeremy Quin)
In August 2022, Bain & Company and its global affiliates were excluded from bidding for UK Government business. Following the decision, Bain & Company has co-operated with our investigations and provided considerable additional information on its self-cleansing actions. It has also agreed to a period of rigorous monitoring for a minimum of two years, during which its continued compliance will be assessed. Given the progress made since the exclusion, we can confirm that although Bain & Company South Africa Inc. will remain excluded from UK Government business, Bain & Company Inc. and its affiliates outside South Africa are no longer excluded from bidding for Government work.
Following robust and intensive dialogue with Bain & Company since the exclusion decision was made in August, which has received the full co-operation from the company, we have concluded that Bain & Company Inc. and its affiliates outside South Africa, including both Bain & Company Inc. United Kingdom and BuyingTeam Ltd—trading as Proxima—can bid for UK Government work.
Since the exclusion decision in August 2022, Bain & Company has responded by producing detailed evidence of the measures it has taken internally—including related to the way Bain & Company handles bids for UK Government work—which was not available to the Cabinet Office previously.
This decision is subject to a regular and thorough period of close monitoring, for a minimum of two years, so that we can be satisfied that the company continues to uphold the measures it has now put in place.
During the monitoring period, Bain & Company has agreed that it will engage further with the Cabinet Office to provide evidence that its governance, organisation and internal processes are now working, and will continue to work, as they should do to prevent anything similar happening again.
Bain & Company South Africa Inc. remains excluded from bidding for UK Government procurements until 4 January 2025, given the findings of the Zondo Commission on its prior involvement with the South African Revenue Service. Bain & Company South Africa has acknowledged that it did not fully clarify the facts and circumstances regarding its work for the South African Revenue Service in a comprehensive manner.
Bain & Company has previously apologised for the fact that Bain & Company South Africa’s work in South Africa contributed to damaging a critical public institution and acknowledged that its co-operation with investigating authorities fell short.
We will review any new information that comes to light, including as a result of any potential reconsideration by the South African Government of their decision to ban Bain & Company South Africa.
Bain & Company has welcomed this robust external challenge, to help ensure that going forward its governance is of a consistently high standard, that the self-cleansing actions put in place are operational and that any new issues arising are being managed and communicated transparently.
We strongly condemn corporate malpractice and will not hesitate to exclude suppliers should they be found not to be upholding the highest standards.
[HCWS658]
Tourism Recovery Plan Update Report
(1 year, 9 months ago)
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The Minister of State, Department for Culture, Media and Sport (Julia Lopez)
I am pleased to publish today an update report on progress made against the objectives set out in the Government’s tourism recovery plan.
Tourism is a significant economic, cultural and social asset to the UK. The sector is a powerful engine for economic growth and job creation in every part of the UK. Pre-pandemic, it directly employed 1.7 million people, supported 230,000 small and medium-sized enterprises, and contributed £74 billion in gross value added—4% of the UK’s total. As an industry with long-term growth prospects (forecast at 3% a year globally to 2030), international reach and a presence in every constituency, tourism has a major role to play in the Government’s wider Union, levelling-up and global Britain agendas.
The tourism recovery plan was published in 2021 in recognition of the significant impact of the covid-19 pandemic on the UK’s visitor economy. The plan set out a framework for joint Government and sector development. In the short to medium term, it set out the ambition to recover pre-pandemic levels of domestic and international visitor volume and spending. In the medium to long term, the remaining objectives focused on supporting the growth of a productive, innovative, resilient, sustainable and accessible visitor economy that benefits every nation and region of the UK.
We are now three years on from the beginning of the covid-19 pandemic, the first national lockdown and the start of Government support for businesses affected by closures and social distancing measures.
This update report sets out the progress made against the plan’s six objectives, highlights ongoing work and sets out the future actions that the Government will take to continue supporting the sector as it not only recovers from the covid-19 pandemic but faces the economic challenges that have arisen since publication of the plan in 2021.
The report sets out the mixed picture of recovery in the sector. In total, over £37 billion in support through grants, tax relief and loans was provided to the hospitality, leisure and tourism sectors to help them survive through the long periods of uncertainty and adversity. The sector is, however, still facing economic challenges. Domestic tourism is recovering well, but international tourism is lagging behind the targets set in the plan. Behind this mixed picture of recovery, there is huge long-term potential for economic growth, which is why the Government re-commit in this report to support the sector through the framework of the tourism recovery plan—to help it grow, thrive and, in turn, boost the UK economy. More broadly, the Prime Minister has promised to halve inflation this year and grow the economy, both of which will support the sector.
Overall, the report indicates that good progress has been made against the objectives of the tourism recovery plan. It acknowledges that there is further to go to support the full recovery of the visitor economy in the short term and to work with industry to deliver on the medium to long-term ambition to build a more resilient, innovative, sustainable and inclusive sector that benefits every corner of the UK.
A copy of the update report on the tourism recovery plan will be placed in the Libraries of both Houses.
[HCWS656]
Clinical Trials Consultation Response
(1 year, 9 months ago)
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The Minister for Health and Secondary Care (Will Quince)
The Government have announced plans to overhaul the legislation that governs clinical trials, to introduce a series of measures to make it faster and easier to run clinical trials in the UK. These changes will help speed up clinical trials, without compromising on safety, and encourage the development of new and better medicines for patients. They come after the Government announced an extra £10 million of additional funding for the Medicines and Healthcare products Regulatory Agency (MHRA) to accelerate the delivery of cutting-edge treatments, including cancer vaccines.
Leaving the European Union has provided a unique opportunity for the United Kingdom to improve regulatory regimes for healthcare products and exercise our new powers as a sovereign regulator. The Medicines and Medical Devices Act 2021 allows us to update the current legislation for clinical trials, creating a world-leading regime that prioritises patient safety while enabling and encouraging innovation within the clinical research environment.
To deliver this ambition and gather views of patients, industry and academia, we published a consultation on the future of UK regulations for clinical trials—“Consultation on proposals for legislative changes for clinical trials” www.gov.uk'>www.gov.uk on 17 January 2022.
We received 2,138 responses and I am grateful to all those who have taken the time to respond to the consultation.
Officials at the MHRA, in collaboration with the Health Research Authority (HRA), have analysed the consultation responses and have worked with officials within my Department and the Office of Life Sciences to develop the Government response. The response outlines changes that will support innovation within the UK’s life sciences sector and patient access to potentially life-saving medicines, for example through enhancing the transparency of clinical trials; enabling greater proportionality and streamlining the approvals process.
We are removing granular and duplicative regulatory requirements, moving away from ‘one size fits all’ regulation and embedding principles of proportionality. Ensuring that the regulatory requirements expected are more flexible to match the risk that a trial presents, will result in a regulatory framework that is responsive to all kinds of trials and adaptable to innovative research.
The changes also formalise the combined review process in legislation, ensuring research teams receive a single decision from both regulatory and ethical reviews, done in parallel between the MHRA and HRA. This reflects the UK Government’s intention to embrace innovation in clinical trials and accelerate the evaluation and implementation of advances in medical interventions to the benefit of UK patients everywhere.
The legislative changes outlined in the consultation response provide firm foundation for and align with the review of clinical trials led by Lord O’Shaughnessy and work undertaken by Sir Patrick Vallance, to ensure a pro-innovation regulatory environment. Through this collective work we will cement our status as a science superpower by making the UK the best place in the world to conduct fast, efficient and cutting-edge clinical research.
The Government’s response to the consultation will be published on www.gov.uk'>www.gov.uk today.
[HCWS659]
Great British Railways Headquarters
(1 year, 9 months ago)
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The Secretary of State for Transport (Mr Mark Harper)
Today, I am pleased to provide an update on this Government’s plans to reform our railways. I am announcing the location chosen to be the national headquarters of Great British Railways (GBR), providing further detail on GBR’s regionalised approach including how GBR will benefit the whole of Great Britain, as well as offering more detail on the role of GBR.
From a shortlist of six locations announced last summer, Derby has been chosen as the city to be the future headquarters of GBR.
Among an exceptional list of shortlisted applicants, Derby scored highest in the expression of interest stage of the competition, which analysed its suitability against six published criteria: levelling up, connectivity, opportunities for GBR, value for money, heritage and public support. It also scored highest in the six-week public vote, attracting 45,600 votes, more than 5,000 ahead of the second placed location in a total vote of 205,000.
Derby will become the heart of Great Britain’s rail industry, bringing together track and train, as well as revenue and cost. This means we will finally treat the railway as the whole system it should be rather than the web of disparate interests that it has become. Passengers will no longer face the excuse-making and blame-shifting of years past. Instead, GBR will be wholeheartedly customer-focused, serving as the single point of accountability for the performance of the railway. The rail campus, led by GBR HQ, will help position the industry to achieve this.
GBR will put customers at the heart of its reforms. It will reinvigorate the role of the private sector to help drive innovation with an unrelenting focus on quality, customer service and experience. Under GBR, rail journeys, buying tickets and ticket prices will be easier, simpler and fairer.
While GBR’s headquarters will be in Derby, other towns and cities will also benefit from hosting empowered regional GBR hubs equipped with decision making and investment powers aimed at benefiting their local communities. GBR will support jobs spanning across Great Britain including the north, south-east, south- west and London. The GBR HQ will share learning, partnerships, connections and opportunities across these centres of excellence.
GBR’s Transition Team will now work with Derby to identify the site for the HQ within the city, which will represent value for money for the taxpayer. The midlands is already a transport supercluster for Britain: with DFT and HS2 based in Birmingham, bringing GBR HQ to Derby represents a further boost to the region’s transport sector and demonstrates our commitment to levelling up the country.
[HCWS655]
Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Lord Duncan of Springbank) (Con)
My Lords, shall we begin? Noble Lords know the drill already but we are not expecting any votes in the main Chamber; if there is a vote, I will of course leap into action and adjourn the Committee. Otherwise, let us kick off.
Financial Services and Markets Bill
Tuesday 21st March 2023
(1 year, 9 months ago)
Grand CommitteeRead Full debate Financial Services and Markets Act 2023 View all Financial Services and Markets Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 80-X Tenth marshalled list for Grand Committee - (21 Mar 2023)
Baroness Kramer
“Limitation on the powers of the PRA
The PRA may not accept an application from any insurance undertaking, reinsurance undertaking or third-country insurance undertaking for the application of a matching adjustment to a risk-free interest rate term structure for a portfolio of assets with a rating of less than BBB by Standard and Poors Global Ratings or its equivalent.”Member’s explanatory statement
This amendment seeks to prevent a matching adjustment being applied to a portfolio of high-risk and/or illiquid assets.
Baroness Kramer (LD)
My Lords, I start by thanking your Lordships for your patience in putting up with me being gone over the past few weeks following surgery. Noble Lords from all sides of the House have been so kind; I have appreciated it very much. It is lovely to be back in this company today. Special thanks go to my colleagues who have carried the burden that I should have been here to carry.
In a way, it is almost ironic that the three amendments in this group are all in my name. Amendment 216 deals with insurance and matching adjustments; Amendment 241C deals with the ring-fencing brought in following the 2008 financial crash; and Amendment 241D deals with the senior managers and certification regime, which is also a feature of the remedies proposed after the financial crash. When I tabled these amendments, a number of people pointed out to me that they did not seem particularly pertinent to the time—what a difference two weeks make. We have had three mid-sized banks fail in the United States and HSBC has had to step in and take over Silicon Valley Bank’s UK arm. Of course, we have also had the debacle of Credit Suisse, now part of UBS.
All that underpins the consistent jeopardy and risk that exists in the financial services industry and, to my mind, underlines the importance of having proper regulatory mechanisms in place to remove that risk in the first place, deter risky behaviour and provide a resolution mechanism for when things go wrong, as they always will. I regard the three amendments in my name in this group as rather crucial.
Earlier in Committee, we discussed the concern that the new secondary objective of international competitiveness could compromise the primary objective of financial stability. However, in many ways, that was an abstract discussion. These amendments in these three crucial areas of the financial services sector—all are areas where the Government have clearly signalled both their intention to allow, indeed incentivise, a significant increase in risk and their determination to use the law to prevent regulators limiting that risk—provide us with something much closer to real-life examples.
I start with Amendment 216, which addresses the insurance industry. Of course, this also encompasses many people’s pensions; in a sense, that was clarified in the Budget by the Chancellor, who talked about, in essence, opening up defined benefit pension plans to holding illiquid high-risk assets, in the same way as he anticipates Solvency UK opening up insurance companies to holding a far greater portfolio of illiquid high-risk assets. Under the EU regime, Solvency II, insurance companies are required to build a capital buffer based on the risks in their investments—their asset portfolio. The provision is designed to provide a safeguard if an insurance company fails, protecting both policyholders and the taxpayer. Solvency II allows an insurer to reduce its buffer where the insurance company is holding long-term assets that match the cash flows of its life and annuity insurance and its reinsurance obligations. That relief is called the matching adjustment. It allows adjustment to the discount rate that the firm is required to use to value its cash flows in order to determine the size of the buffer.
With Brexit, Solvency II is being replaced by Solvency UK. No one, including me, denies that Solvency II is probably overly restrictive and requires a degree of reform. I have not objected that Solvency UK is reducing the level of capital—the sort of raw capital buffer—by 65% for life insurers and 35% for general insurers. But the Government are now choosing to go much further. At present, the matching adjustment, which, as I said, has the effect of reducing the buffer even further, applies only to long-term assets held by the insurance company that qualify as investment grade. The change now proposed allows long-term, high-risk, illiquid, sub-investment grade assets—subprime is another word that is often used—to get the benefit of the matching adjustment. There is nothing that the regulator can do about it.
Why would the Government take such a risk? I think the answer is sheer desperation. They are hoping that the insurance companies and the defined benefit pension funds, to which we now know that this will extend, if they do not need to hold much of a buffer, will invest much more in the scale-up of innovative businesses, because scale-up money is hard to find in the UK. Unfortunately, scale-up is the phase at which many companies fail. The standard rule of thumb is that 40% of companies scaling up fail.
The Government are also hoping that the money will go into infrastructure. I should explain that many infrastructure projects are investment grade. TfL bonds, for example, are investment grade, as are the bonds for the M6 toll road; they qualify for the matching adjustment. But many infrastructure projects are high-risk and the bonds they issue are very illiquid. Just look at the pattern for most major infrastructure projects, and small ones as well. There have been delays and overruns in Crossrail, HS2 and pretty much every nuclear power project anywhere in the world. The worst part with infrastructure is that you rarely know that it is in trouble until it is very close to its official completion date. The matching adjustment would apply a far more extensive range of sub-investment grade investments. I know from talking to many companies that they see this as their way to get back into subprime mortgages and subprime property arrangements.
I am very old-fashioned. I believe that the primary purpose of an insurance company is to pay its policyholders on time and in full, and the primary purpose of a defined benefit plan is to pay its pensioners on time and in full. As I said at Second Reading, many people point out that these are pools of money and that the equivalent pension funds in Canada invest heavily in global infrastructure. I point out yet again that, if anyone reads the comments of the rating agencies on those Canadian pension funds, they will become very aware that the Canadian Government are regarded as a backstop should those funds collapse.
That is very different from the situation that we have in the UK, unless the Minister is about to tell me that the UK taxpayer is now willing to become a backstop for pension funds and insurance companies in the UK. The only example that I know about is one that we discussed earlier—Equitable Life. We know that nearly a million policyholders lost more than three-quarters of their investments when Equitable Life failed and that the Government did not bring them back to full recovery, even though the financial ombudsman found serial maladministration by both the Treasury and the regulator. I would very much like to know from the Minister, as we look at Solvency UK, which is enabled by the Bill, whether the Government now propose to give an equivalent backstop to that provided by the Canadian Government.
My amendment basically says that:
“The PRA may not accept an application from any insurance undertaking”—
I will not give you the rest of the details—
“of a matching adjustment to a risk-free interest rate term structure for a portfolio of assets with a rating of less than BBB by Standard and Poors … or its equivalent.”
This is my attempt to stop that reduction in the capital buffer for illiquid, high-risk investments.
I will try to be briefer in dealing with the other two amendments in this group. I shall take Amendments 241C and 241D together. These amendments sprang from the Chancellor’s speech on the Edinburgh reforms. I have referenced before my concerns, which are shared by many who, like me, sat on the Parliamentary Commission on Banking Standards, that we are seeing the rollback of the safeguards that followed our commission’s report Changing Banking for Good. Let me quote from it:
“An important lesson of history is that bankers, regulators and politicians alike fail to learn the lessons of history … measures that are implemented while memories are fresh will be at risk of being weakened once the economic outlook improves, memories fade, and new, innovative and lucrative approaches to global finance emerge.”
That is exactly what we are seeing today, and the past two weeks have illustrated it in spades. The failure of three significant mid-sized banks in the United States was enabled by the rollback of regulation, a rollback that had been sought by the siren voices of the industry. Those same siren voices are currently extremely influential in the Treasury, and I am hoping that we will hear from the Minister that she will go back and look at the decisions to weaken that regulation in the light of the reality that we have seen over the past two weeks and the experience in the United States. Many of these regimes, particularly the senior managers regime, are now to be carried over into the shadow banking world. I am sure that is a good thing, but it is very concerning if those projects are watered down before they are carried over.
I am very concerned about the watering down of ring-fencing. Today, I asked some questions in the Economic Affairs Committee, and it is clear that the Chancellor intends to make changes to the ring-fencing regime. I accept that there are times when one could claim that ring-fencing has been overzealous with small and medium-sized banks and there are some arguments for the need to change MREL, but it is shocking to see that the Government are backing the recommendation of the Ring-fencing and Proprietary Trading Independent Review that if a bank is deemed “resolvable” its ring-fencing features can be removed.
The proposition behind ring-fencing was that retail banking is an entirely different animal from the casino banking of investment banking. It is essentially in many ways a utility, and it needs to be kept safe and separated by the virtues of the ring-fence. On the commission we also saw constant cross-contamination—in other words, risks being taken within the retail bank because of the impact in the universal banking model of their investment banking colleagues. Things such as PPI and various other forms of general abuse of customers clearly sprang from the internal pressures that were created by the overall culture of the combined firm. We could also see that many of the risks that the investment bankers tended to take were fuelled by their access to retail bank accounts that paid no or very little interest and were protected by insurance and which almost, in a sense, provided a honeypot that incentivised the taking of undue risks and played a very significant role in the kind of failures that led to the crash.
To quote Paul Volcker,
“it is the damage that it does to the culture of the whole institution … Trading operations and impersonal proprietary trading operations are simply different from a continual banking relationship.”
In other words—of which there were many—the linkage between retail banking and investment banking contributes fundamentally to all kinds of abuse of customers and small businesses, from PPI, the asset stripping of RBS GRG and the mis-selling of interest rate swaps. It also lay behind the complete collapse in credit standards and the short-term funding strategies that sank HBOS. Ring-fencing is a vital tool to provide for financial stability. With the plans to remove the cap on bankers’ bonuses, which the Government and industry treat as one of their highest priorities, it is even more important that this protection stays in place. My Amendment 241C would prevent any such destruction of the ring-fence without a decision by Parliament in primary legislation.
Baroness Noakes (Con)
My Lords, the banking commission did sterling work in the years after the banking crisis, helping shape the content of the banking reform legislation. However, I cannot support these amendments because they are trying to set the findings of that conclusion in concrete, to apply for all time. One thing we know is that times change—sometimes for the better, sometimes for the worse. Having constantly to hark back to what the banking commission said before any sensible changes can be made under the existing available rules seems the wrong direction of travel.
If there was one thing that the HSBC/Silicon Valley Bank episode showed, it was the rigidity of the ring-fencing rules, which were effectively one of the great successes of the banking commission in making sure that rigid rules were set in statute. What had to happen to facilitate HSBC’s acquisition and takeover of Silicon Valley Bank were special statutory exemptions via a statutory instrument. The result was that HSBC now has permanent changes to the ring-fencing regime for it alone, which may well end up with it having permanent competitive advantage over its other rival ring-fenced banks in the UK.
We need to learn lessons from what has happened over recent weeks; the noble Baroness, Lady Kramer, is absolutely right about that. I would be interested if my noble friend the Minister could give more of an idea on the timing of when we might get a lessons-learned report—I think she spoke about that when she first spoke at the Dispatch Box about the HSBC takeover. The answer is not necessarily that we should be taking less risk and making things more difficult to happen, as that is not necessarily the right conclusion from what went wrong.
I hope that the Government will not be frightened by the recent events into not carrying out some reforms of ring-fencing. They have shown themselves willing to consider some sensible reforms to make sure that ring-fencing works well, particularly with regard to small and medium-sized banks. Only a few weeks ago in Committee the noble Baroness, Lady Kramer, agreed that the MREL rules caused a particular problem in the UK; indeed, she said that she constantly reminded the chief executive of the PRA about that. There is an issue about how the rules apply to small and medium-sized banks in the UK. We have to remember that the thresholds used to establish what is a small and medium-sized bank in the UK are way below the thresholds which were increased by the Republicans and which may well have contributed to the problems with Silicon Valley Bank in the US.
I hope that the Government will press on with their consultation on ring-fencing and on the senior managers regime. Having been on the receiving end of the senior managers and certification regime for the nine years that I was on the board of what is now NatWest, I know that it is very bureaucratic and inefficient, and it does not necessarily target the kind of things that people thought it was going to be targeting at the time. It is therefore time to step back and ask whether this is the best way of achieving the objectives, which are to ensure that people take responsibility for their actions. What this has ensured is that there is a whole industry of chopping down forests, in order to fill files of evidence that you have taken reasonable steps to carry out your responsibilities, and I do not think that was the intended outcome of the reforms at the time.
I therefore make a plea: let us not get panicked by what has happened in recent weeks into not accepting that there is a good case for reviewing both the ring-fencing and the SMCR rules. I have nothing to say on insurance because it is not my specialist subject.
The Archbishop of Canterbury
My Lords, I have added my name to Amendments 241C and 241D tabled by the noble Baroness, Lady Kramer, and wish to speak briefly in support of them here. I am particularly grateful to the noble Baroness, Lady Noakes, who made some very helpful and powerful points.
As the noble Baroness, Lady Kramer, said, this marks 10 years since the publication of the Changing Banking for Good report from the parliamentary commission, on which I sat with her. The two amendments to which I have added my name are probing amendments to stress the importance of not forgetting the lessons of 2008-09, because people and sectors entirely can have very short memories.
As the noble Baroness has explained, the amendments seek to prevent alteration to two elements of the banking reform Act 2013 by statutory instrument without proper debate in Parliament, and to prevent changes which go against the recommendations of the parliamentary commission. Our memories have certainly been refreshed this week. If the debate on this group had been held when it was first scheduled two or three weeks ago, I think we would have had a very different reception. If one is grateful for anything in the present crisis, it is that we have been so warmly reminded of why we need a clear memory.
The ring-fence was first recommended by the Vickers commission in 2012, and it was “electrified”—in the words of the noble Lord, Lord Tyrie, in the Parliamentary Commission on Banking Standards report—to address the issue of banks seeking to test it. In our first report in 2012, we commended the coalition Government’s intention to introduce the ring-fence but said, as has been quoted, that it would be worn down in time, and that it had to be
“sufficiently robust and durable to withstand the pressures of a future banking cycle.”
After 10 years, we are now in a future banking cycle. We have gone through a long period of very easy money in which the banks have been able to make a great deal of money and to recover and increase their capital to much better standards than were around in 2008.
The very rapid increase in interest rates right across the western economies—particularly in the United States, which has the fastest increase for 50 years—has resulted in, as usual, the exposure of risks being taken that had not been foreseen. It is the “had not been foreseen” and possibly the “unforeseeable” that are important to stress when looking at this.
Electrification gives banks a disincentive to test the limits of the ring-fence. It is human nature—especially in a corporate entity—to test the limits of any regulation and see if they hurt when you hit them. But 2008-09 hurt far more people than simply the banks. It caused a global recession, and it hurt the poorest in the land more than anyone else. At that time, I was working in Liverpool and living in Toxteth, and we saw the impact on those who were least able to live with it. It is still hurting the whole economy, because for at least a generation after a financial crisis, as opposed to a normal economic recession, there is a deep fragility in confidence. The ring-fence and the other regulation of banks and higher capital are all about maintaining confidence, not about making it impossible for people to go bust.
The recent failure of SVB in the US, and the ease with which what is by global standards a major bank was reclassified as a systemically important bank and thus eligible to be rescued—even though there is a system for resolving banks which is meant to be robust—demonstrates that the issues of systemically important banks are very difficult to handle. Again, the problem is one of confidence: we are talking about the contagion of a lack of confidence, and not simply about the failure to observe rules and regulations.
The resolution of banks is part of the system in the USA. It applied to SVB and to Credit Suisse, but it was not enough to protect the taxpayers of the US or Switzerland from having to put in significant implicit and explicit support. This is all about confidence. If we go on bailing out the system as it is, one of the unintended consequences is likely to be further damage to confidence.
For me, one of the most memorable moments of the banking standards commission was hearing the very broken and tragic testimony of a former head of a global bank outside this country. He was a man of absolute integrity who had been brought to the point of complete breakdown—I suspect my colleagues remember it—by the impact of the failure of the bank he led. Right at the end of his testimony, I asked him, “When you wake in the night, what do you remember and wish you had done differently, because we all do that over events in our past?” He said, basically, “That’s easy. I remember that you can run a small, complicated bank safely, or a big, simple bank safely, but you cannot run safely a big, complicated bank”.
The Archbishop of Canterbury
Going back to the fiscal event, a lot of the pension funds almost went bust. We learned a lesson from that, quite rightly, and I think it is a lesson that will be kept.
The ring-fence and the SMCR have been important for encouraging—not solving—improved standards and culture in the banking sector and for protecting the public from bearing the brunt of future banking failures. We cannot forget the lessons learned with such pain for so many outside the banking sector, who had no idea what goes on in banking but found that life suddenly just did not work any more.
I hope that the Government take a further look, certainly through the consultation, at the lessons of the last few weeks, and that the ring-fence is strengthened, not weakened, and improved. I agree with the noble Baroness, Lady Noakes, about both the ring-fence and the SMCR. Both are cumbersome and need rethinking, but not abolishing.
When asked why he had changed his mind, John Maynard Keynes—apocryphally, I think—replied:
“When the facts change, I change my mind. What do you do, sir?”
Given that the facts have changed over the last few weeks, the Government need to ask themselves whether they are going to change their minds and think harder about adequate protection for the basic financial structures that protect the weakest in our society.
Lord Eatwell (Lab)
My Lords, these three amendments project a peculiar background, which is an issue that this Committee debated in an earlier session—that of accountability. The first amendment of the noble Baroness, Lady Kramer, Amendment 216, is too detailed for primary legislation. On the other hand, I sympathise entirely with the noble Baroness’s goals. In a principles-based system, I would have expected these goals to be expressed in the principles and achieved by the rule-making regulator but, given the lack of accountability with which the Government seem so comfortable—I was impressed by the noble Baroness’s argument on Amendment 216—we cannot be confident that changes will be made at the necessary points. There is no vehicle for Parliament to ensure or inspect the rule-making of the regulators.
I think Amendment 216 is necessary because the Government are so weak on accountability. If we had strong accountability, whereby we could hold the rule-makers to account—both positively, in the sense that you are doing something that you should not be, and negatively, in the sense that you are not doing something that you should be—amendments such as this would not be necessary. Amendment 216 is necessary in the way so carefully described by the noble Baroness, Lady Kramer, simply because of the lack of accountability in the system.
This also applies to the other two amendments in this group. The noble Baroness, Lady Noakes, powerfully pointed out that, because of the peculiar circumstances in which it took place, the resolution of SVB UK required a relaxation of the ring-fence. I am entirely sympathetic with the goals of these amendments, which address the overall structure of the industry and therefore the overall risk appetite of this country for banking and financial services. That is what the ring-fence and the senior managers and certification regime are about.
The “but” is the important case highlighted by the noble Baroness, Lady Noakes, where some modification was necessary. If we had proper accountability, this could come to Parliament, which could then examine this example of relaxation to discuss whether it is appropriate to extend it to other banks, so that there is this mythical level playing field in the competitive relationships between them.
I am enormously sympathetic to the goals of these amendments: to the first because it is a practical issue of excessive risk-taking by insurance companies and, as we have seen, pension funds; and to the other two because they refer to the structure of risk which Parliament has decided is appropriate in this country’s financial services industry. It should not be modified wilfully—I am thinking of the marriage ceremony—and without due consideration of the consequences. Therefore, the Government would once again be well advised to reconsider the issue of accountability, which they have brushed away so casually, because it would provide the flexibility for Parliament to be involved in changing the risk appetite of the country as a whole.
Viscount Trenchard (Con)
My Lords, I again declare my interest as a director of two investment companies, as stated in the register. I will speak about all three amendments.
In Amendment 216 the noble Baroness, Lady Kramer, seeks to prevent a matching adjustment being applied to a portfolio of assets with a Standard & Poor’s rating of BBB or less. Does this mean a portfolio of assets comprising at least one holding of BBB paper, or a portfolio consisting exclusively of holdings rated BBB or worse? Either way, I welcome the Government’s proposal to remove the disproportionately severe treatment of assets with a credit rating of BBB or below, which will reduce the incentives for insurers to sell BBB assets in a market downturn. These reforms would encourage insurers to revise their investment strategies and risk appetites for investing in sub-investment grade assets, increasing funds available for investment in beneficial infrastructure projects, for example.
In any case—here I agree with the noble Lord, Lord Eatwell—is this attempt to constrain the powers of the PRA not too specific, and the kind of very precise regulation that we want to get out of primary legislation so that we can give discretion on this kind of thing to the regulators? I therefore cannot support this amendment.
I tremble in my shoes to disagree with the good intentions expressed by the noble Baroness, Lady Kramer, the noble Lord, Lord Tunnicliffe, and the most reverend Primate the Archbishop of Canterbury in seeking, in their Amendments 241C and 241D, to make it very difficult to weaken the ring-fencing provisions or change the senior managers and certification regime. It is clear that she and her co-signatories are among those who believe that the introduction of ring-fencing has reduced the risks to which bank customers’ deposits are exposed and that it is therefore important to make it very difficult to weaken the ring-fencing regulations in any way.
Baroness Bennett of Manor Castle (GP)
My Lords, in rising to follow the noble Viscount, Lord Trenchard, I have to comment on a couple of the points that he made. When he referred to Amendment 216 and suggested that we could rely on the discretion of the regulators, I regretted that the noble Lord, Lord Sikka, was not here, because I am sure that he could have given some extensive account on that basis. We have cause for concern about the actions of the regulators. The noble Viscount also suggested that the relaxation of the ring-fence in the case of SVB, allowing its purchase by HSBC, was not important or significant. Of course, relaxation of rules under emergency weekend conditions is reminiscent of stopping contagion—rather like the kind of emergency steps we took in the face of the Covid-19 pandemic, where lots of things were done that would not be seen as viable under normal conditions.
On Amendment 216, I confess that I can see the arguments for why this should be considered too technical. However, the points made by the noble Lord, Lord Eatwell, about the fact that we do not have sufficient controls otherwise make the case for it.
On the points made by the noble Baroness, Lady Kramer, we have a problem where the primary purpose of insurance companies and pension managers has been chasing after massive profits, not looking to long-term security. While we are in that situation, we need find rules to manage it.
Responding to the comments of the noble Baroness, Lady Noakes, again suggesting that what has happened in recent weeks suggests that the ring-fence is not working, I think that a military analogy might be quite useful here. If you are in a city under attack and your walls are very nearly overtopped by the enemy, you do not at that point pull the walls down and start reconstructing them. You reinforce those walls. The events of the past couple of weeks have demonstrated that what we have now is not enough of a security system—that is patently obvious—but the answer is reinforcement rather than pulling everything down and starting again, because we saw fit to take actions after 2007-08 which we are hoping will make those defensive walls hold this time.
I would have attached my name to Amendments 241C and 241D had I been able to keep up with the flood of legislation we have before us. In reflecting on them, I want to quote an economist on the New York Times, Ezra Klein:
“Banking is a critical form of public infrastructure that we pretend is a private act of risk management.”
That is the context in which I hope the Minister can today reassure us that, as we come towards the end of Committee and in the new environment in which we find ourselves, the Government will seriously rethink this Bill, particularly key elements of it such as competition and ring-fencing, before we get to Report. I have to borrow from a letter in the Financial Times this weekend —I am relying on this as a source—the fact that apparently the correct name for a group of black swans gathered on the ground is a bank.
Baroness Bowles of Berkhamsted (LD)
My Lords, I did not prepare a speech on this, but recent events and the speeches have moved round to what a fundamental issue we are approaching here. One important issue, which underlines the Government’s changes on Solvency II, is how to get investment into our economy. That is a fundamental need that we have. It is possibly intertwined with how much national risk we are prepared to take. I do not intend to try to solve that now.
If we look at recent events and the responses to them, we see that we have different risk appetites in different countries, in how they will accept failure and what, in essence, they are prepared to bail out. As my noble friend Lady Kramer said, it appears to be the assumption that the Canadians would bail out the pension fund. Maybe they think that is a decent quid pro quo for getting a large amount of infrastructure investment and other investments. That is a balance that it is legitimate for a country to make, but I do not think it is one that we have made here in the UK. We have said “No more bailouts”. That may be something that can never be absolutely held to, as we know, but we do not operate on a principle that it is going to be the case.
Let us look at what happened with Silicon Valley Bank in the UK, where there was not really a great deal wrong other than it suffering the repercussions of what happened in the US and a bank run through co-ordination and a loss of confidence. What does that say about our challenger banks, if people are not prepared to rely on the amount of the deposit guarantees that we have? For industry, we have next to nothing. The Americans are talking about raising their amounts of guaranteed deposits because they realise that businesses will not trust smaller banks with large deposits if there are not higher guarantees. That worries people in the United States, because they do not want to lose their regional banks and to have everything go into large systemic banks. It should worry us that we have lost a challenger bank and that it has gone into a large systemic bank.
We may have to re-examine what our risk appetite is around things such as deposit guarantees. It is not pertinent to these amendments, but we have the same kind of risk issues when we expand and try to get insurance money into more risky investments. The same can be applied to what we want to do with pension funds. I suppose I had better declare my financial services interests as in the register again, just for the record. The recent history is that our institutions are not very good at investing in UK assets. Of the fallout from LDI, one of the things that is already under way is that pension funds will invest less in gilts. They will want to invest in something else—something that they can repo. They will therefore invest in corporate bonds but, to get the liquidity to be able to repo, they will be US corporate bonds. We will have yet another shift from investing in something in the UK. Even if that was the systemic risk concentrations of gilts, nevertheless it is a shift away from investment in UK assets, or not taking an opportunity for a switch in assets to be able to invest in those in the UK. Some of this is to do with our size. Maybe the Canadians have thought about that; I do not know. I am just sort of tossing these thoughts in. They are not hugely relevant to these amendments, but they are hugely relevant to the big issue that underlies the change on the matching adjustment —that is, how do we get investment into the UK economy? I should think absolutely every person in this Room wants that. It is hard to do it in a piecemeal way by changing the eligibility to the matching adjustment.
I do not fully trust the consultation process that we have in this country, because the pre-consultation process is dominated by an industrial lobby which knows what it wants. The consultation responses are weighed, and they are inevitably heavy with what the industry wants and why, and there is much less that comes in to counteract that. Therefore, we go down the track of accepting the proposals of the Government and getting what the industry says—but where is the backstop? This is where we come to the backstop that my noble friend has put in. The backstop is that it is for Parliament, through primary legislation. She does not say in her amendment, “Thou shalt never amend ring-fencing” or, “Thou shalt never amend the things that the Parliamentary Commission on Banking Standards did”. It says that it requires primary legislation. It says that this should go back to the body—albeit different people at a different time—and that there should be that analysis. This is the same sort of thing that the noble Lord, Lord Eatwell, was saying. Maybe you could get legitimacy from Parliament through a better accountability mechanism but, absent that, the only one we have is that it has to come back to primary legislation. With a Whip system and a government majority, that does not necessarily guarantee anything, but it will get at least a thorough airing and, in normal circumstances, you would get some toing and froing and some reasonable amendments if necessary.
Lord Tunnicliffe (Lab)
My Lords, I thank His Majesty’s Treasury for sharing its policy on the Edinburgh reforms last month. This Government, following their initial floating of the HMT intervention powers, have given parliamentarians serious cause for concern regarding their judgment. We should be slow to trust that they have the judgment and operational competence to implement the changes in the Edinburgh reforms safely and effectively. Could the Minister give an indication of the Government’s intentions and/or direction of travel concerning both ring-fencing and the senior managers and certification regime?
We heard from the Bank of England governor this week that the Government’s version of Solvency II reform increases risks for insurance firms by 200% more than the Bank’s preferred option. I think we are vindicated in our general concern about the Government’s gung-ho approach to financial stability. Sweeping changes to ring-fencing and the senior managers and certification regime are too important to be left to statutory instrument. The amendments from the noble Baroness, Lady Kramer, are sensible safeguards that the Government should consider thoroughly.
We have seen chaos in two banks this week—Silicon Valley Bank and Credit Suisse. What is the Government’s assessment of whether other systemically important banks are safe and sound? Did we see SVB and Credit Suisse coming? Did the regulators? What are they proactively doing to protect UK consumers and investors?
My view on Amendment 216 is not yet fully formed; I want further discussions with colleagues. I agree with the general view on Amendments 241C and 241D that the issue is really about scrutiny and accountability. In my view, it is impossible to argue that a relaxation of either ring-fencing or the senior managers and certification regime is other than very significant. The present method of accountability through an affirmative instrument is clearly insufficient and I commend the device of the noble Baroness, Lady Kramer, which she has included in these two amendments. The Government should support them.
The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)
My Lords, I will speak first to Amendment 216, which pertains to the Government’s announced reforms to Solvency II, made possible through the Bill’s revocation of retained EU law.
The Government are reforming Solvency II, the rules for prudential regulation of the insurance industry currently set by the EU, to reflect the UK insurance market’s unique features. These reforms will provide incentives for insurers to increase investment in long-term productive assets by more than £100 billion. They will also benefit consumers by increasing insurers’ ability to provide a broader range of more affordable products.
The Government have committed to make changes to the matching adjustment, an accounting mechanism whereby insurers can match their long-term liabilities with long-term assets and hold less money to pay out claims. These reforms will incentivise firms to invest significantly more in long-term productive assets such as infrastructure. This investment will support growth across the UK and the Government’s climate change objectives.
The noble Baroness’s amendment would instead result in a stricter treatment for some assets than under current rules. I reassure noble Lords that the Government’s reforms to Solvency II strike a careful balance between boosting growth across the economy and maintaining high standards of policyholder protection. Insurers will still be required to hold extra capital to safeguard against unexpected shocks, they will still have to adhere to high standards of risk management, and they will still be subject to comprehensive supervision from the PRA, our world-class independent regulator.
The noble Baroness, Lady Kramer, asked whether we would replicate the Canadian Government’s position with regard to pensions and insurance firms in this context. She referred to statements in the Budget about pension funds—although I think they were focused more on defined contribution pension funds than defined benefit pension funds. I do not know the detail of the specific Canadian regime, but the reforms proposed here do not pose risks to financial stability. As I said, each insurer must still hold enough capital to survive a 1-in-200-year shock over one year. Insurers will still have to adhere to the high standards of risk management. The Government and the PRA have announced a series of additional supervisory measures that the PRA will take forward to ensure that policyholders remain protected. For example, the PRA will now require insurers to take part in regular stress-testing exercises.
Lord Eatwell (Lab)
May I comment on the issue of stress tests, which the Minister also raised during Questions this afternoon? You can stress test only risks that you know are there. It depends on the underlying model that you create to examine in your stress tests. Thus stress tests did not pick up the LDI problem at all because it was not there in the models that were used. In financial services, risks appear in entirely unexpected places, and relying on stress tests is, and has been demonstrated to be, a very weak answer. She should reconsider her reliance on this argument.
Baroness Bennett of Manor Castle (GP)
Since it is related, I also question the readiness for a 1-in-200-year shock. We have seen very similar kinds of mathematical approaches, if you like, taken to issues such as flood risk and other climate risks, and they have been found to be very ineffective in dealing with problems. They only increase the failure to understand risks.
Baroness Penn (Con)
I would point to stress tests as one of the tools that the Bank of England, including the FCA and the PRA, has in its toolbox for securing financial stability. It is not the only tool that it uses. The noble Lord is right that it tests against certain scenarios, which are updated each year to take into account the changing picture around the world and look at different risks, but it can test for only the risks that we have thought about. It is a tool in the toolbox, not a solution to everything.
The noble Lord mentioned LDI. The picture there is mixed. It was identified as a source of risk by the Financial Policy Committee but the extent of movement in gilt prices that it was then stress-tested against was far greater in the scenario that we saw unfold. It may be a good example of the benefits of being able to horizon-scan and look for risk—risk was identified—but also of the limits of some of that work. I completely acknowledge that. The same applies to the point made by the noble Baroness, Lady Bennett.
Amendments 241C and 241D relate to important regulatory reforms introduced following the global financial crisis and the recommendations by the Parliamentary Commission on Banking Standards. I pay tribute to the important work of that commission and to its members who are here today. It has had a lasting legacy in improving the safety and soundness of the UK’s financial system.
Amendment 241C relates to the ring-fencing regime, which, as we have heard, is a major post-crisis reform separating retail activities from investment banking activities in large banking groups. As required by the Financial Services (Banking Reform) Act 2013, the Treasury appointed an independent panel, chaired by Sir Keith Skeoch, to review the ring-fencing regime. The legislation required this review to take place after the regime had been in operation for two years; that review concluded in March 2022. I say to my noble friend Lord Trenchard that the Skeoch review looked at the questions about the effectiveness of the ring-fencing regime, and it is in the context of that review that we are discussing the way forward.
In December, as part of the Edinburgh reforms, the Chancellor announced a series of changes to the ring-fencing regime. These broadly follow the recommendations made by the independent review. It concluded that the financial regulatory landscape has changed significantly since the last financial crisis—a point made by my noble friend Lady Noakes. UK banks are much better capitalised and a bank resolution regime has been introduced to ensure that bank failures can be managed in an orderly way in future, minimising risks to depositors and public funds.
In the light of these considerations, the independent review concluded that changes could be made in the short term to improve the functionality of the regime. Crucially, the panel stressed that these could be made while maintaining financial stability safeguards. The panel also recommended that, over the longer term, the Government should review the practicalities of aligning the ring-fencing and resolution regimes. I assure noble Lords that the Government remain firmly committed to the objectives of the ring-fencing regime: to protect core banking services, such as retail deposits, from risks elsewhere in the financial system while minimising risks to taxpayers in the case of a bank failure. As recent events have shown, it is critical that the Government and regulators have the necessary powers to act decisively in pursuit of these objectives.
In response to the review, the Government have announced their intention to consult later this year on a series of near-term reforms to the ring-fencing regime to implement the independent review’s recommendations. The proposed reforms will make the regime more adaptable, simpler and better placed to serve customers, while maintaining important protections for depositors and financial stability. Alongside this, and in response to the review’s longer-term recommendations, the Government recently published a call for evidence that explores how better to align the ring-fencing regime with the resolution regime. I assure all noble Lords that, in the context of that longer-term call for evidence, no decisions have been made on the longer-term future of ring-fencing. The call for evidence is seeking views on a wide range of options including the possibility of disapplying the regime where banks are deemed resolvable, which was one of the Skeoch review’s recommendations. It also seeks views on retaining or further alternative options for reforming the regime.
Baroness Kramer (LD)
My Lords, I thank everyone who has spoken. When I originally drafted these amendments, they were genuinely probing amendments. I felt that I had stumbled on some issues that, if I was correct, would surely be of such significance that they would have been brought before the House and widely discussed. They changed two of the absolute pillars of our financial regulatory regime: ring-fencing and the senior managers regime. It is evident to me that this is a relatively new topic for most noble Lords here, who are the core of those in this House who engage on these issues. I am therefore very troubled that this has not been part of a broad, in-depth discussion between the Government and Parliament.
I very much agree with the noble Lord, Lord Eatwell. If we had a working accountability system, there would be a mechanism to help deal with all this, but we do not have one. Frankly, I do not want to wait until we do, unless we agree something on that in this Bill, because these fundamental changes have such a possibility of putting our financial stability in jeopardy that we cannot simply sit back and treat them as if they are fairly minor adjustments. They are fundamental to changing the guard-rails that have protected us for the past several years.
I very much agree with the noble Lord, Lord Eatwell. Stress testing is not a litmus test; it is simply a tool to try to expand one’s thinking and to try to identify potential possibilities. The Government have treated it as if it was some kind of litmus test: if it comes up red or blue, or whatever else it is, you have passed and everything is fine. That is not what it is about—in fact that is an abuse of the whole concept of stress testing.
I am extremely worried about the changes to Solvency II as it moves to become Solvency UK. I should say to the noble Baroness, Lady Bennett, that I do not have a quibble with the regulator—the regulator has been shut out of this process. This is a government decision that the matching adjustment will be allowed to apply to illiquid high-risk investments because those are the kind that the Government wish to see increased in our economy. I am happy to see them too but, frankly, I would like somebody in the financial capital market who understands the risk and is willing to take the risks to put money in, whether it is scale-up or infrastructure. The idea that this will now become the norm for pension funds, where basically the policyholders will have absolutely no say and I suspect very little understanding of the level of jeopardy in the fund to which they are contributing on a regular basis, bothers me hugely.
I will be very glad if someone else can come up with some mechanisms. The mechanisms that I used here of parliamentary accountability have been my attempt to deal with what seemed like a problem that was not being discussed. However, the excellent speeches that we have heard today, and indeed the Minister’s reply—it did not suggest that we have been exaggerating the situation, but confirmed the problems—mean that we will have to try to find some mechanism, and quickly, to deal with this range of issues. The last two weeks have made it clear that it is complacency to think that we have in place the kind of structure that genuinely protects us from financial risk, and complacency is exceedingly dangerous. I beg leave to withdraw the amendment.
Lord Holmes of Richmond
“Digital identification
(1) Within six months of the passing of this Act, the Secretary of State must publish the Government’s plans for the development and deployment of a distributed digital identification (“Digital ID”) for individuals and corporate entities in the financial sector.(2) The digital IDs should be—(a) scalable,(b) flexible, and(c) inclusive.(3) The Secretary of State must also undertake a public engagement campaign around Digital IDs to raise awareness and participation in the process with regard to the financial sector.(4) In this section—“digital ID” means a set of attributes related to an entity, as according to the International Organization for Standardization and International Electrotechnical Commission framework 24760-1;“flexible” means capable of resilience and workable as technologies develop and evolve;“inclusive” means capable of including all entities and individuals, not least, in respect of their protected characteristics as set out in the Equality Act 2010;“scalable” means capable of national deployment.”
Lord Holmes of Richmond (Con)
My Lords, it is a pleasure to move Amendment 218 in my name and to speak to this group of amendments. In doing so, I declare my financial services and technology interests as set out in the register. I will speak to Amendments 218, 220 and 221 in my name and will also speak briefly to the remaining amendments in the names of my noble friends Lord Bridges and Lord Forsyth respectively.
Amendment 218 is about perhaps one of the most significant things that we could do to transform financial services in the United Kingdom. Whether we are talking about fraud, operational efficiency or whatever measure or element of financial services we are considering, to have a form of digital ID would transform the current situation. It is vital that the Government strongly consider and move forward with such a system of ID and, in doing so, fully engage the public on this. Understandably, if the public one day wake up and find that they need a digital ID to access their banking services, why would they think that is a good thing if they had not been involved at any stage in the creation and the deployment of such an ID?
To put it in a non-financial services frame, if I wanted to have a pint—not now, obviously, although the previous group perhaps took longer than we were expecting—I might be asked for a passport. What is the purpose of that? Why should the bartender see my name, my date of birth, my passport number, where I was born, et cetera? All that is required for that pint to be put in front of and consumed by me is that, at the point when I order and consume the pint, I am over the age of 18. Nothing more needs to be known.
The same credential-led approach is what we require in financial services—not a huge giveaway of data with the potential for businesses to grab everything about us, as has happened in other sectors of the economy. Put simply, we need a particular credential that is within an individual’s control and can be put across to enable a transaction or inquiry, whatever it may be, to take place. I ask my noble friend the Minister to comment on the need for the Government urgently to engage and to increase the work that is happening in other departments on a general digital ID to be particularly applicable to the financial services sector.
Amendments 220 and 221 concern artificial intelligence. It is worth me making a few preliminary points before I go into the specific elements of the amendments. A helpful Bank of England paper on this subject was put out on 11 October last year, lest anybody think that AI is something for the future and not for us to worry about in the Bill. In the paper, 72% of financial services businesses said that they already use, or are about to use, AI. None of them said that they believed that the current way in which they used AI was high-risk, while more than half said that they were currently constrained in their ability to deploy AI fully because of current regulations on the PRA and FCA approach to the subject. That is some of the backdrop. To put my own cards on the table, lest anybody think otherwise, I am neither Panglossian nor po-faced about AI or, indeed, any of the other new technologies that we have in our hands. Yes, they are incredibly powerful technologies, but they are in our human hands in terms of how we design and deploy them. Thus I describe myself as rationally optimistic about their potential.
Amendment 220 brings this to life, I hope. It is a real opportunity for the UK, not just in financial services but across the whole of our economy and society, if we have an approach to ethical AI. The UK could be world-leading in the deployment of ethical AI; financial services is as good a place as any to have such an approach. I reference the Centre for Data Ethics and Innovation in this amendment; I am not wedded to it. Other organisations, such as the Alan Turing Institute, also have a role to play but the key is that there is an agreed underpinning.
For example, when we did the Lords Select Committee AI report in 2018, we set out five ethical principles; I do not want to give them any more concretion, to reference a previous group, but I say to my noble friend the Minister that one of the key architects of those ethical principles was the right reverend Prelate the Bishop of Oxford, who was a member of the committee. One therefore understands that they have behind them more than just the weight of the mere mortals here today.
Amendment 221 seeks to build on the ethical AI deployed in financial services institutions, and to have in every such institution a member with a responsibility for AI, in the same way that we have a money laundering reporting officer. Obviously, specific to the size of the organisation, it does not need to be an individual who performs only that role, but somebody in every financial services institution in the UK needs to be a designated AI officer. Does my noble friend the Minister agree?
Lord Forsyth of Drumlean (Con)
I apologise for not being able to attend the Committee last week because I was not in the Lords. I have been asked to speak to Amendment 241F, which was tabled by the noble Lord, Lord Bridges, who is currently in the Economic Affairs Committee interviewing the Chancellor. I shall speak also to my Amendment 241FD. I am grateful for the support of my noble friend Lord Holmes for the idea that there should be primary legislation in respect of any CBDC.
The Committee might be relieved to know that I am not proposing to go through the merits of CBDCs. I am very happy to do so if the Minister would like it, but the arguments are well set out in the paper, which was produced by the Economic Affairs Committee that I chaired, published on 13 January 2022 and entitled Central Bank Digital Currencies: a Solution in Search of a Problem? That might give noble Lords an idea of the conclusions of the committee.
The Government and the Bank of England are not convinced. They are still in search of the problem and the solution and a lot of work is being carried out on this. I do not propose to get into whether they are right or wrong about that, but I commend the committee’s report and the Government’s response, which was a letter to me dated 9 March 2022 which ran to all of seven pages—a commendable example of brevity from the Treasury.
On the first page of the letter, the then City Minister, John Glen, said:
“No decision has been taken by the government and the Bank of England as to whether to issue a UK CBDC, which would be a major infrastructure project.”
Indeed, it would. He went on:
“A decision will be based on a rigorous assessment of the overall case for a UK CBDC and will be informed by extensive stakeholder engagement and consultation. Exploring and delivering a UK CBDC, if there were a decision to proceed, would require carefully sequenced phases of work, which will span several years.”
Noble Lords will note that there is no mention whatever of Parliament in those considerations.
In their response, the Government acknowledged that there was
“a broad range of opportunities and risks, which require careful evaluation.”
In response to the committee’s request to get a commitment from the Government that this would require parliamentary approval, the sentence which stands out is:
“The government expects to fully engage Parliament—including through any possible legislation—in an open and transparent manner to ensure that there is a full and proper scrutiny of any proposals over the coming years.”
I am prepared to bet any Member of the Committee a bottle of champagne that, when the Minister replies, we will hear exactly the same words.
The problem with those words is that they are not a commitment to parliamentary scrutiny; they are not a commitment even to secondary legislation, which my noble friend Lord Bridges’s amendment calls for. They are certainly not a commitment to introduce primary legislation to implement something of this scale and importance, which is what my amendment calls for.
My noble friend Lord Holmes mentioned that the Chinese were keen on CBDCs. I am not surprised: they are a means of controlling and knowing what every citizen is doing with their money and how much of it they have. Although the Bank of England will say that its system would be devised in a way which acknowledges the privacy issues arising from CBDCs, I do not for a moment imagine that there will be any such undertakings in China. I can see the attractions of it; there are huge civil liberty and privacy issues at stake here.
There are also substantial risks to financial stability arising from a CBDC and how it is constructed. On the one hand, if you go the whole hog and everyone’s cash holdings are held digitally by the central bank, that clearly has all kinds of implications for privacy and stability. If, on the other hand, it is argued that the commercial banks will carry this out and you would be allowed to hold only a certain amount in a central bank digital currency, it rather defeats the object of doing it in the first place.
If there is the ability to move money into your CBDC account on any scale, in circumstances such as those that have occurred in recent days with some banks, where people fear stability, they will move their money out of the banks into the central bank digital currency, which is clearly a safer haven. That could create huge liquidity problems for the banks. Depending on how it is designed and operates, we could see ourselves moving towards the nationalisation of credit. At this point, I should declare that I have an interest as chairman of Secure Trust Bank.
All of this, we are told, is going to take a lot of time and require a lot of consultation. However, it seems to me that something as fundamental as this cannot be left for the Bank of England and the Treasury to cook up without proper consideration by Parliament, given the issues that are involved.
In paragraph 13 of its equally lightweight response to the committee’s report, the Bank of England states:
“The Committee cites privacy and identity as key considerations related to CBDC and points out potential reputational risk to the Bank of being drawn into controversial debates on these issues. The Bank recognises that these are important topics for the design of any CBDC system and that appropriate safeguards must be ensured if CBDC is to command users’ trust and confidence. These matters are being looked at as part of the Taskforce’s exploratory work and will be taken forward in the Consultation Paper.”
Then there is the important part:
“The Bank also recognises that these issues extend beyond the remit of the central bank. As such the Bank will closely support the work being undertaken by, and take its lead from, HMG”,
not Parliament. Once again, as with the previous set of amendments and as so often in this Committee, we are wrestling with the question of accountability and accountability to Parliament. Here, we are looking at a major change with huge risks to personal privacy, financial stability and the cost and availability of credit. The notion is that this can all be done without proper consultation by Parliament.
In speaking to these amendments, I am a reasonable person. My noble friend Lord Bridges’ Amendment 241F simply requires a vote in Parliament and looks to secondary legislation. I would support that, but I would prefer that if the Bank of England and the Treasury decide, having carried out their consultations, that they wish to proceed with this it should be the subject of primary legislation and subject to extensive debate.
Again, we have not made a lot of progress today, so all I ask of the Minister is for her to fill in the blanks in the undertaking that was given to the committee of this House. It was an all-party report, supported by the members of the committee. They included the noble Lord, Lord King of Lothbury, who knows a certain amount about central banking, and several members of the committee have great experience. I hope that the Minister will be able to say that she can give an undertaking on behalf of the Government—if not at this stage, certainly at a later stage, but ideally at this stage so that we will not have to discuss it again later—that there will be primary legislation and that the Government will instruct the various committees of the Treasury and the Bank of England to proceed on the basis that it will require primary legislation, a draft Bill and an undertaking to deal with the many issues that arise from a central bank digital currency, which I will not bore the Committee with now.
There has been a lot of talk about what caused the financial crisis in 2008 and the risks that occur. In my experience, the really dangerous thing in financial services is groupthink and belief in models. This is an absolutely classic example of thinking, “The Chinese are doing it and others are doing it so perhaps we need to do it as well. What is going to happen in future?” That is fair enough—have an eye to the future—but just because everyone else is going to do something that might increase risk is not a reason to copy them.
I have a simple request for the Minister: will she please give an undertaking that we will have legislation should the Government decide to go down this course in future?
Baroness Bennett of Manor Castle (GP)
My Lords, I rise briefly out of a sense of obligation and with a sense of déjà vu because on the previous financial services Bill I recall that I was the only Back-Bench speaker addressing a group of amendments from the noble Lord, Lord Holmes of Richmond, on digital issues associated with the financial sector. As then—having written a thesis on artificial intelligence 20 years ago, when we were said to be almost reaching it—I argue that we are no closer now than we were 20 years ago. We now have big data, not genuine, rich artificial intelligence. If noble Lords do not believe me, they should try putting mathematical questions into ChatGPT and see how far they get. What they will get is plagiarism and statistics, not understanding.
Lord Sharkey (LD)
My Lords, I will speak briefly to the amendments in the names of the noble Lords, Lord Bridges and Lord Forsyth. I agree with the analysis by the noble Lord, Lord Forsyth, of the dangers of having Parliament bypassed in the creation of a CBDC, but I will mention two things to which he may not have given enough weight.
The danger crystallises in the possibility of the disintermediation of the retail banking system, which would have incalculable consequences. Given the difficulties people have in dealing with their own banks at the moment, imagine the difficulty of trying to deal with the Bank of England about your personal account when things go wrong or you do not understand what things are doing. Given banks’ habit nowadays of closing people’s accounts without notice or reason, I wonder whether the Bank of England would take the same view if it had that power.
Like the noble Lord, Lord Forsyth, I would prefer any such creation—although I am not sure that I want one—to be via an Act of Parliament rather than regulation. However, regulation is tempting because I notice that proposed new subsection (3) of the amendment tabled by the noble Lord, Lord Bridges, finds a way of amending secondary legislation. With a bit of luck, we will deal with my amendment tomorrow, which does exactly the same thing in exactly the same kind of words but with broader application.
It is dangerous in the extreme to have Parliament excluded on the central bank digital currency, as the Government clearly intend at the moment. We ought to be very careful about that. When it comes to Report, where we need to think about what amendments we press, I would be very tempted to suggest to the noble Lord, Lord Forsyth, that he presses his amendment.
Lord Eatwell (Lab)
My Lords, I will make two general comments about these amendments—first, on Amendment 218 in the name of the noble Lord, Lord Holmes.
When I was chairman of the Jersey Financial Services Commission and therefore the regulator in Jersey, I was continually lobbied about the issue of digital identification simply because of the high cost of repetitive KYC investigations that institutions had to go through. It seems that the possibility of having a system of digital identification which would be generally acceptable and generally accepted within financial services would significantly reduce the costs of KYC and would provide a much sounder foundation for the credibility and respectability of the individuals attempting to transact within financial services. So this is broadly a good idea. It is very complicated, as I discovered when I tried to introduce it in Jersey, and it raises very important privacy issues, but, none the less, this is the way that the world is going and we need to think this through extremely carefully. It could be of great benefit to the whole KYC problem.
With respect to digital currencies, the one comment I will make is to remind the Committee of the debate that we had about the decline in the acceptance of cash and the fact that a significant number of people in our country are being deprived of money, since cash no longer works as money—it is no longer generally acceptable in discharge of a debt, which is the definition of money. Therefore, there will be a responsibility for the state to provide a digital form of money, because digital payment, as the noble Baroness, Lady Noakes, argued strongly at the time, will become the standard form of payment and cash is basically going to disappear —apart, perhaps, from the Tooth Fairy.
The issues of digital currency and digital identification are both hugely important for our future and, as the noble Lord, Lord Forsyth, argued—I agree with him most strongly—they require very careful parliamentary consideration.
Lord Tunnicliffe (Lab)
My Lords, on the digital pound, we support the Bank of England’s work exploring the potential benefits of a safe and stable central bank digital currency, but the Government’s overall approach to crypto remains unclear.
With the collapse of FTX, it is clear that crypto can pose a real threat to normal people in the real economy and therefore may pose a systemic risk in future. The approach HMT has taken to the digital pound is a welcome contrast to this Administration’s eagerness to lean into a crypto Wild West in the recent past. We need to get serious about attracting innovative fintech companies to the UK by safely harnessing the potential of new technologies. How will the Government do this?
On the amendments in general, the issue of accountability has come up once again. The concept of using primary legislation to have a check on these ideas is clearly practical and therefore very attractive, but it will have problems. If the Government would only embrace our concerns about accountability and come forward with a proper and comprehensive accountability structure, perhaps we would be able to develop a more sophisticated approach than the rather raw power of primary legislation. However, as a fallback it is very attractive.
Baroness Penn (Con)
My Lords, the Government have been transparent about their plans to enable the use of digital identities in the private sector, including in financial services, and we are committed to ensuring the scalability, flexibility and inclusivity of secure digital identities.
The Government initiated their digital identity programme following industry calls for the Government to take the lead in developing common standards for digital identity across the whole economy. We continue to believe that a whole-economy approach is the right way forward, and we are working with stakeholders to deliver this at pace.
For example, the UK digital identity and attributes trust framework has already enabled right to work, right to rent and criminal record-checking processes to be digitised, making these checks quicker and more secure. In addition, measures in the Government’s Data Protection and Digital Information (No. 2) Bill, which was introduced to Parliament on 8 March, go further by securing the reliability of digital identity services across the economy for those businesses and consumers who wish to use them. The Government also recognise that greater clarity with respect to how digital identity services certified against the digital identity and attributes trust framework support requirements under the Money Laundering Regulations will be key for market uptake. As set out in the Government’s 2022 Money Laundering Regulations review response, we have committed to considering this too.
I hope that I have reassured my noble friend Lord Holmes that the Government remain committed to enabling the use of secure, reusable digital identity products across the UK economy and that Amendment 218 is therefore not necessary.
Turning to Amendments 220 and 221, also from my noble friend, the Centre for Data Ethics and Innovation guidance has not been designed to form the basis of regulatory requirements relevant to financial services and is unlikely to address AI risks specific to that sector. Appropriating CDEI guidance for the basis of regulation that is aimed at the wider governance of AI through non-regulatory tools and industry-led techniques is therefore likely to lead to unintended consequences; however, I appreciate my noble friend’s point that he used the CDEI for illustrative purposes.
I assure my noble friend that the newly created Department for Science, Innovation and Technology is already developing a cross-economy, pro-innovation framework for AI regulation, underpinned by a number of cross-sectoral principles to strengthen the current patchwork approach to regulating AI directly. Further proposals for the new regulatory framework will be published in a White Paper in the coming weeks. Through our proposals for a new AI regulatory framework, we are building the foundations for an adaptable approach that can be adjusted to respond quickly to emerging developments. The vast majority of industry stakeholders we have engaged with agree that this strikes the right balance between supporting innovation in AI while addressing the risks.
Furthermore, the FCA, the PRA and the Bank of England recently published a discussion paper on how regulation can support the safe and responsible adoption of AI in financial services. Therefore, to avoid unintended complications with the use of digital identities and artificial intelligence in the financial services sector, I hope that my noble friend will not press his amendments.
Finally, I turn to the important topic of central bank digital currencies and Amendments 241F and 241FD, both ably introduced by my noble friend Lord Forsyth. The Government have been clear that they consider that Parliament will have a vital role to play in the future of any digital pound. As I set out to my noble friend Lord Bridges in a previous debate in the Chamber, when we discussed the findings of the report to which my noble friend referred, the Government expect to fully engage Parliament, including through any possible legislation, in an open and transparent manner to ensure that there is full and proper scrutiny of any proposals over the coming years. As the joint Treasury and Bank of England consultation paper published on 7 February set out, the legal basis for the digital pound will be determined alongside consideration of its design; this is the subject of ongoing work.
Lord Forsyth of Drumlean (Con)
Could my noble friend the Minister just define what “vital” means? Does it mean primary legislation?
Baroness Penn (Con)
As I said, the approach we take will be determined alongside the consideration of any design of a central bank digital currency. The decision to move ahead with a CBDC has not yet been taken; however, we do believe that it is likely to be needed in future. Although it is too early to commit to build the infrastructure for one, we are convinced that further preparatory work is justified. Therefore, that definition will become clearer as the design of the approach also becomes clearer—but the commitment at the outset to parliamentary engagement is there.
Lord Vaux of Harrowden (CB)
The Minister just made a statement that it is likely to be needed in future. Can I ask a very simple question: why? Why is a CBDC likely to be needed in future? That seems a fairly bald statement.
Baroness Penn (Con)
My Lords, we may not wish to repeat the debate that we had in the Chamber earlier this year, but I was going to address my noble friend’s question about retail versus wholesale and the point from the noble Lord, Lord Vaux, about the use case for a CBDC.
The noble Lord, Lord Eatwell, made one of the points in relation to a CBDC. We want to ensure that central bank money, which is currently available to the public only as cash, remains useful and accessible to the public in an ever more digitalised economy. We have heard about access to cash in our debates earlier in Committee.
The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)
My Lords, I am sorry to interrupt the Minister but there is a Division in the Chamber. The Committee will adjourn for 10 minutes, after which we will resume and allow the Minister to finish what she had to say.
Baroness Penn (Con)
My Lords, I was explaining why we think that the UK may need a digital pound in future. The central point is that we want central bank money, which is currently available to the public only as cash, to remain as useful and accessible as ever in an ever more digitalised economy.
I was going to address my noble friend Lord Holmes’s question about whether the work we are taking forward is focused on a wholesale or retail central bank currency. The proposal being considered is potentially to introduce a retail CBDC at some point in the future. With regard to a wholesale CBDC, banks have access to electronic central bank money in the form of reserves; we are open to exploring innovative ways in which wholesale firms could use reserves. There is a programme for reform under way on electronic central bank money in the form of reserves that will bring similar benefits to those that we see for CBDCs in the retail space.
Lord Forsyth of Drumlean (Con)
Is there going to be a limit on the amount that people can hold in this retail central bank digital currency? Does the Minister accept that, if there is no limit, that will have major implications for financial stability?
Baroness Penn (Con)
These are some of the questions that we want to consider through the consultation that is currently open and any further work. That consultation recognises the financial stability implications of developing such a proposal; we will want to consider them as we take this work forward.
Lord Tunnicliffe (Lab)
I hope that the Minister anticipates consultation and research. To me, “consultation” means coming back to the industry. The industry comes from a perfectly respectable position but it is one position. We need basic research, modelling and all the various techniques to explore the potential risks.
Baroness Penn (Con)
The noble Lord is right that the public consultation phases of this work are one element of the work that will be done by the Treasury and the Bank of England in developing this concept. There are many other strands of work that will also be undertaken. As we discussed in the previous debate, any such project would be a significant infrastructure project with significant financial implications so we would need an appropriate approach acknowledging that.
We are at an early stage of this work. As I said, we have not taken the decision to go ahead with a CBDC but we think that there is sufficient evidence to justify further exploratory work. At this stage, it would be premature to include any provision in the Bill. I reiterate my previous statement that the Government expect to keep Parliament fully engaged in this work as it progresses. I therefore hope that my noble friend Lord Holmes will withdraw his Amendment 218.
Lord Tunnicliffe (Lab)
That word, “engaged”, flummoxes us all. We do not see a mechanism in our system. Will the Minister write to us and spell out what “engaged” means?
Baroness Penn (Con)
I can look to write to noble Lords on this question but I am not sure that I would be able to add more to my response at this stage, which is that the Government expect to fully engage Parliament, including through any possible legislation, in an open and transparent manner to ensure that there is full and proper scrutiny of any proposals over the coming years. As the joint consultation paper set out, the legal basis for the digital pound will be determined alongside consideration of its design; that is subject to ongoing work. If I wrote to noble Lords at this stage, I think I would be saying exactly that but, if there is anything further to add, I would be happy to do so.
Lord Sharkey (LD)
I just want to make sure that I understand exactly what the Minister is saying. If the Government decide to bring in the digital pound, will they commit to bringing it in via legislation?
Baroness Penn (Con)
I am afraid that I have gone as far as I can in detailing the approach that we would take to Parliament. We expect to engage Parliament fully. However, the legal basis for the digital pound will be determined alongside consideration of its design. Work is not yet at the stage where we can provide that further clarity.
Lord Holmes of Richmond (Con)
I thank all noble Lords who have participated in this debate and my noble friend the Minister for her response. At this stage, I beg leave to withdraw the amendment.
Earl Attlee
“Money laundering regulations: exports to Ukraine
(1) Within three months of this Act being passed, the Treasury must take all reasonable steps to make regulations to amend the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692) so as to secure that they do not prevent a supplier of financial services to a relevant person from supplying financial services in the relevant conditions.(2) For the purposes of this section, a relevant person is a small or medium-sized enterprise which exports armoured vehicles or other military equipment to Ukraine for the use of Ukrainian defence forces, or the agent of such an exporter.(3) For the purposes of this section, the relevant conditions are that an export licence has been granted to a relevant person under the Export Control Act 2002 for the export of items on the United Kingdom Military List of controlled goods to Ukraine for the use of Ukrainian defence forces, and the relevant person is in the process of supporting the export of those items for which the licence has been granted.(4) Regulations under this section are subject to the affirmative procedure.”
Earl Attlee (Con)
My Lords, in moving my Amendment 223, I will speak to my Amendment 241FB. They both deal with the unintended and undesirable effects of the anti-money laundering regime in the UK. I do not profess to have any expertise here; my relevant experience is in defence and security.
I fear that I am obliged to weary the Committee with a little detail. Russia has launched an unprovoked attack on Ukraine and, presumably, HMG have an absolute minimum strategic objective of preventing Ukraine being defeated. Failure to achieve this would result in significantly increased world insecurity and the need at least to double UK defence expenditure. EU and NATO Governments have been providing Ukraine with a range of armoured fighting vehicles—AFVs—through Government-to-Government arrangements. Armoured personnel carriers and armoured reconnaissance vehicles allow troops to move around the battlefield without unnecessarily falling victim to artillery or small arms fire.
To supplement Government-to-Government arrangements, the Ukrainians, through commercial agents and UK SMEs, have also been buying up privately and commercially owned AFVs in the UK. There are only a few businesses and individuals in the UK who can efficiently acquire and export these privately owned AFVs. They are generally small. To undertake this activity, they need to have the necessary technical knowledge, workshop facilities, ingenuity, innovation and contacts; have finance and premises; be seen as a fit and proper person to be granted an export licence for controlled goods on the military list; and, most importantly, be trusted by both Ukrainian buyers and UK private sellers.
The Committee needs to understand the facts of the real world. These small businesses simply do not have the resources to perform due diligence on Ukrainian businessmen and their intermediaries. Even if they could, the Committee will recognise that they would soon find red flags galore. However, the Government have the ability to check that the export of these AFVs is in line with their overall strategic objective.
The Export Control Joint Unit at the Department for International Trade grants export licences for controlled goods on the military list, among other things. So far as I can discern, it is doing a very good job. It is important to note that the Export Control Joint Unit has all the facilities of HMG at its disposal to determine whether military equipment should be exported to a certain customer or not. The money laundering regulations add nothing useful to this process.
I now turn to the mischief which my amendment seeks to address. During our debate on Ukraine on 9 February, I explained the problems that “Peter”—not his real name—is experiencing with the provision of banking services in the context of his exporting AFVs to Ukraine. I will continue to use his pseudonym for continuity reasons. I understand that Peter has export licences for around 100 AFVs and has already delivered a considerable number. Although the high street bank’s name is in the public domain, I will not name it, as it has done nothing wrong and has been extremely helpful. Apparently, in these circumstances, MPs will just get stonewalled by the banks, but I have very good relations with Peter’s bank.
On 20 December 2022, Peter’s bank wrote to him, closing his accounts with the bank without any explanation why. Peter was going to completely lose his banking services on 20 February. This would have put him out of business, as he cannot secure banking services from any other provider, and he would not be able to export any more AFVs to Ukraine. Other banks will not step in because they will have the same difficulties as Peter’s current bank. Peter’s bank made it clear to him that it was not prepared to discuss the matter further. This is standard practice, and I understand why. However, I have found out that the problem is that Peter’s current bank cannot accept the regulatory risk of supplying banking services involving large sums of money when Peter does not have the correct anti-money laundering systems in place. But even if he did, he would surely find red flags, as I have already mentioned, because he is dealing with Ukrainian businessmen. Fortunately, I managed to negotiate with the bank an extension to 20 March, which was yesterday.
Initially, I thought that the problem lay with an overzealous junior bank official and that a quick engagement at a senior level in the bank would get it sorted. I then discovered that it was a money laundering problem, as described, but the problem could be solved if a Treasury Minister wrote to the bank relaxing the money laundering regulations in a specific and minor way. I thought all this could be done discreetly and behind the scenes. How wrong I was. Ministers have refused to relax the money laundering regulations because, as I understand it, they believe that the complete integrity of the regulations is more important than facilitating the export of armoured fighting vehicles to Ukraine.
I repeat the question that I asked my good and noble friend Lord Ahmad on 9 February. Is it settled Government policy that the complete integrity of the money laundering regulations is more important than facilitating the export of armoured fighting vehicles to Ukraine? I look forward to the Minister’s reply. The reality is this: each and every additional armoured fighting vehicle that we send to Ukraine will give another group of Ukrainian soldiers protected mobility on the battlefield. Conversely, stopping the export of AFVs will result in avoidable loss of Ukrainian lives, which is quite immoral.
My Amendment 223 works by requiring Ministers quickly to amend the money laundering regulations so that banks do not have to suspend provision of banking services to SMEs that are exporting AFVs or other military equipment to Ukraine under a relevant export licence granted by the Export Control Joint Unit—in other words, a relaxation under very limited circumstances. Of course, my amendment is unnecessary because Ministers can simply write to the bank asking it to relax the money laundering regulations in the way that I suggest.
On my Amendment 241FB, during my investigations it became apparent that there is a wider problem with banks withdrawing provisions of financial services from aerospace and defence SMEs, for two reasons. The most important reason is again the money laundering regulations. In addition, there is a reluctance within some banks to have anything to do with the defence industry, particularly with things that go bang. However, these are highly regulated businesses, and they are dealing with other businesses and Governments, often outside the OECD. Thus the regulatory risk is far too high for the banks when the potential income is often quite small. It is simply not worth the bank’s while to accept the regulatory risk. I accept that my Amendment 241FB is imperfect and does not necessarily solve the problem. At this stage, it is only a probing amendment. I have been briefed by ADS Group, the relevant trade association, on this problem, and it is clear that it is a growing problem that will not go away.
On my Amendment 223, this is a serious and urgent matter. Clearly, the Minister intends to resist, or she would already have relaxed the regulations and saved a lot of the Committee’s time. I am afraid that thus far, I have not been able to generate much interest in this issue. His Majesty’s Opposition in your Lordships’ House do not appear to be very interested, and neither are the media. It does not currently look as if I will be able to win any Division at Report. In view of these circumstances, I was not in a position, nor was it my role, to seek a further extension of service from Peter’s bank when I could not offer any evidence that the policy was likely to be changed. As a result, Peter lost his banking facilities yesterday and will have to stop exporting AFVs to Ukraine. No one can step in, because they will experience the same problems.
The sense of the Committee will be unusually important on this occasion. Your Lordships can merely listen to an interesting debate or make it very clear to my noble friend the Minister that the Committee will not tolerate the money laundering regulations that are causing avoidable loss of Ukrainian lives by preventing the export of AFVs to Ukraine. I beg to move.
Viscount Trenchard (Con)
My Lords, I support my noble friend Lord Attlee in his amendment. His story about Peter reminded me that I have had considerable time-consuming discussions—not with my noble friend’s Peter, whose acquaintance I have not had the pleasure of making, but with another Peter. He is a person like Peter, a former military officer in the British Armed Forces of some distinction who now operates an SME and is closely connected with manufacturers of arms that the Ukrainians are importing from other sources and which they badly need, arms which our own Ministry of Defence is happy to assist in the Ukrainians receiving.
I have listened to my Peter—he is not called Peter; let us call him Jonathan—who has had a nightmare time. He is approved and holds an export licence with the SPIRE system in what is now the Department for Business and Trade; I think that the SPIRE system is the same as the export control system.
Viscount Trenchard (Con)
Thank you. So, Jonathan is licensed—and has been for many years—with the SPIRE system, formerly under DIT. This means that the security services have carried out a considerable amount of due diligence on him. Nevertheless, he found it completely impossible to persuade any bank to open an account to handle the funds necessary to enable him to assist the Ukrainians in this way, not just at the working level. The moment you fill in a form that suggests any military connection in the goods, red flags fly and bells ring all over the place.
However, these anti-money laundering regulations are considered so important that it is difficult to find any way of obtaining exemptions to go round them, even in situations such as this. It is just a pity that, even at the senior director level, banks are completely prevented under any circumstances—even when the individual is approved under the SPIRE system, as my noble friend Lord Attlee explained. I have sympathy with and support his amendment.
Lord Holmes of Richmond (Con)
My Lords, I will speak to Amendment 238 in my name. Does my noble friend the Minister agree that “know your customer” and anti-money laundering—KYC and AML—are not working optimally? There is a plethora of examples that we could look at; I will not do so. The simple truth is that they are not fit for purpose and are not achieving their aims. They are not providing the environment that we would want to conduct our financial services in. Does my noble friend the Minister not agree, therefore, that it is high time we had a thorough review of the regulations to put in place a system that works and is inclusive, efficient and effective?
If we look at some of the practical elements, to put it in terms, is it not time that we stopped messing about with gas bills? That takes us to an amendment in a previous group on digital ID, which would go far in resolving many of the issues around KYC and AML. Does my noble friend the Minister not agree? The difficulties that we have heard about and which many members of the Committee may have experienced in all areas of the financial services landscape could be effectively resolved if we resolved the current situation with KYC and AML. It is resolvable; when she comes to respond, my noble friend the Minister could simply say, “I will resolve it”.
Lord Eatwell (Lab)
My Lords, on the point made by the noble Lord, Lord Holmes, surely these regulations are derived from the Financial Action Task Force. We would usurp international agreements if we modified our regulations in a way that was outwith the positions established by the FATF.
Baroness Noakes (Con)
I completely accept that we need to comply with the Financial Action Task Force regulations but, as we discovered the other day when we were discussing PEPs, the regulations we have in the UK have in some instances gone beyond what is actually required by the Financial Action Task Force. The issue with the KYC regulations is one of immense bureaucracy and great irritation for people to no particular end. It is worth looking again at whether the way we have drafted our regulations, to the extent they go beyond what we are required to do, has in turn led to more problems for individuals.
I am sure we have all had problems but I will share one with the Committee. My husband had a very small investment—way below the level at which it would have to be declared as one of my interests in your Lordships’ House—and there was periodic updating of the know your client regulations. Because of the way that firm’s forms were comprised, it refused to accept my noble friend Lady Neville-Rolfe’s signature attesting that the document was a fair copy, because she could not tick a particular box on the form. It was completely ludicrous.
That permeates the way many financial service institutions have come to apply these rules in practice. They have become highly bureaucratic, operated by people who probably have no common sense and possibly not even a brain. To go back to the regulations and see what is absolutely required and then follow it on through the FCA seems a really important thing.
Earl Attlee (Con)
My Lords, although I agree with everything my noble friend Lady Noakes said, I point out that I have discussed Peter’s case at a very senior level with his bank and I can absolutely understand the decision the bank made. It looked at it very carefully, but it cannot take the risk because it is dealing with Ukrainian businessmen of whom it knows very little.
Lord Tunnicliffe (Lab)
There is no official Labour Party position on this, but I feel enormous sympathy for the position of the noble Earl, Lord Attlee. I hope the Minister will take this away, not as a legislative proposal but as a problem to be solved, and ensure that it is considered at a very senior level in the Treasury.
Baroness Penn (Con)
My Lords, before I speak to his Amendments 223 and 241FB, I first thank my noble friend Lord Attlee for his engagement and for bringing to my attention the specific example he has raised today as context for his amendments. I commend his staunch support for Ukraine, and the Government remain fully committed to supporting Ukraine in the face of the relentless Russian bombardment.
I reiterate to the Committee that the money laundering regulations are a vital part of the UK’s comprehensive economic crime response. The regulations are designed to combat illicit finance but should not be barriers to legitimate customers, including those connected with the export of military equipment to the Ukrainian defence forces.
As the Prime Minister has set out, the Government are fully committed to helping Ukraine emerge from the war with a modernised economy that is resilient to Russian threats. Of course it is important that those contributing towards this are not prevented unnecessarily from carrying out their business, but this needs to be balanced with the existing controls which protect this country, and international partners, from risks of money laundering.
It is important that we do not take steps that might allow the money laundering regulations to be circumvented by bad actors, even in circumstances such as this. It is therefore right that financial services firms continue to be empowered to carry out their own, risk-based due diligence when financing the export of armoured vehicles or military equipment, or individuals who are engaged in the international defence industry.
The money laundering regulations are purposefully not prescriptive and are designed to allow firms to make their own decisions about how to comply, balancing their understanding of the risk with proportionality. The Government do not and will not involve themselves in commercial decisions of individual firms but we can be clear that, where all the correct licences are in place, the money laundering regulations should not be a barrier to the financing of legitimate export activity.
Earl Attlee (Con)
I am sorry to interrupt my noble friend, but I would like to make it clear that Peter does not need any financing. The other cases that I have come across in the aerospace and defence sector are very well financed; that is why their businesses are not very attractive to the banks, which can withdraw financial services because there is no money in it. Peter does not need finance; all he needs is the bank to process the money, but the bank has a real difficulty processing money from Ukrainian businessmen.
Baroness Penn (Con)
My Lords, I was making the point that there is a wider context here that there should be no barrier to the financing of legitimate export activity.
Turning to the point made by my noble friends Lord Attlee and Lord Trenchard, the government process for the granting of export control licences focuses on the end use of goods rather than the source of funds paying for them. It is therefore distinct from the due diligence checks that a bank would carry out before conducting the transaction. I assure noble Lords that, through the Government’s engagement with my noble friend on this, we have engaged with the Export Control Joint Unit, the Financial Conduct Authority and other partners on this issue. While I appreciate the frustrations of individual cases, we are not aware of a systemic issue. The Government will continue to monitor reports of similar problems; if we identify a systemic problem, we will act to address it.
I turn to the solutions suggested by my noble friend. The noble Lord, Lord Eatwell, and my noble friend Lady Noakes are right that our obligations around anti-money laundering regulations stem from our international obligations to the Financial Action Task Force. The approach set out in these proposals would very likely be in contravention of those obligations. My noble friend Lady Noakes is right that the current version of our anti-money laundering regulations reflects our membership of the EU, which is consistent with those obligations from the Financial Action Task Force, but in some areas goes beyond them.
I turn to Amendment 238, tabled by my noble friend Lord Holmes of Richmond. The Government undertook a review of the money laundering regulations, which was published last year. This was a comprehensive assessment of the effectiveness of their implementation and whether they had led to unintended consequences for businesses or consumers. It explicitly assessed whether aspects of the money laundering regulations remain appropriate and proportionate in light of the UK’s exit from the EU and the additional flexibilities that affords us. It identified a number of areas for reform to make the regulations more proportionate and reduce unnecessary burdens on legitimate customers, which we will take forward through future updates to the regulations. These reforms will further tailor the regime to the UK’s risk profile, following the removal of specific European requirements from the money laundering regulations last year.
While the Government remain committed to ensuring the proportionality and effectiveness of anti-money laundering regulations and the regime around it, and monitor the effects on financial inclusion, the review required by Amendment 238 would largely repeat the exercise conducted last year, of which we are still to implement the full results.
My noble friend referred to the previous group on digital identity. He is absolutely right; we recognise that greater clarity on how digital identity services are certified against the Government’s digital identity and attributes trust framework would support requirements under money laundering regulations that will be key for market uptake, so we see the opportunity there and the role for government in providing assurance on that process of uptake as a potential technical solution to make some of these processes easier. As set out in our 2022 money laundering regulations review response, we have committed to consider this fact too.
For the reasons I have set out, I hope that my noble friend Lord Attlee can withdraw his amendment and that my noble friend Lord Holmes will not move his when reached.
Earl Attlee (Con)
My Lords, I am grateful for the attention that my noble friend the Minister has paid to my concerns. One thing I would like to pick her up on is that she seems to have been briefed that there is not a systemic problem with the money laundering regulations. I have found out very quickly that there is, and have been briefed by the ADS, which is the aerospace and defence sector trade association and was the Defence Manufacturers Association.
The problem is that where they are exporting around the world, especially outside the OECD, they are immediately coming into contact with money laundering problems. In fact, I had a meeting with a gentleman in Portsmouth who deals in helicopter parts and helicopters. What tends to happen is that he might spend 24 months organising a deal, and then he suddenly gets a cheque for quite a large sum of money from some far-flung part of the world; that is a huge risk for the banks. When we come to Report, I will come back with further examples from the ADS briefing, where sadly this is a systemic problem that is not going away.
I am particularly grateful for the support from the noble Lord, Lord Tunnicliffe, and do hope that the Minister pays attention to what he said. In the meantime, subject to the usual caveats, I beg leave to withdraw my amendment.
Baroness Fox of Buckley
“Freedom of expression protections for payment service users
(1) Within six months of this Act being passed, the Secretary of State must, by regulations, make provision preventing payment service providers from refusing or discontinuing access to payment services on account of a person exercising their freedom of expression.(2) In this section—a “payment service provider” and a “payment service” have the meanings given by regulation 2(1) of the Payment Services Regulations 2017 (S.I. 2017/752), anda “person” means a payment service user as defined by regulation 2(1) of those Regulations.”
Baroness Fox of Buckley (Non-Afl)
My Lords, I rise to speak to Amendment 241B in my name. After the US fintech company PayPal’s deplatforming of UK political campaigns—the Daily Sceptic, the Free Speech Union and UsforThem—last September, there was a debate about payment processing and censorship associated with this Bill. There was an amendment in the other place that received quite a lot of attention, and it led the Minister, Andrew Griffith, to note that he shared the concerns of the principal issue and potential risks of protecting customers’ freedom of expression when it came to payment providers. He assured us that it should not be possible for service providers, especially those with significant market position, to terminate customer relationships based on those customers’ views.
I was delighted when the Government confirmed that they will include this issue about the role of payment service providers in delivering services without censorship in their consultation about financial regulations enforced by the FCA. However, as I argued at Second Reading, I am not convinced that this is enough. Rather unusually for me, I would like to see more legislative guarantees.
The definition in this amendment is deliberately expansive. It goes beyond the likes of PayPal in order to cover banks and payment processers, whether they are card providers such as Mastercard and Visa or companies such as PayPal and Stripe. There are several reasons for this. The first relates back to important discussions on earlier amendments that I have sat in on and participated in. The ubiquity of electronic systems in an increasingly cashless society, and the emergence of the ubiquity of online payment, means that someone being deprived of those services or cut off from any source of funds would be akin to British Gas refusing services to a household on account of their beliefs or views or free speech that they had exhibited. We would not accept that.
Of course companies can make their own policies and contracts, and that would allow them to remove users without explanation. I understand that, but I am trying to explore whether the law can be used to prevent payment providers closing accounts on the basis of political beliefs. If we do not, global firms are likely to put their own interests—financial, reputational and political—before any moral duty to act fairly or without discrimination. I do not think we can have global tech firms, online payment services or banks deciding who they can censure or cut off from financial services because of the views they express.
This is a matter of some concern, not least because—this is the other focus that I want your Lordships to consider—at the moment, environmental, social and governance, or ESG, targets and equality, diversity and inclusion, or EDI, policies have been embraced zealously by many financial services companies. We have seen from recent controversies around failing banks that they were arguably far more concerned about ESG than whether they were banking well. We have a situation in which corporates have taken to moralising about how their customers should behave and think, which is a real and present danger.
Currently, the big tech companies in the US that deal in financial services have adopted political positions and are regulating the speech of their customers. That is considered a growing problem, as identified by a wide range of civil liberties organisations that I reeled off at Second Reading. Sadly, we know from broader cultural trends—for example, the way that cancel culture at universities started in the US—that what happens in the US should often be seen as a warning of what is likely to come.
Here in the UK, under current law, ESG has become a vehicle for companies to baldly state their right to block the accounts of those whose politics clash with their corporate values. Payment providers such as PayPal, but also high street banks, may terminate the accounts of groups on the basis of lawful speech—as long as they give adequate notice—according to the law. They can terminate accounts where views they deem unpalatable clash with those values if they include such provisions in their terms of service. Acceptable use policy often proclaims, “We will take action when we deem that individuals or organisations are involved in promoting hate or intolerance”, but “hate or intolerance” is increasingly seen as and understood to be a rather vague tagline which can be interpreted in a wide range of ways.
This was illustrated last year when Halifax was involved in a controversy after announcing its staff pronoun policy on social media—I do not know whether your Lordships remember this. We were shown a picture of Gemma wearing a “she/her/hers” staff badge; the idea was that this was a campaign that would stop any “misgendering” by the customers of Halifax. There was something of a customer backlash online, which led to Andy, the person who seemed to be in charge of Halifax’s online communications at the time, berating critics with the rather shrill
“If you disagree with our values, you’re welcome to close your account.”
As it happens, lots of people did close their accounts, because they were so outraged at being talked to in that fashion. Telling customers where to go is an unusual policy for growth for any financial service provider.
However, I think this was more than an overzealous EDI employee, because on its website Halifax says that any customers it deems to be transphobic could have their accounts closed down. Indeed, underneath the page entitled “What we stand for” it says:
“We stand against discrimination and inappropriate behaviour in all forms, whether racist, sexist, homophobic, transphobic or ableist”—
and, wait for it—
“regardless of whether this happens in our branches, offices, over the phone or online on our social media channels.”
The actions that it threatens customers with include account closure or contacting the police. Note that HSBC shared the Halifax post and tweeted it out to its 101,000 followers, saying:
“We stand with and support any bank or organisation that joins us in taking this positive step forward for equality and inclusion.”
Customers, it seems, are the target of political campaigning by financial organisations, rather than being seen as those who need to be given the very best financial services. We should also note that in 2022, when that tweet went out, Halifax cut 27 branches across the country. Never mind encountering Halifax staff wearing pronoun badges; the problem is that you would be lucky to encounter a Halifax staff member at all, badgeless or not, and there is certainly very little in the way of physical branches.
In a recent report Matthew Goodwin, politics professor at Kent University, noted that a growing number of companies and corporations are now “adrift” from the wider public by
“lecturing them about political issues and being seen to stifle their free speech and expression.”
Professor Goodwin also warns against potential discrimination against consumers and customers in this context, and account holders
“deemed to hold ‘controversial’ beliefs.”
However, as one Halifax customer noted:
“I don’t want to be having conversations about gender when I go into my bank. Frankly, I’d rather they be focused on lowering interest rates.”
Of course, we need to respect the right of private companies to choose whom they do business with, as I said. However, this rather modest amendment seeks to ensure that they are not free to discriminate because of political, philosophical or religious beliefs within the law any more than banks or online service providers would be allowed to discriminate against people on the basis of the colour of their skin. We therefore need robust measures in place to protect organisations and individuals from being punished by being cut off by those financial service providers whose EDI or ESG commitments have made them rather cavalier about going far beyond their financial remit. They should be prevented from acting against people for otherwise legal speech. Remember, we have laws in this country such as the equality law, which should not be undermined by the terms and conditions and values designed in Silicon Valley—which in many instances is what we are talking about and is exactly what happened when PayPal punished the Free Speech Union by removing any financial services from it.
I hope that this amendment urges the Government not to kick this regulatory duty into the long grass or suggest that some other piece of legislation would be appropriate. I put it forward in the spirit in which the Minister in the other place spoke about the importance of this issue, rather than it being trivial. I hope the Minister will consider accepting the terms of this amendment in any amended Bill that is brought back on Report.
Lord Jackson of Peterborough (Con)
My Lords, I rise briefly to support Amendment 241B, moved by the noble Baroness, Lady Fox of Buckley. I declare at the outset for full transparency that I am a paid-up member of the Free Speech Union. To be fully topical, I am also a graduate of Royal Holloway, which has been in the news today along with the noble Baroness on similar free speech issues. We debated this matter in the Chamber earlier.
This is a very gentle nudge by way of an amendment. Like the debate we had earlier this month on politically exposed persons, in this case, we see that a regulatory regime does not work and that we sometimes need a legislative nudge by way of something like this amendment. We could have a sterile debate about EDI/ESG and woke and cancel culture, but that is perhaps for another day. My concern is that untrammelled free speech should not be a monopoly; it is a relative concept because we have laws in this country to prevent egregious offence against certain people who have protected characteristics under the Equality Act 2010. Free speech within the law cannot be the preserve of a plutocratic, wealthy elite as represented by big financial institutions and big tech companies.
I never thought I would quote the comedian Jack Dee but, when the decision was taken by PayPal on 15 September last year to throw off the Free Speech Union, the Daily Sceptic blog and UsforThem, he quite rightly said:
“Big Tech companies that feel they can bully people for questioning mainstream groupthink don’t deserve anyone’s business.”
The offence of UsforThem was to question the efficacy of a policy of the teaching unions and, by inference, the Government not to force or even encourage children to go back to school. UsforThem felt that there was a serious public policy issue around that; it was well within its rights to debate that on the basis of empirical evidence and a well-argued case but PayPal took against it and threw it off the platform for breaching its rather Orwellian-sounding “acceptable use policy”. I do not think that is at all right.
The point that the noble Baroness, Lady Fox, made is right. In a competitive market where you have perfect competition—that is, lots of participants and allowing people to enter and leave the market—people can pick and choose which banks and tech companies they go to. However, when there is an oligopoly, as in this case, with a small number of providers of technical applications, perfect competition falls down. There is effectively a situation where people have no choice. That is why people who are not exactly conspiracy theorists, including me, worry about the idea of a cashless society because it puts absolute power in terms of business into the hands of the powerful, the influential, the wealthy, the well-connected and those who believe in and articulate groupthink.
The other thing that slightly worries me is not necessarily the overt idea of censorship, which is itself very worrying in an advanced liberal democracy such as the UK and the United States, but the concept of self-censorship—that is, you do not debate these important issues of public policy that might push against vested interests because you know that the battlefield is so asymmetrical that you do not have the funds to fight big tech or to engage civil litigation, and you run the risk of criminal penalty and sanctions should you do so. That is important. You cannot afford to take the risk so we get into this cul-de-sac of self-fulfilling beliefs and views, which were represented by PayPal.
I am glad that PayPal capitulated and surrendered, and said that it was wrong, but it did a lot of damage to the Free Speech Union, its membership base and its cash flow. Not surprisingly, Toby Young, the founder and CEO of the Free Speech Union, made it absolutely clear that he would not go back to PayPal because it had egregiously ruined his business model.
However, that is not as important as the general principle that, unless you have a bit of stick with these tech companies, they will not voluntarily eschew the concept of EDI and their fixed beliefs. Only the power of legislation can force them to comply with the basic tenets of a decent, liberal society: that free speech should be available to everyone; and that people should be able to voice unfashionable opinions. The mark of a mature and sensible society is that we allow people with whom we vehemently disagree to have a say in the public square.
To an extent, this a probing amendment, but my noble friend the Minister—incidentally, she has done extremely well in a very long and difficult Bill; I give her that plaudit, having given her a hard time the last time I was before this Committee—should reflect on it and come back with some sanction to defend the long-standing commitment that all of us, as parliamentarians and legislators, should have to the concept and practice of free speech.
Lord Harlech (Con)
My Lords, I thank the noble Baroness, Lady Fox, and my noble friend Lord Jackson of Peterborough for raising the important issue of freedom of expression and, within that, the role of payment providers.
Following PayPal’s temporary suspension of some accounts in autumn last year, to which both the noble Baroness and my noble friend referred, the Economic Secretary met PayPal and the FCA, as well as interested Members of Parliament. He subsequently set out the Government’s position on this matter on Report during this Bill’s passage through the Commons.
The Government fully recognise the importance of protecting free speech and the crucial role of payment providers in delivering services without censorship. The Government are committed to ensuring that the regulatory regime respects the balance of rights between users’ and service providers’ obligations, including in relation to protecting freedom of expression for anyone expressing lawful views. My noble friend made that distinction in his remarks.
I draw noble Lords’ attention to the letters from the Economic Secretary, the Financial Conduct Authority and PayPal regarding this issue, copies of which have been deposited in the Commons Library. The letter from PayPal explains that it re-evaluated and reversed its decision in a number of the specific cases raised. It made clear that it was never its intention to be an arbiter of free speech and that none of its actions were based on its customers’ political views.
While welcoming this clarification, the Economic Secretary expressed his concern about the importance of protecting free speech and recognising the crucial role of payment service providers in delivering payment services without censorship. As a result, he pledged to take evidence on the adequacy of the existing legislative framework through the statutory review of the Payment Services Regulations. This was published on 13 January 2023; the Government look forward to responses from all interested parties. I note for the Committee that that consultation is open for 12 weeks, meaning that it will close on 7 April. The Economic Secretary will promptly update Parliament through a Written Ministerial Statement following this review. He has committed that, if it emerges that there is a problem with the existing regime, the Government will act swiftly to address it.
In terms of going further to protect the importance of free speech, we have to understand that the Government do not believe there is evidence of a potential issue with payment services regulation beyond these few PayPal cases. The existing legal regime includes statutory minimum notice periods, rights of appeal to the Financial Ombudsman Service and the FCA’s principles on fair treatment. Users of payment services, in common with all UK citizens, benefit from a safety net of legislation such as the Human Rights Act, criminal law and court decisions, which balance the rights of people to express their ideas in a public space with the necessary limits of a democratic society, for example, to protect people from hate speech. More specifically, the Equality Act 2010 prohibits service providers in the UK denying services to users on the basis of their beliefs, including philosophical as well as religious beliefs.
Noble Lords talked about going further in this Bill. The Government’s view is that making legislative change just for payment services would not be proportionate or correspond with the requirements placed on other essential service sectors. The Government need evidence if there is a problem given the existing protections in the current legal regime for payment service users. Today I am aware of the concerns raised in relation only to PayPal, which re-evaluated and reversed its actions in several cases. The FCA has explained that it has the tools to regulate in a further specific way through its authorisation processes if there is a problem.
Lord Jackson of Peterborough (Con)
When the Minister analyses the results of the review which is concluding next month, will he also look at the slightly wider issue of barriers to entry and the possible oligopoly behaviour of payment services? That is a linked issue which is pertinent to the debate we have had today.
Lord Harlech (Con)
My noble friend makes an excellent point. I will certainly feed that back to the department in terms of the review.
To conclude, the Government already have the means to act on this issue and have made a clear commitment to do so if necessary. We are clear that we first need public consultation and an evidence base before determining the right course of action on this matter. I therefore request that the noble Baroness withdraws her amendment.
Baroness Fox of Buckley (Non-Afl)
I thank the noble Lord, Lord Jackson, and the Minister for that response. I will not keep noble Lords long. What the noble Lord, Lord Jackson, said about self-censorship was important. I mention that because I am worried that the Government are underestimating the climate that financial services providers are embroiled in relating to ESG and EDI. This is a warning shot that we recognised around PayPal, but I did not confine it to PayPal. It is just one example. There are sadly lots of recent examples, with organisations such as GoFundMe refusing to accept certain people because of their views and so on. I know that is not strictly within the remit of this Bill, but I know that the Government understand that there are tensions here. I do not want them to be too narrow and technocratic in the way they approach it by saying “Oh, there are only three examples, so what is there to worry about?” We have seen this internationally. I note that the Chinese social credit system lurks around this debate as something we want to be careful of. Big tech financial companies do not have regard for free speech as their terms and conditions will often cut against what is required in equality legislation here. That was the point I was making.
I hope that this short debate will be taken note of in that consultation. I also hope the Government do not feel that they can just deal with it simply through the consultation but will keep a close eye on what could be a dangerous and nasty situation of financially powerful organisations having an impact on individuals, frightening them into thinking that if they say the wrong thing they will not get banking. That is not the sort of society that we would like to end up with. I beg leave to withdraw the amendment.
Lord Leong
“Regulation of factoring companies
(1) Within one year of the passing of this Act, the Secretary of State must by regulations make provision for factoring companies to be regulated by the FCA.(2) Regulations under this section are subject to the affirmative procedure.”Member’s explanatory statement
This new clause would bring factoring companies, those which provide, arrange or facilitate invoice discounting or factoring, into FCA regulation.
Lord Leong (Lab)
My Lords, I rise to speak to Amendment 241E in my name. Start-up and scale-up businesses, especially small and medium-sized business, occasionally face the issue of managing their cashflow, especially when expanding. Traditional funding through banks has diminished since the 2008 financial crisis and often, in looking for a more flexible, less onerous solution, businesses look to factoring or invoice-discounting companies. I used many factoring companies when I started my businesses and when we ran into a bit of a cashflow situation.
The model for this is straightforward: the factoring or discounting company pays the client typically 80% to 90% of the value of invoices they have raised for goods or services supplied and then either assumes responsibility for the debt itself or bills the client for the amount given, plus a percentage fee, when the invoice is settled by the customer. This enables the client company to operate and expand with limited capital. It effectively does not have to wait for the normal 30, 45 or, in some cases, 60 to 90 days settlement period, which is typical for larger companies and many public sector organisations. This model is typically used in sectors with long payment cycles that require the purchase of goods or raw materials to create products and in international transactions.
However, there has been considerable growth in this sector in recent years due to the uncertainties and disruptions caused by the pandemic, Brexit and the war in Ukraine. Like any well-run financial services, when times are good, such arrangements are mutually beneficial, but if the financial crisis of 2008 has taught us anything—and I hope it has—it is that the money ultimately must come from somewhere, and problems with financial instruments often become apparent only when things go wrong.
Factoring as a concept has existed for a very long time, but its use has grown rapidly in recent years. UK Finance, the collective voice for the banking and finance industry, maintains an independent standards framework setting out and enforcing standards for its members that clients can expect from providers of invoice finance or asset-based lending. However, companies do not have to become members to operate in this sector. This is why I have tabled Amendment 241E as a probing amendment. There are concerns that factoring and invoice discounting risk becoming a scandal for small businesses equivalent to the payday loans rip-off for consumers. Unscrupulous companies can obfuscate fees, and interest rate charges of 2% to 4% for a period of 45 to 60 days seem low but equate to 18% to 24% per annum, which is a relatively expensive way to finance a business in the medium to long term.
Many companies offer their service “with recourse”, which asserts the lender’s right to be paid their fee even if the customer defaults on their invoice. This means that small companies could become liable for fees and interest charges on invoices that they have never been paid if, for example, their customer goes bankrupt. This is a rising concern, as there has been a sharp rise in insolvencies in the past 18 months and we are approaching levels not seen since the 7,000 insolvencies per quarter at the peak of the 2008 financial crisis, with almost 5,995 declarations of insolvency in the quarter ending January this year.
Dependency on the factoring model can develop; debts which have been purchased by a factoring company cannot be counted in the company’s balance sheet when applying for other financial products such as a bank loan. There is a danger that a company may find it difficult to move on to cheaper and long-term finance. There are a lot of companies operating in this space and, while many are entirely credible and reputable, we must recognise that, without FCA regulation, small businesses particularly are at risk of being exploited or taking on excessive fees or risks in their eagerness to survive and grow.
Of course, we cannot mitigate against all risks. As the very well-known fellow book publisher and former Member of this House observed, “Events, dear boy, events.” We know from recent history that clear, strong and effective regulation, such as that which can be provided and enforced by the FCA, can prevent excess and exploitation, and help us build a stronger economy in turn, with the passion, flexibility and innovation of SMEs at its heart. I beg to move.
Lord Eatwell (Lab)
My Lords, I support the amendment from my noble friend Lord Leong. I was a bit shocked to discover that factoring companies are not regulated through the FCA. My discovery of this through my noble friend’s initiative reinforces my view, which he very clearly expressed, that this is the business equivalent for SMEs of payday loans in the consumer retail sector. Given the importance of small and medium-sized enterprises to the growth of the UK economy, which he quite rightly pointed out, one of the most important elements of public policy is to ensure that they receive the best, most appropriate and well-regulated financial services, which provide them with a firm financial platform on which to grow. I hope that the Minister takes this amendment away and has a serious think about it, because this is a serious gap in the regulatory framework.
Lord Sharkey (LD)
I rise briefly to support this amendment. It was with some surprise that we also discovered that this sector is unregulated, but we entirely understand how important it is to the small business community. In that respect, it is hard to see why it is not regulated and why it should not be regulated. It is hard to see how any Government could resist the force of the noble Lord’s amendment—but we may see a demonstration of that in a moment or two.
Lord Tunnicliffe (Lab)
My Lords, I first welcome my noble friend Lord Leong to this very special club, the Financial Services and Markets Bill club. I am sorry that it is a little thin on the ground. I will say no more than that the case, as presented and supported, seems strong.
One of the sad things about occupying this position is that, every time credit comes up, you get abusers. The large companies are frequently the abusers, and payday loans are a classic example of that. Anywhere there is credit, you end up with pockets of abuse. I unashamedly believe in regulation. I do not believe in bad regulation; I believe in good regulation and I think it should enter this field. But that is not a formal position, so we will listen to the Minister before concluding our point of view.
Lord Harlech (Con)
My Lords, I thank the noble Lord, Lord Leong, and others noble Lords for their contributions on this amendment headed “Regulation of factoring companies”.
As noble Lords know, invoice factoring is a type of invoice finance where suppliers effectively sell their invoices at a discount to a finance provider in exchange for an advance. This means that suppliers can receive payments sooner, helping them to manage cash flow. Invoice factoring is an important product for British businesses, helping them to grow sustainably when they might otherwise struggle to do so. It is a relatively standardised product designed to help businesses manage their cash flow and support growth.
Businesses benefit from a diverse finance market made up of high street banks, smaller banks and a range of non-banks to ensure that they can continue to access suitable finance. This is particularly important to ensure that UK SMEs are accessing finance to support their goals and contribute to the UK’s growth agenda. We have discussed the approach to regulating small businesses in an earlier debate but, as noble Lords know, invoice factoring is not considered credit, because it is an advance on invoices already generated; therefore, any small businesses using these products do not benefit from protections such as those under the Consumer Credit Act, which apply to the smallest businesses taking out loans.
However, invoice factoring is generally used by larger SMEs that would not benefit from protections under the Consumer Credit Act in any case. UK Finance estimates that its members advanced invoice finance and asset-based lending facilities to just 35,000 firms in 2022, representing less than 1% of all UK businesses; in comparison, according to the SME Finance Monitor, 36% of SMEs—nearly 2 million of them—were using external finance in 2022.
However, the Government believe that businesses using invoice finance are well protected in other ways. The banking and finance industry has recognised that businesses should be able to use invoice factoring with confidence, so has taken steps to ensure that businesses have adequate protections. UK Finance members, representing between 90% and 95% of invoice factoring by volume, are subject to a standards framework and code, which set the standards that firms should meet when supplying invoice factoring facilities. They include an independent complaints process focusing on the requirements of those smaller businesses using invoice factoring, which might otherwise be reluctant to raise concerns about their treatment. For invoice factoring among larger firms, these businesses will have the financial and legal resource available to take action through the courts.
Bringing invoice factoring into regulation would likely increase costs for businesses. This would negatively impact the ability of these businesses to manage their cash flow in a flexible, cost-effective way at a time when it is important that they have the confidence to invest and expand. There is a fine balance between the costs and benefits when bringing activities into the regulatory perimeter. It requires careful consideration to ensure that there is an appropriate balance between several factors, including ensuring that consumer protection is in place and that businesses are allowed to innovate.
Overall, the Government believe that the current approach—enforcing standards through industry bodies and voluntary codes while facilitating innovation and competition—is more likely than new regulation to drive positive outcomes for businesses that rely on invoice factoring. I therefore ask the noble Lord, Lord Leong, to withdraw his amendment.
Lord Leong (Lab)
I thank all noble Lords who have kindly supported this amendment. Access to finance is vital to start-ups and small companies; it is one way in which they can easily get money without any security. The number of small companies that have to resort to factoring invoice discounting is on the rise because banks are becoming more and more demanding as far as security is concerned. As I said in my speech earlier, my amendment is a probing one. I want to take this opportunity to ask the Minister this: can we do some more work to see how many companies access this form of finance and how many companies go bust because they cannot afford to pay some of the rates that are being asked by these companies?
On that basis, I beg leave to withdraw my amendment.
Lord Tunnicliffe
“Defined contribution and defined benefit pension funds investment review
(1) The Treasury must publish a review of how to incentivise defined contribution (DC) and defined benefit (DB) pension funds to invest in high-growth firms and a diverse range of long-term assets in the United Kingdom, which must include green infrastructure.(2) In carrying out the review, the Treasury must consult—(a) the Department for Work and Pensions,(b) the Department for Business and Trade,(c) the Pensions Regulator,(d) the FCA,(e) the PRA,(f) pension trustees, and(g) relevant financial services stakeholders.(3) The review must consider the merits of—(a) amending the definition of “specified scheme” within the meaning of the Occupational Pension Schemes (Scheme Administration) Regulations 1996 (S.I. 1996/1715) so as to increase the threshold of such DC schemes in respect of which trustees and managers are required to produce a value for members assessment under regulation 25 of those Regulations;(b) adjusting the terms of reference for DB Local Government Pension Schemes (LGPS) funds to consider regional development as an investment factor;(c) establishing frameworks to enable DB pension funds to invest in firms and infrastructure alongside the British Business Bank.(4) The Treasury must prepare a report on the outcome of the review, and lay it before Parliament within one year of the passing of this Act.”Member’s explanatory statement
This amendment would compel the Treasury to publish a review within a year of Royal Assent on how to incentivise pension fund schemes to invest in high-growth firms and green infrastructure. The review would have to consider requiring DC schemes to assess the merits of: consolidation, establishing frameworks for British Business Bank investments (so that DB pension schemes will be able to invest alongside them), and adjusting the terms of reference for Local Government Pension Schemes (so they consider regional development as an investment factor).
Lord Tunnicliffe (Lab)
Before I start, would the Government Whip like to give us some indication as to how we are going to end this session?
Lord Harlech (Con)
The Grand Committee is scheduled to run until 7.45 pm, which gives us half an hour. However, in the usual way, if the debate has not concluded by that point, the debate on this group will continue into the next day of Committee.
Lord Tunnicliffe (Lab)
Thank you. I rise to move Amendment 241FA. Patient, long-term capital is crucial for both the growth of innovative companies and investment in green infrastructure to support the transition to net zero. One of the key sources of patient and venture capital is institutional investors, in particular pension funds in the City. Compared with our peers, such as Canada, the Netherlands and Denmark, the UK sees relatively little patient capital funding coming from pension funds; while around 70% of venture capital funding in the US comes from pension funds, in the UK, the figure is under 20%. The Government must do more to enable pension funds to invest in the British economy.
I have tabled Amendment 241FA, which would compel the Government to review how to incentivise defined contribution and defined benefit pension funds to invest more in high-growth firms and diverse long-term assets in the UK. The review would cover three areas. First, we know that a significant barrier to increasing DC pension fund investment is the relatively small size of many UK DC funds. The Government could raise the threshold at which schemes are required to produce a value for members’ assessment; they previously legislated to do this for schemes smaller than £100 million but a review could explore raising the threshold significantly —up to £5 billion, for example—to deliver real change. I would appreciate the Minister replying to the merits of this particular point, if possible, but this figure is something that the review could explore.
Secondly, we know that Local Government Pension Scheme funds have around £340 billion of assets under management, of which £30 billion is already invested in alternative asset classes such as VC. In order to mobilise some of this capital into regional green infrastructure and business, a review should look at adjusting the terms of reference for LGPS funds so that they could consider regional development as an investment factor.
Thirdly, a review should explore how the British Business Bank could put the necessary framework in place to allow DB pension funds to invest alongside it. DB pension funds have nearly £3 trillion in assets under management; unlocking even a small proportion of this would be a substantial boost to the amount of additional financing available to British companies and projects.
It is helpful that the Chancellor referenced exploring unlocking pension funds’ potential in his Budget speech. I would appreciate an update from the Minister on HMT’s work in this area. I am aware that the FCA is currently consulting on the value for money framework for DC pension schemes, for example, but does that work fit into a wider government strategy to incentivise DC schemes to invest in UK firms and green infrastructure?
I beg to move.
Baroness Bennett of Manor Castle (GP)
My Lords, I thank the noble Lord, Lord Tunnicliffe, for introducing this amendment. I have chosen to address simply the green infrastructure parts, and at this time of the evening I shall park the high-growth debate in the interests of not sidelining the main issue.
The idea of a review is useful here, because the evidence we have of other measures the Government have tried to take to encourage green investment is perhaps mixed—that is the charitable description. I refer to a survey published this month by Pensions for Purpose, which looked at the first wave of obligatory reporting of the scheme introduced in October 2021 based on the Task Force on Climate-Related Financial Disclosures being done by the larger occupational pension schemes and authorised master trusts. That study found that this introduction by the Government was having very limited effects and that it was, to a large degree, being treated as a tick-box exercise. Where it was having an impact on investments, it was not driving towards green investment but rather to a portfolio decarbonisation—a stepping away from things rather than into the kinds of investments we need. This is something we are also seeing implicitly, in that the pension regulator is about to launch a publicity campaign for pension trustees, stressing the need to look at ESG responsibilities, particularly around climate issues—that has been its responsibility since 2019. It is clearly thought necessary to have a publicity campaign about this.
We really need to see steps forward and to see things joined up here. I am reminded of a debate last week with the same Minister, when we finally finalised the UK Infrastructure Bank Bill, which, of course, is looking at another source of investment going into green. I am very encouraged by the Government’s decision to include nature-based solutions there, which is obviously a cross-reference to our need to see much more private investment in nature-based solutions as well. Dare I say it, it would be nice to see some circular economy as well—if I can just put that in there.
On the idea of a review, we desperately need to see money going into green infrastructure. All the evidence we have says that is simply not happening. I also note that the Government need to create the frameworks in other areas of policy to make this happen. I was sitting here, thinking of when I was in this very same Room a few weeks ago with the Energy Bill. One of the things that could be a very good target for investment would be that if we are to get community energy schemes up and down the land—if we get delivery of the widely-backed Local Electricity Bill, as it is in the other place—that would be a great area to see pension funds investing in and supporting. I was at an event this morning debating social value and the importance of that in procurement.
We need to tie all these things together. All these things are running off at different angles, but we are still not creating an environment where people who are putting money into their pensions, seeking to invest in their own future, will have a liveable future for that pension to pay out in.
Lord Eatwell (Lab)
My Lords, it is obvious that the issue of pension funds investing in equities and longer-term growth prospects was highlighted by the LDI crisis in the autumn. I hope that, when the Government come to consider the consequences of that crisis, they will look at the letter that your Lordships’ Industry and Regulators Committee sent to Andrew Griffith MP, the Economic Secretary to the Treasury, setting out the reasons it saw for the peculiar financial structures that led to the LDI crisis and the lack of long-term investment in equities and growth stocks by British pension funds. They traced this to the accounting regulations that are imposed on British pension funds—particularly the way in which liabilities are assessed—and noted that, since those regulations were introduced maybe 15 years ago, there has been a dramatic reduction in the investment by British pension funds in long-term equity assets and a focus mostly on rather low-yielding government securities instead.
The LDI scandal was produced by the development of a peculiar financial device using repos, which were then used to make some investment in equities. There is clearly a fundamental problem in the regulation of British pension funds, which has both reduced the returns on their investment and limited the sort of investments they might be able to make in growth assets to their benefit and that of the economy as a whole. There needs to be a major review on the regulation of pension funds, both to make them more secure—to avoid them resorting to very unstable financial constructions to try to increase their returns—and for the overall benefit of the economy.
Lord Sharkey (LD)
My Lords, I agree with everything that the noble Lord, Lord Eatwell, has said. We are happy to support this amendment. I simply have two questions and one observation about it.
The amendment says that we must include “green infrastructure”. Is there a practical, generally agreed working definition of what that actually means? I also notice that, in carrying out the review, the Treasury must consult a list of organisations. The final group of organisations is “relevant financial services stakeholders”. Is the intention also to include professional advisers? They would be a vital addition; perhaps that should be made explicit as we go forward.
My observation is that proposed new subsection (3)(c), which talks about
“establishing frameworks to enable DB pension funds to invest in firms and infrastructure alongside the British Business Bank”,
is an extremely good idea. We should make sure that this happens as soon as we can.
Baroness Penn (Con)
My Lords, the Government remain fully committed to the objective of unlocking pensions capital for long-term, productive investment, where it is in the best interests of members. High-growth sectors developing cutting-edge technologies need access to finance to start, scale and stay in the UK. The Government are clear that developing the next generation of globally competitive companies in the UK will require unlocking defined contribution pension fund investment into the UK’s most innovative firms.
That is why, in the Spring Budget last week, the Chancellor committed the Government to working with industry and regulators to bring forward an ambitious package of measures by this autumn. He also set out a number of initial measures to signal the Government’s clear ambition in this area. They included increasing support for the UK’s most innovative companies by extending the British Patient Capital programme by a further 10 years until 2033-34 and increasing its focus on R&D-intensive industries, providing at least £3 billion in investment; spurring on the creation of new vehicles for investment into science and tech companies tailored to the needs of UK defined contribution pension schemes by inviting industry to provide feedback on the design of a new long-term investment for technology and science initiative; and leading by example by pursuing the accelerated transfer of the £364 billion Local Government Pension Scheme assets into pools to support increased investment in innovative companies and other productive assets. The Government will shortly come forward with a consultation on this issue.
Lord Tunnicliffe (Lab)
My Lords, I thank all noble Lords who have spoken in this debate.
The noble Baroness, Lady Bennett, went banging on about the green issue again. In many ways, I cannot think of a better day to do so, with the report from the United Nations that came out yesterday. This is the challenge not particularly of my lifetime but of the community’s lifetime and younger people’s lifetimes—our children, grandchildren and so on. This green issue is not optional. It is central to our survival and the survival of our civilisation as we know it.
I thank my noble friend Lord Eatwell for his support. Getting this right is not trivial; you have to get the balance right. The LDI issue, as I understand it, was essentially about pension schemes wanting to nudge in this direction, discovering that they could not do it in a straightforward way then finding a way around the back without actually realising how destabilising that scheme was. We need good-quality thought in moving this forward so that we get growth, yield and safety all in the same package.
I agree with the noble Lord, Lord Sharkey, particularly on the definition of “green”. This brings me to an adjacent issue, which is the whole concept of the green taxonomy. I hope that this will develop and grow and that it will become an international standard; it will provide a basis for the development of this type of initiative and, of course, all sorts of other initiatives.
As for the Minister, I cannot see why she is not accepting my amendment. I know that the Government like to chew them up so I am looking forward to a government amendment coming forward on Report to embrace this useful and sensible thrust. I beg leave to withdraw Amendment 241FA.
House of Lords
Retirement of a Member: Viscount Falkland
The Lord Speaker (Lord McFall of Alcluith)
My Lords, I should like to notify the House of the retirement, with effect from today, of the noble Viscount, Lord Falkland, pursuant to Section 1 of the House of Lords Reform Act 2014. On behalf of the House, I thank the noble Viscount for his much-valued service to the House.
European Structural and Investment Funds and the European Agricultural Guarantee Fund
(1 year, 9 months ago)
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Lord Kirkhope of Harrogate
To ask His Majesty’s Government whether they have matched the funding previously provided by the European Union to the United Kingdom for the European Structural and Investment Funds and the European Agricultural Guarantee Fund in 2014–20; and if not, what is the extent of the shortfall.
The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)
The 2021 spending review announced the £2.6 billion UK shared prosperity fund, which improves on the European structural funds by empowering local places. The Government have also introduced farming and rural support worth a cumulative £3.7 billion annually over this Parliament and £33 million annually to support fisheries. This meets our 2019 manifesto commitments to maintain the levels of funding for farmers, fisheries and local economic growth in ways that are less bureaucratic and better targeted at local priorities.
Lord Kirkhope of Harrogate (Con)
I thank my noble friend for that partial reassurance, but I ask her to consider very carefully two elements. One is the farmers and members of agricultural communities, who are seeing an erosion of direct payments right now against a future sustainable farming incentive, and their deep concern to keep food production at a high level. The other is structural funding; many local authorities and regions in our country have had expectations for the new UK shared prosperity fund, but that is not coming in for some time. Can my noble friend give us further reassurances that these gaps will be filled?
Baroness Penn (Con)
My noble friend is right that, in both schemes, as the EU funding falls away, the UK funding comes in to replace it. We are seeking to do that in as smooth a way as possible. When it comes to support for farmers, we will continue to set out next steps on our environmental land management schemes, including the sustainable farming initiative, Countryside Stewardship and landscape recovery. On the shared prosperity fund, I reassure my noble friend that that fund is ramping up as EU funding falls away; its profile is faster than the way in which previous EU funding had been distributed.
Lord Wigley (PC)
My Lords, is the Minister aware that, when Wales first received structural funds from the European Union in 2000, that money was accepted by the Treasury in the UK and was not initially passed over to the beneficiaries, on the basis that they were already getting adequate money from the Treasury? It needed the intervention of Michel Barnier, the regional commissioner at that time, to get the Treasury to pass that money over. Will she give a guarantee that all money that is supposed to be equivalent to structural funds will be additional to the base spending for the areas that need it?
Baroness Penn (Con)
My Lords, the commitment that the Government have made is that the replacement of EU funding in each nation will meet the levels that they previously received. That is the commitment that we are delivering through the shared prosperity fund.
Baroness Randerson (LD)
My Lords, Wales was a beneficiary of EU funding, as one of the poorest parts of the EU. The Welsh Government used a big slice of that funding to support university support partnerships across Wales and beyond. Because the new shared prosperity fund is administered by the UK Government and local authorities, there is no scope for universities to benefit in the same way, leaving a big hole in the amount available for university research, which is of course essential for levelling up. Will the Minister undertake that she will, with her colleagues, examine this problem and amend the UK’s funding mechanisms in order to solve the big hole that is appearing in university research funding? I declare an interest as chancellor of Cardiff University.
Baroness Penn (Con)
My Lords, the UK shared prosperity fund was designed to give local areas more discretion about how they spend that funding, aligned with local priorities. The UK Government provide significant support to our research sector, including through universities, but I am happy to take the noble Baroness’s feedback back to the Treasury.
Baroness Ritchie of Downpatrick (Lab)
My Lords, many social economy projects in Northern Ireland have relied on the European Social Fund for many years. Because that funding is due to end next week, they face a cliff edge, and they have not received any communication about funding allocations from the UK prosperity fund. To enable such social economy projects to continue with their good work, right across the communities, will the Minister ensure that this funding is made available to such projects that do such good work for the benefit of all?
Baroness Penn (Con)
I am aware that there are elements of funding from the European Social Fund in Northern Ireland that are due to come to an end at the end of this month. The Department for Levelling Up, Housing and Communities is administering a competition to replace that funding, and it received strong and positive responses from organisations across Northern Ireland seeking to deliver the aims of that programme. It is working very hard to make the final selection decisions as quickly as possible.
Baroness McIntosh of Pickering (Con)
My Lords, does my noble friend accept that, for two categories of farmers—particularly hill farmers and tenant farmers—the level of income from the European funds is falling faster than initially expected? Will she work with Defra to ensure that their incomes are protected, and that they continue to produce the excellent food that they do for this country?
Baroness Penn (Con)
My Lords, I am sure that Defra will want to support the work of all farmers in our economy. My noble friend referred to two different categories of farmer: I know that my noble friend Lady Rock did an excellent review into tenant farmers, and a number of her recommendations have been taken forward. As Defra develops its programmes for the sustainable farming incentive and other replacements for EU funds, it will want to take into account the needs of different farmers across the UK.
Baroness Hayman of Ullock (Lab)
My Lords, the Government made a very simple promise to the nations and regions of the UK, as well as to farmers: European funding would be matched pound for pound, and the mechanisms used to allocate funds would be simpler and fairer. Several years on, we are still waiting for the shared prosperity fund, environmental land management schemes and the UK Infrastructure Bank to get fully up and running and to hit the targets they have been set. How have the Government managed to get this so badly wrong? Why is progress so slow? Does she acknowledge that this is a difficult time for farmers and that the Government really need to crack on with it?
Baroness Penn (Con)
My Lords, as I have explained to the House, as European funding tails away, UK funding ramps up. For example, the shared prosperity fund will reach £1.5 billion a year by the end of the spending review period. For each of the sectors that the noble Baroness mentioned, we have provided clarity around the funding available for the full three years of the spending review and the mechanisms by which it will be distributed. I know that my colleagues in Defra continue to work hard with farmers to ensure the successful rollout of the replacement schemes.
Lord Jones (Lab)
My Lords, will the Minister acknowledge that, in recent times, Wales has lost a great foundation industry, which was mining? It provided tens of thousands of jobs and created some prosperity. In recent times, the once mighty steel industry of Wales has also all but disappeared—it has shrunk. We are more and more in need of investment. It was from the privy counsellors’ Bench over there that former Prime Minister Harold Macmillan, Viscount Macmillan, paid tribute to the miners and steelworkers who, in two world wars, defeated first the Kaiser and then Adolf Hitler. Wales now needs more and more government funding. In the lovely heartland of Wales—cefn gwlad—there is great distress among the farming communities. We are in need of investment.
Baroness Penn (Con)
My Lords, we had a discussion last week about the needs of Wales when it came to government funding. I told noble Lords then that we took into account the greater needs of Wales as calculated by the Holtham commission. Indeed, the funding that goes to Wales is over and above the assessed needs of Wales at the present time.
Lord Hannan of Kingsclere (Con)
My Lords, will my noble friend the Minister confirm that we now have the advantage of being able to start with an identified need and then look for how to fund it rather than, as necessarily happened under the European funds, to start with a figure of money and then cast around for ways to spend it?
Baroness Penn (Con)
My noble friend is right that one of the opportunities that we have, having left the EU, is to look at programmes and make sure that they deliver against our policy priorities in the UK. That is exactly what we are seeking to do with our agricultural support schemes, for example, and we will continue to look for opportunities to do that.
International Higher Education Students
(1 year, 9 months ago)
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Lord Watson of Invergowrie
To ask His Majesty’s Government what steps they have taken to arrest the decline in the United Kingdom’s global market share in international higher education students, which fell from 11 per cent in 2008 to eight per cent in 2019.
The Parliamentary Under-Secretary of State, Department for Education (Baroness Barran) (Con)
My Lords, in 2019 we published the International Education Strategy, which commits to hosting at least 600,000 international students per year by 2030. We have met that for two consecutive years, with nearly 680,000 studying here in 2021-22—a 37% increase on 2019 and almost double the number in 2008. While the international student market is becoming more competitive, the absolute number continues to grow, which is testament to the global reputation of our higher education sector.
Lord Watson of Invergowrie (Lab)
My Lords, I thank the Minister for that reply. Three years ago, after the Government had removed all post-study work opportunities and rolled out the then Home Secretary’s policies of an unwelcoming environment, the UK slipped from second to third among English-speaking destinations for international students, with Australia overtaking us. The international education strategy to which she has referred was a response to the failure of those policies. While it has indeed reversed the deadline, Universities UK is now saying that new government proposals will restrict its ability to recruit international students. International students make a huge contribution to the economy, and surely the Government need to make more of promoting the UK as a welcoming and accessible destination for study and post study. Is it not the case that the Minister cannot deny that the Government’s policy of restricting student visas will have the opposite effect?
Baroness Barran (Con)
I really do not recognise what the noble Lord is saying. In 2019, we had 496,000 international students coming to this country; last year, there were 679,000. We have introduced a graduate route, which allows international students who are graduates to work in this country. We have increased our educational exports from this area from £19 billion to £25.6 billion and are heading to our target of £35 billion.
Lord Storey (LD)
My Lords, does the Minister agree that we should have a diverse international student population in our universities, and is she not concerned that, of the 590,000 non-EU students, those from China, India and Nigeria dominate? Is she concerned about the 120,000 Chinese students and maybe their effect on security?
Baroness Barran (Con)
The Government absolutely agree that we need a diverse population of international students. The noble Lord mentions India and Nigeria; those were two of the countries that were specifically targeted in our International Education Strategy, and we are delighted to see how successful it has been.
Lord Krebs (CB)
My Lords, it is not just international students who are important to our universities but international research funding. In this context, does the Minister agree with the analysis that shows that, in the two oldest universities in this country, Oxford and Cambridge—I declare an interest as a retired Oxford professor—funding from the European Union has fallen from £130 million a year to £1 million a year? What is the Government’s assessment of the impact of this loss of £129 million a year, and what are the Government going to do about it?
Baroness Barran (Con)
I cannot argue with the noble Lord’s figures; I do not have them directly in front of me. Obviously, the balance in the relationship between government and universities, as autonomous institutions, is a delicate one, which both sides respect. He will be aware that we are delighted at the EU’s recent openness to working with us on the Horizon programme.
Lord Forsyth of Drumlean (Con)
My Lords, would my noble friend care to reflect on the fact that in Scotland, which has St Andrews as the oldest university, the failure of the Scottish Government to have tuition fees for Scottish students has meant that there are no places for Scottish students, and the universities are having to raise the money by having more international students, at the expense of youngsters in Scotland?
Baroness Barran (Con)
I cannot really comment on the experience of youngsters in Scotland. I can say that, from our perspective in England, we believe that the presence of international students is a great source of soft power for the nation—both those in our universities here and the more than 500,000 students who study in British universities overseas.
Lord Morgan (Lab)
I am deeply grateful to the House for its delayed courtesy.
It is surely lamentable that the number of university students from, particularly, European universities, has declined in department after department. I know from my experience how enormously enriching the Erasmus scheme, for example, was. It was invented by a fellow Welshman, Hywel Ceri Jones, and we are deeply grateful for it. Furthermore, as has been said, university students from elsewhere contribute enormously to the local economy in a variety of ways. Can we not try to reverse this trend by a very much more European-focused policy in our universities, in the hope of restoring what has been lost, perhaps never to return?
Baroness Barran (Con)
I am not sure that I agree entirely with the noble Lord. We are interested in a diversity of students from different parts of the world. I am not clear from the noble Lord’s question what is particular about European students. All our international students bring cultural diversity. We welcome students from Europe as we welcome students from all parts of the world, and all contribute enormously to our economic well-being.
Lord Trees (CB)
My Lords, international students certainly enrich our academic community, but there is a danger that they can displace UK students, as the noble Lord, Lord Forsyth, said, because of the much higher fees that can be charged to them. This is a particular issue in veterinary science, in which I declare my interests. The core funding there from government is inadequate to fund the full course. Over 20% of the graduates that we produce in our British veterinary schools now are overseas students who are not destined to work in the UK workforce, at a time when we have a desperate shortage of vets. Can His Majesty’s Government please look at this issue?
Baroness Barran (Con)
I am more than happy to take that back to the department.
Baroness Wilcox of Newport (Lab)
Does the Minister agree that it is regrettable that universities, and particularly their international students, increasingly are seen by some vocal commentators as a convenient political battlefield rather than existing for the public good? Given reports that the Government are considering reforming migration rules for international students, can the Minister confirm whether a comprehensive impact assessment has been conducted around the proposed changes?
Baroness Barran (Con)
Quite obviously, in all areas of policy there are different aspects which we would consider in great detail—the economic impact, our international soft power, which I mentioned, and a number of others.
Baroness Smith of Newnham (LD)
My Lords, my noble friend has already mentioned two of the target countries in the Government’s strategy—India and Nigeria. Can the Minister explain why Saudi Arabia is one of the five target countries and whether diversification could not go a little further? I refer to my interests as laid out in the register.
Baroness Barran (Con)
The Government are looking at the range of countries that we should prioritise beyond our initial focus. Saudi Arabia is obviously an important strategic partner for us on many levels.
Lord Cormack (Con)
My Lords, can we take it, following the Prime Minister’s brilliant negotiations over the Northern Ireland protocol, that we will now be participating fully in the Horizon project?
Baroness Barran (Con)
I think I have already addressed Horizon. My noble friend may be aware that the Secretary of State at DSIT met with the EU’s ambassador to the UK, Pedro Serrano, on 14 March and discussed collaboration in this area. We hope very much that this leads to more positive relationships regarding Horizon.
UK-EU: Revised Passenger Requirements
(1 year, 9 months ago)
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Lord Blunkett
To ask His Majesty’s Government, further to the decision by the European Commission to delay the introduction of the Entry/Exit System (EES) and European Travel Information and Authorisation System (ETIAS) until the end of 2023, what steps they intend to take to facilitate a smooth transition for travellers from the United Kingdom wishing to enter the European Union under the revised passenger requirements.
The Parliamentary Under-Secretary of State, Home Office (Lord Murray of Blidworth) (Con)
The Government are engaging both the European Commission and the French Government through officials holding routine technical meetings to understand and influence the implementation plans of the new system. This includes working with port owners and operators to understand and support their plans, in order to mitigate the impacts from EES and ETIAS at the border. However, ultimately it is for EU member states to implement the new system.
Lord Blunkett (Lab)
My Lords, the Minister’s final words were the ones used by the previous Home Secretary when appearing before your Lordships’ Justice and Home Affairs Committee. However, three weeks ago, in a Question about overcrowding and difficulties at the border, the Minister then said:
“our own electronic travel authorisation scheme … will accelerate the rate at which people can cross the border.” [Official Report, 28/2/23; col. 126]
What is the electronic scheme that was referred to three weeks ago, and would it not be sensible to have a scheme like the US ESTA scheme whereby people can have their fingerprints and documentation taken before travelling, rather than being held up at the border?
Lord Murray of Blidworth (Con)
I find myself in the odd position of agreeing with the noble Lord, Lord Blunkett. Let me explain. The European Union has chosen to implement something called the European Entry/Exit System. This replaces passport stamping and requires non-EU nationals entering and exiting the Schengen area to provide a digital photograph and fingerprints on entry and exit. That is different from the electronic travel authorisation that the UK will be implementing in due course; that requires only a digital photograph. That is what will accelerate the rate at which people pass through passport controls into the UK, over which we have control. We have, sadly, no control over passport controls into the EU, and the EES will apply in that sphere.
Baroness Deech (CB)
My Lords, can the Minister explain why, when British people travel abroad, they are put in a queue with all the non-EU people but when they come home to Heathrow and elsewhere, Europeans and the British are in the same queue? Why are the Europeans not separate, and can that not be used as some sort of leverage?
Lord Murray of Blidworth (Con)
I understand that the United Kingdom has always taken the view that the Europeans are our friends and we treat them in the same way we always did. That, sadly, has not been the approach adopted by some of our European and EEA colleagues.
Baroness Randerson (LD)
My Lords, in his first Answer the Minister referred to working with port operators, but of course, the Channel Tunnel also deals with 10 million passengers a year and is a conduit for £140 billion of UK-EU trade. The operators of the Channel Tunnel calculate that 85% of their customers will have to pre-register and be subject to the necessary border controls. This is obviously a huge task, so can the noble Lord give us some details of his Government’s discussions with the EU? Are there any plans for a phased introduction, and to try to defer this whole huge change until after the Paris Olympics?
Lord Murray of Blidworth (Con)
If I may, I will address the question in relation to the European Entry/Exit System. That is a separate procedure from the European Travel Information and Authorisation System; it is the ETIAS which will require people to log their intended visit online and to record some biological data. The European Commission intends that it will be implemented some six months after the operationalisation of the European Entry/Exit System, which is the photograph and fingerprints at the border system I discussed a moment ago. As the noble Baroness rightly observes, the Paris Olympics fall in June next year. On the latest indications from the European Commission, the implementation date has been postponed from the end of 2023 to an uncertain date. It may be that that date will be after the Paris Olympics, but we have no indication one way or the other.
Lord Watts (Lab)
My Lords, given that most tourists are travelling to mainland Europe, would it not have made sense for us to have the same system as the French, and speed the process up?
Lord Murray of Blidworth (Con)
Clearly, the European Union and the Schengen area have set up their own system. It does not incorporate all members of the European Union; for example, the Republic of Ireland is not participating in EES or ETIAS. It makes sense for the UK, as a sovereign country, to have its own entry and exit system, as the United States does.
Lord Coaker (Lab)
My Lords, the Minister has just said the system, whenever it is sorted out, will not now be delivered until after the 2024 Paris Olympics, which is over two years after it was supposed to be introduced. He will know that Eurostar is already saying there are real problems at St Pancras, Folkestone and Dover, and you only have to travel to know there are problems. What are the Government going to do to work with colleagues across Europe to try and sort this out before summer 2024?
Lord Murray of Blidworth (Con)
My Lords, it is for the European Commission to decide when it implements its system. Our system will be ready probably before then, and implementation of the ETA is well advanced. But obviously, it is in everyone’s interest to work closely, and I am pleased to report that we have been very much doing so. Technical meetings are happening today between the United Kingdom and France regarding ongoing co-operation on questions of border control. Clearly, if we can reduce any impact, that assists both the UK and the EU member states.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, I am pleased that I have still got a maroon passport, a European passport, whereas my good friend, my noble friend Lord Watson, has got one of these, a blue passport, which I understand is printed and produced overseas. Why can we not produce our own passports any more?
Lord Murray of Blidworth (Con)
I will not castigate the noble Lord for using an exhibit in the Chamber, but perhaps I can say this. We are delighted that passport covers—which are indeed, as I understand it—presently made in Europe, are obtained through a competitive tendering process. We use taxpayers’ money sensibly on this side of the House.
British Banking Sector
(1 year, 9 months ago)
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The Lord Bishop of St Albans
To ask His Majesty’s Government what assessment they have made of the health of the British banking sector, following the challenges faced by overseas banks.
The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)
The UK Government welcome the steps taken to support financial stability on Sunday by the Swiss authorities relating to Credit Suisse. This follows the sale on 13 March of Silicon Valley Bank UK to HSBC after the resolution of its US parent. No other UK banks have been materially affected by these actions. The Governor of the Bank of England has confirmed that, in his view:
“The wider UK banking system remains safe, sound, and well capitalised.”
The Lord Bishop of St Albans
I thank the Minister for her reply. Many people watching the events unfold at the moment are concerned that they may lose their jobs or that there will be another financial hit to people at a time of high inflation. It is 10 years since we had the publication of the Parliamentary Commission on Banking Standards report. One of its conclusions was that the implicit taxpayer guarantee gives banks
“access to cheaper credit than would otherwise be available and creates incentives for them to take excessive risks.”
Do His Majesty’s Government have any steps to remove the implicit taxpayer guarantee? If not, what other incentives will His Majesty’s Government give to ensure that bankers act prudently?
Baroness Penn (Con)
My Lords, I emphasise to people at home the words of the Governor of the Bank of England that the UK banking system
“remains safe, sound, and well capitalised.”
The situation is different from 2008. Over the last 15 years, the Government and the Bank of England have taken robust action to strengthen the regulatory system and the resilience of the UK banking system. Specifically to the right reverend Prelate’s question, we have put in place a resolution regime to ensure that the failure of a bank can be managed in a way that minimises the impact on depositors, the financial system and public finances. I note that the resolution solution found for Silicon Valley Bank last week involved no UK taxpayer money whatever.
Lord Lamont of Lerwick (Con)
My Lords, is the implication of the right reverend Prelate’s question not a policy that would make banks far riskier than they already are? It is an extraordinary policy for him to advocate. I understand from the press that the Government were involved in the actions taken to save Credit Suisse and merge it with UBS, but a certain amount of disquiet has been caused by the preferential treatment that appears to have been given to shareholders rather than bondholders. Can she explain why this situation has arisen? Is the implication of that not rather disturbing for bondholders in other banks?
Baroness Penn (Con)
My Lords, the Swiss authorities were in the lead in the solution for Credit Suisse but my noble friend is right that, given the significant presence of Credit Suisse in the UK, the Treasury has remained in close contact with the Bank of England and the Swiss authorities in recent days. We welcome the comprehensive set of actions set out by the Swiss authorities to support financial stability. The UK authorities are going to take a number of actions to support that action, including PRA plans to approve a change in control application for the Credit Suisse subsidiaries in the UK. The resolution of the Credit Suisse situation was for the Swiss authorities, but the UK remains in close contact.
Lord Tunnicliffe (Lab)
My Lords, we welcome the Bank of England’s swift action on SVB UK and its recent statements about the safe nature of the UK’s banking system. Nevertheless, events elsewhere, including those relating to Credit Suisse, are creating uncertainty in the global financial system. With this in mind, will the Treasury and the Bank of England commit to undertake a systemic review of the impact of interest rate rises and wider events in the system on our own financial sector and banking system?
Baroness Penn (Con)
My Lords, as with any major event, the Treasury will reflect on the lessons to be learned and how improvements can be made. I assure noble Lords that, each year, the Bank of England carries out a stress test of the major UK banks that incorporates a severe but plausible adverse economic scenario. The 2022 stress test scenario includes a rapid rise in interest rates, with the UK bank rate assumed to rise to 6% in early 2023. The results of that test are taken forward by the PRA in its supervision of the banks. The results will also be published this summer.
Baroness Bowles of Berkhamsted (LD)
My Lords, an FT piece yesterday, headlined “How ‘competitive’ would you like your bank regulation now?”, says:
“The UK regulatory pendulum has been halted in mid-swing.”
Is that true? Credit Suisse had G-SIFI levels of capital and liquidity but was undone through bad culture. Are not the twin bastions of culture in the UK banks ring-fencing and the senior managers regime? Is it not also of massive cultural significance that it came from the Parliamentary Commission on Banking Standards? If the Government mess with those, where is the break on culture-based runs? What do they say when these practices come under lobbying pressures?
Baroness Penn (Con)
My Lords, I think the noble Baroness was asking about the Government’s proposed Edinburgh reforms package, which represents a move towards proportionate, simple regulation that works for the UK and will help to drive growth in the broader economy, supporting families and businesses across the country. In that approach, we recognise that the UK’s success as a financial services hub is built on agility, consistently high regulatory standards and openness. We will continue to take those principles forward in our reforms.
Lord Eatwell (Lab)
My Lords, I found the noble Baroness’s position on the current status of the banking system to exhibit extreme complacency. Is she aware that Credit Suisse was very highly capitalised and had in place all the financial anchors on which she relied in her Answer? Yet Credit Suisse has collapsed. Do the so-called Edinburgh reforms not actually come up to this: we are going to make the banking system more competitive, which equals taking greater risks?
Baroness Penn (Con)
My Lords, in the Financial Services and Markets Bill we are introducing a new objective for the regulators to look at competitiveness, but we are clear that that objective comes second in the hierarchy to the systems objectives around financial stability. We think that strikes the right balance. We are absolutely not complacent about the global banking system and the wider financial services sector, but it is important to recognise that we are in a different position from 2008 and that we are making further changes to ensure the resilience of our sector. For example, the Bank of England announced in December that, for the first time, it will run an exploratory stress-test exercise focused on non-bank financial institutions, recognising the increased risk posed there. We will continue to do what we need to do to ensure financial stability in this country.
Lord Grabiner (CB)
Are we entitled to assume that the London branch of Credit Suisse is being properly regulated by the FCA and the Bank of England?
Baroness Penn (Con)
The noble Lord is right that the Credit Suisse subsidiary in the UK was regulated by the Prudential Regulation Authority and met its obligations under those regulations.
Baroness Williams of Trafford (Con)
My Lords, it is the turn of the Green noble Baroness, and then it will be my noble friend.
Baroness Bennett of Manor Castle (GP)
My Lords, we have had two questions addressing the dangers of the competitiveness agenda of the Edinburgh reforms, which the Green Party has consistently opposed. The other element is that the Government talk about boosting growth. The Minister suggested that was for the general economy, but it has been presented as a desire to grow the financial sector. Is there not, as demonstrated by recent events, a great risk of too much finance and too large a financial sector when what we need is a real-sized financial sector to serve the real economy?
Baroness Penn (Con)
I disagree with the noble Baroness. The UK’s financial services sector is one of our great strengths in and of itself and as an engine to power growth across the rest of our economy; that will remain the case under this Government.
Lord Reay (Con)
My Lords, is my noble friend the Minister confident that the risk controls at the UK fintechs are adequate, given the current challenging conditions in the global financial markets?
Baroness Penn (Con)
My Lords, one thing that UK regulators have sought to do is ensure that the fintech sector is well regulated while continuing to innovate. We have been able to use things such as regulatory sandboxes to allow safe spaces for that innovation to be tested out, and we will continue to take that approach.
Judicial Pensions (Fee-Paid Judges) (Amendment) Regulations 2023
(1 year, 9 months ago)
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Lord Bellamy
That the draft Regulations and Order laid before the House on 23 January and 8 February be approved.
Relevant document: 30th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 20 March.
Special Immigration Appeals Commission (Procedure) (Amendment) Rules 2023
(1 year, 9 months ago)
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Lord Murray of Blidworth
That the draft Rules laid before the House on 2 February be approved.
Relevant document: 30th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 20 March.
Security of Government Devices
(1 year, 9 months ago)
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Lord Collins of Highbury (Lab)
My Lords, I welcome the announcement of this ban but the question of why it has taken the United Kingdom so long to come to the same conclusions as many of our closest allies remains. As Angela Rayner noted in the Commons just weeks ago, the Secretary of State for Science, Innovation and Technology said that there was “no evidence” for a ban being brought forward. So what changed? Has there been a specific incident that prompted a shift in policy? I hope the Minister will be able to answer that. Oliver Dowden, the Chancellor of the Duchy of Lancaster, was honest that the previous list of banned apps did not apply to every government department. Can the Minister outline which departments were exempt and why?
A number of MPs asked about the rules for Ministers’ personal devices. Given recent revelations about the scale and use of WhatsApp and personal email across government, the Chancellor of Duchy of Lancaster said that any substantive government business should be done on official devices. Will new guidance on the use of personal devices and WhatsApp clearly define what is meant by “substantive government business” or will that be a matter of personal interpretation? We have already heard Grant Shapps appear to say that he wants to continue to use his own personal device and use “TikTok”.
Lord Collins of Highbury (Lab)
I did ask someone earlier what TikTok is—I thought I was a modern person, but clearly not.
Can the Minister tell us whether this sort of interpretation is going to involve a change in the Ministerial Code? A Minister may not think sharing a draft Written Ministerial Statement on personal email qualifies either as substantive business or as a security risk, but the Home Secretary was of course temporarily forced out after sending such material to the wrong people. Oliver Dowden also talked about the granting of exemptions for operational reasons. Can the Minister provide an example of why a banned app may be deemed necessary? If she cannot today, could she write with such an example?
This debate takes place in the context of wider concerns about some forms of Chinese-made technology, including CCTV camera systems. On 2 February, my noble friend Lord Bassam of Brighton asked when the Government would commence important product security provisions under the Product Security and Telecommunications Infrastructure Act, which is intended to protect users of smart products such as CCTV doorbells. The noble Lord, Lord Parkinson of Whitley Bay, was unable to provide any date. I hope the Minister can do so today. The Government said they intended to bring the first half of that Act into force as soon as practicable, so why are we still waiting?
Lord Clement-Jones (LD)
My Lords, as a long-standing deputy chair of the all-party China group, I welcomed the proportionate approach taken in the Government’s statements in the integrated review refresh about relations with China. In the face of the current human rights position in Xinjiang and the situation in Hong Kong, however, this should not change any time soon.
On these Benches, we are in strong agreement with those who consider that the Government could and should have been a great deal more strategic about relationships with sensitive Chinese suppliers—whether internet or data based, hardware or software related—in the run-up to this Statement. This is a one-off Statement about TikTok, a social media company. It would be good to see the assessment and the evidence of potential cybersecurity issues which the Government have not yet—as far as I know—produced.
However, when it comes to makers of surveillance cameras, as the noble Lord, Lord Collins, said, the Government appear far more reluctant to act. The Surveillance Camera Commissioner, Professor Fraser Sampson, has been very clear in his warnings, in particular about Hikvision and Dahua cameras, which, as far as we know, are used extensively in Xinjiang for surveillance purposes and pose security risks here, even when live facial recognition is not enabled.
Just last week, we saw Tesco lead the way in the private sector and order the removal of these cameras from its stores. The Government have simply ceased to install them. Why are they not directing their removal, particularly in police forces? Have they mapped exactly where on the government estate and in other spaces these cameras remain?
Regarding TikTok, why act so late when the EU and US, as the noble Lord, Lord Collins, mentioned, acted earlier? Presumably they have the same security information. When did the evidence emerge that has led to this ban? Will the Government publish the review by cybersecurity experts which assesses the risks posed by these third-party apps on government devices?
As the noble Lord, Lord Collins, also mentioned, why are private devices used by government Ministers not covered? I note that Oliver Dowden repeated that position last week. After all, we know there has been extensive use of private devices by Ministers, particularly —dare I say—among former Health Ministers. What assessment of this aspect has been made? Which government departments and public bodies are actually covered? What is the process for drawing up the promised approved list of apps? What criteria will be used?
As many said in the Commons, this looks like whack-a-mole; the Statement is no substitute for a coherent cross-government strategy. Why do the Government not now move, for instance, to include the capture of biometric data in the definition of “critical national infrastructure”? Questions have been raised recently about Chinese cellular internet of things modules—CIMs—which are imbedded in many devices. What is the Government’s approach to this? Are they even aware of what CIMs are?
Finally, if the Government are concerned about information being harvested by social media and other apps, why is the Data Protection and Digital Information Bill, now before the Commons, widening the circumstances in which research data can be used for commercial purposes? Is this not a typical example of this Government’s incoherence and lack of co-ordination on issues such as this?
The Minister of State, Cabinet Office (Baroness Neville-Rolfe) (Con)
My Lords, I welcome the welcome for the Statement made by my right honourable friend the Chancellor of the Duchy of Lancaster last week. By way of background, I should explain that the Government commissioned a review by our cybersecurity experts of the risks posed by third-party applications, including TikTok. As a result, the review concluded that we needed further security measures to protect the data.
There is obviously a limit to what I can say due to the sensitive nature of the Government’s work, but we are taking what we believe is proportionate, considered action to strengthen the security of government devices, and we are doing that in two ways. First, as is already the case in many departments—and that includes my own, the Cabinet Office—all government departments will now move to a system where only the third-party mobile apps available on their devices are those which have been pre-approved for inclusion on a departmental “allow list”.
Secondly, as a precautionary measure, all government departments are now required to take action to prohibit TikTok on their devices with immediate effect. It is a prudent, proportionate step, and more broadly, we are absolutely committed to bolstering national security, of which this is an example. As I explained to the House about 10 days ago, new guidance on the use of non-corporate communications will be issued very shortly and will bear on some of the questions that have been raised.
I was asked about TikTok on Ministers’ personal devices. The Secretary for State for Energy Security and Net Zero, who has been quoted, supports our policy and has been very clear that he has never used TikTok on his government devices. On personal devices, it is more of a personal choice. As I have explained before, all Ministers are carefully trained in security when they are appointed, and they have a briefing from time to time to keep that up to date.
To answer the question about exemptions, the business justification for having TikTok on government phones is to my mind very limited, but there are a small number of cases where it is necessary. Examples would include security and law enforcement. I know that some of my colleagues who are involved in security may need to use TikTok to make observations. Marketing would be another area—I think that the Secretary of State for Energy Security and Net Zero, Grant Shapps, comes into that category. We need to have common sense and proportionality. Departments will be able to make exemptions on a case-by-case basis through a departmental approval process, but with ministerial clearance as appropriate and risk mitigation in place.
Regarding Chinese security cameras, we have acted— we have discussed this in this House many times. We are also strengthening the powers in our Procurement Bill, and suppliers will be considered for addition to the debarment list on the basis of a rigorous and fair policy. This policy is under development, so it is too early to say, but regarding the action we have taken, we are now working with departments to make sure that Hikvision cameras are phased out.
The noble Lord, Lord Clement-Jones, talked on a more strategic level about China, about which we need to be sober and realistic. Obviously, we do not dispute the importance of China, but it has become more authoritarian at home and more assertive overseas, which is of concern to the UK—our policies need to reflect that. In the integrated review refresh, which was published last week and is well worth a read—the noble Lord referenced it—the Prime Minister set out clearly the overall direction across government for a consistent, coherent and robust approach to China, rooted in the UK’s national interest and aligned with our allies. A proper, and properly resourced, approach to security is an important part of that.
I repeat that the Prime Minister set up a new department, and the Budget included a substantial pledge—£3.5 billion by 2030—to support the Government’s ambitions to make the UK a scientific and technology superpower. This is one of the Prime Minister’s five priorities. So we should take the steps we need to take for security, but we also need to be careful to encourage the positives of new technology, whether that is AI, quantum technologies or engineering biology. We seek an important balance here.
Lord Alton of Liverpool (CB)
My Lords, given the Minister’s previous professional connections with Tesco, she will have noticed that, last weekend, it announced that it will remove Hikvision cameras from its supermarkets—many of us applaud that decision. The Minister will also recall that, when the Procurement Bill left this place, it included an all-party amendment on Hikvision and surveillance cameras. Why did the Government then remove that amendment in Committee in another place? Will they support Sir Iain Duncan Smith, the former leader of the Conservative Party, in his attempts, and those of others from across the political divide in the House of Commons, to reinstate that amendment on Report? If not, does that not make everything that has been said to us in the House today contradictory?
I also ask the Minister to look at the evidence of Professor Fraser Sampson, referred to by the noble Lord, Lord Clement-Jones, which he gave to the Joint Committee on Human Rights at the beginning of this month. In answer to a question I asked, he said directly that, because of the facial recognition techniques that can be used, not just by these cameras but by many other pieces of technology, this poses a risk to personal privacy and is therefore liable to be in breach of the European Convention on Human Rights. Will the Minister please look at what was said to the Joint Committee?
Baroness Neville-Rolfe (Con)
My Lords, as a former executive of Tesco, obviously I was extremely interested to see this at the top of my in-tray, where other things it does often appear. On Chinese cameras, I have not seen the evidence to which the noble Lord refers, but I would be very interested to see it. But I assure him that discussions on the Procurement Bill continue in the other place, and my noble friend the Paymaster-General has been in discussions with Sir Iain Duncan Smith on this and other issues. Of course, the Procurement Bill will come back to this House in due course, and I look forward to engaging further with the noble Lord.
Lord Watson of Wyre Forest (Lab)
My Lords, I understand the Minister’s argument for proportionality with regard to this Statement. Does she have any advice for her non-ministerial colleagues in Parliament—those who sit on defence and intelligence committees—on how they should use their personal devices with TikTok?
Baroness Neville-Rolfe (Con)
I need to tread carefully here because, of course, security in Parliament is independent of government. So this is a matter for the parliamentary authorities. I understand the drift of the noble Lord’s question, and he can see what steps the Government have taken in relation to government devices. I am not sure I am allowed to put apps on my parliamentary device without the permission of the IT department. We stand ready to assist the parliamentary authorities if they would like us to share information on this important matter.
Lord Walney (CB)
Further to that question, does the Minister accept that it is difficult for parliamentarians, and that it is a potentially unsatisfactory situation, if the message is essentially that it is our personal choice, but we are not—probably for very good reasons—privy to the sensitive security advice on which the Government have made their assessment? So will they encourage Parliament and the parliamentary authorities to allow a collective position to be reached on this?
Baroness Neville-Rolfe (Con)
I can certainly pass the concerns that have been expressed back to the security authorities in Parliament. I add that we have a Defending Democracy Taskforce, headed up by Tom Tugendhat, and the parliamentary authorities are involved in that because of the importance of sharing information, including sensitive security information, which it may not be possible to make public.
Lord Scriven (LD)
My Lords, I want to go back to the Biometrics and Surveillance Camera Commissioner, who through freedom of information requests has found out that 18 police forces across the country use external cameras that have equipment that have serious security and ethical concerns. He says that the use of such equipment by police forces needs to be seriously questioned. What action will the Government now take on a systemic approach across government to deal with those ethical and security issues, rather than just a pick-and-mix approach?
Baroness Neville-Rolfe (Con)
We have security and resilience frameworks which try to do just that, but obviously the police are independent, so the noble Lord’s question about the police goes beyond the areas in which I am expert today.
Lord Harris of Haringey (Lab)
My Lords, I have been listening carefully to the Minister’s responses to the questions, and I am still not sure that I understand the logic for not including Ministers’ private phones in the ban, particularly as some of the security information will be common; for example, the location of the Minister concerned, and so on. If the argument is that the bit we are really worried about is that, if the security breach were on an official phone, it would include access to ministerial emails on government business, then the Minister really should have answered my noble friend’s question about whether the use of private phones for government business will be addressed in the review of the Ministerial Code. Can she do so now?
Baroness Neville-Rolfe (Con)
I do not have anything to say specifically on the review of the Ministerial Code; it is of course kept under review, and we now have a new ethics adviser. These sorts of matters are certainly being considered in the context of the new guidance on the use of non-corporate forms of communication, and I look forward to making a public statement on that in the not too distant future.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, the Minister said in reply to a question from my noble friend on the Front Bench that Ministers are given security advice. But that is useful only if they take notice of the advice they are given. How can we believe that they do that, when Boris Johnson, when he was Foreign Secretary, went to parties in Italy as a guest of Alexander Lebedev, and then later on promoted Alexander Lebedev’s son, Evgeny—the noble Lord, Lord Lebedev—to the House of Lords, against the advice of the security services? Surely that gives some evidence that he may well have been compromised.
Baroness Neville-Rolfe (Con)
I always resist commenting on individual cases. Of course, that comment does not necessarily take account of the steps we have made on briefing Ministers, including new Ministers, on security matters. The evolution of social media has been beneficial in many ways; I am sure that noble Lords use it for non-security matters, and we believe that that is perfectly all right on people’s private phones as a complement to the use of government phones for government business. We are very clear that, where people use private phones for government business because they cannot do anything else, it is important that substantive government exchanges are passed on to the private office or elsewhere, so that they are added to the public record. You have to have a balance in this system; we have to have rules which make sense and respect security but are also workable.
Lord West of Spithead (Lab)
My Lords, I apologise for not being here at the beginning of the Statement; I was caught up with the Intelligence and Security Committee, where, of course, we have to hand our mobile phones in because we all know how dangerous mobiles are. I know from my past experience in this arena that, despite many lessons to people, people up to the level of Prime Minister make major errors in using private phones for material that they should not. Does the Minister not agree that we have to look at private phones as well as government phones to ensure that we have the right security that we ought to have? Whenever you speak on a mobile phone, you can guarantee that someone is trying to listen to it.
Seafarers’ Wages Bill [HL]
(1 year, 9 months ago)
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Baroness Vere of Norbiton (Con)
My Lords, I begin by expressing my gratitude to all noble Lords for their thoughtful consideration of this important legislation. As the Bill progressed through your Lordships’ House and the other place, the Government listened carefully to concerns raised by parliamentarians, and we engaged further with stakeholders. The amendments before your Lordships’ House today address many of the concerns raised and ensure that the Bill is effective and enforceable, simple to apply and delivers its intended benefits to seafarers.
The amendments to be considered today may appear numerous, but many are minor and technical. The amendments can be considered according to four themes: switching powers to duties; clarifying matters around equivalence declarations; switching the duty for setting a surcharge from the harbour authority to the Secretary of State; and, finally, changes to regulations, guidance and directions, most of which come from the previous three themes.
I turn to the first set of amendments, which change the previously discretionary powers of harbour authorities to request declarations, impose surcharges and refuse access to harbours to mandatory duties. Through continued engagement with port stakeholders, we were informed that harbour authorities would be unlikely to exercise their discretionary powers without being directed to do so. Therefore, this change from discretionary powers to duties will strengthen the Bill.
Baroness Scott of Needham Market (LD)
My Lords, I thank the Minister for bringing these amendments. I confess that when the Bill finished its passage through this House, I felt rather depressed that I had not been able to convince the Government that there were some fundamental flaws, but the changes today show that the Government were convinced. The problem, I think, was not quite understanding the nature of the relationship between harbour authorities and the vessel operators that use the harbour. Putting them in the position of trying very hard to get the business of operators and then leaving it up to them as to whether they take action against them just did not feel right, particularly in cases where the vessel operators and the harbour authority are under the same ownership—there is a direct conflict of interests. All these amendments that change powers into duties are a really welcome clarification, particularly the duty on the Secretary of State and not the harbour authority to set surcharges.
I have two questions for the Minister. On Amendment 36, spending funds on seafarers’ welfare facilities is a really smart idea, but has anything been considered to ensure that any money spent this way will be additional and will not simply replace money that the vessel operators or harbour authorities would have spent anyway? Finally, and in many ways most importantly, on Amendment 44 and the refusal of access to a port under certain circumstances, I know that the industry was concerned that this would not be lawful under international maritime regulations and would amount to impeding the right of passage. , Has the noble Baroness had any further discussions with the industry and has she been able to convince its members that they are on safe legal ground?
Baroness Taylor of Stevenage (Lab)
My Lords, I am very pleased to support the Motion before the House today in the name of the Minister. The action taken by P&O Ferries was a national scandal which should have marked a line in the sand, and any attempt to prevent a repeat of such events will always be welcome. On that basis, we have supported the limited measures in the Bill, but given the limited scope of this legislation, my noble friend Lord Tunnicliffe and others also called for broader measures beyond wages.
The wider issues, including roster patterns, wages and pensions, have yet to be addressed, and I hope the House will soon see further legislation to deliver these. It would also be helpful to know how those responsible for such exploitative practices can be brought to justice, and there are still serious health and safety concerns regarding the working conditions of seafarers. We also have to consider the much wider problem of fire and rehire—another favourite of exploitative employers—but I am sure that is for another Bill on another day.
However, as much as I am disappointed that many of these problems remain, I am pleased that the Government have now introduced amendments, as set out in detail by the Minister, on issues which required clarification. These new amendments, including in relation to tariffs, fines, surcharges, the information that a harbour authority can request from an operator and the introduction of relevant offences, each have our support. It is important as well that it is not the harbour authority that sets the charge, as this raised a number of issues. We agree that spending money on seafarers is appropriate and right, and I am interested in the Minister’s answer to the question from the noble Baroness, Lady Scott.
I will finish by expressing how grateful I am that the noble Baroness, Lady Vere of Norbiton, has engaged with the House throughout the passage of the Bill. I thank her for her time in a meeting to explain progress on the Bill on my second day as transport spokesperson, and for her patience in answering all my questions. I thank the noble Baroness, Lady Scott, for her involvement and contribution to the Bill. I thank the trade unions for continuing to champion the cause of seafarers and my noble friends on the Front Bench, particularly my noble friend Lord Tunnicliffe for his personal support and for bringing his encyclopaedic knowledge to bear during the passage of the Bill. I hope the House will share our support for the Bill.
Higher Education (Freedom of Speech) Bill
Tuesday 21st March 2023
(1 year, 9 months ago)
Lords ChamberRead Full debate Higher Education (Freedom of Speech) Act 2023 View all Higher Education (Freedom of Speech) Act 2023 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 104-I Marshalled list for Consideration of a Commons Reason - (20 Mar 2023)
Earl Howe
That this House do not insist on its Amendment 10, to which the Commons have disagreed for their Reason 10A.
Earl Howe (Con)
My Lords, I am pleased to be back again to debate the Higher Education (Freedom of Speech) Bill. I must express my thanks once again for the time and thought your Lordships have given to this legislation. Members of the other place were particularly happy to see the amendment banning the misuse of non-disclosure agreements in cases of sexual abuse, harassment or misconduct, or other bullying or harassment, as proposed by the noble Lord, Lord Collins of Highbury. I am grateful to him for tabling this amendment as a very positive addition to the Bill.
As your Lordships know, the tort has been by far the most contentious issue during the passage of the Bill, but the Government remain firm that it is vital for it to be included. I recognise that the decision of the other place to reinstate the tort as it was originally drafted, without amendment—including the government amendments that were tabled in this House on Report—has been of concern to noble Lords. I am very aware of the strength of feeling in this House regarding the tort clause. I have spoken to many noble Lords individually and listened carefully to the points raised during debate. Ministers have also had useful discussions since the Bill returned to the other place last month and have given further consideration to what form the tort should take.
Before turning to the amendment to the Government’s Motion tabled by my noble friend Lord Willetts, I shall set out once more the Government’s rationale for the tort’s inclusion and offer clarity on issues raised in recent ministerial engagement with noble Lords. I believe that the possibility of bringing legal proceedings is critical. We have said many times in this Chamber that, where issues cannot be solved satisfactorily by other routes, there should be an option to go to court. It is right that cases can be brought, and the court has a range of remedies at its disposal to achieve redress where it is concluded that that is appropriate.
The tort is a crucial part of the package of measures brought forward by the Bill to strengthen the law that protects freedom of speech, with a robust enforcement mechanism as a solid foundation for the new duties. Indeed, it is the view of some in this House and indeed of numerous academics and other stakeholders that, if the tort were removed, the Bill would not have the necessary force to bring about the cultural and behavioural shift necessary to prevent further erosion of freedom of speech on campus.
However, I also want to be clear that including the tort in the Bill will not create a free-for-all with cases being brought to court without due consideration. Indeed, we expect the use of the tort to be relatively rare, as indeed do those stakeholders who strongly support its inclusion in the Bill. The vast majority of complaints will be successfully handled by providers themselves, through the free-to-use Office for Students complaints scheme or via the Office of the Independent Adjudicator for Higher Education. Examples of where the tort may be used include where complainants feel that their complaint has not been resolved by the OfS or OIA to their satisfaction. In addition, it will be useful in the rare cases where a provider fails to comply with a recommendation made by the OfS or OIA.
There has been a suggestion that the inclusion of the tort will undermine the position of the OfS, but in fact the Bill will give the OfS new wide-ranging powers to investigate when higher education providers, colleges and student unions have breached their freedom of speech duties. It creates the role of director for freedom of speech and academic freedom, who will oversee the new free speech functions of the OfS. The tort is intended to complement those new powers, providing a backstop mechanism on the rare occasions when it is needed. We expect that the courts will generally be slow to overrule the OfS, as the expert in the sector, and the OfS will find any court rulings helpful in developing guidance and considering future cases.
Some noble Lords have expressed concern about the potential implications of the tort for student unions, which they think will not have the wherewithal, including the financial resources, to defend themselves against threatened legal proceedings. It is of course true that by bringing student unions within scope of the Bill, and by giving them new duties, they will become liable for breaches, but what is reasonably practicable for a small student union will not be the same as what is reasonably practicable for a large provider, an issue that the OfS and the courts will have at the forefront of their considerations. Examples of what is reasonably practicable include maintaining a code of practice, having a room-booking policy that covers freedom of speech appropriately and providing training to those who have a relevant role.
Other noble Lords have expressed concerns about student societies, a matter on which I believe I can also offer reassurance. As I have said, student unions will have a duty to take reasonably practicable steps to secure freedom of speech. Importantly, student societies will not themselves be subject to the duties in the Bill. However, those who run societies will be subject to the codes of practice published by their provider, college or student union. A failure to comply could result in disciplinary measures.
Similarly, if a student society is affiliated to a student union, those who run it will need to comply with the student union’s rules. Therefore, if a society is holding an event on student union premises, the student union’s room booking policies will apply, as well as the code of practice. Measures should be in place to ensure the society is aware of the rules that apply and that action can be taken if these rules are broken.
This point is crucial: a complainant would have no course of action against individual students or a student society. Although they may consider whether they are able to bring a complaint against a student union, the burden of proof will be on them to show that the student union has breached its duty to take reasonably practicable steps.
I also wish to address the point that some noble Lords have raised about the potential for the tort to create a paradoxical chilling effect, with providers, colleges and student unions avoiding holding controversial speaker events for fear of litigation. I want to be clear: the best way to avoid litigation will be not to cancel events but to take reasonably practicable steps to ensure that events can take place. There are provisions in the Bill that are intended to encourage a culture change on our university campuses, including a duty on providers and colleges to promote the importance of freedom of speech. A blanket policy of vetting all invitations and deliberately avoiding inviting any controversial speaker could itself constitute a breach of the duties under the Bill.
Finally, I turn to the amendment to the Government’s Motion, tabled by my noble friend Lord Willetts, which replicates amendments tabled by the Government on Report in the Lords. This House, carrying out its important constitutional function, opted to send a clear message to the other place that it should think again regarding the tort provisions. The other place, having thought again, has returned an equally clear message to this House as to the strength of its feeling that the tort should remain in the Bill. I note that, to emphasise that, it was willing to reinsert it without the government amendments tabled on Report in the Lords. In the light of that strong view, I hope the House will acknowledge that action by the other place and instead seek consensus on an outcome that rightly recognises that the tort should be retained but with some sensible amendments to clarify and reassure in relation to the implementation of the regime.
Indeed, I thank my noble friend Lord Willetts for his pragmatic engagement on this issue, particularly in his acknowledgement that the tort has a role to play in the new statutory regime. The Government take the view of the House seriously and therefore support this amendment to the Motion, assuming that it is moved, and I hope that other noble Lords will do so as well.
The amendments provide an opportunity to give clarity about how the tort will operate in practice. Our intention has always been that the tort should be used as a last resort, with the majority of complainants likely to rely on the free-to-use complaints schemes. Similarly, only those who have suffered loss should be able to bring a claim.
When the Government tabled those amendments back in November 2022, four months ago, the prevailing view from the sector and stakeholders was that they offered a good compromise. However, since then the issue has grown in importance, and controversy about the application of the tort has sharpened. It is only right that I share with noble Lords the concerns expressed to Ministers since this issue was last debated in this House, particularly from those the Bill is most designed to protect. In conversations with academics, we have heard serious concern that their freedom of speech is being quietly curtailed.
Given the strength of feeling from those who are genuinely concerned that their jobs are on the line and academic freedom is under attack, I have to be clear with noble Lords that this concern may well be reflected in a move in the other place to amend the Bill still further. I cannot presume to encroach on conversations or proceedings in the other place, but in that event it is only right that I commit the Government further to explore possible opportunities to achieve consensus in the Commons stages. I am therefore content to say that the Government support these amendments. But given that those academics are at the forefront of our minds, I am conscious that this matter may not yet be finally settled, should your Lordships agree to my noble friend’s amendments.
I hope that, alongside the assurances I have given today, noble Lords are persuaded that the tort is a vital legal mechanism that is necessary if we are to ensure that our world-class universities are the home of plural debate. I beg to move.
Lord Willetts
At end insert “and do propose the following amendments to the words so restored to the Bill—
“(2) A person may bring proceedings under subsection (1) only if—
(a) the person has brought a complaint relating to the same subject matter as the proceedings under a relevant complaints scheme, and
(b) a decision has been made under that scheme as to the extent to which the complaint was justified.
(3) Each of the following is a “relevant complaints scheme”—
(a) the scheme provided by virtue of Schedule 6A (the free speech complaints scheme), and
(b) the scheme for the review of qualifying complaints (within the meaning of section 12 of the Higher Education Act 2004) that is provided by the designated operator (within the meaning of section 13(5)(b) of that Act).””
Lord Willetts (Con)
My Lords, I declare my interest as a visiting professor at King’s College London and an honorary fellow of Nuffield College, Oxford.
I warmly welcome the Minister’s assurances about how this legislation will work. I particularly welcome his commitment, and that of other Members of this House, to support the amendments in my name. These amendments bear a striking resemblance to amendments the Minister himself tabled, which we debated on 7 December. It is evidence of his common sense and wisdom that he is supporting them now, as he did then.
I assure him that across the House, after many hours of debating this important legislation, there is shared agreement that there is a problem. Nobody is denying that there are egregious and appalling examples in which universities and students unions are not the safe spaces for free speech that we wish them to be. Sometimes people believe that they should somehow be a safe space from free speech, which is not what universities stand for.
There is also very strong support across the House for the Office for Students as a tough and effective regulator. I pay tribute particularly to my noble friend Lord Johnson of Marylebone, who early on intervened to make clear that it was the body that should have the crucial role in this case.
The issue has been about tort. As we were told, this is not the first time that Clause 4 has been the most controversial feature of a piece of legislation. Many of us had a real concern that the threat of civil litigation could have a chilling effect, threatening the activities of student unions in particular. That is why your Lordships’ House voted to remove Clause 4 from the Bill. The other place has reinstated it and we have to understand and respect that vote, but these amendments are a sensible compromise to clarify the circumstances in which the tort provision would apply. The litigant has to have sustained a loss and have exhausted other complaints procedures, notably the enhanced powers that this legislation gives to the Office for Students. I am very pleased that the Government have reiterated their support for those principles and recognised that this is how this tort provision should operate—very much as a last resort.
What these amendments would do is ensure that Clause 4 is very sensibly targeted. They would make it workable. In particular, they would remove the risk, which many of us on all sides of this House are concerned about, that a university, or even more so a student union, could find itself on day one receiving an investigation letter from the OfS and on day two receiving a lawyer’s letter threatening it with litigation. We thought that that was not a sensible or reasonable way to proceed, and indeed would obstruct the effective discharge of a regulatory function by the OfS.
I welcome the assurances that the Minister has given. The debate we have had on this legislation has been an excellent example of the role of your Lordships’ House as a revising Chamber. It has also reminded us of the shared values we have: a commitment to freedom of speech and diversity of opinion.
Lord Grabiner (CB)
My Lords, I confess to be rather miffed by the Government’s acceptance of the amendment of the noble Lord, Lord Willetts, because it deprives me of the ability to make the fire and brimstone remarks that I had planned to make. However, I certainly welcome the Government’s reaction to the excellent amendments of the noble Lord, Lord Willetts, and can as a result be quite brief.
On Clause 4, we have really come full circle and are back where we started. As has been pointed out, in our debates Clause 4 was subjected to many serious criticisms by noble Lords across the House, and I will not repeat them. In the face of those criticisms, at Report in this House the Government accepted a clarifying amendment from the noble and learned Lord, Lord Etherton, which incorporated a reference to damages in Clause 4. In a further attempt to meet these criticisms, the Government brought forward their own amendment, as the Minister has pointed out, which gave priority to the regulatory regime and deferred the ability of a private claimant to deploy Clause 4, pending those regulatory procedures being exhausted.
I respectfully urge your Lordships to support the amendments put forward by the noble Lord, Lord Willetts. As to those amendments, the loss point would clarify and emphasise the need for proof of damage as a condition for making a Clause 4 claim. It would deter some frivolous claims, and to that extent would be a valuable amendment.
The priority point in the amendment of the noble Lord, Lord Willetts, is perhaps rather more important. The OfS will have extensive regulatory powers for dealing with an offending student union. Clause 7 would amend the Higher Education and Research Act 2017, whereby the OfS would be obliged to monitor student unions’ performance of their new duties. Importantly, the OfS would also be empowered to impose a financial penalty on a student union and seek an injunction in court. Common sense suggests that the Bill would be significantly improved if priority were given to the regulator and claimants were not able to invoke the private law cause of action until the regulatory function had been performed and completed. This was the Government’s view just a few weeks ago, and I am absolutely delighted that it still is their view—at least in this House.
If I may, I want to briefly draw attention to the email from Ministers which arrived while we were in the Chamber but before this debate began. I will reference the end of the sixth paragraph, which is a point to which the noble Lord adverted when he opened this debate just a few minutes ago. The letter says: “Those affected by the Bill are at the forefront of our minds and it is only right that we reflect that the Government may wish to explore further opportunities to achieve consensus when it returns to the Commons”. The only point I want to make about that is this. The implication of what is said there, and of what the Minister said at the Dispatch Box, is that there may be amendments in the other place that will take away the amendment that I hope we are now going to support, possibly without even a Division. My concern is this: I believe that that would not be a sensible thing for the other place to do.
I would urge one point: if there are felt concerns in the other place that are not satisfied by these amendments, a more appropriate route to be undertaken would be directed towards the regulators, rather than to diminish the quality of the amendment that I hope we are about to make. The regulators are very powerful—they have strong powers in the statute and in this Bill. In my view, the correct party to be concerned with in dealing with the kinds of concerns that trouble everybody in the story, and the proper starting position, is the regulator. That is what the regulator is there for. It would not be right, in my view, to undermine the quality of the amendments that have been put forward in respect of this provision without first facing the possibility that the regulator ought actually, if I may be blunt about it, to pull its finger out.
Baroness Fox of Buckley (Non-Afl)
My Lords, I was all ready to welcome the restoration of the original Lords amendment to this Bill by the noble Earl, Lord Howe. Previously, I was despondent that we had passed legislation with no teeth, which was potentially a lame duck law, so I was delighted with the reinstated, stronger statutory tort in the Bill that would mean staff and students would have a robust backstop that allowed the ability to sue in the civil courts for breach of their speech rights. In explaining the change, the Minister said he has spoken to many noble Lords. But I am rather taken with the words of the Under-Secretary of State for Children, Claire Coutinho, who noted that she had spoken to many leading academics and that they shared her belief that the tort was necessary to secure cultural change on campus, and that that is why she had introduced the amendment I was prepared to welcome. I can ask only what on earth has changed, other than that the Minister has spoken to noble Lords rather than to leading academics or students.
It is disappointing that we are now being asked to accept a fudge, in the form of the amendment from the noble Lord, Lord Willetts. I fear it will mean that the new, enhanced free speech duties will be viewed as more box-ticking by university managers and student union bureaucrats.
Perhaps I can share my own recent lived experience—to use the fashionable jargon—of being cancelled. I hope at least my remarks will be heard by those in the other, elected place when they consider this debate. Last year, I was delighted to be invited by the University of London’s Royal Holloway debating society to give a talk this February. It was a lovely invitation, from a student called Ollie, who wrote: “We would absolutely love for you to speak to the society about your interesting career, and to talk about the Academy of Ideas and the House of Lords to our keen crop of debaters.” Never one to miss a chance to meet and talk to a keen crop of debaters, I set a date firmly in my diary and I reorganised a number of clashes.
Unbeknown to me—though this has become routine these days for student societies—behind the scenes the debating society had to go through onerous and bureaucratic checks imposed by the student union on whether I would be given permission to speak. Student unions these days have created a veritable cottage industry in safeguarding checks, risk assessments, et cetera. It was a complete pain for the students and time-consuming, and with an undoubted chilling effect on inviting outside speakers. That is what this Bill set out to address, was it not?
Eventually, I was given a clean bill of health by the student union. Apparently, there was no evidence that I was a hatemonger or a threat. However, just a week before I was due to speak, the debating society cancelled. What happened? Once the event was advertised, the same student union bureaucrats claimed that six societies had raised concerns about me coming on to campus, the evidence for which was that I retweeted a clip from a comic on Netflix. Maia Jarvis, the president of the student union, wrote a menacing message to the debating society, stating:
“I hope that you can see that Claire Fox retweets and praises a video of Ricky Gervais being overtly transphobic. I wonder if you have thought about the impact of bringing a person who is an advocate for hate towards trans people and publicly ridicules them. And whether you are comfortable with the fact that that is the message your society is sending out to RHUL trans students.”
Lord Lucas (Con)
My Lords, what the noble Baroness, Lady Fox of Buckley, has just said emphasises the main point I wish to make: that this applies to students just as much as to academics. The whole idea of freedom of thought is really important. We are bringing up our children to think that they must curtail their thought. I have a daughter at university at the moment and that is certainly her experience. The atmosphere of not being allowed to discuss and talk about things is prevalent. The Bill is really important in making a difference to that. I will be very interested to see what Members in the other place think of the amendments we send down to them.
We should not think that this is happening just in universities. On 8 March I received, as other noble Lords might have, an email from the parliamentary security vetting department asking us to fill in and sign a form. It said that we must not share passwords, override or undermine security measures and sensible things like that. But it then went on to say that we must not be offensive or put the reputation of Parliament at risk. I do not know how to survive in this place without doing both those things; I imagine that applies to other noble Lords too. Our freedom of speech is now to be curtailed by a directive from parliamentary security vetting without—so far as I can see; I have contacted the authorities without getting any reply—any way in which noble Lords can be involved in that process. I am not sure who will take me to task for being offensive in this place, but I find offensive the idea that I should be asked to sign saying that I will not be.
Lord Triesman (Lab)
My Lords, I am not sure that I am going to be offensive; I now feel that my presentation is lacking as a result. Let me at once declare an interest. I was the general secretary of the Association of University Teachers in times when the issue of—and necessity for—freedom of speech in universities was regarded as one of their paramount responsibilities.
I readily agree with the noble Lord, Lord Willetts, who said that that is fundamental to almost all of us who have been concerned with higher education. I appreciate what the Minister has said; this has been a very solid development. I also support the amendment the noble Lord, Lord Willetts, introduced, for much the same reasons as the noble Lord, Lord Grabiner.
I feel a sense of disappointment and sadness on behalf of the noble Baroness, Lady Fox. It is obviously never pleasant to be invited somewhere and then told you are not going to speak, but I urge her to get over it. The truth is that when you go into academic climates and start talking to academics, you are going to find—rather like with lawyers—that a large number will agree with you and a large number will disagree. They will tell you that with all the spitefulness, generosity and so on while they do it.
I have come across a lot of academics who want to make sure that the world of universities does not automatically become subsumed in a world in which people pursue litigation against one another, rather than try to resolve things through more sensible routes. It was bound to end in a reasonable compromise, and I think the Minister put that very fairly and very well.
In welcoming these developments, the academics who have bothered to get in touch with me have told me that the kind of change we are contemplating today is the kind they would find easiest to live with. They are more and more—probably in part because of the debates we have had—sympathetic and attentive to the problems that have been created by cancel culture. I used to cancel my own culture when I was a lecturer, largely by giving very erudite lectures on obscure mathematical problems. Very few people enjoyed them. There is only so much multiple regression you can hear about before you conclude that you should take yourself home because no one is going to be that interested, but it was what I was teaching.
That is why I say to the noble Baroness, Lady Fox, that of course some people will be uncharitable and malevolent, but it is something we can get past with a sensible compromise of the kind we have seen—particularly in the light of the reservations the noble Lord, Lord Grabiner, has about it.
Baroness Fox of Buckley (Non-Afl)
To clarify, as I stated earlier—this really is important—I do not have a right to a platform and I do not care if people disagree with me. I do not mind if students invite me and then disinvite me. All I care about is if students are bullied into disinviting me. It is for the students that I made the speech, not for myself. Who cares about my feelings? They are of no relevance.
My point is that many academics and students have looked to this Bill and the amendment. The noble Lord, Lord Triesman, has talked to people who want the compromise. I have talked to people who think it is a fudge. Let Parliament decide—fair enough—but I do not think anyone can claim they have spoken to all the academics, and this is the only answer. I think that this is a cop out.
Earl Howe (Con)
My Lords, I just say to the noble Baroness, Lady Fox, that strictly speaking there should not be any interventions at this stage of the Bill.
Lord Triesman (Lab)
Because we are not having that kind of iterative debate, I will refrain from making the point that I am not saying that I spoke only to academics who took the same view I might take. I am just saying that if you speak to academics, you will hear as many views as the number of academics you speak to; that is in the nature of the business.
I welcome the process we have gone through because it has alerted people to a very significant problem. A few days ago in your Lordships’ House, I heard somebody say that trigger warnings were now being attached to reading lists of some of the great classics from the English oeuvre. I was just about to embark on a re-reading of Northanger Abbey. If anybody has any advice for me about dangerous pages that I should avoid, I should be extremely grateful to hear it, because I would hate suddenly to find my entire spiritual underpinnings removed while reading Jane Austen.
This debate will leave a legacy. It will make everybody more attentive to the risks to free speech and academic freedom, and I am not at all sad that we have gone through the process if that is the outcome.
Lord Moylan (Con)
My Lords, I am conscious that, as a Conservative Back-Bencher loyally supporting the Government in season and out, I am probably a Member of this House worthy of least consideration when it comes to discussing the contents of this Bill. Despite my having taken part at every stage in its progress so far, I think I am forgiven for being somewhat confused.
We started out with a proposal for a statutory tort, which I am going to call “hard tort”. I turned out to support it, not only out of loyalty but because I strongly believe in it. On Report, recognising that there were some concerns about it, I had the privilege to table an amendment that had previously been tabled in Committee by my noble friend Lord Sandhurst, which would have retained the tort but allowed a judge to stay proceedings and instruct mediation to take place. I thought that a good compromise that could have been accepted, and I am going to call that “middle tort”.
However, my noble friend the Minister pre-empted me to some extent by coming forward with a proposal which allowed the tort to be accessed only after every possible complaints procedure had been exhausted; we might call that “soft tort”. Your Lordships’ House voted for “sort tort”, and then went with the noble Lord, Lord Willetts, and voted to remove the clause all together in addition, which we can call “no tort”.
Today I have turned out loyally, because I am encouraged to do so, in order to vote for “hard tort”. Here I am, and with only half an hour to go I see that the noble Lord, Lord Willetts, has now moved to the “soft tort” position and I am expected to give my support to it. So this is not simply a question of “how do you manage your team?”—that is a minor consideration and purely a whipping matter—but of what it is we are actually saying to the world with these goings on.
The noble Lord, Lord Triesman, said that the important thing here is that the Bill sends a signal to universities. It does in my view send a signal to universities: that this Parliament and this Government are not as concerned about how universities conduct themselves to maintain freedom of speech, as a principle and as an activity, as the Government originally said they should be. That is clearly the signal it sends, and as I have said before in Committee, strong emphasis is being placed on the role of the regulator because regulators are subject, wherever they appear, to capture by those being regulated. That is very much why those who support this, and the university leaders, are very comfortable with it.
Like the noble Baroness, Lady Fox of Buckley, I note that in the various choices between “hard tort”, “mid tort”, “soft tort” and “no tort”, at the end of this debate we will still have no idea. My noble friend has said that when it returns to the Commons, as it must, there will be scope for further compromise. Who knows what is going to come back—“hard”, “mid”, “soft”, nothing? Anything could come back to us from the Commons because clearly, the Government do not know what they want to do about this.
I strongly suggest to noble Lords that not only have we misconducted ourselves, as far as the management of this is concerned, but we are sending a very poor signal. It is most regrettable that we will agree to the amendment in the name of my noble friend Lord Willetts today. Like the noble Baroness, Lady Fox of Buckley, I very much hope that, when the Bill comes back from the Commons, someone will have found their backbone and the tort will have been restored.
Baroness Lawlor (Con)
My Lords, I apologise that I did not speak in the earlier debates on this matter because, as I recall, I had not made my maiden speech. I simply add my voice to those who regret my noble friend Lord Willetts’s Motion A1, which I do not support because, as other noble Lords pointed out, it waters down the small protection that existed with the original Clause 4 for academics in many institutions.
An institution has great power: it has powers of office, of man and woman power, of employment and of funds. The original Clause 4 gave a simple and cheaper way for an individual academic who was suffering because his or her freedom of speech was under threat. I assure noble Lords that it is under threat in many universities, and especially the one I know best: my own university, Cambridge. Hardly a day goes by without threat after threat reaching the newspapers of academic freedom being impinged on. I draw noble Lords’ attention to Arif Ahmed’s publications and submissions to an earlier Committee on the Higher Education (Freedom of Speech) Bill. The problem has not stopped.
For those reasons, I am worried about Motion A1 going through. It will make life much more expensive for individual academics, who often plough a lonely furrow against top-heavy and powerful institutions. I would like to restore the original Clause 4, which gives a straightforward and cheaper alternative to someone taking action against an institution. I do not believe that there will be vexatious causes that involve universities or institutions in long and litigious claims that cost money and time, because existing law covers these matters in many respects. Cheaper claims can be dealt with under protocols before action or by agreement.
So Clause 4 is necessary not only for free speech but for free thought. It is not just about student union bodies, although they should observe this; it is about how academics pursue their subjects and whether their reading lists and courses are in line with official thinking—universities have a powerful officialdom. For those reasons, I remind my noble friend Lord Willetts of his having to be smuggled into the University of Cambridge not many years ago. I do not believe that my noble friend’s amendment would prevent that happening again. I thank noble Lords for their attention.
Lord Wallace of Saltaire (LD)
My Lords, we have demonstrated that there remains a range of opinion about the nature and size of the problem, and the appropriate response to it. Therefore, a compromise amendment is perhaps the best point for us to end up at. Some of us feel that this is an unnecessary intervention into the autonomous institutions that are our universities, and conservatives are supposed to believe in the autonomy of institutions and in not promoting undue state interference. I remind those on the Conservative Benches that, if you are in favour of a smaller state and deregulation, particularly of banks and companies, you should be careful about how much you are in favour of detailed or excessive regulation of autonomous bodies like universities.
After all, our universities are very highly rated in global terms; they are an asset to this country. Boris Johnson, when he was Prime Minister, used to talk about them as one of the major planks of our soft power in the world. We need to be very careful that we do not damage them.
Listening to the noble Baroness, Lady Lawlor, I was thinking of my time as an undergraduate at the University of Cambridge, and the behaviour then was, in some ways, not entirely different from the way it is now. I recall the occasion when my wife and a number of other Oxford students prevented an ambassador from speaking at an Oxford student occasion, and of my first year as a university teacher at the University of Manchester, when a number of students blocked the Secretary of State for Education from speaking at a university event. These things are not entirely new.
As the Minister suggested, we have of course seen a number of cultural changes. While the cultural changes mean that universities have become more sensitive to student opinion because student funding has changed, another change is that social media has widened the debate about what is acceptable. It has imposed, from different directions, the new cancel culture among the young, which we did not have in my generation and in most of the time that Members of this House were at university. We all have to face that problem—it is not solely a university problem—and we have to answer it at the levels of political leadership and of society. I very much hope that, when the Bill returns to the Commons, the decision on this will not be reversed.
When we talk about culture, I am concerned about those who talk about a culture war. I have read two op-eds in the Sunday Telegraph in the last month which have suggested that the pursuit of a culture war is the way for the Conservatives to win the next election, and that they should imitate the example of Governor DeSantis of Florida, who is pursuing, so the articles argued, a successful culture war against wokeism, cultural Marxism and the universities of his state. I know that there are some on the right wing of the Conservative Party who would like us to go down that route, but it would be a very dangerous route. We do not want this country to become as divided a society as the United States has become, in which a governor educated at Yale and Harvard now says that he was exposed to communist ideas as an undergraduate at Yale—I suspect that that is a slight exaggeration—and who thinks that the way to ensure his path to a presidential nomination is by dividing the country between the educated and those who do not have higher education. We do not need that in this country, and it would be extremely dangerous for ring-wing Conservatives to try to take that direction.
On a different level, I find the argument that we should pass Bills so that we send a signal a rather worrisome idea; I think that we should pass Bills so that they actually do something, that they enforce something and that they change the way in which we behave. Sending signals is something which political speeches should do—not Acts of Parliament.
I ask the Minister about the time of the implementation of the future Act, now that the Bill has been delayed somewhat; it will clearly be delayed again by going back to the Commons. I hope that he can confirm that there will be no attempt to implement the Act in full by the beginning of this coming university year, because it will take universities some time to consider it. He may not be able to give me an answer at the moment, but that is an important fact that we now need to have addressed.
I hope that the Minister also takes note of some of the criticisms which the Committee on Standards in Public Life and others have made about the appropriateness of appointing committees. We heard the noble Lord, Lord Moylan, discuss regulatory capture, but we have also heard those who oversee public appointments committees talking about the inappropriateness of people who know very little about the subject for which a person is being appointed deciding on the nature of the appointment. There is a balance—which I hope the noble Lord, Lord Moylan, will accept—between regulatory capture and political appointments being made for political reasons, which is important when one is considering such a major asset to this country as our universities.
I welcome the Government’s acceptance of this amendment. I very much hope that the Common Sense Group and others on the right wing of the Conservative Party will not attempt to take it back when it comes to the Commons and that the Government will re-establish a relationship with our universities, both staff and students. The relationship between free speech for students and free speech for staff has, on occasions, been muddled in all our debates on this Bill. I hope, therefore, that this Bill as now amended will become law.
Lord Moore of Etchingham (Non-Afl)
My Lords, I listened with great interest to what the noble Lord, Lord Moylan, had to say and I sympathised with the anguish he felt as a loyal Conservative supporter trying to deal with the problem the Government have presented him with. As a non-affiliated Peer I do not have that problem, but I share his anxiety about what the Government have done as it seems very vacillating and unhelpful.
I draw noble Lords’ attention to the famous words of Adam Smith that no people of the same trade are ever gathered together, even for diversion or merriment, without at some point conspiring against the public. It is lovely to have so many noble Peers in this House who hold or have held high positions in universities and university administrations—chancellors, vice-chancellors, professors and all the rest of them—but overall they constitute an interest. Their interest, naturally enough, is to believe that they are right, universities are well run and the critics are wrong. I ask them perhaps to consider that none of this would have come about if universities were being well run. These freedom of speech issues are very important and need some bolstering. When so many noble Peers who are associated with universities challenge and reject that, they must be conscious not to behave like trade union leaders in the 1980s who were defending powers that, it became clear, were unacceptable.
Lord Collins of Highbury (Lab)
As a former trade union leader I am a bit hesitant to contribute, but let me just say to the noble Lord, Lord Moore, that what has been excellent about our consideration of this Bill from Second Reading through to Committee is how, through excellent scrutiny, we have tried to reach a consensus, not a compromise. That is the important thing. On Report I confessed that I had changed my mind about the need for this Bill. I accept that better, more effective regulation will help to change culture in a more sustainable way. All this emphasis on tort does not really help the real problem that we have heard described.
I will be brief. I appreciate the comments of the noble Lord on non-disclosure agreements—a key element in terms of openness and transparency. The duties and responsibilities of the regulator, and how they are applied, will be important; I accept that universities need time to properly do that. But they have been developing good practice and best practice. They have responsibilities to freedom of speech, and I absolutely support that. I stress that the Opposition’s approach to this Bill has been totally non-partisan. I have supported the amendment from the noble Lord, Lord Willetts. I have certainly encouraged him because I have listened across the board as we have moved through each stage, and I think we will end up with a better Bill. In fact, with the consensus that has been reached, we now have a better Bill.
Despite some of the Minister’s concerns about what might happen down the other end, across this House and across all political parties we have reached a consensus; let us put the matter to bed. With our non-partisan approach, I assure him that the Government will have the Opposition’s support on their support for the amendments from the noble Lord, Lord Willetts. We can safely say that this Bill shall pass, and it will pass to defend the freedom of speech values that we all share. That is an important step that we can make.
I hope that the Minister will feel reassured about our approach to this Bill and how we have listened, changed our minds and supported very important consensus changes, which I think will ensure that all academics and university institutions will support this legislation.
Earl Howe (Con)
My Lords, there is little more for me to say, other than to thank noble Lords for their contributions to this debate and for the way in which, amid many doubts and hesitations, Members of the House have been willing to look for compromise and common ground on what I know has proved a difficult set of issues.
I thank in particular the noble Lord, Lord Grabiner, especially for his positive comments and remarks on the role of the regulator, as well as my noble friend Lord Lucas, the noble Lord, Lord Triesman, and, for his words about the need for us all to look for consensus, the noble Lord, Lord Collins.
I simply say to the noble Lord, Lord Wallace, that I too instinctively fight shy of the suggestion that Governments should unduly interfere with the workings of our universities. However, some of his remarks suggested to me that he does not accept that there is a serious problem to be addressed. If that is his view, I believe that he is in a minority in this House.
Lord Wallace of Saltaire (LD)
I think we have a large social problem, which has been partly raised by social media, in the intolerance of the young as a whole and cancel culture. It stretches across our society and we have to deal with it, but it is not purely a problem for universities, nor is it thoroughly based in universities—and it certainly does not result from indoctrination by left-wing staff.
Earl Howe (Con)
I am grateful to the noble Lord, but I think we all agree that universities, par excellence, are places that should be safe spaces for freedom of speech, as my noble friend Lord Willetts said, whatever may happen outside the confines of the campus.
As to the timing of the coming into force of the Bill, I can tell the noble Lord that it will not be before the start of the next academic year. The Government need to consult on the regulations and indeed draft them, which will take a little time.
I simply cannot agree with the noble Baroness, Lady Fox, that my noble friend Lord Willetts’s amendments represent a fudge—in other words, a watering down of the tort or a “soft tort”, as my noble friend Lord Moylan put it. With respect to my noble friend, I utterly disagree with him that the amendments send a signal, or any semblance of a signal, to the other place or the world that the Government are not serious about protecting freedom of speech in our universities. The idea of watering down, I suggest, is more theoretical than real.
As I said earlier, the vast majority of complaints will be successfully handled and dealt with without any need to go to court. However, where a complainant believes that that has not happened, they will still have the option of going to court. In other words, the amendments from my noble friend Lord Willetts underscore what we think will happen anyway.
I hope that Members of another place will come round to that view and that both Houses of Parliament will reach the endpoint that Ministers and the Government have felt it their duty to try to achieve, which is consensus.
Lord Willetts (Con)
My Lords, I want briefly to reflect on the important points that have been made. First, I think there is widespread recognition that there is a problem. Of course I understand the problem; I have been on the receiving end of exactly the kind of threats to freedom of speech that this law is trying to tackle. I have seen student unions protect my right to speak and I have seen student unions collapse under pressure to not allow me to speak. I have seen universities that have done their best to enable me to speak, even with shouting and jeering and protests outside, and I have seen universities cravenly collapse under pressure to not allow me to speak. I am absolutely aware of the issue, as I think Members across the House are. However, at no point when I faced these protests did it occur to me that the way to solve the problem was for me to have the right to sue somebody. That is the issue: what is the best way to deal with the problem?
I have to say that the path of the past decades has been to increase the power of regulation. The noble Baroness, Lady Fox, made a passionate intervention that began with a description of the bureaucracy involved in trying to prove that she was not a hatemonger. I am speculating, but I think I know where that bureaucracy comes from: it is the Prevent initiative. I remember my conversations with officials in the Home Office who said to me, “There are extremists being invited to speak at universities and we need to have a process to make sure extremists who will stir up hatred are not allowed to speak”. I remember meetings with Home Office Ministers where, if I may say so, it is possible that I made some of the points that the noble Baroness made. But the pressure was, “We cannot allow an unregulated approach; we need to know who these speakers are so we can check if they’re potentially going to infringe the law”. That, I suspect, is the origin of the bureaucracy. That is where it started, over a decade ago.
The noble Baroness recently had the shocking experience of not being able to speak at Royal Holloway college. But I do think that here she does this legislation a disservice. Faced with the problems she encountered, is it really the case and is she really confident that suing the student union, which is where the legal process would have started—and, clearly, she had some sympathy for the student union and the pressure it was under—is the way to resolve the problem?
The Bill envisages—and I have to say that Ministers have made it clear throughout that this is the way they see the Bill working—that, if the noble Baroness encounters a problem such as that, her first port of call is the Office for Students. I heard in several interventions noble Lords say, “It’s a patsy”, “It’s producer capture”, “It’s the university friends”. I would invite noble Lords on all sides of the House to read, for example, the recent letter of complaint from universities about the OfS, saying precisely that it was too aggressive, that it was not working with them and that it was a heavy-handed regulator. The idea that the OfS is some kind of patsy that has been put up to put off any intervention is a complete misreading of the powers that it already has under legislation steered through Parliament by my noble friend Lord Johnson of Marylebone and that are now enhanced by this legislation.
If the powers prove still to be inadequate—if someone still has a grievance even after the Office for Students and the OIA have investigated a complaint—at that point they can go to law; that is what these amendments, originally proposed by the Government last year and now proposed and brought before the House by me and others today, ensure. That is not some feeble abandonment of a commitment to freedom of speech; it is the right way to proceed.
This legislation is a powerful further intervention; it makes the legal framework absolutely clear. It means that any Member of this House, or any citizen who faces a challenge to their right to speak at a university, will know there is someone at the OfS who has an explicit legal responsibility for protecting their rights to freedom of speech. That is a very powerful provision, rightly reinforced, but only if the regulator fails by a power of tort as well. Therefore, I hope the House will support the amendments in my name and in the names of others in this House.
Building Safety (Leaseholder Protections) (England) (Amendment) Regulations 2023
(1 year, 9 months ago)
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17:45 - Division on Baroness Pinnock’s Motion to Regret. - Ayes: 185 / Noes: 138 - Motion agreed.
Baroness Pinnock
That this House regrets that in laying the Building Safety (Leaseholder Protections) (England) (Amendment) Regulations 2023 (SI 2023/126) His Majesty’s Government have not published data on the number of landlords who have benefited from an error which allowed landlords to transfer costs of remedying historical building defects on to their leaseholders; further regrets that His Majesty’s Government have no intention to identify leaseholders affected by that error to advise them to appeal to the First-tier Tribunal to recover costs; and calls on His Majesty’s Government to publish these figures in a spirit of transparency and write to those affected with clear guidance on how to recover costs.
Relevant document: 31st Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)
Baroness Pinnock (LD)
My Lords, the regret Motion standing in my name is critical of the Government’s response to those leaseholders who have been adversely impacted by a government error, which the Building Safety (Leaseholder Protections) (England) (Amendment) Regulations 2023 have recognised. The regret Motion puts the spotlight once again on the plight of leaseholders. Since the awful Grenfell Tower tragedy nearly six years ago, leaseholders and tenants have been at the very heart of the policy response to the crisis in building safety that was so cruelly exposed that night.
The Grenfell Tower inquiry has meticulously gathered evidence of years of malpractice by developers and materials manufacturers. It is clear where responsibility lies for the very significant number of building safety defects. Those not responsible in any way are the innocent leaseholders, who have done everything right and nothing wrong. The Building Safety Act set out the ways for the building industry to rectify past building defects. Those related not just to the removal of dangerous flammable cladding but to the lack of fire breaks, for instance, that were required at the time of construction. The Act also established how the very large costs of remediation were to be funded. In the case of non-cladding defects, there was a cascade of responsible entities. At the bottom of the cascade were leaseholders, who may be required to pay a capped contribution, which was limited to £10,000 outside London and £15,000 in London. These alone are significant sums—for first-time buyers, for instance.
There are still questions to be asked about whether the Government’s attempt to ensure that cladding is fully removed and safety defects are put right is effective in practice. However, the focus of the regret Motion is an error that inadvertently crept into the regulations, which determined how much developers would be required to pay, if at all. It was the intention that a family of associated companies of the developer would be included in the assessment of the value of the companies and, therefore, the ability of the developer to fund the remediation works. The regulations, unfortunately, excluded what have been described as parent and sister companies. This led to one very large developer being able to demonstrate that the special purpose vehicle that had been set up for the development did not of itself have the funds to pay for the remediation of safety defects. If the family of associated companies had been included with that special purpose vehicle, as was the intention of the regulations and of the Act, the developer would have been funding the costs of remediation. As a result of the error, this company was able to avoid paying for the defects and, via the cascade system, was able to pass on part of the costs to the leaseholders.
This is grossly unfair to the leaseholder, and a major company, which had already bypassed building regulations unlawfully in constructing the property, was now avoiding the responsibility of paying for this dangerous and deliberate practice that put profit first and people’s lives in jeopardy. The Department for Levelling Up, Housing and Communities was made aware—and only made aware—when a leaseholder contacted the department to query why they had been asked to pay remediation costs when they knew that the developer in question was a very large one and likely to be within the limits to be able to pay. I am pleased that the department quickly remedied the error, passed these amended regulations and brought them into force the following day, just to make sure that no other developer tried to bypass paying for remediation because of the error. However, there is currently no remedy for those leaseholders who have unwittingly paid towards remediation costs when they should not have done.
The Secondary Legislation Scrutiny Committee asked the department to quantify the numbers of leaseholders who have been forced to pay when they should not have been. Unfortunately, the department was unable to provide a figure and does not seem to have made any attempt to do so.
There is a route for any leaseholder caught out by the Government’s error, and that is to appeal to the First-tier Tribunal—but who knows about that? Leaseholders have been trapped all through this saga by the unscrupulous, immoral and unlawful behaviour of developers and others. The very least the Government can do is to seek out those leaseholders, provide them with the necessary information about how they can recover their costs and support them in doing so. The Secondary Legislation Scrutiny Committee asked whether protection for affected leaseholders could be introduced retrospectively, via primary legislation if necessary, and I too ask that question of the Minister.
This is injustice heaped on injustice. It was a government error, and the Government should do all in their considerable power to put it right. I will listen carefully to the response from the Minister. I hope she will be able to provide all the information that I and the Secondary Legislation Scrutiny Committee are asking for, including the ways in which leaseholders can find retribution. Meanwhile, I beg to move.
The Lord Bishop of St Albans
My Lords, I shall add a few words of support for the noble Baroness, Lady Pinnock. I stand with a weary sense of déjà vu, looking around at a number of people with whom I have sat as we have worked through building safety and fire safety measures.
What is interesting is that the Government fundamentally tried to grasp this problem. I pay tribute to the right honourable Michael Gove, who has been quite exceptional in taking hold of it and trying to solve it. I say well done to the Government for shifting the main problem in this very troubling area.
Like many noble Lords, I am still finding that people contact me because they are in a dreadful situation. Some of them are going bankrupt because they are simply unable to pay for the remediation work on their properties. This does not just affect big tower blocks; it happens to quite modest blocks of flats in places like St Albans, Stevenage and Bedford, in my diocese.
On the particular problem that the noble Baroness has mentioned, it is extraordinary, when the Government have already committed themselves to doing so many things on this—not least reforming the leaseholder system, which we will watch with great interest—and troubling that this unintentional problem, which is having a devastating effect on some people, is seemingly not being addressed. It would be a huge help if we could simply get the figures published to find out how many people are being affected by what seems to be an error and then try to help those people to find a remedy.
This is a terrible scar on the whole industry. We need to find ways to work with those who have unintentionally found themselves caught up in this and are quite desperate. That is supported by, as the noble Baroness has mentioned, the point made by the Secondary Legislation Scrutiny Committee that we need that data. I add my weight to the points that the noble Baroness, Lady Pinnock, has made today, and I hope we will see some movement.
Baroness Hayman of Ullock (Lab)
My Lords, clearly what we are talking about today is building safety and the importance of leaseholder protections. That is at the core of everything.
We have discussed, on a number of occasions now, the terrible events that happened at Grenfell Tower along with similar incidents that brought to light the significant issues surrounding building safety and the appalling impact that it can have on the lives of those who have lived, and continue to live, in affected properties. The safety of the homes that we live in has to be of the utmost importance to all of us, and it is the responsibility of the Government to ensure that buildings are safe and secure for those who live in them. So the Government’s Building Safety Act, as the right reverend Prelate the Bishop of St Albans said, is an important step towards improving building safety and ensuring that incidents such as Grenfell cannot happen again. However, we still need to ensure that leaseholders who have been bearing the brunt of the cost of remediation works are properly protected and can continue to make their homes safe.
The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)
My Lords, I thank the noble Baroness, Lady Pinnock, for securing this important debate to discuss the Building Safety (Leasehold Protections) (England) (Amendment) Regulations 2023. I also pay tribute to the Secondary Legislation Scrutiny Committee for its careful consideration of the regulations and to the right reverend Prelate and other noble Lords who have contributed to this discussion.
As noble Lords will know, the regulations correct an error in a previous instrument to ensure that, when assessing liability for the costs of remediating relevant defects, the consideration of the net worth of a landlord group for the purpose of the contribution condition includes parent and sister companies, as originally intended.
The department does not collect data on leaseholders who are liable to pay for the remediation of historical safety defects, not least because it is not a centralised process. We have, however, been made aware by leaseholders and, indeed, parliamentarians, of a very small number of cases where landlords state that they did not believe they met the contribution condition because of this unfortunate and unintended error. As I say, to date these cases are small in number, but of course we must say sorry to those people, because it will affect them, however few they are.
Due to the caps for qualifying leaseholders in relation to non-cladding remediation and interim measures, the maximum amount such qualifying leaseholders could have been charged is limited to £1,000—or £1,500 in Greater London—over the past year. Landlords are already required to produce a new landlord certificate which complies with these regulations in specified circumstances, including within four weeks of becoming aware of a relevant defect not covered by a previous certificate.
I wanted to make sure your Lordships were aware that the Building Safety Act already includes anti-avoidance and enforcement provisions to ensure that those who are liable to pay do so, and, where it is just and equitable, that costs incurred for historical safety remediation may be recovered. Remediation contribution orders allow interested persons—including local authorities, fire and rescue services and leaseholders—to apply to the First-tier Tribunal, as we heard, for an order requiring a landlord, developer or associated company to make payments in connection with remediation costs. Applications to the First-tier Tribunal for a remediation contribution order cost £100.
The department is clear that any opportunities to avoid the protections needed to be closed off swiftly, and that is what these regulations have done. Although it may be possible to give retrospective provision in law—as the protections in the Building Safety Act do—there is a general presumption not to apply new law retrospectively, and the department does not believe it would be proportionate to do so in this case. The Government therefore have no plans to introduce retrospective provision through primary legislation.
The department has published extensive guidance on the GOV.UK website to explain the leaseholder protections, including information relating to remediation contribution orders. Those affected who write to the department—and I encourage any noble Lord who knows of anyone who is worried about this to tell them to come to the department—will be informed of their options and directed to the guidance to help them to make an informed decision. Of course, each case is different, and leaseholders may wish to consider seeking legal advice before pursuing avenues of recompense.
LEASE—the leasehold advisory service—is providing free support and guidance to leaseholders who face costs for historic safety defects, and officials in my department continue to look at new ways to raise awareness of the leaseholder protection provisions to all leaseholders. These regulations are being issued free of charge to all known recipients of the 2022 regulations, and I put on record my assurance that the department will update GOV.UK guidance to further raise awareness of available redress options, with notifications sent to those who have signed up for them.
The circumstances surrounding the leaseholder protection legislation introduced last summer—particularly the speed of its preparation—were highly unusual, but necessary to ensure that leaseholders were afforded the financial protections under the Building Safety Act without delay. As my honourable friend the Building Safety Minister, Lee Rowley MP, said in his letter to the committee, we are confident that we can rely on the department’s processes that have long been in place, but which were abbreviated last summer, to ensure that, as far as possible, such mistakes will be avoided in the future.
I should like to deal with a couple of further questions. The noble Baroness, Lady Pinnock, referred several times to developers and their related companies. I point out that these regulations refer to landlords; that is, building owners. The mistake has no effect on the liability on developers.
I have answered the right reverend Prelate the Bishop of St Albans, in that we think that this is a very small number. Of course, if anybody knows of any such person, we will give them the support they might need to ensure they get the redress they should have. I hope I have answered all your Lordships’ questions. As ever, I will happily follow up in writing on anything I have not covered, and I am very happy to meet with any noble Lords to discuss this issue further.
I thank the noble Baroness, Lady Pinnock, for bringing forward the debate today. We can all agree that qualifying leaseholders should be protected from the costs of historical safety remediation. This legislation is important in ensuring that landlords’ groups that meet the contribution condition must meet the full costs of both non-cladding remediation and interim measures. On that basis, I ask the noble Baroness to withdraw her Motion.
Baroness Pinnock (LD)
My Lords, I thank the right reverend Prelate the Bishop of St Albans, and the noble Baroness, Lady Hayman of Ullock, for their support.
The right reverend Prelate has been at the heart of this issue for the six years since the awful Grenfell tragedy; he knows first hand, as he said, the devastating impact it has had on leaseholders. Perhaps I am wrong in saying this, but it was almost the last straw, in that all of us across the House had tried so hard to get the Building Safety Act to provide legislative ways of delivering remedies for leaseholders, and at that moment when everything should have been put right as far as possible—there are omissions that I still intend to pursue—an error crept in. Even then, where things were put right, innocent leaseholders were at the mercy of landlords who wanted to pass on the costs to them. The Minister has said that it is a small number but actually, we have no idea whether it is small or large, and the Government should find out.
I am grateful to the Minister for apologising for the error on behalf of the Government. I accept that it crept in inadvertently, but apologies do not pay bills. Leaseholders have had enormous bills of up to £10,000 from the cascade cap, which they would be required to pay. I am disappointed with the Minister’s response, both to my regret Motion—
Baroness Scott of Bybrook (Con)
The £10,000 would have been over 10 years, and we have stopped it at the end of the first year, so the maximum that would have been required was £1,000. I just wanted to clarify that. I would not want it to be £10,000.
Baroness Pinnock (LD)
I thank the Minister for pointing that out. I will see what the legislation says.
I am very disappointed with her response and the response to the request by the Secondary Legislation Scrutiny Committee, which also made a very strong statement that the Government ought to find out how many leaseholders were affected and provide them with information and support. This is a government error, albeit one made inadvertently. The Government ought to be leading the way in showing that if errors are made, efforts are made to put them right. Currently, no efforts are being made to put this right. Therefore, I want to underline my considerable concern that the Government are not intending to take any action, and I would like to test the opinion of the House.
Health Education England (Transfer of Functions, Abolition and Transitional Provisions) Regulations 2023
(1 year, 9 months ago)
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Lord Markham
That the draft Regulations laid before the House on 20 February be approved.
Relevant document: 32nd Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord Markham) (Con)
My Lords, the noble Baroness, Lady Merron, has tabled a Motion to Regret, and I will first address her concerns in turn.
First, the noble Baroness noted that the regulations do not offer sufficient evidence to support the change, and that the information on the potential costs of and savings from this reorganisation are unspecified and vague. In response, I note that an amended version of the Explanatory Memorandum for these regulations has been laid, with additional information on the costs and benefits of, and evidence for, the transfer of functions from Health Education England to NHS England.
As the Explanatory Memorandum sets out, there are some smaller costs and savings relating to the transfer of Health Education England’s functions to NHS England, and more significant costs and savings related to the wider transformation programme that NHS England is currently undergoing, which would include the transferred Health Education England functions. As I will set out in more detail later, overall, the merger of HEE and NHS England will bring significant benefits to the delivery of workforce planning for the NHS.
Transition costs include the creation of the HEE transition programme office and short-term consultancy to deliver the overarching design and the new workforce function. Ongoing savings and efficiencies from the wider NHSE transformation programme are expected to include a reduction in the total size of the new NHSE, including Health Education England and NHS Digital, of up to 40%; savings from not having a Health Education Board; and removing the need for a range of duplicate processes currently in place.
These amendments to the Explanatory Memorandum are also intended to address comments on the regulations by the Secondary Legislation Scrutiny Committee in its 32nd report of Session 2022–23.
The noble Baroness’s second point was that the regulations have not been published alongside the Government’s NHS workforce plan. I will say more about the longer-term plan later, but I can confirm that the Government have committed to publishing the plan this spring and will include independently verified projections for the number of doctors, nurses and other professionals who will be needed in five, 10 and 15 years’ time, taking full account of improvements in retention and productivity.
The noble Baroness’s final point was that the regulations do not guarantee that NHS England will give long-term workforce issues sufficient priority. I can confirm that the Government are putting in place a range of measures to ensure that NHSE places sufficient priority on these vital issues. This includes setting objectives on workforce within the NHS England mandate, continuing to monitor and track expenditure on education and training, and establishing a ministerially chaired board to provide oversight and governance of workforce in the NHS.
Baroness Merron
At end insert “but that this House regrets that the explanatory memorandum to the Health Education England (Transfer of Functions, Abolition and Transitional Provisions) Regulations 2023 does not offer sufficient evidence to support the change; that the information provided on the potential costs and savings from this reorganisation are unspecified and vague; that the Regulations have not been published alongside His Majesty’s Government’s promised NHS Workforce Plan; and that they do not guarantee that NHS England will give long-term workforce issues sufficient priority”.
Baroness Merron (Lab)
My Lords, I am grateful to the Minister for introducing this draft statutory instrument, which facilitates the merger of the body responsible for the education and training of the health workforce, Health Education England, with NHS England, with the purpose of improving long-term workforce planning and strategy for the recruitment of NHS staff. I would also like to express my appreciation of the work of Health Education England and acknowledge the contribution of staff who have worked within that organisation. I am also grateful to the Minister for his initial response to the points raised in the amendment standing in my name on the Order Paper.
As noble Lords will know, on these Benches we are very committed to long-term workforce planning for the NHS and for social care, which requires independent workforce projections. Once again, I have to say, it is staggering that the NHS has not had a workforce plan since 2003—and still we wait. In answer to the much-asked question about the publication of the workforce plan, your Lordships’ House and the other place have been told that it would be “soon”. The meaning of the word “soon”, I do feel, has been somewhat overstretched, and I know the Minister understands that point. So, to repeat the question: when will the workforce plan be published? And can the Minister indicate what will be the role of NHS England within the workforce plan?
In earlier debates about the merger of NHS Digital and NHS England, the point was rightly made that talented expertise has to be retained. Given that, in this case, we are looking at an estimated cut of up to 40% in workforce numbers, this point bears repeating. Could the Minister provide an update on how the work on retaining talent and expertise is progressing? What assurances can he give to your Lordships’ House that the staff are being treated fairly throughout this process? Could the Minister also set out what specific service improvements are anticipated because of the merger and what metrics the department will use to judge NHS England’s performance, given its new remit?
I am grateful to the BMA for its contribution, which highlights areas of concern it has picked up from practitioners. I hope the Minister can assist with allaying those concerns, which I will now set out. Doctors are anxious that these changes could devalue the importance of supporting education and training, compared with the desire to increase service delivery during an ongoing workforce crisis. How will this be guarded against?
There are also concerns that the reduced size of the new NHS England will damage its ability to deliver support to junior doctors and negatively affect the day-to-day running of postgraduate training programmes, which are currently supported by the local offices of Health Education England. Can the Minister give reassurance on this point?
Finally, there is a question about NHS England’s ability to adhere to the minimum standards set out in the code of practice on the provision of information for postgraduate training. I hope the Minister can also assist by responding on this point.
Although we on these Benches will not oppose these regulations, I now turn to the substance of my amendment and draw the attention of your Lordships’ House to the report of the Secondary Legislation Scrutiny Committee, which says:
“The Explanatory Memorandum describes what the instrument does in quite legal terms but does not offer evidence to support the policy by setting out the costs and benefits anticipated from this transition. We have received further information from the Department … which is published in Appendix 1 but despite our enquiries the information on the costs and savings from this reorganisation remains quite vague.”
In addition to these points, my amendment notes that
“the Regulations have not been published alongside His Majesty’s Government’s promised NHS Workforce Plan; and that they do not guarantee that NHS England will give long-term workforce issues sufficient priority”.
I heard the Minister’s initial response, but I feel he has spoken of promises of delivery in the future, so could he explain how the shortcomings, which have been criticised by the committee and in the context of the amendment, have arisen and how he will seek to address them in full?
Although there is no fundamental problem with the general policy of abolishing Health Education England and transferring its responsibilities to NHS England, once again the presentation, content and communication has been somewhat lacking. The SLSC has been damning of the regulations’ Explanatory Memorandum, which, as the committee says, does not provide sufficient evidence to support the policy, or set out the costs or savings clearly enough. This is clearly unacceptable, so could the Minister—this, again, is a repeat question for him—confirm what steps he has taken to ensure that important regulations such as these are properly and thoroughly brought before the House?
More broadly, and to return to where I started, these regulations are before us without reference to the broader NHS workforce plan, and it is this for which we still wait. Absorbing Health Education England into NHS England before knowing the number of health workers it will need to educate and train really does feel like putting the cart before the horse. The NHS is nothing without its workforce, yet we are still unsighted on how many doctors, nurses, care staff and allied health professionals we will need in five, 10 or 20 years’ time. Can the Minister set out the reasons behind this delay? Is it a matter of cost, or is it some kind of disagreement within government as to what the NHS needs and what the Government are prepared to commit to? I beg to move.
Lord Allan of Hallam (LD)
My Lords, I very much appreciate the opportunity that the noble Baroness, Lady Merron, has given to the House to debate this reorganisation on the back of her regret amendment. In preparation for this, I had a look at Health Education England’s website; it is always good to look at the thing you are abolishing. It is worth quoting in full what it says about itself:
“Health Education England … exists for one reason only: to support the delivery of excellent healthcare and health improvement to the patients and public of England by ensuring that the workforce of today and tomorrow has the right numbers, skills, values and behaviours, at the right time and in the right place.”
That would perhaps be an appropriate motto for the Minister to have. It is timeless: we want people to be focused on that mission of delivering the right people with the right skills at the right time and in the right place.
Again, I looked at the history of the body. It was set up as a special health authority in 2012. I imagined that it was something we had had for years, but no, it was set up in 2012 and became a non-departmental body in 2014. So in about a decade we have gone from wanting a body with a singular focused mission to saying, “No, that’s a disaster; it needs to now be fully integrated into a much bigger body in order to be able to deliver”. I fear we have seen this again and again; we had it with NHS Digital. A group of people got together a decade or so ago and said that the important thing is that all these functions have a team that is solely dedicated to delivering workforce, digital or whatever, and 10 years later the fashion has changed. The Minister makes a reasonable argument that you would not now have a separate HR function. Clearly, a decade ago, we thought that was exactly what we should do, and we spent time and money constructing this thing. Now we are spending time and money destructing it.
There is a risk that we end up mistaking circular motion for forward motion. It is still motion—we are moving things around—but there is a risk that we are not making progress. I will explain why we need to have really serious measures to understand whether we are doing that; otherwise, I fear we will back here in five or 10 years’ time, with people standing at the Dispatch Box arguing why we need to separate all these functions out, because merging them into NHS England meant that we lost focus.
The one group of people that will continue to make money out of this is the consultants. I note we are told in the Explanatory Memorandum that they were paid £1 million plus VAT to create this reorganisation. I am sure a similar group was paid £1 million plus VAT to spin out HEE when it was originally set up, and we will see this again with all the different parts of the health service. We spend money and we reorganise. Even if we support the latest organisation, we in this House need to continue to hold the Government’s feet to the fire, whoever they are, to say, “Prove that the reorganisation was worth the money”.
The noble Baroness, Lady Merron, is quite right to keep bringing us back to the information in the Explanatory Memorandum and the reports we get from the scrutiny committee. We are given explicit information about the costs. We are told that it is £1 million plus VAT for the consultants and another £1 million for staff costs, so a couple of million pounds here and there for direct costs. The savings are much less clear. We are told they are £1.3 million because we no longer need a separate board; then the big savings are wrapped up in this aspirational 40% for all of these reorgs into NHS England, but we are not given any more detail than that. I know the current body of staff in Health Education England is some 2,000 people, overseeing approximately £5 billion of expenditure, so there is clearly a lot of scope for potential savings.
I ask the Minister to make a firm commitment that the Government will come back and that future NHS England reports will give the kind of detail we need in order to understand whether those savings were realised. When these reorgs happen, there is a risk that NHS England’s future reports will be structured in a way that disguises the savings so that we cannot pull them out. It would help the House and the public if, when NHS England reports in a year’s time, there is a separate item that says, “For NHS Digital, we did or did not realise these savings”, and, for Health Education England and the education functions, “This is how many staff we now have working on it and that is why we think we are getting better value for money from the budget”.
From an accountancy point of view, you can go either way: you can either try to hide things by smushing them all up together or try to make them explicit by ensuring that the data is there. I hope that the Minister will commit so that we can come back at this time of year in 2024, 2025 and 2026—I recognise that this will take time to play out—to see whether this reorganisation has had the effect. This would inform the debate next time we are asked to reorganise; I am sure we will be told every time that they will make savings.
Finally, the substantive point raised by the noble Baroness, Lady Merron, is around the workforce plan. We can repeat our previous exhortations: that this is desperately needed; I know the Minister agrees that it is desperately needed. There are concerns that the reason it is being held up is that the funding is not there. Every time we see good news—the pay settlement for nurses and others is good news—a little bit of us asks where they will find the money; we hope they will not find the money by cutting in other areas. We need continual reassurance that the workforce plan will be accompanied by the money that will be needed to deliver it, and that we will not see it shaved away as it goes through the process of finalisation. That might be partly why we want it quickly. Once it is published, it is much harder to step back. The fear is that, the longer it takes, the more likely it is that there will be a process of salami slicing and the bold, ambitious workforce plan, which I am sure the Minister and his colleagues in the department supported, ends up “Treasury-fied” and no longer quite as ambitious as it was.
Finally on the workforce plan, we are talking about the NHS and we are rolling Health Education England into NHS England. As we have discussed many times in this House, health and social care are intimately related in terms of being able to deliver for people out there and being able to run an efficient service. I hope the Minister will at least be able to say that this reorganisation will not negatively impact joined-up workforce planning across both sectors. Ideally, I hope he will be able to say that there will be some positive impact from this reorganisation in terms of making sure that social care staff numbers correspond with the increase in NHS staff that he knows we need.
Baroness Watkins of Tavistock (CB)
My Lords, I declare my interest as a relatively new non-executive director of NHS England, appointed together with two expert doctors to give clinical input to the board and tackle the issues that have just been discussed. However, I want to put on record that I think Health Education England has been a success and has set up sound processes that have enabled a good estimation of the workforce needed for the next 15 years.
The workforce plan is in draft and is being considered by the Government, but I want to underline the fact that, without sufficient funding, it will not achieve what everybody wants it to achieve. I believe that making it mainstream in NHS England should mean that, working with the ICBs, we have a sound approach for the future. I am aware that the two previous speakers will be able to hold NHS England to account on whether we get it right or not. I felt that I should be here this afternoon to say that I think it will work, but only because of the sound foundation that NHS Education has left behind.
I also want to echo one concern: that we have to calculate social care needs within the workforce development plan, in particular the needs of leaders of teams in social care, who are often nurses or allied health professionals such as physiotherapists. On that note, I will sit down; I wanted to express my current understanding of the situation.
Lord Scriven (LD)
My Lords, I wish to add briefly to the very useful and interesting debate that the noble Baroness, Lady Merron, has stimulated with her amendment. In so doing, I point out my interest as a vice-president of the Local Government Association.
I support the general direction of the merger. I can see why HR functions need to be streamlined together rather than partly devolved and partly in NHS England. The Minister quite rightly pointed out his business background; I have a background in organisational development and public sector reform, not necessarily in the UK but in Africa and south-east Asia. One of the key failures in the public sector when these organisational structures happen, predominantly for cost reduction reasons—it is always said by those leading them that cost reduction is not the reason, but it is important—is that there are no measurements for success in three, five, 10 and 15 years. Without that, you get a structure without understanding how the structure will deliver exactly what is needed.
So, what are the measurements for success in three, five, 10 and 15 years? Without those, everyone can say there is a target, but no one knows what that target, or bull’s-eye, really is. What are the clear measurements within three, five, 10 and 15 years? If they are not there, how do we know what success looks like based on what the merger was about in the first place? That is really important.
The other part of this is that you can have all the training and numbers you like for the workforce, but if the support, conditions and culture are not right, people will leave, as they are doing now in parts of the NHS. In certain specialties, you cannot get a doctor for money, no matter how much you offer. Part of that is about working conditions, culture and support. How does this merger deal not just with numbers and education but more holistically with the culture and support? For example, in many trusts, junior doctors cannot even get a meal in the evening. You can have all the numbers you want in terms of training, but if people decide not to work because of the conditions, how does that help holistically? How do we ensure we have not just the training and numbers but the culture and support within organisations so that people decide to go and work there?
My final question is simple. All noble Lords who have spoken have mentioned social care. As I said, my question is simple: how does this plan link with a plan for the social care workforce? What problems are envisaged and what mitigation has been put in place to ensure, first, that the two plans work in tandem and, eventually, as a long-term aim —I have heard Ministers talk about this—that staff will be able to move across the organisational divide? How will the links be there? What mitigation is being put in against the risks for a social care plan and a healthcare plan? This is important because people who start with a health problem then require social care to make as good and independent a life as possible. It is important that, when the Government start on one plan, they understand the linkage with the other and the mitigations needed. I hope that the Minister can put the mitigations in place.
As I said, in general, I understand the reasons for this but there are serious questions that the Minister needs to answer to ensure the maximum impact from this merger.
Lord Markham (Con)
I thank noble Lords for their contributions to today’s debate. As ever, I will attempt to answer the questions as best I can, and I will come back in writing with the details.
First, on when the workforce plan will be published, forgive me for this answer but I cannot resist it. I looked on the HEE website and it will be delivered “at the right time and in the right place”. I could not resist that one. I think the term I am allowed to use is “shortly”, which is different from “soon”, but I will let noble Lords decide. Seriously, however, there is a very detailed plan. While I acknowledge that there are concerns about delays and this being “Treasury-fied”, at the same time, serious questions have been raised, as we would expect. This is leading to a lot more thinking, which is the right thing to happen, provided we come out with the right answer. I hope noble Lords understand that work is going on to ensure deliverability.
I will try to answer the many questions asked, particularly on what the measures of success will be, as raised by the noble Lord, Lord Scriven. From my point of view—it may be personal—we are publishing the workforce plan and the measure of success will be how well this body performs against that. It will not be down to that body alone; it is part of the newly merged entity. As the noble Lord, Lord Scriven, said, it is about recruitment, training and retention.
A key issue, as I know from being tangentially involved in some of the conversations with unions in the last few weeks, is a real recognition on our part that pay is a core issue, but so are things such as hot meals, rest areas for staff and parking. Some of those issues are important “health factors”, if you will excuse the pun, and we are very alive to them.
Turning to the questions raised by the noble Baroness, Lady Merron, and the noble Lords, Lord Allan and Lord Scriven, as I say, it is about looking at savings across the piece. As noble Lords will know, we are talking about quite a considerable structure. The average trust is run by 300 or 400 admin staff; an ICB has 700 staff; a region has 650 to 700 staff; the NHS itself, at the centre, has 4,000 staff; and the Department of Health and Social Care accounts for another 3,500 to 4,000 staff. I think we would all agree that layer upon layer of management is not good, from not only a cost and efficiency point of view but a management point of view. We all talk about our various backgrounds, and speaking from mine, the fewer layers you have between the so-called management and the front line, the better. That is the wider picture of what we are trying to do here.
Lord Scriven (LD)
I totally agree. I think Tesco, for example, has four levels of management between the customer and the chief executive. But I hope the Minister understands that, regardless of layers—this may not make me popular outside this place—the NHS is one of the most effective health services in western healthcare in terms of management costs. I hope the Minister does not take the populist view that having a go at the managers suddenly makes savings. We have to get the balance right. On comparators, the NHS is significantly well placed in the western world in terms of its cost ratio of managers to patient care. I hope the Minister will accept that.
Lord Markham (Con)
The noble Lord is right: it is about the effectiveness of the layers. I come at this from the view, “How do we make this most effective?” That is the major gain to be won from all this.
The noble Baroness is right to bring up the issue concerning the Secondary Legislation Scrutiny Committee. I have spoken to all the staff in the DHSC about it, and I have given assurances to the House on the importance we attach to it. I am meeting the Leaders of both Houses tomorrow to discuss how we are working to make improvements in this space. Hopefully, we are making progress.
I thank the noble Baroness, Lady Watkins, for her contribution. It is fantastic to have her on the board, given her experience. Several noble Lords asked about the social care element. As we know, the situation is slightly different because most people in the social care space are employed by third-party organisations. There will not be a direct read across, but the Minister will be announcing shortly the next version of People at the Heart of Care, which aims to address a number of issues. It is probably best to wait for that, and we can take it from there.
I have tried to cover as many of the issues raised as possible, and I am quite happy to follow up in writing any I have missed. Reassurance was sought regarding current training budgets, pointing out that, while we want to make savings where possible, we need to know they are being made in the right place. A separate board structure is being set up within the organisation to make sure that such matters are separately scrutinised and not lost within the overall picture, because it is understood how vital that is. These are all elements I will try to cover more completely in a written response.
Lord Scriven (LD)
That is a helpful answer. To be clear, you can have a separate board, but if the budget is not ring-fenced, all that they are scrutinising is a smaller budget. I think the question that was asked—although maybe not specifically—was, will the training budgets be ring-fenced and will the board therefore be looking after a ring-fenced budget?
Lord Markham (Con)
I think that is probably one element I need to come back to the noble Lord on in writing.
As I said, I will try to follow up the questions in detail. I welcome the contributions of various noble Lords and their understanding of what we are trying to do here. I understand the arguments, as an ex-management consultant, regarding centralisation versus decentralisation and how they go in and out of fashion. This is a slightly different case because it is about bringing a core function in house. To me, that is the key change and the key thing we will be seeking to measure. As well as setting out clinical needs, the key role of the NHS at its centre is making sure that it is recruiting, training and retaining talent to meet the workforce plan needs. On that note, I thank noble Lords for their contributions and hope that my follow-up answers any questions that I missed.
Baroness Merron (Lab)
My Lords, I am grateful to the Minister for his response, and to the noble Lords who have spoken in this debate: the noble Lords, Lord Scriven and Lord Allan, and the noble Baroness, Lady Watkins. I did smile when the noble Baroness gave us an update on the workforce plan, which I am sure was helpful to the Minister, and I also wish her well in her new role.
As the Minister and your Lordships’ House will have equally understood, this is not about the actual steps that are being taken. We have had a useful debate to pull out some aspects, but the regret Motion is about the workforce and, in particular, the failure to have produced a workforce plan. This is not something recent from the last year or so. We have to remind ourselves that this Government have been in government for 13 years, and still we wait. For every day we wait, we lose an opportunity—as noble Lords have said—to plan for the future, as well as to deal with the immediate, and that is what motivated me to put forward this amendment.
We are all in agreement today that a workforce plan has to be for health and social care, which are inextricably linked, and has to not sit on the fence—well, it may; we will see. The plan has to not sit on a shelf but be fully resourced and do the job it is intended to do. We will look forward to holding the Minister to account on that point, as I know he expects.
Regrettably, I do not believe that in this debate the Minister has addressed the shortcomings of the regulations before us. Those shortcomings are somewhat unnecessary, which is a great shame because overall the statutory instrument is one that will be beneficial. It is a shame that we have had to debate it in this fashion. With that, I beg leave to withdraw the amendment.
Arrangement of Business
The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)
My Lords, given the importance of the issue raised by the Statement we are about to hear, the Lord Speaker has waived the House’s sub judice resolution. However, I ask noble Lords to exercise caution and avoid referring to the detail of any cases that are currently or soon to be before the courts to avoid any risk of prejudicing proceedings, particularly criminal proceedings.
Baroness Casey Review
(1 year, 9 months ago)
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The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)
My Lords, I shall now repeat a Statement made in another place:
“With permission, Mr Speaker, I would like to make a Statement on Baroness Casey’s review of the Metropolitan Police. I wish to put on record my thanks to Baroness Casey for undertaking the review on such a difficult and sensitive topic with the utmost professionalism.
The Metropolitan Police Service plays a big role in our country: tackling crime throughout the capital and keeping 9 million Londoners safe; preventing terrorism nationally; and managing significant threats to our capital and country. I back the police. I trust them to put our safety before theirs, to step into danger to protect the most vulnerable, and to support all of us at our most fearful, painful and tragic moments. Many of us can never imagine the challenges that regular police officers face every day. That is particularly poignant as tomorrow marks the sixth anniversary of the murder of PC Keith Palmer in the line of duty while he was protecting all of us in this place. For their contribution, I am sure all Members will join me in thanking the police for their work.
But there have been growing concerns around the performance of the Metropolitan Police and its ability to command the confidence and trust of Londoners. That follows a series of abhorrent cases of officers who betrayed the public’s trust and hideously abused their powers. In June last year, His Majesty’s Inspectorate of Constabulary and Fire & Rescue Services announced that the force would be put into an Engage phase. In July, the Government appointed Sir Mark Rowley to the post of Metropolitan Police Commissioner, with the express purpose of turning the organisation around.
Today’s report, commissioned by Sir Mark’s predecessor, makes for very concerning reading. It is clear that there have been serious failures of culture, leadership and standards in the Metropolitan Police. That is why Sir Mark Rowley’s top priority since becoming commissioner has been to deliver a plan to turn around the Met and restore confidence in policing in London. Baroness Casey’s report finds: deep-seated cultural issues in the force; persistent poor planning and short-termism; a failure of local accountability; insularity and defensiveness; and a lack of focus on core areas of policing, including public protection. She also highlights the recent decline in trust and confidence in the Met among London’s diverse communities.
The report underlines the fact that the Met faces a long road to recovery. Improvements must be made as swiftly as possible, but some of the huge challenges for the organisation may take years to fully address. Baroness Casey is clear that Sir Mark and Deputy Commissioner Lynne Owens accept the scale of those challenges. I know that to be true from my own work with them. I will ensure that the Metropolitan Police has all the support it needs from central government to deliver on Sir Mark’s pledge of more trust, less crime and high standards. Every officer in the force needs to be part of making those changes happen.
As I said as soon as I became Home Secretary, I want all forces to focus relentlessly on common-sense policing that stops crime and keeps the public safe. The Government are already providing the Metropolitan Police with support to do just that. Funding for the force will be up to £3.3 billion in 2023, a cash increase of £178 million compared with 2010, and the force has by far the highest funding per capita in England and Wales. As a result of the Government’s police uplift programme, the Metropolitan Police has more officers than ever before—over 35,000 as of December last year. The Home Office is providing funding to the force to deliver innovative projects to tackle drug misuse and county lines. We are working with police and health partners to roll out a national “right care, right person” model, to free up front-line officers to focus on investigating, fighting crime and ensuring that people in mental health crises get the right care from the right agency at the right time.
It is vital that the law-abiding public do not face a threat from the police themselves. Those who are not fit to wear the uniform must be prevented from doing so. Where they are revealed, they must be driven out of the force and face justice. We have taken steps to ensure that forces tackle weaknesses in their vetting systems. I have listened to Sir Mark and his colleagues; the Home Office is reviewing the police dismissals process to ensure that officers who fall short of expected standards can be quickly dismissed. The findings of Baroness Casey’s review will help to inform the work of Lady Angiolini, whose independent inquiry, established by the Government, will look at broader issues of police standards and culture.
I would like to turn to two particularly concerning aspects of Baroness Casey’s report. First, it addresses questions of racism, misogyny and homophobia within the Metropolitan Police. Baroness Casey has identified evidence of discriminatory behaviour among officers. I commend those officers who came forward to share their awful experiences with the review team. Discrimination must be tackled in all its forms, and I welcome Sir Mark’s commitment to do so. I will be holding the Metropolitan Police and the Mayor of London to account by measuring their progress. I ask Londoners to judge Sir Mark and the Mayor of London not on their words but on their actions to stamp out racist, misogynistic and homophobic behaviour. Action not words has been something that victims of police misconduct and criminal activity have asked for.
Secondly, officers working in the Parliamentary and Diplomatic Protection Command perform a vital function in protecting our embassies and keeping us, as Members of Parliament, safe on the Parliamentary Estate. Baroness Casey’s report is scathing in its analysis of the command’s culture. The whole House will be acutely aware of two recent cases of officers working in that command committing the most abhorrent crimes. I expect the Metropolitan Police to ensure that reforms reflect the gravity of her findings, while ensuring that the command’s critical security functions are maintained. The Home Office and the Parliamentary Security Department will work closely with the Metropolitan Police to ensure that that happens.
Although I work closely with the Metropolitan Police, primary and political accountability sits with the Mayor of London, as Baroness Casey makes clear. I spoke to the mayor yesterday; we are united in our support for the new commissioner and his plan to turn around the Met so that Londoners get the police service they deserve. We all depend on the police, who overwhelmingly do a very difficult job bravely and well. It is vital that all officers maintain the very highest standards that the public expect of them. Londoners demand nothing less. I have every confidence that Sir Mark Rowley and his team will deliver that for them. I commend this Statement to the House.”
Lord Coaker (Lab)
My Lords, as the son of a Metropolitan Police officer who served for 30 years, I need no reminding of the bravery and service of many police officers, including those around Parliament. As the Minister laid out, tomorrow we will remember the service of PC Keith Palmer, who was killed six years ago in a cowardly terrorist attack on this Parliament.
But there can be no hiding place from this damning report into the culture and behaviour of the Metropolitan Police, and the noble Baroness, Lady Casey, and her team are to be thanked for their exceptional work. It is so depressing to learn that the Metropolitan Police has not done the institutional work to root out racism, sexism and homophobia. The individual case studies in the reports, and the reports given in evidence, show appalling and shocking behaviour going unchallenged. How will all of this change? Why will it change now, following this report, given that so many other reports highlighted these failings in the past?
Even recently, when change was promised and cultural change was made a priority for the police, what does the Casey report say? As an awful example, it says that, following the abduction, rape and murder of Sarah Everard by a serving police officer, there was a “plane falling out of the sky” moment when we should have witnessed real change and reform. Instead, the police failed to understand the gravity and impact of the crimes of a serving police officer, saying that the force preferred to pretend that its own perpetrators were just “bad apples”. The report asks what it will take for the police to wake up and change, so I ask the Minister the same question.
What will the Government themselves do to ensure that the cultural change needed is driven forward? Of course, others have a responsibility, but the Minister has to accept that the Government of our country have a responsibility as well. It is not just at a senior level: what about local commanders? Why did no one realise that having rape kits in overflowing and broken fridges was unacceptable and, as the report says, symptomatic of a force that has simply lost its way?
What plan will there be to stop this? Will the Government take any role in overseeing an action plan for the future? What discussions will they have with not only the commissioner but the inspectorate and the mayor, on an ongoing basis? It cannot be right when a front-line officer tells the review:
“You don’t want to be a victim of rape in London.”
How will racism be rooted out? Why is nothing being done about the fact that, if you are a black officer, you are 81% more likely to be in the misconduct system than white colleagues? I can only wonder what my colleague, my noble friend Lady Lawrence, feels—I know she is not in her place. What do the Government say to the criticisms made by the noble Baroness, Lady Casey, when she points out the eyewatering use of force against the black community? Does the Minister now agree that the Government have a responsibility? How does it help when, despite strong arguments in this Chamber, the Government are extending the use of stop and search powers without suspicion for protest offences? It was said time and again in this Chamber that these powers will be disproportionately used against black and minority communities. The Government themselves need to learn and take responsibility.
It goes on, with the admission that many more officers are being investigated. Is it not simply shocking that, on the media this morning, the commissioner could not say categorically that no predators are still serving within the force? Is it not true that evidence was given about the treatment of gay officers and homophobic police practice? Again, following the Stephen Port inquiry into the murder of four men and the issue of homophobia, promises were made, practices were to be reviewed and change was to be brought about because of police failings. How has nothing happened? What is happening? Does the Minister know?
Therefore, action is needed culturally, but, in the short term, will the Government commit to suspending officers accused of rape and domestic abuse, as we would? Will the Home Secretary introduce mandatory national police standards on vetting, training and misconduct, as we have called for? Does the Minister agree with the report that austerity has profoundly affected the Met, eroding front-line policing? The Home Office has a clear role in driving up police standards. As part of this change, will the Government commit to the Casey report recommendation for specialist units to deal with violence against women and girls, and specialist 999 call handlers for such cases, as we have called for?
Does the Minister agree with me that the time for closing ranks to protect our own has to be over, that the time for defensiveness is over and that the time for denial is over? Trust and confidence have to be restored, and that can be done only by action, not just words. This is the time for that rebuilding of confidence and the restoring of trust. We have to seize the moment and do it now.
Lord German (LD)
My Lords, in my 24 years of parliamentary activity, this has been one of the toughest and hardest-hitting reports that I have read. We must thank the noble Baroness, Lady Casey, for that review.
For decades, there has been racism, sexism, misogyny and homophobia in the Metropolitan Police, and, throughout that time, police leaders have wilfully denied it or have been so embedded in the culture that they do not recognise it. Those who stood up to be counted and reported misconduct were labelled troublemakers, ostracised by colleagues and targeted for misconduct investigations themselves. Some of those who were violent and racist were reinstated, even when they had been found guilty and dismissed.
A chief superintendent told my noble friend Lord Paddick, “You can get away with anything in this job, providing you don’t upset anyone”. Predominantly white male officers had senior officer supporters, while black, female and gay officers did not have the same sponsorship and were more likely to be formally investigated and have their appeals rejected. Even when a senior officer was accused of rape, the reputation of the Met was seen as paramount, and he was allowed to retire on a full pension, with no questions asked. So does the Minister accept that all of this is a failure of leadership at all levels, including that of the Government?
But, of course, in order to support the police, we must recognise that not every black, female, Sikh, Muslim or gay officer has had these experiences. But that does not detract from the fact that there is a corrupting and unhealthy culture that allows unacceptable behaviour to flourish and grinds down those who stand up for what is right.
Things have changed over the decades. For example, overt racism has been replaced by closed WhatsApp groups, to which only a few trusted colleagues are allowed access. Does the Minister agree that disproportionality in stop and search—stereotyping young black men as criminals, for example—demonstrates underlying racism? Does he agree that disrespecting women demonstrates underlying sexism, and that gay officers being afraid of the police demonstrates underlying homophobia? Does the Minister agree that the most important, pivotal change that Sir Mark Rowley has to make, and is making, is to reverse the overarching philosophy of “cover up” rather than “own up”? Does he agree that we need to support him?
Does the Minister agree that armed units such as the parliamentary and diplomatic team attract people who want to dominate and control, rather than cultivating such behaviours? Vetting and screening for these units are clearly inadequate, as is the whole process of vetting, as we have repeatedly raised in this Chamber in relation to having appropriate vetting procedures for both new and continuing officers.
Austerity has made things worse, as the Minister said. He said that, between 2010 and 2023-24, they have increased the cash budget of the Met by £178 million on a £3.3 billion budget over 13 years. I do not think that that is a magnificent increase, but it has certainly been reflected in the fact that we have only half the number of PCSOs in London and that specials have more or less disappeared. It means that there is a major role for the Government to play in putting things right. The Government have to assess whether they are funding the Met properly, and whether those resources are being used to the best effect.
The Home Secretary, the Mayor of London and the commissioner must all take responsibility for rescuing the Met from destroying itself. So I ask the Minister: what role do the Government see that they must play in making that change happen, given that they have sat around for all this time and we have not yet seen the results? It is clear that, despite all those repeated reviews—from Scarman, Macpherson and the HMIC—the force’s toxic culture has never been properly addressed. But this time it has to be. The leadership in the Met and the Home Office must view this as a precipice moment. The Home Secretary must take personal responsibility for this and must draw up an urgent plan. Can the Minister say what the plan is and what timescales they will use to show progress that goes beyond the tick box? The stakes are too high for anything less. The fundamental principle of policing by consent is at stake.
Lord Sharpe of Epsom (Con)
My Lords, I thank both noble Lords who have spoken. I will also take this opportunity, as the noble Baroness, Lady Casey, did, to thank the vast majority of police officers in London, who, frankly, must be as depressed as we all are by reading the awful findings of the report.
It is paramount that public trust in the Met is restored. The Home Secretary is committed to ensuring that the commissioner and the Mayor of London will be held to account to deliver a wholesale change in the force’s culture. Of course, there is more to do, and the nature of that mission of rooting out unfit officers will probably mean that more unacceptable cases will come to light. I am not surprised that Sir Mark was unable to answer that question directly.
However, as I have already said, we should not overlook the many officers working in the Met who carry out their duties with the utmost professionalism—I emphasise that point. I am also confident that, under Sir Mark’s leadership, progress is being made to reform standards and to deliver common-sense policing for Londoners. The noble Baroness, Lady Casey, was very explicit about this; she said that Sir Mark and his deputy, Lynne Owens, have her trust—and they also have the Government’s trust. The Government are driving forward work to improve culture, standards and behaviour across policing, which includes strengthening vetting and reviewing the dismissals process, which are subjects I will come back to.
On the subject of institutional racism, sexism and homophobia, it is obviously clear from the report that recent cases, including instances of all those things, in parts of the Metropolitan Police are completely unacceptable. It has been made very clear that standards have to improve in this area as a matter of considerable urgency. The Met has to rebuild trust, improve standards and keep all Londoners safe from harm, regardless of their background. Urgent steps must be taken now to bring this change and to right those wrongs. It is critical that we do not lose momentum and that we come together with the Met to drive this much-needed change.
The noble Lord, Lord Coaker, asked what action the Home Office is taking now. At this precise moment, the Home Office is closely monitoring the progress that Sir Mark is making to deliver the transformation that is required in the Metropolitan Police through regular attendance at the MPS’s turnaround board meetings and in the chief inspector-chaired policing performance oversight group. We stand ready, with other system leaders across policing, to consider what further support we may be able to provide to support the action plan that the commissioner has developed. We are working with chiefs and other partners to deliver a programme of work to drive up standards and to improve culture across policing.
I am afraid that I will turn to chapter 8 of the report, because the noble Baroness, Lady Casey, makes it very clear that
“the primary public accountability of the Met for policing London should exist through the Mayor of London, together with his Deputy Mayor for Policing and Crime and the Mayor’s Office for Policing and Crime (MOPAC) oversight arrangements … A dysfunctional relationship has developed between the Met and MOPAC, with defensive behaviours on one side”—
to which the noble Lord, Lord German, referred—
“and tactical rather than strategic approaches on the other”.
The noble Baroness, Lady Casey, has recommended that the mayor chairs a quarterly board, and we support that. As I said in my opening remarks, we will make sure that both the commissioner and the mayor are held accountable on that. But the governance relationship is clear.
Much has been made of the impact of austerity, but I am afraid that I cannot agree because the Government have proposed a total police funding settlement of up to £17.2 billion in 2023-24—an increase of up to £287 million compared with 2022-23. As I have already said, as a result of the police uplift programme, officer numbers in the Met are at a historic high: there were 35,000 in December. On a per capita basis, in 2021 the Met received 57% higher funding per capita than the average for the rest of England and Wales, excluding London, and 24% more funding than the next highest force—Merseyside—which has a higher rate of police recorded offences per 1,000 of the population. Those numbers exclude funding that the Met receives for policing the capital city, counterterrorism and so on. Those numbers speak for themselves: the fact is that funding in London is about £300 per head of the population, compared with an average of just over £200 in the rest of the country.
Obviously, trust in the police is a subject of considerable concern, in particular in some of the communities that have been mentioned. I refer to comments made in the other place by Karen Buck, the MP for Westminster North, who pointed out:
“Neither the long-standing concerns about police culture identified in the Casey report nor the individual instances of racism, misogyny and homophobia in the police can be laid at the door of the cuts to the police budget over the early part of the last decade”.
She was happy to accept that, and I think that we should, too.
Questions have been raised in the report about PaDP—Parliamentary and Diplomatic Protection—and the firearms unit, which make for appalling reading. However, these units provide a vital function in providing protection and ensuring the public’s safety, and we expect the Met to take immediate action to drive reform in these functions and to root out any officers who are not fit to serve. I am pleased to say that considerable progress is already being made on that. In addition to a root-and-branch review, the Metropolitan Police has taken a large number of other steps to ensure that the public can have greater confidence: it is under a new commander, Chief Superintendent Lis Chapple, whom I am sure we all wish well; a third of all sergeants are new; PaDP officers have been prioritised as part of the MPS’s data wash against the police national database; and Operation Onyx is looking at historic misconduct cases that have previously been investigated and resolved, but which have included allegations of sexual offences or domestic abuse over the last 10 years. I am pleased that that work is taking place, and it is good news that it is taking place quickly.
As to the noble Baroness’s recommendation of “effectively disbanding” the PaDP unit, we do not believe that that is appropriate. As I have said, the Met has committed to, and made progress on, overhauling the command, and we expect it to make sure that the reforms reflect the gravity of the recommendation, while also ensuring that the command’s critical security functions are maintained. I think that those expectations are obvious and self-evident.
The noble Lord, Lord Coaker, raised stop and search. We remain of the belief that stop and search is a vital tool to tackle crime and to keep our streets safe. In 2021-22, stop and search removed around 14,900 weapons and firearms from our streets and resulted in almost 67,000 arrests. We are clear that nobody should be stopped and searched because of their race. Extensive safeguards, such as statutory codes of practice and body-worn video, exist to ensure that this does not happen. It is essential that we use data and context on stop and search to provide greater clarity and to reassure the public about its use. That is why the Government have committed to improve the way that this data is reported and to enable more accurate comparisons to be made between different police force areas. We have included new analysis in our police powers statistical bulletin in October 2022, which allows users to compare stop and search rates between the 43 police forces. To be clear: a higher rate should not automatically be regarded as a problem, but the reasons should be transparent and explicable to local communities.
I accept that this can cause disquiet, of course, but I came across these words earlier when I was reading my briefing on this subject and was really rather taken with them. I will read them to noble Lords, who I hope will indulge me. Sharon Kendall, whose 18 year-old son Jason Isaacs was murdered in London, said:
“For those who try and tie the hands of the police in making their job more difficult, I ask you to stop and look at all the murdered teenagers’ faces. If we collectively gave a little more support to the police using stop-and-search and enforcement, things would change.”
I accept that the police have a great deal of work to do to improve the culture—of course I do. However, we should also bear in mind her context and take it very seriously when discussing this subject.
The noble Lord, Lord Coaker, asked about the vetting process. There is already a statutory vetting code for all forces, and the Government have asked the College of Policing to update it to insert stricter obligations for chief officers on how vetting should be carried out within their forces. That is currently out for consultation. On the subject of bans for applicants with histories of domestic and sexual abuse, the revised code will be clearer on obligations on chiefs not to appoint individuals who are not suitable to be police officers.
On chief officers suspending officers under investigation for such allegations, the chief constables have a power in law to suspend police officers either where an investigation would otherwise be prejudiced or the public interest requires the officer to be suspended. In both cases, chiefs must also consider whether temporary redeployment to an alternative role or location would be appropriate. These are rightly operational decisions for chiefs following careful consideration of the full facts and circumstances.
On leadership, I agree that leadership has been found wanting in the police but we have invested £3.35 million from 2021 to 2023 for the College of Policing to create a national leadership centre. As part of this, the college is now in the process of setting and rolling out national leadership standards at key levels in the police service and providing leadership development programmes aligned to these standards. I have spoken to Andy Marsh and the chair of the College of Policing on this subject, as I know has my right honourable friend the Home Secretary. I suspect it is a subject to which we will return, as clearly work needs to be done there.
Lastly, but by no means least, on the subject of violence against women and girls, my answer will include Operation Soteria to which I have referred from the Dispatch Box before. It goes without saying, but I will say it anyway, that rape and sexual violence are devastating crimes that have a long-lasting impact on victims. Protecting women and girls from violence and supporting victims and survivors of sexual violence are a key priority for the Government. It is abhorrent.
The cross-government tackling VAWG strategy and tackling domestic abuse plan set out actions to prioritise prevention, help support survivors, strengthen the pursuit of perpetrators and create a stronger system. In 2021, the then Home Secretary commissioned HMICFRS to inspect the police response to VAWG. It found that while there had been progress, there was more to do to improve the police response. We accepted all the report’s recommendations to government.
To support policing to improve its response, we are funding the first full-time national policing lead for VAWG, Deputy Chief Constable Maggie Blyth, who is driving improvements in the police response. We have added VAWG to the strategic policing requirement, which means it is set out as a national threat for forces to respond to alongside other threats such as terrorism, serious and organised crime, and child sexual abuse. We are providing £3.3 million for domestic abuse matters training and are funding Operation Soteria, which will improve the police response to rape. We have introduced a range of tools and powers to help policing tackle VAWG, including stalking protection orders, sexual harm and sexual risk orders, and forced marriage and FGM protection orders.
I have talked about Operation Soteria from the Dispatch Box before. In the pathfinder forces there are signs of improvement, which is welcome, but I acknowledge that they still do not go far enough. To the Met’s credit, it is one of the first five forces to go into that programme. I forget what the precise terminology is, but it is one of the trial forces.
I accept that there has been a failure of leadership in the police, of course, but I have faith in Sir Mark and I suspect that most of the House will share that faith. The police have a lot of work to do to restore trust, and I hope that has been made clear. There is clearly a long way to go for the Metropolitan Police, but in Sir Mark and Dame Lynne we have a very strong top team, as the noble Baroness, Lady Casey, acknowledged. They are certainly well placed to start and prioritise this work and make sure it is delivered in a timely fashion.
Baroness Chakrabarti (Lab)
My Lords, does the Minister agree that in the spirit of bipartisanship, on such a dark day for the capital and the country, nobody should double down against the central finding of institutional prejudice? This does not mean that everybody is prejudiced; it just means that there are systemic problems that need to be addressed if we are to tackle these deep-seated problems in the institution.
Secondly, does the Minister agree that it is not just for the mayor or the Government and that Parliament has a role in this, going forward? Some of the many findings in the very difficult but excellent, robust report perhaps require primary legislation—pension forfeiture, robust disciplinary and vetting systems and so on. Is this something that we can continue to discuss together at this terrible time for policing and the rule of law?
Lord Sharpe of Epsom (Con)
I certainly agree with the noble Baroness’s latter point. During my response I omitted to mention the review into police dismissals. Obviously, that is ongoing. It started on 17 January and is expected to last four months and conclude at the end of next month. I cannot imagine for a moment that it will not address many of the more pertinent points made by the noble Baroness, Lady Casey. I quite expect that I will be up here discussing the findings of that review in due course.
As regards the institutional racism and so on, like Sir Mark Rowley I probably would not use that description because it can be misused and risks making it harder for officers to win the trust of communities, but I of course acknowledge the noble Baroness’s point.
Lord Cormack (Con)
My Lords, does my noble friend accept that a particular responsibility rests on the Home Office here? Will he take away an idea and discuss it with his colleagues? Namely, there should be a Minister of Cabinet rank within the Home Office, or maybe detached from the Home Office, whose prime, indeed sole, responsibility should be to be stationed at Scotland Yard supervising what goes on, and answerable to both Houses of Parliament. This is a shameful day for us all, and the Home Office cannot escape its share of the blame.
Lord Sharpe of Epsom (Con)
My noble friend makes an interesting suggestion. There is already a Policing Minister. My personal view is that it would be difficult to station a Minister in a police station, which is effectively what he is suggesting. We need to be very careful to make sure that political oversight and operational responsibility, as the noble Baroness, Lady Casey, calls it, are clearly delineated. I am sorry if he does not like the fact that the noble Baroness pointed to the Mayor of London’s responsibility for the political side of policing in London, but that is what she did in chapter 8.
Baroness Jones of Moulsecoomb (GP)
My Lords, it is obvious that the Home Secretary there is setting up the Mayor of London to be totally accountable. We all know that she has to play a role as well. In fact, it might be good if she stopped using racist, inflammatory language, because that would probably help the situation in the Met. Perhaps the Minister could take that back to the Home Office.
There is also the fact that anyone who has been watching the Met for the past 20 years—and I include myself—knows that nothing in that review is new. We have all raised all those issues many times—the noble Lord, Lord Harris, is agreeing with me. It is not new and should have been dealt with long before.
However, there is one thing in the review that could be fixed if the police actually tried to sort it. The noble Baroness, Lady Casey, makes the point that
“the Met does not look like the majority of Londoners.”
That is a very good point because it is mostly white—82%—and 71% male. Over the years the Met has tried to make itself look more like London, but there is a big problem in that most officers do not live in London. Also, when you have this level of misogyny, racism and homophobia, you do not attract people in. Does the Minister agree that a big move on recruitment might help the situation?
Lord Sharpe of Epsom (Con)
On the noble Baroness’s last point, yes, I agree—but I also think that a key element of that is to restore trust among the diverse communities that the noble Baroness, Lady Casey, has identified as having reduced or lost trust in the police. I am afraid that I cannot agree, though, that the Home Secretary is setting up the Mayor of London. It is in black and white: it is the noble Baroness, Lady Casey, who makes the point, not the Home Secretary. I shall acknowledge, of course, that the Home Secretary bears some responsibility for policing in the capital—because, of course, the Metropolitan Police has a large number of national aspects to its work, too.
Lord Russell of Liverpool (CB)
I thank the Minister for repeating the Statement. It cannot have been much fun to read it out—and it is horrifying to read. For those of us who have been involved in some of the legislation going through this House in the last few years, I am afraid that very little of it is a surprise.
To follow on from the noble Baroness, Lady Jones, speaking as a Cross-Bencher, one of the things that I find most egregious is the politicisation of dealing with this problem. I live in a constituency in London where my wonderful Member of Parliament, Mr Hands, has recently, poor chap, been made the chairman of the Minister’s party. Every week, I have an email from him, which I call “The wonder of Greg”, which tells me about all the things he is doing, including taking the oath to the new King—and we had a clip to watch. But every week, week in and week out, there is constant sniping at the Mayor of London, in a nakedly political way, which is doing nobody any good at all.
Mr Khan may not be everybody’s flavour of the month, but the only way in which we will tackle this issue is to depoliticise the relationship between whichever Government it is, the Home Office and the mayor, who is there to represent all Londoners and not there to be an enemy of those who are Conservatives. If the Minister could take one message to his right honourable friend in the other place, when she is not doing home decorating in parts of Africa, it is to try to remember that the mayor is there to represent all of us who live here in London, and there to represent the interests of all victims—and please can we be a bit more grown-up about this and be very careful about the language that we use?
Lord Sharpe of Epsom (Con)
From a broad point of view, I of course agree with the noble Lord. I do not personally approve of the politicisation of policing. However, I shall go back to the words of the noble Baroness, Lady Casey, who said:
“A dysfunctional relationship has developed between the Met and MOPAC”.
Under those circumstances, I would say to the noble Lord that it works both ways. I also think that whatever he is seeing locally is best dealt with locally. I shall of course raise his concerns with the chairman of my party, but the fact is that these are not Home Office points—they are made by the noble Baroness herself, when she says that a “dysfunctional relationship has developed”. That dysfunctional relationship needs to be resolved.
Lord Blunkett (Lab)
I was not going to say this, but now I shall. First, I declare an interest because the Deputy Mayor for Policing and Crime was my special adviser 20 years ago and remains a very close friend. Those who have taken responsibility in this area—and, of course, I have—will be aware of the real difficulty of holding the police force to account. Yes, there may have been a dysfunctional relationship, spelled out in chapter 8 of the brilliant report by the noble Baroness, Lady Casey, who deserves a medal for what she has done over these months. But what the noble Baroness was pointing out was the real difficulty that any mayor has—and this applies to the Home Secretary as well—in a situation where the force is so defensive. This is illustrated in the report time and again: the force is so defensive that any criticism at all is taken personally, and people go on the defensive to the point where you cannot have a sensible or rational conversation.
From now on, perhaps the Minister would take it back to the Home Secretary—and, of course, to the mayor and the mayor’s office—that it is time to stop the police hiding behind operational responsibility and to understand that somewhere and somehow they have to be held to account. At this moment in time, we are doing so, but on the back of years of failure. If we are to avoid that in future, we will have to have transparency and honesty in a way that we have not had.
Lord Sharpe of Epsom (Con)
I defer to the noble Lord’s extensive experience, of course, and I actually agree with everything that he has just said. The fact is that the report also identified an “evasive” culture and a culture that is overly defensive when it comes to perfectly justified criticism. I have confidence that Sir Mark will change that culture and do so very quickly—but, of course, he needs to be held accountable for doing that. The noble Lord is completely right: this cuts both ways, and for this situation to become less dysfunctional both sides have to operate in a much more functional way.
Baroness Wyld (Con)
One of the themes of this report is a “we know best” culture. Clearly, the Met has not wanted external challenge or external help from expert stakeholders, be it on women’s issues or all the things that are revealed in this shocking report. Can the Minister say what specific conversations he has had about a plan in place to change the culture, drawing in that external expertise? As the noble Lord, Lord Coaker, said, if you are going to do this, you need a strategy, but you also need specific plans, tools, metrics and deliverables. I take on board all the points that the Minister has made about the mayor’s role, but there is a responsibility in the department to know how and when this will be delivered and how it will be measured.
Lord Sharpe of Epsom (Con)
My noble friend makes an extremely good point. I have had a couple of conversations with Sir Mark Rowley, but I know that the Policing Minister has had many more. It is obviously the case that our response, as well as that of the commissioner, will develop over the coming days. I think that we should give him a little bit of time to respond to this report in full. Having said that, he has been in post for six months and he has our good will and support but, to maintain that good will and support, he is going to have to deliver, and metrics and deliverables will have to be a key part of that.
Lord Harris of Haringey (Lab)
My Lords, I refer to my policing interests in the register. I chaired the Metropolitan Police Authority some 20 years ago, and one of my members was the noble Baroness, Lady Jones. It is a very strong and powerful report, and all credit to the noble Baroness, Lady Casey, for producing it and to Dame Cressida Dick for commissioning it in the first place. The point about the report is that it tells us things that we have known for all that period.
Strikingly, a recommendation is made by the noble Baroness, Lady Casey, that says:
“As a minimum, Met officers should be required to give their name, their shoulder number, the grounds for the stop and a receipt confirming the details of the stop”.
That is something that the Metropolitan Police Authority gave instructions should happen over 20 years ago. It was introduced then, but somehow along the way it has disappeared. That is part of the way in which the police service reverts to a particular type, unless there is constant pressure and vigilance, and support for those many officers who want to make things happen.
I have two points that I want to make to the Minister. First, he said that he did not accept the statement that there is institutional racism, misogyny and homophobia, but he also said that he wanted to rebuild confidence with those communities. Maybe a statement in which the Home Office, the mayor and the commissioner all acknowledged the fact that, despite all those officers and staff who do not behave in this way, there is an institutional effect, would be part of restoring that confidence.
The second point is that today we have focused, necessarily, on the Metropolitan Police, but what assurances can the Minister give us about the state of other police forces elsewhere in the country, because I rather suspect that the diagnosis that has been made here could also be made in many other places?
Lord Sharpe of Epsom (Con)
I think I need to correct the record. I did not say that I did not accept that there has been evidence of institutional racism, sexism or homophobia—I said that I would not use that description, which is rather different. Of course, I accept the conclusions of the noble Baroness, Lady Casey, and there have been clear evidences of all those things, as I said earlier.
As regards other police forces, obviously this particular report deals with the Met. It is one of the five forces that are currently in Engage, so clearly there are some failings in other police forces around the country, which I think we are all familiar with. It would be unfortunate to tar all the other forces with this brush, but I am quite sure that there is evidence of the sorts of behaviours identified here in some of those things. Of course, some of them will be specific to the Met, because of course they do not necessarily mirror the structures and commands in other forces. This should be a wake-up call to all policing—I think that that is fairly evident—and I hope that senior police officers, and all police officers around the country, will make the effort to read this report and reflect.
Baroness Berridge (Con)
My Lords, it is 30 years ago next month that Stephen Lawrence was killed. So there have not been “growing concerns” among young black people in London; they have been telling us for years that things have not changed and we—meaning all of us—did not listen. At that time, in 1983, a black gentleman called Leroy Logan did join the police and rose to be a superintendent. He founded the Metropolitan Black Police Association and chaired it for 30 years. He is one of the people who has an insight. I asked him today, “Has the commissioner asked to see you?” “No.” Unfortunately, this does not give me confidence that the Metropolitan Police are prepared to hear from their detractors. If someone such as this, who was the subject of a short film by Steve McQueen that was based on his life, has not been through the door of the commissioner in light of today’s report, I hope that the Minister can take back a specific request that he meet Leroy Logan.
I have asked my noble friend the Minister on other occasions why, when the force is under special measures or the Engage process, and we know that other officers have potentially committed criminal offences, it is the Metropolitan Police investigating other officers in their own police force. We do not know whether the CPS will ever get sight of those files. Why is there not an equivalent process to that in the health service and the education service, where, when you are put into this kind of process, there is independent oversight of that function?
Finally, the report is limited to culture. Culture and competence are like twins. We have an example of rape evidence being lost from a fridge because a heatwave came. Is the Minister going to treat this as the Government’s role? We now need a further piece of work on the competence of the police. Is it the case that evidence is being lost routinely? Is it correct when barristers tell me that Amazon may know where your parcel is by using the barcode, but the Metropolitan Police do not necessarily know where evidence is? Is it the case that the Criminal Cases Review Commission is having trouble when it asks for swabs from a case a few years ago because the police do not know where they are? These are all competency issues. Do we not now need a separate piece of work on competency and not culture?
Lord Sharpe of Epsom (Con)
I say to my noble friend, on the subject of the police officer she mentioned, that it is not for me to tell Sir Mark who he should speak to; I am sure he has a very good idea who he ought to speak to. It sounds to me as though that particular person’s experience is obviously relevant. Maybe it is part of an ongoing plan; I do not know. Obviously if I see him, I will ask him.
It is clear that the Met must have the confidence of all communities, including black and ethnic groups. If it manages to regain that confidence, that should help recruitment and all the other things that were identified by the noble Baroness, Lady Jones.
On competence, I think that the Met should be allowed to deal with the cultural side of this report over the coming days. I am sure that, if there were incompetence allegations, they would have been aired in a much more detailed and methodical way, rather than the anecdotal side of things—although I accept that those are very serious. Having said that, I think it is for Sir Mark to come back to us on this. Obviously, there is the crime survey, and the reported statistics will be very revealing.
Baroness Thornton (Lab)
My Lords, I was very pleased to hear the Minister agree with my noble friend that sexism, homophobia and racism were institutional in the Metropolitan police force, because that was certainly not what his right honourable friend the Home Secretary said at the other end of the building a few hours ago, and that is a great shame.
Here we are again; I think this is the third time in several months that we have been discussing the terrible conduct of our uniformed forces in this country, on whom we so depend. I just wonder what on earth has been going on that has allowed the same things to be said over and over again. We had the fire brigade a few months ago; now we have the Metropolitan Police.
I would like to ask the Minister about the examples of violence against women from police officers, because, if 43 police forces do what they like on vetting, training and misconduct, can the Government finally accept that we urgently need mandatory national standards on vetting, misconduct and training? That follows on from my noble friend’s statement that we will need primary legislation that deals with those issues.
Lord Sharpe of Epsom (Con)
My Lords, I am going to defend my right honourable friend the Home Secretary, who said the following. I have already read this, but I am going to read it again. She said:
“I would like to turn to two particularly concerning aspects of Baroness Casey’s report. First, it addresses questions of racism, misogyny and homophobia within the Metropolitan Police. Baroness Casey has identified evidence of discriminatory behaviour among officers. I commend those officers who came forward to share their awful experiences with the review team. Discrimination must be tackled in all its forms, and I welcome Sir Mark’s commitment to do so.”
I do not see her avoiding the charges, as was suggested.
As regards vetting, the Government have asked the College of Policing to strengthen the statutory code of practice for police vetting, making the obligations that all forces must legally follow much stricter and clearer. This is currently out for consultation. That consultation process closes on 21 March. The Home Secretary has also asked the policing inspectorate to carry out a rapid review of police forces’ responses to its November 2022 report, which highlighted a number of areas where police vetting can be strengthened. The NPCC has also asked police forces to check their officers and staff against the national police database—I mentioned earlier that the parliamentary unit is having that fast-tracked—to help identify anyone who is unfit to serve. The data-washing exercise is on track to be completed towards the end of this month, following which forces will need to manually analyse the information received and identify leads to follow up. That exercise is expected to be completed by September.
Rail Services
(1 year, 9 months ago)
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Baroness Taylor of Stevenage (Lab)
My Lords, I will start on a positive note—I like to do that—by saying that we welcome the successful negotiations with Network Rail, although all those who regularly travel by train, as I do every day, will wish that this had happened 10 months ago to avoid all the misery inflicted on both the staff involved and the passengers.
I wonder whether the Secretary of State and the Minister have any idea of the incredulity with which yesterday’s announcement of the extension of the Avanti contract for a further six months was greeted by residents, businesses and community leaders all along the route of Avanti West Coast. This is a company that has flouted all attempts to improve services, has treated its passengers with contempt and has left those working tirelessly to improve the economy in those parts of our country despairing of ever having the public transport system they need.
Last chances are all well and good when applied to a naughty toddler who has crayoned on the bathroom wall or a teenager who has stayed out too late. When they are given to a company that has done its best to wreck the economy of large swathes of our country and disrupt the lives and livelihoods of millions of passengers, it is intolerable.
To hear the Minister speak yesterday of improvements in the service would, I am sure, have been excruciating for those who have to use Avanti services regularly. Even under the intense focus and scrutiny of a government improvement plan, those trying to get to work, school or college and to carry out their businesses are still faced with a barrage of late trains and cancellations. Avanti West Coast has had the highest number of trains more than 15 minutes late and the worst single month of cancellations ever—worse even than in August, at the height of the chaos, and worse than during the pandemic. And we still see the number of trains arriving on time falling, with only one-third meeting their scheduled arrival time. So I ask the Minister why this incompetence has been rewarded with a further six-month contract and how much worse services have to get before the Government act.
Just what message does this send to people and businesses, let alone potential investors, about the Government’s commitment to levelling up? Your Lordships have spent many hours discussing the levelling-up Bill in this House in recent weeks, but for people out there, actions speak so much louder than words, and the Government’s complacency about the long-term and chronic failure of railway services to the north, the north-west and Wales does nothing to convince them that there is any real commitment to levelling up at all.
Because it is not just Avanti that is failing. Consider the consistent deficiencies that passengers of TransPennine have had to endure. These go back at least to when my son was at university in Preston over 20 years ago, when a weekend visit to him would become an endurance test. Yesterday, for example, more than 35 services were cancelled on TransPennine. There really are no adequate excuses for this continuing debacle. Will the Minister press her colleagues in the department to end this indefensible shambles for good in May by not extending the TransPennine contract?
All we hear from the rail companies are attempts to blame the trade unions and the workforce for issues that quite clearly sit right at the top, with management and with Ministers. There were 4,100 cancelled services last month, on top of 17,800 fewer services altogether. Surely, the Minister can understand that rail passengers of Avanti and TransPennine have had enough. Why would she and the Government want to put them through another six months of chaos by extending this contract? Why, in spite of Avanti having the most complaints of any operator in 2021-22, did the Government sanction a £12 million dividend for Avanti shareholders and £4 million of taxpayers’ money being paid in bonuses to company executives? Surely it is the passengers, who are being failed so badly, that need compensation.
Even when the trains do run, the service for passengers is woeful. My noble friend Lady Hayman of Ullock travels here from Cumbria every week and often finds there are no catering facilities at all on trains for a journey of some six hours. We hear other reports of mouldy food and locked toilets on these lines. The provision and support for passengers with disabilities is often woeful. The passengers really do seem to be the very last consideration of these failing companies.
To turbocharge our economy and to encourage the use of public transport, which could then transform our ambition to achieve net-zero emissions, we need railways that are efficient, trusted, reliable and affordable. Not one of those adjectives applies to Avanti West Coast or TransPennine, yet the Government shrug their shoulders and push decisions back into the railway sidings for another day. They hold on to this broken railway system for their own ideological reasons, presumably believing that competition will always serve passengers best and deliver lower fares: neither of these is the case. In some circumstances, it is cheaper to buy a return air ticket to Berlin than to travel to Wales on the train from London.
If the Government cannot or will not make the vital decisions on public transport that we need for passengers, for our economy, for the environment and for levelling up, then they should step aside. Labour will end the fractured, fragmented system which is failing passengers, communities and businesses, and put them back at the heart of a public transport system that works for everyone. At the moment, it is very clear that while this Government are in charge, the railways will stay broken.
Baroness Randerson (LD)
My Lords, this Statement sums up the mess our infrastructure has become under a succession of Conservative Governments. I agree with the Government on a couple of points: I welcome progress in resolving strike action, so far as it has occurred. That has been allowed to drift on for far too long and was indeed stoked by the previous Secretary of State. It has badly damaged trust in railway services just when recovery from the impact of the pandemic should have been crucial. I also agree that discussions on who owns the railways is irrelevant, because the Government have effectively nationalised them and taken responsibility. That is the important thing: the Government have taken responsibility for how the railways are run.
However, turning to the rest of the Statement, I have some major points of difference. First, awarding Avanti a six-month extension is an extraordinary decision, and I mean that in the proper sense of that term. FirstGroup has failed in this franchise and continues to fail with TransPennine Express. Other train operating companies have faced exactly the same pressures—Covid, weather, strikes—but by better management and decision-making, they have more effectively minimised the impact on customers. So my first question is: how badly does FirstGroup have to do to lose either of these franchises? Because they are truly being rewarded for failure.
The improvements that the Government cite at Avanti seem very recent and very insubstantial. My question is: there have been months of past poor service; will Avanti or its shareholders face any financial penalties for poor service, repeated cancellations, late running and systematically misleading the public and the Government about cancellation rates by cancelling late on the night before? Another question refers to the 100 extra drivers that the Government cite. Can the Minister give us a view as to whether that is enough in the Government’s eyes? How long will it take to train those drivers?
Reference is also made to a new discounted ticket scheme on some routes. What proportion of routes will have this new discounted scheme? I remind the Minister that what passengers want is to be able to book ahead, because advance fares are cheaper, and they want to be able to book ahead on all routes. When will they be able to do this? Have the Government just handed Avanti another golden cheque, or are there some useful conditions to this funding? I recall that Transport for London has very stringent conditions attached to its funding. What are the stringent conditions attached to the funding of Avanti for the next few months? While we are talking about railways, is it true, as is reported in the Daily Telegraph today, that the Government are about to announce a reduction in passenger rights to delay repay compensation? If that is true, it really is adding insult to injury.
Finally, the Statement looks vaguely at the issue of reform, which is, of course, long overdue. There is a great deal of consensus on the issue of reform, so when can we expect legislation on it? The Government have repeatedly told us that simplification of ticketing is just around the corner and that it does not need legislation, so I ask the Minister when we can expect to see it happen.
The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)
I am grateful to the noble Baronesses, Lady Taylor and Lady Randerson, for their contributions to this Oral Statement repeat. To a certain extent I am always very sad when I do not get to read out the Oral Statement, because sometimes it helps to set the tone and remind noble Lords of what was in the Statement. There were certainly some elements that may have slipped the minds of noble Lords to date. I will go through as many of the issues as I can and, I hope, helpfully provide those bits of information that may have slipped noble Lords’ minds.
I appreciate that the noble Baroness, Lady Taylor, welcomed the news on the strikes. It is good that the RMT workers “overwhelmingly”—their word, not ours—accepted the National Rail offer by 76% on a 90% turnout, which leads one to ask why the RMT chooses not to put a very similar offer to its members around the train operating companies. We believe it would be extremely beneficial for them to do so and may well bring strikes to an end, but they, for whatever their reasons, choose not to, and that is extraordinarily disappointing. As we all know, it causes an immense amount of delay and disruption to passengers’ journeys and is something that we absolutely want to avoid.
The noble Baroness, Lady Taylor, said that Avanti “has flouted all attempts to improve services”—except that it has improved services, so I could not quite put those things together. If we look at what Avanti has done, it has increased its weekday services, in many areas back to pre-Covid levels. There has been an enormous increase, up to 40% in some areas —from 180 weekday services a day up to 264. Cancellations are now down from 25% to 4.2%. I accept that needs to go lower, but I think all noble Lords can agree that that is an improved service, which the noble Baroness was not even willing to admit has even happened. Then we know that at least 90% of services arrive within 15 minutes of their scheduled arrival time. I can confirm that today 92.5% arrived within 15 minutes of their scheduled arrival time, and there was just one partial cancellation, the 7.30, which would have already departed by now.
It is also worth noting that sometimes the train operating companies have other issues that they need to look at when it comes to the challenges that they face. For example, today—and I have noted the 92.5% of services running within 15 minutes of their planned time—the train operating company had to deal with a trespasser at Cheadle Hulme; a technical issue affecting a London Northwestern service, which caused the Avanti services to be late; a Network Rail track defect between Rugby and Hillmorton Junction; a track failure at Queen’s Park, and a safety inspection of the track between Coventry and Rugby. None of those things could reasonably be put at the door of Avanti to say, “That’s entirely your fault.” Sometimes, it is not. Sometimes we need to recognise that the Government’s plans for bringing together track and train under GBR are to try to deal with such issues. We have issues with the infrastructure, and we need the services to be within that ecosystem such that those issues are minimised as much as possible.
I accept, however, and my right honourable friend the Transport Secretary accepts it too, that this is a journey. This is a reward for recovery, which the noble Baroness was not willing to accept has happened, and not for completion of all of the issues that Avanti might have. That is why this is a recovery plan, and it is why the extension is only for six months, because we believe that further improvements are necessary. We need more reliable weekend services; we need a further reduction in cancellations, and we need improved passenger communication for planned and unplanned disruption.
The noble Baroness, Lady Taylor, then talked about TP and there being “no … excuses” for its poor performance. There are, however, some issues that it would be wise for the noble Baroness to understand, and I am very happy to help her understand them. The first is sickness. The sickness rates among train crews and those providing training at TPE are extraordinary: more than twice the level of other train operating companies. That cannot be right. Why might that be happening? I would also point the noble Baroness to the lack of rest day working, which was—simultaneously and with no warning—withdrawn. We believe that was co-ordinated by ASLEF and it meant that, all of a sudden, various train operating companies that suffered this—it was mostly Avanti and TPE—were forced to reduce their timetables. They did not want to reduce them. Train crews and drivers had been doing voluntary overtime on this basis for decades, and then all of a sudden, it was withdrawn and there was a consequent impact on service. That cannot be laid at the door of the management; it just cannot. It is up to the management to try to fix it, and that is why they are recruiting the train drivers. I am very content to reassure the noble Baroness, Lady Randerson, that we are aware of the number of train drivers who are coming through. There are almost 100—obviously there is phasing over three years—and we are reassured that those train drivers will do the trick.
The noble Baroness, Lady Randerson, asked what financial impact there would be. There is a vigorous performance evaluation system looking at operational performance, passenger experience and financial management, working with National Rail, train operating companies and their shareholders. That is how they are judged: it is independently evaluated and that is absolutely right. It is done in accordance with the contract that they signed up for. That is only fair.
I have said before that legislation will come forward when parliamentary time allows. I will not comment on speculation in the Telegraph; I have not read that newspaper today. On the discounted routes, I will have to write to the noble Baroness, but I can assure her that Avanti does not use any P-codes, so she should rest assured in that area.
What I am struck by from all this is the lack of willingness to understand that it is a very complex system; the levers that the train operating companies have are not always within their gift, and neither of the noble Baronesses who have spoken so far have offered any alternative. The only alternative that I am aware of is that the Labour Party has to date—and we are still a little way off from a general election—made £62 billion of unfunded commitments for the rail industry. We look after taxpayers’ money. It is really important that we do. We need a modern railway that works seven days a week. That is what we are aiming for and that is what I think our reforms will deliver.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, may I just ask the Minister—perhaps I missed it—about bonus payments to executives? I may have missed it, but why do we think those are paid?
Baroness Vere of Norbiton (Con)
I am very happy to discuss what I know about it. Obviously, bonus payments are a matter for the companies themselves. They are not authorised by DfT or anything like that; it is a matter for the companies. There is often this thing about—and I think the noble Baroness referred to it—dividends, and I think it was £12 million. I cannot attest as to whether that £12 million is right or not, but I know that dividends that were agreed quite some time ago relate to a period from pre-Covid. Noble Lords may or may not be aware that the independent evaluation of the different rail contracts has been published only up to September 2021. There is still some more information to come; there is always a lag. Sometimes people say, “You are rewarding for failure.” No, that would be for a period that is not the current period; it would be for a period that was quite some time ago, because we, quite rightly given the complexities of the railway system, take the time for independent people to evaluate by the different criteria that are clearly set out, the different reasons why delays happen, why cancellations happen or why a company may or may not be performing as it should. Of course, we publish those things, but there is always a delay. Therefore, the money might not match up with the period that we are currently in. That is always important to remember.
Baroness Taylor of Stevenage (Lab)
Can the Minister kindly clarify the bonus situation? If she cannot clarify it now, then I will be happy to receive her response in writing. Which period do those bonusses cover? I am sorry, I have given my speech to Hansard, but more than £4 million in bonuses was given to senior managers. I am sure that the Minister will understand that, in these very difficult times for rail passengers, for them to see senior executives in that company rewarded with very significant financial bonuses really goes against the grain. Therefore, I would be most grateful to know what period those bonuses cover.
Baroness Vere of Norbiton (Con)
I will put that in writing. I have some data here on executive bonuses. The total amount for the executive team for the financial year to 31 March 2021—a little while ago, which obviously covers a prior period—was £279,059. For the executive team, the Virgin Trains bit, it was more, at £2.5 million, but that of course related to a period a long time previously. The following year, total bonuses were £461,000.
I want to put on record that 20% of train drivers earn over £70,000 a year. I am not necessarily comparing the two, but this focus on bonuses for senior executives sometimes means that we do not look at what has happened to train drivers’ pay, which has gone up by more than the average over 10 years. As I say, 20% of them earn over £70,000 a year.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, the Statement refers to an extension to 15 October this year and says that the department is looking for improvements from Avanti over the next few months. It talks about more reliable weekend services, continued reductions in cancellations and improvements in passenger information during planned and unplanned disruption. Can the Minister say more about the measures that will be used to ensure that we get those improvements? If we are back here again in September and we have not had those improvements, where will we stand? Avanti needs to know that the Government are prepared, if need be, to take away its contract. At the moment, looking at the report, I am worried that they are not prepared to do that, and Avanti needs to hear from the Government that they are. Otherwise, there is no impetus to improve.
Baroness Vere of Norbiton (Con)
Absolutely. For the complete and utter avoidance of doubt, the Government are considering and will consider all options for both Avanti and TPE if they do not meet the required level of service. All the improvements we are talking about—to weekend services and passenger communications, and reducing cancellations—are set out in the recovery plan agreed with the Office of Rail and Road. It is content with it, and I know that the Rail Minister meets certain train operating companies weekly to go through the recovery plan. As I say, all possible options remain on the table. We have given the six-month extension to Avanti, until October. We will be making a further Statement on TPE when its contract ends towards the end of May, but it is too early to prejudge what the outcome will be.
As I say, we continue to look closely at the improvements that have been made. There have been significant improvements in the face of some challenging industrial relations, but I believe we are potentially over the worst now. I very much hope that we can bring our railway back to where I am sure all railway workers and passengers want it to be, and where our nation needs it to be.
Lord Kennedy of Southwark (Lab Co-op)
The Minister has told the House that there is a weekly meeting with the Rail Minister, and that is good to hear, but what else is happening behind the scenes? We would like to know a bit more about what is going on, because we all want to ensure a better rail service. Although I do not live in the north-east, I am conscious that many Members here do. What more is going on with the department? The Minister works with the Rail Minister every day, so what is actually happening?
Baroness Vere of Norbiton (Con)
I am struggling to understand the basis of the noble Lord’s question. What is happening is that the officials are working with the train operating companies and those companies are working with their workforces. Any contractual relationship with an organisation within the Department for Transport requires greater or lesser oversight, depending on what is happening. I cannot really add much more, other than it is government being government with one of its contractors.
Baroness Randerson (LD)
The Minister did not have time to answer all my questions. I simply ask that she review them and answer them in a letter.
Baroness Vere of Norbiton (Con)
I am happy to do so but, given that I have a tiny bit of extra time, I will knock another one on the head. On the booking window, I agree that it is very important that passengers have the confidence to book ahead. The booking window now extends to 12 June—another area where Avanti has shown real improvement. We understand that the weekend booking window is shorter, at five weeks, but that is in order to take into account engineering works. That is another example of the infrastructure side of the business impacting on the services side, and of course we want them to work closely together.
I will look at some of the noble Baroness’s other questions. I cannot see too many that I have not answered, but I will ask officials to look through Hansard and we will write accordingly.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, my apologies: maybe I am not explaining myself very well. Clearly, many Members here, and the travelling public, are frustrated by what is going on at the moment. I am trying to find out from the Minister, in addition to what is in the Statement and the weekly meetings, what work is going on between the officials and the rail companies. How do we ensure that when we get to October, we have those improvements? If there are still problems, what is happening next week, the week after and the week after that to ensure that we are not sitting here in September saying, “We’ve got another extension for six months. What we need to see is more improvements”? Currently, we still have all these problems, and it appears to the public that actually, not much is happening.
Baroness Vere of Norbiton (Con)
I dispute that it appears to the public that not much is happening. I believe that the travelling public will have noticed the significant improvement in the train services. On the point made by the noble Baroness, there are milestones in the recovery plan that need to be hit relating to driver training, recruitment and cancellations. All these things will be set out in great detail in the recovery plan, which will be scrutinised by the Rail Minister and his officials.
It should also be remembered that this is a private company and it will be managing its recovery plan from the operational side without the dead hand of government fiddling with it, because we should not—that is not our job. We are just there to provide the oversight and scrutiny to ensure that the recovery plan is going to plan.
Baroness Taylor of Stevenage (Lab)
I respectfully ask the Minister, rather than waiting until October when we might be back here having another discussion about this issue, if we could have some kind of interim update before then. Presumably, the issue of TPE will come up in May, just before the contract expires, but it would be helpful to know at some point how the improvement plan for Avanti is going, rather than waiting until October.
I agree with my noble friend Lord Kennedy that, although we heard about improvements yesterday from the Minister, when you listen to passengers—whether that is noble Lords or people outside—or look on social media, their constant concern is that lives and businesses continue to be disrupted. I am interested to know if we could have an interim update, so that we can at least know that the improvement plan is going in the right direction and that the phasing of the employment, training and so on of the 100 drivers the noble Baroness, Lady Randerson, referred to is going to plan, because presumably, that would greatly assist the situation. If we could have some kind of interim update before we are back here October, with the Government telling us whether they have decided that the contract can be awarded, that would be extremely helpful.
Baroness Vere of Norbiton (Con)
The noble Baroness is of course in an extremely privileged position in that she can table Oral Questions or ask me Parliamentary Written Questions whenever she likes. I would be happy to answer those. I am sure that over the period, we will be back in your Lordships’ House to discuss Avanti; indeed, I believe there is a topical Oral Question on Thursday. I am not expecting that I will have anything at all different to say by then, but perhaps we can have a rehash of where we are.
Every now and again I have a little look at Avanti on social media, and things are much quieter than they used to be. What I see much more of now is the disruption caused by the strikes.
Lord Kennedy of Southwark (Lab Co-op)
I would like to move on to TPE. Will the Minister confirm that when we get the report—and I accept there will be another Statement about TPE before the end of May—taking the contract off it is still one of the options on the table?