Westminster Hall

Wednesday 31st January 2024 Westminster Hall

Wednesday 31 January 2024

[Hannah Bardell in the Chair]

Hospitality Sector: Fiscal Support

Wednesday 31st January 2024 Westminster Hall

09:30

[Alyn Smith (Stirling) (SNP)]

I beg to move,

That this House has considered fiscal support for the hospitality sector.

We always say that it is a pleasure to see you in your place, Ms Bardell, and it is this morning; thank you for looking after us. I thank colleagues from all points of the compass for their support on a subject that is close to my heart: fiscal and other support for the hospitality sector—by which I mean on-trade pubs, restaurants, cafés, hotels, and bed and breakfasts. I am grateful to the Scottish Licensed Trade Association, the Scottish Beer and Pub Association, the Scottish and UK hospitality organisations, Castle Leisure Group, Greene King, and several dozen businesses in rural and urban Stirlingshire for helping me to prepare for the debate. I also thank Paul Anderson and Matt Gower from my office, as well as the House of Commons Library, which has produced a number of useful briefings that I commend to colleagues.

This issue is not easy, but I will be up front with colleagues. Am I looking for special treatment for the hospitality sector? Yes, I am: these businesses need and deserve it. They need it because of the unprecedented economic times that we are living through, and they deserve it because they are a part of not just our economy, but our society; they are community hubs at a time when we face an epidemic of post-covid loneliness, and they contribute to our sense of place and keep our high streets busy. As well as urban Stirling, I represent a number of rural communities, which turn into dormitories once the pub goes. That is not a sustainable future for those communities. Hospitality businesses promote social mobility. How many of us—myself included—had a first job waiting tables, pulling pints or doing dishes? Hospitality provides flexible employment that keeps a lot of people engaged in the workplace who might otherwise not find jobs that suit them. These are good, sustainable jobs, and great careers.

Hospitality businesses are also significant for the economy. The stats are vital: the beer and pub sector accounts for 936,000 jobs and contributes £26 billion to the UK economy; in Scotland, it accounts for 62,000 jobs and £1.8 billion in tax receipts. According to UKHospitality, the wider hospitality sector employs 3.5 million people in one form or another, and generates £54 billion in tax receipts. These businesses are at the sharp end of an economic crisis that is not of their making. They are at the sharp end of the post-covid slump, an energy cost spike and insurance cost rises. They face labour shortages and costs due to Brexit. Now, I do not blame Brexit for everything, but it has made everything worse, and we need to deal with its consequences, which hospitality businesses are living with right now. They also have lower footfall, because in the cost of living crisis everybody is cutting back on discretionary spend. They are dealing with a perfect storm, and they need more help.

During covid, we proved that we can act fast, as we did with the VAT cut and eat out to help out, with all its issues; we demonstrated that we could move fast when a demonstrated emergency was under way. For our hospitality businesses, there is still an emergency under way. I am supportive of the Scottish Government, although I am not part of it; I am clearly in opposition here, though I hope I am a constructive Opposition Member. I am bringing some ideas to the Minister, and look forward to his response. I am also not a part of Stirling Council. I am aware that budgets in all places are under real pressure, but I am calling for support because I am dread afeard that, unless we act, a number of these good, sustainable businesses will not make it through to the better times, when they do come, and that all those revenues and social benefits will be lost. Across my constituency, there are a number of great businesses, but they need help to make it through. It is up to all of us, in all our places, to put the badges to one side and work together to support these crucial organisations.

What am I calling for? I will be brief to allow colleagues to speak. First, if hon. Members remember only two words from me today, they should be “cut VAT.” I would cut VAT on food, soft drinks and alcohol to 5%. Of course, that is a big ask. I know the fiscal situation for the UK, Scotland and local government, but cutting VAT would be a clean and immediately effective way of supporting those businesses’ bottom line. It would be directly linked to turnover, so if a business is not doing much business, it will not get that much benefit, and if it is, it will. It would not require any complex architecture or bureaucracy and would not need much to administer. It would be an effective way to boost growth and help these businesses survive.

In other countries, a VAT cut would not be unusual. VAT on accommodation is 10% in Austria, 6% in Belgium and 9% in Cyprus. VAT on restaurants is 13% in Croatia, 5% in Hungary and 10% in Italy. Of course, it is not quite like for like, but the UK is taxing this sector far more than other European countries do, and I think we need to boost and celebrate it, not tax the bejesus out of it from all parts of Government.

Speaking of which, we need business rates reform. To be clear, I was glad that the UK Government temporarily cut business rates in England. I called for the Scottish Government to pass that on, and I regret that they did not, but let us remember that it was just a one-year suspension and the actual problem is that business rates are not fit for purpose in any of our countries. That outdated system is creating perverse incentives for a lot of good businesses. Of course, local government needs to be supported, but we need to find a better way to do that. Tom Arthur, the Scottish Minister, has been proactive in engaging with business across Stirling and elsewhere. He acknowledges the problem—but business rates are crippling a lot of businesses, and we need urgent reform in all our countries.

[Richard Foord (Tiverton and Honiton) (LD)]

I am very grateful to the hon. Gentleman for making that point about business rates reform. I have just pulled up the Midweek Herald, in which a pub that closed fairly recently, the Honiton Inn, is advertised at £395,000, but before the advert says anything about the pub, it says, “Business rates may apply”. Does he agree that business rates on pubs are deterring new tenants from taking over?

[Alyn Smith]

I do agree, and they are also deterring growth in existing businesses. A number of business owners in Stirling have told me that once they invested in refurbishing their pub or doing it up after covid, they got hit with a higher rates bill—so that was a disincentive to investment. The system is broken, and I commend to colleagues the House of Commons Library research that compares how other countries do this stuff. I am conscious that there is not an easy answer. It is easy for me to call for reform, which is pressing, but I do not necessarily have a preferred way to do that.

Hospitality businesses have been hit by energy costs. They are big energy users, in terms of heating and cooling, and have been hit by eye-watering uncapped price rises from the energy companies, many of which are making substantial profits. I do not begrudge companies making profits—I celebrate that—but if they are doing it in a way that shuts down big chunks of another industry, we need stronger regulation. The UK energy market is deeply broken and is not working for an awful lot of business consumers. In the meantime, I think we could look seriously at business rate rebates for energy users.

It will not surprise colleagues that a number of stakeholders are keen on a cut to duty for cider, beer and spirits. That is a way of supporting brewers and distillers. I am not hostile to that, but I think the best way to support the hospitality sector is a VAT cut. That would be a tide that raises everybody’s boat, although there is some evidence that previous cuts have not been passed on to the wider sector.

We also need to do things to rebalance the playing field between the on and off-trade sales. The Scottish Government have tried to do that with minimum unit pricing. I do not want us to turn into a nation—however “nation” is defined—of people who drink alone in front of the TV. Pubs, restaurants and cafés provide a social environment for the consumption of alcohol; they are socially inclusive, open to all and regulated constructively —whereas the other market is tending in the other direction.

There are a number of things we can do to help this sector, which is vital not just because of the social and economic aspects, but because it helps define who we are as a community. We all need to work together to make that happen. I think a VAT cut for the hospitality sector would be deeply popular. I appreciate that the Chancellor and the Minister do not have an easy task in the Budget ahead of us, but that would be a constructive way to boost growth and help these businesses through the tough times, because the emergency is not over. If the Chancellor introduces any of those measures, I will be the first to applaud, because these businesses are too important to all our communities.

[Several hon. Members rose—]

[Hannah Bardell (in the Chair)]

Order. I remind Members that they should bob if they want to be called. The hon. Gentleman was good enough to be brief to let colleagues in, but seven Back Benchers are looking to catch my eye. I will not impose a time limit, but I ask colleagues to try to keep to about five or six minutes.

09:39

[Steve Double (St Austell and Newquay) (Con)]

It is an honour to serve under your chairmanship, Ms Bardell. I am delighted to take part in this debate, and I very much congratulate the hon. Member for Stirling (Alyn Smith) on securing it. I am delighted to see the Minister in his place to respond; along with my hon. Friend the Member for Sutton and Cheam (Paul Scully), there have never been two greater champions in Government for the tourism and hospitality sector. I am delighted that the Minister is now in the Treasury, because I am sure that he can be a champion there for this very important sector—not putting any pressure on him at all!

I represent a constituency that is one of the most dependent on the tourism and hospitality sector in the whole country. For example, it is estimated that around 60% of all jobs in the town of Newquay rely on it, and that one in three households across Cornwall derive at least some of their income from hospitality throughout the year. The subject is therefore so very important to us in St Austell and Newquay. We have some amazing hospitality businesses, from St Austell Brewery—which was established in 1851 and is, I believe, the biggest family-owned brewery in the country; it produces amazing beers, like Tribute and Proper Job, has been around for nearly 170 years, and employs hundreds of people in my constituency and well over 1,500 people in the wider region—right through to an American diner in St Austell called Rocky’s, which opened last week. I was delighted to be there on the opening night, and I wish the people there well in starting up a hospitality business in these very challenging times.

We have amazing hotels like The Headland in Newquay, with which the Minister is familiar, the Watergate Bay Hotel in Watergate Bay, and Scarlet in Mawgan Porth. On the south coast, we have the Carlyon Bay Hotel, which Mr Speaker very much enjoys, and Fowey Hall in Fowey, in which I know many hon. Members have stayed. They all play a vital part in the economy and the communities that I have the pleasure of representing.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I thank the hon. Member for giving way as he extends his conducted tour around his constituency; I congratulate him on so doing. Does he agree that we all, Government especially, need to ensure that the magnificence of areas like his, and like mine on the north coast of Northern Ireland, are promoted nationally and internationally, in order to maximise the benefits for all our constituents?

[Steve Double]

I absolutely agree. We need to get international tourists who come to this country out of London. Too many never venture past London. I know that the Department for Culture, Media and Sport has worked on that, and we have certainly seen some benefits of more international visitors coming to Cornwall and enjoying all that we have to offer.

I will never forget the moment, shortly after the lockdown was announced, that I read a report that said that my constituency of Newquay was predicted to be the hardest hit by the lockdown. Those days were deeply worrying for me. I had business owner after business owner on the phone asking, “What am I going to do? This will literally devastate my business.”

There was a sense of relief a few days later when the then Chancellor—the now Prime Minister—announced the package of support that would be put in place, particularly the furlough scheme but also the targeted support for the hospitality sector. My phone lit up with the people who had rung me in the preceding days; they were so relieved that the Government were stepping in. That demonstrates that this Government understand the importance of the hospitality sector. They provided more support to the hospitality sector than to any other part of our economy during the pandemic, and I know hundreds of businesses in my constituency who are so grateful for it. It is sometimes very easy to forget that support, but it shows the importance that the Government place on the sector.

However, as we have heard, many of those businesses are finding times equally challenging right now. The challenges are different; they are mainly to do with rising costs rather than with demand being taken away. Those could be energy costs, costs in the supply chain or rising wages. I absolutely support the increase in the national living wage, but we need to appreciate that there is pressure on businesses to meet that increased wage. There is therefore a need for the Government to look at what further support they can provide to this sector, not just to get it through the current challenges, but for the long term.

I would ask two things in closing—both of which have already been said, but I will add my voice. There is a case to be made for cutting VAT. I would go for a 10% cut in the VAT rate for hospitality. We have shown that that works. I know there were concerns about how much the cut that was put in place during the pandemic was passed on; I think about 70% of businesses passed on at least some of that cut, but we need to work with the sector to ensure that if VAT is cut, all of the cut is passed on to the customer.

Business rates also need to be looked at. The rise of 6.7% is out of step. I urge the Government to look to the October rate for inflation when increasing business rates. We need more fundamental reform of business rates for the hospitality sector in order to reduce the burden of that tax.

[Robin Millar (Aberconwy) (Con)]

I recognise much of what my hon. Friend says about his constituency in the description of my constituency as the largest resort area of Wales. The difference in Wales, of course, is that the Welsh Government have not passed on the full business rates cut that has been enjoyed in England. Does my hon. Friend agree that that would be the first and most sensible measure that could be put in place to help tourism and hospitality businesses in Wales?

[Steve Double]

My hon. Friend makes a sensible and important point; I agree.

I hope the Minister senses the cross-party support for this important sector and takes away a clear message to the Treasury to look at what more can be done to support the sector in the upcoming Budget.

09:47

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

It is a pleasure to serve under your chairmanship, Ms Bardell. The hospitality sector is at the sharp end of all market sensitivities and feels every economic challenge acutely. Although it is used to seasonal highs and lows, when covid hit, the sector’s resilience became dependent on intervention. Whether businesses were supplying food, drink or accommodation or operating as a wider part of the tourism sector, the covid and post-covid shocks served their blows on hospitality. There are also the issues of the cost of living—whether that is seen through reduced customer disposable income or increased energy costs—and diversion of shipping in the middle east; each part has a story to tell about the sector.

Indeed, Brexit produced serious challenges in labour supply, and the new visa rules are also creating pressure. Last year, 8,500 visas were provided for the sector, and that is not to mention the dependants who come with health workers and so on, and the students; that also takes its toll. I ask the Government to think again. Although I welcome higher income and a rise in the minimum wage to address the wage disparity in this sector, we must recognise that it needs cushioning and that the sector needs support.

In York, we face the additional challenge of flooding. The floods have an impact. There is usually poor reporting describing York as being like Venice, but I can assure everyone that York is open and functioning. Today, because of the resilience measures that have been put in place, only a small cluster of hospitality outlets are impacted by flooding. However, they have received no business rate suspension—they must receive that, and I ask the Minister to look at that issue—and the Bellwin scheme cannot be triggered for a small area. Those businesses have costs associated with flooding, so that needs to be addressed.

Turning to other fiscal challenges and solutions, we would welcome a reform of business rates. I have long debated in this place how disadvantage and disincentives impact on the sector. Frankly, the Government have demonstrated a sticking-plaster approach during my time here. I am glad that Labour is listening and that it will bring in reform of business rates, but I plead that it puts those reforms in its manifesto so that everyone can be clear about that.

The hospitality sector and other businesses in York have talked about a profit-related tax to make it a fairer system in the long term; I urge the Minister to look at that.

The sector’s turnover in York is worth £1.16 billion annually and is ranked 16th highest in the country. For a relatively small, concentrated area it employs 16,500 people across 1,283 venues to date. However, there is a 5.4% vacancy rate—484 jobs—so we need to consider the impact that is having on the sector’s ability to stay open full time and welcome people into their establishments. I recognise how York has weathered this stormy time and I recognise its resilience. People enjoy coming to the incredible city of York and taking advantage of the offer that we have, but that should not be taken for granted. Ensuring that resilience measures and fiscal reforms are put in place is important for the long term for the hospitality sector in York.

I note that the overseas sponsorship programme has offset some of the vacancy issues, not least for chefs, and we need to ensure that the labour shortages are tackled. I ask the Government to look again at the impact that withdrawing from such schemes will have.

A focus of my work looks at how we can increase the family offer in York. We really need to broaden the base of people wanting to come and use our city for a broader interest. I certainly welcome those interested in talking about the family coming to York because that will also build greater resilience for the longer term.

I know that the Minister understands the sector well, given his previous roles. Indeed, he could come on a whistlestop tour round the city with me. I urge him, as we come up to the next fiscal event, to allow an extension, a quick win, on the covid loans. Businesses could make further investment to grow their businesses if they could pay their loans back over a longer period. That would be a quick and easy win for the Government.

On VAT, I concur with the remarks made earlier. Hospitality Association York has also made the case to me that a drop in VAT would very much assist the sector and provide an economic stimulus. We all want to see that benefit passed on to consumers and customers who use the sector. I want the work that Hospitality Association York is doing in growing the skills and talents in the sector and building for the long term to be recognised and supported.

Finally, as York becomes a world heritage site and York Central is developed for the future, we have great opportunities for investment beyond the walls as well. Up in Acomb we see many independent businesses now providing great opportunities. Right now we are in the heart of the most challenging season for our sector. Despite the ice trail coming up this weekend, the Viking festival over the half-term period and the residents’ festival that we have just had, we need action from the Treasury to ensure that the hospitality sector is sustainable now and in future.

[Hannah Bardell (in the Chair)]

Before I call the next speaker, I ask Members to stick to five-minute speeches because I want to try to call everybody and give equality to all.

09:53

[Anthony Mangnall (Totnes) (Con)]

It is a pleasure to serve under your chairmanship, Ms Bardell.

UK hospitality is an integral part of our national economy and this debate would be incomplete if we did not consider the impact of tourism. It is worth £127 billion to our economy—9% of GDP—and hospitality alone is worth £56 billion, with 2.5 million people working in it and 233,000 businesses directly related to it. I started my career waitering in Royal Hospital and in the Queen’s Gallery. I also served in a cocktail bar in rural Dorset—one can imagine how successful that was. It is a perfect way of entering the working environment, placing service at the centre of its values and making sure that people across this country can enjoy the fine local produce that we produce in this country.

However, hospitality has been deeply impacted by the pandemic, lockdowns, the tightening of belts, and of course the strikes. Those attending the UKHospitality event yesterday will have heard time and again how many such businesses throughout the country have been impacted by rail strikes, costing them hundreds of millions of pounds each year. There needs to be an answer to that; perhaps the Minister will remark on it.

In the course of the past four years, an industry, a sector, that has been routinely hit by lockdowns, pandemics and strikes has had a great deal of help from the Government, whether it was the eat out to help out scheme or the campaign that I led by getting Conservative colleagues from across Parliament to support a reduction in VAT—temporary though it may have been—to 5%, in parity with what our European friends and neighbours had done. The results of that cut to 5% were enormously successful. Businesses across the country are still calling out for the reinstatement of that reduction, which is why I think that the hon. Member for Stirling (Alyn Smith), who has done so well to call this debate, will find that there is very little opposition when it comes to reducing VAT. That 5% rate proved that it was possible to create a sustainable business model for the tourism and hospitality sector to thrive, to give it the resilience to weather certain shocks and to maintain confidence in the sector overall. We also looked at how we could change licensing rules. We have taken a far more European approach in allowing businesses to operate outside, on pavements, which has been enormously successful in places like mine and across south Devon.

However, the challenges remain. The challenges for the whole sector are that there are labour shortages, VAT is still high, energy costs are still hitting those operating in the sector and business rates need to be reviewed; I have already mentioned strikes. I would like to make one point about labour. Each of our constituencies will have hotels, pubs, bars and restaurants that are absolutely suffering over the idea of labour shortages, so I would like to make this point to any colleague here and anyone watching this debate at home. Within the terms of the UK-Australia free trade agreement there is something called the working holiday visa, for anyone between the ages of 18 and 35. People will be able to come over here for three years without any visa requirement, starting in July. No businesses seem to be talking about that, and it is our job as Members of Parliament to go back to our local businesses and tell them about it, because it will make a real and significant difference to their labour shortages, if they are able to prepare for it and capitalise on it when it comes in, this July.

In that difficult moment during the pandemic, it worked to reduce VAT to 5%, to give businesses that headroom—to continue not to have high tax bills, and to be able to supply their customers and pass on some of those savings. Where we are different from Europe is that although Europe has lower VAT rates it also has quite high tourism taxes. We must have a discrepancy for that, and my proposal to the Government is, I hope, a little simpler. It is that we reduce VAT by 10%. I know it is easy for Back Benchers to say, “We need a 10% reduction in VAT—you figure out the cost,” but let us do it on a sliding scale over the next five years, during which we reduce VAT by two percentage points each year, so that we get down to a level that is fair and acceptable to a sector that has gone through so much.

As has been said about business rates, we do need to ensure that things are passed on. It is disappointing, when we have been generous in government, that we have not seen the devolved Administrations passing that generosity on. The hon. Member for Stirling said that he was disappointed by his own Government’s actions in this area.

We must also end the train strikes. They are having an impact, whether people are in London or any other city, or even in rural areas such as south Devon. We must get to a point at which we are looking to deal with the strikes and stop that unbelievably catastrophic stranglehold on our tourism and hospitality sectors.

Finally, Ms Bardell, whether you are staying at the Berry Head Hotel and drinking Salcombe beer or Hunts cider, or still on dry January and enjoying Luscombe’s drinks at the Pigs Nose, the Barrel House, the Durant Arms, the George, the Queens Arms, the Kings Arms or the New Inn Morleigh, or just visiting Gara Rock and eating at the Crab Shell, the Seahorse or Rockfish, it is important to remember that they are all a great deal closer than any of those fine establishments in Cornwall and you can reach them far more easily.

09:58

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

I will see whether I can follow that! I am grateful to serve under your guidance, Ms Bardell. The hon. Member for Stirling (Alyn Smith) has done this place a great service by introducing this hugely significant issue.

One of the privileges of living among the lakes and dales of Westmorland is that we get to share our breathtaking landscapes with the world. We are a world heritage site and are Britain’s biggest visitor destination after London. We are the place where 20 million people each year come to spend their leisure time, actively or passively absorbing creation in the raw. Those 20 million visitors create a tourism and hospitality economy with a value getting on for £4 billion a year. With 60,000 people working in it, the sector is Cumbria’s biggest employer—across the UK it is the fourth biggest—yet it is so often overlooked. Because its interests are never closely tied to a single Department, it tends to fall between the gaps, and so do its interests.

This is a time when we cannot afford to overlook our tourism and hospitality sector or ignore its voice. Although domestic visitor numbers have not been bad over the past year or so, those visitors are not spending as much as they used to, on the whole, because of the obvious impact of the cost of living crisis. To put it bluntly, as people are now paying £400 a month more on mortgage payments thanks to the 2022 Budget, they do not have spare money to spend in the pubs and restaurants of the Lake district. There is a real need to support our hospitality and tourism economy in Cumbria through prudent and effective measures.

VAT rates for hospitality are significantly higher in this country than in the rest of Europe. The nature of tourism and hospitality is that our competitors are overseas, so this unfair playing field is a self-imposed penalty on our economy. Even a small reduction in VAT to 12.5% for tourism and hospitality would give the Treasury a net fiscal gain of £4.6 billion over 10 years. The Government are desperately thrashing around for even the merest whiff of a Brexit benefit, and here is one staring us in the face. The question is: will the Government do it? How about looking at a tax-free shopping scheme for international visitors? According to UKinbound, launching a new VAT reclaim scheme would generate £4.4 billion over two years for the UK economy, with a net benefit to the Treasury of £1.3 billion.

To support our visitors, to continue to be an attractive destination and to ensure we are fair to our local communities, we also need funding for our local infrastructure. The fact is that our councils, our health service and our police service are not fairly funded to take account of the impact of our huge visitor numbers. Some 85% of our visitors come by car, adding to the wear and tear on our roads, yet it is local people who have to bear the brunt through council tax. The Government should amend their funding formula to end that unfairness. There would be no need for any talk of tourism taxes if the Government funded us properly.

One thing the Government did that we are very grateful for, as we campaigned for it for many years, was allowing our councils to double the council tax on second homes. Indeed, I think I mentioned it in my maiden speech. Yet the Government’s lack of urgency and failure to get their act together has meant that councils are not allowed to do so until 2025, even though it was expected to happen this April. That will cost Westmorland and Furness Council £10 million and will hit our spending power and our local communities. I add my voice to those that say that business rates, temporary cuts and short-term reductions are all welcome, but they do not help our businesses to plan in the long term. There needs to be radical, long-term action, and it needs to happen now.

We have talked about several parts of the hospitality industry, including our pubs, which are so important. For many lakes and dales villages, the pub is the only community asset left. It has been a pleasure to work alongside the community in Orton recently to try to ensure a long-term future for the George hotel. We want our communities to have more power to retain their pubs, and we need to support publicans by reducing their costs and their taxes, so that their pubs can continue to be the hub and the centre of our local communities.

I mentioned that 85% of our visitors come by car. It does not need to be that way. If we introduced the possibility of a passing loop at Burneside to the Lakes line to Windermere, we would effectively double the capacity of that line and could bring so many more people to the lakes by rail.

The No. 1 issue that businesses throughout Cumbria face in hospitality and tourism is that our workforce is far too small. I am told by 63% of hospitality businesses in Cumbria that they are operating below capacity because they do not have a big enough workforce to meet demand. There are two fundamental reasons for that.

First, the Government have failed to act to counter the collapse of the long-term rented market into Airbnb properties. We have seen an eviction—a Lakeland clearance—of local people who could work not just in hospitality and tourism but in care, education, health and other sectors. The Government promised to bring in a separate category of planning use for short-term lets, but they have failed to do so and have let my community down in the process.

Secondly, our visa rules are ludicrous, short-sighted and impractical. We need to put chefs on the long-term shortage occupation list. Some 80% of the workforce living in the Lake district are already working in hospitality and tourism. We have lakes, yes, but no overwhelming reservoir of untapped talent. What we need is homes for local people, a local workforce and a visa scheme that allows us to bring in the people we need to serve our 20 million visitors.

I really hope that the Minister will listen and bring in the action we need. All we ask is that he back a sector that will boost our economy to the tune of billions, if we only have the ambition to listen to and back our local businesses.

10:04

[Mr Tobias Ellwood (Bournemouth East) (Con)]

I am grateful to have caught your eye, Ms Bardell, and am pleased to see the Minister in his place. I am passionate about tourism, not just because I represent the best seaside resort in the country, but because my first job when my party was in opposition was as shadow tourism Minister. I am pleased that we are having this debate today.

Bournemouth is a vibrant, family-friendly seaside resort. We have three pillars to our economy: financial services, thanks to J.P. Morgan; creative industries, thanks to our fantastic Bournemouth universities; and tourism. Since the arrival of the railway in the 1870s, our part of the world has developed into one of the UK’s leading destinations for domestic and international tourists.

From the Bournemouth International Centre, with which parliamentarians will be familiar from conferences, to the Russell-Cotes museum, the Bournemouth symphony orchestra and AFC Bournemouth, who are doing so well in the premier league and are still in the FA cup, there are so many reasons to visit. Bournemouth is proud to host the National Coastal Tourism Academy, which I hope the Minister will visit. It also has miles of spacious, sandy beaches, from Studland to Hengistbury Head, which is ranked among the 25 best in the world and the fifth best in Europe. All those things have helped Bournemouth to become one of the most popular, family-friendly resorts in the country, and they are complemented by the vibrant night-time economy, with pubs, restaurants, bars and clubs attracting thousands in the evening.

There is no doubt that hospitality plays a vital part in the local economy. A quarter of all visitors to Dorset come to Bournemouth. Tourism is a critical component of Bournemouth’s prosperity: it represents 15% of the local economy, with a contribution of more than £500 million. It supports more than 15,000 jobs, both directly and through the supply chain.

As other hon. Members have mentioned, the impact of covid was colossal, and the hospitality sector’s economic output dropped by 90%. The furlough scheme was welcome; nevertheless, 10% of the hospitality industry closed, never to recover. What saved many businesses in the hospitality sector was reducing VAT to 5% for food, drink, accommodation and attractions. The Government made it clear that that was always going to be temporary, with a planned gradual increase to 12.5% and then back to 20%. The hospitality industry, particularly in Bournemouth, is starting to recover—no thanks to the local council, which wants to ditch the local air festival, our flagship tourism event, and to abandon the blue flag schemes and build on car parks.

Numbers are returning to pre-pandemic levels, but solid, permanent recovery will not be achieved if VAT stays at 20%. Today, licensed premises continue to shut at an alarming rate; indeed, more are closing than opening. VAT has gone up and down over the past few decades. In the years leading up to the 2008 financial crash, the UK maintained a VAT rate lower than in many other European states, at around 17.5%. After the crash, when VAT was slashed across Europe to encourage spending and stimulate economies, it was raised to 20% here.

My simple but critical call to action today is “Please listen to the hospitality sector, which is screaming out that VAT is too high, as more and more businesses are seriously impacted and unable to handle the increased costs of food, fuel and pay. Minister, please, please reconsider the decision to raise VAT back to 20%. Otherwise, you will face ever more business closures and you will subsequently raise less tax for the Exchequer.” The maths is very simple. Cutting VAT will mean more hospitality businesses staying open and thriving. That will lead to an increase in corporation tax income, because if their profits are higher, they will pay more tax.

I end by simply saying that Bournemouth illustrates the importance of hospitality: it gives a place a sense of identity and personality and helps bind a community together. Let’s support our hospitality sector. Let’s reduce VAT to 10%.

10:09

[Wera Hobhouse (Bath) (LD)]

It is a pleasure to see you in the Chair, Ms Bardell. I congratulate the hon. Member for Stirling (Alyn Smith) on securing the debate, and I welcome the Minister to his place. I remember his visit to Bath; in Bath, we consider him a friend.

My Bath constituency has a thriving hospitality sector that caters to local people and to visitors from all over the world. However, our businesses have had to deal with Brexit, covid and now high and rising costs. Bath’s visitor numbers are recovering from the pandemic, yet many of our cultural attractions and hospitality venues are still struggling, with fewer visitors and increasing costs.

The difficulties that the sector faces are widespread. A survey by the Night Time Industries Association revealed a staggering 40% increase in total operating costs last year because of rent increases, energy costs, inflation and business rates. Businesses are trying to manage increasing costs while keeping prices affordable for customers, and it is smaller, independent hospitality venues that bear the brunt. Our high street is kept vibrant by the variety of pubs, restaurants and other businesses to choose from, but without financial assistance from the Government, only large chain companies are insulated from the cost rises.

The hospitality industry employs 3.5 million people nationally and contributes more than £50 billion in tax receipts to the Treasury. By employment, it is the UK’s fourth largest sector. Many owners fear that they may have to close permanently in the coming year; many others have already shut their doors. In Bath we are still reeling from the closure of Moles, a small music venue that was loved and known across the UK for nurturing young and up and coming musical talent. Last year, 3,000 hospitality businesses closed. Among UK businesses that filed for administration in 2023, the third-highest sector was the hospitality industry, which accounted for more than 10%. The figures have nearly doubled in two years and owners are afraid that they could continue to rise, so it is important that the Government take note. Every single closure means the loss of people’s livelihoods and of valuable community institutions.

Many businesses in my constituency have expressed disappointment that the Government decided to remove energy bill support. One pub’s energy bill went up by £35,000. If the energy bill support scheme that was in place until April last year had continued, that bill would have been reduced to £5,000. The Chancellor’s decision to replace the scheme has meant that the pub now receives only £3,000. Under Liberal Democrat proposals, small and medium-sized businesses would have been offered Government grants covering 80% of the increase in their energy bills for one year, giving small hospitality businesses the stability that they need to get through these difficult times.

It is impossible to talk about energy without discussing the role of the green transition. The Government must accelerate the review of electricity market arrangements so that households and businesses alike can benefit from lower-cost renewables. That should involve decoupling electricity from wholesale gas prices. Renewables are now the cheapest source of energy, but their price is artificially linked to expensive natural gas. The Federation of Small Businesses has suggested a help-to-green scheme, which would provide direct financial support and advice to companies. That would include a grant to allow small businesses to invest in energy efficiency or microgeneration. The independent review of net zero also championed that idea. Have the Government looked at that?

The Government must provide the temporary help that small businesses need now, as well as long-term solutions to stabilise rising costs. We must act now to protect all the well-loved businesses in our constituencies from difficult times in future.

10:14

[Priti Patel (Witham) (Con)]

It is a pleasure to serve under your chairmanship, Ms Bardell. I congratulate the hon. Member for Stirling (Alyn Smith) on securing a very important debate.

The tourism and hospitality sector in Essex is valued at just over £3.5 billion, and supports over 60,000 jobs. In the debate thus far, we have heard about the enormous contribution made by the sector across the United Kingdom. With the spring Budget approaching, it would be remiss of me not to make my representations to the Minister and His Majesty’s Treasury; I want to press the Treasury, and outline why further fiscal measures are needed in support of the hospitality sector and wider areas.

Across Essex, but specifically in my constituency, there is a strong case for lowering the tax burden on hospitality. We have already heard that is also the case for other parts of the country. We all have fantastic businesses in our constituencies; mine specifically has Colchester Zoo, the Langford Museum of Power, the Tiptree Tea Rooms—which most colleagues will know about—and many other venues, including a lot of hospitality and wedding venues, which did receive support from the Government throughout the pandemic. I pay tribute to those businesses because they have not only been resilient during the pandemic, but learned to adapt so that they can continue to grow and diversify.

Leisure businesses and attractions clearly suffer from volatility in the economy, and it is important that we do everything possible to support them, hence my modest call—and the collective modest call—for changes to the tax regime that we know would make the difference between businesses closing and surviving.

But although this is about surviving, it is also about thriving and growing; we already know about the impact on retail in our town centres and we have seen pressures in our local communities, but we need the sector to be vibrant and thriving. Central to that—and I make no apology to the Minister for saying that this is what we need—is a better labour market strategy. We have heard about labour shortages throughout this debate. I have been consistent, in my time not just in Parliament but in Government, in saying that I do not think it is right to associate or link our trade deals with automatic visas and some of the schemes proposed; I think we should have a better labour market strategy. We have to invest in the sector, grow the talent and pay people properly. We have a real epidemic of low wages in hospitality, and that is simply not good enough.

I would welcome the Government considering the whole issue of business rates, and I have also made representations on this previously. The freeze in the small business rates multiplier has been welcome, and I think it is vital, but we need a strategic, longer-term approach so that businesses can plan ahead, invest in the bricks and mortar of the properties they buy or lease, and look at how they can grow. With that, the 75% rates relief is welcome, but when reliefs of that size are removed, it clearly places seismic pressures on cashflows. We have to look at the sector from a basic day-to-day perspective and think about what this means for cash flows. Hospitality businesses operate with very tight margins, and they are having to absorb so many costs that they automatically pass on to their customers. I know that the Minister and the Treasury have heard me speak about this issue before, but we really need to look at it.

The case for reducing VAT has been made very clearly and I support it; we have seen so many issues around VAT levels, and their impact on hospitality and tourism. I absolutely support the case made by the hon. Member for Westmorland and Lonsdale (Tim Farron) for reducing VAT on shopping and tourism; there is really big argument for that. VAT is complex and we need to do much more to simplify our tax system, as the Minister has heard me say many times. We need a tax system that supports tourism and hospitality.

I am a great believer in encouraging overseas visitors to our amazing country—more so than perhaps other countries in the world. In Essex, we are always open for business, and one of our prized assets is of course Stansted airport. I praise its 24% growth in passenger numbers last year to nearly 28 million. It has massive and exciting expansion plans—I have also always supported expansion at Heathrow airport—and should be commended for supporting employment and apprenticeships. We need our airports to attract more tourism not just to Essex but to Britain; this is about the health and wellbeing of our country. I am therefore making the case to the Minister and pressing the Government yet again to re-examine their approach to tax-free shopping for overseas visitors, and to duty free at arrivals and air passenger duty—there is a long-standing argument in that regard. The case for tax-free shopping has been made many times in this Chamber and the main Chamber, and it will bring in huge dividends.

It is important to reflect, with the spring Budget coming up—that is why we are having this debate and everyone is making representations. I genuinely believe in making changes, as they could result in another £4 billion into our economy on the shopping side of things, but the principle of cutting tax and reducing the tax burden is also one of the most effective ways in which we can grow and support the hospitality sector, and that means more growth and more sustainability.

I urge the Minister and the Chancellor to take the maximalist approach—using the fiscal levers at their disposal to really support these businesses across all constituencies of the United Kingdom. They are the backbone of our economy and many of our communities, so of course we want them to thrive and grow.

[Hannah Bardell (in the Chair)]

We now come to Front-Bench speakers, who have around 10 minutes each, which should allow the sponsoring Member to sum up at the end.

10:20

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

It is an honour and a privilege to see you up there in the Chair, Ms Bardell. Like so many colleagues, I started working in the food and hospitality industry. I was a shelf-stacker in Tesco, a caddie on the Old Course in St Andrews, and I worked in a cocktail bar. I have to say, cocktail bars do rather better in Glasgow than it sounds like they do in other parts of these islands.

Like many of my colleagues, I spend a lot of time visiting local businesses. Indeed, I was delighted recently to host the First Minister Humza Yousaf at the excellent Unorthodox Roasters in Kinross, where I chaired a roundtable discussion with business owners in the hospitality trade from across Ochil and South Perthshire. It was a listening exercise for the First Minister, with regional entrepreneurs updating him on their successes and their struggles. We were joined by an award-winning ice creamer, Stephen Sloper, from Penny Licks in Tillicoultry; those from Unorthodox Roasters themselves; Alex from the Glenturret distillery; and my friends from Café Rhubarb in Dollar.

Everyone, from the owners of a wee Syrian café in Alloa called Syriana—who arrived as asylum seekers and are now embedded in their community—to Scotland’s oldest distillery, kept telling us variations of the same story: times are beyond tough; and costs are so high that they are simply unsustainable in the long term. One business owner said

“the big issue which is strangling us is gas and electricity costs.”

That is a common refrain. The Westminster Government and the Prime Minister set out their solution: drill for more oil and gas in the North sea. Remember, that was the oil and gas that, during the independence referendum 10 years ago, they told us was worthless and about to run out. Due to disastrous decision making by successive Labour and Tory Governments, North sea energy is sold back to us at world market prices. This will not make energy cheaper for people in Scotland. Clean renewables are the future. To the glaikit Tory MSP who demanded to know what we would do when renewables ran out, the key is in the name—they are renewable.

The hospitality sector needs help now. Westminster has the levers to control VAT, and as we have heard from Members all around this room, it is important to get VAT down. The UK Government refuse to take measures to limit energy prices, so let them instead give the businesses in our communities a break by lowering VAT. We have been out and about talking to businesses in Alloa this past week to get a sense of the difference that a VAT reduction would make. Alison Turner, from the Ladybird Tea Room, said that this reduction would be “an enormous help”. Craig, the owner of the Royal Oak in Alloa, said,

“When the previous VAT reduction happened, it was amazing. It made such a difference.”

The owners we spoke to had little faith that Westminster would act to help.

In his latest toe-curling party political broadcast, I noticed that the Prime Minister briefly stopped attacking asylum seekers in order to pose in front of a massive sign reading, “TAX CUTS”. We might think, “Oh, good! A chance to relieve the burden on those hardest pressed in these difficult times.” No, of course not. He wants to cut taxes for the wealthy so that their families can benefit from inheritance tax cuts. Earlier this morning, we discovered that the Labour leadership now wants bankers—[Interruption.]

[Hannah Bardell (in the Chair)]

Order. If Members at the back would like to make an intervention and have it on the record, I am sure we would all be very interested. If they do not, perhaps they could keep their comments quiet so that the rest of us can hear Mr Nicolson deliver his speech.

[Mr Ellwood]

On a point of order, Ms Bardell. This is Westminster Hall; this is not “Just a Minute”, but if it was “Just a Minute”, that contribution would probably have been a deviation.

[Hannah Bardell (in the Chair)]

I say kindly to the right hon. Gentleman that whether in Westminster Hall or the main Chamber, that is not a matter for the Chair; that is a matter of opinion. The right hon. Gentleman is entitled to his opinion, but it is not a matter for the Chair.

[John Nicolson]

And that would certainly have been repetition; we all know the rules of “Just a Minute”—in fact, some of us have even been invited to be on it. If I may continue, I was about to highlight the new Labour policy of allowing bankers to keep tens of millions in bonuses.

The one subject that everybody in the hospitality sector wants to talk about is Brexit, and what a disaster it has been. The Gleneagles Hotel in my constituency is world famous, but it cannot get enough staff post-Brexit and so cannot operate at full capacity. Harvesters cannot get enough people to pick fruit and other crops. A cheese manufacturer in my constituency fears that they will have to lay off staff because one of their ingredient suppliers in France does not want to do the mountains of post-Brexit paperwork; it is simply not cost-effective.

The Glenturret distillery has stopped exporting to several European Union countries because the post-Brexit labelling rules are too cumbersome and expensive. It has told me that it sometimes now takes longer to get whisky to Paris than to Japan. This is the Tories’ Brexit dividend. And what of Labour? Well, it is now up to its oxters in Brexit Kool-Aid, too. The Labour leader tells us there is “no case” for rejoining the EU. Try telling that to young Scottish voters or to businesses in my constituency.

I am glad that this debate has been brought forward by my SNP friend and colleague, my hon. Friend the Member for Stirling (Alyn Smith). I am glad that Humza Yousaf spent so much time with entrepreneurs in my constituency. I thank all the businesses in Alloa and elsewhere for giving me their thoughts so that I could bring them here to the Westminster Parliament. The Minister, a friend of mine from our days on the Digital, Culture, Media and Sport Committee, is an expert in this field. He cares deeply about it, is knowledgeable about it and was passionately anti-Brexit; he warned wisely and accurately of its dangers, and I know that he will be listening carefully.

[Tim Farron]

It will be no surprise to the hon. Gentleman that I kind of agree with him on the whole Brexit situation but, being practical in consideration of where we are now, would he press the Minister to consider the UK reaching out to other European countries for youth mobility visa schemes? We have arrangements with a number of countries around the world, but to badly paraphrase “Father Ted”, their populations are small and far away. The only European country we have such a scheme with is Andorra. We could have arrangements with Poland, Spain and France, which could open up a source of labour for both his community and mine.

[John Nicolson]

I thank the hon. Gentleman for that contribution. I lament the days when the Lib Dems were with us as an anti-Brexit party. That ship has sailed, and we are the only party now that is anti-Brexit and wants Scotland to rejoin as an independent country.

I fear that negotiations with the European Union are going to be tough on any accommodation whatsoever— I mean, Westminster has few friends in Brussels these days. I have great faith in the Minister on this particular issue, though I doubt his pro-Brexit Labour and Tory colleagues—trembling before the power of Mr Murdoch and his press baron Brexit chums—are much in a mood to listen with such an open mind.

10:28

[James Murray (Ealing North) (Lab/Co-op)]

It is a pleasure to speak in this debate with you in Chair, Ms Bardell. I begin by congratulating the hon. Member for Stirling (Alyn Smith) on securing this debate on fiscal support for the hospitality sector. I am pleased to be able to respond on behalf of the Opposition. We have heard Members from across the House speaking passionately about the importance of the hospitality sector, in the jobs it brings to local economies, the vitality it brings to our high streets and the enjoyment it brings to all our lives. My hon. Friend the Member for York Central (Rachael Maskell) in particular spoke about the importance of Government policy to the many hospitality venues in her constituency. Not only does the sector provide 3% of the UK’s economic output and billions in tax revenues for the Treasury; it is a central part of our social lives. That is why our constituents value the hospitality sector so greatly and are so keen to support it.

This debate has been an opportunity not only to speak about the policy but to recognise the sector’s central role in British life, including the way that it underpins high streets as places that communities take pride in. Because of time constraints, I will resist the temptation to mention all the cafés, pubs and other venues in my constituency, although I congratulate other Members on their valiant efforts to do so— I particularly commend the hon. Member for Totnes (Anthony Mangnall) for getting so many references into his speech.

In my constituency of Ealing North, it is hard to imagine Pitshanger Lane without Cinnamon café, where I first went with my grandparents many years ago. I thank the café for its excellent coffee and sandwiches, which keep me sustained and happy whenever I pop in as a customer. A few hundred yards away is the Duke of Kent, which is a gem of a pub that I am glad to be able to enjoy, but a couple of miles away is one of my favourite pubs, the Black Horse, which sadly closed just over a year ago. It is such a deep shame to see it boarded up whenever I walk or drive past. It is a sad reminder of the struggle that many hospitality venues face and of the real loss that local communities can feel when they close.

Our analysis shows that we have lost over 6,000 pubs from our high streets since 2010. Many hospitality venues are finding it harder and harder to succeed, because of high inflation, staff shortages, rising rents and the burden of business rates. At the same time, their customers have less money to spend on enjoying what pubs, cafés and restaurants have to offer, because their wages have flatlined, while taxes and the cost of living climb relentlessly.

Many hospitality businesses may have been hopeful when they heard about the Government’s 2019 manifesto promise of a fundamental review of the business rates system. However, the fundamental review never materialised, and trade groups representing businesses on the high street have expressed their disappointment. In March last year, the Federation of Small Businesses stated that

“the 2019 Manifesto commitment to hold a fundamental downward review of business rates has not happened…these changes do not amount to the fundamental overhaul the system needs”.

Meanwhile, the British Retail Consortium said that the Government’s rates review report

“falls far short of the truly fundamental reform that is needed and was promised in the government’s 2019 manifesto.”

In the absence of fundamental action from this Government, Labour is committed to scrapping the current system of business rates and replacing it with a new approach that is fit for the current economy. As the shadow Chancellor, my right hon. Friend the Member for Leeds West (Rachel Reeves), has set out, if Labour were in government, we would scrap and replace business rates, and shift the burden away from hospitality and retail businesses on the high street, which continue to shoulder a heavy burden compared with those that operate primarily in the digital economy. Our new system would incentivise investment, promote entrepreneurship and reward businesses that move into empty premises. It would help the hospitality sector to thrive once again. Our plans for business rates form just one part of our five-point plan to reverse years of decline and revitalise local high streets, alongside our commitments to stem rampant energy bills, stamp out late payments, revamp empty shops and tackle antisocial behaviour.

Before the next general election, we expect another Budget, so I would be grateful if the Minister explained what representations he has had from the hospitality sector ahead of the Budget in March and what proposals he is considering to support hospitality this year. I am sure that many businesses will be interested in the Minister’s response. In this year’s general election, the Opposition will offer the change that businesses need: a Government that are ready to work hand in hand with businesses, get the economy growing and do everything we can to support the hospitality sector to thrive.

10:34

[The Financial Secretary to the Treasury (Nigel Huddleston)]

It is a pleasure to serve under your chairmanship today, Ms Bardell. I congratulate the hon. Member for Stirling (Alyn Smith) on securing the debate, and thank everybody who has contributed. Everyone contributed in a very constructive manner—until a few minutes ago. Many hon. Members graciously commented on my previous role. As tourism Minister, I had the real pleasure of visiting the vast majority of their constituencies, and it has been fantastic to have a tour of the UK today. We have heard about the fantastic hospitality, tourism and leisure offerings in everybody’s constituencies, including some absolute gems that make us very proud of this industry.

The hospitality and leisure sector is formidable. Definitions can sometimes be difficult; sometimes when people use the term “hospitality”, they are just talking about pubs, bars and restaurant, but we are thinking more broadly about the tourism, hospitality and leisure offering. To respond to the hon. Member for Ealing North (James Murray), I can say that we engage with the sector all the time. Just yesterday, many of us attended the UKHospitality reception, at which the formidable Kate Nicolls articulated the sector’s asks very well. We hear them all the time, and we are always listening to ideas.

[Wera Hobhouse]

The Minister mentioned a range of hospitality businesses. Will the Government please look at ensuring the survival of struggling businesses such as small music venues, which will close if they do not get the support they need?

[Nigel Huddleston]

In this debate we have heard an ongoing request for simplification in recognition of these challenging times—we did, of course, spend £350 billion on the pandemic—and a series of requests for additional relief here, there and everywhere. Everybody recognises—the Welsh and Scottish Governments are also struggling with this—that financial times are tight and that every single one of those requests comes at a cost: either other people would pay more tax or spending would be reduced somewhere else.

We absolutely hear the requests, but as my hon. Friend the Member for St Austell and Newquay (Steve Double) pointed out, over the past few years—certainly during the pandemic—the Government have recognised how vital the sector is and have been absolutely committed to it. It rightly received the immense support that it needed during the pandemic, including through the culture recovery fund to help music and heritage. So many sectors contribute to our tourism and hospitality offering. If we had not made those interventions during the pandemic, many businesses that are here today would otherwise not be. Ongoing asks during the period of recovery, when we need to start paying back that £350 billion, are very difficult because there would be massive consequences for taxpayers and the whole of the economy. I understand the challenges, but I think everybody recognises that every one of those asks comes at a cost.

[Tim Farron]

We obviously have to be careful with the nation’s finances and act within the envelope available to us, but what does the Minister make of the fact that UKinbound, Cumbria Tourism and others say that a variation of VAT levels would be of net benefit to the Treasury? Has he analysed those assessments? I am sure he has met those outfits personally.

[Nigel Huddleston]

I suspect I could spend the whole of this debate answering Members’ questions rather than going through my speech, much to the chagrin of my officials. Again, I understand the request. Many hon. Members pointed out that I was the one making these requests to the Treasury not so very long ago, for all the reasons they outlined, but we all recognise that we have to find the balance.

The point about dynamic modelling is really important. I will come on to VAT in a moment, but we must recognise that one of the biggest challenges of all requests for VAT relief is whether it will be passed on. There is not a 100% fantastic record of that happening in the hospitality and tourism sector or across the board, for understandable reasons. Cash flow was key during the pandemic, so not everybody was able to pass on the VAT reductions. When it comes to future requests for VAT reductions, we must be absolutely confident that they will be passed on, and that applies to multiple sectors.

[Mr Ellwood]

The Minister is being very generous in giving way. My right hon. Friend the Member for Witham (Priti Patel) mentioned the forthcoming Budget. Is there anything the Minister can tease us with? Can we look forward to anything in the Budget to support the hospitality industry?

[Nigel Huddleston]

I do love it when former Ministers try to tempt me in that way, knowing full well what the answer will be. What I can say is that we are listening.

I have gone off script for the past few minutes to try to respond to hon. Members, who have spoken eloquently and with real consideration of the challenges with their asks. There are no easy answers, given the challenging financial services. I and the other Treasury Ministers, and certainly the Chancellor and the Prime Minister, are always listening. We are always open to listening to evidence-based information. In that context, I cannot make any hints or promises about what may be in the upcoming Budget, but I can say that the view and opinion of the hospitality sector, especially as embodied by talented people such as Kate Nicholls at UKHospitality, and many others right across the UK, is valued. The sector used to be incredibly fragmented, and therefore did not have the voice it has now. Now, the sector comes in with credible, decent asks that need to be assessed with evidence. The voice of the hospitality sector has never been stronger in Government. I applaud all the lobbyists and groups for doing that.

[Priti Patel]

The Minister mentioned UKHospitality and Kate Nicholls and the way they have come together. Clearly, there are problems with labour markets in the hospitality sector, and there have been for many years—it is not a new phenomenon. What are the barriers to UKHospitality and the Treasury working together to create a labour market strategy for the hospitality sector?

[Nigel Huddleston]

Again, these are ongoing conversations across multiple Government Departments. In my former capacity as tourism Minister, I certainly had extensive conversations. There were sub-working groups at UKHospitality identifying areas for further work. That has had some impact, including through apprenticeship schemes. My right hon. Friend was absolutely right to highlight this issue. We have debated Brexit, which probably goes slightly beyond the current remit, although I understand the impact—and, by the way, the opportunities that come from that. My right hon. Friend is right that we need to focus on the domestic skills agenda. The hospitality and leisure sector contributes to one in five new jobs, so it is absolutely pivotal to that.

If hon. Members will forgive me, I will try to get through some of my speech—and not try your patience too much, Ms Bardell—because I am not even on page 1 yet.

[Hannah Bardell (in the Chair)]

Just to clarify, the Minister has a little bit of flexibility. Given the extent of the debate and the number of questions, he is free to go over the 10 minutes and answer everyone’s questions—as he would like.

[Nigel Huddleston]

I will make sure I leave a minute or two at the end for the hon. Member for Stirling to conclude—I may have shot myself in the foot there by giving everybody the opportunity to ask all the awkward questions they now have.

Like many hon. Members, my first job was in the hospitality and leisure sector, with a travel agent. I then had the very difficult choice at the age of 22 between taking a job for Arthur Andersen and becoming a Club 18-30 rep. I wonder if my life might have been considerably different if I had taken that slightly different path. My right hon. Friend the Member for Witham is right: jobs in the hospitality and leisure sector help people with numeracy skills, self-confidence and interpersonal skills, which can stay with them for life.

We need to recognise that this sector is not just about part-time jobs for students or young people; we should not forget that there are also valuable, often very high-paying, long-term careers in the sector. The sector has evolved and changed, and is now a major contributor to the UK economy, with £140 billion of economic activity. There are masses of opportunities there, but the reputation and image of the sector is sometimes one of its inhibitors. I am therefore a huge champion of the sector for all the reasons we have outlined.

We have had quite a lot of debate today about the various support measures, including business rate relief. It is worth remembering that the Government provided £16 billion of business rate relief in England through the pandemic. In addition, we launched the temporary 50% retail, hospitality and leisure relief scheme at the 2021 Budget. That was built on in the 2022 autumn statement, and the Government announced further tax cuts to the sector in last year’s autumn statement—about £4.3 billion over the next five years—and extended the retail, hospitality and leisure relief scheme at 75% up to a cash cap of £110,000 per business for 2024-25.

As has been recognised, the Labour Government in Wales and the SNP Government in Scotland were not able to extend those reliefs. I recognise that everybody realises there are considerable financial pressures, but with the greatest respect to my opposite numbers, who have been somewhat critical, I do think this is important and it is something I will play up very heavily: we have done things in England, where we have controlled the levers, that have not been done in Wales and Scotland.

Overall, this tax cut is worth about £2.4 billion for around 230,000 retail, hospitality and leisure properties to continue support for our vital high streets and protect so many small shops and businesses. The Government have also decided to freeze the small business multiplier for the fourth consecutive year. That will protect over a million rate payers and 90% of all properties from a multiplier increase.

For example, as a result of the changes, the average independent pub will receive about £11,800 of relief off their final business rates bill in 2024-25. Combined with the small business multiplier being frozen, they will benefit to the tune of about £12,800 of support. I repeat: that is not the level of support that they would get in Scotland or Wales.

A few points were raised about other areas, and I remind hon. Members that reliefs are also available for improvements in property. If there is an incremental rateable value because of improvements, that will not be included for the first year where eligible. I also remind hon. Members about the changes in alcohol duty and the Brexit pubs guarantee, which are designed to support the pubs sector and to help it operate on a level playing field with supermarkets.

My right hon. Friend the Member for Witham (Priti Patel) made many points about skills and jobs. I will not repeat what I said, because I think I have made the point that we are very aware of the importance of that sector and the role we have in developing skills and opportunities.

Cutting VAT was mentioned by nearly everybody, and I want to be clear on this point. As we all know, VAT is a major contributor to the nation’s finances, which we then spend on our vital public services. It is forecast to raise about £173 billion in 2023-24. Since we left the EU, we have been taking advantage of multiple reliefs. I believe that if we were to rank ourselves against all other EU countries for the total number of reliefs we are able to exercise through VAT, we would be about second or third. We have been taking advantage of leaving by reducing reliefs and making real differences where and when we can.

The VAT cut for tourism and hospitality that we made during the pandemic came at a significant cost of more than £8 billion. Reintroducing it would come at a considerable cost. That was just one element of the support for the retail, hospitality and leisure sector during the pandemic, but it was a really important part of it.

[Anthony Mangnall]

I thank the Minister for that response; it is very helpful to get an understanding of what the costs would be around VAT. Was any modelling done of what would have happened if we had not made that cut and what the impact would have been in terms of lost businesses and rising unemployment numbers? Could those models be produced or published, so that we can make that comparison in Parliament?

[Nigel Huddleston]

Various pieces of internal and external analysis have been released. We all know anecdotally from experiences in our constituencies that it literally did save businesses around the country. As I said, the Treasury keep tax policy under review all the time—that is a mantra, but it is true. The message I want to get across to colleagues today is that this will not be an easy choice. I understand the asks and we understand the impact, and there are various points of modelling, but it would not be an easy option. I repeat the caution that pass-through is vital when it comes to VAT relief. That did not happen wholly last time, but I understand why, as some of it was cash flow.

[Mr Ellwood]

Everybody understands the passion with which the Minister is pushing this. I do hope, as I teased last time, that he is having private conversations with the Treasury and making the mathematical case very clear. A business that closes does not pay any VAT at all. A business that thrives because VAT has been reduced somewhat can then pay more corporation tax. That is the mathematical formula that we would like to see, which I think has been presented by UKHospitality, and which justifies reducing VAT to 10% in the hospitality sector.

[Nigel Huddleston]

My right hon. Friend makes a logical point. I assure him that I am listening, but I am not making any promises.

I will refer to a couple of other areas that hon. Members mentioned. I appreciate the tone adopted by the hon. Member for Stirling. He recognised that there are things that the sector is requesting and looking for that Scotland, Wales and other countries are not able to deliver. That does not mean that any of us are not sympathetic; it is about the balance of the support package that we need to deliver. Like many today, he commented on both business rates and VAT.

My hon. Friend the Member for St Austell and Newquay has one of the most beautiful constituencies in the country, but also, as he said, one of those that is most reliant on this sector. He raised a variety of points, and he and I have had ongoing conversations about this subject, because he is such a champion of it. His point about the ongoing efforts to make sure that we get more inbound tourists outside London is pivotal. There are various opportunities and measures: VisitEngland, VisitBritain, VisitScotland, VisitWales, Discover Ireland and Discover Northern Ireland all do a fantastic job of helping to support and enable that tourism, plus there is a key role for our transport system.

My hon. Friend is right, however, that about 50% of all inbound tourism spend is within the M25. That is great, and we are not saying that that should be less; we are saying that we want it to be “London plus”. That is a key part of the tourism strategy, and I assure my hon. Friend that we are talking about this on an ongoing basis with DCMS and the Tourism Minister.

The hon. Member for York Central (Rachael Maskell) highlighted issues in her fantastic constituency, which I have had the pleasure of visiting on multiple occasions. She highlighted the importance of heritage in the tourism and hospitality ecosystem, and also mentioned flooding. She may or may not be aware that there are opportunities for businesses that are severely impacted by flooding under what is called a “material change in circumstances”. Working with the valuation office, there are opportunities to see, on a case-by-case basis, whether some relief is available. She might want to see whether some of the businesses impacted could consider that, as well as other support measures that we have provided for those impacted by flooding.

My hon. Friend the Member for Totnes (Anthony Mangnall) raised multiple points. He highlighted the upside of some of the trade deals that we are doing, so his constituency is now probably going to be flooded by Australian barmen and barwomen over the next few years. That is not necessarily a bad thing; I wonder whether they are better cocktail waiters and waitresses than he was.

My hon. Friend also raised the important point that, although the headline rates of VAT in some of our European friends’ countries may be lower, there is often a sting in the tail of quite considerable—startlingly high, in some cases—tourism tax, sometimes at a very local level. There is not a huge amount of evidence to suggest that that works either. There is always a balance, and although something may look like a beneficial tax rate system, one only has to scratch beneath the surface to find that there is something a bit more to it.

[Anthony Mangnall]

The Minister is giving a comprehensive answer to all the points raised in the debate. I re-emphasise the point that, if he is worried about the £8 billion figure that was quoted as a cost for when we reduce VAT by 15%, he could get around that not only by using UKHospitality’s data, but by tiering it and doing a 2% reduction over a five-year period. I hope that would at least comfort the bean counters in the Treasury and reassure UKHospitality that we are going in the right direction.

[Nigel Huddleston]

I am yet to see the beans being counted, although I am sure that it happens somewhere. My hon. Friend is building on a very clear message that I have received from right hon. and hon. Members today.

The hon. Member for Westmorland and Lonsdale (Tim Farron) and I have had ongoing conversations over multiple years. I do not doubt his passion and support for the sector, or how important the sector is for his constituents. He was right to raise the issue of holiday lettings. I understand that he is disappointed with some of the measures that we have brought in, although some of those measures will make a real difference, including the ability to charge more for some rental properties. All I can say is that we are well aware of some of the additional lobbying for proposed changes and, again, that we are always open to further ideas.

[Tim Farron]

Although we need labour from outside, we also need to be able to grow our own talent domestically; that is the specific thing that will make a difference. The real problem is the collapse of residential properties for long-term occupation. The answer to that is a separate category of planning use for short-term lets and a separate category for second homes. Will his Government choose to do either of those things? They promised to do at least the first one.

[Nigel Huddleston]

All I can say to the hon. Gentleman is that we are listening. Some measures are being put in place that local authorities will have powers to implement, but I understand that a lot of people are not happy with the situation. I completely understand the challenges at a local level, particularly when it comes to employment and the unaffordable cost of housing in many parts of the country, as many Members have mentioned.

[Rachael Maskell]

In my speech I mentioned the extension of covid loans for businesses that have those loans. What is the Treasury’s view on extending them so that investment can be made in those businesses elsewhere?

[Nigel Huddleston]

I cannot comment on any further changes, but there has been some flexibility with covid loans, as we have announced. This is important. Of course, we want those covid loans to be paid back, but that needs to be done over a period of time that is sustainable for businesses. This is in the context of the overall support, including the comments that I made about business rates relief and other things for the retail, hospitality and leisure sector. We are aware that the sector was hit so hard by the pandemic and is still in the process of recovering—it is recovering remarkably strongly, but it is not out of the danger zone yet.

[Steve Double]

Will the Minister give way?

[Hannah Bardell (in the Chair)]

Order. Before the Minister gives way, I just say that I gave him extra flexibility so that he could answer everybody’s queries and questions, but I want to give an opportunity to respond to the sponsoring Member, the hon. Member for Stirling (Alyn Smith). So please keep the intervention short.

[Steve Double]

On the housing issue, one thing that the Treasury could do is level the tax playing field on the tax breaks between short-term holiday lets and residential properties. That would make a significant difference and would really help. Perhaps the Minister will take that message back.

[Nigel Huddleston]

I thank my hon. Friend and others for their input today. I will briefly comment on a couple of more items before I close, Ms Bardell. The hon. Member for Bath (Wera Hobhouse), which is another beautiful constituency that I visit frequently, raised a range of issues, including the importance of the environment in the tourism eco-system and environmentally sensitive tourism. I think we will respectfully disagree on the efforts being made by the Government on decarbonising and so on. I think we have a very proud record. I recognise that there is a debate in this area, but her broader points about the contribution of tourism to the environment and the importance of sustainability are important.

The hon. Member for Ochil and South Perthshire (John Nicolson) raised a range of issues, and I will present to him the challenge that I also presented to my opposite number, the hon. Member for Ealing North. The hon. Member for Ochil and South Perthshire made a comment about tax cuts just for the rich and wealthy, but that is so far from reality that I will have to respectfully disagree with him. If he does not believe that we are giving tax cuts to everybody—as I said, the national insurance cuts that we made were for 27 million people— I will present him with the same challenge: let us look at his pay packet for this month and see whether the contribution is lower than December’s. If he does not believe that it is lower, with respect, why does he not give that money to charity or back to the Government? It is important that we recognise that the national insurance cuts are meaningful for 27 million people, including many people on low incomes. That is far from the characterisation of saying that these are tax cuts for the wealthy. We have a laser focus on making sure that the low-paid benefit from such tax cuts.

[John Nicolson]

I am sure the Minister will have heard me: I specifically referred to cuts in inheritance tax. That is what I raised in my speech. If he would like to tell us that that is a red herring and that no such cuts are intended, I would be delighted to hear it.

[Nigel Huddleston]

No such cuts have been made. As I said, the hon. Member’s point was speculation and that is not anything I can comment on today.

Ms Bardell, thank you for your patience. I thank everyone for their contributions. All points have been taken on board, and I thank hon. Members for their passion for the sector.

10:59

[Alyn Smith]

In the time available, I will just thank colleagues for a very constructive debate with a number of good ideas. I think the Minister gets it. He has proven that he understands the sector and that he is passionate about it, but I would stress the cross-party urgency. Whether we are talking about a VAT cut to 5% or 10%, there is unity for a cut. Businesses that go under do not pay any tax at all. They do not employ anybody and will leave gaping holes in our communities. I think the Minister takes that point. He knows he has an opportunity in the Budget coming up. If the Chancellor brings forward measures to support the hospitality sector, nobody will applaud louder than I will, because this is urgent and there is a need for all of us to work together on this point.

Question put and agreed to.

Resolved,

That this House has considered fiscal support for the hospitality sector.

Real-Time Bus Information: North-East

Wednesday 31st January 2024 Westminster Hall

11:00

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

I beg to move,

That this House has considered real time bus information in the North East.

It is a pleasure to serve under your chairship, Ms Bardell, and to open this important debate. I am pleased to see colleagues from the north-east here to support the motion. The Minister can rest assured that I will ask him when he last took a bus in the north-east, but I will start by talking about when I last did not take a bus. That was three days ago, when I chose to walk one and a half miles to Newcastle train station dragging a suitcase rather than wait at a bus stop for a bus that might not come. Had I been in London, I could have looked the information up on one of the many apps that show real-time bus information.

For me, the unreliability and unpredictability of bus services in the north-east is a continual frustration, but for many of my constituents, it is a blight on their life—a barrier between them and their work, their loved ones, their studies and their pastimes. It is a form of cruel and unusual punishment and, for some, a matter of life or death.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I congratulate my hon. Friend on securing this important debate. She will know, as I do, that there are constituents who are left stranded regularly—school children are left standing in the dark; people are missing hospital appointments or, as she did, having to walk; and people in the outer west really struggle or are not able to make a journey into the city centre on foot so have to save up for very expensive taxis just to get to basic necessities like work, hospital appointments and school. Does she agree on how important real-time information is so that people can rely on public transport and we can therefore grow our public transport service because it has a regular customer base who trust it?

[Chi Onwurah]

My hon. Friend is absolutely right. Her passion highlights the importance of this issue for our constituents in Newcastle and across the north-east.

Given that so many people rely on buses, it goes without saying that bus services should be reliable. The bus service improvement plan published just last year by Transport North East recognised that poor performance affects people who rely on the bus service, especially those from low-income households without cars. As my hon. Friend said, a cancelled or late bus can mean a missed doctor’s appointment, trouble at work or even being left stranded, which makes women and girls especially vulnerable. Long waits are also challenging for many disabled people. It is clearly unacceptable and a major barrier to travelling confidently and safely.

People with cars may choose to drive instead, increasing the economic and environmental harms of traffic congestion. We want more people to travel by bus, which means making catching a bus as easy as possible. The difficulty in finding a bus to catch may be why we have seen a downward trend in local bus journeys in the north-east since 2010, and after covid-19 passenger numbers have struggled to climb much beyond 80% of pre-pandemic figures.

In March 2021, the national bus strategy described one basic way to make travelling by bus easier: better real-time information. The strategy said:

“It is too difficult for non-users to find where buses go. Information online is often incomplete, misleading or hard to locate.”

It went on to say:

“None of the most commonly-used public transport journey planning apps and websites yet provide comprehensive, accurate, England-wide local bus information”,

and:

“A number of apps and websites give inaccurate information when tested.”

It also said:

“Information at bus stops is often poor.”

In a November 2021 debate on buses in the north-east secured by my hon. Friend the Member for Blaydon (Liz Twist), I mentioned a sign in Eldon Square that said, “Working with bus operators to bring you real-time travel information.” I said that the sign had been there for years. After I raised that in the debate, there was immediate action—they took the sign away. That is about all the action we have had under this Government.

As a self-confessed tech evangelist, I like to go on and on about how technology can improve all aspects of our life, including public transport. As an engineer, I know the challenges inherent in technology roll-out. However, this is not rocket science. Indeed, one enterprising Geordie, Mark Nelson, used the time he has spent waiting for buses to develop a bus tracker, which can be found on the SPACE for Heaton website. He told me that there are two key types of data missing that would make it usable by more people: cancelled services and the external factors affecting bus journey times. No matter how long bus companies force him to wait at bus stops, he cannot fix the bad and unreliable information that bus operators provide.

Another commuter into Newcastle Central station tells me that their three-mile journey can take anywhere from 20 minutes to an hour because Stagecoach buses simply do not match the live times on the apps. I waited at a bus stop in Kenton for more than 45 minutes as a succession of Stagecoach buses failed to turn up. Critically, it was only two or three hours before a Newcastle United match, and many fans were debating whether it was better to walk the three miles to the stadium.

I was at Haymarket bus station one evening when the bus we were waiting for disappeared from both the information board at the station and the app. Some left the queue, others phoned friends for lifts, but I clearly remember one distraught young girl on the phone to her mum trying to figure out how to get home safely. In the recent snow, people were forced to wait at freezing bus stops, even if their homes were only metres away, because they did not have real-time bus info. I hope the Minister agrees that accurate, real-time bus information is a matter of safety and accessibility.

When I asked a written parliamentary question on the topic last October, the then buses Minister, the right hon. Member for North West Durham (Mr Holden), gave a rosy picture. He told me that the Government had launched the bus open data service—BODS—in November 2020, with the legal obligation to publish data coming in from 1 January 2021. He said that 98% of buses have an automatic vehicle location device, and that developers have been able to use BODS to create apps for journey planning in the north-east. If all that is true, why have things gone so wrong? Why are bus operators in the north-east failing in their duty to provide the most basic information on the running of their services—services that are subsidised by public money?

[Mary Kelly Foy (City of Durham) (Lab)]

This is such a hugely important debate. Bus services in the City of Durham are, quite frankly, ridiculous. To add insult to injury, the former buses Minister, who my hon. Friend refers to, is from our patch.

[Chi Onwurah]

Exactly.

[Mary Kelly Foy]

Constituents tell me that real-time data is a huge issue, making it impossible for them to accurately plan their journeys, whether for a very rare dental appointment or to get to school on time. It is even worse for those in smaller rural communities where they are often put off using public services due to infrequent or unreliable bus services. It is really affecting them, especially when they are waiting, as my hon. Friend says, for up to an hour for a bus that may or may not turn up. Does my hon. Friend agree with me that we need to see buses in the north-east taken into public control, like in Manchester?

[Hannah Bardell (in the Chair)]

Order. I remind hon. Members that interventions should be short.

[Chi Onwurah]

I thank my hon. Friend for her passionate intervention. I agree with her that local accountability would be a huge improvement, which is why I am excited about Labour’s plans to give every local authority the power to franchise their buses and reverse the ban on municipal bus ownership.

This is what I would like to see: when someone gets off the train at Newcastle Central station and puts into an app one of our wonderful destinations—Benwell, Scotswood garden, St James’ park, Blakelaw community centre, Kenton School—I want them to know when a bus will come to take them there. Does the Minister agree that that must be the test? Why is it not happening?

Nexus, the Tyne and Wear passenger transport executive, told me that the real-time systems for passengers in the north-east are

“fragmented and need both investment and harmonisation”.

Each bus company, whether it is Arriva, Stagecoach or Go North East, has an app and real-time feed, created to its own design and specification, decided by corporate headquarters HQ. I was told that the Arriva app is designed in Germany, making integration more challenging. Apparently, they did not know about the disappearing bus bug until I raised it with them, and they have still failed to respond to my letters. Will the Minister encourage them?

Different operators provide their data feeds to different standards. Should the Government not use their levers—guidance, bus service improvement plans, city region sustainable transport settlements and so on—to ensure greater collaboration and standardisation in real-time bus information provision? Nexus tells me there is no specific duty on bus companies around real-time information that it can enforce, but the previous Minister, the right hon. Member for North West Durham, told me that there is a duty to supply data. Does the Minister believe that local or regional decision makers should have the powers to enforce real-time information delivery to an agreed standard?

As I know from my time working in competition regulation, standardisation does not stunt competition but enhances it, by allowing the best, most innovative apps to win out. When people travel across our region they should not have to download 10 apps in order to do so. There is also the problem that the technical systems and infrastructure underpinning those services do not guarantee a high enough standard of information. They are too open to human error—for example, when drivers decide to change their running boards early in their route—and they cannot account for simple things like a bus being at the start of its route. What are the Government doing to enable improvements in infra- structure, after more than a decade of local government cuts?

It should not take MPs to get bus operators and Government working on this issue. Bus operators should be aware of the failings of their services. Where passengers find an issue, there must be a clear avenue to make a complaint and get redress. I note that the accessible information regulation, which applies to journey information while someone is on a bus, will have a clear complaints enforcement process; why can we not have something similar for the information needed before someone gets on the bus?

The legislation that created BODS requires that the Government publish a review of the regulations at least every five years. That deadline of July 2025 approaches. Specifically, will the Minister confirm that his officials will respond to the issues raised today, and that members of the public, or their representatives, will be able to provide feedback?

Lastly, I want to question why the previous Minister gave such a rosy picture when I asked my question in October, when we all experience such difficulty in accessing real-time bus information. Does the Minister understand the very real issues that bus passengers in the north-east are experiencing? If so, will he retract and condemn the tone struck by his predecessor? It is disgraceful that, when real-time bus information has been standard in London for years, we in the north-east still do not know when and if a bus is going to turn up. It shows what Tory levelling up really means: Geordies left to shiver at bus stops in the dark, both literally and metaphorically. Does the Minister accept that we need a Labour Government to fix our broken bus services? Finally, when did he last take a bus?

11:15

[The Parliamentary Under-Secretary of State for Transport (Guy Opperman)]

I was delighted only last week to take the 148 into work here in Westminster, having visited the local bus depot in Camberwell.

[Chi Onwurah]

Will the Minister give way?

[Guy Opperman]

The hon. Lady has had 15 minutes. I have barely finished my first sentence, and she wants to interrupt me.

[Chi Onwurah]

In the north-east!

[Guy Opperman]

The situation is that the last bus I took was the 148 last week. [Interruption.]

[Hannah Bardell (in the Chair)]

Order. If Members want to intervene on the Minister, they can do so in the usual way. Shouting from a sedentary position disadvantages not only themselves but the public, who are paying attention to an important debate.

[Guy Opperman]

The 685 and the 122, which are run by two different organisations, are the buses I take in Northumberland.

I will try to address some of the points raised. Clearly, we accept that buses are, without a shadow of a doubt, the most popular form of public transport in our country. They are essential to our national transport system in both urban and rural areas, and they play a vital part in the economy that we all wish to see thrive. In the year ending March 2023, around 128 million passenger journeys were made by local buses in the north-east. That is an increase of 12% compared with 2022. Following the introduction of the £2 fare cap in January 2023, bus fares in England outside London fell by 6.2% between September 2022 and September 2023. I congratulate the many bus operators in the north-east that have signed up to the subsidised £2 fare cap scheme, and I hope that others can see the benefit of doing so.

I will set out the national bus strategy and the bus service improvement plan in a little detail, and will then come to the more substantial questions of the hon. Member for Newcastle upon Tyne Central (Chi Onwurah). In March 2021, the Government published England’s national bus strategy, setting out the vision for bus services across the country. It sets out how we will deliver better bus services for passengers through ambitious and far-reaching reform.

As a first step, the Government asked every local authority to work with their bus operators to develop the bus service improvement plan—BSIP for short. Those plans are intended to set out each local authority’s vision for improving bus services in its area and to act as a guide to help design local transport networks that are tailor-made for the communities they serve. The central aim of the national bus strategy—to get more people travelling by bus—can only be achieved by making buses a more practical and attractive option for more people. Strong local plans delivered through enhanced partnerships between local transport authorities and bus operators or franchising operators are crucial to achieving that.

The Government have invested over £4.5 billion to support and improve bus services since March 2020. We have consistently provided funding to subsidise local bus services through other routes. We have provided over £200 million a year through the bus service operators grant directly to operators to help keep fares down and maintain extensive bus networks. A further £42 million is provided to local transport authorities annually from the bus service operators grant to subsidise socially necessary bus services; of the 80 English local transport authorities outside London, Nexus receives almost £1 million a year to subsidise services in the north-east through that route. We are also providing funding to local authorities so that older and disabled people up and down the country can travel on buses for free. That is a concessionary scheme that costs around £1 billion per year.

Further funding of £2 billion has been allocated to prevent reductions to bus services following the pandemic, £1 billion of which was allocated in 2022 to help local authorities deliver their bus service improvement plans. Subsequently, the Prime Minister announced an extra £1 billion in bus service improvement plan funding—redirected from the High Speed 2 decision—to deliver improved bus services in the north and the midlands as part of Network North.

[Catherine McKinnell]

Will the Minister give way?

[Guy Opperman]

I have a number of points to make, but yes of course.

[Catherine McKinnell]

I thank the Minister for giving way. My hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) raised some specific issues about real-time information. I hope the Minister will not talk the debate out without addressing them. The Minister will also know that there are issues across the entire north-east regional network. He should bear in mind that providing more information could hugely increase tourism. For example, tourists come to our region, explore the beautiful Northumberland coast, walk halfway up it and get a bus back; I do so regularly, but relatively recently I stood for 45 minutes in the freezing cold, waiting for a bus to turn up in Bamburgh.

[Guy Opperman]

I was coming to the issue of real-time information on what is called the bus open data service. The Public Service Vehicles (Accessible Information) Regulations 2023, which were formulated in collaboration with local authorities, Guide Dogs and various other disability organisations, came into force on 1 October 2023, so the idea that we are not doing anything is, with respect, wrong. When it comes to real-time information, there are apps such as Google Maps, Trainline, Apple Maps, Citymapper and Moovit in every major region across England.

[Chi Onwurah]

Will the Minister give way?

[Guy Opperman]

I am trying to respond to the points raised by the hon. Member for Newcastle upon Tyne North (Catherine McKinnell). Is this a work in progress? Yes, it is, but it gives passengers control over how they travel on buses. The app helps them save time and plan their journeys.

[Chi Onwurah]

Will the Minister give way?

[Guy Opperman]

One second. I cannot be accused of not answering the point when I am trying to answer the questions asked by both the hon. Member for Newcastle upon Tyne Central and the hon. Member for Newcastle upon Tyne North.

In 2020, we launched the bus open data service to support the digital transformation of bus services. It requires all bus operators of local services in England to open up high-quality, accurate and up-to-date passenger information, including timetables, fares, tickets and vehicle location information. Those improvements are clearly designed to give a better journey experience and provide people with the information they need to plan. That is clearly in all our interests.

[Chi Onwurah]

Will the Minister give way?

[Guy Opperman]

Okay, but I am trying to answer the hon. Lady’s questions.

[Chi Onwurah]

But the Minister is not answering my questions, and I fear—if it is in order, I will put it in this way—that he may be unintentionally misleading the House: he said that the Google app and other apps give people the information necessary to plan and control their journeys. Google does not provide real-time bus information in the north-east. If the Minister is not aware of that, he needs to spend more time on the buses and less time answering questions without giving the facts.

[Guy Opperman]

Clearly, there is a five-year review that comes through in 2025, as the hon. Lady identified. All aspects will be considered. She mentioned the shortage of bus drivers. We have a plan to address that, and we are working on trying to get—

[Chi Onwurah]

I did not mention bus drivers once. I do not know whether the Minister is reading from a previous speech, but I did not mention a shortage of bus drivers. The debate is on real-time information in the north-east. Can the Minister possibility speak to that?

[Guy Opperman]

The hon. Lady criticised the fact that buses were not there at the appropriate time. There is a common problem: it is unquestionably the case that bus operators up and down the country have a driver shortage. If there was a full complement of drivers, they would be more able to fill the gaps that occur from time to time. Doing that requires more drivers, which is why there is a plan, with local jobcentres and skills bootcamps, to train them up and ensure that we have a full complement—without a shadow of a doubt. That would enable bus operators to provide more regular services and not have gaps, which unquestionably exist. Does that help in terms of real-time information? Clearly, gaps makes it difficult. I am acutely conscious that there are problems with the roll-out. The service was introduced only in the last couple of years, and it is being rolled forward and improved on a daily basis.

Let me address some of the other points raised by the hon. Lady. Franchising is a matter for the Labour party to pursue if it wishes to do so, but the evidence seems to show that it will lead to fewer services, not more. Clearly, the matter of how the Labour party is going to pay for that prospect is an interesting one. It is unquestionably the case that we want to see greater collaboration between the apps, and that it something that we are happy to do.

I am also happy to write to the hon. Lady to address any point in relation to the enforcement of the Public Service Vehicles (Accessible Information) Regulations 2023 by local bus companies. It is unquestionably the case that the regulations apply from, in the final instance, October 2026. They require the majority of local bus and coach service to incorporate audible and visible route, destination and upcoming stop announcements, which are particularly important for disabled people; we hope that they will be welcomed.

Finally, I stress that we have commissioned research to understand disabled people’s experience of bus services and the infrastructure serving them. That is important. I acknowledge and appreciate that there are ongoing problems, although they are being slowly but surely addressed by the change in the regulations and the rules. We want to ensure that all people in society have the opportunity to use a bus on a regular basis.

Question put and agreed to.

11:26

Sitting suspended.

Internationally Recruited Health and Social Care Staff: Employment Practices

Wednesday 31st January 2024 Westminster Hall

[Stewart Hosie in the Chair]

14:30

[Kwasi Kwarteng (Spelthorne) (Con)]

I beg to move,

That this House has considered employment practices for internationally recruited health and social care staff.

I am very pleased to introduce this very important debate on a very important issue, which in the hubbub of the emotional conversation around immigration has not, as far as I am aware, been thoroughly discussed or even addressed; it relates to the critical work undertaken by people in the health service and particularly in social care. What I have noticed, and what has been brought to my attention, is that because of high levels of immigration, we have brought in people who are recruited to work in our health and social care system who have often, though not always, been badly treated and poorly paid.

We all know that the health and care worker visa has been exempted from the increase in the earnings threshold for skilled workers, so a lot of the people underpinning our social care and healthcare earn very little income; they are also often very vulnerable and not particularly fluent in English. Given the concern felt by everyone in the House about human trafficking and modern slavery, there is also a real concern that a large number of healthcare and social care workers are being exploited in a way that none of us wants to see.

There is a particular issue with regard to workers who leave their contract before an agreed period. The code of practice allows for this, but there has to be a reasonable expectation; fees owed as a result of workers leaving their contracts early should be reasonable. I have heard reports of fees in excess of £10,000. That is completely unacceptable. In that situation, the contracted employee is being exploited—and it very much has the look and feel almost of extortion. I am sure that the Minister is very concerned about this issue. In the midst of a very charged debate around immigration, it is something about which any Government professing humanity, and looking after our people, should be concerned.

On top of all the exploitation, and in the context of staff who are often highly vulnerable, there are reports that rogue international recruitment agencies have extorted —that is a word I use with some degree of caution, but they have extracted payments—from people. That is really a form, dare I say it, of trafficking. Often when the workers find themselves in the UK, perhaps because of language barriers or a lack of knowledge, they find themselves with no recourse; their employment conditions are often deplorable, but they cannot find a way to push back against some of the more extreme demands. I mentioned repayment clauses, and anecdotally I hear that there is often a lack of understanding of what exactly people are signing up to.

We all understand that we need people who can operate in our social care system and support us in maintaining the health of an ageing population, but that employment needs to be regulated. One statistic that particularly horrified me was that between January and September last year there were something like 76 reports and referrals with modern slavery and human trafficking indicators in the care sector alone. That is a couple a week, and of course that could be just the tip of the iceberg. I am very pleased to be able to have this debate, and I look forward to hearing what the Front Benchers—particularly the Minister—have to say.

I have spoken about the problem and outlined the situation broadly. I think we all feel a measure of concern about it, but we have to look forward and think about ways we can improve the situation. I have spoken to friends, and liaised with people I know at the Royal College of Nursing and some of its officials, and a lot of what they say is eminently sensible: there should obviously be standards for induction; the Department of Health and Social Care needs to establish pastoral and professional support; and there needs to be some sort of structure by which we can monitor potential exploitation and even trafficking in this area.

From what I have heard, we know very little about this phenomenon: we know very little about the number of people whose lives are blighted by exploitative practices. We talk all the time—in this House and outside—about immigration. We talk about the scale of immigration, but we rarely talk about the types of immigration that we are seeing, and I am not aware that we have dealt with this specific issue.

There is a code of practice for the international recruitment of health and social care personnel in England, which was last updated in August 2023, but what is a code of practice? It seems to me that it is really only a start in investigating the seriousness of what is being alleged. Publicly available hard evidence is difficult to come by, but we all know of reports; in my constituency, I have heard pretty hair-raising stories about the conditions in which many such workers find themselves.

I think there is a question about the code of practice. We should always be trying to get the best standards. I am sure that the Minister is fully aware of that, given her experience. We must always be interrogating ourselves, and ensuring that our guidelines and codes of practice are fit for purpose and up to the job. Given reports of rising numbers of exploitation cases, there is a broader question about whether the code of practice for international recruitment is really up to scratch. I know that colleagues and friends in the RCN have questioned whether the current code is really doing its job.

I am afraid to say that the issue of human trafficking and modern slavery will always be associated with immigration and bringing people into the UK. It is a very negative side-effect of seeing huge numbers of people coming into the UK about whom we know very little. I appreciate that the Minister is here today to represent the Department of Health and Social Care, but it is an issue not just for that Department; there are wider agencies of Government and more Departments involved. I will be very interested to hear what she says and, if at all possible, about the work that her Department is doing across Whitehall, with Treasury and Home Office colleagues, to get a better measure and a firmer grip of this chronic and increasing problem.

14:40

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate.

I thank the right hon. Member for Spelthorne (Kwasi Kwarteng) for leading the debate and setting the scene so very well. I have to put on record our thanks to all the wonderful health and social care staff, who, as we all know, go above and beyond the terms of looking after us and our constituents; they give a wealth of ability, energy and time, and regardless of where we are, the job they do is undeniably challenging. We thank them dearly, and we mean that.

It is also always great to be here in Westminster Hall to give a Northern Ireland perspective, as I always do in these debates. Health is devolved back home, so the processes there are slightly different. I will also make a couple of important points—everybody’s points are important—to remind hon. Members that although we are discussing internationally recruited health and social care staff, some of our own people here who wish to do the same job are restricted from doing so.

In November 2022, Northern Ireland welcomed 133 new international nurses, mostly from India and Zimbabwe, who took up permanent posts across Craigavon, Lurgan and South Tyrone hospitals. At such a challenging time for the health and social care sector—with ongoing demand for services, issues within the workforce, and lots of developments—ensuring sustainable care for others should be at the forefront of our priorities.

I am keen to say that there are clearly issues in terms of entry requirements and placements for those wanting to study nursing, medicine and so on in Northern Ireland universities. I suspect that the same problems occur in other parts of the United Kingdom. I am aware of so many people who wanted to be a nurse or in medicine, and wanted to stay in their own country to do so, but did not gain the entry requirements needed or there were no places for them. Whenever the Minister responds to the debate, perhaps she could tell us what discussions have taken place with those universities to ensure that the opportunities and number of places are increased—in Northern Ireland and across the whole United Kingdom.

For example, I have a constituent who attained 10 A* grades in her GCSEs—my goodness, this is a smart lady! She also completed her gold Duke of Edinburgh award and went to on to help with healthcare in small communities in Africa; that is very commendable. By the way, I know this lovely young lady well, and she will go far and do well. In her A-levels, she got 3 A* grades and one A, and she attended interviews but did not receive a place in university in Northern Ireland. If she had, she would have stayed in Northern Ireland. Whenever we talk about recruiting internationally—we should be doing so, and highlighting that issue—we also have to highlight the fact that we have talented people at home who wish to stay, but there is not an opportunity for them to do so.

Ultimately, that young girl went to Wales to study, with a further £5,000 of debt for each year of her degree. She is now a junior doctor in Cardiff, but the point is that she should have been given that opportunity in the place where she wanted to live, work and serve. The question for me is: will she ever come home to Northern Ireland? While Wales has gained her, Northern Ireland has lost her. I am all for securing our health and social care workforce, and if that means going international, let us do that; but there is also a source of talent back home.

There seems to be an issue with those who want to study nursing in their own country but are unable to do that because of placement issues, so will the Minister tell us whether that is one reason why we are struggling to maintain a steady workforce? If we can train them back home and keep them, we will not have to source them internationally. It all comes down to funding, which comes from Westminster. We need to increase the number of spaces that universities can facilitate. With great respect, I ask the Minister whether it is possible to engage with the Department for the Economy back home in Northern Ireland. Hon. Members have heard the news today: the Northern Ireland Assembly will be up and running, hopefully shortly. What can be done to give local students more opportunities to study in their own country?

Northern Ireland offers wonderful opportunities for international recruitment. We recruit internationally all the time. The number of people on the permanent register in Northern Ireland who were initially registered outside of the UK increased to 3,794 in 2022-23 from 3,399 the previous year—an increase of 400 international nurses. We recruit internationally and are pleased with the contribution, ability and talent they bring to Northern Ireland. I welcome the wealth of experience they bring, but I want also to be a voice for those students from Northern Ireland who cannot get a place and therefore have no choice but to leave Northern Ireland and study, work and live elsewhere.

Will the Minister engage with the Department for the Economy back home in the Northern Ireland, with the Assembly, and with local universities such as Queen’s University Belfast, Ulster University and Magee university, to see what more can be done to facilitate greater placement opportunities for Northern Irish students in our local universities and, ultimately, to ensure that they take up nursing and medicine opportunities in Northern Ireland? The health service can only gain from that, and it would reduce the numbers of people we have to source internationally.

14:47

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

It is a pleasure to serve under your guidance this afternoon, Mr Hosie, and it is great to follow the hon. Member for Strangford (Jim Shannon). The right hon. Member for Spelthorne (Kwasi Kwarteng) has made a great contribution to the House by securing this important debate and making his interesting opening speech.

The exploitation of workers, wherever they are from and whatever the circumstances, is unacceptable, and we should stand against it. Likewise, we should be deeply concerned about the state of social care in our country. The two things are clearly interlinked. The background, of which I am sure many Members will be aware, is a sharp rise in shortages in the social care workforce. That rise essentially followed from Brexit, but other issues will have led to that shrinking of the labour pool.

Perhaps understandably, the Government’s response in February 2022 was, among other things, to lower salary requirements and visa fees for migrant social care workers. That has had a significant impact on the numbers of people coming in on social care visas: there were 101,000 social care visas in 2022-23, up from 22,000 just the year before—a fourfold increase. As a result, vacancies have fallen. It does not feel like that in my part of the world, but the stats bear that out: there has been a reduction from 10.6% to 9.9% in 2023. The vacancy rate for the UK economy as a whole is 3.5%, so a bit of maths tells us that the vacancy rate in social care is getting on for three times above the national average. The increase in the number of care worker visas continues to accelerate, with 34,000 applications in quarter 3 last year.

One observation made by those who analyse the sector more scientifically—but it is my personal observation in my community as well—is that migrant workers are to a large degree replacing UK workers, who are moving to more attractive sectors. Incoming migrant workers are therefore not really filling gaps at all. Rather, they are filling additional gaps that British workers are vacating simply because care is not attractive financially or in other ways.

That highlights the big problem that is the source of all this. Social care is an utterly vital sector on which many of us depend, yet we pay a pittance to the people who lovingly and professionally care for the most vulnerable in our communities. They often have poor job security and poor working conditions, which of course impact on recruitment and retention. If this were improved, there is no doubt that we would secure more UK workers in the profession, and perhaps not put ourselves under pressure when it comes to the obvious issues of exploitation.

There was a debate in Westminster Hall this morning on hospitality and tourism. When people like me say that part of the answer is to have less restrictive visa rules for migrant labour, the Government say the answer is simply to pay British workers more. I would say to the Government, “Take your own advice.” Social care workers are paid a pittance because we underfund social care, so if the Government believe that is the way to ensure British people work in this sector, then pay them properly, and do not exploit people who come in from overseas either, because they are hugely valuable to what we are trying to achieve.

Exploitation should seriously worry us all. There are many pieces of evidence—the right hon. Member for Spelthorne set many of them out wisely and correctly—but one figure that really blew me away comes from the charity Unseen, the modern slavery and exploitation helpline. It reported a—wait for it—606% increase in the number of modern slavery cases in the care sector from 2021 to 2022. That is an absolutely astonishing increase.

As an adjunct, talking about migration policy is often emotive. Through the Government’s Illegal Migration Act 2023—it is the Act that is illegal, rather than the act of immigration—people arriving on our shores by irregular means will not have access to this country’s modern slavery provisions, unlike others. What will be the consequence? Many victims of modern slavery will not get the care they need. I also suspect that we will find that people will to our shores and simply not claim asylum, going under the radar, and that they will be exploited all the more outrageously.

Returning to the issue at hand, the director of labour market enforcement has identified adult social care as a high-risk sector for labour exploitation, with live-in and agency care workers believed to be at particular risk. Employers who are guilty of exploiting their staff are unlikely to demonstrate any better set of ethics towards the vulnerable residents who are also in their care. The increase in the salary threshold for skilled workers will not apply to those coming in on health and social care visas, yet people on those visas will, from 11 March, not be permitted to bring in dependants. That is a cruel and demoralising thing to do to people who we rely on to care for those we need the most. It is likely to lead to fewer applications, worse retention, and therefore a bigger problem for our social care sector.

In response to the vast increase in reports of exploitation of those on the health and social care visa, the Government have announced that care providers in England will be required to be regulated by the Care Quality Commission in order for them to sponsor visas. It is a good thing that care homes will have to be regulated by the CQC to sponsor migrant workers. My question for the Minister, however, is will they be required to have a minimum CQC inspection rating of good or outstanding before they are able to do so? Secondly, have any extra resources been provided to the CQC to enable them to undertake this role with the health and social care visa, given the additional effort it will involve? What powers will they have to enforce labour standards? Surely, due to the concerns raised, recruitment should only take place via agencies on the ethical recruiters list. I would be interested to hear what the Minister has to say about that.

We need to value care work, and we need to reflect that in the pay and conditions people receive. That includes treating migrant workers well. I reiterate that the decision to end their rights to have family with them is cruel and pointless, given that those people will not have recourse to public funds anyway. It is a cruel and almost performative piece of policy. It seems that the Government feel all the more inclined to give into the temptation to put silly populism and appeasing a small number of people out on the margins of the electorate ahead of governing wisely and compassionately. Whether I agree with the Government of the day or not, I always hope they will govern wisely and compassionately, yet this is another example of them failing to do that.

Labour market enforcement needs to be better resourced. It is important to establish a single enforcement body that is accessible to workers in practice and adequately funded, that is provided with robust enforcement powers, and that has secure reporting pathways. The Government must separate all labour market and immigration enforcement activity.

I have a few other thoughts about what else the Government ought to think about doing. The Health Foundation has suggested that we need to recognise that workforce planning must take account of the range of social care services and providers, as recruitment and retention can differ from place to place, and can vary considerably by care provider. For instance, places offering contract employment will find it hard to retain staff, and in some places the availability of public transport can have a massive impact on the retention of personal assistants. For those living in Cumbria, in Appleby, Ambleside or Arnside, the existence of the £2 bus fare is completely irrelevant if there ain’t no bus for them to use. That applies to people working in social care, but also to other parts of our community.

It is worthwhile getting to the very bottom of all this, which is the way we treat social care. Had we been living to the ages that we are now, when my late, great, right hon. Friend the noble Lord Beveridge wrote that important report in the 1940s, and if families had been as they are today, then I am sure social care would have been included in the national health service right from the beginning. Yet in the decades that have followed, we have attached it to the side of the health service, like a rickety lean-to. It is time we treated social care as we always should have: as integral to, and equal to, the national health service.

The situation is awful. What are the diseases we fear —those which, I guess, we fear more as we get older? Maybe the two main ones are dementia and cancer. But what a lottery: those with cancer at least get their care provided through the national health service, while those who end up with dementia are on their own and might lose absolutely everything. That is a nonsense. I want us to channel Beveridge and do what he would do today, which I am certain would be to ensure that social care workers are considered equal in value to those working in the health service, and are paid and treated accordingly.

That is why I think that free personal care is something the Government should consider seriously. I am very proud that the current Scottish Government maintain a policy that we introduced when we were in power alongside the Labour party in the ’90s and noughties. These issues are particularly relevant to communities such as mine. We are 10 years above the average age in Westmorland and Lonsdale. Our need for care is that much greater than in other parts of the country, and we value it hugely.

By the way, it is also vital that we value unpaid carers, who look after loved ones at great cost to themselves, and to whom we owe a huge debt. We should do more than just say thank you; we should change payments, benefits, and all sorts of other allowances that allow them to succeed. It was an honour for me to do the Great North Run last year, to raise funds for Carer Support South Lakes. Let us make sure we back those outfits that support our carers so well.

In conclusion, I am asking that we take the issue of exploitation seriously, that the Minister answers the questions that I and others have put to her today, and that we recognise that this is all a function of our failure to treat the labour market wisely and compassionately, and our failure to treat social care as we should. If we invested in social care properly and paid carers properly, the knock-on effect would be happier people who stayed in their positions, who were easier to recruit in the first place and who had career prospects. Those who are cared for would be happier and better cared for, and the pressure on our national health service would evaporate, or at least be alleviated, almost overnight.

In my communities in Morecambe bay and the rest of Cumbria, often more than 32% of the beds in our hospitals are occupied by people who are fit to leave, but for whom there is no care package to help them to leave. That has consequences for A&E waiting times, cancer waiting times and ambulance response times, and it is all down to the fact that no one has yet been brave and compassionate enough to tackle the care crisis meaningfully. I hope this Government will do, but if they do not, I am determined to play a part in doing just that in the next Parliament.

14:59

[Amy Callaghan (East Dunbartonshire) (SNP)]

I thank the right hon. Member for Spelthorne (Kwasi Kwarteng) for securing this debate. He made balanced and measured remarks and I share a number of his concerns.

I will begin my contribution with a huge and heartfelt thank you to our NHS and social care staff in Scotland, many of whom looked after me during the four months I spent at the Queen Elizabeth University Hospital in Glasgow back in 2020 and who care for my constituents in East Dunbartonshire in our many care homes, GP practices, pharmacies and hospitals. This debate discusses a critical aspect of an issue that I continue to raise time and again: NHS workforce shortages. The Government’s latest draconian plan to curtail immigration, banning those who come to these isles to work in the care sector from bringing their families, including children and spouses, is another shambolic and cruel attempt by the Government to shift blame. Anti-migrant and quite frankly racist rhetoric has become symptomatic of contemporary Britain, largely fuelled by the Government’s culture war. In introducing the change in legislation, they have concocted a narrative that frames migrant workers as the problem. Let me be clear: this Government are the problem.

They have allowed our health and social care workforce to crumble in front of our eyes due to 14 years of austerity, starving it of much-needed investment. Preventing overseas care workers from bringing their families is a dehumanising move, viewing migrant workers as resources to be used for work rather than as the people that they are; people with families whom we need to come to these isles. Migrating to the UK for such arduous and underpaid work might be someone’s best bet for a better future, but in doing so they are forced to leave their dependants behind, having to leave their families to care for ours.

Overseas care workers have been treated appallingly by this British Government. Many sold everything to fund their move to the UK. The Home Secretary and the rest of the Cabinet clearly do not value the social care sector since they were content to sign off on the visa rule changes. Disappointingly, the Health Secretary has defended the visa changes too. The only thing the announcement will achieve is to break up families, scare workers and erode trust.

Now, social care workers who come here face a sentence of destitution, and it is far too simplistic to suggest that there are ample numbers of people already based here to fill the gaps in the health and social care workforce. It is not a sector that pays adequately and people do not want to fill the gaps in employment, so we need people to come from overseas too to fill the skills gaps. The sector is struggling, and struggling badly, due to terrible political decisions.

Skills for Care, the workforce development and planning body for adult care in England, estimates an average 9.9% of roles in adult social care were vacant in 2022-23. That is the equivalent of approximately 152,000 vacancies. What are the Government doing to address those vacancies? They are making it harder for people to come here and fill them. The number of vacancies decreased by around 11,000 between 2021-22 and 2022-23 partly because of increased recruitment of overseas workers, demonstrating how crucial those recruits are in tackling the shortages we face.

Donald Macaskill, the chief executive of Scottish Care, has said that workforce shortages are

“an enormous challenge, and one of the reasons for that is the legacy of Brexit”.

He went on to say that

“what we need is a flexible immigration policy, which isn’t as hostile and toxic as the one we have now”.

The fact of the matter is that the social care sector cannot function without overseas staff.

Plans to prevent overseas care staff from bringing family members with them to the UK risk worsening the sector’s already significant shortages. If care workforce numbers fall, unmet needs will continue to escalate. Too many people in need struggle to access good care as it is. The plan to curb migration for care sector workers will undoubtedly only make that worse. We have an ageing population, which will need more care and we will struggle to provide that care without international recruitment. Those needs are being undercut by this British Government. Social care requires a major fix, but this certainly is not it. Without migrant staff, care homes could close and support would disappear for the vulnerable living in their own homes. The Minister must rethink this cruel visa plan before permanent damage is done.

There is another area in which this British Government cause a headache for our constituents. If the new restriction reduces the number of people who are migrating to the UK to work in the already understaffed care sector, it is unpaid carers who will bear the brunt. Those unpaid carers are already in a dire situation, with evidence suggesting that they are more likely than non-carers to live in poverty, to be isolated and to be depressed. Although many family members would continue to care for loved ones, even with more paid help, we should not underestimate the importance of paid care workers in providing support and respite.

Today in the UK, if someone performs unpaid family care for 35 hours or more a week and earns under £139 a week from paid work, they can claim carer’s allowance to help them get by, but that allowance is only £76.65 a week. The Minister is already struggling to attract workers within the UK to work in the care sector, and now she is facing additional barriers to overseas recruitment. That is all due to colleagues who are so obsessed with decreasing net migration that they will happily watch an understaffed health and social care service fall into further ruin.

How does the Minister justify dissuading social care workers from immigrating to these isles, when they are quite literally keeping our system afloat? When will the Government finally commit to solving the underlying problem by making care work a more attractive career path and by training, retaining and reforming in the health and social care sector? That last point was explored in depth by the hon. Member for Strangford (Jim Shannon).

This Government fundamentally are not acting in Scotland’s best interests. We want and need more people to come and work in our health and social care services, not fewer. The alleged problems that this British Government are trying to address with their new policies on overseas recruitment are not issues for Scotland. We strive to create a warm and welcoming environment that encourages people from overseas to make Scotland their home. We want and need overseas recruits here. The Tories’ hostile environment is not working, but there is another path for Scotland. The Scottish Government have outlined their vision in the policy paper, “Building a New Scotland: migration to Scotland after independence”. That policy will make it easier for people with skills and expertise to come to Scotland and contribute to our businesses, communities and economy. We would set visa fees at a fair level and offer family schemes to encourage those who come to Scotland to put down roots and make Scotland their home.

The Scottish Government are also supporting international recruitment with a pilot project that was launched in summer 2023 to support providers with sustainable and ethical international recruitment and to gather information on how we can best support both providers and the workforce through the visa sponsorship process and develop supporting materials to be shared across Scotland. We will not ask overseas workers to abandon their families to come and care for ours; that is not what Scotland is about.

Only once these decisions can be made by Scotland, for Scotland and in Scotland can we have the full power to ensure that our health service is well staffed and well looked after. It is clear that whatever party forms the next Government in this place will not make decisions based on Scotland’s specific needs, and it is only once we achieve independence that we can ensure that our NHS and the health and wellbeing of our ageing population and our population more generally are in safe hands.

15:08

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

It is a pleasure to serve under your chairmanship this afternoon, Mr Hosie. I shall begin by congratulating the right hon. Member for Spelthorne (Kwasi Kwarteng) on securing this important debate and on the way in which he opened the debate; it was incredibly insightful and certainly chimed with a number of the issues that have been raised by Members across the House, as well as with the concerns we share about the role of an international workforce and how we look after those people who come to this country to help those in our social care service.

I also thank my friend, the hon. Member for Strangford (Jim Shannon). I know that it is convention to call him “hon. Member”, because he is from a different party, but he is my friend, because—I do not know whether I am stalking him or he is stalking me—we are always at the same debates. He made an important point about how we get workforce planning right across the United Kingdom. I am aware that if, at some stage in the future, I were to have the Minister’s job, it would be very easy to come up with a workforce plan for social care that plugs the gaps in England by pinching staff from Northern Ireland. We have to ensure that, as we go forward with our workforce planning, there are enough people in the social care workforce across the whole of the United Kingdom. We must not create a perverse situation whereby working in social care in England becomes very attractive at the cost of social care in Scotland, Wales or Northern Ireland. We must work together on this journey of upskilling and building a workforce for the future.

Likewise, the hon. Member for Westmorland and Lonsdale (Tim Farron)—I will call him a friend too as we are all friends in this Chamber—made some really important points. He spoke about the challenges—not just workforce challenges but general challenges—in delivering quality social care and other public services in sparsely populated areas such as his constituency in the Lake district, which are linked to other issues that he speaks passionately about in the Chamber, including housing and transport. We need to join up those things if we are to attract the right kind of social care workforce to meet his constituents’ needs.

I disagree profoundly with the desire of the hon. Member for East Dunbartonshire (Amy Callaghan) for Scotland to be separate from the rest of the United Kingdom. I am a proud Unionist. I have Welsh heritage, as my surname, Gwynne, indicates. I am half-Scots, as my first name, Andrew, suggests. My Scottish gran from Lochwinnoch was very adamant that I have a Scottish name. And obviously I am English—I am Mancunian—and proud of that. I see the benefits and the strength that comes from the people of the islands that make up the United Kingdom working together for the common good. I get that under the devolution settlement Scotland has the ability and the responsibility to develop, provide and plan social care services that meet the needs that are particular to the towns, villages and cities in Scotland, but migration is a reserved power. There must therefore be a relationship between the way in which the Scottish Government meet those needs and plan health and social care, and the United Kingdom Government’s wider responsibilities on migration.

We can be in no doubt that we have a workforce crisis in health and care services right across the country. Members have said that there are 152,000 vacancies in social care alone. I have been meeting providers and representatives of local authorities, and they tell me that the challenges are massive. That is why we need a proper grasp of how we build the workforce of tomorrow responsibly. It takes only the opening of a new supermarket in somebody’s area for social care to lose a whole swathe of low-paid workers because they get paid more to stack shelves, so there is something fundamental there.

We are failing to recruit the staff we need, and staff in the services are leaving. That is not sustainable. Our health and care workforce so often represents the best of Britain, going above and beyond to keep us and our loves ones safe. We cannot and must not exclude from that recognition those who come from overseas to support our health and care system. They make huge sacrifices day in, day out, and they deserve our immense gratitude and respect. They must not be used to score political points, as is too often the case.

As we have heard, overseas workers, particularly those in social care, often face very challenging environments and are vulnerable to shoddy employers, so it is vital that we ensure we have a system in which the exploitation of overseas workers is simply not tolerated. Steps must be taken to stop those who perpetrate abuse. That is not only good for them; it is essential if we are to ensure a decent quality of care. That should not detract from recognising that most workers from overseas come here to do legitimate jobs and are employed by legitimate care companies, including some that enjoy high CQC ratings for the quality of care they provide. However, those people still face abuse and exploitation in the workplace.

We must also recognise that the contribution of overseas care workers to our care economy has been, and continues to be, crucial to the functioning of health and social care. We should be deeply grateful; without them, many more care services would have closed in the last few years, leaving thousands without the support they need. Even with their contribution, Age UK estimates that 1.6 million older people in our country have some form of unmet need for care, and because our population is ageing, the demand for care is increasing all the time.

The hon. Member for Westmorland and Lonsdale referred to Beveridge and old age. An ageing population is a massive challenge to this country because of care needs and things such as pensions and the sustainability of the welfare state, but the real challenge in adult social care—this links to the issues related to our ageing population—is that in the past, people born with severe learning or physical disabilities did not live long into adulthood, if at all, and they are now living way into adulthood. Huge cost pressures are building in the system around working-age adults with disabilities, which we also need to address; it is not just about the ageing population.

We need to recruit and retain more care workers to give the sector the workforce it needs to deliver for those needing care, and we will support that. That is why we do not just have a workforce plan for the NHS; we have ensured that we have considered social care as well. The next Labour Government will introduce the first sectoral fair pay agreement in adult social care, which is testimony to the persistent battling of my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner), who started her working life as a social care worker. We will ensure that pay, terms and conditions and training and development meet the needs of staff. As part of our 10-year plan for fundamental reform of the sector, which culminates in the creation of a national care service in England, we will ensure that social care is no longer a route for those seeking to abuse overseas staff and fuel the perception of care being the bottom rung of a ladder.

We must make sure that we build a career pathway that incorporates training and has parity with caring responsibilities in the NHS as part of our workforce plan, so that there is more fluidity between the NHS and social care. Somebody who starts off as a nurse should be able to have a career pathway that ultimately leads them to be the chief executive of a major care provider. Why shouldn’t somebody who starts as a social care worker have a career pathway that leads them to be the chief executive of an NHS trust? We can only do that by building a workforce that has some form of parity.

We will ensure that, in future years, comprehensive independent workforce assessments are made, so that NHS and social care staff can keep up with the demands of a growing and ageing population, rather than falling behind. I get so frustrated at the lack of progress on some of these issues. I know the Minister is trying her best, but for too long, under too many different Governments, social care has been seen as that lean-to, as the hon. Member for Westmorland and Lonsdale put it. It is time that we have a Government committed to fixing social care and to developing the services we need, built around the needs of the people who require social care services, and it is time that we have a workforce plan that drives up quality, ensures career progression and fills those gaps. We need that general election—the country is crying out for change after 14 years of this Tory Government delivering an NHS and social care system that is broken. It is time to fix that broken system—it is time for Labour.

15:20

[The Minister for Social Care (Helen Whately)]

I am grateful to my right hon. Friend the Member for Spelthorne (Kwasi Kwarteng) for opening the debate and setting out some of the challenges we face in international recruitment in health and social care. I pay tribute to our international health and care workers, who play an important part in our health and care system, looking after people and bringing their skills, equipment and compassion to look after loved ones. We benefit enormously across the UK from their knowledge and skills. In return, it is imperative that employers, whether in health or social care, provide a safe and supportive environment for their staff to work in.

I want to be clear that international recruitment is not the long-term answer to our health and social care workforce needs. We have been clear about that as a Government, and I have been clear about that personally. That is one of the reasons why, on the NHS side, we have our long-term workforce plan, investing in training our home-grown healthcare workforce. On the social care side, we have a 10-year vision for social care, which includes ambitious workforce reforms, which are in progress, including the first ever national career structure for care workers and new national qualifications. I am determined that care workers—indeed, care professionals —be recognised for their skills and supported in their work and career.

I would say to the SNP spokesperson, the hon. Member for East Dunbartonshire (Amy Callaghan), that she should read up on these care workforce reforms, as should the shadow Minister, the hon. Member for Denton and Reddish (Andrew Gwynne), who called a moment ago for a care workforce pathway. I know he is relatively new to this role—we have not done that many debates opposite each other—so I ask him to go take a look online. He will see our care workforce pathway programme, which we have published and which we worked closely with the sector on to develop this national career structure. We did so exactly because it was one of the things we knew was missing from social care, and because when people come into social care, they want to see that they have an opportunity to progress in that career. We are also developing national training that will be recognised across different employers. Those are just two of the headline policies of a truly ambitious reform programme for the social care workforce.

[Amy Callaghan]

I do not particularly appreciate being given homework by a Minister who is doing so much damage to the health and social care sector in Scotland. I have certainly done my homework already—I do not need to be given some by her.

[Helen Whately]

I think it is probably helpful if I move on, rather than our having some sort of back and forth.

I turn to the question in hand, which is specifically to do with international recruitment and the reasonable concerns raised by my right hon. Friend the Member for Spelthorne about the exploitation of some workers who come to support us in this country in health and social care. One of the things he spoke about was the code of practice. He is absolutely right that we have a code of practice for the international recruitment of health and social care personnel, which sets out ethical recruitment and employment standards that employers must adhere to. The code is kept under regular review. In fact, my right hon. Friend referred to the update of the code last year. I can assure him that my Department works closely with the Royal College of Nursing and other trade unions and stakeholders to strengthen that code and make sure it addresses the current issues and ethical concerns. For instance, we have set out stricter principles on the use of repayment clauses in employment contracts, and the code is now explicit that charging recruitment fees is illegal under UK employment law. I absolutely agree with my right hon. Friend that we should continue to make sure the code of practice truly captures all that it needs to, and is as effective as it can possibly be.

Alongside the code of practice, we have the ethical recruiters list. This contains a cohort of recruitment agencies that have agreed to operate in accordance with the rules of the code. The list is run by NHS Employers, and it makes it easy for employers in the NHS and the social care sector to check that recruitment agencies are signed up to meet the high ethical recruitment standards we expect. Any organisation suspected of breaching the code will be investigated, and can be removed from the list.

Most overseas staff have a positive experience working in the UK, but I acknowledge that, regrettably, this is not the case for all. We know there are some rogue agencies and employers that take advantage of people who want to come to the UK to work. We have published guidance for prospective overseas candidates to help them make informed decisions and prepare for life in the UK. The guidance sets out what candidates should check in their employment contracts before signing them, what working rights and standards they can expect in the UK, and how to recognise and deal with exploitation, should that unfortunately be something they experience.

My Department is working with colleagues in the Foreign, Commonwealth and Development Office to disseminate that guidance effectively, so that it reaches prospective candidates at an early stage and helps make informed decisions and avoid scams and unethical practices. We want them to be able to do that in their home countries, before they even apply to work here in the UK.

My right hon. Friend the Member for Spelthorne mentioned punitive repayment clauses in employment contracts. We are clear that those are unacceptable, and in certain cases illegal. There are some instances where repayment clauses may be used legitimately to cover some up-front costs incurred, should an employee decide to leave their job after a short time. But in all cases, employers must make it clear in contracts what is to be reclaimed, and how and when that will take place. Instances where repayment clauses are excessive, or extended over a lengthy period, have the effect of trapping international workers into jobs, and that is unacceptable. Repayment clauses cannot be used by employers to cover the cost of agency fees, certificates of sponsorship or the immigration skills charge.

As I mentioned, the code was updated to address that issue. The NHS has gone further, producing additional bespoke guidance for NHS employers to explain how to implement the code’s principles when using repayment clauses. That will ensure transparency and fairness in employment contracts for all international recruits working in the NHS.

Another issue raised by my right hon. Friend is that of recruitment agencies charging international candidates high fees to find them work in the UK. For UK-based agencies the law is clear: charging a candidate any recruitment fee to find them a job in the UK is illegal. The Employment Agency Standards Inspectorate is the organisation responsible for regulating employment agencies, and it will investigate such misconduct and prosecute where appropriate.

However, we do face the challenge of agencies based overseas that fall outside the UK’s jurisdiction. Regrettably, we have limited direct levers to stop the unethical treatment of workers overseas, but we have taken steps to try and mitigate the risk as far as possible. First, our international candidate guidance, which I mentioned a moment ago, warns potential candidates that they should not be paying any kind of fee to find work in the UK, and that they should not work with any agency that requests such a fee. Secondly, our embassies and high commissions are actively working with higher-risk countries to tackle exploitative practices by recruitment agencies overseas. NHS Employers, as holders of the ethical recruiters list, undertakes regular spot checks of agencies on that list to ensure they are complying with the code of practice.

As a Department, we are working collaboratively with the labour enforcement agencies that take action against those breaking the law in the UK. Those include the Gangmasters and Labour Abuse Authority, UK Visas and Immigration, and the Employment Agency Standards Inspectorate. We therefore have a multi-agency approach across Government which uses our collective intelligence, capabilities and resources to respond to concerns about exploitation. That includes providing insight, advice and guidance to businesses and supply chains in relation to possible labour market offences.

My right hon. Friend mentioned language skills and the potential challenge for somebody whose English might not be fluent, to navigate the landscape and know their employment rights, for example. It is clearly important that the language skills of anyone providing care in England are good enough to communicate with their employer, the people they provide with care, and other care and healthcare professionals.

Care providers must ensure that their chosen candidates have the skills needed to work in care and should assess a candidate’s English proficiency at the interview stage of recruitment. For somebody to work in social care, employers should ensure a good standard of English. For staff from overseas, the Home Office sets English language proficiency requirements. Individuals are required to prove they can speak, read, write and understand English to at least level B1 on the common European framework of reference for language scale.

My right hon. Friend also asked about cross-Government work in general on tackling exploitation. I can assure him that we are working across Government. My Department is working particularly with the Home Office and UKVI, both at official and ministerial level. I have had several conversations with Home Office Ministers about our care worker visa scheme and what we are doing to tackle the risk of exploitation and abuse.

I worked closely with Home Office colleagues on the recent changes to the care visa. We agree about striking the right balance with overseas care workers, who are supporting us in some of the challenges of meeting the social care and healthcare need in the UK. We also need a balance between international workers and our home-grown workforce, ensuring that there are safeguards for international recruits.

Following those conversations, we have announced changes to the care visa scheme, as referred to during this debate. One is that, as of March, we will no longer allow care workers to bring dependants with them. Another safeguard is that we are restricting sponsors to CQC-registered care providers. At the moment, as long as someone is providing social care, CQC-registered or not, it depends on the sort of care provided.

The Government do not have all the answers at the centre, and I feel strongly about that. That is one reason why, as we have introduced the care worker visa, we put £15 million funding into regional partnerships of local authorities, to have established leads around the country for international recruitment, to support employers and recruits. I meet our regional leads, to hear what it is like in their areas, and to discuss what they are doing on the ground to support employers and social care staff. For instance, they are supporting providers with legal and HR advice on recruiting and employing international staff.

There is a specific example relevant to this debate. East of England has commissioned Unseen to run seminars and provide one-to-one support for care providers on safeguarding and spotting signs of exploitation. I continue to work with those leads to get the best possible insight on the ground on the extent to which internationally recruited workers may face difficulties. That could happen if someone has been brought here for a job with a particular sponsor who loses the licence to employ them, and the leads are working hard, trying to support recruits in that situation. I am also setting up a meeting directly between our regional leads and the Home Office and UKVI, to ensure that they share their intelligence directly, making the most of the leads’ work and insights.

I want to come briefly to some of the points made by the hon. Member for Westmorland and Lonsdale (Tim Farron). He mentioned the connection between social care supply and delayed discharge in his local area, which is something that I have done a huge amount of work on over the past year. I want to be clear, particularly on this topic, that social care does not exist just to discharge and support the discharge of patients from hospital. Social care is absolutely an end in itself, supporting both older people and those of working age with care needs.

We know that there is a connection between discharge delays from hospital and social care, because some people who are delayed in hospital, when they are medically optimised for discharge, are in need of social care packages. That is why we put in an extra £600 million in funding to support discharge over the past year, and there is another £1 billion coming this year. We have also put in an extra £570 million of funding to support social care. Just this morning, I was talking to a number of directors of adult social services from local authorities who assured me that that funding has made a meaningful difference to social care funding and supply.

I know that there are still significant financial pressures, and the national living wage increase puts an additional pressure on care providers and local authorities for the coming financial year. While that increase is a good thing for those at the bottom of the pay scale, it also places financial pressure on employers and those funding social care. I assure the hon. Member for Westmorland and Lonsdale that that increase in supply, thanks in part to the extra funding, has helped to speed up discharges over the past year and reduced some of the delays, and we have seen an increase in the number of people being discharged both overall and particularly with social care support. We have made progress on that point.

I come back to this point in closing. I want to be categorically clear, in the light of this debate, that no member of staff in health or social care should face abuse of any kind, and illegal and unethical international recruitment and employment practices will absolutely not be tolerated. Internationally recruited staff play a really important part in caring for people across health and social care. They have helped us to build and increase our health and social care workforce. On the NHS side, we have achieved our manifesto commitment of 50,000 more nurses. On the social care side, we have over 20,000 more care workers in the care workforce. We have seen vacancies come down and retention improve, so we have been making progress on both the social care and the NHS workforces. While international recruitment plays an important part, it goes hand in hand with our work as a Government to build up our home-grown workforce both on the NHS side, with our NHS long-term plan, and the social care side, with our ambitious social care workforce reforms.

15:38

[Kwasi Kwarteng]

We have had a wide-ranging and generally quite even-tempered discussion, although people have occasionally strayed into the political stuff. The point of these debates is to have a broad and tempered discussion, and the spirit with which we have debated this matter does the House proud.

This issue has not had the attention that it deserves, and it is clear that Members on both sides of the House and from all parties are concerned about it. It is also abundantly clear that, whoever the election decides will form the next Government, it will be even more important and critical that this issue has our focus, whether that Government is Conservative or Labour. I am delighted that the Minister spoke at length, showing her understanding and experience. This is only really the beginning, and I look forward to more debates in the future on this sensitive and difficult subject.

Question put and agreed to.

Resolved,

That this House has considered employment practices for internationally recruited health and social care staff.

15:39

Sitting suspended.

Leaving the EU: Driving Licences

Wednesday 31st January 2024 Westminster Hall

16:00

[Stewart Hosie (in the Chair)]

I will call Dr Coffey to move the motion and then I will call the Minister to respond. There will not be an opportunity for the Member in charge to wind up, as is the convention in 30-minute debates.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

I beg to move,

That this House has considered the potential impact of leaving the EU on driving licences.

It is a pleasure to serve under your chairmanship, Mr Hosie, and I am delighted to see several other hon. Members here for this short debate.

The essence of what I am trying to put across today is that we have an opportunity—a Brexit bonus—to look again at some of the driving licence regulations that were put in place thanks to our membership of the EU in order to ensure, first, that we support rural communities and, secondly, that we unlock economic growth opportunities. I think the Government have already recognised that. In particular, I am seeking reform of our driving licences so that the C1 and D1 categories are applied to everybody who has passed a driving test in this country, in the same way that those of us who passed our test before 1997 acquired grandfather rights. That was an arbitrary deadline, and driving tests have got longer and longer.

This issue first came to my attention when I visited Halesworth Area Community Transport and was told about its challenges in getting more drivers. To drive a van for that not-for-profit organisation, as it then was, people had to pay £2,000 to £3,000 to do a course and pass a test thanks to the regulations. When I went to see the Minister, I was told that they were EU regulations, and that as long as we were part of the EU there was absolutely no way we could change them.

[Karl MᶜCartney (Lincoln) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hosie. I commend my right hon. Friend for securing this debate. This is all about grandfather rights and the cost to others, and I just hope the Minister is listening to what she has to say. We look forward to all people getting the same rights as those who passed their test before 1997.

[Dr Coffey]

My hon. Friend was recently a Minister in the Department for Transport and was involved in the response, so he will know the Department’s thinking—

[Stewart Hosie (in the Chair)]

Order. There are Divisions in the House. I will suspend the debate for 15 minutes for the first vote and 10 minutes for any subsequent votes, so let us all be back here for about 4.19 pm.

16:02

Sitting suspended for a Division in the House.

16:16

On resuming—

[Stewart Hosie (in the Chair)]

The new end time for the debate will be 4.44 pm.

[Dr Coffey]

It is a pleasure to resume our debate, having just undertaken democracy in the voting Lobby. I was just starting to talk about community transport.

[Alan Mak (Havant) (Con)]

This June, we commemorate the 80th anniversary of the D-day landings in northern France. My constituents and those of Members here today will be making the journey to the commemorations in Normandy by minibus and in other vehicles. Will my right hon. Friend and the Minister join me in calling on the drivers to ensure they have the right licensing and other arrangements in place, so that their journey is both safe and smooth?

[Dr Coffey]

My hon. Friend is right to point that out. While there are wider community transport links—I was starting to talk about the Halesworth area, and there are community buses in other parts of my constituency such as Southwold—at times we also need to be able to call on a wider range of drivers to take as many people as possible to these special events. The D1 could be used—and has been used in the past—by teachers or parents, for example, to make connections for children, perhaps to the clubs they run. I am conscious that, if we allowed that for those who had taken their test pre-1997, not everybody might want to take advantage of that, but I think we should take the opportunity to do it as quickly as possible.

[Andrew Lewer (Northampton South) (Con)]

My right hon. Friend is making some very good points. She touched upon community transport and voluntary work. I chaired a community transport organisation for some years, and indeed was a driver for disabled adults because of my driving licence. Does she agree that we need to allow younger drivers—we are talking about some people in their 40s here—the opportunity to serve their communities, such as via ABILITY community transport, which serves my constituency of Northampton South?

[Dr Coffey]

I completely agree with my hon. Friend. I am sure his organisations have talked about the lack of people who are able to readily come forward, and the costs they are enduring. I know that has happened in my constituency. Investment was made in people but, understandably, after they pass a test and get this extra licence—because they did not take their driving test before 1997—they will quite often get a job, and while they might still be committed to community transport, that commitment will perhaps not be on the same scale.

[Jim Shannon (Strangford) (DUP)]

I thank the right hon. Lady for bringing this forward. One of the interventions earlier on referred to grandfather rights. Does she not agree that the punitive response of the EU will lead to problems that exist only on paper and in imagination? Does she also agree that someone who was qualified to drive in Europe on the basis of their driving test five years ago still goes through the same vigorous testing as now, and they should be entitled to drive, just as they were? She deserves to be congratulated on bringing this forward. She is absolutely right, and the more I think of the EU, the more I thank the Lord we are out of it.

[Dr Coffey]

I believe this is a real opportunity to adopt some sensible approaches and that that would be welcome across the House. I am conscious that the Government signed up to the Vienna convention in 2018. There are a number of things in there, and we had already adopted these regulations pretty much under EU regulations. However, we have the opportunity to make changes, and this is just like in the Vienna convention; we put in reservations against elements of that. We have put a reservation in to say that people do not have to wait for the pedestrian crossing to tell them to go; they can cross the road if there is no traffic coming. We have used our common sense for regulations affecting people in this country while still having a safe environment.

It is important to hear from the Minister how other, European and non-European countries go about this, in particular for D1 and C1. I come back to the real need to make it more straightforward for people to get D1 licences, because those sorts of services are closing down or are starting to have to be commercial. That is not what we need for our communities. I understand the challenge of the cost of living and the fact that volunteers’ time is precious. More and more people do want to volunteer. At the moment, we still have a threshold; quite a lot of people coming forward have had those licences before. But it is about the next generation. It is about that that community link, particularly with younger children. People have had to take tougher and tougher tests over the years—far tougher than the ones I took. I do not see why we should expect them to pay £2,000 or £3,000 more and go through all sorts of activities to do something that is frankly quite straightforward.

I turn now to C1 and the commercial and economic impact. I went on about this within Government for several years. When we left the European Union, I had the opportunity to look at regulations that either hindered or helped or were things that we might want to tweak. I saw this as a standout opportunity, as a result of my constituency experience of the community of Suffolk Coastal. That was also driven by my experience as Secretary of State for Work and Pensions at the time. Recently, as Secretary of State for Environment, Food and Rural Affairs, I saw this as an opportunity for economic growth and to alleviate the impact on rural areas.

I have to say that my right hon. Friend the Member for Welwyn Hatfield (Grant Shapps) did listen. He put out a call for evidence, which I was pleased about. I think it reflects that the Department more broadly does not want to make any changes here, which disappoints me. That can be determined to some extent in some of the response, or the summary responses and aspects of the response, that the Government gave at the time.

But I have not given up, because I think this is the right thing to do. I think it is the right thing for our economic growth, and so do the majority of people who responded to the call for evidence. There were business people saying that this would be good. It would be much more efficient to run a single trip in a 4.6-tonne van than to be restricted to multiple trips, as it would require fewer journeys to transport the goods. It would mean fewer vehicles on the roads and fewer trips. This is good news.

I should have explained what C1 does: it covers, not the heavy goods vehicles that we all know, but vehicles between 3.5 to 7.5 tonnes. That is an important threshold—and by the way, this also applies to a number of commercial activities. To go back to D1, a lot of the community minibuses were rightly equipped to take people with disabilities and wheelchairs. Some minibuses are just under 3.5 tonnes, but as soon as the equipment and the person in the wheelchair goes on to the minibus, it goes over that limit. As a consequence, activities can be suspended or services withdrawn.

I turn to the responses. A significant number were very pro and wanted a change without any conditions whatsoever. That was the biggest result, at 43% I think, while there were those who thought we could have an opportunity, but with some changes to conditions—at the moment, the licence would apply only from the age of 18, but once people turn 70, it has to be reviewed. I agree with that, which is why I want to see reform, but in combination, that is 73% of the people who responded to the call for evidence who wanted the change and felt that it could be made safely or that it might need no adjustments at all. I am open to discussion with the Minister about possible reforms—perhaps two or three years since driving, or perhaps a slightly older starting age than 18—but the important thing is to make this as straightforward as possible, rather it being about the cost that goes in.

I should also say to the House that this issue actually stops people driving ambulances, and has done for the last couple of years. Although people were already undergoing advanced training and blue light training, because they were waiting to get a C1 assessment, they could not drive an ambulance. That has led to a driver shortage.

We all know what happened in the HGV driver crisis, as it was called at the time. I do not criticise HGV drivers for that at all—I have cousins who are HGV drivers, and they diligently help to power the economy of the country. However, with the explosion of much more localised delivery, which reflects patterns of consumption in the market, the local delivery element can become attractive to people. Instead of being away from home for several days at a time, travelling and staying overnight in the cab, they can have a much more localised job.

Taking this opportunity would open up the market, enabling many more drivers to take advantage of these opportunities and allowing businesses to grow their business, reflecting the availability of labour. By making this simple change, we would significantly increase the availability of drivers to help to drive the economy, which is absolutely vital.

I know that tests have become a lot tougher since I took mine, and I am conscious that there will be organisations that worry about this. I am not looking to try to make things less safe; I am trying to reflect the fact that our driving standards have got higher over time, yet key elements are holding up, at significant cost. The impact of that on the economy, on economic opportunity and on our communities really needs to be considered.

There may be some other things that we need to look into, such MIDAS—the minibus driver awareness scheme. I am not suggesting, by the way, a full repeal of the regulations needed for C1E. I know that my right hon. Friend the Member for Welwyn Hatfield was quite keen on making things more straightforward for trailers when he was Transport Secretary, but we are also talking about people driving camper vans or with a horse-box. There are all these different sorts of activities where, thanks to an EU regulation that we now have the opportunity to remove, we have just loaded on cost. There would be fewer vans on the road, making fewer trips—it all makes sense, and would actually be a sensible way to improve safety.

I am conscious that the Chamber is filling up with Members who expect the next debate to start in two minutes. Because of the Divisions, this debate can now finish later, and I hope that this much wider audience will hear why this simple change could make a massive impact in their local communities. I will conclude, though, because I am conscious that the household support fund is very important—I was involved in establishing it, and I should have put my name down for that debate, too.

Having worked with this Minister for many years when we were together in the Department for Work and Pensions, I know that he is assiduous and cares about his constituents in Hexham. I also know that he is innovative. Together we worked on many things that might not have come to complete fruition while we were together in the DWP, but we know they were the right things to do. They are now part of the Government’s plan to unlock economic opportunity, and we will continue to be interested in and motivated by them.

The Government set out a plan for drivers, which I think was a really good plan. We need a few extra additions to the plan for drivers, and I hope that the Minister will work with me on that. I should give him notice that on 21 February it is my intention to introduce a ten-minute rule Bill, and to work with him in advance of that, to try to ensure that we find a good process that helps our rural communities and helps the economy, while maintaining of course the safe roads that we all enjoy.

16:24

[The Parliamentary Under-Secretary of State for Transport (Guy Opperman)]

Thank you for your chairmanship, Mr Hosie. I thank my right hon. Friend the Member for Suffolk Coastal (Dr Coffey), who I was delighted to serve under at the Department for Work and Pensions, where I did eight wonderful years. That was good training for the work that I am doing at the Department for Transport, trying to wrestle difficult problems and find long-term solutions.

My right hon. Friend approached the debate in a very constructive and positive way: we are trying to find the art of the possible, rather than perfection on an ongoing basis. She and I both represent seriously rural constituencies, and although I am bound by the wonders of collective responsibility, and echo and endorse everything that the Government do, I share her concern that there is a definite lack of drivers in rural communities in the circumstances that she outlined. My hon. Friend the Member for Northampton South (Andrew Lewer) also set out his knowledge of community transport on behalf of the people of his constituency. It is a genuine issue, and to pretend otherwise is naive and wrong. We must acknowledge that.

My right hon. Friend the Member for Suffolk Coastal has been a doughty campaigner in this space. I look forward to her ten-minute rule Bill and subsequent private Member’s Bill, which as I understand it, looks to reform the process and find a way through. My hon. Friend the Member for Lincoln (Karl MᶜCartney), who is a member of the Transport Committee and formerly held my role, put his strong views on the record.

Clearly, the legislation is complex, but it is ironic that my driving licence—this applies to the driving licence of anyone above the age of approximately 43—entitles me to drive these vehicles, even though I passed a driving test that, on any interpretation, was of a lesser standard in days gone by. And yet, someone who is under the age of 42 has done a much more vigorous driving test—it is no question that it has got harder, and quite right, too—but is not so entitled, because of the 1997 grandfather rules, even though they might be a policeman or someone who drives a response vehicle. That strikes me as an anomaly.

I accept and entirely understand the concerns of those who do not want someone who is newly qualified to drive a much more substantial vehicle, and it is entirely right to be mindful of that. A multitude of arguments were set out in the detailed call for evidence, which was published and updated in summer last year, as my right hon. Friend the Member for Suffolk Coastal knows. It outlined particular concerns about the legislation. She will be aware that on 6 June we published the responses to the call for evidence, which sought evidence on, among other topics, the road safety impacts of returning to the pre-1997 licence position. This is not a simple issue, and it is a vital duty of this Government to ensure, to the best of our ability, that road safety is paramount and is observed on an ongoing basis. The analysis of the responses showed that there was support for some form of extension to the driving licence entitlement, but there were also some concerns about road safety.

My right hon. Friend also rightly identified the international obligations that apply by reason of the 1968 Vienna convention, which lists C1 and D1 as separate categories, and which we ratified in 2019. That would need to be addressed. There is also the issue of ongoing driver shortages. We need a legitimate examination of that issue in relation to bus drivers, delivery drivers and HGV drivers, and of whether the change that she seeks would alleviate the pressure that unquestionably exists on the economy and the communities that we all serve. One would also have to think about driver medicals, because we require C1 and D1 drivers to demonstrate a higher medical standard.

Let me respond to a couple of other points. My hon. Friend the Member for Havant (Alan Mak) rightly lauds and applauds the work of his local community to celebrate the 80th anniversary of the D-day landings on 6 June, and the work that all are doing to commemorate that historic date. I will do everything I can to assist him and his constituents to ensure the safe passage of his community as they, quite rightly, pay their due respects.

Several colleagues have raised legitimate concerns on community transport, and that has unquestionably been taken on board. I will certainly do everything I can to try to find out the extent of that issue, and all evidence we can elicit to clarify just how grave that situation is would be of great assistance.

My right hon. Friend the Member for Suffolk Coastal outlined the position in relation to ambulances. I confess that that is not in my briefing and I am not aware of that issue specifically, although I know it was in the call for evidence, in particular. I think that is a legitimate question and I will take it up with the Department of Health and Social Care to try to clarify the extent of that problem and the difficulties that exist. Any Government, and particularly this Government, are passionately committed to trying to alleviate those particular problems on an ongoing basis.

To summarise, we always look to keep the driving licence regime under review, and there has been a call for evidence. If there was to be change, it would require consultation, so any implementation of change would have to be consulted upon. For my part, I see a significant difference in respect of a community volunteer who is, for example, a qualified policeman of 40 years of age being allowed to drive a community minibus. There is also the larger issue of how we deal with C1s, and the age of individuals and their experience on an ongoing basis has to be addressed.

We are clearly considering the ongoing position with the European Union and the extent of any new driving licence directive that may or may not come in, which has been agreed by the European Parliament. That may also constitute an opportunity for my right hon. Friend to address those particular points on an ongoing basis. I thank her for her ongoing campaign, which is massively to her credit; it is what Back Benchers can and should do. I know that she is a doughty proponent of positive change and I welcome her efforts to improve the lives of those in her community in Suffolk and the community organisation that she represents. I commend her efforts, and I look forward to working with her.

Question put and agreed to.

[Stewart Hosie (in the Chair)]

Order. Given the delay for the vote, we are not scheduled to start the next debate until 4.44 pm, and I am minded to wait until that time to allow those who remember the rules to get here in good time. It is rather obvious that the next debate is very heavily subscribed, with at least 10 Back-Bench speakers already notified to me, and we require the Opposition spokesperson to start their summing up at 5.27 pm, with the Minister at 5.32 pm. That would imply that those Back Benchers who wish to speak can take a maximum of three rather elegant minutes to say what they need to say, and then sit down to give everybody else a chance—although even with three minutes, we may struggle. If some colleagues are not called to speak, I apologise; stick to three minutes and we should be okay, but that depends how long Sir Stephen Timms takes. We have another five minutes until the next debate.

16:38

Sitting suspended.

Household Support Fund

Wednesday 31st January 2024 Westminster Hall

16:44

[Sir Stephen Timms (East Ham) (Lab)]

I beg to move,

That this House has considered the Household Support Fund.

It is a pleasure to serve under your chairmanship, Mr Hosie, and I am delighted that we have the opportunity to debate this matter. Since October 2021, the household support fund has provided £2.5 billion in local crisis support. I am delighted that both of the Ministers responsible for setting it up, the right hon. Member for Suffolk Coastal (Dr Coffey) and the hon. Member for Colchester (Will Quince), are in their places, as is the current Minister, the hon. Member for Bury St Edmunds (Jo Churchill). The fund has played a crucial role. At the autumn statement, I asked the Chancellor whether it would be extended into next year. His answer was yes, but it turns out that that was incorrect; the documentation did not bear that answer out, and we still do not know the answer to my question, hence the debate.

In the 1930s, the then Unemployment Assistance Board offered one-off additional payments on top of weekly assistance. From 1988, discretionary payments were centralised in the Department for Work and Pensions social fund. The coalition Government replaced that with local welfare assistance, making the fair argument that local authorities were best placed to distribute the funding. The social fund budget went to local authorities, but it was never ringfenced to the new local welfare assistance. As local council budgets have been squeezed, leading to recent bankruptcy announcements, councils have cut back. Local welfare assistance spending fell 87% from 2010-11 to 2019-20, and 35 councils operated no local welfare assistance at all in 2021-22. That decline was only ended by the household support fund.

The remarkable Liverpool-based charity End Furniture Poverty sent freedom of information requests to every local council about the year 2022-23. Eight said they depend entirely on the household support fund to fund local welfare. In a further 23 councils, the fund provides more than half of their spending. Of the £91 million spent by local authorities on local welfare assistance in 2022-23, only £34.7 million came from councils’ core budgets; 62% came from the household support fund. Failing to extend the fund now, with no replacement, would end vital support in the midst of a continuing crisis, but it would also end a feature of social security that has been supported by every Government since 1934.

[Imran Hussain (Bradford East) (Lab)]

I congratulate my right hon. Friend on securing such an important debate. He is right to put the situation in context, because it has to be viewed against the backdrop of 14 years of ideological austerity cuts, combined with the worst cost of living crisis. Not only has destitution increased by 61% in the past three years, but local authorities are poorer and cannot provide this support. Does he agree that, should the fund be cut, it would take away the essential lifeline that many families who struggle to put food on the table rely on?

[Sir Stephen Timms]

I agree with my hon. Friend, as I do with the press release issued last Friday by the Minister. It said:

“The Household Support Fund is there for anyone who needs a helping hand.”

The question is whether it will still be there in six weeks’ time, which is the subject of this debate.

[Afzal Khan (Manchester, Gorton) (Lab)]

I thank my right hon. Friend for securing this important debate. In Manchester, the household support fund provides a vital safety net to 60,000 residents, including providing cost of living support payments for 12,500 vulnerable households. Does he agree that, by not guaranteeing funding for the next financial year, the Government are putting at risk essential support schemes for many vulnerable people? After all, our constituents are struggling financially due to the Government’s economic mismanagement, with soaring inflation, a massive spike in energy bills and sky-high mortgage rates.

[Stewart Hosie (in the Chair)]

Order. I understand why people want to make interventions, but if they are that long, colleagues will be reduced to around two minutes each.

[Sir Stephen Timms]

I am grateful to my hon. Friend. I noticed that the leader of Manchester City Council wrote to the Prime Minister today, on behalf of the eight core cities, calling for the household support fund to be extended, making the point that it would be “catastrophic” for many people in our poorest communities if it is not. Given your remarks, Mr Hosie, perhaps I should not give way again.

I have no doubt that we will hear examples of the positive impact of the household support fund. At the Work and Pensions Committee last week, we heard from the head of benefits and advice at the Royal Borough of Greenwich. Like many councils, Greenwich has used the fund to support, in the school holidays, families entitled to free school meals. She told us how important it has been to those families to receive that £15 a week per child during the holidays. If the fund is not renewed, those families will have problems buying food in the Easter holiday.

One group that depends on the household support fund consists of hard-working, law-abiding families from overseas—often with children born in the UK—who have leave to remain in the UK but not yet indefinite leave, and who therefore have no recourse to public funds. They cannot claim universal credit, however tough their situation. Many councils have been able to support those families through the household support fund. Without it, there would be nothing.

The household support fund contributed £9.6 million towards essential white goods and furniture in 2022-23. The fridge of a pensioner in my borough, Newham, was not working. She is the guardian for her two grandchildren, one of whom has cancer. She was able to buy a fridge thanks to the household support fund.

The need for the fund to continue is clear. One-off help has always been needed, but gas and electricity prices are respectively 60% and 40% higher today than in 2020. The Trussell Trust, which had a reception in Parliament today, gave out 1.5 million emergency food parcels between last April and September—16% more than in the previous year. The continuation of the fund is crucial.

The current uncertainty is bad for everyone involved. One local authority told End Furniture Poverty:

“Part of the nightmare of this funding is, out of a team of 26, I have three permanent members of staff…we’re constantly onboarding and training people.”

Another said:

“Delaying the decision and failing to give local authorities sufficient notice has made it impossible to plan.”

This is no way to govern.

The Government can take some pride in the household support fund, but uncertainty undermines it. At a webinar attended by nearly 200 people yesterday, comments in the chat included:

“Without it, there will be no localised welfare assistance in Warwickshire.”

“In Brighton and Hove, our 50+ emergency food providers will have no way of coping if HSF is removed.”

“On the Isle of Wight we have used some of HSF to provide much needed funds for…food banks so they can purchase sufficient food to keep up with demand as donations have depleted drastically.”

Barnardo’s told us that it will publish a report about this precise issue next week.

Let me conclude by quoting a single mum of three in Greenwich. She said of the household support fund:

“It is a lifesaver…I hope and pray it continues.”

I agree, and I hope the Minister will too.

16:53

[Selaine Saxby (North Devon) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hosie. I thank the right hon. Member for East Ham (Sir Stephen Timms) for securing the debate and for his work on this issue as Chair of the Work and Pensions Committee, of which I am a member. The Committee has heard evidence on the fund, and it is clear that it has been a vital support to families since its introduction.

The fund has been essential in supporting vulnerable households in need with food, energy and water bills, and other associated tasks, with at least 50% of the total funding required being spent on families with children. The scheme was well received by residents in North Devon and across the UK. Recognising that, the Government have extended the fund several times. We all know that it has been a particularly tough time across the country, not least given rising energy prices as a result of Russia’s illegal invasion of Ukraine, but the scheme’s end in March 2024 will come at a cost to vulnerable families.

Despite the Government’s hard work on bringing down inflation, continued economic pressures on vulnerable families mean that the household support fund is still needed in constituencies like mine. In North Devon, 30% of children live in poverty. The campaign by Barnardo’s to extend the fund has been supported by residents back home, as the fund provides a lifeline for families in urgent need of practical help. Throughout the pandemic, the fund allowed councils to significantly expand local support where households were struggling to afford essentials or facing severe hardship.

I have written to Ministers at the Department for Levelling Up, Housing and Communities about disparities in rural council funding. Councils and other frontline services report record demand for local welfare support. Devon County Council has warmly welcomed the more than £10 million it has received from the fund in this financial year. In a six-month window, the fund provided help in over 50,000 different cases.

Ilfracombe in my North Devon constituency is the third most deprived rural town in the country, in contrast with the much wealthier south of the county, and I have been continuously presenting a case for more funding in the town. I am not confident that this is the right time to be cutting funding from those who need it most without a replacement. I understand that the Government will continue to keep all their programmes under review, but I would be most grateful if the Minister could set out further steps and tell us about potential replacement schemes, as successful as the household support fund, that will provide a safety net to our most vulnerable families.

16:55

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

It is a pleasure to speak in this debate with you in the Chair, Mr Hosie. I thank my right hon. Friend the Member for East Ham (Sir Stephen Timms) for securing this debate on such an important issue.

In Salford City Council, the household support fund is run by the excellent Salford Assist service. Last year, nearly 19,000 people accessed emergency funds. As in the example given by my right hon. Friend, the fund also provided vouchers to ensure that children entitled to free school meals had food in the school holidays.

I am deeply concerned that the future of the fund is not secure past the end of March. Salford City Council has had its funding cut by £245 million since 2010. There are literally no funds to fill the gap that ending the household support fund would leave. Eighty-four per cent of councils that responded to a recent Local Government Association survey said that hardship had increased in their area, and in Salford, demand for the fund has increased by 86% in the last year.

Carers are particularly hard hit by the cost of living crisis; according to the Joseph Rowntree Foundation, a third of them live in poverty. Carers Trust highlighted that the household support fund has enabled carer organisations to work with local councils to ensure that carers who are in need of financial help have access to the household support fund.

I will give a couple of examples of how the fund has been used to support my constituents. One constituent had lost everything when she fled a domestic violence situation with her two small children. She was offered social housing but it was unfurnished. The household support fund was essential in helping to provide basic furnishings for her new home.

Another constituent contacted me when a change of job meant she was put on an emergency tax rate. She was living in private rented accommodation with her partner and two children, who both have long-term health conditions. The children’s health issues meant that her partner had to stop work to look after them, and the family was finding it more and more difficult to meet the cost of their rent. She said:

“I have lived in Salford all my life, paid my contributions, provided for my children, maintained a home, but right now with all factors in play, this is becoming more and more unachievable as time passes.”

With the energy crisis and the cost of living crisis, I am contacted by so many people who are in hardship due to rent increases or sudden changes to their salary or benefits. That is where the support of the household support fund is vital. This is not the time to remove that support. I and my hon. Friends the Members for Salford and Eccles (Rebecca Long Bailey), who is here, and for Blackley and Broughton (Graham Stringer) have raised the matter with the Secretary of State and asked him to meet us and a cross-party group of elected councillors to raise our serious concerns about the potential impact of losing the household support fund in Salford. I hope the meeting can be arranged soon and I hope we get a commitment from the Government to continue this vital fund.

16:58

[Will Quince (Colchester) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hosie. I am grateful to the right hon. Member for East Ham (Sir Stephen Timms) for securing this important debate. As we worked closely when I was a Minister at the Department for Work and Pensions, he knows how strongly I feel about the subject.

In 2020, my right hon. and learned Friend the Member for Banbury (Victoria Prentis)—then a Minister at the Department for Environment, Food and Rural Affairs—and I set up a small ministerial working group on food and essential items. We recognised that despite the significant support given to the most vulnerable during the pandemic, including free school meals, healthy start payments and the holiday activities and food programme, on top of the additional support specifically relating to covid, some families were still struggling, especially during the school holidays. We wanted to design a scheme that provided targeted support with a focus on food and bills. We also believed, as the right hon. Member for East Ham rightly pointed out, that local councils were best placed to understand which groups needed extra support and to get to the families most in need.

We initially started with £63 million secured from the Treasury for local welfare assistance. That then morphed into an additional £170 million through the covid winter grant scheme and then became, in October 2021, what it is today, which is the household support fund, with £842 million. Indeed, I understand that, so far, more than £2 billion has been distributed. As the right hon. Member for East Ham rightly set out, it has already helped millions of people and families, and like him I urge the Government to continue it so that it can continue to support millions more.

I understand that the fund is the Minister’s responsibility, but ultimately it is down to the Treasury. She is an excellent Minister, for whom I have so much time, and I have no doubt that she will point rightly to the considerable support currently available to families. However, we know that despite that there will sadly continue to be households that will struggle; they will struggle to afford the essentials and face severe hardship. The household support fund allows councils directly to target help to the hardest-hit families and individuals, as well as providing food for children who need it over the holidays.

I gently say to the Minister that, as the right hon. Member for East Ham pointed out, any family or household could be in crisis with energy, food and other essential items, such as the unexpected breakdown of a boiler or white goods breaking. I also gently say to her—noting that I have very little time—that the fund is a targeted safety net for when families and individuals have nowhere else to turn. When I look back at my time in the Government, it is one of the things that I am most proud of, because it has made a huge difference to millions of families up and down the country. I urge the Minister and the Treasury to ensure that the scheme is continued, so that it can go on to support millions more.

17:01

[Mr Nicholas Brown (Newcastle upon Tyne East) (Ind)]

I will take up the theme of the hon. Member for Colchester (Will Quince), but I first thank my friend the right hon. Member for East Ham (Sir Stephen Timms) for the able way in which he introduced the topic. Views are probably widely held and similar across the Chamber.

I thank the Minister for replying to the letter that I sent to the Secretary of State for Levelling Up. The reply arrived this morning, and it gets straight to the heart of the matter. The question, of course, is: will there be a continuation of the scheme? The Government’s position as of this morning, set out by the Minister in the letter, is as follows:

“No further decisions have been taken on the Fund and the Government continues to keep its existing programmes under review in the usual way.”

Apart from thanking the Minister for her candour, I have two observations: this is not fair, and we are running out of time. Local authorities must plan ahead for the rest of the financial year, and there is absolutely no chance whatsoever of them finding the money from their own resources, particularly in the metropolitan districts, whose budgets have been constrained yet further.

I have been an opponent of the Conservative party all my life, but at least there was an element of it that believed in social justice and helping those who, through no fault of their own, needed extra help because they were the poorest. This is not doing such a thing. I usually argue my case in practical terms, but this is immoral and wrong. The Minister should announce a reversal of the policy, or at least a further implementation —that might be a better way of putting it—at the end of the debate.

17:03

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hosie. I draw the House’s attention to my entry in the Register of Members’ Financial Interests.

I thank the right hon. Member for East Ham (Sir Stephen Timms) and very much agree in particular with the starting point of his contribution. It has been my experience—I speak as a councillor in London for 24 years—that local authorities know their communities best and are always in a stronger position than anyone in central Government to deploy resources in a way that reflects the needs of a particular community.

My constituents have had the benefit, for many years, of a local authority that has worked both with its own resources and with a network of charitable and voluntary organisations, ranging from some that are relatively new and sprung up to support refugees, such as the recent one in response to the arrival of large numbers of people from Ukraine, to those that have long-standing roots, such as Charlotte Gell’s Ickenham coal charity, which was established to give a free bag of coal to people in need of heating and today provides grants to those struggling with energy costs. It is that range and depth of resources that is so important. The local authority adds to that the ability both to identify households that are in acute need and, often, to signpost those who may not qualify for a particular type of support to another organisation that may be in a position to assist.

As we know, it has been part of the mission of local authorities, since their very inception, to address the relief of poverty. That is one of the reasons why, in my time as a councillor, I was keen to support the efforts in the late 2000s to establish the food banks, such as the Hillingdon food bank in 2009. However generous a safety net of benefits system we think we have, there will always be individuals and households that are at risk of falling between the cracks.

I have had the benefit of extensive research that has been carried out by both the Local Government Association and London Councils. I thank them for the work they have done to draw attention to the benefits that come with local authorities taking the lead on this issue. I hear from constituents that one of the weaknesses in the current fund relates to the ability to deploy resources outside local authority boundaries—individuals who may find themselves in temporary accommodation are an example of those who may be falling between the cracks. It is clear that we could be doing more work to ensure that resources are addressed flexibly.

Recognising the exceptional contribution that the fund and others, such as the holiday activities and food programme, have made to supporting the relief of poverty, and also recognising the fact that the fund does not sit on its own, my key plea to the Minister is that, once this policy comes to an end and a new iteration is developed, its successor respects the local knowledge and expertise of our councils. They are in the best position to identify the individuals who are the most in need and most able to benefit from the support that the fund offers.

17:06

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hosie. I thank my right hon. Friend the Member for East Ham (Sir Stephen Timms) for securing this crucial debate.

Salford City Council recently commissioned Greater Manchester Poverty Action to research the impact of the household support fund. That research showed that the fund has been a vital lifeline for people in Salford. As my colleague stated, nearly 19,000 low-income households access the scheme. That is a staggering 86% increase from the year before and is set to increase even further this year. Therefore, both the Salford City Mayor and all three Salford MPs were extremely concerned that the autumn statement seemingly omitted to clarify the Government’s position with regard to the continuation of the fund.

The Minister must understand that to withdraw this fund at a time when the cost of living crisis is demonstrably outstripping so many incomes will have disastrous consequences for our most vulnerable residents, families and children who simply cannot make ends meet. For so many, cutting this vital lifeline will mean that they are quite simply catapulted into further destitution, hunger, fuel poverty and worse. For many, their health will be put at extreme risk.

Given that the Government are supposedly consulting on the next provisional local government finance settlement, will the Minister provide financial clarity today by confirming the extension of the household support fund? Will she also commit to formally ringfencing financial measures such as the household support fund and the ongoing revenue support grant calculations for local government, to support the most deprived residents during the cost of living crisis? Will she confirm that she will not cut the current services grant for local government, and that she will instead increase it by inflation to reflect the financial pressures that local authorities face at this time? Will she work with the local government sector to urgently address the acute financial pressures facing local authorities?

Finally, as my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) said, will the Minister meet me, along with the Salford City Mayor and Salford MPs, to urgently address these issues?

17:07

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

It is a pleasure to speak in this debate, and I congratulate the right hon. Member for East Ham (Sir Stephen Timms) on securing it. He will recall the situation that we were faced with in the middle of covid, when covid was continuing for longer than we had initially expected. Recognising the challenges that families and pensioners were facing, it was right that we took that action then. I give credit to the Prime Minister, who was then the Chancellor, for working with me and my Department to establish the household support fund. It was with great pride that I formally announced the fund on 30 September 2021.

The right hon. Gentleman was right to raise local welfare assistance. Indeed, it was the Department for Work and Pensions that handed money to councils—it was not ringfenced, but the Department took a localist approach. That funding was kept in as part of the baseline grant for many years; I think it was not until 2020 that it was removed from the information that was formally published on the transfer, recognising that councils were still being funded on local welfare assistance.

I am conscious that covid was a challenging time. In particular, we wanted to make sure we went to the upper-tier unitary authorities that had statutory responsibility for children and adults. We made sure the funding was ringfenced, and we also imposed reporting conditions to ensure the money went either directly into people’s hands or to agencies that could make a difference.

I am conscious that quite a lot of councils resorted to vouchers for funding, but I commend Telford and Wrekin Council, and others like it, for thinking ahead. Instead of just handing out vouchers, the council identified the children who were struggling at home and started buying coats for people—they considered the long term. I would have loved to have seen more innovation in some of the ways the money was spent—whether that concerned bed poverty or similar issues—so that the local elements could be identified. It was important to increase funding for pensioners too; they did not have any opportunity to increase their economic income and were struggling.

I hear what councils are saying, and I do think the Government should extend the household support fund—whatever they may choose to call it in the future. We should challenge councils more to work with, for example, community foundations, whereby significant tax relief is given to local philanthropists to make the money go further. At the same time, we still have the holiday activities and food programme. That was established in October 2021 and was deliberately targeted at young children who were receiving free school meals. Those are the sorts of initiatives in which I am proud to have played a part. I urge the Minister to look further at how we can make the most of the money we distribute.

17:11

[Munira Wilson (Twickenham) (LD)]

It is a pleasure to serve under your chairmanship, Mr Hosie. I congratulate the right hon. Member for East Ham (Sir Stephen Timms) on securing this important debate.

I will focus my remarks on children and the lifeline that the household support fund provides to so many children living in poverty. Many Members will be aware that the Joseph Rowntree Foundation recently published a report that estimated that approximately 1 million children in this country are experiencing destitution. That is 1 million children growing up not knowing the comfort of a warm home or where their next meal will come from. The household support fund has enabled councils, which know their local populations’ needs best, to provide local welfare support to those families who are on the edge. It is vital that that funding continues beyond March.

As we have heard, many councils up and down the country, including my own in Richmond upon Thames, have used the household support fund to ensure that children eligible for free school meals are able to access them in the holidays through vouchers or cash support for families. School holidays are a time of real hardship, and children go hungry. Across London alone, councils are providing school holiday food support to almost half a million children over this academic year.

Richmond is also using money from the household support fund to support looked-after children and care leavers with food and fuel payments. These are some of the most vulnerable children and our young people in our society, and the Government’s welfare system has allowed them to fall through the net. But the household support fund has enabled councils to catch them and ensure they are not left destitute.

The need is growing: Richmond is projecting an overspend in the current round of HSF allocation because of rising need. Demand for support remains at unprecedented levels, and with the Government withdrawing energy bill support, this winter is set to be even tougher for many families.

I am sure the Minister will refer to other measures, such as the uprating of benefits and the local housing allowance, but they do not credibly replace the HSF and will benefit only specific groups. The beauty of HSF is that it affords flexibility to local councils, and the partner organisations they work with, to target support at those who need it. I pay particular tribute to Richmond AID and Citizens Advice Richmond for their work in administering grants.

What will happen come April? We all know that local authorities throughout the country have finances that are in an extremely precarious state—indeed, many local authorities are on the brink of bankruptcy. There is no alternative funding stream. The reality is that without the HSF, councils will be forced to make difficult decisions about what essential support to families in greatest need they will have to cut. Once again, children and young people are in the firing line, so I implore the Minister to make the case to the Chancellor to extend this lifeline to our most vulnerable constituents.

17:15

[Ian Lavery (Wansbeck) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hosie. I congratulate my right hon. Friend the Member for East Ham (Sir Stephen Timms) on securing this extremely important debate.

We have to look at who is in most need with regard to the household support fund. These people are so desperate. What are they after? They are after food. It is 2024, and we have people pleading—begging—for food. The people in receipt of the support are people who are on the breadline, as other speakers have explained. It is a lifeline—it is a lifesaver. Why on earth the Government are considering not continuing the fund, or have possibly already made the decision not to continue it after the next month or so, is beyond me.

[Richard Burgon (Leeds East) (Lab)]

Is my hon. Friend, like me, seeing more and more people coming to his constituency advice sessions who are in desperate need, pushed into penury and really struggling to make ends meet? What they need now is certainty that the Government will say, “Do you know what? Yes, we’ll extend the household support fund and we’ll do it now.”

[Ian Lavery]

I totally agree. These people are after food; they are after soap powder; they are after sanitary products. Potentially, they are after heat, warmth and light. This is 2024, for goodness’ sake! We all understand it; we all have people in our constituency surgeries who are suffering greatly as a consequence of this.

As politicians, we all have decent lives and we are all very comfortable, but we see constituents who are in desperate need of help. They are not after luxuries; they just want to keep themselves clean and feed their kids. That is what the household support fund is for.

I place on the record my massive thanks to Northumberland Communities Together. It is led by Julie Leddy, who is getting into the community and has been able to speak to people. The people who need support the most are the hardest to reach. Julie and her team have been absolutely fantastic.

The household support fund needs to be funded adequately and needs to be renewed on a multi-year basis. We need to encourage non-digital applications. Most of all, we need to ensure that the fund continues in the best interests of the people who, sadly, we all see in our constituency offices on a regular basis, who have got absolutely nothing.

17:18

[Sarah Edwards (Tamworth) (Lab)]

It is a pleasure to see you in the Chair, Mr Hosie, and to be making my first Westminster Hall speech in a debate secured by my right hon. Friend the Member for East Ham (Sir Stephen Timms).

I am not alone in this Chamber in expressing deep concerns for my constituents, who face a cost of living crisis that they neither asked for nor deserve. Just this afternoon, I was speaking in Parliament with the Trussell Trust, which warns of an unprecedented level of demand for food banks across the country. In my constituency, the demand for its food banks has risen by 44% since 2022 and by an alarming 101% since 2018.

I have been heartened and genuinely inspired by the community spirit shown in Tamworth during these tough times by the work of the Community Together CIC, led by Lee Bates; the Tamworth Co-operative Society, which donated stock to produce 450 food parcels for children and their families at Christmas; and the Heart of Tamworth community project, which runs weekly lunch clubs for those who are lonely, isolated and vulnerable. The Manor House project has played a crucial role in our community, offering counselling services, a food bank and many other initiatives. My constituent Liz Wadsworth created the community-run Tamworth Pantry, which has repurposed an old bus into a mobile community support station.

Now is not the time to withdraw support from struggling households. We need assurances from the Government that the household support fund will continue past March 2024. Between April 2023 and March 2024, Staffordshire County Council will have received just over £11 million from the household support fund. If the fund is not continued, it is extremely likely that councils will not be able to afford to replace that funding. A Lichfield District Council cabinet member wrote to me on the state of the council’s finances:

“How can councils fill in the gaps when it comes to supporting the most vulnerable, when they are struggling with the pressures of providing statutory services under the extreme cuts of the last 10 years?”

The Government must extend the household support fund.

[Stewart Hosie (in the Chair)]

I call Preet Kaur Gill. Is that Preet? [Interruption.] Apologies! I call Yasmin Qureshi.

17:21

[Yasmin Qureshi (Bolton South East) (Lab)]

It’s okay. It is a pleasure to serve under your chairmanship, Mr Hosie. I thank my right hon. Friend the Member for East Ham (Sir Stephen Timms) for securing this important debate.

The household support fund is worth £5.5 million for people in Bolton. Following reassurance in the autumn statement, it was understood that it would continue, but of course we have heard nothing from the Government. Bolton Council has had to hold back a further half a million pounds to bolster its local welfare provision service and mitigate the impact of possibly losing that £5.5 million. Today, another blow has been dealt to Bolton Council with the announcement that its service grant is going to be cut by a staggering £2.4 million.

Withdrawing the household support fund is taking away £5.5 million from desperate households in Bolton, which we need to support vulnerable people and pay for their clothes, food and other essentials. The Joseph Rowntree Foundation found that Bolton is now in the top five for child poverty in the north-west. The household support fund is a lifeline for my constituents. I urge the Minister: please do not cut the fund. It is a great safety net for the families and individuals facing the greatest hardships.

[Stewart Hosie (in the Chair)]

I call Sarah Maskell. Sorry: Rachael Maskell. Forgive me—it’s been a very long day.

17:22

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

We all make mistakes, Mr Hosie.

I have to ask: what do we come to Parliament for? It brings real shame that in this day and age we are sent here to beg the Minister to provide essential funding for our constituents living on the poverty line. It is not only that they are already in poverty, but that just five weeks out from the Budget, we have to stand up in this place and call for emergency support funding. Of course, the fund is not a solution to the deep deprivation that we are seeing across all our communities; it will take a Labour Government to get into the root causes and address the poverty that, shamefully, we see across our constituencies because of the inequity in the economy that the Government have driven.

The household support fund is a lifeline for many of our constituents. That is why it desperately needs funding today. It cannot wait for the next Budget. Local authorities certainly cannot wait that long to plan how they are going to support their communities. With the housing disparities in York, with low wages and with the highest housing costs across the north, my constituents really struggle.

I stand here on behalf of all councils in Yorkshire, especially North Yorkshire. Across Yorkshire, 1 million awards were granted between October 2022 and March 2023; £94 million is needed. That is why we need the Government to come forward with an announcement today. We know there are many people out there who are going to exploit our constituents if that money is not forthcoming, so we need to do it to safeguard their interests. We also need to ensure that we stave off the cold and the hunger for the families we are here to represent.

I have to say that it is simply not good enough to stall us further. We have written to the Chancellor, we have had the data, we know the statistics and now we need the answers. I trust that the Minister will announce exactly what the Government will do to help those most in need. The Joseph Rowntree Foundation has said that the welfare support that our constituents receive is nowhere near enough for the essentials. We need that to be addressed, too, but today we need this money coming forward, because this is the last thread of the safety net on which our constituents depend. I look forward to hearing what the Minister has to say.

17:25

[Jim Shannon (Strangford) (DUP)]

I congratulate the right hon. Member for East Ham (Sir Stephen Timms) on securing the debate and on setting the scene so well. We have had marvellous contributions from right hon. and hon. Members. From the outset, I want to be clear that Northern Ireland has a different method of allocation —it is a different system. Our access to the household support fund ended with the energy costs support, and our constituents are directed to find equivalency in the discretionary support fund, as we have no existing household fund.

The funding in Northern Ireland is deliberately so pared back that people can claim discretionary support for only a small number of reasons. Simply being unable to cope is no longer one of them. It should be, but it is not. Those who suffer domestic violence and have to leave all their goods in the middle of the night cannot access good enough support. That is just one example.

Yet again, the ordinary person in Northern Ireland is still paying more to be part of the Union. If only we got all the benefits of being part of the Union! I am very supportive of it, but I think it is time that that was looked at. The Government committed today in the Chamber to looking at the Barnett consequentials and seeing whether we can have the equivalent of the Welsh provision. If we do, that will be a step in the right direction.

I have outlined in another debate how money in the local economy shrinks. The hon. Member for Tamworth (Sarah Edwards) mentioned food banks; I will speak about my food bank, to give some equivalency. Take a middle-class family with two working parents who perhaps used to take a wee weekend holiday once every quarter. The hotel now misses out on its income from them, so it cuts back the hours for the cleaner it employs, and the cleaner loses their income. The family no longer go to the restaurants they used to go to, so that money is pared back. Where do they end up? I will tell you where they end up, Mr Hosie: they end up at the food bank.

An answer has to be given to explain why the cost of gas and oil is substantially lower, and yet the savings are not being passed on. As an example, one family I know have paid £250 for their gas bill. They are a small family with two children. If they cannot manage it, there is no way in the world that pensioners can. The Government must step in with help for energy costs, not simply for those on benefits who need the help, but for all people who are struggling in every working and non-working capacity.

The Newtownards food bank, which is based at the House church in Newtownards in my constituency, is the first ever Trussell Trust food bank in Northern Ireland. The stats tell a story—I will finish with this point, Mr Hosie, because I know you are looking at the clock. The food bank helped to feed 1,272 people in December 2023, compared with 988 in December 2022. That is an increase of almost 29%. Many of those were new referrals: people who had never been before. That shows where we are. Poverty in Northern Ireland has risen, and people who have never had to claim before simply cannot meet the escalating costs. Action is needed, and action is needed now.

[Stewart Hosie (in the Chair)]

I call Vicky Foxcroft—five minutes.

17:28

[Vicky Foxcroft (Lewisham, Deptford) (Lab)]

It is a pleasure to serve under your chairship, Mr Hosie. I congratulate my right hon. Friend the Member for East Ham (Sir Stephen Timms) on securing the debate, and I thank him for his invaluable work as Chair of the Work and Pensions Committee. This debate is hugely important, as we can see from the number of Members present. I am frequently grateful for the rigour with which the Committee conducts its inquiries and for the superb job that it does of holding the Department to account.

The question that all Members are asking today—I started writing down individual Members, but it was literally all of them—is “Will the household support fund still be there?” That is a question to which I hope the Minister can respond today. As we have heard, since its announcement in September 2021, the household support fund has provided much-needed short-term support to many vulnerable households. However, as we head towards the Chancellor’s spring Budget, its future remains uncertain.

All hon. Members have outlined why the fund is so needed at the moment. The right hon. Member for Newcastle upon Tyne East (Mr Brown) and my hon. Friends the Members for Bolton South East (Yasmin Qureshi) and for York Central (Rachael Maskell) mentioned the financial challenges that local authorities are under and the vital support that the fund provides. My hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey) outlined research on why it is such a vital lifeline.

As shadow Minister for disabled people, it concerns me that the future of the household support fund is in doubt while we are still in the grip of a cost of living crisis. My hon. Friend the Member for Tamworth (Sarah Edwards) spoke for the first time in Westminster Hall—I have to say, I could not tell—and outlined the cost of living pressures her local constituents face: higher energy bills and the extra costs that disabled households face. My hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) highlighted devastating cases of people fleeing domestic abuse and the way in which the household support fund has supported them.

I would like to highlight an issue I have come across in my constituency casework. My office is trying to assist a young person who lives in one borough and attends a school in another. Both boroughs are using the household support fund to pay for free school meal vouchers during the holidays—many Members mentioned this issue—but the home borough bases support on a pupil’s school address, while the other bases it on their home address. This frustrating situation means my constituent is missing out on support that both boroughs are, in theory, happy to provide. It is worth noting that, while local authorities are best placed to spend the money how they see fit, the variation in how one qualifies for support can lead to problems.

This debate has made it clear that the Government must carefully consider the future of the household support fund. Local authorities, such as my own in the London Borough of Lewisham, are being left in limbo as they try to plan for their 2024-2025 budgets, which may lead to interruptions to service provision and job losses. In an ideal world, we would not consider the future of the household support fund in isolation. When the fund was announced, my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds), who at the time was our shadow Work and Pensions Secretary, said:

“Temporary and inadequate sticking plasters are no substitute for a proper social security system that offers security to families in hard times.”

That remains true. However, for now, it is for the Government to say whether or not the fund will continue for next year. Labour’s plan for a new deal for working people, for affordable energy, for safe and dry homes and to get people better jobs and better pay is the long-term plan that we are focused on delivering, but today we need to hear the Government’s plans. As my hon. Friend the Member for Wansbeck (Ian Lavery) said, the people who rely on this fund are desperate. They are pleading—begging—for food and we must give certainty on the future of the fund.

17:33

[The Minister for Employment (Jo Churchill)]

It is a pleasure to serve under your chairmanship, Mr Hosie. First, I would like to add my voice to those of others in thanking the right hon. Member for East Ham (Sir Stephen Timms) for securing this debate. As Chair of the Work and Pensions Committee, I know he is not only passionate about supporting those in need, but very thoughtful in the suggestions and the comments that he makes. I think we both recognise—indeed we have heard it from virtually every Member—the significant help that the household support fund has provided to people across England and, via Barnett consequentials, more broadly across the nation since its inception and during these challenging times. At this point, I feel it is only right for me to thank my right hon. Friend the Member for Suffolk Coastal (Dr Coffey) and my hon. Friend the Member for Colchester (Will Quince) for their diligence and grit in ensuring that this reached those people who need help the most, as we have heard from every constituency. The attenuation of this scheme, and the fact that it is directed at those who need help the most, is a mark of its true success.

The right hon. Member for East Ham showed how beneficial the household support fund was, and how its local nature and adaptability was part of its success. Since its launch in 2021, the Government have provided more than £2.5 billion, including Barnett consequentials, to support those most in need. This includes last year’s provision of some £842 million for England plus Barnett consequentials, bringing it to £1 billion in this year. The additional funding has enabled the latest and longest extension from April 2023, with those funds currently being delivered incredibly effectively by local councils. Across England, 153 local authorities have used this funding to provide—[Interruption.]

[Stewart Hosie (in the Chair)]

Order. Unfortunately, there is a Division. I will have to suspend this sitting for 15 minutes for the first vote, and then for 10 minutes for any subsequent vote. Let’s hope we can be back here at 5.51 pm.

17:36

Sitting suspended for a Division in the House.

14:30

On resuming—

[Jo Churchill]

I hope I am picking up where I left off.

Across England, 153 local authorities have used this funding to provide a variety of support to help households with their essential costs. As we have heard from across the Chamber, that support has included—not exhaustively —vouchers for food and energy costs, warm clothing, and enacting simple energy-saving measures. Since April 2023, councils have also been able to fund advice and guidance services as part of their offer, helping to direct individuals towards longer-term help and support.

Since its inception, the household support fund has provided help to millions of people in a wide variety of circumstances. There were more than 26 million individual awards of support across the first three schemes, which ran from October 2021 to March 2023; indeed, totting it up roughly, over £100 million of support was given to councils in the constituencies of Members sitting here. We know that around two thirds of the funding from these schemes was used to support families with children—that was heard very clearly—and that was in addition to other support that we have made available, including the £200 million per annum holiday activities and food programme, which will carry through into 2024-25. We have also extended free school meals to more groups of children than any other Government in the past half century.

Many Members have raised concerns about the end of the current household support fund on 31 March. Some have even suggested that the Government have cut the fund. I re-emphasise the remarks I made in a debate in this place two weeks ago. To be clear: the Government continue to keep these matters under review. No decision on the future of the scheme has been taken, and the current scheme runs until the end of March.

Although the household support fund does important work, and we have heard about much of it, it is only a part of what we are doing. As I am sure the right hon. Member for East Ham will agree, over the past two years in particular, in the light of the pandemic and Putin’s illegal war in Ukraine, we have provided one of the largest cost of living support packages in Europe, and further support is still to be delivered in 2024-25. For example, over 8 million households across the UK on eligible benefits have received two of the three cost of living payments, which will be worth £900 in total this financial year, and the third cost of living payment—a further £299—will be made to most eligible households next month.

To put things into context, the annual welfare spend in Great Britain will be £276 billion this year. Having uprated benefits in line with inflation for 2023-24, we have announced a further increase of 6.7% in working-age benefits for 2024-25, subject to parliamentary approval—as we know, that order began its journey through the Commons today. On top of that, we are increasing local housing allowance from April, which will benefit a further 1.6 million low-income households by, on average, around £800, and we are increasing the national living wage for people aged 21 and above by over 9.8% from April. That means there will be an annual increase in gross earnings of more than £1,800 for someone working full time on that wage. Those workers who are at the younger end—at 21 or 22 years old—will see an increase of some 12.4% on average, as we extend the national living wage to them.

Additionally, we have reduced the main rate of class 1 national insurance contributions to 10% from this month, providing a tax cut for a further 27 million working people. Nevertheless, we rightly remain committed to that strong safety net for those who need it, particularly during challenging economic times and when lives get a bit turbulent. We have always believed that the best way to help people improve their financial circumstances is through work and support, and that approach is based on the clear evidence around the beneficial role of work, and especially full-time work, including the part that it can play in lifting people out of poverty.

Data from 2021-22 shows that there were 1.7 million fewer people in absolute poverty after housing costs compared with 2009-10, including 400,000 fewer children. With more than 900,000 vacancies across the UK, our focus is firmly on helping people take their first steps into work and progress towards financial independence. We know that for many, many people, that can be a challenge in itself. We therefore need to make sure that there is the right support to help people on that journey, which is why we have introduced WorkWell, the back to work plan, Access to Work and many other schemes. We have heard today that the fund is ringfenced, goes to upper-tier authorities, looks towards local attenuation and looks to make the best of all those charities that do so much for our communities. I thank hon. Members for those positive words.

In summary, the household support fund has done much to help those in need, providing billions of pounds through millions of individual awards. Local authorities have used the funding to help those most in need. As I have said, the current round will end on 31 March, as planned. However, we remain committed to a sustainable long-term approach to supporting vulnerable individuals and tackling poverty, alongside inflation-matching increases to benefits and the state pension, increasing the national living wage and reducing national insurance, as the Government continue to empower people to move into work and have control over their own lives.

I have heard everyone’s comments, both on the success of the scheme and the local focus. Hon. Members will be aware that there is a fiscal event on 6 March. It is not for me to pre-empt what may be included. However, I will ensure that the comments from today’s debate are passed to No. 11. On that note, I look forward to working with colleagues from across the House to continue to support those most in need, and I again thank the right hon. Member for East Ham for calling this very important debate.

17:58

[Sir Stephen Timms]

I am grateful to everybody who has taken part in this debate. I particularly welcome the robust cross-party support for the household support fund, not least from the two former recent Ministers responsible for it, the right hon. Member for Suffolk Coastal (Dr Coffey) and the hon. Member for Colchester (Will Quince). I also welcome the positive tone the Minister has taken in her remarks about the household support fund; perhaps we should all wish her well for her discussions with the Treasury in the next few weeks so that the fund gets extended.

We heard a powerful case being made across the Chamber. I am grateful to my hon. Friends the Members for Worsley and Eccles South (Barbara Keeley), for Manchester, Gorton (Afzal Khan), for Salford and Eccles (Rebecca Long Bailey), for York Central (Rachael Maskell) and for Tamworth (Sarah Edwards), who all spoke powerfully.

I want to make a final point. The household support fund was initially announced for six months. The longest it has ever been in place for was a year. Each time it gets changed, the goalposts have shifted. Local councils really need a longer-term commitment so that they can plan to make the most of this very welcome funding. I very much hope it will be extended.

Question put and agreed to.

Resolved,

That this House has considered the Household Support Fund.

17:59

Sitting adjourned.