Westminster Hall

Wednesday 29th March 2023 Westminster Hall

Wednesday 29 March 2023

[Mr Clive Betts in the Chair]

Human Trafficking and Modern Slavery

Wednesday 29th March 2023 Westminster Hall

09:30

[Mr Peter Bone (Wellingborough) (Con)]

I beg to move,

That this House has considered the matter of human trafficking and modern slavery.

I am grateful to Mr Speaker for rescheduling this debate. Unfortunately, I had flu when it was first scheduled; I am not entirely sure I am over it, so I might croak my way through my speech. It is a great pleasure to serve under your chairmanship, Mr Betts.

I thank the Under-Secretary of State for the Home Department, my hon. Friend the Member for Derbyshire Dales (Miss Dines), for appearing today to respond to this important and timely debate, and I also thank the shadow Minister, the hon. Member for Halifax (Holly Lynch), and the SNP spokesman, the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald), for being here. I thank my exceptionally talented senior parliamentary assistant, Isobelle Jackson, for the preparation of this speech; my parliamentary assistant, Jack Goodenough, for his assistance; and Tatiana Gren-Jardan, the head of the modern slavery unit at the Centre for Social Justice and at Justice and Care, who has helped me a lot with the research for this debate and over many years on the issue of human trafficking. I know that they will be watching this debate closely.

When I was first elected a Member of Parliament in 2005, I had a letter posted to my constituency office. It was anonymous, but the person who wrote it was a prostitute from Northampton. She was very concerned about what was happening to young women who were being brought into this country and forced into prostitution in Northamptonshire. That was the first time I had come across human trafficking, and from that moment on, I began to campaign on the issue. I have served as the chairman of the all-party parliamentary group on human trafficking, and I am the chairman of the parliamentary advisory group on modern slavery and the supply chain. Given that the House is considering a Bill that will affect provisions of the Modern Slavery Act 2015, this debate could not be more relevant. Having said that, its purpose is not to scrutinise the Illegal Migration Bill; it is about the crime of human trafficking.

In debates concerning small boat crossings or modern slavery laws, I often hear the terms “human trafficking” and “people smuggling” used interchangeably. In fact, each has a distinct meaning, and the language we use when describing these criminal activities matters. I sometimes throw things at the TV when I hear Ministers using the wrong terminology. Let us get this sorted out. According to the United Nations, migrant smuggling is

“the facilitation, for financial or other material gain, of irregular entry into a country where the migrant is not a national or resident.”

The people being smuggled have willingly paid smugglers—often large sums of money—to help them enter a chosen country. In so far as a country can be defined as a victim of crime, the victims of smuggling are the countries where the borders have been breached.

On the other hand, human trafficking is defined as

“the recruitment, transportation, transfer, harbouring or receipt of people through force, fraud or deception, with the aim of exploiting them for profit.”

Victims of human trafficking are individuals who are coerced into being exploited in the most horrendous conditions. They often arrive in the UK legally, with valid visas and passports. However, the largest group of people referred to the national referral mechanism are British nationals. Some 80% of the British nationals referred are children exploited for criminal, labour and sexual purposes in their own country, and one in five—3,337—of the potential victims found in the UK last year was a British child.

The national referral mechanism is the Government’s mechanism for supporting the victims of human trafficking. When I started to campaign on the issue of human trafficking, alongside Anthony Steen, the former Member for Totnes, human trafficking was not recognised as a crime in this country. It was not even recognised as happening. Anthony Steen has gone on to set up the Human Trafficking Foundation, which serves as a secretariat for the APPG. It was a pleasure to meet up with Anthony last week. He almost single-handedly brought the issue of human trafficking to the attention of this Parliament, and we are greatly indebted to him for that. He is an absolute star. Some of the things he used to get up to even I would blush at. He would somehow talk his way into a Romanian prison to speak to traffickers—just amazing.

During my time as chairman, the all-party parliamentary group on human trafficking and modern slavery travelled to Europe and further afield to understand and learn from existing frameworks relating to modern slavery. The group visited Europol so as to understand the international approach to identifying traffickers, and we met with the Dutch rapporteur, who was a former judge.

National rapporteurs are an initiative originating in the Council of Europe, under which Governments are encouraged to appoint an independent rapporteur to report on the Government’s actions against human trafficking. In the case of the Dutch rapporteur, once the office was established, it was recognised that she had helped the Government, because she did not just criticise; she promoted the good things that were being done.

When I started campaigning for a national rapporteur in this country, we had to overcome two problems. First, the name clearly sounded too French, so there was no way I could recommend that, but that was easy to fix. We changed the name to independent commissioner —job done. The second problem was much more difficult. It was to explain to the Home Office that it needed to do this. The Home Office resisted.

Initially, the Home Office created what it considered to be an equivalent to a rapporteur, an interdepartmental ministerial group. Sir Humphrey would have been proud. The group proved largely ineffective and met infrequently, normally with a large number of ministerial absences. Eventually, however, pressure from the APPG forced the Government to appoint an Independent Anti-Slavery Commissioner, and the Modern Slavery Act 2015 imposed a duty on the Home Secretary to make such an appointment. The first commissioner was Kevin Hyland. He was replaced by Dame Sara Thornton, who was appointed in May 2019. She left in April 2022. Since then, there has been no Independent Anti-Slavery Commissioner. At the same time, suspected cases of human trafficking have hit an all-time high, and Parliament is scrutinising the Illegal Migration Bill, which clearly has implications for human trafficking.

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

My hon. Friend is making a fantastic speech on important issues. I wonder whether I might lift his gaze to the global situation. The International Labour Organisation estimates that there are 50 million people in modern slavery, a large number of whom are in south and south-east Asia and involved in textiles, construction and fishing. Many of them will never leave, for example, the same brick kiln. Does my hon. Friend agree that it is incumbent on the UK Government to challenge Governments in the countries concerned to look at what is happening, and to challenge businesses here to ensure that goods produced in this way do not end up in UK supply chains? Does he agree that we all have a role to play in that important work?

[Mr Bone]

My hon. Friend raises an important factor, and there are more slaves in the world now than in Wilberforce’s day. That is an issue that Parliament is looking at in particular, so as to ensure that nobody in the supply chains for this Parliament is a slave. However, a year or so ago, we did find a product that was produced by slaves, so it is important that we use our soft power. If I were spending our overseas aid budget, that is where I would put a lot of the money, because there would be real benefit for everyone involved.

[Andrew Selous]

Does my hon. Friend agree that that story had a good ending? We went back to that business in Malaysia, and the conditions for the workers are now improved. We effected real-world change for the better, and we should count that as a positive result.

[Mr Bone]

My hon. Friend is absolutely right. If we discover something in this House, as he says, we correct it. We do not just say, “We are not going to use that product.” We go back and improve the situation, which is entirely the right approach.

It is not good enough that we do not have an Independent Anti-Slavery Commissioner. The only conclusion that people can draw is that the Home Office does not want independent scrutiny of human trafficking. I cannot see any other reason for it. In 2022, almost 17,000 potential victims of human trafficking were referred to the national referral mechanism—an increase of 33% on the previous year. Last year, the average number of days that a victim waited for a conclusive grounds decision was 543. That is an improvement on the previous year, when it was 560-odd days. In about 100 years’ time, we will probably get it down to an acceptable level. We are creating a huge backlog in the system and stretching the resources available to support survivors of human trafficking.

In last year’s Queen’s Speech, the Government promised a new modern slavery Bill. In addition, a new modern slavery strategy had been promised in spring 2021. That was in response to the 2019 independent review of the Modern Slavery Act 2015, which suggested improvements. To date, neither the Bill nor the strategy has been forthcoming. The independent review had four main topics of focus, one of which was the safeguarding of child victims of modern slavery. That issue has long been a source of personal frustration to me.

As I have said, almost 80% of UK nationals referred to the NRM are children. The situation regarding the safeguarding of children who may have been trafficked is unique, in that the provision of care for trafficked adults is far better than that for trafficked children. Where else in Government do we look after adults better than children? I made that point during my Westminster Hall debate over 10 years ago. I recounted how in 2010 I went to a safe home in the Philippines, where there were children who had been trafficked and had experienced the worst kind of abuse—in the Philippines it was largely prostitution. They received specialist support and went to school. They were in a safe environment, and after a few years, they left a changed person. In fact, I had the great pleasure of attending a wedding of a former trafficked child who had gone through that process. There is no reason why this country could not offer the same standard of care. We should learn from best practice elsewhere, and could offer more specialist support and rehabilitation to trafficked children in this country.

[Sarah Champion (Rotherham) (Lab)]

I thank the hon. Gentleman for securing this debate and for everything that he is saying, which I reinforce. I had a meeting with the International Justice Mission a couple of weeks ago, which has been working in India for 20 years. It has created child advocates—effectively magistrates. When they find a trafficked child, they go into the care of the advocacy group, which makes sure that all the support services, police and justice services do their duty by that child. Does he agree that that is a really useful model that we could learn from?

[Mr Bone]

I will talk a little about that, and what the Government are doing for children. Unfortunately, it is not working. I will come to that.

In this country, child victims of trafficking are treated similarly to any other at-risk child, and are under the primary care of local authorities. That often means that they are placed in care with non-trafficked children, where security and staff observation is limited. They are supposed to have an independent child trafficking guardian. That does not work, and still does not apply in all areas of the country. I say it does not work; I will explain further a little later, but too many of the children disappear and are re-trafficked. They go missing from local authority care. That does not happen under the system for looking after adult victims of trafficking. In 2020, Every Child Protected Against Trafficking UK, which originally provided the secretariat to the APPG on human trafficking and modern slavery, found that one third of trafficked children go missing from local authority care. The average number of “missing” episodes per child was eight—significantly higher than for other children in local authority care.

I am describing a system where a child who has been subject to trafficking and horrific child abuse is put into a children’s home with other non-trafficked children and has no increased security. The child abusers can locate the child and traffic them all over again. The criminal gangs have got even smarter: if there is good access to the home, they bring it into their business model. They leave the children in the children’s home—that is free accommodation and food—and take them away on demand to be used as prostitutes. Then they return them to the home. How can that possibly, in any way, be right? In effect, local government is inadvertently becoming a partner of the human trafficking business. That is frankly a scandalous failure in our duty of care to some of the most vulnerable people in our society.

By contrast, when it comes to adults, the Salvation Army has been the prime contractor for what is apparently called the Government’s modern slavery victim care contract for the last 11 years. When that started, the Salvation Army became the overarching body in charge. The trick that the Government did—this is a great credit to them—was not to give the money to the Salvation Army to spend, but to ensure that it worked with partners across the UK, including groups interested in looking after victims of human trafficking and, quite often, faith groups. That added value produced a really successful way of looking after adult victims of human trafficking. They get support with accommodation, translation services, financial subsistence, and transport, as well as bespoke support based on victims’ needs, which is administered by the Salvation Army and its partners. Without doubt, we look after adult victims better than child victims.

It is absolutely crucial that we give world-leading care to both adult and child victims, both from a compassionate perspective, and to prevent re-trafficking and encourage survivors to help bring the evil criminals to justice. The charity Justice and Care has pioneered the introduction of victim navigators. Importantly, victim navigators are independent of but integrated with police officers working on modern slavery cases. Victim navigators have access to the relevant police systems and can share information with victims, which builds trust and frees up police time. Victim navigators take on the responsibilities related to survivor support, meeting survivors’ needs and keeping them updated on the criminal investigation. The navigators have helped to safely repatriate 32 survivors to 17 different countries, and find local contacts in those countries that can continue to provide support.

Justice and Care victim navigators benefit from the relationship and partnership with the police but retain their independence, giving survivors a more assessable ally at the point of rescue. This work has been extraordinarily successful: 92% of victims supported by a navigator were willing to engage on some level with police, and victims who had access to the services of navigators were five times more likely to engage in supporting a prosecution than were victims in a sample of non-navigator-supported cases. Hon. Members should not take my word for it. One survivor said:

“He’s done everything for me. Every bit of support I’ve needed. If it weren’t for”

the navigator,

“I would have been lost honestly…If I didn’t have”

the navigator,

“I wouldn’t have gone through with the case. I wouldn’t have had the strength I had to do it…I couldn’t have done it without him.”

An awful lot of people—from the left, I have to say—want to look after the victims of human trafficking, and that is an honourable thing to do. Having a right-wing chairman was a problem for the left-wing members of the all-party group, but I said to them: “Let’s stop people being victims. I would rather stop them becoming victims than look after them after they have gone through huge abuse.” One way of doing that is prosecuting these evil criminal gangs. The victim navigator service was independently evaluated between September 2018 and June 2022 and was found to be so successful that the independent evaluators recommended that it be rolled out nationwide.

In 2021, there were 93 prosecutions and 33 convictions for modern slavery offences, as a principal offence, under the Modern Slavery Act. On an all-offence basis, including where modern slavery charges are brought alongside more serious charges, there were 342 prosecutions and 114 convictions. Hon. Members might say that that is good, but it is actually shockingly poor. There were 9,661 recorded modern slavery crimes in 2021-22; in fact, the National Crime Agency estimates that between 6,000 and 8,000 offenders are involved in modern slavery crimes in the UK. Victim navigators will clearly help to increase the prosecution rate, but modern slavery is currently a low-risk, high-reward crime, and low prosecutions are not the only indicator of that.

Analysing sentencing is crucial to understanding the outcomes for modern slavery offenders. In 2021, fewer than one third of offenders with modern slavery as a principal offence received a custodial sentence of four years or more. In the past five years, no offender with modern slavery as a principal offence has received a life sentence, and only one has received a sentence of more than 15 years. The average custodial sentence for modern slavery offences in 2021 was four years and one month. That is less than half that recorded for rape, yet the young women forced into brothels as victims of human trafficking are, effectively, repeatedly raped. On a sentence of four years and one month, the person will probably be out within two years. If we do not get serious about prosecuting, the police can break up more modern slavery networks, which they are very good at, and the victim navigators can support victims properly to bring the case to trial, but their hard work will be undermined by poor prosecutions.

I said that this debate is not about the Illegal Migration Bill, but I hope you will forgive me for going back on that a bit, Mr Betts. Without getting too entrenched in a discussion of the Bill, I must say that I fully support the Government’s ambition to end the small boats crisis. That is the No. 1 issue for my constituents in Wellingborough, and it is absolutely vital that we stop the boats. Although I established a clear distinction between people smuggling and human trafficking, there are some things that unite them. Those running both evil trades regard people entirely as commodities; they care nothing for the lives they destroy or endanger.

Returning those who have been illegally smuggled into the UK to their country of origin or a safe third country is essential to dismantling the business model of the evil people smugglers. However, in doing that, we must be careful that we do not undermine protections for genuine victims. Victims of modern slavery who are rescued from abuse in this country must have the security that they will not face deportation as a consequence of coming forward. Many foreign nationals rescued from modern slavery in the UK want to return to their country of origin and familiar support networks, and have done so, and that is fine; they should be supported in doing that. However, the threat of deportation may undermine efforts to bring about prosecutions, by deterring victims from coming forward.

Some survivors’ immigration status may have become irregular while they were under the control of traffickers, perhaps due to a visa expiring. Others may have arrived in the country illegally, and their abusers may use the threat of deportation to continue to exert control over them. The Illegal Migration Bill needs to make a distinction between those who are identified on arrival at the UK as having been trafficked, and those who are identified as such later. We must not do anything that stops support being given to those who have been moved to the UK and suffered abuse, who have clearly been trafficked.

The Nationality and Borders Act 2022 established temporary leave to remain for confirmed victims of human trafficking, as is absolutely right. That should not be, effectively, overridden by the Illegal Migration Bill, and I hope the Minister can reassure me on that point—my right hon. Friends the Members for Maidenhead (Mrs May) and for Chingford and Woodford Green (Sir Iain Duncan Smith) raised similar concerns yesterday in Committee on the Bill. Will the Minister be so good as to meet me and other concerned Members before the Bill’s Report and Third Reading?

Finally, I thank the Government for the Modern Slavery Act 2015 and all the things we have done to protect victims of human trafficking. We lead Europe in this regard, and that is fantastic. I just want to ensure that that continues and that we do not move backwards in any way.

[Several hon. Members rose—]

[Mr Clive Betts (in the Chair)]

Four Members wish to speak, and we have 30 minutes, so if hon. Members could divide that into seven and a half minutes each, and stick to that, it would be really appreciated. I call Sarah Champion.

09:57

[Sarah Champion (Rotherham) (Lab)]

May I put on record my deep thanks to the hon. Member for Wellingborough (Mr Bone)? He has championed this cause for years, when many others really did not want to. We are talking about a dirty and disgusting business—and it is a business. I am grateful for all that he has done and continues to do to put the profile of this awful crime exactly where it needs to be.

I rise to raise my concerns about the Government’s current approach to tackling modern slavery and human trafficking, particularly through the so-called Illegal Migration Bill; regrettably, it completed its Committee stage yesterday, which makes today’s debate timely. I could have chosen so many topics. The hon. Member spoke about prostituted women; I completely agree that we have to stop the pull factor, which is the fact that it is still legal to buy sex in this country. I could have spoken about child sexual exploitation, which unfortunately I know far too much about, or child criminal exploitation. The hon. Member for South West Bedfordshire (Andrew Selous) spoke a little about child labour in the supply chain, and children working at brick kilns. I was in Nepal with the International Development Committee a couple of weeks ago, and we met those very children. I am really proud that some of our foreign aid goes on supporting those children and letting them know their rights, and, most importantly, on working with the employers, because it tends to be small businesses that still use children in modern slavery. Our aid goes on educating employers and encouraging them to change their practices.

However, let me focus on the UK. Many professionals are troubled by the Government’s rhetoric, as well as the Illegal Migration Bill, which conflates modern slavery with migration, asylum and smuggling. The International Justice Mission states that conflating those issues risks hindering efforts to assist survivors and ensure traffickers are held to account. It only makes this problem worse.

I was very proud in 2015, when the UK was genuinely a world leader in tackling modern slavery, with the unprecedented Modern Slavery Act. I was on the Bill Committee, and it was genuinely world-changing. People came from all over the world to see what we were doing, although the hon. Member for Wellingborough is right that children were always an omission and not supported properly.

That pride feels light years away from where we are today. The measures in the Illegal Migration Bill, particularly in relation to modern slavery survivors, are deeply disturbing, cruel and lacking in compassion and common sense. I cannot imagine how terrifying it must be to be trafficked to this county against one’s will, as well as, in many cases, being a victim of sexual exploitation or modern slavery.

We must remember that modern slavery and trafficking also happen in the UK. I referred to child exploitation: in Rotherham, the police innovatively used trafficking legislation, because it says that moving a person from one side of the street to the other is trafficking. We have strong legislation in place for that; it is just not being enforced as often as it should be, and nor is the national referral mechanism. I was disappointed in the early days of that scheme that many local authorities were not referring local people into that support network.

The Government now want to refuse vulnerable people vital protections that we put into law less than eight years ago. The Illegal Migration Bill would disqualify victims of trafficking and modern slavery from protections under the national referral mechanism and deny crucial support to those who arrived in the UK through irregular means, allowing them to be removed entirely from this country. That includes child victims of trafficking whose family members meet those conditions.

Almost 90% of modern slavery claims are found to be valid, meaning that these new provisions will remove support from genuine victims who need our help. The reality is that this will not prevent traffickers, and it certainly will not help victims of modern slavery. I am especially worried about the impact that this will have on victims and survivors of sexual and gender-based violence. Researchers at the University of Birmingham found that survivors are unlikely to report crimes of sexual and gender-based violence or trafficking, without legal protections or safe reporting mechanisms that protect them from immigration exposure.

If the Government really want to stop the boats, they must first protect victims and survivors of trafficking, slavery and sexual exploitation, to end the traffickers’ business model. Instead, this Bill will punish only the victims. Case studies from the University of Birmingham’s SEREDA project demonstrate why survivors of sexual violence, in particular, must be exempt from removal to other so-called safe countries.

Samiah fled Algeria after being raped by an influential man in the Algerian army and, facing pressure from her family, married her rapist. Her sister sold her jewellery to pay for Samiah’s passage to safety. Samiah passed through France on the way to the UK but, given the large Algerian population there, and the threat from both her family and the man who attacked her, she did not feel France was safe enough to offer her protection.

When she arrived in the UK, she had no idea of her rights, and slept rough in Victoria station. She was befriended by a man who gave her alcohol for the first time in her life, and she was raped again, becoming pregnant. She was taken in by a stranger, who helped her find a lawyer, and told she should put in a claim for asylum. Samiah’s case illustrates why it is vital that victims of sexual and gender-based violence must have access to support, no matter how they arrive here. Not all forced migrants feel safe in the first safe country they pass through. The vulnerability of survivors of sexual and gender-based violence will be preyed on even more without the relative protections of the asylum and national referral mechanisms.

The previous Independent Anti-Slavery Commissioner warned repeatedly that denying trafficking victims support makes it harder, not easier, to catch criminal traffickers. Why will the Minister not listen to experts, and protect the victims, rather than the traffickers? Such vast changes to our modern slavery policy should not take place at a time when the UK’s new anti-slavery commissioner has not been appointed. With the role remaining vacant for almost a year, it is deeply concerning that we have lost an independent voice, expert insight and essential scrutiny of the UK’s approach to tackling modern slavery and human trafficking.

Will the Minister confirm in her response when the new Independent Anti-Slavery Commissioner will be appointed? Will the Home Office commit to consult the new commissioner before pushing ahead with these new measures? I am proud that Labour voted against some of the measures in the Bill, because we are on the side of the victims. I am one of those people from the left who want to support victims, but I am also one of those people from the left who want to stop the business model of these traffickers and modern slavery owners. We have to do all we can, in a united way, to make that happen.

10:05

[Priti Patel (Witham) (Con)]

It is a pleasure to serve under your chairmanship, Mr Betts. I thank all Members here today, and particularly my hon. Friend the Member for Wellingborough (Mr Bone), who is such a stalwart campaigner and a champion of everything to do with tackling human trafficking. I remember the day he was elected as chair of the APPG, and his reaction, and the comments he has made today about someone with right-wing political views working with others, show that there really is no political divide on this issue. We are here to build bridges, and there is so much collective experience in this room in terms of people who have fought for the victims.

The debate is timely. We have heard reference to the Illegal Migration Bill, and today we will also see the introduction of the Victims and Prisoners Bill in Parliament. I have been campaigning for a victims Bill for many years, and I stand alongside those who have stood up, compassionately, for decades, for victims of the most appalling and abhorrent crimes. My hon. Friend made an outstanding speech and unpacked many of the complex issues associated with human trafficking, some of which are often conflated.

Our priority must always be the victims. My remarks will focus on dismantling human trafficking criminal networks, tackling modern-day slavery and supporting victims. Some of these matters touch on my time in Government, most recently in the Home Office, but also in International Development. Many colleagues will know some of the work we have collectively done and what we have achieved in the past.

Taking action on human trafficking and modern-day slavery requires continued focus, both at home, which is incredibly important, and abroad. As has been noted in the debate, there is ongoing legislation in this House, and future legislation coming. This is both a domestic and an international issue.

[Jackie Doyle-Price (Thurrock) (Con)]

Does my right hon. Friend share my concern that the fact that modern slavery has become part of the debate on the Illegal Migration Bill, which is before the House, means that we are forgetting some of the most vulnerable victims in our society right now? I particularly highlight the cuckooing of people with learning disabilities, who are perhaps the most discriminated community in our society. If we let the debate continue to be seen through the prism of migration, we will be letting down the most vulnerable.

[Priti Patel]

My hon. Friend is absolutely right. If I may, Mr Betts, I would reflect on the fact that, when I was Home Secretary, we saw the most appalling act of people trafficking, in a lorry in my hon. Friend’s constituency; that was the Purfleet incident, and 39 individuals—victims—passed away. It was one of the most horrific incidents, but we have had strong criminal prosecutions, and other work has taken place. I will come to that in a minute.

On my hon. Friend’s point, cuckooing, children being exploited through drug gangs, and other vulnerable people have dominated much of my work over three and a half years. There is a fundamental link here: criminal gangs showing contempt and disregard for human life and dignity. This is a big tragedy, which we are all here discussing today.

The latest figures from the ILO estimate that in 2021, 28 million people worldwide were forced into labour and 22 million were forced into marriages. These issues are more prevalent than ever today, despite the fact that we think the world and society have moved on and there is greater awareness. That 50 million is more than the population of Spain, so we should just think about the scale of the challenge we face. The ILO also estimated that that number had increased by 10 million between 2016 and 2021. That demonstrates the nature of the criminality, which my hon. Friend touched on, and that is why we have to be relentless.

I recognise the Home Office footprint in this as well. We do need an anti-slavery commissioner; there are reasons why that was delayed last year, which are mainly down to the changes in Government that took place more than once. In reality, however, this should be a whole-of-Government effort. That is why my right hon. Friend the Member for Maidenhead (Mrs May), who deserves every credit and tribute for the work she led on securing the Modern Slavery Act 2015, was fundamental in this area because she recognised that. During my time in the Department for International Development, we worked internationally on this matter, and I had the privilege of working with my right hon. Friend when she was Prime Minister to develop that call to action to end forced labour, modern slavery and human trafficking. Under her leadership, that went straight to the United Nations General Assembly in 2017, and its impact was significant. It was a major moment for the United Kingdom and one we should be proud of. It brought together 37 countries to introduce commitments to strengthen law enforcement activity, galvanise international co-operation and support victims. We rightly funded that and put aid into that. That investment helped tackle modern-day slavery upstream in transit countries, tackling trafficking at the source. It absolutely shows how development assistance safeguards people and safeguards people’s lives. Over recent years, because this is no longer integrated in the way it once was, we have gone backwards and, with that, our international standing on this issue has also regressed. Sadly, I do think this is right.

There are many issues around illegal migration that rightly need to be tackled, and the Government have to find all the right ways to do that. That is why, through the Nationality and Borders Act last year, we brought in temporary protection measures because it is right that we give the care and support to genuine victims. This was down to hon. Friends who spent time with me as Home Secretary, including my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith), my hon. Friend the Member for Wellingborough and others, who made this case. I worked with the Centre for Social Justice on this matter, and the various commissioners obviously made this point clearly.

In the interests of time, I want to make two quick points. We must work comprehensively and thoroughly to bring offenders to justice, and our laws are too weak on this—they really are. On the level of prosecutions, there was a targeted measure in the Nationality and Borders Act last year to ensure that small boat pilots would be focused on for prosecution, obviously through the right way. Our National Crime Agency, which my hon. Friend mentioned, deserves great credit. Much of the work it does is based on securing intelligence information that can be disclosed only in court for prosecution purposes. The agency’s work in this country must be reinforced and bolstered at every single level.

My last point is about supporting the victims. They are victims of horrendous and heinous crimes. I am delighted that the Victims and Prisoners Bill will come forward today—I have been going on about it for over a decade. This is where we must work together to ensure that the victims of human trafficking and modern-day slavery are given support in the criminal justice system, and that the laws are strengthened to ensure the prosecutions take place. My hon. Friend highlighted the frankly derisory figures on sentences and prosecutions. We must change that, and this House can do that.

The other area to touch on for victims is statutory services. The care for adults is good, but we have institutional state failure on the approach for children where local authorities are allowing children to abscond. It then becomes a policing issue, and it should not just be about the police. Our statutory services must step up. Mental health services, housing services and trauma-informed approaches must be embedded.

I know the Minister has been working assiduously on this issue, but we must start to hear further details on what work is taking place across Government to ensure that victims are given support and to bring forward the reforms required to give them justice.

[Mr Clive Betts (in the Chair)]

It is seven minutes each for the remaining speakers, so that we start the wind-ups at 10.28 am.

10:14

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to follow the right hon. Member for Witham (Priti Patel) and I thank her for her contribution. I especially thank the hon. Member for Wellingborough (Mr Bone) for securing this important debate and powerfully setting the scene. It is a grave injustice that abuses such as human trafficking and slavery persist in the modern world, being used as weapons against already marginalised and vulnerable communities. I will focus on human trafficking and its relevance to freedom of religion or belief—two distinct but overlapping areas of human rights where much more work could be done by our Government. I declare an interest as chair of the all-party parliamentary groups for international freedom of religion or belief and for religious minorities of Pakistan.

It is a grave injustice, heaped upon other injustices, that where girls and women are persecuted for their faith, they are also at risk of human trafficking. Such targeting threatens to dismantle entire communities, as women are no longer present to pass their faith on to their children. Should women escape their captors, as others have referred to, they face stigma and ostracism from their community.

Reports by Open Doors on gender and freedom of religion and belief find that in many countries where Christians are the most persecuted, marriage documentation is often used to cover up human trafficking. It is estimated that in the 50 countries with the highest level of Christian persecution, forced marriages of women have increased by 16%. It is a real issue, and, through the APPG, we know of many cases and incidents. Those women are at a heightened risk of human trafficking and sex trafficking as a result. Open Doors’ research notes that traffickers often attempt to cloak the associated sexual violence behind a claim that the girl is now married, when clearly the girl has had no choice. In reality, it is often a forced marriage or one resulting from targeted seduction. We should be under no illusion what this means; evil people—evil men—target ladies for that purpose.

Where religion forms a dimension of human trafficking and modern slavery, the motivating factor of profit no longer applies to those who exploit other humans. Material gain may come from the trafficking of those who belong to a different religious group, but the driving motivators are religious factors and the eradication of a religious group different from one’s own. That is a clear issue that we have identified. Sex trafficking serves as a primary tool for the persecution of religious groups, be that Boko Haram targeting Christians—as happens regularly —or Daesh targeting the Yazidis. Those are just two examples; there are many more across the middle east and the world.

Freedom of religion or belief is a cornerstone human right, one that I adhere to and often speak about in this place, as do others. That cornerstone right also lays the foundation for other human rights; we cannot divorce the two—the two are married. Human rights and religious persecution go hand in hand. The prevalence of human trafficking in countries where freedom of religion or belief is not realised bears witness to that, as Open Doors, Christian Solidarity Worldwide and others have indicated. Similarly, modern day slavery correlates with places where freedom of religion or belief is not realised. In Pakistan, religious minorities are ghettoised into squalid conditions, and forced to do jobs under the most disgraceful conditions just because they do not belong to the Sunni branch of Islam.

I was very privileged to be in Pakistan in February as part of the delegation on behalf of the APPG for international freedom of religion or belief. We were able to witness first hand some of the ghettos that Christian groups and other small ethnic minorities live in. A garage or shed has better conditions than the places where they were living. They are pushed into small portions of land with squalid conditions and little or no opportunity for education and healthcare. They are a caste group, and it concerns me. The APPG will be doing a report on the visit, and hopefully we can make recommendations, highlight the negatives and positives and then look at the solutions. As always, I am solution based. Solutions are how we make things better.

To conclude, I ask what the Government and the Minister are doing to mainstream freedom of religion or belief in their international development and aid policy? I am a great believer that if we are going to give aid we should tie it in with human rights, ensuring the opportunity for people to practice their religion, whatever that may be. That opportunity should be there, and when it comes to giving aid to Pakistan or any other country across the world, we should ensure that.

Against a worldwide background of worsening religious-based persecution, how can the Government be sure that their programmes are successful when they operate religion-blind? I seek some assurance from the Minister; I hope she can give it to me. If not, I will be happy for her to follow through with a letter. I feel that sometimes the grasp of the civil servants and the Foreign Office officials may not be as real as we would like it to be. We seek some assurance on that. The most vulnerable and persecuted groups are often defined by their religious beliefs. We cannot divorce the two. They are very clear in my mind, and the evidential base would prove that. How are the Government—my Government—responding sensitively and effectively to this?

10:20

[Giles Watling (Clacton) (Con)]

It is an honour to serve under your chairmanship, Mr Betts. I congratulate my hon. Friend the Member for Wellingborough (Mr Bone) on bringing forward this important debate and speaking so powerfully. Since Kindertransport and before, right through to those coming from Afghanistan and Ukraine today, we are proud in this country to give people safe haven, and we must continue to do so.

I will focus on the boats. As a yachtsman, I am well aware of the dangers of crossing open waters. On 23 September last year, I was crossing the channel—quite legally—and I saw the French warship Athos behaving in the most extraordinary fashion. I looked on the navigation device and saw that it was circling, and it kept circling as it left the French coast towards the UK coast. It was circling around a very small boat crowded with people. When we got closer, we could see those people; they were in a desperate condition. What horrified me about that particular incident was that the French warship was just circling them. I am a yachtsman; I am a seaman. That is what I do. What we do is take desperate people off those boats and make sure they are safe. I have the evidence on my phone right here.

We must stop that sort of thing happening. Stopping illegal boats is a matter of common humanity. As my right hon. Friend the Member for Witham (Priti Patel) said, 39 people lost their lives in the back of a trailer, so it is not just the boats in south Essex. That is because of our weak borders. The cost to the taxpayer is enormous because of this Home Office malfunction, as I see it. It is not acceptable. I believe something like £7 million per day is spent on hotel fees, which is outrageous, but we are looking to address this. We have to show humanity about it.

Locally, at a party conference last year I was contacted by the chief executive of my local council. He told me that he had been given 24 hours’ notice, at a weekend, that we were going to have a migrant hotel suddenly opened upon us. The council did not have time to get services in line. Those people would need help. It was a question of putting desperate people in a deprived place. This was not nimbyism; the local council had identified other, more suitable sites, but the company that the Home Office had employed had decided to open that site within 24 hours.

Fortunately, by working with officials and asking an urgent question in the Chamber, I was able to get that particular incident stopped. We are dealing with this with a scattergun approach. We are being reactive as the incidents happen. We cannot go on like this. We cannot keep fighting a rearguard action. For the sake of humanity, and for the sake of the taxpayers of Clacton and elsewhere, we must stop the boats. That means backing the new Government measures, which have been laid out here today, and making the Home Office more logistically competent. In my view, and I have said this several times before, that means liaising with our French counterparts and getting British boots on the ground in France. We can do this. I am sure our French counterparts would like to see it. That would stop the boats leaving those beaches, and prevent the horror that so many people go through. We saw a child on a beach in Kent, and we never want to see that again.

[Mr Clive Betts (in the Chair)]

I thank all hon. Members for keeping to time. We will move on to the wind-ups now. Each Front-Bench speaker has 10 minutes, or effectively 11, given that we have a bit of extra time.

10:23

[Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)]

I, too, start by congratulating the hon. Member for Wellingborough (Mr Bone) on securing what he quite rightly described as a very timely debate. I hope that he is restored to full health very soon. I also very genuinely thank him for all his work over many years, which I think is recognised across the House; he has been a real champion for victims of trafficking.

The starting point for this debate—unusually, I agree with the right hon. Member for Witham (Priti Patel)—should be recognition that we have in place across the United Kingdom some genuinely world-leading pieces of legislation that are designed to tackle trafficking and slavery. The problem, as a couple of hon. Members have already said, is that the message coming from those who work with trafficking victims is that we are in danger of going backwards and that these are truly worrying times for people caught up in those appalling crimes.

That is because—again, as has already been alluded to in this debate—the Government are increasingly conflating trafficking and immigration. That is despite the fact that, as other hon. Members have also already said, since 2018 over 16,000 British nationals have been referred to the national referral mechanism. That is a clear reminder that modern slavery is a crime of exploitation and not immigration. Despite that, however, the Government now seem to be consciously stripping away rights and protections from trafficking victims as a tool of immigration policy. So, the first and most important call that I make today is that we need the Government to recommit to eradicating modern-day slavery, because at the moment the Government’s commitment is increasingly being seen as playing second fiddle to immigration policy. Indeed, I almost think that we are at a point where we have to ask whether we should have trafficking policy being decided by the same Department that is in charge of immigration policy, because I think that one is dominating the other and that is not good for victims.

I will address three issues today. First, I will briefly consider the impact of the Illegal Migration Bill; secondly, I will take a quick look at some of the so-called “evidence” being used to justify that Bill, which the hon. Member for Rotherham (Sarah Champion) has already spoken about a little; and, thirdly, one issue that has not been touched on already is some of the updates to the modern slavery statutory guidance, which was implemented on 30 January 2023.

First of all, in relation to the Illegal Migration Bill, it is fair to say and Members will be aware that there were widespread and deep-seated concerns raised right across the House yesterday about the impact of that Bill on victims of trafficking. Members will be aware that I absolutely reject the logic of deterrence. However, even if someone accepts that premise, the logic of deterrence that permeates the Bill just does not apply when it comes to trafficking, because the simple point is that we cannot deter a trafficking victim from coming here; it is not a free choice, as the hon. Member for Wellingborough pointed out. So it makes no sense for the Government to massively undermine the various UK modern slavery laws through the Bill in the way that they propose to do.

The carveout in the Bill for situations where there is assistance with an investigation is worthless. That is because the result of the Bill will be that trafficking victims simply will not come forward to seek help at all, particularly if they are simply going to be discarded as soon as they have served any useful purpose in the criminal justice system. Consequently, I suspect that the Bill may well deliver a reduction in the number of possible trafficking victims being referred into the NRM, but that will simply be because fewer victims are coming forward and not because there are fewer victims.

Indeed, the Anti-Trafficking Monitoring Group is clear that the Bill will increase the number of victims and reduce the number of prosecutions against traffickers, driving the modern slavery system underground, meaning that survivors will no longer be able to report trafficking and access the assistance that they genuinely require.

Secondly, like the hon. Member for Rotherham, I will speak about all these allegations that people are “gaming the system”, to quote the current Home Secretary. I think that that narrative is quite simply not backed up by evidence, so the Home Office and the Home Secretary herself should provide the evidence to back up those claims, if there is any. The Home Office has already been reprimanded by the Office for Statistics Regulation and in December 2022 three UN special rapporteurs also expressed alarm at the UK Government’s increasing use of unsubstantiated and unevidenced claims.

The simple point made by those working in the field is that abuse of the modern slavery system is barely possible, and that point was made several times yesterday as well in the debate in the main Chamber, because someone cannot just claim to be a modern slave and enter the NRM in that way; someone has to be referred by an approved first responder. The Home Office must trust its own system, which prevents people with fraudulent claims of modern slavery from accessing support. The reasonable grounds decision within the NRM is designed exactly for that purpose.

So what are the actual statistics that are available to us? Based on Home Office figures, of the 83,000 people who arrived in the UK on small boats between 1 January 2018 and 31 December 2022, only 7% were referred as potential victims of modern slavery. In the calendar year 2022, it was only 6% and the percentage subsequently recognised as victims of modern slavery or trafficking was 85%. There is also no evidence of an uptick in those being referred into the NRM and receiving a negative decision. The calendar year 2022 is absolutely consistent with earlier years in showing that 90% or more of those being referred into the NRM received conclusive grounds decisions that are positive.

This is the issue for the Minister: if the Home Office is going to persist in arguing that the modern slavery system is being abused, it must produce evidence. It would be useful to know what evidence and data the Government have.

I agree with the hon. Members speaking yesterday that the Illegal Migration Bill, which is now before Parliament, risks pushing victims away from seeking support and back into the arms of traffickers. We should improve the NRM and trafficking assessments. We should improve access to support and not drive people away from it.

The modern slavery statutory guidance, which was operationalised on 30 January 2023, was designed to remove what the Prime Minister referred to as the “gold plating” in our modern slavery system. Those updates include changes to the decision-making thresholds, which require survivors to provide unreasonably high levels of evidence in unrealistically short timeframes. New exclusions for bad-faith claims have been applied, but without sufficient safeguards built in. Victims and first responders will not be able to gather the necessary evidence in the five-day timeframe, meaning that genuine trafficking victims will be prevented from entering the NRM. There is no data yet available to determine the impact that the new guidance has had, so it would be useful to hear from the Minister what early analysis the Department has done about the impact of the new guidelines.

In implementing these guidelines, it seems to have been forgotten that the whole premise of the NRM and the two-tier decision-making process is to allow people to get a reasonable grounds decision fairly easily in order to access a recovery and reflection period. At that stage, evidence can be gathered in order to receive a conclusive grounds decision, if that can be reached.

Upping the reasonable grounds threshold will directly affect first responder organisations. They will have to provide a higher level of and more complex evidence, meaning that the amount of evidence and casework required to get a positive reasonable grounds decision, when compared with the situation previously, will put further extensive pressure on organisations that are already at breaking point. One designated first responder organisation has commented:

“The update puts additional burden on an already collapsing First Responder system, with capacity for referrals dangerously low.”

Concerns have been raised by modern slavery and trafficking organisations that the changes are building on previous regressive changes, including when the recovery period was reduced from 45 days to 30 and the multi-agency assurance panel process was removed. There are significant concerns that, together, those changes will make it harder for survivors to be identified and to access support, and that this represents a regression in efforts to increase identification and trauma-informed support for modern slavery victims.

We could have said a lot in this debate about where we should go with our modern slavery policy. There are calls for more evidence-led policies; for collaborative approaches; for investment to fix the NRM and the huge backlog there; to improve training for first responder organisations; and to recognise more first responder organisations. There are calls for better and longer support for survivors that is tailored to their individual needs. That helps them and it helps us to prosecute criminals. We must improve prosecution rates and, as many hon. Members have said, we must have an independent anti-slavery commissioner in place.

The problem is, however, that before we can move forward, we must stop moving backwards. Sadly, things appear to be getting worse, rather than better. At the very least, we must take out the modern slavery provisions in the Illegal Migration Bill. We must also reconsider some of the recent changes to modern slavery guidance. We have to consider whether we can continue to have one Department responsible both for looking after trafficking victims and for immigration policy, because it seems to be delivering absolutely the wrong results.

10:33

[Holly Lynch (Halifax) (Lab)]

It is always a pleasure to follow the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald). I will start, as others have, by paying tribute to and thanking the hon. Member for Wellingborough (Mr Bone) for securing the debate. In addition, I thank him for all the campaigning work that he has done in this policy area. He shared powerful examples of where the failures in the system have further compounded the risk, particularly for children, of being re-trafficked. I also join him from the outset in paying tribute to the incredible work of Justice and Care, which has had a transformative effect. I have had the opportunity to see their victim navigators in West Yorkshire and the tremendous impact that they have had in supporting victims and securing prosecutions.

 We know that the number of victims of these heinous crimes is increasing. My hon. Friend the Member for Rotherham (Sarah Champion), like almost every Member who has contributed to the debate, made the point that we were once so proud of our modern slavery laws, but, as we have just heard, we seem to be taking backward steps in identifying victims and supporting them through to the prosecution of their abusers. Nearly 17,000 potential victims were referred to the NRM in 2022—a 33% increase on the previous year—but charities have predicted, using police data, that there could be at least 100,000 victims in the UK.

I want to share the story of Sanu, who was tricked into living and working in slave-like conditions in the UK. For seven years, he was beaten, threatened and given no wages for the constant work he did in his trafficker’s shop. He had had to beg for money and food. Now he is living in a Salvation Army safe house where the support he is receiving is helping him to overcome his ordeal.

Sanu told the Salvation Army:

“I came to the UK to study. That was my goal…I worked at least 50 to 60 hours a week and sometimes 90 to 100. I would start at 8 o’clock and have to carry on until he said I could leave. I wasn’t allowed to go anywhere; no mobile phone. I couldn’t go to the GP. He said if you talk to anyone then the police will come and get you…My trafficker knew I had nowhere to stay and no other friends. He knew how to control me. He controlled me like in a video game with a remote controller…Every minute every second he took from me. Even now I can still be scared. What happened to me is all wrong. I still have trauma and nightmares…I try to sleep but I still see his face, it is like he’s still chasing me.”

I do not need to tell the Members who are here in Westminster Hall that when we talk about victims, we are not solely talking about foreign nationals. The reporting of British victims to the NRM is rising, and 2022 saw the highest number of British possible victims identified since the NRM began. Most of those, as we have heard, were children. In 2022, one NRM referral in five was for a British child, and many more British children are thought to be vulnerable. Research suggests that there is a failure to refer many British victims to the NRM because they are not identified as victims of modern slavery or because of missed opportunities to safeguard them.

In the face of such a crisis, we need a system that finds victims, protects them, supports them and helps them to rebuild their lives, but as things stand that is not happening. Many victims never access the NRM support system, and if they do, there are huge delays in decision making. That means that many are stuck in the system, receiving wildly varying quality of care and unable to move through. Once people are confirmed as victims, there are few meaningful support mechanisms to help them rebuild their lives, and the impact of that on their mental health must not be understated.

How do we ensure that those vulnerable victims are reached and receive help once they have been identified? We desperately need to improve the first responder role. Effective, informed training and safeguarding procedures are needed to ensure that victims do not slip through the net. Training and policies need to include increasing understanding of the specific needs, circumstances and entitlements of British national victims, improving the transition from child to adult services, and the development of professional modern slavery risk assessment tools for British nationals.

Let me look at how we can improve the decision-making process. Decision makers must have modern slavery understanding, expertise and experience. Evidence from pilot schemes that have devolved the decision making away from the Home Office shows that the pilots look to have generated impressive results. The processing is speeded up, and any conflict of interest for the Home Office is removed. A multi-agency approach, and the broad knowledge and wisdom that come with it, could improve decision making for victims—certainly those with complex needs.

The key to truly ending these terrible crimes is to lock up the traffickers—a point about which the former Home Secretary, the right hon. Member for Witham (Priti Patel), spoke powerfully. We know that the number of victims is increasing, but prosecution rates are shamefully low. Ministry of Justice statistics show that in 2021 there were only 93 prosecutions and 33 convictions in cases in which modern slavery was the principal offence.

Proper support enables modern slavery victims to engage in securing the prosecution of traffickers. Support for victims, including victim navigators, whose incredible work I have had the opportunity to see, is central to successful convictions.

I want to talk about a case study that was shared in The Guardian this week by investigative reporter Annie Kelly. Julia is a Ukrainian survivor of human trafficking and sexual exploitation. She was tricked into coming to the UK under the false promise of legitimate hotel work. For five years, she was controlled by criminal gangs who had seized her passport and forced her to engage in prostitution. She had no control over who she saw or what she was expected to do. Desperate to support her child back in Ukraine and unable to speak English, Julia says she felt trapped by her immigration status and her debt. When she was rescued by the police, she began to build a relationship with a victim navigator, who supported her. Julia, with the victim navigator’s support, worked with the police, and her bravery has resulted in the establishment of an international taskforce, the identification of 120 other female victims and the conviction of five exploiters. Julia is now recovering and rebuilding her life.

Julia’s story and research from charities on the frontline make it clear that consistent support means that victims engage with police investigations. That support needs to come first, to create stability and confidence, and the evidence backs this up. The final evaluation of Justice and Care’s victim navigator pilot scheme found that between September 2018 and June 2022, 92% of survivors who were supported engaged with police, compared with just 44% of survivors without a victim navigator. Twenty exploiters were convicted, 38 prosecutions of accused exploiters were supported and the total sentences for convicted offenders amounted to 178 years and eight months. Between 2018 and 2020, all 62 adult survivors receiving long-term support through one of the Home Office local authority pathways pilot schemes supported a police investigation.

The public are very much ahead of the Government on this; they recognise the connection between supporting victims and bringing offenders to justice. Recent polling for the CSJ and Justice and Care revealed that 82% of the people asked agreed that more Government support for victims of modern slavery is needed to bring more criminal gangs to justice. All of this goes to show that if Government were serious about convicting traffickers, they would be serious about support for victims, but as others have said over the past two days, the Government’s legislation will make it much worse.

The Illegal Migration Bill will have a devastating impact on victims of modern slavery. This is a quote from a letter by the CEOs of organisations that support people through the modern slavery victim care contract:

“Were this bill to come into effect, we fear that many of these survivors would be denied the opportunities to rebuild their lives and reclaim their autonomy.

This bill will do nothing to break cycles of exploitation or help people break free of modern slavery. Instead, it will feed the criminal networks who profit from the lives of vulnerable people. It is essential that genuine victims of modern slavery are afforded the right to seek support.

Furthermore, by closing the route to safety and support, the Illegal Migration Bill risks strengthening the hands of trafficking networks. Traffickers keep people under their control with threats that they will not receive help if they reach out to the authorities. This bill will substantiate this claim and further dissuade survivors from coming forward…Failure to support survivors will result in an undermining of criminal investigations and prosecutions.”

Modern slavery referrals are only a small proportion of overall illegal migration and asylum claims. As the Centre for Social Justice states, only 7% of small boat arrivals since 2018 have been referred to the modern slavery national referral mechanism.

I join the hon. Member for Wellingborough in stressing how disappointed we are that Dame Sara Thornton, who was incredibly effective as the Independent Anti-Slavery Commissioner, left the post in April last year and it has been vacant for nearly a year. That is unacceptable, and I urge the Minister to update the House on why it has not been a priority for this Government and how they intend to correct that.

We agree with the hon. Member for Thurrock (Jackie Doyle-Price) that cuckooing is an abhorrent crime. We welcome the Government’s commitment this week to engage with stakeholders on a new offence, but I urge them to move forward as a matter of urgency to protect people who might be subject to such a degree of abuse.

It is right that we try to stop the dangerous crossings—the human cost is so great—but brutal and cruel targeting of vulnerable victims is not the right path, and I hope the Minister has understood that.

[Mr Clive Betts (in the Chair)]

Could the Minister finish by 10.58 am to allow Peter Bone to do a short wind-up at the end?

10:44

[The Parliamentary Under-Secretary of State for the Home Department (Miss Sarah Dines)]

I shall do my best. It is a pleasure to serve under your chairmanship, Mr Betts. I am very grateful to my hon. Friend the Member for Wellingborough (Mr Bone) for securing this debate. As he made abundantly clear, he has a long-standing interest in this issue and has done a lot of work on it over the past decade. I welcome this opportunity to respond, and I will address as many of the points that he and others made as I can in this reduced time.

First and foremost, I want to express my total disgust at cases of modern slavery and human trafficking. The Government are steadfast in our determination to prevent these heinous crimes from happening, to support genuine victims and to bring perpetrators to justice. This is an ever-evolving threat, and our policy levers need to keep pace with changing trends.

I pay tribute to the previous Prime Minister, my right hon. Friend the Member for Maidenhead (Mrs May), and the former Member of this House, Anthony Steen. I second the comments from my hon. Friend the Member for Wellingborough, who thanked my right hon. Friend the Member for Maidenhead for all her work on the landmark Modern Slavery Act, and Anthony Steen, who was one of the early advocates in this field and is now the chair of the Human Trafficking Foundation. I thank them and all others who have contributed to our efforts in this space.

The former Home Secretary, my right hon. Friend the Member for Witham (Priti Patel), worked very hard on this issue for three and a half years. I recall that in one of the first meetings I had with her when I was a new MP, she talked about upstream work and about looking internationally. Her work in this field required foresight and effort. We must not forget to thank those who have worked hard on this issue.

I was going to outline in detail the difference between human trafficking and people smuggling, but I do not need to because my hon. Friend the Member for Wellingborough did that most eloquently—I will save half a minute by skipping over that page. Instead, I will talk about the progress that has been made on prosecutions. Many Members have emphasised the need to increase prosecutions. It is shocking that there were only 188 live operations in 2016, as my right hon. Friend the Member for Witham will recall. That rose to 3,724 live investigations in February 2023. The Government have made real progress, and we continue to be committed to improving the criminal justice response to modern slavery and to ensuring that law enforcement has the right tools and capability to identify victims and tackle offenders.

Prosecutions have increased since the MSA came into force, other than in 2020 when there was a decrease due to courts closing during the covid pandemic. In 2021, the Government prosecuted 466 individuals for modern slavery crimes, with a conviction rate of more than 70%. Those with an interest in criminal justice will know that that is high. The Government have granted more than £1.3 million of funding to the Modern Slavery and Organised Immigration Crime unit, which operates out of Devon and Cornwall police, and have supported the development of national infrastructure to bring consistency across forces. There has also been a significant increase in activity since the Modern Slavery Act came into force, leading to better identification, information and evidence, and an increase in live investigations, prosecutions and, importantly, convictions.

Notwithstanding that success, there is a great deal more to do. The Government recognise that there are still challenges in the criminal justice system, which is why we are continuing to do more with law enforcement generally and the Crown Prosecution Service, including identifying ways of supporting victims to engage with prosecutions to help bring the exploiter to justice.

In addition, the Human Trafficking Foundation’s lived experience advisory panel will work with the Modern Slavery and Organised Immigration Crime unit. I hope that this collaboration will help to enhance guidance and ensure that the police take account of victim and survivor experience. I am grateful to Justice and Care for its work in this field, and to the victim navigators. We welcome their use by law enforcement agencies across the UK.

It is hoped and expected, through intense preparation, that the Online Safety Bill will assist in this area. The Government will add section 2 of the Modern Slavery Act to the list of priority offences in the Bill. That section makes it an offence to arrange or facilitate the travel of another person, including through recruitment, with a view to their exploitation.

Right hon. and hon. Members said that sentencing needs to be looked at and raised concerns about the low level of sentences handed down by courts relative to other offences. The Modern Slavery Act 2015 gives law enforcement agencies the tools to tackle modern slavery, including a maximum life sentence for perpetrators and enhanced protection for victims, and following consultation in August 2021, the Sentencing Council published new sentencing guidelines for those convicted of modern slavery in England and Wales, but further progress is needed. Judges and magistrates now have clear dedicated guidelines when sentencing adult offenders who are guilty of offences under the 2015 Act, including slavery, servitude, forced or compulsory labour and trafficking for the purposes of exploitation. The new guidelines came into effect in October 2021 and aim to promote consistency of approach, improve the general area and help the courts to pass appropriate sentences when dealing with modern slavery offences.

[Sarah Champion]

Will the Minister give way?

[Miss Dines]

I will make a little progress. I will mention at this point that I listened carefully to the hon. Member for Champion—[Interruption.] Sorry, the hon. Member for Rotherham (Sarah Champion)—I will be reminded about that later by my hon. Friend the Member for Rother Valley (Alexander Stafford). The hon. Lady has done some hard work on this subject, and I took a clear note of what she said. I will give way to her briefly, but there really is not much time.

[Sarah Champion]

The focus on sentencing is very welcome, but is the Minister also focusing on the pull factor? Women coming over tend to be sexually exploited, and men are going into, for example, cannabis farms. If we could be tougher and put legislation around the pull factor, rather than just dealing with the outcomes, that would be really helpful in preventing this awful crime.

[Miss Dines]

The hon. Lady makes an important point. It is exactly about the pull factor, and not necessarily just because of gender-specific professions or exploitation, such as cannabis farms or the sexual arena. We must be careful about the pull factor; when he was giving evidence yesterday, the Prime Minister said that the pull factor is a big factor and we must be careful. When concerns are expressed about changing the present regime, as has been elucidated over the past two days in the main Chamber, we must be cautious because, as the Prime Minister said, we do not want to create a pull factor, whether it is for children or a particular class or group of individuals who may be running the criminal activities or being exploited in the way that the hon. Lady said. That is really important.

I know that cuckooing is close to the hearts of several Members who have spoken today, particularly my hon. Friend the Member for Thurrock (Jackie Doyle-Price). The Government fully recognise the exploitation and degradation associated with that pernicious practice and are determined to tackle it. The Home Office-funded National County Lines Co-ordination Centre has identified all national law enforcement initiatives designed to tackle cuckooing, and the Government are actively considering whether new legislation is needed. It is an important item under consideration, because it is a most dreadful crime. We really need to protect the most vulnerable in our society. The Government’s recently issued antisocial behaviour action plan will engage stakeholders, and I am hopeful that there will be a new criminal offence in this area.

I know that hon. Members also feel keenly about victim support. The United Kingdom continues to meet its obligations to support victims of modern slavery as a signatory of the Council of Europe convention on action against trafficking in human beings, or ECAT. The support given by this Government is unparalleled, and indeed a world leader, valued at over £300 million over a five-year period. As we all know, the Home Office funds the modern slavery victim care contract, which supports victims in England and Wales to give them access to vital support they need to assist with their recovery. That includes, as has been mentioned today, access to safehouse accommodation, financial support and a dedicated support worker.

The Government are committed to ensuring that the national referral mechanism effectively supports both victims to recover and the prosecution of their exploiters. Statistics show that the better someone is supported, the more likely they are to give evidence and bring their exploiter to justice through the Crown. We made it clear in the Nationality and Borders Act 2022—as a former Home Secretary, my right hon. Friend the Member for Witham, is keenly aware of this—that where a public authority, such as the police, is pursuing an investigation or criminal proceedings, confirmed victims who co-operate and need to remain in the UK in order to do so will be granted temporary permission to stay for as long as they are required to be in the UK to support the investigation.

I will turn briefly—I have only three minutes left—to child victims. Concern has been voiced that adults get better care, and there appears to be some evidence of that and of care being patchy across the country. That must be addressed by local authorities, other stakeholders and mental health services. As the safeguarding Minister, I am concerned if young people are less effectively protected when they are in the care of the state. Sometimes children are less protected than adults and that cannot be allowed to continue. The Government are working very hard and other options are being considered.

The Government have, to their credit, rolled out independent child trafficking guardians to two thirds of local authorities in England and Wales, but more needs to be done. Those guardians are an effective and additional source of advice for trafficked children, and they can advocate on the children’s behalf. We know from the debate that that approach has been successful. A staggered approach to roll-out has been adopted, with robust built-in evaluations along the way to make sure the service meets the demands of vulnerable children. That must evolve to do better.

We will continue to review how the needs of individual children are best met through the programme. We must not allow children to be taken away from a place of safety—a children’s home or a foster placement—to be abused and then brought back in. That simply cannot be tolerated. Local authorities must work harder and in close co-operation with the police. Across the country, there must be no area—ethnic or geographical—where standards are not good. We will work harder to protect child victims.

In the debate, right hon. and hon. Members said clearly that a commissioner must be appointed. The Home Secretary recognises the importance of the role of the Independent Anti-Slavery Commissioner and has launched a new open competition to recruit for the role. The advert for the role went live last month and the advertising has just concluded. The process is going as quickly as possible. It is hoped that all necessary steps will be taken in a short period and that the best person for the role will be recruited. There will be news very soon. The position has improved from a few months ago when there was not even a competition. I can reassure the House that there is movement in that area.

In our modern slavery strategy, we are still regarded as a world leader. The Illegal Migration Bill is essential to make sure that our borders are properly protected and that criminal gangs do not bring people into exploitation. There is a need for reform. I need to wind up, so I cannot say as much as I wanted to, but I will say that there will be protection, and vulnerable people will not be removed unless the disqualifications under the Nationality and Borders Act apply. I am able to commit to a meeting, as hon. Members asked.

The points raised by my right hon. Friends the Members for Maidenhead and for Chingford and Woodford Green (Sir Iain Duncan Smith) were addressed in yesterday’s debate by the Minister for Immigration, who stated that there is evidence that, unfortunately, the Modern Slavery Act has enabled some false applications. The 3,500 referrals envisaged on the passing of the Act have risen to 17,000 referrals and there is evidence of abuse of the system. In 2021, 73% of people who arrived on small boats and were detained for removal made modern slavery claims, so more needs to be done, but I can commit to ensure that genuine victims are discussed in a meeting with the Immigration Minister and interested parties.

[Mr Clive Betts (in the Chair)]

Peter Bone has less than one minute to wind up.

10:59

[Mr Bone]

This is wonderful, Mr Betts. I get to sit in the Chair that you have, and when we come to Westminster Hall we have a debate that is non-political about an important issue. I have learned from people’s contributions today, so I thank everyone for attending. The Minister dealt with her speech on an important subject at rapid speed. I am grateful that she has agreed to a meeting to look into the problems of the Illegal Migration Bill and modern day slavery. I thank her for that and I thank everyone for attending.

Question put and agreed to.

Resolved,

That this House has considered the matter of human trafficking and modern slavery.

Fuel Costs: Rural Households and Communities

Wednesday 29th March 2023 Westminster Hall

09:30

[Angela Crawley (Lanark and Hamilton East) (SNP)]

I beg to move,

That this House has considered the cost of fuel on rural households and communities.

It is a pleasure to serve under your chairship, Mr Betts, and to bring this debate to Westminster Hall this morning. Around 2 million people across the UK are reliant on off-grid gas supplies to heat their homes, including heating oil, liquefied petroleum gas, coal and biomass. According to the latest fuel poverty statistics, rural homes are much more likely to be reliant on off-grid gas and more likely to be less energy-efficient. That has made rural households across my constituency of Lanark and Hamilton East, and across the UK, much more susceptible to the impact of the rising cost of fuel. In 2022, households in rural areas had the highest rate of fuel poverty, at 15.9% compared with 11.1% for those in urban areas.

In summer last year, I was contacted by Roy, a constituent from Lanark who was worried about heating his home over the winter. In June 2022, the price of kerosene for Roy was £1 plus VAT per litre, with further increases on the horizon. With a minimum order of 500 litres as the industry standard, it was becoming unaffordable to keep up with the price increases. For Roy, the £400 energy bill support, the warm home discount and the alternative fuel payment simply do not go far enough. Paying for fuel up front with the exponential price increases that this winter brought is a significant hurdle for rural households and communities. Issuing alternative fuel payments months after households have already put their fuel order on their credit cards or taken money out of savings to cover the cost simply does make sense.

[Helen Morgan (North Shropshire) (LD)]

Some households have still not received payments because they are having difficulty with their electricity supplier or their landlord. The delay in accessing support for off-grid households is causing real hardship in rural areas. It seems unfair that people who have to pay for their energy up front—often the most vulnerable people—are still waiting in some cases for Government support with their household bills.

[Angela Crawley]

The hon. Lady is absolutely right. Although I welcome the fact that the Government recognised that there is a need, the response has been too slow. In reality, people, especially pensioners, had no more money on which to draw to pay up front. That has had a knock-on effect on many households, in particular many of mine in rural Clydesdale.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Lady for bringing this subject forward. I agree with her, but it is not just about fuel; it is also about rural isolation. Does she agree that rural social isolation in the farming community is compounded by the rise in fuel costs? Going to young farmers’ club events, or something similar, does not boil down to finding time; it is about whether people have the resources to go. We need not only look at rural households and their fuel costs, but offer greater support to the farming community than it currently receives.

[Angela Crawley]

I thank the hon. Member, as always, for his intervention. He makes an important point. I am truly blessed to be the representative for Lanark and Hamilton East, which is home to a very wide and diverse community, including Clydesdale, the Clyde valley, which has a large population of farms. That community has been adversely affected by these costs.

With all due respect to the Government, there is little that can be done in retrospect to ease the impact this issue has had on livelihoods. Issuing alternative fuel payments months after households have already put fuel orders on credit cards or taken money out of savings to cover the costs does not make sense. It is all well and good for households that have wriggle room or back-up savings, but many do not, as we all know. Rural households are often occupied by pensioners reliant on their pension as their only source of income. They may not have the means to stretch their budget any further.

There are still households that are eligible for the alternative fuel payment but have not yet received it. The picture is even bleaker for those who are not connected to the gas grid and rely on electricity to heat their homes. They are not eligible for the alternative fuel payments, despite the latest fuel poverty statistics indicating that households using electricity as a main source of fuel for heating have the highest likelihood of experiencing fuel poverty.

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

The hon. Lady is being generous, and I congratulate her on securing a really important debate. Families in rural communities face excessive costs for fuel not only to heat their homes but to get about. There is no public transport for many of us in places such as Cumbria, and when there is, it is very expensive. People need a car just to get to work or study, and to shop. The coalition Government brought in the rural fuel duty relief scheme, but only 10,500 residents in the whole of England qualify for it. People from Brough, Appleby, Kirkby Stephen, Shap, Ambleside, Coniston or Hawkshead who need to travel are not able to benefit from the scheme. Would the hon. Lady advise the Minister to expand the scheme to ensure more communities can take advantage of it?

[Angela Crawley]

The hon. Member has made a compelling case in his own right. I acknowledge that transport is devolved in Scotland, but he makes an important point. Will the Minister say what she is doing to ensure that the remaining households who are eligible for the payments receive them as soon as possible? How does she intend to ameliorate the impact the rising cost of fuel is having on households who are off the gas grid and reliant on electricity to heat their homes?

After facing increasing pressure to introduce a price cap to help domestic fuel customers with high fuel prices, the Government, unsurprisingly, fell on the side of big business. They were too concerned about the impact that placing a price cap on heating oil and liquefied petroleum gas would have on market competition, rather than the impoverishment of households struggling to afford to heat their homes. My office has had the unfortunate job of forwarding the Government’s position on to concerned constituents who are struggling to keep up with the cost of being off grid. One constituent said:

“My concern is that my future financial security will be damaged just to keep my off-grid gas supplier making a healthy profit.”

This year, I have been surveying my constituents to gather their experiences and opinions on the cost of living. When asked what the one thing I could raise in Parliament for them would be, an overwhelming majority of responses were concerned with the immense profits of energy suppliers. This week, there have been increasing rumours that the windfall tax the Government have already put in place may be relaxed. What would the Minister say to my constituents and the many other people who are calling for a more stringent windfall tax regime to be implemented, rather than relaxed?

The winter may be drawing to an end, but the issue remains. For Roy, the price of kerosene in April is estimated to be around 71p per litre excluding VAT. This month, according to the Office for National Statistics, the price sits at around 81p, which is still 35p higher than this time last year, and 32p higher than it was before the pandemic in 2020. I am sure the Minister will be quick to reel off all the support measures the Government have put in place throughout this crisis, and I recognise that a number of measures have been put in place, but many people fell through the gaps, and Roy and many of my rural constituents are among them.

The reality is that the measures introduced simply do not go far enough for those who are off the grid. On top of the pressures of the rising cost of fuel, increases to standing charges have been allowed to happen under the radar. Because of that, while households across the UK may receive some relief through the support measures put in place this winter, they are still feeling the pinch. Will the Government commit to taking more meaningful action to reduce the exponential increases to standing charges? What support is she prepared to put in place to support those reliant on off-grid gas to heat their homes, outwith the context of a cost of living crisis?

I will close my contribution by discussing the picture in Scotland. The Scottish Government’s recent statistics show that one third of households in remote rural areas are classified as experiencing extreme fuel poverty. In Scotland, 65% of rural dwellings are not covered by the gas grid, and our remote and rural communities are facing annual energy bills of more than double the UK average. That discrepancy was ignored in the UK Government’s energy support package this winter and in the spring statement. Scotland is abundant in clean, green and renewable energy and, indeed, oil, but we cannot reap the benefits while under Westminster control. Rural households, which have contributed so much to the export of renewable energy, pay exponentially for being off the grid. That cannot continue. In my opinion, Scotland needs full powers of independence to truly equalise the energy price discrepancies between rural and urban communities. I hope that the Minister will respond with action.

11:10

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)]

May I first say what an excellent speech that was, and what thought-provoking words have come from this debate? I express my gratitude to the hon. Member for Lanark and Hamilton East (Angela Crawley) for initiating the debate, and for her additional work on supporting rural households and communities.

The Government have implemented several comprehensive support schemes across the United Kingdom to assist our rural households and communities. In particular, I would like to address the issue of the support being provided in Scotland, given the importance of these communities to Scotland, as well as the wider United Kingdom. I am aware of the significant proportion of Scottish domestic properties not on the gas grid; as the hon. Member said, it is estimated to be about 65% of homes in rural Scotland. These communities face significant challenges. The number of households classed as being in extreme fuel poverty is about three times higher in rural areas than in the rest of Scotland. As hon. Members will know, many factors influence that, including a longer heating season, exposed conditions, and historically poor housing stock. As a result, the Government’s energy schemes have rightly offered much-needed support to rural communities over the winter in the face of high energy costs.

A range of domestic and non-domestic support has been provided to rural communities, and particularly off-grid users. The alternative fuels payment is available to households that use as their main heating source alternative fuels, such as heating oil or liquefied petroleum gas. That includes many Scottish rural households. More than 85% of relevant customers in Great Britain will have received their payment automatically via their electricity supplier in February 2023. Those who have not received the payment automatically will need to apply to the AFP alternative fund via a short online form on gov.uk.

[Helen Morgan]

On that point, I cannot reiterate enough how many people might not be able to access that online portal. I am aware that there is a phone number, but the messaging on and advertising of that number have been quite poor. Constituents have come to us asking about this, and we have pointed them in the right direction, but there will be people out there who are not aware that they can access that support, because they cannot get online.

[Amanda Solloway]

I thank the hon. Member for a very valid point. As she points out, we have been engaging. We have the helpline; we have a contact number. We are trying to reach out as much as possible. I encourage all hon. Members, on the record, to reach out and encourage people to go through the website portal or, indeed, through the helpline.

The energy bills support scheme is being delivered as a £400 discount on electricity bills, provided by suppliers in monthly instalments from October 2022 to March 2023. It has been delivered to 2.6 million households in Scotland. As March is almost over, may I use this opportunity to again urge hon. Members to join the Government in highlighting to their constituents that it is important that traditional prepayment meter users redeem their vouchers for that scheme now? Electricity suppliers can reissue expired or lost vouchers, but they must all be used by 30 June, when the scheme closes. It is vital that households in Scotland that use traditional prepayment meters and receive EBSS in the form of vouchers make use of the support being provided to them. Our latest transparency publication data shows that as of 1 March, almost 340,000 vouchers in Scotland remain unused—a point to which hon. Members have referred.

Households in Great Britain that do not have a domestic electricity supply, such as off-grid households and park home residents, and who have not been able to receive their support automatically, can now apply for their £400 support through the energy bills support scheme alternative funding. I encourage households that are eligible to apply for support before the scheme closes on 31 May 2023, either through the online application form on gov.uk, or by calling our contact centre helpline. I would be happy to share this information with MPs following the debate.

The final aspect of domestic support that we have provided is the energy price guarantee, which reduces electricity and gas costs for domestic customers. It helps to lower annual bills, combat fuel poverty and maintain supplier market stability. The scheme covers approximately 2.5 million households across Scotland and 29 million households across the UK in total. I hope the hon. Member for Lanark and Hamilton East was pleased to hear the recent announcement that the energy price guarantee will be kept at £2,500 for an additional three months from April to June, providing more savings to households.

[Tim Farron]

I am grateful for the Minister’s comprehensive answers. The support that businesses get will expire, which is a problem that we could address. Lumped under the category of “businesses” are our hospices, which have seen a 350% increase in fuel bills. Not only are they getting insufficient support now, but they will soon get nothing. Will the Minister consider a special package to support hospices, which clearly cannot turn the heating down?

[Amanda Solloway]

I thank the hon. Member for that question. I assure him that I am reaching out to a whole host of stakeholders, and am talking to a variety of groups about that very issue. Alongside the support we are offering to households, there is the energy bill relief scheme, introduced in October 2022 for the winter; we will continue to run it until the end of the month. The support offered by this package is worth £7.3 billion and is available across the United Kingdom.

It is right that we balance continued support with energy costs with our duty to the taxpayer. Energy prices are coming down, but we must also recognise that prices remain 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. Under this support package, energy and trade intensive industries and domestic customers on heat networks will receive more than the baseline element of support.

I thank again the hon. Member for Lanark and Hamilton East. I give my assurance that I am reaching out to a variety of stakeholders, including suppliers. This has been an incredibly important debate, and I sincerely thank her for securing it. It is important to raise awareness of the support for rural communities in these challenging times.

Question put and agreed to.

11:19

Sitting suspended.

Spring Budget: Wales

Wednesday 29th March 2023 Westminster Hall

[Mr Philip Hollobone in the Chair]

14:30

[Mr Philip Hollobone (in the Chair)]

Prynhawn da. I call Ruth Jones.

[Ruth Jones (Newport West) (Lab)]

I beg to move,

That this House has considered the Spring Budget and Wales.

Diolch yn fawr iawn, Mr Hollobone, and thank you for your introductory remarks in Welsh. I am sad to say that I will not be able to continue in that vein, but it is a pleasure to serve under your chairmanship, and I do so with the voices, views and concerns of the people of Newport West and the whole of Wales at the forefront of my mind.

This afternoon is an important opportunity for colleagues representing Wales to speak up and speak out about the failing economic policies of this Government. The recent Budget could and should have been a unique opportunity to unlock Britain’s promise and all the potential that we see in and around our communities. Instead, it was more decline and decay. It is clear to everyone—and, I suspect, to the Minister too—that this Government have decided to continue papering over the cracks after 13 years of Conservative economic failure, rather than giving us the change we need. Indeed, as I have said in the House, that papering over the cracks was exemplified by yet another handout for the richest 1%. There was no regard for the livelihoods and wellbeing of my constituents in Newport West, or the livelihoods of people across Wales, whether they call home Ceredigion or Conwy, Bangor or Bridgend. Wales is a nation of people who work hard, pay their taxes and simply need real change and real investment in their communities.

I noted from a report that the UK Treasury has recently taken back more than £155 million from the Welsh Government. The reason the Treasury gave for this smash and grab was that the Welsh Government had not spent it fast enough, which is an arbitrary change of tune from previous years. This callous approach is both unacceptable and unwise, and I echo the Welsh Government Finance Minister, Rebecca Evans MS, in calling on Westminster to give Wales our money back.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

I must respond to that point about the £155 million. Has the hon. Lady actually read the report that the Senedd Committee produced? It was pretty scathing about the performance of the Welsh Government in managing their money. She describes it as a “smash and grab” raid. The truth is that it was a failure on the part of Welsh Government Ministers to spend money given by UK Government to alleviate the effects of the pandemic at its peak.

[Ruth Jones]

I disagree with the right hon. Member. Obviously, the report can be read in several ways. The fact that the money was taken back in such an arbitrary way, and that what happened was different from what happened in previous years, means that the rules were changed this year to suit the Government. I am afraid we disagree on that.

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

Does the hon. Member agree that there is a discrepancy here? If UK Departments do not spend all their money within the financial year, it goes back to central UK Government. Surely, under any rational devolution settlement, there should be the same arrangement for Wales, so that if money is not spent by certain Departments in Welsh Government, it remains in Wales.

[Ruth Jones]

The right hon. Member makes the point perfectly well; that rule would be fair. Opposition Members will pick this issue up in the coming days, along with the issue of the inadequacies of the spring Budget, because it is a new case of robbing Wales to pay Westminster, and it cannot go on. We have seen this before with High Speed 2, an England-only project that should, according to a Welsh Affairs Committee report of 2021, be classified as such. The acknowledgment of this simple truth, which I and cross-party Welsh MPs spelled out to the Government nearly two years ago, would give Wales the £5 billion it is owed. We are seeing the same thing play out again with the Northern Powerhouse Rail project; that is another £1 billion that could and should have gone to Wales. That money would have a real and substantial effect there, but it has been withheld. The Secretary of State for Wales may have entirely ducked responsibility for his Government’s role in this matter, but we will not let this go.

Growth was downgraded in this Tory Budget. That will surprise nobody in Wales who is battling with rising inflation, rising energy bills and rising food costs. That is why Labour will not allow Wales to keep bumping along this path of managed decline from Westminster. I mentioned my constituent Dawn Jones in the Budget debate in the Chamber last week, and I mention her again here. She is a pensioner living in Caerleon who has worked all her life and now cannot afford to put the heating on. She has not had it on all winter because of the expense, and every time she goes to buy anything in the supermarket, she finds it has increased in price. She wrote to my office and said: 

“I am really struggling now with all these increases and do not know how I am going to pay my way; I am worried to death!”

It seems like every other day my constituency office receives more cases of desperate people who have found themselves at the end of the options for help and support. It is heartbreaking, and to be quite frank, it makes me deeply angry with those who have made the political choice to put my constituents in that position.

[Wayne David (Caerphilly) (Lab)]

Is my hon. Friend aware of the Bevan Foundation report? Only last month, its in-depth analysis showed that it is the poorest people, the elderly, the disabled and people who are renting socially who are suffering most from the cost of living crisis.

[Ruth Jones]

Absolutely. My hon. Friend has made a perfect point; the Bevan Foundation in Wales is very clear and accurate in its reporting. I pay tribute to Victoria Winckler and the other staff there. That is why I welcome Labour’s mission to secure the highest sustained growth in the G7; that will be good for Wales, the Welsh economy and the people of Wales.

[Stephen Kinnock (Aberavon) (Lab)]

My hon. Friend is making an excellent speech. On the point around growth, does she agree that a vibrant and competitive steel industry has to be at the heart of any growth strategy, and that the UK Government’s continued dithering and delay when it comes to stepping up and showing the Welsh steel industry the support that it requires is a massive issue? Does she also agree that UK Labour’s £3 billion clean steel fund is exactly what we need to ensure that we get our economy firing on all cylinders?

[Ruth Jones]

Absolutely. My hon. Friend makes a powerful point, because steel is integral to the industry and heart of Wales. In my constituency, in the last week we have had issues with a steel company, which I will be talking to my hon. Friend about shortly. We all want steel to thrive and grow in Wales.

Only with strong, inclusive growth, including in the steel industry, will Wales get the good jobs and productivity gains for which our people are crying out. It is not rocket science; in fact, it is pretty simple. Despite all the claims from the Chancellor, the Office for Budget Responsibility downgraded the UK’s long-term growth forecast; there are downgrades in each of the last three years of the forecast period. We will be the only country that will see negative growth. No other G20 economy, apart from Russia, is forecast to shrink this year. The OECD has confirmed that the UK will be the weakest economy in the G7 this year. What a ringing endorsement of 13 years of Tory Government! The blame for that lies squarely with the Tories, their Prime Ministers, and the current Chancellor—and the one before, obviously. They are the party of economic mismanagement.

It is worth noting that the average French family is now a 10th richer than their British counterparts, while the average German family is a fifth richer. After 13 years of Tory Government, and a failed spring Budget, our people are paying more, earning less and bearing the overwhelming brunt of this Conservative cost of living crisis. This Government have let down the people of Newport West, and of Wales. The spring Budget was a wasted opportunity for Wales; it delivered a tax cut for the richest and nothing for the many. It continued a Conservative agenda of delay and decline. As my constituent Dawn Jones wrote in her heart-rending correspondence:

“This should not be allowed to happen in this day and age, these conditions are not acceptable.”

The best way—the only way—to change course, to deliver for our people and to move forward is with a UK Labour Government, and the sooner the better.

[Mr Philip Hollobone (in the Chair)]

Diolch yn fawr. The debate can last until 4 o’clock. I am obliged to call the Front-Bench spokesmen just after half-past 3, but until then we are in Back-Bench time, and I am determined that everybody will get in. There is no need for a time limit if everybody is sensible.

15:09

[Virginia Crosbie (Ynys Môn) (Con)]

Prynhawn da. It is a pleasure to serve under your chairmanship, Mr Hollobone, in this important debate. I would like to say congratulations—llongyfarchiadau—and put on record my thanks to the UK Government for a Budget that is good news for my constituents on Anglesey, for Wales, and for the UK.

Before the Budget was announced, the Finance Minister in the Labour Government in Cardiff stated that:

“The Chancellor has the powers to…ease the challenges being experienced by households and businesses”,

and to

“support those most vulnerable—including practical actions to support people with energy costs, housing needs and welfare benefits.”

The Chancellor delivered. The energy price guarantee was kept at £2,500. There were new childcare plans to help working-age people get back into work, with 30 hours’ free childcare for children aged from nine months to four years—in England, at least; I understand there is still some doubt about what Wales will do with its share of the funding. I hope the Minister will enlighten us in his closing remarks. There is a new universal support scheme to help disabled people who want to work to do so, worth up to £4,000 per person.

Housing is a devolved matter. However, the Labour Government in Cardiff could have used some of their £155 million underspend, instead of always asking UK taxpayers for more and more money. I am delighted that the Chancellor delivered way more for Welsh people in the spring Budget than would have been delivered under the relatively low aspirations of Labour.

[Liz Saville Roberts]

The hon. Lady raised the matter of housing. It is worth considering the local housing allowance, the perimeters of which are set by the UK Government. Does she share my concern about a constituent of mine at Aberllenfenni, who faces an increase of £150 month in rent set by her landlord? No more can be paid in local housing allowance, because that is set at a lower level, at 25% of private rents. Does she agree that that should be raised by Westminster to 30%, to support people in private rental arrangements?

[Virginia Crosbie]

I thank the right hon. Member for her intervention. My concern is that Labour in Cardiff should be building more homes that people want, in locations where they want to live, including for young people starting off their life.

In addition to delivering the day-to-day support that people need with the cost of living crisis, caused by Russia’s illegal war against Ukraine, the UK Government have delivered hope, and a promise of long-term prosperity in Wales. We need to grasp that with both hands and work together for the benefit of the Welsh people. We have seen what working together in a constructive way means for Wales. It means a freeport on Anglesey, with 13,000 new jobs and £1 billion in economic investment.

The Budget is an example of how this Conservative Government are investing in Wales, and levelling up communities both north and south. Families across north Wales see that the UK Government, rather than the Labour one in Cardiff, are supporting the region with long-term investment and good-quality jobs. I was delighted that £20 million for the refurbishment of the Holyhead breakwater was announced in the Budget. That investment in a vital piece of infrastructure is important if we are to keep Holyhead from flooding, and are to attract new investment to the port—the second busiest roll-on, roll-off port in the UK. That follows the announcement of £17 million from the levelling-up fund to regenerate Holyhead town centre.

The funding will attract new investment and good-quality, long-term job opportunities for local people across the whole island. It will give Ynys Môn a new lease of life, and turbocharge the island’s economy. My island has one of the lowest levels of gross value added in the UK, with high levels of temporary and seasonal work. Every year, we lose young people, who move in search of decent employment elsewhere. My dad had to leave Wales to find work. These investments will ensure that other young people do not have to leave Wales. The UK Government are investing to protect our island’s communities and our Welsh language.

It is the nuclear energy announcements in the Budget that will have the greatest long-term impact on the people and economy of Ynys Môn, and across the whole of north Wales. That point was highlighted when the Chancellor mentioned Ynys Môn in his speech. Earlier this month, I wrote a letter to the Prime Minister, co-signed by 57 of my right hon. and hon. Friends, asking him to push ahead with Great British Nuclear, and to make new nuclear energy part of our green taxonomy. The steps the Chancellor took in the spring Budget underline the Government’s commitment to our long-term energy security and net zero. With energy independence and jobs in new nuclear, alongside renewable energy production, this country can become a more prosperous and balanced economy.

The Budget was overwhelmingly positive for nuclear in the UK: there was the launch of Great British Nuclear, and the labelling of nuclear as environmentally sustainable in the green taxonomy. It was also great to hear the Chancellor’s commitment to nuclear providing a quarter of Britain’s electricity. That means a massive ramp-up of new nuclear projects on a scale that we have not seen for a very long time. What does that mean for Wales? It means opportunity. GBN will make the delivery of new nuclear projects, including in Wales, much more efficient, enabling us to build vital new stations more quickly than ever before.

[Wayne David]

I welcome the announcement by the Government on Great British Nuclear, belated though it is, but does the hon. Lady think it is certain? If so, perhaps she would like to say on what date nuclear on Wylfa will be given the go-ahead.

[Virginia Crosbie]

The last time a nuclear power station was invested in and built was under a Conservative Government. As the hon. Member will know, we have a huge energy statement tomorrow in the Chamber; I would not want to pre-empt what the Minister will say.

GBN means jobs and investment in areas that are calling out for them, including my constituency of Ynys Môn. I want good jobs for hard-working people—jobs that support Welsh communities—and nuclear can deliver that. Wales can be a centre of energy innovation. In the Budget, we learned of plans for a small modular reactor competition. There is already a long list of companies looking to Wales to house these game-changing stations, which will help decarbonise not only the power grid, but energy-intensive users in the heavy industry sector. We need these projects to come to Wales, but of course we need to attract investment.

Giving nuclear the green label will drive crucial investment. Nuclear has the lowest life-cycle carbon intensity, lowest land use and the lowest impact on ecosystems of any electricity source, according to the United Nations Economic Commission for Europe. If that does not attract investment, I do not know what will. Wales has a world-class site in Wylfa and Trawsfynydd at its disposal. It is essential that we make the most of those sites; it would be a huge missed opportunity if we did not. Over the next decades, there will be a significant ramping up, with new nuclear projects across the UK, facilitated by Great British Nuclear. Wales can and should be part of these plans, and the Budget was a big step forward, but there is much to do.

This Budget has delivered for Wales; it is way more than the hand-to-mouth support that the Labour Government in Cardiff asked for. It has paved the way for long-term sustainable growth and employment in Wales, for levelling up parts of Wales that have seen little interest or investment from Cardiff in the past 20 years, and for an economic revolution in Ynys Môn.

[Beth Winter (Cynon Valley) (Lab)]

It is clear from the evidence provided by the Welsh Government that we receive substantially less funding via the levelling-up fund than we did as a member of the EU. The Minister for Economy quoted a figure of £1.1 billion less. What does the hon. Member have to say about that?

[Virginia Crosbie]

That is simply not the case. I will highlight the way that north Wales has been treated by Labour. In the past six months, it has been deprived of one of the two bridges connecting it to the mainland. It has seen abject failures in the devolved health service, and suffered over 700 job losses with the closure of 2 Sisters in Llangefni. While Labour MPs sit there and complain about our Budget, let us look at the actions their own Welsh Government, in co-operation with Plaid, have taken to support my already deprived community through these challenges. They have refused to compensate the businesses that suffered significant losses as a result of the closure of the Menai suspension bridge—a closure that, I hasten to add, resulted from failures in its maintenance programme. They stalled on funding a much-needed GP co-location in Holyhead, which would have helped people who have struggled for years with a health board that is in and out of special measures. With their £155 million underspend, they could have stumped up the funding for some of those 700 people who lost their job at 2 Sisters in Llangefni to travel to another plant and continue working for a few months. They chose not to.

The only reason why Labour MPs are unhappy is because they cannot face the fact that the UK Government are delivering on their promises to the Welsh people in a way that Labour has abjectly failed to. I commend the Budget and the difference it will make to people across Wales, particularly in my constituency of Ynys Môn. Diolch, Mr Llefarydd.

[Mr Philip Hollobone (in the Chair)]

I call Beth Winter.

14:48

[Beth Winter (Cynon Valley) (Lab)]

Diolch yn fawr, Mr Hollobone. I wonder if I am living in an alternate universe to the previous speaker, the hon. Member for Ynys Môn (Virginia Crosbie). This time last year, I undertook a research study on the cost of living in my constituency. I will share a copy with Conversative Members because the evidence about the levels of deprivation was stark, with people going without food and unable to pay their gas and electric bills. The responsibility for that lies squarely with the UK Government, and my contribution will evidence why I feel so strongly that that is the case. So I beg to differ with the hon. Member. I congratulate my hon. Friend the Member for Newport West (Ruth Jones) on securing the debate.

Wales fired the UK industrial revolution through our coal and steelworks, and we are now leading the green industrial revolution through onshore and offshore wind. The United Kingdom’s wealth was built on Wales, but it now resides in London and southern England. There is a lot of research to evidence the fact that there is a disproportionate amount of money in the south-east of England.

Wales has been let down by Westminster—by Tory Governments—for many years, and this month’s Budget continues that theme. The reality is that under this Tory Government, households in Wales and in my Cynon Valley constituency are worse off, despite the Welsh Government’s significant efforts to put in place a range of measures to help households. We have seen the largest fall in living standards since the 1950s, wages are lower in real terms than they were 13 years ago—that is a fact—and public services, including local government services, continue to be cut in real terms.

Ahead of the Budget, the Welsh Government called for increased support for households in the cost of living crisis, including increased public spending to ensure public sector workers are paid a fair wage, increased funding for public services and investment to boost growth in the economy. Wales TUC called for a boost to pay across the economy, with decent pay rises and a path to a £15 an hour minimum wage, alongside a plan for strong public services, fair taxation and protection from hardship for workers.

After the Budget, the Welsh Government said:

“The Chancellor has chosen to hold back funding at a time when extra investment is desperately needed to ensure our hard-pressed public services can respond…and to ensure public sector workers are paid a fair wage.”

The Institute of Welsh Affairs said that the Budget

“puts money into the hands of well-off high earners”,

and that it “represents a political priority” that is completely “at odds with the needs” of the vast majority of people in the country.

The Bevan Foundation said that

“the fact that there is so little direct action on the cost-of-living crisis is a source of concern”,

and that the Chancellor’s focus is

“starting to drift from this very real problem.”

I was fortunate, about 18 months ago, to commission the Bevan Foundation to undertake a piece of research on our economy in the Cynon valley and come up with an action plan based on community wealth building to address the appalling levels of deprivation and inequality. We are on the path to implementing that at a grassroots level. I am really encouraged by the work that people in Cynon Valley are undertaking to provide an alternative future, but that is no thanks to the UK Government.

The reality is that Wales is constrained from offering more by the UK Tory Government, who routinely withhold fair, needs-based funding for Wales to meet the increasing pressures on our communities. After more than a decade of austerity and the pandemic, Wales’s economy and public services, including local government services, have been absolutely stripped to the bone.

Wales is yet again being starved of funds. We heard news this week that, as my hon. Friend the Member for Newport West said, the UK Government have taken £155 million from the Welsh reserve fund, despite the Welsh Government making proposals that would see the money retained, which has been agreed many times before—there was a precedent. It is—I will use the term—theft from the people of Wales, and it demonstrates the Tories’ complete contempt for our country.

[Stephen Crabb]

The hon. Lady talks about local government services, but how would she respond to the point that local authorities across Wales—all of them, and especially some of the Labour councils not far from her constituency—are sitting on billions, or at least hundreds of millions, of pounds of reserves, seemingly with very little intention of dipping into them to invest in the kinds of priorities that they need to at this time? They might say, “Well, we’re waiting for a rainy day,” but it is pouring outside, for all the reasons the hon. Lady set out. Why will they not spend that money?

[Beth Winter]

I beg to differ. If we look at local governments, there are very few with any significant reserves. For example, my local authority has experienced cuts in excess of £90 million since the start of austerity, and it has tapped into reserves significantly to meet the shortfall. I think the figure was about £30 million in the last year, although do not quote me on that. That is already happening, and local authorities do not have the reserves to which the right hon. Gentleman referred.

In terms of EU structural funds, Wales faces a £1.1 billion shortfall in funding—so much for “not a penny less, not a power lost”. I am interested to hear the Minister’s explanation for the significant shortfall in funding post EU.

On the levelling-up fund and the shared prosperity fund, the Tories’ record is one of failure, and the announcements in the Budget do very little to reverse more than a decade of austerity. One year on from the levelling-up White Paper, most places have lost out in the scramble for levelling-up funding. Millions have been wasted in the application process. Bids have been eaten up by inflation. My constituency has not received a penny, nor have other valley constituencies such as Blaenau Gwent or Torfaen. The UK Government’s shared prosperity fund was to replace EU structural funds, but funds have been cut, and the Welsh Government have been completely cut out of that process.

[Liz Saville Roberts]

I am sure that the hon. Lady shares my concerns and those of Welsh universities, which face a risk to 1,000 jobs and 60 research projects because European structural funds are coming to a close. I am sure she will join me in asking the Minister whether the Government intend to come up with a £71 million bridging fund to enable Welsh universities to survive the period in which they are waiting for funding.

[Beth Winter]

I am just coming on to the university sector, where I worked for 10 years as a researcher and a trade union representative. Indeed, universities in Wales have been at the forefront of green growth and research in Wales and internationally, but with EU structural funding coming to an end, they face the loss of more than 1,000 skilled jobs, as the right hon. Lady said.

Swansea University, where I worked for many years, has been delivering on 50 projects awarded total grants of £150 million from EU structural funds. We have only to look at some of those projects—ASTUTE 2020 and SPECIFIC 2—to get a sense of that cutting-edge research. I was involved in lots of those projects; outstanding work is being undertaken. Universities have written to the Welsh Affairs Committee to say that there is little emphasis on research and innovation within the shared prosperity fund, and wider reforms of the funds are needed.

However, there was absolutely nothing in the Budget to deal with the failings of so-called levelling up and the shared prosperity fund. As the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) said, I am interested to hear the Minister’s response on how the Government will address the shortfall, with all those jobs at risk from the end of this month, as I understand it. Over 1,000 jobs could be lost in Wales.

Moving on to the legacy of the coal mines, the UK Government continue to benefit unduly from their share of the national mineworkers’ pension scheme. They should be paying that money to former mineworkers and their families, many of whom live in Cynon Valley. It is a continued failure of this Government that they have not funded the £600 million legacy costs of making the coal tips safe in Wales. As I said, we created the wealth in the south Wales valley. People sacrificed their lives in many instances. We deserve our fair share of that wealth back.

The UK Government’s record on housing is one of failure. The Bevan Foundation, which has been cited, has undertaken comprehensive research. Evidence shows that there is a shortage of properties to rent, and the local housing allowance rates set by the Tories do not cover real-world market rents. The data found that 75% of Welsh local authorities did not have a single property available at LHA rates, and just 1.2% of rental market properties advertised across Wales were available at LHA rates. The Bevan Foundation has called for rates to be uplifted, and for the collection of better, more comprehensive data from the private rental sector, yet the Budget again said nothing. I want to hear the Minister’s response to the issues with the LHA in Wales, which is a reserved matter.

On transport, the UK Government have continued 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 Budget shows how urgently we need a change of Government in the UK. We need a completely different economic approach to deliver a new funding settlement for public services, and fully funded, inflation-proof pay rises for workers. We need the wealthiest in society finally to pay their fair share of tax. While the Tories will not do it, Wales requires fair, needs-based funding to be able to do what we want to do, which is to address the levels of inequality that are completely unacceptable and completely avoidable. The UK Government need to stop riding roughshod over the devolution settlement. The Budget showed why we need a UK Labour Government, who will work hand in hand with the Welsh Government to deliver and level up, lifting incomes and living standards and building an economy for future generations. Diolch yn fawr.

[Mr Philip Hollobone (in the Chair)]

I call Jonathan Edwards.

15:01

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

Diolch, Mr Hollobone; it is a pleasure to serve under your chairmanship. I congratulate the hon. Member for Newport West (Ruth Jones) on securing this debate and on her opening remarks.

During my time as a Member of Parliament, I have often found that the key document to read following any Budget is the Office for Budget Responsibility report that accompanies it. This often provides a more sober analysis of the state of the economy, as opposed to the offerings from Ministers at the Dispatch Box. The OBR analysis indicates a future of a stagnating economy, which should worry us all. Economic growth by the end of the forecast period in 2028 is projected to be a pathetic 1.75%.

Let us remember that the projections are for UK economic growth. Over many decades, the Welsh economy —as a result of the sectoral and geographical priorities of UK economic policy—has lagged the UK average, meaning that economic performance in Wales will in all likelihood be even more anaemic. The old problems of low business investment and low productivity haunt economic policy. The hard Brexit policy of the British Government makes the situation worse. The OBR is clear that nothing that the British Government have done has changed its forecasts that productivity will be 4% lower in the long run than if the UK had remained in the EU’s economic frameworks.

Weak economic growth has inevitable consequences for living standards. The OBR analysis estimates that real household disposable income is expected to fall by 2.6% in 2023, following a fall of 2.5% last year. That is the largest two-year fall in real living standards since records began in the 1950s, as we have heard. Economic stagnation and falling living standards—that is where the UK economy is heading following the Budget. Those are the hallmarks of a failing economy, and they should set off alarm bells among not only Ministers, but the official Opposition, who I suspect will inherit that legacy shortly.

Of the UK Government’s five priorities announced at the beginning of the year, three were economic: reducing inflation, reducing Government debt and getting the economy back into growth. The pledge on inflation was particularly cynical for two reasons: first, inflation was always likely to normalise due to global factors, so the pledge could be achieved without any sort of Government intervention; and secondly and more importantly, the reduction of inflation over the remainder of the year—notwithstanding the worrying acceleration last month to a rate of 10.4%—is being spun as if the cost of living crisis were over, as if somehow prices were falling. Of course, that is not the case.

The increases in prices over recent years are now baked in. Without people’s incomes increasing to compensate, it will mean that the squeeze on living standards will become embedded, with its effects felt more acutely in those areas of the UK—like Wales—where incomes are lower than the UK average. The Institute for Fiscal Studies estimates that the real inflation rate for the poorest-income 10th of households was an eye-watering 14%, proving that the disproportionate impact of inflation depends on a household’s income situation.

As I have more time than I was expecting, I will caveat what I said about inflation falling during the next year. We are acutely aware of events in the financial sector at the moment, with the turmoil in the banking sector. I had never heard of Silicon Valley Bank before two weeks ago, but it appears that issues with that bank in the US are affecting other banks across the world. We know what happens when the financial sector is under duress. What do central banks do? They ease monetary policy and, if we ease monetary policy at this time, what would that mean for inflation? I have never wanted to be a central banker, and I fear that unless the situation in the financial sector stabilises, they may find themselves with a very difficult choice: do they preserve the financial sector, or do they squeeze the living standards of ordinary people?

Given that I have more time than I thought, I should perhaps mention the Edinburgh reforms, which were really pushed by the British Government before Christmas. They should set off massive alarm bells for us all, considering what is happening at the moment. The British Government’s approach is to minimise the regulation of the banking sector at a time of banking turmoil. In 2008, it was not the bankers that paid for the financial sector’s business model going wrong; it was ordinary people who have faced over a decade of squeezed incomes and reduced public services. History often repeats itself as farce; I hope that I am wrong.

On all the UK Government’s priorities—the three that I mentioned on the economy, and the other two on NHS pressures and small-boat crossings of the English channel—they would benefit from closer collaboration with the European Union and its economic frameworks. Although I understand the politics of the situation for Labour as we approach the general election next year, I sincerely hope that, when it is in power, it will take a far more rational approach to European relations for all our sakes.

Most of the post Budget commentary has focused on the announcement about abolishing the cap on the lifetime allowance on pension contributions. In several debates over the years, I have called for flexibility for NHS consultants to help ease NHS pressures, but what I had in mind was a specific carve-out, as is already available to judges. I am uncomfortable with the universal nature of this policy, as it is clearly a tax cut for the wealthiest in society. At the same time, the Chancellor has introduced tougher sanctions for those on universal credit. Why is it always carrots for the rich and sticks for the poorest?

I turn to the investment zones announced in the Budget. The OBR analysis indicates that their impact would be negligible. However, it would be useful if the Minister, in winding up, outlined how the policy will work in Wales, and specifically whether an equitable amount of funding will be made for any investment zones in our country.

Meanwhile, as the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) mentioned, we know that 60 Welsh university projects, which support 1,000 research jobs, face immediate threat next month when the European structural funds come to an end. The Budget would have been an ideal opportunity to announce the bridge funding needed to preserve those jobs and projects. It is disappointing that the warnings of several Welsh representatives have gone unheeded.

The Welsh Government’s overall budget in 2023-24 will be £900 million less in real terms than it was expected to be in 2021. The Welsh Government have also rightly criticised the Budget for awarding only £1 million extra in capital funding for 2024-25. We all know that capital funding is vital if we are to tackle low productivity and business investment.

If the UK Government are to address the sluggishness of the economy, which will last for the remainder of this decade as projected, I propose three main priorities. First, forget the Brexit fantasies and rejoin the European economic frameworks. Secondly, channel investment into geographic areas with low productivity, as that would have a far greater impact on overall UK productivity levels, as opposed to prioritising investment in London and the south-east. Lastly, follow the United States, where President Biden has thrown a trillion-dollar kitchen sink at improving US transport links and public utilities, such as broadband and telecommunications, and investing in renewables, electric vehicles and research into the technologies of the future. Diolch yn fawr iawn.

15:09

[Ben Lake (Ceredigion) (PC)]

Diolch, Mr Hollobone; it is an honour to serve under your chairmanship. I congratulate the hon. Member for Newport West (Ruth Jones) on securing this important debate. It is a pleasure to follow my hon. Friend the Member for Carmarthen East and Dinefwr (Jonathan Edwards). I fear that I need not reiterate many of his points in my own speech because he made them so eloquently and effectively.

Before I address the substance of the spring Budget, it would be remiss of me not to comment on the report published earlier this week by the Senedd’s Public Accounts and Public Administration Committee, which found that due to a budget underspend in 2021-22, the Welsh Government breached the limits of the Welsh reserve. Other Members have commented on that this afternoon. I would just add, echoing the point made by my right hon. Friend the Member for Dwyfor Meirionnydd (Liz Saville Roberts), that it cannot be right—it is certainly inconsistent and illogical—that any underspend in a UK Government Department returns to the UK Government, but the same does not apply to any underspend in Welsh Government Departments.

I turn to the issues facing the spring Budget. High on the agenda was the rising cost of living. Much has been made of the measures included in the Budget that aimed to support households and businesses with energy costs. We have heard comments to that effect this afternoon. The Chancellor was right to identify that as a key concern, but given that energy bills are still expected to increase by some 17% next year, the Budget did not go far enough. To help families see out the spring, the Government could and should have considered extending the energy bills support scheme.

I do not dismiss the extension of the energy price guarantee, which will be a great service to a lot of people across Wales, but the measure does not offer the 74% of my constituents living in off-grid homes support with their fuel costs. There should be further support for off-grid households; I would welcome a further round of the alternative fuel payment, for example. It is difficult to deny the inconsistency in the level of support offered to off-grid households compared with those connected to the mains gas grid, and I am sure the Government would want to address that.

Meanwhile, small businesses have been left without any additional support with energy costs. We know of the increased percentage of business insolvencies last year in England and Wales. I fear that we will see a further escalation in insolvencies this year, unless the UK Government expand the energy bills discount scheme or at least require energy companies to allow small businesses to renegotiate their contracts early in order to reflect falling prices.

I mentioned that 74% of properties in my constituency of Ceredigion are not connected to the mains gas grid. Much has been made of the plight of households and rightly so, but for off-grid businesses, the situation is quite acute. They have been offered only a one-off payment of £150. We do not need to be experts in business to know that that falls woefully short of reflecting the increase in energy prices that these off-grid businesses have experienced over the past 18 months to two years.

Let us remember that these off-grid businesses are local post offices, village shops, swimming pools, and rural factories in Ceredigion—key pillars of rural society and economy, and the lack of meaningful support has placed them at a competitive disadvantage to those companies connected to the mains gas grid. When we consider that most off-grid businesses are located in rural areas, that failure surely flies in the face of the UK Government’s professed levelling-up agenda.

Of course, part of the long-term solution to bringing down energy bills for both households and businesses is to improve the energy efficiency of our buildings. I have previously called for the £6 billion committed to energy efficiency in the autumn statement last year to be brought forward in the term of this Parliament, but it is critical that the current energy company obligation schemes—the ECO schemes—are delivered properly.

E.ON Energy estimates that as of December 2022, only 11% of the ECO4 scheme obligation had been delivered, compared with an expected delivery rate of some 19%. By comparison, at the same point during the ECO3 scheme, it estimated that 29% of the obligation had been delivered.

The company has suggested that inflation is partly to blame for this underperformance, having escalated costs beyond the funding assumptions originally set for the installations. But it is also important to note that the scoring limitations of the scheme have set the bar far too high for the minimum improvements required for a property to be eligible for support under the scheme. The result is that many eligible households fail to secure an installer willing to undertake work on their properties. This is something the Government need to review with some urgency.

I now want to take a step back from the immediate issues facing households and society more broadly, and look at the longer-term problems. I echo many of the points that the hon. Member for Carmarthen East and Dinefwr made in his very eloquent speech. I agree that this Budget wasted an opportunity to tackle some of these longer-term productivity issues that have hampered prosperity in Wales for decades. I am concerned that businesses in Wales, particularly in rural areas, risk being left behind due to poor digital connectivity. For example, gigabit connectivity in Wales stands at some 50% compared to the UK average of 68%, and—as always—the problem is far more acute in rural areas, with only 27% of Ceredigion connected to gigabit internet.

We cannot allow rural areas to miss out on productivity-boosting technologies, whether that means simple broadband connectivity or the integration of new AI technologies. I therefore urge the UK Government to release the funding allocated to Project Gigabit without delay and in accordance with recommendations set out in the report of the Select Committee on Digital, Culture, Media and Sport. In addition, the Government should consider accelerating the timescales for the roll-out of gigabit broadband in very hard-to-reach areas, which often lack both fast broadband and a 4G signal. Sadly, many are located in my constituency of Ceredigion, and I know that the Minister is deeply aware of the impact of such notspots on the people living there.

The National Infrastructure Commission for Wales estimated that it would cost about £1.3 billion to connect every property in Wales with fibre-to-the-home technology, yet the Government have only released £1.2 billion of Project Gigabit funding so far for the entire UK. There is a real opportunity to boost productivity in all parts of the United Kingdom, if only the Government were willing to bring forward some of the funding that they have already allocated for this purpose. If fibre-to-the-home technology is too challenging in the short term, let us instead see greater effort made to expand projects designed to target very hard-to-reach areas, such as the rural small cell projects or work on gigabit-capable, fixed wireless access technology.

There must also be a way to reform the self-defeating systems that currently see fibre taken to the curtilage of some rural properties only for residents to be forced to pay exorbitant excess construction charges if they want that connection extended to their actual home—in other words, if they actually want it to work. In rural areas, where the curtilage of a property may lie some distance from the house, this is proving a real barrier to improved connectivity.

Another key area that should be prioritised if we are to boost the Welsh economy is, of course, renewable energy. Others are far more informed than I am on this topic and could make contributions, so I will just say that we have considerable generation potential along the Welsh coastline in both marine renewables and offshore wind, and an opportunity to seize a first-mover advantage in technologies such as offshore floating wind and become a world leader in the manufacture of components, and in the export of skills and expertise into a growing global market.

[Liz Saville Roberts]

There is a risk that we keep repeating ourselves, but there is a reason for us to do so. In Scotland, the Crown Estate 12 miles out to sea is devolved to Scotland, so that policy can be made in relation to it and the profits that arise from the Crown Estate remain in Scotland. Why, if it is good enough for Scotland, is it not good enough for Wales?

[Ben Lake]

I am grateful to my right hon. Friend for posing that question. It is indeed a question that keeps me up at night. Why is it good enough for Scotland but not good enough for Wales? Perhaps the Minister will address that point when he winds up.

The Welsh Affairs Committee recently published a report setting out that offshore floating wind technology could represent the single biggest investment opportunity in Wales for decades, and recommended that the UK Government take the necessary steps to ensure that its potential is realised. I very much hope that they do.

Wales desperately needs an economic strategy capable of providing adequate funding for its public services, reducing poverty, improving incomes and ensuring that we realise our potential contribution to the global effort of tackling climate change—a strategy that, I am afraid to say, the spring Budget did not deliver.

15:19

[Christina Rees (Neath) (Ind)]

It is an honour to serve with you in the Chair, Mr Hollobone, and I congratulate my hon. Friend the Member for Newport West (Ruth Jones) on securing this important debate.

To help people survive the cost of living crisis in Wales, the UK Government must reform local housing allowance and universal credit. Local housing allowance was introduced in 2008, and it is the amount of housing benefit or the housing element of universal credit available to those who are renting from private landlords. The amount of support provided is based on the area in which the individual lives and the number of bedrooms they require. There are a number of determining factors, including allowing a tenant to rent in the cheapest third—the 30th percentile—of properties within a market area, which depends on the location of the property. Wales is divided into 23 broad rental market areas.

Despite the good intentions behind the local housing allowance when it was introduced in 2008, the scheme has been the subject of criticism and controversy in the last decade. In many areas, it does not cover the full cost of renting a property, leaving individuals and families in a precarious financial situation. The issue has been exacerbated by the UK Government freezing local housing allowance rates since 2020 at 2018-19 private rental rates.

Research by the Bevan Foundation found that in my Neath constituency, 51 properties were advertised for rent in February 2023, but not one property was fully covered by the local housing allowance rate. Furthermore, the gap between market rents and the rate in my constituency is £95 for a one-bedroom property, over £110 for a two-bedroom property, nearly £150 for a three-bedroom property and over £250 for a four-bedroom property. That means many people in Neath face the prospect of homelessness, and some are being forced to choose between paying their rent and putting food on the table. This is an unacceptable situation that the UK Government need to address urgently.

The Welsh Government have already taken steps to address this issue, with the introduction of the Welsh housing quality standard and the Housing (Wales) Act 2014. Low-income tenants may face more barriers when looking for properties in the private rental sector, and many may find them difficult or impossible to overcome—for example, deposits of more than one month’s rent, guarantors, credit checks, minimum income checks and professional-only tenants.

The Bevan Foundation found that only 32 properties in Wales were at or below the local housing allowance rate. Twenty-three properties had one or more of the barriers that I just mentioned, so only nine properties fully covered by the local housing allowance did not ask for one or more of the additional qualifications. Seven were in Cardiff, one was in Ceredigion, and one was in Rhondda Cynon Taf, but there was none in Neath. The Chancellor could have used his spring Budget to uplift local housing allowance rates to the contemporary 30th percentile and keep it at that rate, providing housing security, which would improve mental and physical health among those struggling to pay their rent in Wales and the UK, but he did not.

The Joseph Rowntree Foundation recently launched its research on an essentials guarantee, which would reform universal credit to ensure that people can afford the essentials during hard times. It tested public opinion and worked out the cost of basic non-housing essentials in Britain today—food and non-alcoholic drink, electricity and gas, water, clothes and shoes, communications, travel and sundries such as cleaning materials—to be £120 a week for a single person aged over 25, which is £35 a week more than universal credit, and £200 for a couple aged over 25, which is £66 more than universal credit. Those figures are for April 2023, and the gaps for under-25s are bigger. It is clear why so many people have to go to food banks.

The Joseph Rowntree Foundation, with Trussell Trust support, proposes that the UK Government should introduce an essentials guarantee, which would embed in our social security system the widely supported principle that, at a minimum, universal credit should protect people from going without essentials. Its research shows that 90% of households on universal credit are going without essentials, and that universal credit is now at its lowest level as a proportion of average earnings. Over 66% of the public believe it is too low, and almost 50% of households have their universal credit reduced by benefit deductions and caps.

Inadequate social security is the main driver of food bank need, with the Trussell Trust giving out 1.3 million parcels between April and September 2022. The essentials guarantee, which would be developed in line with public attitude insights and focus groups, would enshrine in legislation an independent process to regularly determine the essentials guarantee level based on the cost of essentials—such as food, utilities and vital household goods, but excluding rent and council tax—for the adult in a household. Universal credit’s standard allowance must at least meet that level, and deductions such as debt payments to the UK Government, or as a result of the benefit cap, should never pull support below it.

The cost of implementing the essentials guarantee would be an additional £22 billion a year in 2023-24, assuming there is a full roll-out of universal credit. The devastating effect of people going without essentials has a profound effect on our society and economy, and there would be savings to public services as a result of improved incomes.

The Chair of the Work and Pensions Committee, the right hon. Member for East Ham (Sir Stephen Timms), has stated that social security benefits are reviewed every year but are not updated. In real terms, the current level is the lowest in 40 years. Furthermore, low benefits are a problem for the economy because people take the first job they are offered, irrespective of whether it matches their skills, so economic productivity is a problem. The benefits levels are not linked to anything logical; they are arbitrary figures, which are actually set at the deep poverty level, not at the poverty level. Universal credit needs reforming because it is not preventing widespread poverty, but the Chancellor did not use his spring Budget to do so.

[Wayne David]

Not only is poverty bad in itself, but it also creates enormous pressure on the health service, because there is a direct correlation between low income and poor health.

[Christina Rees]

I completely agree with the hon. Gentleman, who has made his point succinctly. I was about to say that the Chancellor could have at least restored the £20-a-week uplift that recipients of universal credit received during the covid pandemic. That would have been a good start.

The Minister will know how important rail investment is in Wales. On several occasions, I have raised the issue of Barnett consequentials coming to Wales as a result of HS2, as is happening in Scotland and Northern Ireland. The same has happened with Northern Powerhouse Rail being classified as an England and Wales project, so Wales does not get a consequential. The cross-party Welsh Affairs Committee, which has already been mentioned, has recommended that HS2 be reclassified as an England-only project so that Wales can receive the £5 billion it is entitled to. There is precedent for this: when Crossrail was classified as an England-only project, Wales received a consequential.

Wales has around 10% of the UK rail network, which includes some sections going into England, such as the Marches line and the Severn tunnel, but it has historically received 1% to 2% of rail enhancement investment. Right hon. and hon. Members can see why the people of Wales feel unfairly treated when it comes to investment in their rail network.

The Minister will be aware of the global centre of rail excellence being developed in my Neath constituency, which will become the UK’s first net zero rail-testing facility. It will be a shared campus for rail innovation, research and development, testing and verification for main-line passenger and freight railways, developing next-generation solutions for the rail sector. The UK Government have pledged £30 million for the global centre of rail excellence, of which £20 million has been received for the construction phase. Will the Minister confirm when the remaining £10 million will be paid, so that the centre can be completed?

In summary, the Budget delivered nothing beyond the bare minimum for Wales, and was specifically lacking in support for local housing allowance and universal credit reform, and the investment in rail that we are entitled to.

15:30

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Newport West (Ruth Jones) on securing the debate, and the passionate way she opened it.

We can all agree that, when the Chancellor of the Exchequer presented his Budget, it was an opportunity to address the worsening impacts of the cost of living crisis, and to drive economic growth in Wales and across the United Kingdom. The Budget is also a statement of priorities, but it was clear from the lack of extra funding for our public services, as well as the bare minimum of additional support for people and businesses who need help now, that the UK Government do not have a grip on the bigger picture and are content to tinker around the edges.

The Chancellor announced that Wales would receive an additional £178 million over the next two years, as a result of spending decisions made in England, but the settlement in 2023-24 is still up to £900 million lower in real terms than expected at the time of the 2021 spending review. This was meant to be a Budget for growth but, while the London School of Economics Growth Commission, the OECD and others have highlighted the vital importance of additional public investment in the infrastructure to improve productivity and growth, the Budget contained a derisory £1 million extra in capital funding in 2024-25 for Wales.

We have had a wide-ranging debate. My hon. Friend the Member for Newport West rightly highlighted the UK Treasury’s callous clawback, which I will return to later. She also talked about the downgrading of growth, and highlighted the case of her constituent Dawn Jones. I am sure many others across Wales will relate to the concerns raised by her constituents and their experience in dealing with the Tory cost of living crisis.

My hon. Friend the Member for Caerphilly (Wayne David) raised the excellent report of the Bevan Foundation, and the evidence that the most vulnerable are affected by this Government’s policies. My hon. Friend the Member for Aberavon (Stephen Kinnock) highlighted the importance of the steel industry, its being the heart of economic growth. The hon. Member for Ynys Môn (Virginia Crosbie) picked highlights; in response to an intervention by the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) about the level of local housing allowance being far too low to meet housing needs across Wales, the hon. Member continued to talk about the Budget being overwhelmingly positive. That is definitely a matter of opinion, and not one shared by many of my constituents or others.

My hon. Friend the Member for Cynon Valley (Beth Winter) talked about the reality check of work on the cost of living crisis that was carried out last year, and about the need for fair wages for our public sector workers. In an intervention, the right hon. Member for Preseli Pembrokeshire (Stephen Crabb) talked about the use of local authority reserves. As an ex-local councillor of 20 years, I think people often do not differentiate between free reserves and committed reserves. The vast majority of reserves held by most local authorities tend to be committed reserves, rather than reserves that they can use freely. Many do use free reserves to plug the gap, and there is more of that at the moment.

My hon. Friend the Member for Cynon Valley also mentioned that the Welsh Government were cut out of the process around the shared prosperity fund, something that many colleagues have called out and said should be rectified. It is not right that the Welsh Government are cut out of discussions of such a significant investment in Welsh communities.

[Wayne David]

Does my hon. Friend share my concern that local authorities believe there is, unfortunately, a distinct possibility that they will be unable to spend the moneys that have been allocated, and we will see yet another clawback by the Government up here?

[Gerald Jones]

I absolutely agree. The arrangements with local government about the timescales for the funding have been woeful. Given everything that local authorities have to contend with at the moment, it is unfair to expect them to meet the unrealistic timescales set.

My hon. Friend the Member for Cynon Valley also talked, like other Members, about the local housing allowance rates. I will return to that later. The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) talked about the OBR analysis of the woeful spring Budget, and the impact of rising inflation. He raised concerns about the universal tax cut through the pension allowance benefiting the wealthiest 1%, and about plans for investment zones.

The hon. Member for Ceredigion (Ben Lake) highlighted the energy companies and the call for early renegotiation of contracts, which could significantly help many people across the country who are dealing with rising energy costs. He raised specific concerns about off-grid customers and the need for an economic strategy.

My hon. Friend the Member for Neath (Christina Rees) joined other Members in raising concerns about the local housing allowance rates in her constituency. All the evidence suggests that, across Wales, the rate is woefully inadequate. Change has been called for many times, and the Government would do well to listen to the concerns raised by the Bevan Foundation and address the issue. My hon. Friend also highlighted her concerns about universal credit and the rising use of food banks.

Earlier this month, the Senedd passed the Welsh Government’s budget for 2023-24, which provides significant investment for the NHS, social care and schools. The Welsh Government will, of course, consider how best to use the small amount of additional funding announced by the Chancellor to meet the needs and priorities of Welsh people.

Ahead of the Budget, the Chancellor was asked to provide support for households, to increase funding for public services and to invest to grow the economy. While it is positive that he listened to the many calls to maintain the energy price guarantee at £2,500 from April, it is disappointing that he refused to take the other practical actions that were called for—measures that could have made a real difference to those most exposed to the cost of living crisis.

The reality of the Chancellor’s Budget is that it represents sticking-plaster politics, with no growth for the many. The OBR has confirmed that the hit to living standards and working people’s pay over the past two years is the largest since comparable records began. In fact, the only permanent tax cut in the Budget, as we have heard, was the £1 billion cut for the richest 1% of earners, via changes to pension allowances. The Resolution Foundation found that a high earner with a £2 million pension pot will get a tax cut of almost £250,000. How utterly unfair, yet it is probably not a surprise, coming from this Government.

Compared with the forecast in 2021, the OBR now thinks the average interest rates on outstanding mortgages will be twice as high. The Tory mortgage penalty has hit £1,950 for a typical household remortgage, thanks to the Tories crashing our economy with their kamikaze Budget last September.

The OBR revealed that the Government have left £10.4 billion on the table last year and this through holes in the windfall tax. Labour announced a form of windfall tax on oil and gas producers in January 2022. The Government announced an ineffective windfall tax in May 2022. Just think what that £10.4 billion left on the table could have made to the lives of people in Wales, and across the UK, supporting them against rising energy costs and other cost pressures. Is it not the case that Tory MPs looked at the state of the nation after 13 years of Tory Governments, and at the cost of living crisis that families are facing, and chose not to vote with Labour against the pension changes, but to benefit those with the biggest pension pots?

The Welsh Labour Government have put in place a range of measures to help people through the Tory cost of living crisis. The Welsh Government fuel support scheme extends to 400,000 homes, with eligible households receiving a £200 payment to help them pay their energy bills. The council tax reduction scheme helps more than 270,000 households in Wales with their council tax bills; around 220,000 households pay nothing at all. More than 300 warm hubs have been set up across Wales thanks to Welsh Government funding.

The hon. Member for Ynys Môn mentioned the Holyhead breakwater. The Holyhead port is one of most important economic drivers in north Wales. The £20 million funding for the breakwater in the Budget follows Welsh Government calls and underlines the importance of the port. The announcement is welcome but long overdue, and the proposal is viable only because of Welsh Government commitments.

Hon. Members also raised freeports. Wales has a better deal on freeports thanks to the Welsh Labour Government, given that the Tory Government proposals were for freeports in Wales with no extra funding, and there was a threat to impose a freeport from the centre without involving the Welsh Government. Through grown-up politics, hard work and negotiation, the Welsh Labour Government convinced the UK Government to deliver a better deal for Wales, which means that UK Ministers will provide at least £26 million of non-repayable starter funding for any freeport established in Wales. The Tories tried to rip off Wales and ride roughshod over the devolution settlement, but Labour in Wales stood up for Welsh communities and businesses. Welsh Tories in Cardiff and Westminster did not fight for them.

I raised the callous clawback from the Welsh Government with the Minister yesterday, and my hon. Friend the Member for Newport West, the right hon. Member for Dwyfor Meirionnydd and the hon. Member for Ceredigion spoke about it today. I hope the Minister shares our concerns. The Welsh Finance Minister has made it clear that the actions of the UK Treasury were wholly unacceptable, as the Welsh Government stayed within their overall budget. The UK Government refused to switch between the revenue and capital budgets—a process that, as the Minister knows, has been agreed many times before. It is all the more questionable given that Welsh Government underspends during the exceptional financial year 2020-21 were significantly below those of UK Departments. The Treasury’s arbitrary application of its guidance in this instance remains deeply regrettable, and has left Wales deprived of £155 million.

As of last month, only £392 million of the levelling-up fund—just 8% of the total—had been spent since November 2020. Many of the projects that have been promised to local communities are a long way from being delivered. Labour believes in the importance of bringing power closer to communities. The Government’s replacement for EU structural funds has been a disaster that has left the poorest communities in Wales empty handed due to unfair formulas, and the distribution of funds is in the hands of Departments that are not even trusted by the Treasury.

Labour is committed to working in partnership with the Welsh Government to set the policy agenda for the use of structural funds. When we were part of the EU, Wales was in receipt of EU structural funds that contributed to a number of programmes, in particular on regional development and employment. The shared prosperity fund was announced in 2017, partly to replace the EU structural funds, but, as we have heard, the governance was changed to cut out the Welsh Government from that process. The effect of that decision is that the Tories have failed to provide an equivalent replacement regime to EU structural funds. They have centralised decision making, cut funds and allocated the remaining resources inefficiently.

As a number of Members said, universities in Wales have been at the forefront of innovative ideas that could change the way we live, thanks to £370 million of EU structural funds that have been invested in university-led projects in Wales. The structural funding from the EU is suddenly coming to an end, so Wales is at a cliff edge. Welsh universities face the loss of 1,000 skilled jobs from 60 projects focused on generating green growth. Hopefully, the Minister will enlighten us about what the Government intend to do to prevent that.

Labour is committed to bringing power closer to communities, and therefore believes that we should work in partnership with the Welsh Government to deliver structural funds in the future. A UK Labour Government would restore Wales’s role as decision maker and budget holder for the relevant structural funds. We would work with Wales to set the UK policy agenda and the use of structural funds, allocate money and agree a robust evaluation process.

The 2023-24 Welsh Government budget has been one of the toughest since devolution because of the significant financial pressures caused by the UK Government’s mismanagement of the UK economy, made worse by the kamikaze mini-Budget last September. The UK Government hold many levers relating to energy costs, and there must be greater support for businesses—particularly energy-intensive industries—and charities. Sadly, the Chancellor’s spring Budget misses the big picture, lacks ambition and fails to demonstrate how he intends to grow the economy.

The Welsh Government settlement in 2023-24 is, as I have said, still £900 million lower in real terms than expected at the time of the 2021 spending review. This was meant to be a Budget for growth, but the derisory £1 million in capital funding for Wales shows that the UK Government really have no interest in building their way out of the current financial crisis. For the Welsh Government to deliver further on behalf of the people of Wales we need a strong partnership between the Welsh Government and a UK Labour Government, working together to deliver on the priorities of the people of Wales and ensuring that Wales has a strong part to play in a strong United Kingdom. To that end, the general election cannot come soon enough.

15:45

[The Parliamentary Under-Secretary of State for Wales (Dr James Davies)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Newport West (Ruth Jones) on securing this important debate, which has triggered many views from opposing directions. I am grateful to all those who have contributed, including my hon. Friend the Member for Ynys Môn (Virginia Crosbie), the hon. Members for Cynon Valley (Beth Winter), for Carmarthen East and Dinefwr (Jonathan Edwards), for Ceredigion (Ben Lake) and for Neath (Christina Rees), and of course the Opposition spokesperson, the hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones).

I am pleased to have this opportunity to discuss the recent spring Budget and my right hon. Friend the Chancellor’s plan for long-term, sustainable, healthy growth in Wales and across the United Kingdom. I will come to the questions raised by hon. Members in due course.

I was incredibly pleased to see my right hon. Friends the Prime Minister and the Secretary of State for Wales on Ynys Môn last week announcing not just one but two new freeports for Wales. The jobs and investment that will come as a result of that announcement will help deliver on our commitments to level up Wales and grow the economy. The fact that we have been able to deliver two freeports for Wales jointly with the Welsh Government is a testament to what can be achieved when the two Governments work together. We saw friendly competitors from Ynys Môn and Preseli Pembrokeshire sitting next to each other earlier, and both of them had a critical role to play in that development, so many thanks to them.

Earlier this month, my right hon. Friend the Chancellor set out a Budget that ensures that the benefits of economic growth are felt everywhere, including in Wales. It promotes the conditions for enterprise to succeed and encourages the inactive back into employment. At the autumn statement in 2022, the Government took the difficult decisions on tax and spending needed to restore economic stability, support public services and lay the foundation for long-term growth. At the spring Budget two weeks ago, the Government built on that foundation with a plan to deliver on three of the Prime Minister’s five key priorities: to get debt falling, halve inflation and grow the economy.

I want first to highlight the funding that the Budget included for multiple projects that will specifically benefit Wales. We are supporting the restoration of the grade II* listed Holyhead breakwater with £20 million of funding for the Welsh Government to ensure the long-term viability of that vital transport hub and, through it, trade links with Ireland.

My right hon. Friend the Chancellor set out that the Government will provide up to £20 billion over the next two decades to support the development of carbon capture, utilisation and storage. That is not something we have heard about today, but the HyNet cluster in north-east Wales and north-west England is already benefiting from our existing £1 billion commitment through the cluster sequencing programme. Decarbonising heavy industry is vital to driving economic growth and creating high-quality, sustainable jobs across the region, while helping us meet our climate commitments. The increased £20 billion ambition will further expand CCUS across industry, which will be vital for economic growth across Wales.

The Government are launching Great British Nuclear to address constraints in the nuclear market and support new nuclear builds as the Government work towards net zero.

[Liz Saville Roberts]

It has already been mentioned that an SMR at the Trawsfynydd site, as well as at Wylfa, is very much in the anticipation. The Minister will be aware that there are proposals for a national medical isotope centre at Trawsfynydd, known as Project ARTHUR. What discussions have there been with the Welsh Government about bringing that forward? There are concerns that there will be a shortage as reactors across Europe and the world cease to produce. When it comes to the medical security of the United Kingdom, there is real potential here.

[Dr Davies]

The right hon. Lady is right to raise that point. If I may, I will write to her with the latest position on that, but she may find that there will be announcements in the relatively near future on Great British Nuclear and its plans, which might assist in that regard. We know that Wales has the best British sites for new nuclear, including Trawsfynydd in her constituency and Wylfa Newydd. I look forward to working with GBN to champion a revived nuclear future for north Wales.

Investment zones were mentioned. Wales, too, will benefit from the Government delivering 12 investment zones across the UK, including at least one in Wales. The programme will provide each successful area with up to £80 million over five years to grow a cluster in one of our key future sectors, bringing investment into areas that have traditionally underperformed economically.

The UK Government are working with the devolved Administrations to develop an investment zone programme for each of Wales, Scotland and Northern Ireland. In addition, the UK Government and devolved Administrations will work together to explore potential options for delivery of new levelling-up partnerships in Wales, Scotland and Northern Ireland, such as those announced for England by the Chancellor in the Budget.

The Budget set out a number of measures that will create the right conditions for enterprise in Wales in all sectors, based on competitive taxes, access to capital and smarter regulation. We will support growth in Wales by attracting the most productive companies to set up, invest and grow in Wales and in the rest of the UK. We expect about 220,000 businesses in Wales to benefit from a range of administrative changes to simplify the tax system, allowing Welsh small and medium-sized enterprises to spend more time on their business and less on meeting their tax obligations.

During the debate, there were a multitude of questions on all sorts of issues. I will do my best to address as many of those as possible. I should declare first that I am a member of the British Medical Association, although I do not expect to benefit from the pension changes myself. Last week, I met the chair of the BMA, Philip Banfield, whom I know from his time as a consultant at Glan Clwyd Hospital. Glan Clwyd, like many in Wales, is struggling, as the Healthcare Inspectorate Wales report has detailed yet again today, so anything that can help to retain senior doctors’ hours and their presence in departments is certainly to be welcomed.

[Wayne David]

Is it not the case that the people who will benefit from the new arrangements are not just doctors, but many other wealthy people?

[Dr Davies]

Inevitably, those at the pinnacle or conclusions of their careers often earn a lot more, but they also have a great deal to offer the economy and society in general. It is difficult to be too black and white about those who are of benefit and those whom we need to retain in the workforce. As the hon. Gentleman knows, in some respects the Budget centred on trying to ensure that the workforce are there for the economy that we need.

My hon. Friend the Member for Ynys Môn referred to childcare. I hope that the Welsh Government will replicate our offer to parents of 30 hours’ free childcare for children between the ages of nine months and four years, and that they will not, as the First Minister appeared to suggest the other day, be different for the sake of it.

The shared prosperity fund has been raised. This is a complicated matter, but the Welsh Government have alleged that Wales is being short-changed. However, I argue that they are making flawed and hypothetical assumptions, and it is my understanding that Welsh Government officials in the Finance Committee in Cardiff Bay have broadly accepted that. It is important to compare like with like. The SPF is intended to replace the European regional development fund and the European social fund, while the remaining funds, covering agriculture and fisheries, are accessed through other means. Different time periods can be looked at as well—it is not just about when the funding is received, but about when it is spent. The funds do ramp up and down in the UK Government’s intentions, as they did with the EU. The Institute for Fiscal Studies has validated the UK Government’s approach. I also emphasise the fact that the local growth funds, including the levelling-up fund and the community ownership fund, are in addition to the shared prosperity fund, so actually Wales has a record level of investment coming from the UK Government.

[Gerald Jones]

The Minister mentioned the shared prosperity fund, which is significant investment that could transform communities across Wales. He also highlighted the positive joint working of the Welsh and UK Governments on freeports. Why does he think that the UK Government have frozen out the Welsh Government in the case of the shared prosperity fund, when there is an example of good working together? Why can that not apply across the board?

[Dr Davies]

My understanding is that the Welsh Government have been feeding into the general approach on shared prosperity fund allocation. In my local area, there is a Welsh Government representative on the body that advises on the funding. There are a range of contributors, as there should be. Proper devolution is the key point, in that local authorities are taking a leading role.

Hon. Members are right to raise the issue of universities, because of course universities in Wales have been dependent on European structural funds. My understanding is that Universities Wales has consistently expressed concerns that the Welsh Government do not invest an equal amount in Welsh universities compared with England. It has also highlighted that the lower level of core funding places Welsh universities at a disadvantage compared with their counterparts in England when competing for UK-wide research and development funding opportunities. To be constructive, I emphasise that the Secretary of State for Wales has asked universities to provide details of the economic value of programmes that were previously funded by the EU structural funds. He and I are very interested in trying to assist on that.

[Beth Winter]

Can the Minister categorically assure us that the £71 million bridging fund that is urgently needed to plug the gap will be provided in time to save the more than 1,000 jobs at imminent risk in the higher education sector in Wales?

[Dr Davies]

The hon. Member will know that devolution is in place and that the Welsh Government have a role to play here. I assure her that this is an issue that I and the Secretary of State take very seriously, and we are working with universities to assist them.

Time is marching on, and I must make some progress. To support employment in Wales and across the UK, the UK Government are helping parents on universal credit who are moving into work or looking to increase their working hours by making sure they have support for childcare up front. We are also increasing support for those parents on UC by increasing the childcare maximum entitlement to more than £950 for one child and more than £1,630 for two children.

I had hoped to go on and talk further about the comprehensive cost of living support in place for large numbers of people—everyone, in fact—as well as the assistance with the cost of energy. I do not have time to do that, but I am always happy to liaise directly with right hon. and hon. Members on their specific questions.

I thank the hon. Member for Newport West once again for bringing forward this important debate. It is useful to have a discussion of all the matters raised. I look forward to doing my bit to help support the people of Wales as we continue through this difficult period.

15:57

[Ruth Jones]

I thank everybody who has taken part in the debate this afternoon. I thank the Minister and the shadow Minister, my hon. Friend the Member for Merthyr Tydfil and Rhymney (Gerald Jones), and everyone who has intervened and made speeches. It has been good to have an informed and, by and large, good-humoured debate. We are all passionate about Wales. We all want Wales to get on, and we want to make sure that we do that in the best way possible. The issues will not be going away. I assure the Minister that we will come back again and again on the issues that we have raised today. I thank everybody for taking part.

Question put and agreed to.

Resolved,

That this House has considered the Spring Budget and Wales.

Electronics Technology Skills: North Lancashire

Wednesday 29th March 2023 Westminster Hall

15:59

[David Morris (Morecambe and Lunesdale) (Con)]

I beg to move,

That this House has considered electricity technology skills in North Lancashire.

I rise to speak about electronics skills in my constituency of Morecambe and Lunesdale, which is an exciting place to be at this time, especially since I secured the funding for Eden Project North, and nearly £3 million with the Friends of the Winter Garden Theatre, which is straight across the road. Morecambe is definitely turning the corner, and we are now regenerating our fortunes, but we are also hiding another gem in my constituency: our high-tech workforce.

Today I want to speak about electronics technology businesses in my constituency and the workforce skills they need to thrive. I have spoken with my businesses in my community, and they have highlighted the need to give graduates in a lot of degree-level curriculum areas the practical electronics experience to get them work-ready. They feel that these practical skills should be part of those qualifications, so that skills such as soldering and hands-on fault finding on a circuit board are already mastered. These skills are crucial to developers and engineers, as they form the basis for all problem solving needed for the role.

Those businesses see IPC-A-610, IPC J-STD or IPC-7711—standards certified by the Institute for Printed Circuits—as representing a good skills basis that should be incorporated into qualifications. There is also a shortage of radio frequency/analogue electronic skills. Graduates do not have experience in this area, and engineers with these skills are usually not readily available, so graduates need significant training in them for companies to employ them. Another area where skills can be lacking is software development. Proficient use of C and C++ is vital, but is often not included.

In the face of this skills gap, electronics businesses in my constituency have formed what they have called “electech clusters”. They have decided to come together as a group of businesses with the same skills and expansion needs to try to address these gaps and grow the whole sector locally. The electech skills pledge is particularly helpful, as it ensures that electech businesses are providing feedback and directly interfacing with academic institutes to ensure that vital real-world skills are understood and can be used to shape the curriculum.

Forsberg, a company in my constituency, provides industrial projects to Lancaster University to help to ensure contextual learning, and also works to identify students who could be future employees, giving them vital work and experience during their degrees so that they are ready to join the workforce as soon as they graduate. This has been particularly successful at Lancaster and Morecambe College, which is extremely employer-focused and ensures that its courses reflect the needs in the labour market. This is not only good for employers, but good for students, whose qualifications give them invaluable skills that enable them to go straight into the workforce.

Lancaster and Morecambe College, headed by Wes Johnson, to whom I extend an open invitation to come and visit us, Minister—I know we have talked about this—is working closely with the electech innovation cluster to address the skills needs and progression opportunities with the world-beating electronics businesses in the LA postcode. Through extensive employer engagement, including active participation in the recent catalyst project, the college has, over the last academic year, co-created a brand-new electech innovation lab—which I visited only a couple of weeks ago on my regular visit to the college—to broaden the learning experiences of our engineering students going into electronics, robotics and green-collar jobs.

This work has generated significant new interest among students in electronics and local career opportunities, with a particularly focus on the electech businesses. The college electech provision has benefited from the time and expertise of local business leaders, as well as the donation of specialist resources and equipment from local companies to enhance the learning experience and the skills development that is required. The innovation cluster has developed and now runs business-led boot camps to directly provide the skills these businesses need. This is already having a positive impact, as graduates using the course, in addition to their university education, move on to full-time jobs with businesses in the cluster after university.

North Lancashire will soon be an exciting place for electronics technology, as the National Cyber Force moves up to Samlesbury, next to where BAE Systems is already based. We see this as an opportunity to put Lancashire on the map as a hub for electronics, and somewhere that can attract graduates from all over the country. We are giving our young people a reason to stay in Lancashire instead of moving away. All the work I have done so far with companies as a Member of Parliament to get investment in projects locally is so that our young people have the opportunity to stay in the area and do not feel that they have to move away to get a good skilled job.

We have a real opportunity with the National Cyber Force to build on the work that our education institutions are already doing and to use the expertise it will bring to the area to enhance our local high-tech businesses, but only if we do this right. It would be great if the Government could work with local businesses, colleges and universities on the recruitment process for the new centre to draw talent to the area not just for the National Cyber Force centre, but to sell the area as an area of excellence for electronics.

In conclusion, I would like to see more practical skills being implemented into electronics qualifications. My area has so many job opportunities in this sector that it would benefit the young person, the business and the local economy if practical workplace skills were being taught as part of the curriculum. I congratulate Lancaster and Morecambe College on its forward thinking on the issue, and I ask the Minister to use its business-led model as an example of best practice in how education can shape business growth in an area. I would like to see more Government incentives to businesses to train new staff in this discipline, and I would like to know what the Government can do to help encourage and promote electronics as a career and ensure that more people are interested in going into this workforce. Again, I extend an invitation to my hon. Friend the Minister to visit us at Morecambe at his convenience.

16:06

[The Minister for Skills, Apprenticeships and Higher Education (Robert Halfon)]

It is a pleasure to serve under you, Mr Hollobone, and I extend special congratulations to my hon. Friend—a real friend—the Member for Morecambe and Lunesdale (David Morris) on securing the debate. He is a champion of skills. He has spoken about electronic skills needs in his constituency and the work going on to tackle it, such as the electech clusters established by businesses in the area. I congratulate him on securing £50 million for Eden Project Morecambe in the second round of the UK Government’s levelling-up fund. In all my years as an MP, I do not think I have been to a parliamentary event without him campaigning for that project. He is an extraordinary campaigner and his constituents are lucky to have him. He has worked for five years to secure the funding, which will be transformative. Importantly, it will also boost skills hugely in the region, especially construction skills and other related areas, so he deserves great credit for that success.

My hon. Friend knows that technological change and the future economic direction of the country means that, as he has highlighted, demand for STEM skills—science, technology, engineering and maths—such as electronics, in the economy is growing. STEM will be at the heart of the UK’s transition to a net zero economy. That is not just about saying that we need to get to net zero; it is because many of the skills of the future will be green skills. Our aim in the net zero strategy is to support 440,000 green jobs across green industries in 2030. To meet STEM skill needs, we know that intervention is needed at every stage of the pipeline, so that we can ensure that individuals can climb the skills ladder of opportunity by having access to high-quality STEM education and training. Of course, we must take action to expand access to these opportunities. Key to that is ensuring that we get students into STEM across all stages, right from early years to higher education. Whenever I visit schools or colleges around the country, I always ask and encourage people to go into STEM subjects. It is important for them and it is important for our country—it is the future.

It is worth highlighting that in schools we have increased spending on maths, digital and technical education to try to increase the uptake of better teaching of STEM subjects. We have the Stimulating Physics Network and science learning partnerships to help improve teaching quality, and the STEM ambassadors programme. Through activities in schools and colleges, they raise awareness of the diverse range of STEM careers. That is working: A-level entries for maths and sciences are increasing. There were 269,525 total STEM A-level entries in 2021-22, a figure that has increased year on year since 2015. In order to meet the skills needs of our country and to ensure that people can have high-quality education and training that addresses skills gaps and boosts productivity, we will invest an additional £3.8 billion in further education and skills over this Parliament.

Knowing my background, my hon. Friend the Member for Morecambe and Lunesdale would expect me to say that apprenticeships are central to our plans. We have transformed apprenticeships, driving up quality and making them more flexible so they better meet the needs of employers and individuals wanting to progress to successful STEM careers. We have had more than 5.3 million starts since 2010; I looked up the figures for his constituency and there have been close to 11,000 since 2010. That is 10,900 apprentices in his constituency, most of whom have had their lives transformed and who will have developed the skills they need in Morecambe and Lunesdale. Over 90% of the apprentices who complete get good jobs, usually in the companies that have trained them, or they go on to additional education. That is an achievement in itself.

My hon. Friend asked what we are doing for STEM. We have more than 650 apprenticeship standards in general, which replace the old frameworks. They aim to ensure that we have high-quality apprenticeship qualifications and that we build the prestige of apprenticeships so that it is the same as that of academic qualifications. He will be pleased to know that more than 350 of those apprenticeship standards are in STEM, including many opportunities in electronics, such as level 3 electrical, electronic product service installation, engineer level 6 and electronic technical support engineer.

By chance, yesterday I met a great man called Ray Olive. My hon. Friend might know him; he is from Morecambe and is chairman of the national T-level ambassador network. He is promoting T-levels across the country as well as in Morecambe. I had not realised that he was from Morecambe, but I told him about the debate and said that we were talking about skills. He was very interested to hear what we would have to say. Just so my hon. Friend knows, we will invest up to £500 million a year in T-levels once they are fully rolled out. They will boost access to high-quality technical education for thousands of young people. We have 11 T-levels available in STEM subjects; T-levels in engineering, manufacturing and construction will give the students the core knowledge and skills they need to enter a range of careers in the electronics sector.

My hon. Friend mentioned his Lancaster and Morecambe College; I would love to visit. I have been to Morecambe and it is such a beautiful place. I was not there for work, I was there for my holiday in that neck of the woods, and it is one of the most beautiful parts of England. He has a fantastic college, clearly. It had a “good” Ofsted rating in 2020 and will deliver T-levels that include technologies in the electric/electronic fields. It is doing a lot of work that is very important on disadvantage; it has developed a schools and community engagement programme from years 7 to 13, with a wide range of activities. That creates a pipeline that helps disadvantaged young people and encourages them to do the subjects that my hon. Friend is rightly keen on.

I looked up the figures, and I am pleased that Lancaster and Morecambe College has received a total of £1.5 million since 2020 through the Department for Education capital transformation fund, and £484,000 in 2021-22 and £193,000 in 2022-23 through the skills development fund. I will also talk about the Lancaster and Morecambe energy hub that my hon. Friend mentioned. I am glad the Government have invested in this college, which is clearly a key centre for promoting skills in his constituency and the surrounding areas.

I want to mention higher technical qualifications: level 4 and level 5. At the moment in our country, there are very low numbers of level 4 and 5 qualifications—just 4% of under-25s in England have a level 4 or 5 qualification, while just 10% of adults in general have them. With more and more employers asking for these qualifications, we have introduced higher technical qualifications—the next stage up from T-levels—which are employer-designed and approved, just like T-levels and apprenticeships, to deliver the skills employers need.

In essence, to ensure that the UK retains its position as a world-leading economy, we need to ensure that through places such as Morecambe and Lunesdale—a skills centre for my hon. Friend’s region in the United Kingdom—people of all ages can develop the skills the country and businesses need and climb the ladder of opportunity. We are therefore investing more in adult education and skills, underlining our commitment to ensure that adults at any age can upskill to reach their potential.

What does free courses for jobs mean? We are giving access, free of charge, to high-value level 3 qualifications in priority areas such as engineering, building and construction and manufacturing. There were 35,000 enrolments reported between the launch in April 2021 and January 2023. My hon. Friend will be pleased to know that level 3 electrical installation and engineering courses are offered by providers that serve areas such as Lancaster and Morecambe College.

We have introduced a scale of quality qualifications, including bootcamps, which, again, are free. Everyone who goes on these flexible courses, which last up to 16 weeks, is guaranteed a job interview at the end. Employers and providers work together through the bootcamps to build up sector-specific skills. There are 900 skills bootcamps all over the country, offering training in STEM, software engineering, data analytics, mechanical engineering and engineering diagnostics, to name but a few. In north Lancashire, Tech Lancaster offers key industrial experience in electronics for adults to acquire the skills local businesses need. My hon. Friend will be pleased to know that skills bootcamps have a high rate of success in his area, with 61.5% positive outcomes from delivery in 2020-21. Tech Lancaster has six bootcamps related to electric, three on electric vehicle charging-point installation and one on domestic electrical. I know how important that subject is.

If my hon. Friend does not mind, I will mention my own college in Harlow, where, with Essex County Council and many others, I recently opened an electric vehicle centre—a multimillion pound investment—which forms part of the college’s advanced manufacturing and engineering centre, where students will learn all about electric vehicles and green skills. I am pleased to see that what is going on in Harlow is also going on in Morecambe and Lunesdale. I am very proud of Harlow College for all its achievements, just as my hon. Friend is proud of his college, and rightly so, for the reasons I have mentioned.

My hon. Friend also mentioned electronic technology skills in his area. Areas across the country will clearly have different skills needs, which will be determined by the employer and learner market. We have introduced local skills improvement plans, or LSIPs—these things always have tongue-twister names—which identify and address those needs. They include colleges, the local chamber of commerce, the council and other people, particularly businesses and providers, to ensure the provision for the area, identify the skills gaps and ensure that the skills that are needed are delivered. There will be a local skills financial plan that goes alongside each LSIP.

In order to deliver the high-quality technical training that is needed, we must also ensure that that providers have high-quality state-of-the-art facilities and equipment. I mentioned some of the funds that Lancaster and Morecambe College has received. Overall, we are investing £2.8 billion in capital, including on T-levels, which are really important; on more post-16 places; and on improving the condition of FE estates over the next three years. Lancaster and Morecambe College is in my hon. Friend’s area. I said I would mention an additional thing. He will be happy with it. He touched on it in his speech. Learners at the college are benefiting from facilities supported by over £600,000 from the DFE’s skills development fund in its new sustainable energy hub.

I hope that my hon. Friend is pleased with the amount of investment. It is very much due to his incredibly hard work and his championing of skills all the time he has been a Member. Money is going to support skills, and the energy hub delivers a range of new courses. Again, we are ensuring that green skills are embedded in the curriculum.

That same development fund has enabled the college to create one of the five electric and hybrid vehicles skills centres across Lancashire, such as the one I was talking about at Harlow College, through a regional contribution of more than £1 million. That has led to the upskilling of staff in colleges across the area in a range of qualifications, including those relating to electric, hybrid and motor vehicles; electric motorsport; battery technology; and electric vehicle infrastructure. Providers now offer wide-ranging provision to employers, students and apprentices across the region in these subjects. The college has received more than £1.5 million from the DFE’s capital transformation fund since 2020.

Other colleges in the region that serve my hon. Friend’s constituents have benefited from capital investment. Many of them have STEM-assured accreditation and deliver a range of science, technology, engineering and maths provision. I am very happy to write to him with all those details. With all the different moneys received by colleges, I think we would be here for a very long time, and I do not think the Chair would approve because there is another debate after this one.

We are investing £300 million in a network of 21 institutes of technology, which are state-of-the-art, employer-led provider organisations that will work in collaboration with colleges and universities. They are incredible institutions of the future because they work with FE, they are part of HE and many are placed at FE colleges. I have seen some myself. They specialise in the skills of the future, such as infrastructure, digital, energy and transport—all the things that my hon. Friend spoke about. There will be 21 around the country. He has one; Lancashire and Cumbria Institute of Technology will be launching in the summer. I am sure he will be at the opening because it is a very exciting skills development in his region.

For those seeking world-class STEM education at a higher-education level, we are investing more than £750 million from 2022 to 2024-25. That will support high-quality teaching and facilities, including in science and engineering. In 2022-23, more than half of the £1.3 million strategic priorities grant budget will be directed towards the provision of high-costs subjects, such as science, engineering and technology.

I hope I have assured my hon. Friend that there is a lot going on in his constituency and in the region to champion technical education and skills in STEM and in electronic skills. To achieve our ambitions, we are expanding opportunities for engagement in STEM subjects, investing more in both further and higher education, and giving people the opportunity to train, retrain and upskill throughout their lives. We have just introduced the lifelong learning entitlement, which will start from 2025. That will allow people to do flexible modular learning from levels 4 to 6, move around from institution to institution and do those shorter courses at a times their choosing. We are doing everything possible to invest in skills, infrastructure and resources and make that significant capital investment so that providers have the high-quality facilities and equipment to deliver those skills.

My hon. Friend asked me to visit his college. Subject to parliamentary duties, I would love to do so. There is nothing more I would like to do than go to Lancaster and Morecambe College to see the incredible work that it is doing to promote skills and T-levels, and to give younger people and adults brilliant qualifications. Subject to parliamentary duties, I would be very happy to visit —not just to see his beautiful constituency, but to learn about the skills and see the never-ending work that my hon. Friend is doing not just to see the implementation of the Eden Project, but to champion apprenticeships, skills, technical education and STEM across his constituency.

Question put and agreed to.

Unpaid Work Trials

Wednesday 29th March 2023 Westminster Hall

16:25

[Stewart Malcolm McDonald (Glasgow South) (SNP)]

I beg to move,

That this House has considered the matter of the use of unpaid work trials.

It is always good to see you in the Chair in Westminster Hall, Mr Hollobone. You will remember, because I think you might have been present, that I introduced in the previous Parliament a Bill to amend the National Minimum Wage Act 1998 in order to outlaw the practice of unpaid work trials. I will come back to the substance of that Bill, which is now a piece of history, but I want to begin with the genesis of this entire issue and why I decided to take it up as a Member of Parliament in the private Members’ Bills selection.

There is a bubble tea company called Mooboo, which had an outlet in Glasgow that was offering unpaid work trials—the practice of inviting applicants to apply for a job and making them work for a trial period for which they are not paid. Although there are many variations on what an unpaid work trial looks like, this was perhaps the most extreme version that I have come across, because the applicants were invited to work for a full 40 hours without payment, at the end of which they were or were not offered a job. That is a particularly egregious and extreme example, but when I decided to take up the case on behalf of a constituent who went through that process, I started to find that this practice was rife and much more common than I had first thought. As I mentioned, it presents itself in many guises.

Although that example is at the extreme end of the practice of unpaid work trials, there are many intricacies and differences in the way it presents itself. When I started to talk about this issue publicly and wrote to Ministers and His Majesty’s Revenue and Customs, I started to gather in my inbox various horror stories about the practice of unpaid work trials across the country. A study in November 2017 by Middlesex University and the Trust for London, called Unpaid Britain, shows that unpaid work trials contribute to about £3 billion in missing wages in the United Kingdom. That figure is six years old, and I do not know what it is today—perhaps the Minister has a better idea—but I would wager that it is probably higher now than it was then. Polling from YouGov shows that 65% of Brits say that such a practice is unfair and only 24% think it is fair.

The way in which unpaid work trials present themselves is often different, as I mentioned, but it is none the less insidious. Quite often an applicant will apply for a job where the trial period may be an hour or two, so that they can come in and show what they are made of—whether that is in a restaurant, a cocktail bar, a hotel, a retail setting or whatever it might be. I discovered that quite often those trials were being offered to applicants for jobs that did not actually exist. Applicants were being exploited to cover staffing shortages and busy periods, such as Christmas trading. Those poor people had often spent hours applying for jobs, sending in CVs and filling out application forms, often going through the soul-destroying process of hearing nothing back. They were being invited to unpaid trials for jobs that did not exist, that were never going to materialise and that they would never be offered.

I suspect the Government position is the same as it has always been—that legislation is not required. I think we can all agree that that it is an egregious thing to ask somebody seeking employment to go through. It is fraud; it is morally fraudulent and must almost certainly be legally fraudulent—except it is not. I have no ambition to relitigate the Government talking out my Bill. The Minister who did so is no longer a Member of Parliament, and I am, so I like to think I won that fight with that Member at the time. When I talked to Ministers and officials about this at the time, we all agreed it was an abhorrent and unacceptable practice, but the Government position was that legislation was not required to fix it.

I would say to the Government today that the fine guidance they produced for employers on unpaid work trials has not had the effect that we all wanted, which was that they would not be used at all and certainly not used in the egregiously fraudulent way that I described. At the time, there was some good will on the Government side, among Labour colleagues and on my own side, which even in today’s Scottish National party environment still exists.

The fact that the practice is still going on and partly contributing to billions of pounds in missing wages that people should rightfully receive—

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

I am listening carefully to the hon. Member’s speech, and he is making some very valid points. I agree that such behaviour is egregious. Is the £3 billion he quotes for unpaid work trials or unpaid work? There is an important difference between the two.

[Stewart Malcolm McDonald]

Yes—and no, in terms of the Minister’s final point about there being a difference. The unpaid work trials contribute to the figure of £3 billion. I am not saying that the trials are worth £3 billion, but the study by the university concluded that that was part of the bigger £3 billion picture. I confess I do not think there has been an updated study. I do not know if the Government have anything to share with us this afternoon. I would be amazed if that figure had not grown since that study was done six years ago.

Among all the good will to try to stop this miserable exploitation, the Opposition and the Government arrived at different conclusions. I was of the view, supported by colleagues in the Opposition, that legislation was required —an amendment to the National Minimum Wage Act 1998—to outlaw the practice. The Government took the view that guidance was adequate, but it is not. It was proven not to be as recently as December last year in a court ruling. The ruling in Ms P Karimi and Ms C Patricio v. Fadi Ltd, published by His Majesty’s Courts and Tribunals Service on 2 December 2022, found that the claimant was entitled to the minimum wage for all hours worked during the trial period. Reasoning the judgment, the employment judge, Judge D Wright, stated that the

“legislation does not give explicit guidance”

as to how long these unpaid trial shifts may last.

An exploitation had taken place, whereby someone had worked in an unpaid trial, and the tribunals service determined that they should have been paid for it, but the judge said that the guidance is not sufficient on the regulation of work trials. I am not against work trials. I entirely support an employer’s right to say to someone, “Come in and show us what you are made of. Come in and show us that you actually have the skills and experience that you set out in the interview process.” What I do not support is exploiting people for jobs that do not exist, or for covering staffing shortages and doing so for 40 hours, as in the extreme examples that I mentioned at the start of my remarks.

Forty hours is an extreme and unusual example. What I thought I would find initially was that the norm would be two or three hours—half a shift or a morning. What I found more often than not was that the time was longer, and the physical experience of the unpaid work trial was demeaning. The number of people—mostly young people—who would work their unpaid trial shift and then just be left, not told whether they had a job, confused as to what was supposed to happen next, clearly tells us that better regulation of trial periods needs to be forthcoming from the Government. I do not think that that is too much to ask in this day and age. A fair day’s work for a fair day’s pay; it could even be said that it is a broadly Conservative value. It is something that even my colleague, the hon. Member for Glasgow South West (Chris Stephens) can rally around.

Let us be clear about what my proposed legislation was not; it was not about banning trial periods, and it did not concern itself with things like unpaid internships. Although I find them objectionable, I felt that would require its own piece of separate legislation. The aim of my proposal—the banning of exploiting people through unpaid work trials—remains an entirely just one.

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

I thank my good friend and constituency neighbour for giving way. There is another way of dealing with this issue. As my hon. Friend will be aware, the Government have been promising an employment Bill for the last six years. For some reason it is yet to become a reality. Does he agree that if the Government were to put forward an employment Bill, that would allow both of us to table amendments to address this topic?

[Stewart Malcolm McDonald]

With all things around employment law, in my party I defer to my hon. Friend. He has a strong history of standing up for employment practices and a knowledge that surpasses mine when it comes to the detail of modern-day employment law.

To conclude my remarks, I think the aim of my Bill —although I suppose it is now an ex-Bill—was entirely just and reasonable. It has been shown in the time that has passed since the falling of that proposed legislation that the guidance the Government produced, although perfectly sensible and reasonable, is not enough. I still get emails, as do many Members from across the House, from people who are being exploited by unpaid work trials or, worse, fake work trials for jobs that do not even exist.

I will end with the example of a young Glasgow student, Ellen Reynolds, who petitioned Parliament a few years ago. She successfully gained the number of signatures required to have a debate in Westminster Hall on an unpaid trial shift that she was asked to take part in. There was no guarantee of a job at the end of it and she even had to buy here own uniform to take part in that unpaid trial shift. That is not an uncommon experience. All across Britain today, there are people working a couple of hours, half a shift, or half a morning —whatever it is—to show what they are made of, and they are not being paid for it, and they should be paid for it. They are not getting expenses for it, and they should be, at the very least.

We have a quirk of the system here, where exploitation is rife. I would bet that every person who can hear the sound of my voice knows somebody who has gone through an unpaid work trial at some point in their life, especially if they know groups of young people. The Government and this House have a duty to bring this exploitation to an end. That would not cost industry enormous amounts of money. It would bring in a bit of regulation that is right and proportionate. It would give some dignity to applicants, and some dignity into the workplace that is currently missing.

This is a small gap in the broad structure of employment law, but one that very much needs attention and could very easily fixed be with an amendment to the National Minimum Wage Act 1998. When the Minister gets to his feet today, I suspect he will not be able to furnish the House with new legislation, but I hope he will be able to say something positive on statutory changes to end the exploitation of unpaid work trials and closing that loophole, which at the minute means that people do not get a fair day’s pay for a fair day’s work.

16:41

[Jim Shannon (Strangford) (DUP)]

I apologise for being a few minutes late, and I thank you, Mr Hollobone, for giving me the opportunity to contribute. I thank the hon. Member for Glasgow South (Stewart Malcolm McDonald) for leading today’s debate and for setting the scene so well. He referred towards the end of his comments to anyone who can hear the sound of his voice having had experience of this situation. As I always do, I will give an example of someone I know back home in Northern Ireland, to add a regional perspective to the debate—one that is replicated right across this whole great United Kingdom of Great Britain and Northern Ireland.

Unpaid work trials have proven incredibly common among some employers—sometimes I wonder whether they do it on purpose—especially in industries like hospitality, where young people tend to get their first jobs as young teenagers. There are a great many people across this United Kingdom who have good jobs now, but this is what happened when they first began. We must do all we can to enforce paid work trials and make young people aware of their employment rights. When someone is starting off, and has the excitement of a trial that might lead to a first job, they say, “I’ll definitely go and I’ll endure a wee bit of hardship or pain to get this job.” If they get it, that is good. If not, they feel a wee bit taken advantage of.

The advice from His Majesty’s Revenue and Customs is that using unpaid work trials does not contravene any current legislation for businesses, if they are part of a genuine recruitment process, do not last longer than a reasonable amount of time and are required to demonstrate the applicant’s suitability to the work. Are they part of a genuine recruitment process, or are they are a way of taking advantage of some people?

The hon. Member for Glasgow South outlined the issue very well. We look to the Minister, the Under-Secretary of State for Business and Trade, the hon. Member for Thirsk and Malton (Kevin Hollinrake), for a response; I am pleased to see him in his place. It is good to see the shadow Ministers for the SNP and for Labour here too, the hon. Members for Glasgow South West (Chris Stephens) and for Ellesmere Port and Neston (Justin Madders).

In Westminster Hall, in a past life for the Minister if not for me, we would have been on the same side, debating issues like banking. We were both lowly Back Benchers then. He has been elevated to greater heights, whereas I am still a lowly Back Bencher. He has reached heights that I will never be able to achieve, and that is a fact—I am not a member of the Conservative party, so it is highly unlikely to happen. I say that in jest!

Work trials are commonly used to allow an employee to see how a business is run and for an employer to see how the employee will settle in. When they are done right, they give the employer a chance to see just what a person can achieve. The problem is that, more often than not, people work an extensive shift and are not paid a penny for it.

One of the young girls who works in my office told me a story similar to that outlined by the hon. Member for Glasgow South, who set the scene so very well. My youngest member of staff recalls a work shift that she did when she was 17 years old—before she ever came to me—for a café in her local area, where she worked from 10 o’clock until 4 o’clock and was entitled to no pay for the shift. Now, that situation was understood between the employee and the employer. However—here’s the story—for the trial she was required to wear a black shirt and black trousers, which she did not have. If she wanted to do the trial and be considered for the job, guess what? She had to go and buy the black shirt and trousers. That cost an additional sum, which would ultimately be wasted once she got her uniform. I found that a bit hard to understand. On certain occasions, these trials just do not seem worth their while when the whole matter is taken into account.

Although there is no legal obligation to pay someone for a trial, I would certainly put forward the argument, as did the hon. Member for Glasgow South, that the individual, by working a trial, is still making money for that company, so they should be reimbursed. That is the crux of the matter. Some employers choose not to take staff on after trial periods, so they should—I was going to say “perhaps”, but they really should do this—offer the minimum wage for the day or for the number of hours worked. That would be fair and justifiable, given the time that the person has provided to make money for the company in their trial period.

I am also shocked to hear plenty of stories of people having been made to work not one day, but a week’s trial at zero payment, only to learn that if they leave that employment within the year, they must pay back the money they made in the trial period. Again, that is immoral, wrong and a disgraceful way to treat employees. Although the legalities around paying people for trial shifts represent a grey area, individual employers should have discretion to ensure that their employees are treated properly.

We know the stories. I gave one example and the hon. Member for Glasgow South has given examples. I am quite sure that my friend the SNP spokesperson, the hon. Member for Glasgow South West, will give more examples than anybody else, because—I agree with hon. Member for Glasgow South—he has a knowledge of these matters, and I look forward to hearing his contribution. Some of the stories we hear are disgraceful, distasteful and just awful.

We have a role to play in ensuring that all employees of or at small, medium or large companies have a good outcome. That is really not too much to ask: simply fair play and fair moneys for time and effort spent. At the moment, that is not the case. There is a duty on the Minister and the Government to sort out the legalities, and ensure that employers pay their employees the wages they should be getting. I very much adhere to and believe in the saying, “A fair day’s work for a fair day’s pay,” which is why I fully support the hon. Member for Glasgow South.

16:48

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

It is a pleasure to see you in the Chair, Mr Hollobone, and to follow the hon. Member for Strangford (Jim Shannon). I hope he enjoyed his birthday celebrations at the weekend; I noticed that he was a social media sensation, with all the well-wishers wishing him a happy birthday.

I congratulate my good friend and constituency neighbour, and fellow left winger—I use the definition loosely—my hon. Friend the Member for Glasgow South (Stewart Malcolm McDonald) on securing this debate on an important issue that affects far too many people in these islands. My good friend talked about one of the more extreme examples, the tea company Mooboo, but he undersold what was going on at that particular workplace. That situation really did go from the bizarre to the ridiculous. I recall that when this story hit the headlines, myself and my good friend were actually sitting next to each other in the Chamber of the House of Commons on a Thursday morning at business questions—the Minister was usually at business questions in those days—as we discussed this great matter.

Those of us who were contacting Mooboo tea on the social media platform Twitter were finding ourselves blocked for asking why unpaid work trials were happening in that workplace. Members of the pubic who were asking Mooboo, “Why are you blocking Members of Parliament for asking basic questions?”, were finding themselves blocked. It was getting to the stage where Mooboo was blocking more people than it had followers. It was one of those ridiculous situations. Even journalists were asking Mooboo those questions and finding themselves blocked, until Mooboo relented and started to engage with Unite—Bryan Simpson, who is a fantastic trade unionist and a constituent of my hon. Friend the Member for Glasgow South, and who does great work in organising trade unions in such areas, where exploitation takes place.

I want to make it very clear that the SNP is still calling on the UK Government to ban exploitative unpaid work trials and to protect workers, but we should not have to wait for the Government to act. As I alluded to in my intervention, we have waited six years for this employment Bill to appear before us. In 2017, the Government said they would bring forward an employment Bill to ban exploitative practices that were happening in the workplace, and then we were told, “Well, Brexit’s taken over.” Recently we have been told, “We’ll bring forward an employment Bill if there’s sufficient parliamentary time,” but that does not stop them introducing immigration Bill after immigration Bill. They can find parliamentary time for that, rather than for the very real issue of the exploitative practices that are happening in far too many workplaces across these islands. Will the Minister update the House on when we will finally see an employment Bill tabled by the Government to address unpaid work trials and all the other issues that come with it, which I will come to?

As my good friend, my hon. Friend the Member for Glasgow South, said, he introduced an Unpaid Trial Work Periods (Prohibition) Bill in July 2017. Guess what, Mr Hollobone—I know you will be shocked when I say this—it was talked out by a Minister. How many private Members’ Bills have been talked out by a Minister? I hope that we will review how private Members’ Bills are put forward in this place and that we stop the practice whereby Ministers are allowed to keep talking until 2.30 pm on the button, when the Bills disappear. That is really disappointing, and that view is shared by others across the House.

My hon. Friend has led in a number of debates and been a consistent campaigner on unpaid work trials. I hope that the shadow Minister, the hon. Member for Ellesmere Port and Neston (Justin Madders), and indeed the Minister, will praise him for his work in shining a light on these issues.

In response to a written parliamentary question from my hon. Friend the Member for Glasgow South about legislative proposals, the UK Government said:

“Existing legislation already bans unpaid work trials that are not part of a legitimate recruitment process”,

yet he has given example after example, as did the hon. Member for Strangford (Jim Shannon), of unpaid work trials happening all over the economy and not being part of a recruitment process. As my hon. Friend and constituency neighbour said, they are being used to deal with staff shortages or fill in for people who have been off sick, which is a scandalous practice. Then there are those who are having to buy uniforms to go to unpaid work trials, which is an absolutely ridiculous practice—I hope the Minister noted what my hon. Friend and the hon. Member for Strangford also said about that. The Minister will need to answer for how we can deal with that kind of exploitation, because that is what it is.

As my hon. Friend said, trial periods can be a legitimate way to assess a candidate’s skills and suitability. They also give individuals the opportunity to assess whether a workplace suits them, which can be just as important. I note that the Department for Work and Pensions is trying to force people to take up more hours, and there are issues in relation to that. However, if an employer offers someone a trial period, it should be paid. There should also be feedback. Many examples have been given of unpaid work trials where nobody hears anything afterwards—whether it is a day, a couple of days or even a couple of hours, they do not hear anything from the employers. That practice needs to end. Perhaps an employment Bill could deal with some of that.

It is interesting that the UK Government have confirmed that unpaid working time, which can include unpaid trial shifts, was a factor in 29% of cases when 208 employers were named for failing to pay £1.2 million to around 12,000 workers, and ordered to pay £2 million in penalties. If there is adequate legislation in place, and the practice is still happening to the degree outlined by my hon. Friend and the hon. Member for Strangford, perhaps there is an enforcement issue.

Perhaps the Minister can tell us what enforcement is taking place within Government to ensure that unpaid work trials are not exploitative. Perhaps he could start by telling us how many vacancies currently exist in the national minimum wage compliance unit. If we had more workers employed by the state to enforce the national minimum wage, as the Government said in their parliamentary answer to my hon. Friend—if we had more enforcement officers—perhaps we would find out that the practice is as the two hon. Members suggested: still widespread, and still happening in too many workplaces.

The UK Government could have supported my constituency neighbour’s private Member’s Bill, or they could have brought in their own legislation. Perhaps the Minister will tell us what legislation is proposed and what timetable will be allowed for an employment Bill. We might not agree with every single provision in that employment Bill, but it would give every single Member of the House an opportunity to raise other issues, put forward amendments and deal with this issue.

[Stewart Malcolm McDonald]

My hon. Friend speaks to an important issue that he touched upon earlier, which is the practice of talking Bills out. I got an assurance from the then Minister that the Bill would not be talked out, and that it would be given a fair hearing and allowed to go through the process, but he then rather dishonourably did the opposite of what he had told me. We ended up with the Bill not having a fair hearing in the House, and not being given the proper readings that it ought to have been given as a Bill from a Member of Parliament. The result is that we are back here six years later, discussing the same problem.

[Chris Stephens]

I thank my hon. Friend for that intervention. As I recall, it might very well have been in the debate on his private Member’s Bill when the then Minister rose to his feet and said, “I will be concluding my remarks at 2.30 pm.” That was at the beginning of his remarks. That is a completely scandalous way of dealing with it, but my hon. Friend is right. We have had assurances before that Bills would not be talked about and then, lo and behold, on the day that the Bill is up for discussion, that is exactly what happens.

We firmly oppose this practice. Because of the sectors of the economy that my hon. Friend referred to, we also oppose the inappropriate use of zero-hours contracts. Sometimes they go together, where there is an unpaid work trial for a zero-hours contract job. They are both exploitative practices. These non-standard types of employment that offer workers minimal job or financial security really have to end, particularly in a cost of living crisis. If the Government are really serious about helping people to earn more money, they need to put forward legislation to stop unpaid work trials and exploitative zero-hour contracts.

[Jim Shannon]

When that Bill was introduced approximately six years ago, we anticipated that it would go through Westminster and address this anomaly. Does the hon. Gentleman, like me, feel aggrieved—I am sure he does—that, in the six years since this legislative change, people have been exploited and thousands have lost out on what was rightly theirs?

[Chris Stephens]

I agree.

I will remind the House why the promise of an employment Bill came about: it was because of the Taylor review. It was the Government’s own task. Matthew Taylor reviewed the working practices taking place across these islands, and the Taylor review listed a whole series of recommendations, many of which have still not been dealt with through legislation. If the Government are going to ask people to carry out that sort of work, we would expect them to back it with action. As the hon. Member for Strangford said, it is quite extraordinary that they have refused to do that.

The Scottish Government and the other devolved Administrations can do their bit, but they can do only so much, because employment law is reserved to this place, unfortunately. I would suggest that if employment law was devolved, including to the Scottish Parliament, work practices across the board would be a lot fairer.

I am conscious of the time. Let me end by saying that if the Government viewed trade unions as a key social partner in this country, these sorts of practices would come to an end in the workplace. I wholly support what my constituency neighbour, my hon. Friend the Member for Glasgow South, is trying to do in this area.

17:02

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

It is a pleasure to see you in the Chair this afternoon, Mr Hollobone. I thank the hon. Member for Glasgow South (Stewart Malcolm McDonald) for securing the debate and for the work he has done over six years to try to deal with this wholly egregious situation.

We can probably start on a note of common concern, because every right-minded person would regard it as wrong that workers should be expected to work for free. In many cases, as we have heard, they actually end up out of pocket after working a trial shift. I firmly believe that we should all adhere to the principle that there should be a fair day’s pay for a fair day’s work, and any action to stop exploitation—whatever form it takes—should be welcome.

As we have heard, there clearly ought to be means by which an employer can test an individual’s suitability for a position, but—call me old-fashioned—I have always thought that that was what a job interview was for. If not that, what about a paid probationary period for someone to be assessed for their suitability? Let us not forget that people have to work somewhere continuously for two years before they get any protection against unfair dismissal, which could be seen as a very long trial period, albeit one that is paid. When we consider the many options available to employers to assess the suitability of potential employees in the round, we inevitably get drawn to the conclusion that, in the main, trial shifts are not necessary—certainly not unpaid ones. When we are confronted with the evidence that we have heard today and on previous occasions, the suspicion continues to grow that they are often used as a quick way to get free labour.

We have to ask what is being done to stop jobseekers being exploited. Although it is welcome that the Government have published guidance on the practice of unpaid trial shifts, it is not worth the paper it is written on without proper enforcement. There is a problem with both the wording of the guidance and the Government’s general attitude to upholding UK employment law. In particular, I have concerns about the fact that, as the guidance notes, there are no definitive rules or tests for whether a trial shift is legal.

As we know, there are six factors in the guidance that a court or tribunal will consider when making a judgment about whether a trial shift should be paid. I ask the Minister to consider how many people have the legal knowledge, patience, time or money to pursue an employer for a handful of hours of lost earnings at the tribunal, particularly if they are in a legally vulnerable position from having no employment protection at that point. Does the Minister agree that the threat of being taken to a tribunal for an unpaid trial shift is self-evidently a hollow threat to employers, and that the Department should be much more proactive in pursuing complaints on behalf of workers? Does he agree that, given that the majority of people in these sectors are young people, because of the nature of the work, and are unlikely to be members of a trade union, they need support in enforcing their rights?

Let me give an example from my own family of what is probably a pretty typical situation. My son has plenty of experience working in bars—quite often in Glasgow, actually. He has applied for various jobs in bars, including one at a bar in Chester. He had an interview. He has all the experience needed to work there, but was offered a trial shift despite the fact that he clearly could do the job. It transpired that the trial shift would run for eight hours and finish in the early hours of the morning, when there is no public transport, so he would have to pay for a taxi out of his own pocket to get home. That looked to me like blatant exploitation. Luckily for him, his father was the shadow employment rights Minister so he could be guided on what to do in that situation, but it begs the question: how many other times have they gotten away with that? How many hours each week are young people being asked to work trial shifts for which they get no payment? The Minister should be tasking his officials with trying to find out exactly how many times this happens each week, because we are probably seeing only the tip of the iceberg.

[Kevin Hollinrake]

What guidance did the hon. Member give his son in that situation? I would be interested to know.

[Justin Madders]

I am not sure Hansard can record in a polite way the suggestion that I conveyed to him. Let me put it this way: the employment relationship did not continue.

The six factors contained in the guidance are useful, but a lot of subjectivity is applied to them. For example, how is observation—which is one of the criteria—defined? How long is a reasonable period of observation? Ultimately, how can a jobseeker be expected to know if their employer has acted in line with the guidance, given how ambiguous it is? The ACAS website does not make any reference to trial shifts at all. People need a lot more support to understand when they are being asked to do something that is unlawful.

Ambiguities aside, the guidance needs to be properly enforced. As has been mentioned, we have this figure of £3 billion for unpaid work in various forms—it is probably is an even greater figure now. The continued reliance on an underfunded and overstretched tribunal system is failing our workers. Surely it is time for a single enforcement body to follow through for workers to ensure that their rights are enforced. I know the Government promised that along with an employment Bill, which we unsurprisingly have touched on. Will the Minister give us a timescale for when this single enforcement body will emerge?

The Government’s record on national minimum wage enforcement in recent times has been concerning. A naming and shaming list has not been published since December 2021, and I know the Minister has expressed his support for that as an important pillar of enforcement. As I have mentioned to him on previous occasions, a number of Departments have awarded lucrative contracts running into the hundreds of millions of pounds to companies that have appeared on the list of shame. What kind of message does it send to companies about the importance that the Government place on enforcement of the national minimum wage if they are then rewarded with Government contracts? I hope the Minister can give us an update on when the next list will be released.

In conclusion, the debate is a useful reminder that this is unfinished business. We can see very clearly how current ambiguities are being used to exploit workers. I want to hear from the Minister about what more can be done to ensure that people get paid for the work they do, and to ensure that these ruses, in all their forms, are put to an end, so that we get to a point in this country where a fair day’s work means a fair day’s pay.

17:10

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

It is a pleasure to speak with you in the Chair, Mr Hollobone. I congratulate the hon. Member for Glasgow South (Stewart Malcolm McDonald) on introducing this important debate, and on his persistence. I think it is his seventh year of talking about this issue. He rightly feels strongly about it. He, like me, the rest of Government and probably every parliamentarian, absolutely believes that people who are at work should get paid the national living wage. I am delighted to be the Minister responsible for national living wage policy and workers’ rights.

Broadly, I agree with the points the hon. Member made. As others have said, if employers are engaging in the behaviour to which he referred—I accept that there is some evidence that some are—that is a scandalous practice. It is absolutely our case that all workers should be fairly rewarded for their work. Most people think that. Who would not agree with the point that a fair day’s work should mean a fair day’s pay? We are all on the same page on that.

We are also all on the same page on a related and very important point. As Minister responsible for national living wage policy, I am pleased to see the largest ever increase to the national living wage: a 9.7% increase to £10.42. That applies from Saturday. It is great to see it go over that £10 mark. Some 2.9 million people across the country will benefit from that measure, including 210,000 in Scotland and 160,000 in Northern Ireland. It is a very welcome move.

We should pay tribute to the vast majority of businesses and employers who—I think we all agree—are decent, do the right thing and do not engage in these scandalous practices. It is really important that we reiterate that, as well as the fact that lots of businesses are already struggling in the cost of living crisis, not least because of high energy bills, for example. They are suffering because of numerous cost pressures, and their paying this increase in the national living wage will not only affect the people on the bottom rung of the pay ladder, but have a knock-on effect on others in their workforce. We are determined to build the high-skill, high-wage economy that most people would like to see.

We have further ambitions. We want the national living wage to reach two thirds of median pay by 2024. That remains our ambition. It is the right thing to do. We are putting in place other measures that reinforce our point that we are absolutely protecting and indeed strengthening workers’ rights. The hon. Member for Glasgow South West (Chris Stephens) made an interesting point about finding parliamentary time; we are effectively finding parliamentary time for a number of pieces of legislation, including six private Members’ Bills for which I am personally responsible. Those Bills include measures to ensure workers get full allocation of tips and service charges; to protect neonatal care for new parents who have difficulties with a newborn, ensuring more leave—up to 12 weeks; to entitle everybody to at least a week’s carers’ leave, which could help many people in the workplace look after dependent relatives; and to ensure redundancy protections pre and post maternity, which, again, is a welcome change.

A further change, and a key measure in the Taylor review, to which the hon. Gentleman referred, is the right to request predictable terms and conditions. It will give people on, for example, zero-hours contracts the right to request predictable hours. We support legislation on that, and on making flexible working something that people have the right to request on day one. Those are all things that we are doing to strengthen workers’ rights and make the workplace more attractive.

[Chris Stephens]

I have been listening to the Minister very carefully, and I welcome what he says about the right to request, but a right to request does not necessarily mean that the right will be given. Will the Minister talk about how he intends to enforce that legislation, and increase enforcement around unpaid work trials?

[Kevin Hollinrake]

I do not want to get too distracted from the issue at hand, but I am happy to address that point in detail afterwards. We think those measures strike a balance. The recommendation from Matthew Taylor was not that there be a right to insist; it was the right to request. The employer could reject that request only on one of eight grounds, and in doing so, has to adhere to a process. We think that strikes a balance and meets the needs of businesses. For example, businesses can refuse a request in order to ensure that they have the right customer service availability and are not put under an undue burden. Those criteria have been set out, and I am happy to have that discussion with the hon. Member after the debate.

On the issue that the hon. Member for Glasgow South raised, there are two things that the Government would question about his policy: is it necessary, and what is the extent of the problem? It is important that we reflect the actual extent of the problem. He said that there is £3 billion of unpaid work; clearly that is a different issue. Following my intervention, he clarified that unpaid work trials are an element of that. The figure of 29% is also about unpaid work; the hon. Member for Glasgow South West said that among the 29% of employers that use unpaid work, work trials were a factor. The extent of the problem is not clear. I would describe people who are abusing the system as rogue employers, rather than something to benchmark.

Anybody who is defined as a worker should receive the national living wage. We updated the guidance in 2018, probably prompted by the work of the hon. Member for Glasgow South. The guidance is clear on the time that someone is allowed to have a work trial for. It says:

“in the Government’s view an individual conducting work in a trial lasting longer than one day is likely to be entitled to the minimum wage in all but very exceptional circumstances”.

Employment tribunals, for example, have a basis on which to make a judgment, and there are other bases.

[Stewart Malcolm McDonald]

I am unclear. Do the Government and the Minister’s Department collect data on the use of unpaid work trials?

[Kevin Hollinrake]

I do not have access to that data. The hon. Member refers to a survey that was done some years ago. It is our belief that unpaid work trials are not widespread, and there are measures to deal with the problem, which I will set out shortly. As the hon. Member for Ellesmere Port and Neston (Justin Madders) said, there are six criteria applied to unpaid work trials.

[Jim Shannon]

Some of the responses have been very positive. The Carer’s Leave Bill, which I have been following, is really welcome. The Minister mentioned the outcome of tribunals, but a person cannot take a case to a tribunal if they have not been in the workplace long enough, which means that a tribunal may not be an option. Can the Minister also give some direction on the uniform issue?

[Kevin Hollinrake]

I thank the hon. Gentleman for all the good work he does in this House. In all the debates he speaks in, he is a champion for doing the right thing. As he said, we have been on the same side of the fence in debates on many occasions, and I am sure that will continue despite my ministerial position. I will come back to both of those points shortly.

Six different criteria apply in deciding whether an unpaid work trial is appropriate. The first is the length of time. The trial should be no longer than a day. Observation is another: is the employer observing, or is somebody just working unobserved? Other criteria relate to the nature of the work, and the value to the employer—is there a value to that work? That would be inappropriate. If the worker is observed, the work would have less value, because somebody has to observe them, and they might as well be doing the work themselves. All those things are taken into account in judging whether that shift should be paid.

There are reasons for having an unpaid work trial; for example, a teacher might be required to do a model lesson. It might be appropriate to ask teachers who are being interviewed to show what they would do in the actual situation. It would not be right to ban the practice altogether.

On having more specific guidance, which the hon. Member for Glasgow South mentioned, the problem is that being too specific in guidance could result in a race to the bottom by some employers—something that he is looking to clamp down on. If we said, “This categorically is the perimeter of work trials,” rogue employers may well take advantage. There needs to be a balance of judgment, rather than exact criteria.

The Government think that work trials can be a legitimate recruitment exercise at times, which is why we are not legislating in this area and do not intend to. I know the hon. Member disagrees, and I respect his opinion, but we do not think it is right to legislate further in this area. What we already have strikes the right balance.

[Chris Stephens]

On the one hand, the Minister says that the Government do not collect data, and on the other, he says that legislation is not necessary. That seems a bit confusing to those of us in the House who study these matters. Before the Government decide whether to legislate, would it not be better to do some investigation into the root of the problem to see how widespread it is?

[Kevin Hollinrake]

Of course, we will always look at information and evidence. As parliamentarians, we get information and evidence from lots of different sources, but we tend to work by seeing where there is obvious detriment and therefore loopholes that we need to close. I do not think it is practical for the Government to look at every single problem and then decide where to legislate; it is usually the other way round. I think we disagree on that, but we will always look at information. If the survey was updated and specified unpaid work trials as an issue, the hon. Gentleman would have a more compelling case.

On uniforms required for a place of work, deduction of the cost of the uniform should not take a person’s earnings below minimum wage. If it did, the employer would be guilty of an offence under the National Minimum Wage Act 1998. It can be appropriate for an employer to say that there is a uniform that an employee must wear, at the employee’s cost, but that must not take that employee below the minimum wage.

[Jim Shannon]

The example I gave was a true one—I bring all my examples with honesty. The person had to buy a black shirt and black trousers to have the trial. If they did not get the job, they were out of pocket. Where is the comeback? It might be better for the employer, who will probably have spares, to make them available.

[Kevin Hollinrake]

I agree with the hon. Member, but that is a different point; I am speaking more to uniforms and how they relate to the minimum wage. It would be entirely inappropriate for an employer to say, “I want you to come on an unpaid work trial, and I want you to buy a new shirt and a new pair of trousers to do that.” I would define them as a rogue employer for taking that approach. As I have said, I was an employer for 30 years, and we would never have even considered that kind of behaviour.

The hon. Member for Strangford talked about awareness. His Majesty’s Revenue and Customs undertakes a programme on best practice for employers. It is an enforcement body, as well as one that tries to help employers meet the relevant employment conditions.

A number of contributors said that an employment tribunal is the only way to deal with the issue. I quite understand that employment tribunals can be expensive and time-consuming. There are other processes; if people feel that they have been wrongly and inappropriately asked to do an unpaid work trial, they can report that to ACAS or His Majesty’s Revenue and Customs, through its online form. All reports are investigated.

We are keen to expand the reach of HMRC’s enforcement capability. We have doubled our investment in national minimum wage enforcement since 2015-16. We spend nearly £28 million every year on ensuring that employers meet their legal responsibilities. Employers who are found to underpay their staff must repay all arrears that they owe to their staff and a penalty of up to 200% of the underpayment, and may be eligible to be publicly named by the Department for Business and Trade.

In 2021, HMRC returned more than £6.7 million in arrears to over 155,000 workers, and issued fines totalling more than £14 million to businesses that had failed to pay the minimum wage. Since 2015, the Government have ordered employers to repay over £100 million to more than 1 million workers, which demonstrates that it is never acceptable to short-change hard-working employees. The shadow Minister rightly asked when we will do the next naming and shaming. It has been too long. The last one was in December 2021. I have absolutely met my officials and said, “We need that list out very shortly.” It will happen very shortly.

I conclude by again thanking the hon. Member for Glasgow South. We absolutely agree that it is vital that the right of workers to be paid the minimum wage continues to be upheld. That is why the Government listened to concerns relating to work trials, and issued new guidance in 2018—prompted by his work, I would say, though I was not in this role at the time. That revised guidance, combined with strong enforcement of existing legislation, will continue to ensure that workers are not exploited through unpaid work trials.

17:26

[Stewart Malcolm McDonald]

We have had a good debate, with all the obsequiousness that is customary in the House. I thank the Minister, who I know to be diligent, but I briefly have to pick up on a couple of things that he said. He cannot have it both ways: he tells the House that he does not have data on the issue, but also that the problem is not widespread. I promise you, Mr Hollobone, that the problem is widespread and very real. The Minister cited the amount of money that HMRC has forced businesses to repay to workers. That is not the sign of a system that is successful. It is the sign of an unsuccessful system when the Government have to go around forcing people to pay money that they should have paid. It is welcome that the Government have done the enforcement, but this should never have been allowed to happen in the first place.

I accept entirely that the Minister does not see the need for legislation, but I think that he is wrong; legislation would be entirely proportionate and is necessary. He tells me to be specific; the title of the Bill was the Unpaid Trial Work Periods (Prohibition) Bill. I cannot think of a more specific title for a Bill trying to solve a very specific problem, via an amendment to the National Minimum Wage Act 1998. The Minister mentions various Bills that he is seeking to bring in. I think he will agree that his job is one of the best in Government, because he can make a material difference. He is choosing not to, and that needs to change.

Question put and agreed to.

Resolved,

That this House has considered the matter of the use of unpaid work trials.

17:29

Sitting adjourned.