Westminster Hall
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Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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Steel Industry: Wales
(9 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Dame Nia Griffith (Llanelli) (Lab)
I beg to move,
That this House has considered the future of the steel industry in Wales.
It is a pleasure to serve under your chairmanship, Sir Gary. First I want to express my gratitude to Mr Speaker for allowing this debate on the very important matter of the future of the steel industry in Wales, particularly as we were limited by time constraints during our debate on steel four weeks ago.
The news that we have had over the past few months has been devastating, with Port Talbot set to bear the brunt of Tata’s plans to shed 2,800 jobs across the UK. With so many jobs going in such a short time, the effect will reverberate right across south Wales, because the number of people affected will be far greater. That will include all the families of the workers, the loss of work for the contractors and the suppliers connected to the plant, and the massive loss of spending power in the community, with the knock-on effects that that will have on local businesses.
I pay tribute to the trade unions that have been working hard to present alternative plans to preserve jobs, keep primary steelmaking in the UK and facilitate a just transition to the green primary steel of the future. I urge both Tata and the UK Government to look again at those plans.
We stand today at a real crossroads for the steel industry in Wales and the UK. We have the opportunity to be at the forefront of the new green industrial revolution, or to allow ourselves to slide into a second-rate position to be left behind as the only country in the G20 that does not have primary steelmaking facilities. I will return to the bigger picture of steelmaking across Wales later. I know that many of my hon. Friends will talk about it, but I want to focus specifically on the future of the Tata tinplate plant at Trostre in my constituency of Llanelli.
Wales has a proud industrial history. Llanelli has thrived on the production of coal, iron, steel, copper and tinplate. The tinplate industry was already established in Llanelli in the 18th century. By the 19th century, 80% of the world’s tinplate was produced in south Wales, with Llanelli the tinplate capital of the world. Today’s Tata plant at Trostre in Llanelli makes a variety of different materials that go on to be used in a range of products—from the tin can that contains the baked beans that we buy to the compounds used to make the aerosol cans on our bathroom shelf.
Forgive me if I sing the praises of the humble tin can: a practical, versatile and green product. It is eminently recoverable and recyclable. Food in sealed cans keeps for months and does not need to be in the freezer or even the fridge—a great advantage for those who cannot afford to run a freezer or have no access to one. Food in tin cans tends to be cheaper than food in other forms of packaging. Furthermore, those in dire straits can even resort to eating tinned products cold without the need to afford the energy costs to heat them. It is little wonder that in hard times, covid and the cost of living crisis, sales of tinned products have held up. By the way, back in 1935, Felinfoel Brewery in Llanelli was home to the first canned beer in the UK and one of the first canned beers in Europe.
Trostre currently receives its steel from Port Talbot, just 20 miles down the railway track. That makes good economic and environmental sense. Most importantly, Trostre workers know that they can depend on the consistency and quality of the steel that comes from Port Talbot. Tata tells us that when it closes the blast furnaces at Port Talbot in the short term before the electric arc furnace is built, it will import steel to supply the Trostre plant. That will be imported steel made in blast furnaces abroad, so there will not be any saving in carbon emissions—quite the opposite. Processes abroad might be dirtier, and then there are the costs and emissions associated with transporting the steel to Trostre.
The challenge will be to source the appropriate quality of steel to satisfy Trostre’s needs. As Trostre makes a number of products and serves a number of different customers, that means steel of the right quality to satisfy all those requirements. As we can imagine, workers at Trostre are very anxious to know that deals for supplies of quality steel have all been sorted out before anyone even thinks about switching off the blast furnace in Port Talbot. They and I know that the works manager and his colleagues at Trostre are doing all they can to assess potential sources, but inevitably, instead of the security that we currently enjoy with our supply from Port Talbot, people are feeling worried.
Importing steel means that there are far more unknowns. We will be more vulnerable to logistical difficulties or price fluctuations; if there is a shortage of supply, foreign producers may prioritise their home customers. What talks has the Minister had with bosses at Tata about where they will be sourcing the imported steel for Trostre, what guarantees they can give that the quality will satisfy all the requirements at Trostre, when they expect the first shipments to arrive, and what risk assessments and contingency plans they have drawn up to cope with challenges such as price fluctuations or a tightening of the market if other countries want to prioritise their own needs? Will she also tell us how imported supplies will be affected by the carbon border adjustment mechanism?
The Government have promised half a billion pounds for Tata to develop an electric arc furnace. Will the Minister tell us whether there is any conditionality attached to that loan in respect of Trostre? In other words, is its availability to Tata contingent not just on building an electric arc furnace but on securing short-term supplies for Trostre—and, indeed, Shotton—and safe- guarding jobs there?
Jim Shannon (Strangford) (DUP)
I commend the hon. Lady for securing this debate. She is right to say that the job losses at Tata Steel affect Wales, but they also affect the ability of the whole of the United Kingdom of Great Britain and Northern Ireland to manufacture steel for our businesses. Does she agree that the production of British steel, which is of the highest quality, needs greater governmental support to ensure it can compete with steel imports from other nations? Does she further agree that the steel sector can provide employment throughout the UK, and that it should be encouraged to do so?
Dame Nia Griffith
Indeed. As the hon. Gentleman knows, there have been five asks from the steel industry over many years, which encompass those issues.
Tata says that for safety reasons it is not possible to keep the blast furnace going until its proposed large electric arc furnace is up and running. However, there have been other suggestions, including starting with a smaller electric arc furnace, which could be built while blast furnace is maintained. What discussions has the Minister had with Tata about keeping at least one blast furnace going in Port Talbot until an electric arc furnace is up and running?
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
We are all aware of the risk to the 2,800 jobs at Port Talbot and elsewhere. We need to be highly alert to the fact that the one blast furnace is part of ensuring that there is a just transition for the community. Other communities in Wales are facing losses—including the farming community, which will face 5,500 job losses if the Welsh Labour Government bring in the sustainable farming scheme, and the just transition is exactly the same issue.
I am sure the hon. Lady will join me in asking the Minister and other Governments to ensure a just transition for communities across Wales that have experienced decades of suffering because transitions have not been carried out properly as a key part of ensuring the industries of all our communities.
Sir Gary Streeter (in the Chair)
Order. I remind Members that interventions should be brief and on the subject of the steel industry in Wales.
Dame Nia Griffith
Indeed, we do seek a just transition for the steel industry.
Of course, it is not just Trostre that Port Talbot supplies. If, as current plans indicate, the idea is to close the blast furnaces several years before the electric arc furnace is ready, all the downstream customers will need supplies. The Government could argue that if Tata closes the blast furnace in 2024 or 2025 but does not have an electric arc furnace up and running before 2027, how it bridges that gap, how it sources supplies elsewhere and how it keeps its customers happy are its problem. However, if those supplies are not there, downstream businesses could go out of business, causing huge job losses. It would be catastrophic for us in Llanelli to lose Trostre. Because the Government are putting half a billion pounds in, and because of the worry about job losses, they should seek assurances from Tata about Trostre, which is why I asked the Minister that question.
We accept that the electric arc furnace has a role to play. Indeed, CELSA Steel UK in Cardiff, a very successful business, produces steel from an electric arc furnace. However, there is work to be done to assess the suitability of the steel produced in electric arc furnaces to meet all the requirements of the products produced in Trostre. It is not as simple as throwing any old scrap into the electric arc furnace; clearly, the quality of the source material is important. I understand that a certain amount of metallics are required, which are not necessarily easy to source. We currently export scrap steel, and it is easy to see the logic of recycling that steel here in electric arc furnaces. However, we cannot assume that all that scrap steel will just turn up at the electric arc furnace in Port Talbot or at the one that I understand is planned for Scunthorpe: it must be sourced.
Stephen Kinnock (Aberavon) (Lab)
My hon. Friend is making an absolutely excellent speech. Picking up on her point, there is a need to sweeten the mix in an electric arc furnace with iron ore-based metallics; otherwise, there is no way that we can make the high-value products such as those for the automotive sector and tin cans. Is she aware that only 3% of the world’s iron ore-based metallics are in a pellet form that can be transported across the world and put into an electric arc furnace? Does she therefore agree that by far the best option would be to keep blast furnace 4 going so that we can continue to produce the ore-based metallics for the electric arc furnace, because with 3% of the global supply there is no way that that will be possible?
Dame Nia Griffith
I absolutely agree.
The Minister has previously referred to steel as “infinitely recyclable”. It is indeed a marvellous material, which is so much easier to recover and recycle than many other materials. However, while the lifecycle of a tin can may be a matter of months, steel used in car manufacturing or construction will be tied up in those products for many years to come. I very much hope that we will see an increase in investment in infrastructure projects.
We on the Opposition side have plans to make the UK a clean energy superpower. We have so much potential in Wales, with the prospect of building floating offshore wind farms in the Celtic sea and using Port Talbot and Milford Haven to deliver and service those projects. It is just a pity that through either incompetence or stubbornness the Government have wasted a year failing to get any takers for floating offshore wind because of the unrealistically low strike price offered.
Increased renewables and increased use of electricity mean upgrading the national grid structure. We need investment in our railways, housing, hospitals and so on. Have the Minister or her Department made any assessment of how much steel the UK is likely to need in the coming decade? How much of that steel will be used for short-term products that will reach the scrap market fairly quickly, and how much will be locked in infrastructure that we hope will last for decades?
Returning to the broader picture, while I recognise the contribution that the electric arc furnace can make, it is bitterly disappointing that the Government plans look likely to leave the UK as the only country in the G20 without primary steelmaking. While countries across Europe have been working on greening the primary steelmaking process using technologies such as direct reduced iron and green hydrogen—indeed, Sweden will start production in 2025—the UK Government have not supported any such venture.
There is huge competition out there to woo investment in the green technologies of the future, whether it is the US Inflation Reduction Act or similar incentives in the EU. When we look at the €2.5 billion that Germany has invested in developing green primary steel, hon. Members will understand why we in the Labour party say that that is the sort of sum needed and why, if we were in government, we would look to invest a total of some £3 billion in the industry, rather than this Government’s £500 million.
The reasons why we now face the end of primary steelmaking in the UK must include the failure of the Government to respond adequately to the asks of the steel industry, which it has set out so clearly time and again. We have pointed out, time and again, how much cheaper energy costs are in countries such as France and Germany, while in the UK there have been specific negotiated packages.
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
I congratulate the hon. Lady on securing the debate and on her leadership on the issue. It seems that the only hope is to try to persuade Tata to delay some of the implementation of its plans until the change of Government, we all assume, by the end of the year.
As the hon. Lady mentioned, there is an alternative proposal from the Labour party for investment in the steel industry. Does she agree that there is a potential role for the Welsh Government to negotiate with Tata? As they sit on the transition board, they would have close relations with Tata executives to put forward the Labour plan, which would be ready to be implemented this time next year.
Dame Nia Griffith
Anyone who can have influence over Tata would be welcome to make those suggestions.
A moment ago, I was talking about specific negotiated packages that this UK Government have offered. Although there have been those packages, we can see why when steel and high-energy industries make decisions, they cannot rely on limping from package to another but need long-term security with low energy prices, requiring substantial measures from the Government such as massive investment in renewables and reform of the energy market. We in Llanelli look across at IJmuiden in the Netherlands, where Tata has a tin plant works similar to ours. However, in close proximity to IJmuiden, Tata will keep a blast furnace open and develop a direct reduced iron facility. This is the reality we are facing: greater investment for the future going elsewhere. The UK Government need to ask themselves why. I hope that in responding today the Minister will answer my specific questions about the challenges facing Tata’s tinplate works at Trostre, as well as the broader issues facing the steel industry across Wales.
Sir Gary Streeter (in the Chair)
I call Christina Rees —and happy birthday!
Christina Rees (Neath) (Lab/Co-op)
Thank you, Sir Gary—21 again! As always, it is a pleasure to serve under your chairmanship.
I congratulate my hon. Friend the wonderful Member for Llanelli (Dame Nia Griffith) on securing this vital and timely debate. As we contemplate the future of the steel industry in Wales, we are discussing not merely the fate of an industrial sector but the heartbeat of a nation’s economy and identity, and nowhere more so than in the Swansea bay region generally and Port Talbot specifically. The area that includes my Neath constituency and its town has long been synonymous with steel production, its history intertwined with the rise and fall of coal and the resilience of its workforce. Today we stand at a pivotal moment in that narrative, poised to script the next chapter in the saga of Welsh steel.
The challenges facing the steel industry are undeniable. Global competition, fluctuating market demands and environmental concerns loom large on the horizon, yet alongside those challenges lies the opportunity to bring about transformation and renewal. The industry cannot do that against a backdrop of uncertainty and a diminished workforce. The idea that 2,800 jobs will be lost from Tata Steel operations across the UK—the majority from Port Talbot—is unthinkable. The rejection of well thought out union plans for a gradual transition to decarbonisation means the almost immediate closure of two blast furnaces. The single electric arc furnace replacement will obviously produce less carbon dioxide, but also fewer jobs.
First and foremost, innovation must be at the fore- front of our endeavours, from embracing advanced manufacturing techniques to investing in research and development. We must harness the power of technology to drive efficiency and sustainability. Innovation will always be the cornerstone of a vibrant steel industry in Wales, but electric arc furnaces do not produce virgin steel and the difference must be considered. The UK has only two sites that use conventional blast furnaces—Scunthorpe and Port Talbot—which collectively produce 5.9 million tonnes of steel per year and make up 82% of UK steel production. Despite the UK importing most of its virgin steel, the notion that we become a country that produces none is beyond the pale. British Steel, the owner of the Scunthorpe plant, is also planning to replace its virgin steel production by 2025. Should that happen, the UK will become the only G20 country that does not produce its own virgin steel. The consequences need to be fully understood.
Secondly, collaboration is essential for success. Alongside partnerships forged between industry, academia and the community, the UK Government need to step up to the table. A £500 million grant is welcome, but much more can be done on energy prices, R&D support and fiscal leverage. In addition, neither the Welsh Government nor the unions were involved in discussions prior to the announcement of the investment deal. The multi-union plan called for an additional investment of £683 million, involving a two-stage transition that would protect a further 2,300 jobs for over a decade, and not involving a single compulsory redundancy. The plan accepted that one blast furnace, and potentially the coking ovens, would close during a managed transitionary period that involved producing iron for use in the new electric arc to be installed by 2031. The second blast furnace would close in 2032.
It is clear that sustainability must be a guiding principle. We are all aware that the steel industry has a significant environmental footprint, and we cannot ignore our responsibility to future generations. By investing in clean technologies, reducing carbon emissions and promoting circular-economy practices, we can minimise our impact on the planet, while maximising our long-term viability. Sustainability is not just a moral imperative; it is also a business imperative, as consumers and investors increasingly demand ethical and eco-conscious products.
Although I appreciate the need for decarbonisation, we must remember that steel accounts for only 14% of industrial emissions in the UK, which in turn is around only 2% of total national emissions. Importing virgin steel simply transfers the emissions and decarbonisation responsibility. Such overseas manufacturing is also far more carbon-intensive.
Lastly, we must never forget the human element at the heart of the steel industry. Our success is built on the dedication and skill of the men and women who toil day in, day out. As we navigate the challenges of the future, we must prioritise the wellbeing of our workforce today, ensuring fair wages, safe working conditions and opportunities for growth and advancement. A thriving steel industry is not just about profits; it is about empowering communities and enriching lives. Employment in the steel industry is not what it used to be, but a quarter of all steel industry employees work in Wales. As such, job losses are disproportionately felt in Welsh communities.
Jonathan Edwards
I commend the hon. Member on her excellent contribution. Is the reason for the backlash to this announcement not the fact that it appears that the UK Government are providing £500 million to lose 3,000 jobs in Wales, which has been a massive PR disaster for them?
Christina Rees
I completely agree with the hon. Gentleman, and thank him for his important point.
The future of the steel industry in Wales is not predetermined; it is ours to shape and define. By embracing innovation, fostering collaboration, championing sustainability and prioritising our people, we can build a future where Welsh steel shines brightly on the global stage. The story of steel should not feature uncertainty, job losses and community adversity. Let us write the next chapter in the industry’s history: one of resilience, renewal and prosperity for generations to come.
Jessica Morden (Newport East) (Lab)
Happy birthday to my hon. Friend the Member for Neath (Christina Rees). I commend my hon. Friend the Member for Llanelli (Dame Nia Griffith) for securing this important debate. Its importance was highlighted for me and other hon. Members on Saturday, when we marched in solidarity with the workers of Port Talbot and Newport and the unions, which I praise for their work. There was a lot of strong political support on both marches, including from my hon. Friend the Member for Newport West (Ruth Jones).
We should never underestimate just how difficult a time this is for these highly skilled workers and their families. I should point out to the Minister that the average age of a steelworker in Llanwern is now 34, so they are people with mortgages and families to support. That will also be true for those at Port Talbot, represented by my hon. Friend the Member for Aberavon (Stephen Kinnock). In my time as an MP, I have seen year after year just how workers in Llanwern have repeatedly had to adapt and innovate to keep the business alive. I pay tribute to them for that. These are well-paid jobs and, as we often say, for every one job in the plant, there are estimated to be three more in the wider community.
I am sorry that the Government and the company have put the workers in this position. We feel deeply for them and we commend the unions for all they are trying to do, because this is a bad deal for steel. We need the best deal for steel, not the cheapest deal for steel, which is what the Government are offering. As the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) said, no matter how the Government dress it up, they are giving £500 million to Tata to make redundant up to 3,000 people—300 in Llanwern. In doing so, they are in effect ending our history of making virgin steel—we will be the only country in the G7 and G20 not to do so—at a time when we will need this steel to build our green infrastructure.
At a time of global insecurity, we will be reliant on imports. The Secretary of State for Wales claimed on Monday that closing the blast furnaces will make us “less dependent on imports”, when he knows that Tata will have to import steel shipped in diesel-fuelled vessels from India. As the Welsh Government’s Minister for Economy, Vaughan Gething, has said, the UK Government are alone in seeking to propel the steel industry off a cliff in this way. In the Netherlands, Sweden and Canada, we see Governments working in partnership with their steel industry.
The UK Government are not contemplating the multi-union plan, which promises a fairer, just transition to a greener future for the sector. The UK Government shut the Welsh Government and unions out of decision making on this matter, and the Secretary of State has claimed that those proposing credible alternatives to protect jobs and virgin steelmaking for the future are “unconstructive”. These are plans that his Conservative colleagues in the Senedd backed in a vote very recently. Then we have the Secretary of State for Business and Trade calling plans to make up to 3,000 people redundant a “good news story”.
We are now in the third week of the formal consultation period, and Ministers continue to signal that this is a done deal. Will the Minister confirm today that she will not undermine the consultation and that she is still willing to engage constructively with Tata and the trade unions should the opportunity for an alternative approach arise? Will she also set out whether she has had assurances from Tata that the consultation will be given as much time as it needs—beyond the 45-day mandatory minimum, if necessary—for a path forward to be agreed? There is still little detail available about how the funding available to the transition board is planned to be spent. Will she also elaborate on that and confirm whether steelworkers, supply chains and communities that may be affected beyond Port Talbot, including in my own constituency, will be supported?
We have often said this, but we have had 12 Steel Ministers and 14 years of inaction, with this Government vacating their role as the champion for our steel industry in a green industrial future. It is the Labour party that is filling the void of ambition by committing to accelerate a £3 billion green steel fund to invest over the next five years in the future of our sovereign steel industry. I strongly urge the Government to look again at the deal. If they will not step up and look again, they should step aside and let us have a Government who will.
Stephen Kinnock (Aberavon) (Lab)
It is a pleasure to serve under your chairship, Sir Gary. I congratulate my hon. Friend the Member for Llanelli (Dame Nia Griffith) on securing the debate and on making such a powerful case both for the Trostre works in her constituency and for the entire Welsh and British steel industry.
It has been said many times, but merits repetition, that the Port Talbot steelworks in my Aberavon constituency is the beating heart of our community and our economy. For generation upon generation, the people of Aberavon have made the steel that has built our country. Quite simply, steel is who we are. This debate is not just about what steel means to my constituents; it is about our entire national story, because Britain as we know it today simply would not exist were it not for our steel industry. Steel makes everything from the cars we drive to the houses we live in and the offices we work in. It even makes the knives and forks that we eat our meals with, and the humble tin can, as my hon. Friend pointed out.
But our pride never slips into sentimentality or nostalgia. Steel is not a sunset industry, and the steelworks is emphatically not a museum. Steelworkers have experienced enormous technological change over the last 30 years, and every time they have risen to the challenge and adapted to it. When a customer asks for a new grade or quality of steel, our steelworkers deliver it. Indeed, most of the grades of steel being made in the Port Talbot steelworks today did not even exist 10 years ago. It is a hotbed of innovation, and every time I go into the steelworks—I have been many times—I am truly impressed and inspired.
When I go into the works, I also see a workforce that is deeply frustrated. The steelworkers know they are making the best steel that money can buy, but for 14 years they have been competing with one hand tied behind their back. They face almost twice the energy costs of their competitors in France and Germany. Government contracts are going to foreign steelmakers, and Royal Navy ships are being made with foreign steel. Our steelworkers are forced to look on helplessly as other Governments around the world bring forward policies, strategies and billions of pounds of investment to support their steel industries, while our Government sit on their hands. We are not here to plead for special treatment or charity; we simply demand a level playing field.
That brings me to the deal between Tata Steel and the UK Government, which is based on £500 million of taxpayers’ money being spent on making 2,800 people redundant—and that is not counting the huge impact on supply chains and contractors. As I have said, nobody is burying their head in the sand. Everyone can see that our planet is burning, and that customers around the world are looking for zero-carbon or low-carbon products. Even countries such as India and China will ultimately be forced to phase out their blast furnaces. The question is not whether the transition is coming, but how to make it work for jobs, our planet and national security.
It is crystal clear that the plan that is being pushed by Tata Steel and the UK Government fails on three counts. First, it fails on jobs. In the US, Joe Biden’s £290 billion Inflation Reduction Act is creating 170,000 green jobs. In Europe, national Governments are investing billions of euros in decarbonising their single steel plants. The UK is the only country that is throwing thousands of steelworkers on the scrapheap.
Secondly, the plan fails on decarbonisation. The Tata-Tory plan is based on importing millions of tonnes of semi-finished products from India, where steel production is 30% to 40% more carbon intensive than in the UK. The deal is based on exporting jobs from Wales to India, and importing carbon from India to Wales. You could not make it up.
Thirdly, the deal fails on our national security. Electric arc furnaces alone are not capable of making all the grades and qualities of steel that are required to meet the current order book, let alone to embrace the opportunities of the future. The result, in this dangerous and turbulent world, is that the UK will be the only country in the G20 that is unable to make its own steel from scratch. That is madness.
Tata has a choice. It could carry on with both blast furnaces for the foreseeable future, which would mean losing customers, making big losses and eventually closing. Nobody wants that. It could go for the 3 million tonne electric arc furnace-only model, which forces a dependency on scrap steel and on imports while making 2,800 people redundant. Let us call that the cliff-edge option.
The final and best option is to adopt the compelling multi-union plan, which would protect 2,300 jobs nationwide over a decade and would see no compulsory redundancies at Port Talbot. In that plan, blast furnace No. 4 would continue to run until the end of its lifecycle in 2032, and a combination of new technologies, such as direct reduced iron, would reduce reliance on scrap and enable Port Talbot to produce the iron ore-based metallics that are vital for the electric arc furnace to function and deliver the entire customer portfolio. Let us call that multi-union plan the bridge from where we are today to where we need to be.
I urge the Tata leadership and the UK Government to walk back from the cliff edge. Choose the bridge to 21st-century steelmaking. Choose the bridge to a committed workforce that will strain every sinew to deliver. Choose the bridge to long-term commercial competitiveness and profitability. I also say this to Tata: remember that a general election is coming, after which, I hope, Labour can deliver a new Government that will replace the chaos and incompetence with stability, predictability and diligence. In place of the laissez-faire negligence of the last 14 years, it will find Labour’s £3 billion steel renewal fund to drive and support the transformation of our steel industry in a way that sustains jobs and bolsters our national security.
Once a blast furnace is extinguished, that is it—there is no turning back. So I urge Tata not to take any decisions now that cannot be reversed following the general election. Tata and the Government can either take the path of managed decline, or they can get behind the multi-union plan. They can either take the cliff edge, or choose the bridge. Let us hope they make the right choice. We need our steel—let us value and fight for it.
Ruth Jones (Newport West) (Lab)
It is a real pleasure to serve under your chairmanship this morning, Sir Gary. I am very pleased to have the opportunity to say a few words in this debate, and to acknowledge the contributions by my colleagues who are expert in this area. I wish my hon. Friend the Member for Neath (Christina Rees) a happy birthday, and I thank my hon. Friend the Member for Llanelli (Dame Nia Griffith) for bringing such an important debate to this place today.
Last Saturday, as my hon. Friend the Member for Newport East (Jessica Morden) has already highlighted, I had the honour of marching through Newport city centre in solidarity with steelworkers from Llanwern. The strength of feeling among steelworkers and their families, and the wider community across Newport and south Wales, cannot be overstated. My home town of Newport was built on steel, and we all know someone who works in Llanwern, whether they are family, friend or neighbour. We are here not just for the steelworkers of today, but for the steelworkers of tomorrow. We all know far too well in south Wales that once these sorts of industries are closed down, it is very unlikely that the skilled, decently paid jobs they provide will ever return.
Alongside my hon. Friend the Member for Newport East, I made a promise on that march last Saturday to stand up for the steelworkers and ensure that their fight on the production lines for the future of the industry is heard loud and clear here in Westminster. It is vital that we fight for them and all our communities. Wales’s future depends on those of us here speaking out and protecting our steel foundations, whether they are at Llanwern or Port Talbot steelworks, or at suppliers such as Island Steel or recyclers such as Sims Metal in Newport West. Our country relies on the steel industry, and this Conservative Government, with their five Prime Ministers in 14 years, have let them all down.
I do not have time to list all the ways in which this Tory Government in Westminster have endangered the future of steel in Wales, but I will highlight just a couple. Island Steel, a smaller supplier that employs 100 people at Newport docks, regularly finds itself hampered by the current quota system, which locks it out of business. That is yet another example of this current UK Government being unwilling to engage with industry or even to make an effort to understand the impact of their indecision and lack of strategy.
Another area in which I have little faith in the Tories at Westminster is their negotiations for a trade deal with India. In principle, we would all welcome a deal, but the one negotiated by the current Government is years overdue and their record on trade deals is not encouraging. They have repeatedly and consistently sold British workers short and undermined vital environmental and workplace standards that we value here in the United Kingdom. The Labour party believes that trade deals should not seek to undermine our core values, such as workers’ rights, environmental protections and fair trade. The long-overdue deal, of which we still do not have the final details, must ensure access for UK manufacturing or it will be yet another bad deal authored by the Tories and will strike another hammer blow to the prospects of our domestic steel industry. We have had a catalogue of failures and bad, short-sighted decisions from this Conservative Government. They have degraded and endangered the UK steel industry.
I do not want to end on a negative note; after all, this is a debate about the future of steel, not the past. There is hope for steel, because a UK Labour Government led by my right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer) would start by earmarking up to £3 billion for investment in green steel alongside the industry. We must retain our strong and viable steel industry because our automotive, defence, renewable and construction sectors depend on it. The next Labour Government will work with, not in opposition to, our steel trade unions. As my hon. Friend the Member for Aberavon (Stephen Kinnock) said, we will build a bridge—not a cliff edge—to a just environmental transition using a blend of technologies. We will not leave anyone behind. We saw what Margaret Thatcher did to our miners in the ’80s. That will not happen on our watch.
Decarbonisation cannot and should not mean deindustrialisation, as we know that that increases costs and pushes the environmental burden on to developing countries. With a Labour Government in Westminster working together with a Welsh Labour Government in the Senedd, we will ensure that steel production continues to play a key role in the growth and prosperity of Wales, for our economy and our people.
Beth Winter (Cynon Valley) (Lab)
It is a pleasure to serve under your chairship, Sir Gary. I congratulate my hon. Friend the Member for Llanelli (Dame Nia Griffith) on securing a debate on this issue, which is so important for the people of south Wales and for the economy of Britain as a whole.
I will limit my contribution to asking the Minister two short questions, based on what the Welsh Affairs Committee heard in its evidence sessions on Port Talbot last month. During those sessions, I asked Tata:
“If the funding were available, would you reconsider your decision?”
Tata’s response was:
“If somebody were to give us money…fine: we can look at other options going forward.”
I also put questions to the trade unions representing the workforce—and I commend the trade union movement in Wales for the work it does in unity with the steelworkers. I asked:
“What levels of investment are needed for the plans and where should that come from? ... Should the Government have a stake in steelmaking?”
In response, the representative of Unite, the main steelworkers’ union, said:
“The need to retain virgin steel production in the UK is too important to be left to the decisions of one multinational company,”
and:
“We think that there is a role for the Government to take a stake in the plant as well”.
My first question to the Minister is this: since Tata said it would be open to other options, have the Government considered that, and have they discussed finding additional funding to save thousands of jobs at Port Talbot? Secondly, in relation to the nature of funding, have the Government considered taking a public stake in the steelworks to ensure the continuation of our virgin steel manufacturing capacity?
In conclusion, as my hon. Friends have already stated—
Stephen Kinnock
I know that my hon. Friend is reaching the end of her speech, but something just occurred to me. I was very pleased to join the Welsh Affairs Committee evidence sessions, and during the second session I asked the Secretary of State for Wales whether the UK Government have attached any strings to their £500 million in the form of job guarantees, and whether he was clear that the electric arc furnace model is going to work without access to iron ore-based metallics. In response, he referred me to the Department for Business and Trade, and said, “Well, they struck the deal, so they should be able to answer your questions.” I wonder whether my hon. Friend might wish to add another question to her list—whether there were any strings at all attached to the £500 million.
Beth Winter
That is an extremely important question. Another question that my hon. Friend raised to which we did not get a response was on the timeframe within which the £500 million is going to be paid. A series of questions were asked during the four evidence sessions that day—if the Minister has not seen the transcript, I urge her to look at it—and a number of them remain unanswered. We have brought some of them to light here today.
My hon. Friends have spoken in much more detail about the devastating impact that the closure of the steelworks in Port Talbot, and many other businesses in Wales, is going to have on our communities. Wales was at the forefront of the industrial revolution—our communities were built on coal, iron and steel—but our history is one of wealth being extracted from our country for the benefit of a few, and that continues. This is a prime example of the lack of consideration given to the people and communities of Wales.
We can and will be at the forefront of change. The multi-union deal—indeed, all the deals that have been proposed by the trade unions—offers a solution. Wales can be at the forefront of a green industrial revolution, where the wealth is not only created in Wales but retained in our communities, so that we no longer suffer unacceptable levels of poverty and deprivation. We are a wealthy nation in terms of our natural resources, and we deserve a different future. We will continue to stand in solidarity with our workers as well as our trade unions to say that we are not going to put up with the continued extraction and exploitation of our communities in Wales. I look forward to hearing the Minister’s response to my specific questions. Diolch yn fawr.
Sir Gary Streeter (in the Chair)
We now turn to our Front-Bench speakers. I call Sarah Jones.
Sarah Jones (Croydon Central) (Lab)
It is a pleasure to serve under your chairmanship, Sir Gary. I am delighted that my hon. Friend the Member for Llanelli (Dame Nia Griffith) was able to secure this debate, and I want to congratulate her on such an excellent speech. She is right: we stand at a crossroads and we risk being left behind. She painted a lovely picture of the tinplate factory—as she knows, that is where my grandfather worked—and how long that has been there.
I also want to mention the other speeches, particularly that of my hon. Friend the Member for Aberavon (Stephen Kinnock), who told us that this is not about the past; this debate is about the future and what the steel industry can become. My hon. Friends the Members for Neath (Christina Rees) for Newport East (Jessica Morden) and for Newport West (Ruth Jones) made, along with others, really brilliant speeches that highlighted the problem incredibly well. I listened carefully to the debate, and I am very proud to have such Members on this side of the House standing up for workers in south Wales.
My main takeaway from considering everything that has been said is: what is this Government for? What are they usefully doing? What is their plan on steel? The challenges we face in Wales have been excellently set out, but let me set out the broader context. The steel industry is badly broken. It has been lurching from crisis to crisis for more than a decade, and there are two fundamental points where the system is not working.
First, the steel industry does not serve the needs of the UK—of our economy or of our security. Companies pursue completely legitimate corporate objectives, but those are no longer aligned with what we need as a country for our security or our economy.
Secondly, the steel industry is not serving the needs of private investors either. Companies are struggling to make money or find opportunities for growth. We have seen investment in the steel industry in other equivalent countries—big investment—but it has been staggeringly low for many years in the UK. It is not working for anyone.
What have the Government done in the face of this challenge? Well, we have the worst of all worlds. They do not know whether they want to be interventionist or not. They do not know whether they want to encourage competition or not. They do not know whether they want to have a plan or not. They dither; Ministers change; obsessions lie elsewhere, so this Government end up treating each crisis in isolation. They support existing players in the market rather than encouraging new ones, failing to tackle the lack of competitiveness and pouring billions of pounds of public investment into the steel industry without any improvement in the sector or any increase in capability. The result has been a significant fall in the amount of steel we are making. What is the overall outcome? Our steel industry is now smaller than that of Belgium, jobs have been offshored and we have damaged our communities.
Labour’s approach could not be more different. We will not pour billions of pounds into an industry without being clear what it is for, what the outcome will be or how the security and economy of the UK will be enhanced. We will not stifle competition; we welcome competition. We will go after new entrants to the market to encourage investment. We want the UK to be the most attractive country in western Europe to invest in steel. Labour’s £3-billion investment in steel will unlock billions of pounds of private sector investment. We will not just shore up a broken model, as this Government are doing. We will not dither. Our industrial strategy will clearly define the objectives for UK growth. We will identify the space in which UK national objectives align with corporate objectives, and we will be agile enough to respond to the different scenarios facing the industry by the time this wretched Government have finished their work.
Labour also has a commitment to primary steel making, unlike this Government. We will not jeopardise the security of our nation.
Jonathan Edwards
This is a genuine question—I am not trying to catch the hon. Lady out. As I alluded to earlier, there will be a change of Government before the end of the year and the hon. Lady will effectively be the Minister. Are the Labour Front Benchers now in a position to negotiate directly with those steel producers about the plan that will be in place in a year’s time? They are essentially a Government in waiting, are they not? Are those negotiations happening, or is there no chance of them happening at all?
Sarah Jones
Obviously, we need to wait and see if there is a change of Government, and we would not assume that. Many of us are in constant conversation with Tata and the unions about the way forward, and we are also talking to the Government about a different approach. We are doing everything we can from an Opposition point of view, but obviously the Government hold the reins at the moment.
Holly Mumby-Croft (Scunthorpe) (Con)
The hon. Lady makes mention of talking to Tata, and presumably that has been ongoing for some time. Can she be very clear whether her understanding is that Tata would have removed all its UK-based jobs had it not been able to reach a deal with the Government for some support at Port Talbot?
Sarah Jones
That is not my understanding—no. What we are trying to focus on in any conversations we have about any industry on steel is what the future is and where we go from here—that is the important question.
My advice to the Minister is to go to the hon. Member for Ashfield (Lee Anderson) and talk to him about when he worked down the mines, and what happened to his communities when the mines shut—the cliff edge, the redundancies, and the closure of all the community assets that went with it. That is what we risk doing in Port Talbot with the cliff edge that we face—nearly 3,000 jobs, as well as the huge knock-on impact of one job in the plant linked to three jobs in the community. Let us not lose 3,000 jobs in Port Talbot. Do not spend half a billion pounds on that. Let that not be the Government’s legacy.
It is not too late; there is an alternative that we could all work towards. The multi-union plan helps us to transition in a way that protects jobs. That is what the Government should be talking about to Tata. It is not too late for the Government to have a steel strategy, to spend taxpayers’ money in a way that works for the UK, our economy and our security, and to listen to their own work, if not Labour’s. The Government’s 2017 review, “Future capacities and capabilities of the UK steel industry”, identified the barriers to growth: supply chains, competitiveness, skills, and research and development capability. Has the Minister read that? What is the Government’s response to that review from 2017? It could do with an update now but the basics are there. The Harrington review is clear:
“The reality is that many of our competitors chase investments via their industrial strategies backed by substantial government support…The UK needs to respond.”
Has the Minister read the Harrington review and what is the response on steel? What is the Government’s steel strategy?
Ministers talk about how important scrap is going to be, and of course it is for electric arc furnaces, but how are they incentivising measures to keep our scrap here rather than exporting it, which is currently the case? Ministers talk about how we need new technology, but electric arc furnaces are not really the new technology any more—they are years old. What are we doing to take us towards a direct reduced iron facility in the UK using hydrogen? What is the plan? What is the plan to grow the steel industry and where is the ambition? What are the Government doing about carbon border adjustment mechanisms? The steel industry will be exposed to unfair competition, so what is the Minister going to do about that? What is the plan on skills, and what is the Government’s view of the multi-union plan for steel in Port Talbot?
Many of the manufacturing industries that I meet across different sectors are at a crossroads. Bills are high, there is no strategy to support them, they are reducing their output and they are struggling to find people to work with them. The steel industry in Wales is a case in point; the Government’s last-minute, chaotic deal was a masterclass in how not to run the transition. Members across the House are worried about the future of the UK steel industry. Members across the House do not want thousands of steel workers to lose their jobs.
Stephen Kinnock
My hon. Friend is summarising the discussion extremely well. I declare an interest as a member of the transition board. During the board’s discussions, we talked about what the vacancies looked like in the labour market in south-west and south-east Wales, and the vast majority of vacancies are in the retail and healthcare sectors. Those are really important sectors and really important parts of our economy, but does my hon. Friend agree that there is not really a connection between the skills and experience of the men and women who have worked in the blast furnaces, for example, and those required to fill the vacancies in the labour market outside those steelworks, and that that is extremely worrying?
Sarah Jones
My hon. Friend makes a really good point, which is why we keep coming back to this cliff-edge approach and saying that it is not the way to transition. If we think about south Wales and the Celtic sea, we think about the huge opportunities with an industrial strategy and industry working together with Government, including the jobs and growth that we could create, but do we have any of that under this Government? No, because they do not even have the starting point of a plan for steel.
Members across the House do not want to see this country becoming the first developed country in the world without the capacity to produce primary steel. Is the Minister concerned about our defence capabilities if we lose the capacity to make steel here from scratch? Does she think that the Government’s plan is really money well spent? Can she answer the question that was originally put today: what conditionality has been placed on this deal? We keep asking for the answer to that question, but we have yet to receive it.
Labour will have clarity of vision on steel. We will invest to unlock private sector investment and we will work hand in glove with the private sector. We will use our flagship policies—the national wealth fund, GB Energy becoming a clean energy superpower, grid reform and an industrial strategy—to make the UK a place to invest in, not a place to leave.
Once again I thank my hon. Friend the Member for Llanelli for making such a brilliant speech today and I also thank all the Members who have contributed to the debate. I hope that this debate serves to raise the Government’s game, but Labour stands ready to step in if it does not.
The Minister for Industry and Economic Security (Ms Nusrat Ghani)
It is an absolute pleasure, Sir Gary, to serve under your chairmanship.
I congratulate the hon. Member for Llanelli (Dame Nia Griffith) on securing this important debate and on speaking so powerfully on behalf of her constituents, many of whom, as she said, are directly affected by the proposed closure of the blast furnaces at Port Talbot. It was lovely to have on the record the importance of the history of steelmaking, especially the creation of tin cans and canned beer, which is something new to me that I will try to take forward somehow.
All hon. Members here in Westminster Hall today have recognised how vital it is that we have a competitive and thriving steel industry, not just for jobs at the Port Talbot and Trostre plants but because of how important steel is to the broader Welsh economy and its future. I thank hon. Members for their valuable contributions to this debate. It is unfortunate that the hon. Member for Croydon Central (Sarah Jones), the Opposition Front-Bench spokesperson, had to make it so political, but I will try to address as many of the points that have been raised as I can in my reply.
First, however, let me start by expressing my heartfelt sympathy for the hardworking employees across Wales and the rest of the United Kingdom who are affected by Tata Steel’s announcement. Undoubtedly, these are challenging and turbulent times for everyone involved, not only the workers but their families and the communities in which they live. Steel has played a pivotal role in modern Welsh history and Welsh people take immense pride in their industry and workforce. This Government are working hard to secure a long-term sustainable future for Welsh steelmaking and to grow the legacy of this cornerstone industry.
The concerns expressed throughout this debate are indeed our concerns; they are shared by hon. Members across the House. They have been expressed by the Government in our negotiations with Tata. We are indeed holding Tata to account. The transition board has been mentioned and we are ensuring that the transition is managed properly, so that every employee receives the support they deserve.
That is why the Government are making a significant investment of £80 million towards the dedicated transition board; Tata is also contributing £20 million. The board includes representatives from this House, the Welsh Government, the local council and other key areas to ensure that the local community is well represented and supported through this period of change.
In addition, Tata Steel has committed a further £130 million towards a comprehensive support package to assist impacted employees. This Government are indeed working hard to ensure that help and support are there for those who need it throughout this disruptive period.
I will be present at those transition board meetings, as will the unions, which I meet regularly. In fact, I believe I met the unions just this week. I forget exactly when, because my weeks blur into one, but regular meetings with the unions are taking place. The point about ensuring that we are involved in constructive dialogue stands, is noted and is on the record. At the same time, however, we must not forget the context that led Tata to make this decision, because the alternative, regardless of the politics being played out, could have led to no steelmaking at Port Talbot.
Dame Nia Griffith
Does the Minister recognise that many of the investment decisions have been taken because over the past few years the difference between energy prices here in the UK and in other countries across Europe, such as France and Germany, have had a significant impact?
Ms Ghani
The hon. Member always makes very thoughtful interventions. It is true that energy prices have spiked, partly because of what is happening in Ukraine, and that is most definitely a challenge, but the support that we are providing Tata is the largest grant that has ever been made available to the steel industry. That was not done under the Labour Government, but under this Conservative Government providing the widest and deepest level of support to the steel sector.
Dame Nia Griffith
Does the Minister acknowledge that the issue of energy prices pre-dates the events that happened in Ukraine two years ago?
Ms Ghani
Energy prices are a component. There is also the challenge that customers and users are seeking cleaner steel and the challenge of managing blast furnaces that are coming to the end of their life. It is a complicated scenario, but, because of the support that we have provided and the transition board that is focused on supporting the staff, there will continue to be steelmaking in Port Talbot.
Holly Mumby-Croft
Can I be clear in my understanding? In the negotiations with Tata—my hon. Friend has talked about the £500 million support package—did the Government get a deal, an understanding, some certainty over when the blast furnaces would be switched off as part of that deal?
Ms Ghani
My hon. Friend is far more knowledgeable on steel plants and steelmaking than I could ever be. The discussions continue. There is a consultation taking place. I was with the unions this week. They will continue to push their plans, which Tata has made clear are neither credible nor economically viable. But within those plans there is a proposal that electric arc furnaces will be upstream, not years away but in a couple of years’ time, which also gives assurances to the supply chains. My hon. Friend knows that the negotiations continue with British Steel and she will probably want to intervene on me later. A huge amount of support was provided by Tata and the transition board, which makes this a far easier programme of work to manage.
Tata has seen a decade of financial losses, with the Port Talbot plant reportedly losing £1.5 million every day. As I mentioned earlier, those challenges stem from complex international dynamics. China’s long-standing practice of flooding the global steel market with subsidised products has been a significant factor. Despite our efforts to mitigate the impact of cheap imports through domestic measures and challenging unfair practices internationally, we cannot ignore the harsh economic reality.
Ms Ghani
I will in a moment. Private companies in the UK steel industry are facing immense difficulties in turning a profit. In fact, without the opportunity to transition to a modem electric arc furnace, the existence of the Port Talbot plant would have been in jeopardy. I cannot stress that enough.
Sarah Jones
On the point that the Minister makes about China, we know that the cheapest steel from China has been a factor, but major importers to the UK are western European nations: the Netherlands, Italy, Spain and Germany. We are not competing with them, either. There is a fundamental problem in the way that we run this economy, which has meant that our industries cannot be competitive when others in the European Union can be.
Jessica Morden
On the issue of competitiveness, we pay 50% more for our energy costs in this country than they do in Germany. The German Government are putting around £2.6 billion into helping the industry transition. That has a major effect.
Ms Ghani
I will go on to answer that point. We have provided support for the energy costs of high-energy industries, and the supercharger initiative is coming down the line, but I will reflect on that point shortly.
The reality is that the Port Talbot plant would have been in jeopardy. Its closure would have had devastating consequences for the town and would have posed a serious threat to the UK as a whole, endangering the 8,000 jobs provided by Tata Steel across the country and numerous small businesses in the steel making supply chain.
Ms Ghani
I will in a moment.
I am on record as having had a regular, constructive relationship, so it disappoints me when Members come to this place and do not accept the reality of what was taking place in Port Talbot. If we had not provided support—the biggest support we have provided to the steel sector—there would have been a devastating effect on the entire 8,000 jobs.
Holly Mumby-Croft
I asked the shadow Minister whether all the Tata Steel jobs in the UK would have been at risk if a deal was not done at Port Talbot—presumably, that is where the “5,000 jobs saved” figure comes from. Will the Minister be very clear that her understanding is not the same as the shadow Minister’s understanding? I think her understanding is that all 8,000 jobs would have gone.
Ms Ghani
I thank my hon. Friend for putting that on the record. I am not sure what evidence the hon. Member for Croydon Central has that the plant would not have been under threat. When Tata circulated information prior to our debates or made announcements, it said that there was an absolute threat to Port Talbot and the company. The reality is that if we did not provide that support, there was a risk of losing all 8,000 jobs.
Stephen Kinnock
Surely when the Government entered into a negotiation with Tata Steel, which is highly experienced in the business of negotiation, they considered the possibility that a gun was being held to their head, and that Tata Steel would of course make threats about total closure because that would strengthen their negotiating position. Were the Government completely naive or just incompetent when they went into a poker game dismissing the possibility that they might be getting bluffed?
Ms Ghani
The hon. Gentleman knows better than most that these conversations and negotiations have been going on for years. The Labour party had an opportunity to invest in the blast furnaces when it was in government, and it did not do so. He also knows that the blast furnaces are coming to the end of their life, so a decision would have to be made at some time. Tata could have decided to exit completely, which would have resulted in a loss of the 8,000 jobs and certainty in the supply chain. The hon. Gentleman knows that, because he had I have been at meetings with the unions and at the transition board. I know it is very difficult when there are potential job losses in one’s constituency, but the reality is that the model was not working.
Before I give way to the hon. Member for Croydon Central, let me say that Opposition Members constantly want harder, greener net-zero policies, and this is what happens when we flow those through. Customers—end users—want cleaner, greener steel that is made in electric arc furnaces, and this is the outcome of that demand. The reality is that, without the support, there would have been a high risk of Port Talbot and Tata no longer producing steel in the constituency of the hon. Member for Aberavon (Stephen Kinnock).
Sarah Jones
The Minister is being very generous in giving way. I want to return to the point about whether it was this deal or the end of everything. If the Government had paid attention to their own report in 2017, which said, “Here are the problems with the steel industry: the supply chain, skills, R&D and transition,” and responded with a steel strategy, Tata would not hold all the cards and would not be able to say, rightly or wrongly, “It’s all or nothing.” We would not be in this situation. But the unions are supporting a reasonable deal that has a calmer transition and would not lead to job losses. Does the Minister think there is merit in that union plan?
Ms Ghani
I will go on to reference that, but not all unions subscribe to the plan, as the hon. Member knows. It was put forward by a collective, but not by all of them. Tata has been clear that keeping open a blast furnace for a very narrow period of time while opening up electric arc furnaces, which will provide the certainty that we need so that we can use scrap steel in the UK, is neither credible nor financially viable. Keeping a blast furnace open also creates difficulties around security and health and safety.
The negotiations continue, and a consultation is taking place. I was asked about what I am doing to ensure that Tata is observing the parameters of that consultation. The transition board is in place, and our focus is on ensuring that the consultation is as wide and deep as it can be, and that the transition board can do the job that it was set up to do, with huge sums of money.
I have already mentioned, and I cannot reiterate enough, the threat that the Port Talbot plant was under. We recognise the vital importance of the steel industry to the community’s heritage and identity. As I have mentioned, the Government have committed £500 million —the biggest sum ever invested in the steel sector—as part of a total investment of £1.25 billion to ensure the future sustainability of Port Talbot steel. That is what we have been able to do, and we should reflect on that. The investment is a huge step towards fortifying UK steel. Sustaining the blast furnaces would entail significant additional losses for the company and compound its current issues. Moreover, as the hon. Member for Llanelli knows, the UK’s blast furnaces, such as those in Port Talbot, are approaching the end of their operational lifespan.
Stephen Kinnock
The Minister keeps saying that the blast furnaces—plural—are reaching the end of their lifespan. Yes, everybody agrees that blast furnace No. 5 is very close to the end of its lifespan; that part of the heavy end, with the coke ovens, should shut down, because the investment does not wash its face. The lifespan of blast furnace No. 4 is until 2032. It does not require that additional investment. I would be grateful if the Minister would stop saying that both blast furnaces are reaching the end of their lifespan.
Ms Ghani
The hon. Gentleman has been at the same meetings as I have, so he knows that the blast furnaces cannot be going if we are to transition in a period of time to having the electric arc furnaces up and running. However, I know that conversations are taking place with the unions, because I spoke to them this week. They are continuing to put their case forward, which is why a consultation is taking place. The hon. Member also knows that we need to give those conversations time to be followed through.
Stephen Kinnock
On a point of information, the multi-union plan is based on a 1.5 million tonne electric arc furnace. Nobody is denying that electric arc furnaces should not be in the mix. We fully support an EAF. We need a 1.5 million tonne EAF, running alongside blast furnace No. 4, not least because that blast furnace could then produce the iron ore-based metallics that are a vital part of sweetening the mix for the electric arc furnace. That would allow us to continue to deliver the current customer portfolio and be ready to embrace the opportunities of the future. I urge the Minister to recognise that we want an electric arc furnace; it is just that a 3 million tonne electric arc furnace is madness.
Ms Ghani
Three million tonne electric arc furnaces do exist in other parts of the world; it is not a unique capacity of arc furnace. I spoke to the unions on Monday, so I know that they are continuing to put their plans forward. Let us see what happens in the next few weeks.
I think everyone recognises that a transition has to take place. We have talked not only about supply chain resilience, but about how we can use scrap steel in electric arc furnaces as technology moves forward. Tata has confirmed that it will observe 90% of its supply chain contracts.
Holly Mumby-Croft
Has the Minister’s Department carried out any work on the quality of scrap in the UK? I keep hearing about tonnages of scrap, but I do not think that anyone knows—or perhaps they do—what that scrap is made up of or whether it is suitable to go in electric arc furnaces.
Ms Ghani
My hon. Friend raises an important point. UK Steel and a number of other umbrella organisations have done a huge amount of work in this space, including with universities in Wales, and they have huge confidence that we could retain most of the 11 million tonnes of scrap steel that circulates in our economy and the 8.2 million tonnes that is exported overseas for use in the electric arc furnaces. Technology will move forward as well—it never stands still—but Tata is confident that it can meet 90% of the contracts it has in place at the moment.
Sir Gary Streeter (in the Chair)
May I make an observation? It is helpful if the Minister can respond to one intervention before people bounce up and down for the next one. Let us take it calmly.
Sarah Jones
It has been a while since I bounced up and down, Chair; I am too old for that. Is the Minister exploring incentives to keep scrap steel in this country? Because at the moment we export it all. Is she looking at VAT relief, tariffs or restrictions to help that process?
Ms Ghani
I will make some progress before I take any further interventions. If the hon. Lady paid more attention to the business model, she would know that we cannot use more scrap steel in the UK economy because we do not have the capacity. But we will with the electric arc furnaces, which will be the dynamic change that is definitely needed.
Furthermore, by reducing our reliance on raw materials such as iron ore and coking coal, electric arc furnace technology offers a more sustainable alternative. Unlike blast furnaces, electric arc furnaces use scrap materials that are readily available—as I said, we have around 11 million tonnes circulating—from abundant domestic sources in the UK. In fact, the UK ranks among the top exporters of steel scrap globally, second only to the United States. Leveraging our ample supply of steel scrap for electric arc furnace production enables us to create new steel products locally, supporting British and international manufacturers alike. Every tonne of steel scrap that is sourced domestically diminishes our dependence on raw material imports from overseas countries, none of them near neighbours.
Wider support for the steel industry was raised in the debate. More widely, we are backing UK-made steel and, crucially, we are backing it in the right way, investing hundreds of millions of pounds to help the industry to thrive in increasingly challenging global markets. We are launching initiatives such as the British industry supercharger, which reduces electricity costs for the steel industry and other energy-intensive sectors, bringing them closer in line with the charges of other major economies. That is complemented by the £730 million in energy cost relief given to the steel sector since 2013. We have given specific support through our energy bill relief scheme and energy bills discount scheme.
We are, then, ensuring the resilience and prosperity of the UK steel industry in the face of increasingly competitive global markets. This work is preparing UK steelmaking for the coming years, but it is not the final word in future-proofing the industry. The SUSTAIN future manufacturing research hub, which is led by Swansea University, is the largest fundamental research activity centre working right now to decarbonise and improve the efficiency of steelmaking in the UK. I believe it is also looking at the quality of scrap steel and new technologies to ensure that we can make even more products using steel in the UK.
Other points were raised by the hon. Member for Cynon Valley (Beth Winter), who serves on the Welsh Affairs Committee. I will go through the transcript from that Committee; I am across most of the issues raised. She asked about an unlimited budget; I am not sure that having an unlimited budget is a good use of taxpayers’ money, nor does it answer the question about the demands of customers looking for cleaner green steel.
A question was asked about absorbing further technologies. We are looking at electric arc furnaces at the moment, but that product is just the first step. As other technologies become commercial, they could be considered in future. I thought the question about our taking a stake in the company was curious because that is not something that we do. Regarding the condition on the grant, the consultation is taking place, and agreements are still being finalised and will include appropriate conditions on the grant. That is why the transition board is vital to that conversation. The grant will be paid in arrears against set milestones for the build of the electric arc furnace.
Beth Winter
I am not sure you have answered all the specific questions from the Opposition. You made a comment earlier about the consultation process that left me slightly confused. You met the unions on Monday and said you want to wait to see what happens in the next few weeks. Is this a done deal—or does the consultation process actually have some teeth in terms of potential outcomes? The unions are pushing the multi-union deal. You met them this week and just intimated that we should wait to see what happens in the next few weeks so—this is my understanding of a consultation process—are you still open to alternative options? Tata may not be, but the UK Government could be, just as the Labour party has proposed if and when we get into government.
Sir Gary Streeter (in the Chair)
Order. That was another long intervention. I remind the hon. Lady that any reference to “you” is a reference to me. I am certainly open to further negotiations, but that does not really matter.
Ms Ghani
This is a decision for Tata to take. It has made it clear that the offers put forward by the unions are not really credible, because it does not think they enable a transition without a huge amount of losses, so they are not financially credible. However, the consultation is taking place. It is not that I just met the unions this week: I meet them regularly and obviously I attend the transition board as well. The consultation is to ensure that Tata can make the right decision, and one would hope that it does that in consultation with the unions and with their overall support, accepting that it is incredibly challenging when we are talking about any level of job losses.
Holly Mumby-Croft
The Minister says it is a decision for Tata to make, which I absolutely understand, but as the UK Government are putting in half a billion pounds of funding and investment support, do we not have some say in that decision as well?
Ms Ghani
We cannot force Tata. We put the support package in place when Tata said that it was struggling and making losses of over £1 million a day, but we cannot insist that Tata continues. We have provided an offer of support, and we want to ensure that the least amount of people are impacted, that the transition board provides support for those impacted, that supply chains continue to be resilient, and that any decision Tata takes to transition is one that meets the framework it puts forward. For example, if Tata plans to continue with its plan for a 3 million tonne capacity electric arc furnace by 2027, we need to ensure that all the milestones are met.
I want to touch on the issue of procurement, which we really have to address. First, less than 1% of UK steel is needed by the defence industry, and it has nothing to do with Port Talbot. This Government have implemented the procurement pipeline, which I was committed to doing when I became the steel Minister, to encourage our steel producers to access more contracts. In the last reporting year, there was an increase in the value of UK-sourced steel, from £97 million to £365 million. It is important to put that on the record, because Ministers say that they will try to increase UK procurement and we have most definitely done so.
I am worried that we are going to run out of time. The reality is that without our support there would have been a serious conversation fundamentally about the loss of 8,000 jobs at Port Talbot. I appreciate that the Opposition cannot understand the realities of business, but under Labour employment in the UK steel industry was cut back by more than half, or 40,000 jobs. Obviously, the Opposition do not appreciate the number of jobs that we hope to have saved.
We understand that Tata’s announcement will come as a heavy blow to the people of Port Talbot, but I recognise that everyone present accepts that we cannot stop the clocks. Technology has moved on. There has to be a transition, and this is a transition in which the majority of jobs will be supported with a substantial sum of money, and of course by the transition board as well. The transition we are talking about is one that enables us to adopt new technologies, with even more allowed to be adopted further down the line. It prevents the further loss of profit and prevents a dependence on imports going forward because we can use scrap steel within our own economy.
I assure the hon. Member for Llanelli that we are committed to working with Members throughout the House to realise a brighter future for our steel-making industry. If the options proposed by Opposition Members—whether it is the £28 billion or the £3 billion—were seen as serious and credible, I am sure that Tata would have taken heed of those support packages. Obviously it thought either that they were not credible or that they would not enable it to continue to do what it wanted—to transition to electric arc furnaces—and that they could have meant even more job losses in Wales and across the UK.
Stephen Kinnock
The Minister is being generous in giving way. She said that the Tata plan would enable us to be open to new technologies. In fact, the opposite is the case because the 3 million tonne electric arc furnace negates the possibility of direct-reduced iron capability, of an open slag bath furnace and of a plate mill; the plan is closing down routes to other technologies, not opening them up.
Ms Ghani
We can look at the reality of a DRI plant at Port Talbot, as well as examples across the rest of the world. A DRI plant requires even fewer people. I was looking at a plant in Texas that ended up having a 2 million tonne DRI plant, and it only requires 190 jobs. It is possible to transition; the opportunity to transition is there. There is often talk of hydrogen. That technology has not been tested to the capacity needed for this particular plant or for the levels of steelmaking that we need in the UK.
Let us deal with the matter in real terms. These conversations have been going on for years. I have spoken to the hon. Member for Aberavon, who represents Port Talbot, and I know that we could have continued the conversations and had a cliff edge, with Tata leaving; or we could have come up with the biggest settlement for steel and a consultation to make sure that the least amount of jobs are impacted—and that is going to provide certainty and security for steelmaking at Port Talbot for years to come.
I fear I have run out of time.
Sir Gary Streeter (in the Chair)
Dame Nia Griffith will have the final word.
Dame Nia Griffith
I thank all my Labour colleagues for a comprehensive picture of the steel industry right across south Wales. We are all very concerned: from Llanwern through to Port Talbot through to Trostre in Llanelli, and all our communities across south Wales. I thank the Minister for her responses, but I hope that she will take away and reflect on our points and questions, and look again at what more can be done to make us a steelmaking champion of the world.
Question put and agreed to.
Resolved,
That this House has considered the future of the steel industry in Wales.
A14: Junction 10A
(9 months ago)
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Mr Philip Hollobone (Kettering) (Con)
I beg to move,
That this House has considered junction 10A on the A14 at Kettering.
May I say what a pleasure it is to see you, as such a distinguished and experienced member of the Panel of Chairs, in the Chair for our proceedings today, Sir Gary? I thank Mr Speaker for granting me this debate, and welcome the Minister to his place; he is an assiduous, diligent, hard-working and energetic Minister, and I am sure that he will listen closely to my constituents’ concerns.
This is not the first time that the House has heard about junction 10A on the A14. I have asked a series of oral and written parliamentary questions, and have had two debates in this Chamber on the same subject—in November 2020 and February 2023. I suspect junction 10A is unique amongst the road projects that the Department for Transport is considering, because it has three defining characteristics: originally, the scheme was in the road investment strategy 1 for the period 2015 to 2020 and it has now been resubmitted for RIS3; it is 50% developer funded; and it has a benefit-cost ratio of 3:1. Those are all impressive and unique characteristics that make the scheme distinct.
I also know that the scheme has the personal attention of the Secretary of State for Transport himself, because I met him in March last year and he was kind enough to write to me to say:
“I was taken with the fact that”
junction 10A is
“significantly developer-funded, had a high benefit-cost ratio, and was originally scheduled for RIS1.
As a result, I am happy to continue progressing the scheme as previously planned during the RIS3 period, subject to business case.
I also agree with your suggestion that National Highways and DfT officials should cooperate intensively with the local planning authority and the developer to progress the scheme as quickly as possible.”
Given the many items that the Secretary of State has to deal with every day, I am pleased that he has personally taken an interest in the scheme.
I know that the Minister knows Kettering: in his previous guise as Pensions Minister he was kind enough to visit in summer 2022 to support our local older persons’ fair in the Corn Market Hall in Kettering, as part of the drive to encourage pensioners to take up pension credit. I thank him for his interest and for having already visited Kettering.
Junction 10A does not actually exist—at the moment it is just a blob on a DFT map—but it is a junction that local residents very much need if Kettering, Barton Seagrave, Burton Latimer and Cranford are not to grind to a halt because of all the traffic generated by the new house building taking place locally.
In short, junction 10A is critical road infrastructure. Originally, it was set to cost £40 million—the figure is probably is now nearer to £60 million or even more—with financial contributions split between the DFT and the developer, and it is required to deliver phase 2 of the Hanwood Park development which, in Government planning terms, is designated as a garden community that will comprise an eventual 5,500 dwellings and employment land covering 328 hectares to the east of Kettering. Local land values will not allow the junction’s development to be funded without Government intervention, so public funding is required.
In line with planning conditions, junction 10A must be in place by the time that between half and two thirds of the dwellings on the development are occupied. Just under 1,400 dwellings are already occupied, and the developer’s current housing trajectory shows that the dwellings trigger for the junction will be reached some time in 2026 or 2027. There is therefore a significant risk that without the new junction the development will grind to a halt in three or four years’ time, so my ask of His Majesty’s Government and the Minister today is for a firm commitment to include junction 10A in the Department’s road investment strategy 3, which is the programme for major road programmes in the period from 2025 to 2030. Junction 10A is already in the pipeline for RIS3, but we now need a definite funding commitment to include it.
The continuation of the sustainable roll-out of the Hanwood Park development can happen with confidence only if there is a definite Government commitment to the junction and a tangible Government commitment to the funding. What we are talking about is the need for joined-up government. If His Majesty’s Government are to get anywhere near their objective of 300,000 new dwellings built each year in England, they need to ensure that the requisite roads infrastructure is in place. The funding of junction 10A and the enabling of Hanwood Park to continue to be developed beyond 2026-27 will be a key test of the dovetailed Government housing and road strategy.
I know that the DFT already recognises the importance of the junction, because funding for it was originally included in RIS1 for the 2015-to-2020 period. The slow roll-out of housing development amid the national economic conditions at the time meant that the programme was not activated then, but housing development on the site is now proceeding at pace, with up to 400 new dwellings a year, and the funding commitment is now required.
Importantly, the Hanwood Park development is the fourth largest sustainable urban extension in the whole country. It is one of the nation’s flagship housing extensions and sits within the strategic Oxford to Cambridge planning arc. For local people, the Hanwood Park development is the equivalent of bolting on to the town of Kettering itself another town the size of Desborough. We have to ensure that the homes built on the development form a vital, liveable community and do not simply become one big, soulless housing estate. To make that happen, we must ensure not only that the infrastructure is in place to serve those new dwellings, but that there is no adverse impact on the quality of life of existing residents in other parts of Kettering, Barton Seagrave, Burton Latimer and Cranford.
Outline planning permission was originally granted in April 2010 for 5,500 houses; a range of employment uses; a mixed-use district centre, including shops, local services and a health clinic; three local centres; a secondary school; four primary schools; hotel and leisure development; and extensive formal and informal open spaces.
Work is well under way to deliver development in the first phase of Hanwood Park, with 2,117 homes benefiting from reserved planning matters approval, and these are either built out, currently under construction or about to be commenced. Reserved planning matters approval has also been given for roads, green spaces, sustainable urban drainage systems and utilities infrastructure. Hayfield Cross Church of England Primary School—the first school on the site—is fully operational and serves the needs of Hanwood Park and the surrounding area. A free school bid has been successful for the delivery of the secondary school.
Despite the challenges of the pandemic and the associated economic downturn, delivery continues across the scheme, with David Wilson Homes, Barratt, Bellway, Orbit, Persimmon, Avant, Taylor Wimpey and Grace Homes, which is a local small and medium-sized enterprise house builder, progressing on site. As of early December 2023, about 1,126 dwellings were occupied, with a further 300 under construction. This includes the successful delivery of more than 20% affordable housing, which meets a key requirement of local housing needs, as well as more recently adapting to changes in the energy system, with the latest developer at Hanwood Park, Grace Homes, delivering 100% electrically heated and powered homes, which are well insulated and using heat pumps ahead of the introduction of the future homes standard.
Further confidence has been expressed in Hanwood Park, including proposed investment in non-residential facilities, including for a health centre and an anchor food store. These investments will be subject to receipt of planning permission, which in turn requires progress to be made on the junction 10A road scheme. The fact that such investment has been made—in effect, conditional on securing the junction improvement—places an increased focus on the RIS3 programme and demonstrates again the strong fundamentals in place at Hanwood Park and the additional benefits that the RIS3 investment will bring.
Hanwood Park is also proposed as the site of a much needed mixed-sex secondary school, which His Majesty’s Government have done much to support. The delivery of the school is also, in practical terms, contingent on the junction project being committed to.
The rate of delivery during the past few years, including throughout the pandemic, has at times reached an impressive 400 units a year. This, against a backdrop of mixed performance elsewhere in the country, demonstrates the significance and substantial contribution that Kettering can make to the UK’s growth prospects.
A new outline planning application has been submitted for the remaining 3,383 dwellings, as well as the remaining schools, formal and informal open spaces, district and local centres, a hotel and employment. The application has reached an advanced stage, with North Northamptonshire Council’s planning committee targeting this spring, in a few months’ time, for a decision on it—but certainty on junction 10A is critical to the scheme.
The development of Hanwood Park forms a key component of housing to be delivered in North Northamptonshire and Kettering in the adopted “North Northamptonshire Joint Core Strategy 2011-2031”. Housing growth will be in parallel to the delivery of employment land and other uses. The development as a whole is estimated to create an amazing 8,100 new local jobs. Without a Government commitment to junction 10A, 2,000 new homes, including 400 affordable ones, simply will not be delivered. Without junction 10A, there would be significant and unacceptable traffic congestion at the existing junction 10 roundabout and elsewhere, as well as untenable residential amenity issues caused by large vehicles accessing the employment uses located in the south-eastern area of the new development. That means that the traffic would be forced to travel through the new residential areas.
In addition to the continued housing delivery, the new junction will unlock employment land, which is key for local sustainable growth. The new junction is essential in enabling the delivery of some 10 hectares of employment land in the south-eastern quadrant of the development. The market delivery of those employment sites would be extremely challenging and may not be possible without junction 10A. The same position is true of land situated in and around junction 10A. There is therefore a significant risk that the development as a whole will grind to a halt. Thousands of jobs could be at risk, and further homes simply will not be built.
At the moment, 2026 remains the target date for the delivery of junction 10A, in line with the DFT’s RIS3 programme, but that requires detailed planning approval to be achieved and procurement to commence concurrently. That can happen only if there is confidence in the Government’s commitment to junction 10A and a tangible commitment to RIS3 funding. Hanwood Park now faces the unwelcome prospect of beginning to halt the development in the next two years unless there is clear and unambiguous confidence in the ongoing support for the project. The challenge will increasingly become a question of supply rather than demand, as there are a little more than 700 homes left to construct and occupy.
Against that backdrop, local residents on site are becoming increasingly frustrated by the lack of delivery of further amenities and facilities, which is leading to more journeys by car to alternative locations to meet basic needs and undermines the principle of the original sustainable urban extension programme. Any further loss of momentum will damage long-term confidence in the scheme and create discontent among the new residents, who are beginning to question whether it will ever be completed. Developers and investors alike need as much certainty as possible to be able to plan and have confidence in the route ahead, and recent progress is now in danger of stalling.
I know that National Highways is progressing junction 10A through its approval processes and considering the part-funding solution for the new junction. North Northamptonshire Council is fully engaged and supporting the process, together with the developer of Hanwood Park. My view is that the process now needs to be expedited so that there is certainty around the delivery of the new junction, which is critical to the delivery of Hanwood Park as a whole. A firm commitment to RIS3 funding is now imperative to ensure continued housing delivery, including vital affordable housing, along with the significant employment opportunities and economic growth that the local area needs, and to give the market confidence that delivery will not be stifled.
I invite the Minister, on one of his regional road tours, to come and see Kettering for the second time in his ministerial career and to see the site of the proposed new junction. For local people, the tragedy is that we could have had as many as 3,500 new homes built on Hanwood Park without the necessary road infrastructure to take us beyond that level. That presents the real risk of gridlock in the town of Kettering, with initial houses already provided but the Government not coming up with their share of the funding for the new junction 10A.
My plea to my hon. Friend the Roads Minister, on behalf of local people in Kettering, is that he recognise the fundamental importance of the new junction to people in the local area, and that the Government make the commitment to fund it that we badly need and expedite the process to deliver the junction on the ground.
The Parliamentary Under-Secretary of State for Transport (Guy Opperman)
What a pleasure and joy it is to serve under your chairmanship, Sir Gary. I put on record my thanks for your work in the House of Commons and our sadness that you are departing; those massive shoes will need to be filled.
It is an honour to respond to my hon. Friend the Member for Kettering (Mr Hollobone). Before I get into the nuts and bolts of junction 10A, I should say that, even though it does not exist as yet, it is probably the most debated junction in the House of Commons in the history of roads and transport. There was a debate on 4 November 2020 and then another debate exactly one year ago, on 21 February 2023. I thank my hon. Friend, because he is a fantastic campaigner. Every single Member of Parliament looks up to him because of the work that he does on behalf of his constituents, and he is nothing if not determined and persistent. He is a worthy local champion for the fine town of Kettering.
My hon. Friend is right: I was privileged and honoured to attend on 1 July 2022—I looked that up—during the dog days as the Minister responsible for pensions, the older persons’ fair at the Corn Market Hall in Kettering. That is a delightful building, and that was a fantastic opportunity to meet dozens and dozens of people who are doing amazing community group work and amazing volunteering but also providing older persons’ work and opportunities, part time and full time, in a variety of ways. It was credit to my hon. Friend and his local council, which was co-running that fair, that I was able to see the massive enthusiasm for community, above everything else, but also the jobs that everybody was trying to provide.
I then enjoyed a particularly fine lunch at 27 Crown Street, where I was talking about all those matters—older workers, pensions and the like—and was only slightly taken aback when someone said, “You really do look too fat to be a steeplechase jockey.” That is something that one has to bear when one is a long way off racing weight. Such is life.
Now I come to the nuts and bolts of the issue today. As my hon. Friend is utterly aware, the A14 is in effect a modern-day Watling Street. It is the key junction, key connection, between so much across the country. It is an integral part of the road network, and it is utterly key to his constituency of Kettering. I totally get that. That point is utterly well made.
The Hanwood Park development is also genuinely groundbreaking. I do not think there is any doubt whatever that the scale of ambition, the number of developers individually, as corporate entities, and the scale of the desire to build a proper garden city that has all the amenities, schools and free schools, and the business development that follows are genuinely game changing. It is something that has been going on for a long time, dating back, as we my hon. Friend and I are acutely aware, to the planning application successfully going through in 2010. It has then had various iterations as the houses have been built.
It is also very much the case that this project has the full support of the Department for Transport. I want to assure my hon. Friend of that, first in outline and then by getting into the nuts and bolts of the details. First, he rightly makes the point that he has met many roads Ministers. He also had a specific meeting with the present Secretary of State, who stated unequivocally that this is a unique development because it is something with a high degree of contribution by developers. On 22 March 2023, the Secretary of State stated:
“I am happy to continue progressing the scheme as previously planned during the RIS3 period, subject to business case.
I also agree with your suggestion that National Highways and DfT officials should cooperate intensively with the local planning authority and the developer to progress the scheme as quickly as possible.”
There have been a number of developments since then, and I want briefly to go back over the planning and the memorandums that have been engaged in before I get to the final points I wish to make. The first issue, clearly, is what has happened in the passage of time since the 2010 planning approval. In April 2021, the developer resubmitted a planning application for the full 5,500 homes, as my hon. Friend is acutely aware. The key issue will be the trigger point in respect of when certain conditions apply. I take it from his assurances in the House that we are to have the final resolution of that planning application in the next couple of months. There is a degree to which this is chicken and egg, and I fully understand that point, but I can certainly confirm that this project is and will be in RIS3.
There are two provisos to that. The first is the business case, but I think my hon. Friend and I know that this project probably has the best business case in the country, as far as I am aware, because it has significant developer contribution and is absolutely in support of all our other objectives. Personally, I see no difficulty whatsoever, but these things have to be assessed on an ongoing basis.
The second key point is that the project is subject to planning permission. If planning permission were to be refused, that would make things complicated. However, I want to convey to my hon. Friend and his constituents, particularly the Hanwood Park residents, and to this House and, most importantly, the local authority that will determine the planning condition that, provided the planning condition is satisfactorily passed, all the conditions in RIS3 will apply. It seems to me inevitable and entirely right that this project should be built as part of RIS3.
Clearly, I cannot pre-judge the decision of my hon. Friend’s local authority in the next couple of months, but there is no doubt in my mind that this project should proceed. Commitments have been made for this project in the past, and, subject to those two preconditions, both of which are eminently resolvable, it should unquestionably be achieved in the next few years.
I wish to try to make clear a couple of other minor points. As I understand it, in the summer of last year—in July 2023—following the steer from my right hon. Friend the Secretary of State for Transport, a memorandum of understanding between National Highways and the developer was signed that set out various protocols, including the role of National Highways in ensuring the works by the developer associated with junction 10 on the A14. Those technical works are already under way as part of stage 1, led by the developer and its technical team. There is also a full transport assessment of the updated proposals, and National Highways is supporting that work and undertaking necessary checks and assurances.
While it is true that this junction does not exist at the present stage, I have some very impressive plans of said junction, and it is way more advanced than many things that are ethereal in the mind and insubstantial in the action that we often discuss in this House. The utterly key thing is that the local authority needs to progress the planning application, and National Highways needs to put all hands to the pump to ensure that it is ready to proceed. I can give my hon. Friend the assurance, as previously expressed in writing by the Secretary of State, that this project is part of RIS3.
Mr Hollobone
Before the Minister sits down, I thank him for his detailed and assiduous response. Once the planning permission is granted—hopefully in the next couple of months—would the Minister be kind enough to come and visit the site so that he can see it for himself and we can then progress the expedition of this scheme on the ground?
Guy Opperman
My hon. Friend has prejudged the point I was going to make, which is that it would unquestionably be a delight, an honour and a privilege to return to the good people of Kettering and to spend some time with him. That was my intention. I do not think there is much point in me coming until the local authority has made its decision, but when that happens it would seem entirely right and proper for me, my hon. Friend, the local authority and National Highways to meet on site. I could come and visit the site and give the proper direction, oomph, and various other steers that this project needs to be proceeding apace. I hope that reassures him. I look forward to coming to visit Kettering on another summer occasion, and to the local authority making the right decision so that we can then progress junction 10A. That is something the Government support in its entirety.
Question put and agreed to.
Access to Education: South-East Northumberland
(9 months ago)
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Ian Lavery (Wansbeck) (Lab)
I beg to move,
That this House has considered access to education in south-east Northumberland.
As ever, it is a pleasure to serve under your chairmanship, Mr Henderson, as we discuss an incredibly important issue for many in my constituency of Wansbeck, and indeed in wider south-east Northumberland. I understand that it might be complicated, because I will be mentioning the different schools, areas, towns and villages, but myself and my staff are happy to discuss the geography with the Minister and his team following the debate.
At the outset, it is important to put on the record my thanks to the school leaders, trustees and governors, the parents, the kids—everybody who has worked extremely hard in my constituency. For quite some time, the Ofsted ratings have not been where they should be, but they are on the turn for the first time in a quite a while. I want to assure the people involved in the schools in every part of the educational structure that they have my full support and sincere thanks for turning the worm with regard to qualifications in the constituency. They have all been at the forefront of turning around the fortunes of the children. For far too long, we have seen what can only be described as less than acceptable educational results.
The crux of this debate is the concept of parental choice in education—something that sounds so reasonable, but has had a disastrous impact on some children. At the 2019 general election, the Government pledged to
“continue to ensure that parents can choose the schools that best suit their children and best prepare them for the future.”
That is something that parents in south-east Northumberland will consider with utter confusion. In the time I have been a Member of Parliament, education in south-east Northumberland has largely been converted to a two-tier system from a three-tier system. I do not intend to make any comment on the effectiveness of either system—that is for another time. The change was certainly opposed by many people, but implemented after consultation, and it will not have been seen by those opposing it locally as upholding parental choice.
The upshot of the change was the closure of middle schools in some of the larger villages of south-east Northumberland. Specifically, it meant that Newbiggin-by-the-Sea and Guide Post lost their middle schools and that children who would previously have been schooled in their community are now travelling to secondary schools in neighbouring towns at a much younger age.
Parental choice in special educational settings is an incredibly important topic, too, but I do not intend to dwell on that today. That topic deserves its own debate, and is something we can return to at a future date.
Jon Trickett (Hemsworth) (Lab)
I am grateful to my great and hon. Friend and I welcome you to the Chair, Mr Henderson. Is the population of my hon. Friend’s constituency sparsely distributed? Mine has got 23 separate villages, and there are probably four or five high schools, so making a choice is limited by the geographic spread of the secondary schools especially. That impacts communities like my hon. Friend’s in the north east, and mine, and those elsewhere, too. In that respect, competition between secondary schools and academies does not necessarily help parental choice in my hon. Friend’s constituency.
Ian Lavery
I thank my hon. Friend for that intervention. As he suggests, it is basically the semi-rural and rural villages—small villages—that have had children travelling to certain schools as feeder schools for years and years, indeed decades and decades, and choice is now being taken away from parents. That is a massive issue—basically, it is the crux of this debate we are having here today.
Jon Trickett
I am grateful to my hon. Friend for giving way again. Has he had the experience of some entrepreneurial secondary academies excluding kids who have issues about attainment in an effort to drive up the average result for those schools? And if he has, what does he think happens to those children—those young people—who have been excluded?
Ian Lavery
Again, that is an important issue with regard to what has happened to a number of, shall we say, allegedly problematic children in education. It has proven to be a massive issue, certainly in my constituency in the past, as it probably has across the piece.
In my view, there is a reluctance among some schools and academies to continue to educate some young people. Basically, they should try to nurture them. A lot of these kids are not going to be told what to do; they have got extreme difficulties. They are living in poverty and have problems. They live in socially deprived areas, which are getting worse and worse. A lot of their parents are using food banks. A lot of these kids need somebody to put an arm around them, but a number of them, at a very young age, get kicked into touch far too early by different schools and academies, across constituencies.
Gordon Henderson (in the Chair)
Order. We do not really want multiple interventions by one Member.
Jon Trickett
I absolutely take your guidance, Mr Henderson. I have not asked to make a speech, but my hon. Friend is raising a number of issues of national importance. With your forbearance, Mr Henderson, can I make one final intervention, please?
Jon Trickett
You are very generous, Mr Henderson. We have a 90-minute debate and my hon. Friend probably has an 85-minute speech, so he will have to cut it down slightly.
I have noticed that the proportion of young people in my hon. Friend’s constituency with no qualifications at all is almost one in five; in the city of London, only 6% have no qualifications. Is that due to social class or is it partly about the density of the population in London compared with the sparsity of the population in his area? In my own constituency, 24% of all the kids have no qualifications at all when they leave school. Is that not a disgrace?
Ian Lavery
I thank my hon. Friend again for his intervention, which had a number of questions. You are an excellent Chair, Mr Henderson, but there are only a few people here in Westminster Hall. [Interruption.] Ah, the hon. Member for Strangford (Jim Shannon) has just arrived.
It is really important to recognise the situation that my hon. Friend described, which is part of what I wanted to discuss here today. This issue is about giving all children equal opportunity and equal choice in schools that their parents went to or where their friends up the street are going to. Children in the same street are going to different schools.
This issue is all about trying to better the educational lives of young people in our constituencies. It is difficult. The constituency of my hon. Friend the Member for Hemsworth is very similar to mine: both have areas with high populations and lots of little areas on the outskirts with much lower populations, and that presents problems. Regardless of party politics, parental choice in education is an incredibly reasonable ambition, but until all parents are able to exercise parental choice it will remain only an ambition.
In recent years, my office has been dealing with an increasing number of cases relating to children who are not able to access their school of choice. That is not because they have sought to access schools in distant communities where they do not have any ties—indeed, as I mentioned before, the schools they are now unable to access are the ones their parents and grandparents attended. If someone was at one school, the next school used to follow; it was a generational thing. But that has been smashed to pieces by the new rules that have come into place for pupil allocation numbers, or PAN.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Member on securing this debate. He and I are often in debates in Westminster Hall on issues of interest to him and me as well. Really well done on bringing this forward.
The issue of education is no different in south-east Northumberland and my constituency of Strangford, although this debate relates to south-east Northumberland. Does the hon. Member agree that access to high-quality education must be automatic—in other words, available to everyone? Should not central Government assist local councils in areas with additional needs by providing more teachers? Furthermore, classroom aids and assistants are essential in getting as many children into mainstream education as possible. I often say that education is vital for our children. If we get them educated, the future is open to them to achieve their many goals and dreams.
Ian Lavery
What the hon. Gentleman says is so true: this is about proper, real and good education. In my constituency, we have seen a number of schools turn the corner—they are now rated good, rather than the unwelcome ratings from Ofsted. That has focused parents’ minds. Instead of thinking that their kids should go to another school, they now want them to go to the school that is now rated good or better and that hopefully will improve further in the coming years.
Everybody should want their children to be part of the best potential educational facilities where the best results are obtained, but also in a really welcoming environment. I mentioned before that as a schoolboy I was at Ashington High School, which is now Ashington Academy. Two large cohorts used to be bused into Ashington High School from Pegswood, which is about two miles away; when my two sons attended the school, they experienced exactly the same. As recently as 2018, 100% of the 19 children leaving Pegswood Primary School, just one and a half or two miles away, were admitted to Ashington Academy, and that was the way it had been for generations. Last year, however, 24 children left the school at the end of year 6, but only 14 were admitted to Ashington Academy. Nine found their way to a different town altogether, six or seven miles away, and one went to the Blyth Academy—even further afield. We can see what has happened there. In the years in between, the number going to Ashington Academy has steadily reduced, with the destination of those not able to get a place varying greatly.
Pegswood Primary School is marginally closer to the King Edward VI School in Morpeth, known as KEVI. [Interruption.] I can see the Minister looking at a map. However, the system there still includes middle schools and the school is regularly oversubscribed. That means that this very sought-after school simply does not provide an appropriate opportunity for those kids to access education.
The reality of the situation is year groups and friendships are split up as children travel further to attend a suitable school. The same issue is in play at Bedlington Academy. In my office, we have been dealing with cases involving children from North Blyth, Cambois, Choppington, Guide Post and Stakeford who all have been unable to obtain a place at the school. This was their natural school.
We have spent many hours seeking a solution for a girl living in North Blyth. For those unfamiliar with the geography of the area, North Blyth is a small community on the north shore of the River Blyth, looking on to the town that shares its name, with the river running in between. The girl has gone through a primary school that was formerly a feeder school to both Bedlington Academy and its predecessor Bedlingtonshire Community High School. By any reasonable measure, given that the girl cannot conceivably cross the river, her closest secondary school is Bedlington Academy, but she has not been able to gain a place there. Her parents do not wish her to attend her next nearest school, which is a faith school. As such, she is out of education, awaiting a place at the academy. These are the issues that are important to families and children in their early stages.
We have spent a lot of time trying to help a kid from Stakeford who, again, having gone through the academy’s former feeder schools, has been unable to obtain a place. He is an incredibly bright young fella, but he is six months out of any formal educational setting, and we cannot just continue. One of the reasons why the debate is happening is to ask the Minister for some sort of support in south-east Northumberland. The boy’s next nearest school is the oversubscribed Ashington Academy, so he is forced to choose from options that are, again, further afield. The two children are not alone; indeed, we are aware that Bedlington Academy is oversubscribed for the next academic year by more than 20 pupils.
I previously alluded to former feeder schools. In 2020, the schools admissions criteria of both Ashington and Bedlington academies, both run by the North East Learning Trust, were amended. Rather than using feeder schools in their over-subscription criteria, they changed to using the distance from the school as the determining factor. Under usual circumstances, that could be seen at first glance as a reasonable change and one that is entirely legal under the legislation. It should be noted, however, that it was against the then advice of the local educational authority—Northumberland County Council —as was North East Learning Trust’s decision to cut the number of places available each year in both their academies.
There are more issues at play in the local area that cause problems. Ashington and Bedlington are towns containing two secondary schools. In Ashington, there was traditionally a split down the middle of the town that decided which schoolchildren attended which school: one side was the Church of England, the other the Ashington Academy. Children from the surrounding villages were split between the two schools, with those from Newbiggin and Lynemouth attending one and those from Pegswood, Linton, Ellington and Ulgham the other. The change in oversubscription criteria alone would have made little difference, but combined with different outcomes for the children, there is a swell in the number of pupils seeking to attend Ashington Academy.
Ashington Academy is at the centre of the town. Its results, as I have mentioned twice already, are very much on the increase, and therefore more people want to go there from the semi-urban areas and from Ashington itself. Every child in Ashington, regardless of where they live, lives closer to Ashington Academy than a child from Pegswood or the other villages. Pupils who would have travelled to Ashington Academy from Pegswood, Linton and Ellington now have fewer options, because people in Ashington town who perhaps would have gone to the other school live closer, and that means the admission criteria is in their favour.
Again, though there are two schools in Bedlington, the traditional split between them is slightly more complex due to one of them being a Catholic academy, but parents from wider Bedlingtonshire increasingly find that parental choice is unavailable to them, too. Children in Stakeford, Choppington, Guide Post, East and West Sleekburn, Cambois and North Blyth are at a disadvantage in attending their closest secondary school because they live too far away. Perversely, though I am not aware of any cases yet, there will come a time when even children living in Bedlington could find attending their closest non-faith secondary school difficult, with parts of Blyth closer in distance to the school than parts of Bedlington.
There is some positive news for those wishing to attend the Ashington Academy next year, as the school has been able to increase admissions to ensure that all those who have chosen it as their first choice can get in. We have made a little bit of progress thanks to Lesley Powell and her team at the at the North East Learning Trust. It does not help those who have been forced out of the traditional school progression in previous years nor, unless something can be sorted, will it help anyone in the future.
Bedlington Academy, however, has not had such luxuries. The school operates in a purpose-built facility that is restricted due to size. There are simply very few options for it to take a similar approach without building work, and obviously building work means more investment into the academy, something that the North East Learning Trust has been seeking. However, that has not been agreed by the education authority.
The data from the local authority for children in the Bedlington schooling system shows that the problem is likely to subside in the coming years. People believe that in the coming years it might change for the better, but that does not take into account any other factors. The progress made in recent years by Ashington and Bedlington academies is absolutely remarkable—their reputations have been so transformed that parents are desperate to get their children into the schools. Regardless of any other factors, the schools are likely to continue to be oversubscribed and children from more distant villages, for whom previously these were the appropriate schools, being split up from their peers and pushed into secondary schools that are even further away than the Ashington and Bedlington academies.
As the MP for the area for more than a decade, I have deliberately sought not to interfere in planning issues and I have no formal role in the process. By and large, that has been a sensible decision, but I have been told on multiple occasions that the explosion of house building in the constituency will have no impact on local services. Specifically, I have been told that there is no issue with school places and I have been shown figure after figure that supposedly proves that. However, with the benefit of hindsight, that does not appear to have been correct.
There is no wonder that local people are angry with the failure of local services to keep up. It is they and their children who are forced to deal with the consequences. The role of the local authority in all this is severely weakened by the academisation of so many schools in the area. Where once it would have had the responsibility to act to ensure fairness, it is now left to pick up the pieces. The warning that Northumberland County Council officers made to NELT in 2020 were not heeded and they have no powers to do anything in response. That is a huge difficulty. Part of the academy chain, the North East Learning Trust, is setting the rules. It has been agreed that it is not doing anything illegal, and the county council advises it that that should not be the case. It is not listening to the evidence from the county council. We have kids falling through the cracks. Nobody has done anything wrong; it is just not working for a number of young people, and it is set to get worse. Where once a local authority would have the responsibility to act to ensure fairness, it is now left to pick up the pieces.
Council officers have concluded that the trust’s change in admission policy disrupted long-established educational pathways, causing much confusion. Students and their families are left upset and uncertain. They report that students are being forced to go to schools outside their communities and away from long-standing friends, often involving unacceptably long journeys. I understand that council officials have met with the North East Learning Trust on an annual basis to try to convince them that the distance criteria are unfair and causing hardship. They are sometimes able to, in their words, “wrestle” some additional places in order to assist some students, but the distance criteria continue to disadvantage many, especially those in the villages in the former catchment areas that are furthest away.
Since 2010, austerity has ravaged parts of my constituency. In some areas, child poverty has gone through the roof. Schools clearly have not escaped that, with funding cuts being patched up by staff commitment. They remain shining beacons of opportunity in our communities, but for too many they are now unable to be accessed. Opportunity must be there for everyone.
I want to end by posing a number of questions to the Minister. Does the Minister understand that the changes made by the stroke of a pen to decades of settled school progression is incredibly hard for a community to take? Does he agree that any system where parental choice is possible for people in Ashington, but less so for those in the villages around it, is unfair? Does he agree that it is unfair that parental choice for some parents in Bedlingtonshire now amounts to choosing a school devoted to a faith to which they do not belong, or a school in a community where they have no connections at all? Does the Minister agree that additional funding to Bedlington Academy to increase its capacity appears to be the only real option? Finally, does he agree that more rigorous checks on the impact of development are needed, and that they should be revisited year on year, so that the students—the kids—are first, second and third?
Gordon Henderson (in the Chair)
Since there are no other Members that I can see who wish to speak, I will leave the Opposition spokesman to respond.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
It is a pleasure to serve under your chairship today, Mr Henderson. I am grateful for the opportunity to speak in this debate on behalf of my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell).
I want to start by congratulating my hon. Friend the Member for Wansbeck (Ian Lavery) on securing this very important debate about access to education in his constituency and across south-east Northumberland. The issues he raised in his speech will resonate with Members of Parliament across the country in relation to their own communities. He speaks with passion and eloquence about the difficulties faced by children, their families and schools in his region. I pay tribute to him for his passion in speaking up for the needs of children and young people in his constituency and the quality of their education. He has focused on parental choice and engagement, recognising that barriers to learning and engagement are having a real impact. There are consequences of structural and other policy changes within our public services and education system on opportunity and equality. He speaks with a deep knowledge of the circumstances in his local area, and what has resulted from how changes have been made.
The reality is that children, students, teachers and parents in south-east Northumberland and across the country have been let down in cumulative ways by the many failures of the Conservative Government over the last 14 years, in our schools as well as in our infrastructure. Councils and their budgets have also been stripped to the bone, which has reduced their capacity and resilience.
My hon. Friend raised the concerning issue of parents and children not getting the schools of their choice. I think we all recognise that parental choice in education is important. As my hon. Friend set out in relation to the case studies he highlighted, issues can arise when year groups and friendships are split up, and children sometimes have to travel much further just to attend school. It is concerning to hear of students in his constituency who have been left out of education because of a lack of choice. I know that the Minister will be sympathetic to some of the challenges that have been outlined, and will give the Government’s response on what can be done for those students.
Let me turn to the main areas of concern for my hon. Friend the Member for Wansbeck. Because of fragment-ation in admission policymaking, some schools have policies that effectively can prioritise high-achieving students and exclude disadvantaged pupils. It is important to ensure that there is more democratic control and oversight over the admissions system. That is why Labour wants to require all schools, including academies, to co-operate with their local authorities on pupil admissions and place planning, and ensuring fairer access and greater certainty for children and their families. I look forward to hearing from the Minister on that; I am sure that there are points he will want to raise.
My hon. Friend the Member for Wansbeck also discussed, extremely effectively, other issues that affect access to education in south-east Northumberland. He referred to the difficulties faced by students with special educational needs. We know that the system isn’t working, and he set out the impact on families of not getting the support that they need. Issues around special educational needs and disabilities need to be a much greater priority for the Government. In all our constituencies, the system is beyond breaking point. Too many families face an uphill battle for the support their children need. It is often a battle that must be fought multiple times across a child’s school life—for support in primary school, to find the right secondary school and ensure that support is in place, and for places and support in further or higher education.
That creates huge pressures on the system, as we have seen across Northumberland and throughout the country. In councils across the country, SEND has been cited as contributing to the issuing of section 114 notices. Local authorities are struggling to balance their budgets, with reduced resilience in their finances for all sorts of reasons. Indeed, more is coming to light about the impact on council finances of the Budget of the former Prime Minister, who was in office for just over 40 days.
What has the Government’s response been? A review of SEND provision was announced in 2019 but delayed three times, and much of the SEND and alternative provision improvement plan will not come into effect until next year—six years after it was announced. The Minister may want to enlighten us as to whether any of that will be brought forward. It is desperately needed in all our communities.
Let me say a few words on child poverty, which my hon. Friend the Member for Wansbeck highlighted alongside the cost of living crisis. The impact of child poverty on access to education in south-east Northumberland and across the country should concern us all. The challenges that children face at home do not stop at the school gates, and the extent of poverty in the north-east is appalling. The impact of that is demonstrated in the fact that some leave school without any qualifications at all.
Indeed, in the north-east we have seen the steepest rise in child poverty anywhere in the UK: almost 190,000 babies, children and young people now live below the poverty line. We hear about dedicated people across our education system going above and beyond every day for our children—for those who do not have books to read, pens to draw with or enough food in their bellies when they go to school. Of course, it is the Government’s role to break down those barriers, but their decisions often make the barriers higher. The previous Labour Government were laser-focused on tackling child poverty, and the next Labour Government will be too.
We also know about the challenges of persistent absence in our schools. Across the autumn and spring terms, more than one in five children were persistently absent from school—more than double the number just five years ago. The Education Secretary continues to claim that absence is her No. 1 priority, but in the north-east there has been a huge increase in the number of children missing days of education: between 2016 and 2022, there was a 169% increase in the number of children in Northumberland missing half their lessons, and the figures are starker yet in Sunderland, Newcastle and County Durham. It is just not good enough.
My hon. Friend the Member for Wansbeck also raised the devastating impact of school funding cuts in his constituency. Official figures show that, thanks to the Conservatives, per-pupil spending in schools will recover to 2010 levels only in 2024-25. Those are 14 lost years. If the Minister is not familiar with those official figures, he may want to look at them, because that is the case. I have heard from school students in my constituency who have been left without a maths teacher for an entire year, as teachers are leaving the profession. Young people told me last week that, due to teacher shortages, English class sizes have doubled, because classes have been combined, and they take place in the school hall.
I want to say a word about access to post-16 education, because the decline of accessibility in education under the Conservatives is not just limited to schools. Under their watch, apprenticeship starts have plummeted by more than 200,000. In the north-east, starts have fallen by 45%, and in Wansbeck by almost 40%, since 2010. Schools and colleges seem to be an afterthought, but they will be at the heart of the next Labour Government’s mission to break down barriers to opportunity at every stage. We will recruit 6,500 more teachers across our schools, because the shortage of teachers is impacting the way schools are able to recruit, provide subjects to ensure a wide curriculum, and expand their offers. To create opportunity, we will recruit 1,000 new careers advisers and introduce two weeks’ work experience, which will be vital in bridging the gap between education and employment. That is so important for the quality of education that all young people receive.
The Labour party wants high and rising standards in all our schools and across all our communities, so that every child everywhere gets the chance to thrive and benefit from the opportunities that flow when they have access to the best education available. That must apply not just to some schools and some children, but to every child in every community.
I am grateful to my hon. Friend for his speech and for outlining the issues in his constituency, which are reflected in constituencies across the country. That is why the next Labour Government will be focused on breaking down barriers to opportunity in south-east Northumberland and across the country.
The Minister for Schools (Damian Hinds)
It is a great pleasure to see you in the Chair, Mr Henderson. It is an auspicious day: I believe it is your maiden chairing of Westminster Hall, and it is a privilege for us all to be part of it.
I congratulate the hon. Member for Wansbeck (Ian Lavery) on his passionate and comprehensive remarks about access to education in his area. The Government are committed to ensuring that every child in the country has a first-class education and every opportunity to make the most of their abilities. We are also committed to ensuring fair access to a good school place for every child, including the most vulnerable. That is why we have taken steps to ensure that schools allocate places in a clear, fair and objective way.
As the hon. Gentleman knows, all state-funded schools, including academies, are required to comply with the school admissions code. In 2021, a new code came into effect, which aims to improve access to school for vulnerable children and to reduce any gaps in their education. The latest data available show that the admissions system is working well. Nationally, in 2023, 94% of parents received an offer of a place at one of their top three preferences for secondary schools, and 98% an offer at one of the top three preferences for primary schools. That matches 2022, so we are maintaining that high level.
Anyone who thinks a school’s admission arrangements are unlawful or unfair can object to the schools adjudicator. The adjudicator’s decision is legally binding. If a school fails to meet its statutory duties, it can be directed to do so by the Secretary of State. I understand that the hon. Gentleman and his constituents will be concerned when children and young people are unable to attend the parents’ preferred choice of local school. The Department works closely with local authorities and admissions authorities on those matters.
Overall in 2023, in Northumberland 99% of parents received an offer at one of their top three preferences for secondary, and 93% were offered their first preference. That compares with 94% nationally for top three and 82.5% for first preference. So, the Northumberland rates are above the national average. As he will know, academy trusts are their own admissions authority, but we do expect local authorities and schools, academy trusts and diocesan authorities to work together, to ensure there is a co-ordinated approach, which helps local authorities to meet the duty on place sufficiency.
I do, though, recognise the frustration of parents and carers living in south-east Northumberland, who may now be less sure of their child’s chance of accessing a place at their school of choice, due to the academy’s change of admissions criteria in 2020, which considers distance from the academy rather than attendance at specific feeder schools, as the hon. Gentleman rightly identified.
Distance is not an uncommon criterion; in fact it is very commonly used for admissions. It does ensure that children living close to the school can access their local school and avoid travelling longer distances. Data provided by the local authority indicate that the number of year 7 pupils in the area will decrease over the current forecast period, up to 2029. To provide wider background for colleagues, there is a general effect going on in the demography of the country. It is not the same everywhere; there are different patterns in different communities.
There has been a bulge—not the most elegant term—of pupils coming through primary school who are now going to secondary school. The secondary school will initially grow, and primary numbers overall will tend to come down somewhat. Over time, that effect will work its way through secondary school as well. The long and the short of that is to say that one would expect that in year 7 admissions those numbers will change over the years.
The local authority is reporting that there are sufficient physical places to meet demand. I do accept that, in some cases, those would be places lower down in preference, due to established patterns of travel, the over-subscription criteria of some schools, or where a school is continuing its improvement journey. We will do all we can to speed up that improvement, so that there is genuine choice in local areas.
The hon. Gentleman asked me to reflect on and respond to some specific points, some of which I have covered in my remarks already. I would say overall on school choice, all parents want the best for their children. In any system where there is school choice, not quite everybody gets their first, and that is a by-product of that choice. As was the policy of the previous Government prior to 2010, we also believe that parents having that choice to rank their preferred schools in order carries great benefits, including for families and children themselves.
The hon. Member asked specifically about housing development. Local authorities make projections of birth rates and the expected effect of rates of housing development, depending on the type of housing, how many families with children there are likely to be and the likely age of those children. I am sure that his authority in Northumberland will do that as well.
The hon. Member referred to PANs, and schools can and do change PANs over time. He is right to identify that in the particular case that we are talking about today, those admission numbers were reduced. That was part of the school improvement plan to give greater headroom. As he rightly said, that improvement has been happening in those schools and we have been seeing better results. I gather that the trust has also been allowing some admission over the PAN, which has been of some assistance.
The Opposition spokesperson, the hon. Member for Feltham and Heston (Seema Malhotra), took the debate into wider areas beyond just south-east Northumberland, which gives me an opportunity to respond to some of those points, so I am grateful to her. She mentioned having to provide for school choice, and I agree entirely. That is why we have created over a million new places in the school system since 2010, specifically to make sure not only that there are adequate numbers, but that school choice is facilitated. That stands in contrast to the 100,000 that were cut in the years leading up to 2010. There is now the highest funding that there has been in schools.
The hon. Lady spoke about attendance, and she is right to identify that we have an issue with school absence, and particularly persistent absence. By the way, we share that issue with most other countries in the world. We certainly share it with the other countries in the United Kingdom, including where other political parties are in control, but we see this much more broadly. During covid, there was an adverse impact on some people—not just directly connected with covid, but in its aftermath—and that has been difficult to work through. That is very understandable and no one is blaming parents for it, but some attitudes to the threshold at which a child should stay home from school if they are under the weather have moved a bit. We are trying to change those attitudes back to where we were pre-covid, and there has been progress. If we look at the autumn term that just finished, absence was markedly lower than it was in the autumn term a year before, but we know there is further to go and we will continue to work on that.
The hon. Lady also mentioned wider questions around society, income levels and the effect on children. She will know that we have extended eligibility for free school meals much more widely than the previous Government did. When her party was in government, one in six children received free school meals, but it is now one in three. That comes at a time when the number of children in workless households has come down markedly—by 600,000 since 2010—and at a time when the proportion of those in work who are on low pay, as a result of the national living wage, has come down very significantly as well. We have also invested heavily in breakfast clubs, holiday activities, food funds and more.
We have made five major extensions to early years and childcare entitlement, and there is a sixth very big extension on its way. In higher education, the opportunities for people from lower income backgrounds to attend university are greater than they have ever been.
The hon. Lady even touched on apprenticeships, which I was surprised about. Apprenticeships have been totally overhauled and reformed. We have modern apprenticeships designed by employers with proper end assessments. We have introduced T-levels with a very substantial, industrial work placement at the centre of them, with English, maths and digital and more hours in college. Again, that is designed and certified by employers. Those are materially increasing the life chances of children taking vocational and academic routes.
We see the results in such things as the PISA—programme for international student assessment—comparisons of international performance in education. In the period from 1997 to 2010, although ostensibly results domestically looked like they were improving, on the international comparisons we were coming down. Since 2010, we have come back up—
Seema Malhotra
I do not propose to come back on all the points that the Minister has made, but the poverty and the challenges of the cost of living crisis and the sustained impact of austerity are having a huge impact on children and families. The impact has been cumulative over many years. Apprenticeship numbers have been dropping since 2017, with the impact of the levy that was implemented, and the engagement of small and medium-sized enterprises with apprenticeships has dropped by 49% since 2016. Those are official figures. Does he agree that it is important, in terms of a good-quality education, that we look at the sustained engagement of employers and tackle the barriers? It is important to recognise that they exist rather than pretending that there is not a problem.
Damian Hinds
When the Labour party was in government, there were many people on apprenticeships who, when asked in a survey about their apprenticeship, did not know that they were on an apprenticeship. That is the change that we have made. Apprenticeships now have proper quality. They are designed by employers. They have a minimum length and minimum time in college. The apprenticeship levy is a landmark reform that underpins that. It gets rid of the free rider problem, which has forever been an issue throughout industry and investment in training, and we now have a most brilliant generation of apprentices coming through.
Up to 70% of trades and occupations are available on an apprenticeship, including the teaching degree apprenticeship. Those are fantastic achievements and I hope that the hon. Lady’s party will turn their backs on what they seem to be saying, which is that they are going to cut the number of apprenticeships and not commit to that system going forward.
But we digress, and I wish to come back to the hon. Member for Wansbeck and thank him again for bringing this important matter to the Floor of Westminster Hall. I thank all those who have contributed. The vast majority of secondary schools in south-east Northumberland are part of strong academy trusts. They provide a good standard of education. Where there are improvements still to be made, we work closely with schools, academy trusts and local authorities to provide support and challenge to ensure that standards are raised. Ashington Academy became a sponsored academy after being judged “inadequate” by Ofsted. It was judged “good” at its first inspection as an academy in 2022 and now performs significantly higher than the national average, therefore improving the life chances of its students.
I want to express my sincere thanks to all those working to secure strong outcomes for children and young people, including the provision of high-quality school places in Northumberland and across our country. My officials will continue to monitor place planning issues in the local area and will engage with the hon. Gentleman’s local authority and academy trusts to ensure that there is fair access to good school places, which is something that he, I and all of us here care passionately about.
Gordon Henderson (in the Chair)
We appear to have a few minutes left. Does Ian Lavery want to wind up?
Ian Lavery
Very briefly—thank you, Mr Henderson. Again, I thank everybody who has made a contribution. The points have been well made here. We are talking about children. Like most if not all MPs, I want to see children in my constituency and across the UK being given the best possible opportunities—the same opportunities that people have up and down the length and breadth of the country. I feel that that is probably not the case in my constituency now.
I will fight until the day I am no longer an MP, and after that, to make sure that we look after these kids. We live in a very impoverished area, and it has an impact; my hon. Friends the Members for Feltham and Heston (Seema Malhotra) and for Hemsworth (Jon Trickett) both mentioned the desperate impact of poverty in our regions. The schools that I mentioned are mainly in very socially deprived areas. Parents deserve the absolute best that can be achieved for our children, but I do not think that that is happening.
It is about academies and academisation versus the state schools. On the whole, the academies are bartering to get more finance from local authorities so that they can increase pupil allocation numbers—more buildings, for example. I think that there is a bit of bartering going on. Local authorities are basically thinking, “Well, it’s an academy. They’re on their own. They should be able to accommodate this.” It is the people in the middle who are suffering as a consequence: the kids and the parents. It is probably the same story up and down the country. We have to get local authorities and academies to bang their heads together so that all kids can get equal opportunities, for heaven’s sake!
I want to say a massive thank you to the teaching staff at each of the schools. Whether schools are “inadequate”, “requires improvement”, “good” or “outstanding”, the work that teachers are doing in them, certainly in my constituency, is absolutely brilliant. I have been to every single school and spoken to the teachers. They are doing a remarkable job in the current circumstances.
Question put and agreed to.
Resolved,
That this House has considered access to education in south-east Northumberland.
Cavity Wall Insulation: Government Support
(9 months ago)
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Hywel Williams (Arfon) (PC)
I beg to move,
That this House has considered Government support for cavity wall insulation.
It is a pleasure to serve under your chairmanship, Mr Henderson, in this debate on cavity wall insulation. I might even say that this is yet another case of déjà vu, given that I have been here before with similar debates, in 2014 and 2017. Alas, some of the problems have not been remedied.
I will explain very briefly for those who may not be familiar with cavity wall insulation that it fills the cavity between the exterior and the internal skin of a house with a material that insulates the house and keeps heat in, and it is a commendable way of doing things, if circumstances allow. Unfortunately, in most of western Britain, where there is wind-driven rain and high rainfall, the wind drives rain in through any cracks or faults in the exterior coating of the house, and the cavity wall insulation acts as a bridge, transmitting the water into the house, which leads to damp, mould and a host of other problems. I will not go into that any further, although I have become slightly expert in the functioning of cavity wall insulation, given the number of times that I have looked at the issue.
The cavity wall insulation scheme was financed with money from the green initiatives that the Government had at the time. It seemed to be particularly targeted at people of modest means, including people who were older or disabled. In fact, I have heard many people who have had damp problems say that a man came to the door and said, “This is a Government scheme. It will save you £350 per year and it’s free. Can we put it in?”, whereupon most people said, “Yes, of course,” because they imagined that it was guaranteed, certain to work, and suitable both for their premises and for the area they lived in. Cleary, it would also better their living conditions and allow them to save energy and to do their bit on climate change.
My area is one where cavity wall insulation is clearly unsuitable; as I said, it has westerly winds, wind-driven rain and heavy rainfall. Many properties actually face the sea. In fact, in the very first case of cavity wall insulation problems that I came across, when we looked out of the front window, where the damp was coming in, we could actually see the sea. That was one of the reasons why that house had so many problems.
The system failed in many ways. I will briefly address several points; there is no point in rehearsing them, because the Minister and others are already familiar with them. When places were allegedly assessed, in too many cases cavity wall insulation was installed where clearly an assessment would have contraindicated it, for example in places where the rendering was very poor.
I do not intend to go into individual cases, because the Minister clearly cannot take them up now—they are historical—and I would be here all day if I did, but I will give some examples. I saw one house, a former council house that had been bought by the tenants, that had a piece of the front rendering about the size of a fireplace missing from the front of the house. The house was on an upland site, facing the sea, and rain was being driven at the bricks where the pointing was faulty and going straight through into the house, causing huge amounts of damp. That case was fairly typical. I asked them whether they had been assessed and they said, “No. They just came here and offered to do it, and we took it.”
Often, the installation was of poor quality. Again, I will just give a quick example. An elderly lady told me that some men came to her door late at night and said that they had one installation to do during the day, and that they were very keen to help her and so on. She was very keen to have the insulation, so they put it in for her. She said, “They were so keen—very nice lads. That they put it in using torches”—they had no lights. When people chased after the installers subsequently, they found that many had gone bust—they had closed down, or become insolvent.
Judith Cummins (Bradford South) (Lab)
The hon. Member is making a compelling argument. I commend him for his steadfast work on the issue over the years. Several of my constituents have contacted me after an insulation company canvassed and encouraged them to have insulation installed in the cavity walls of their homes through the green homes grant. They have since discovered that the insulation installed was entirely inappropriate for their properties, and they are now experiencing damp and mould. One constituent told me that CIVALLI—the Cavity Insulation Victims Alliance—has estimated the cost of damage to her home at about £120,000, which is substantial considering that the average cost of a home in my constituency is around £180,000.
In pursuing compensation for damage, several of my constituents engaged the services of a law company called SSB Law on a no win, no fee basis. After SSB Law fell into administration, the lawyers of the insulation company sent letters to my constituents demanding that they pay legal fees that could amount to tens of thousands of pounds. This is, quite frankly, a scandal and a disgrace, as not only do they now have considerable damage to their homes, but they have to pay the additional legal costs on top. With cowboy companies using Government grants and public funds to install unsuitable insulation that causes damage to homes, does the hon. Member—and, indeed, the Minister—agree that there must be an urgent investigation by the Public Accounts Committee into the misuse of public funds by these insulation companies?
Hywel Williams
I am grateful to the hon. Member for that point; she makes the case succinctly. My area and other areas in Wales are known as legal aid deserts, and that encourages people to seek out no win, no fee companies. In my area, we tend to go to Merseyside, Manchester, Birmingham and even London—these companies are uncontrollable. The circumstances she outlines are tragic and costs of £120,000 are quite extraordinary, but the damage can be very large scale indeed.
I have asked in the past about the review of installations—whether they were inspected. Allegedly, 5% were, but to be frank, I have scarcely come across a single case where an installation has been inspected, found to be defective and resolved. I am not saying that that does not happen, but I am sure it could be done much more effectively.
There is so much that I could say. Another interesting point is that cavity wall insulation was specifically excluded from building standards when it was brought in under the scheme, so given that local authorities are not responsible, people cannot get redress in that way either.
Members might know that there is a guarantee scheme, but many of my constituents who have tried to claim have found the process quite difficult. The victims groups CIVALLI tells me that there have been rumours, although it has not been officially confirmed, that the main guarantee provider, the Cavity Insulation Guarantee Agency, has had financial difficulties because of the number of claims. Perhaps I will talk about that later if I have time. One complaint is that the small print of the guarantee says that the place in question must be properly maintained, but many people who had cavity wall insulation installed were older or suffered some disability, so were scarcely in a situation to climb up ladders to look for micro-cracks in the rendering of west-facing walls. That maintenance clause became very prominent in the refusal to take matters further. As someone once said, the large print giveth and the small print taketh away. That has certainly happened for some people.
Let me turn to removal and repair. CIVALLI says that installation and extraction should be done by separate providers, each with proper accreditation, for example by TrustMark or Oscar. The scheme was set up with insufficient supervision, which allowed in what I can only call cowboy installers—those who sensed that there was money here, but who subsequently disappeared or went bust. Removal is not easy. For example, I have had cases of people having stuff removed twice, and in one case it caused dry rot as well. The dry rot was attended to twice, and when the owner came to sell the house, although the probable price was about £180,000, I think she got about £50,000, because the problems were still there.
CIVALLI has done heroic work to try to get something done, but outstanding cases remain, as I outlined in my speech on 19 April 2017. The Minister at the time told me that CIGA said that there were 3,663 recorded cases, of which it had resolved 2,939, while 724 had been resolved by installers. I am interested in the number and prevalence of cases, because although I have come across a great many in my constituency, I have seen no official estimates of how many installations were carried out in the first place, how many people then found them to be faulty, how many have sought redress through the guarantee schemes, or how many of those cases were successful. Those basic facts would be useful.
My researcher found that CIGA says that the number of claims under that scheme are declining, from 4,806 in 2018 to 2,300 in 2023, but obviously there are many claims left, and there is a question as to whether they have been settled satisfactorily. I would be interested to hear any assessment by the Government of the number of remaining cases or of the cost of remediation. The hon. Member for Bradford South (Judith Cummins) mentioned the figure of £120,000. I have no idea how much the cost will be, but even £10,000 is a great deal of money, and the victims are probably in no position to pay.
I would also be interested in the demographic make-up of the group of victims, so that we can get a grip on the size and nature of the problem. Are they, as I suspect, older and disabled people—poorer people, actually, some of them? One must also ask what the victims actually want. I am in no position to say, but I would guess that they definitely want the damp fixed, the dry rot fixed, if there is any, their homes restored to their previous standard, and an acknowledgement of fault—an acknowledgement that they are victims and that they have done something that should not have led to this situation. As I said, people subscribed to the scheme thinking that it would save them money and that they would be doing something about climate change.
I have asked the Minister a number of practical questions that I realise she cannot answer today, so I would be glad to hear from her in writing on some of these points. However, I think that ultimately the Government should shoulder what is their own responsibility. That would be the right thing to do and would also counter any lack of confidence in other green schemes in the future, which is obviously a potential problem. CIVALLI is calling on the UK Government to take direct control of CIGA and ensure that it offers proper remediation to victims, not cash compensation. People want their houses fixed; it is not a matter of money. CIVALLI also says that victims should be able to have an accredited surveyor visit their homes to do a proper audit, and that if they have been identified as victims of improper cavity wall installation, they should have access to Government funding.
As I said, I have no idea how long this piece of string is—how big the problem might be—but I was interested to see the case of Fishwick in Preston, where external insulation was fitted with damage to homes and danger to residents. The cost of remediation was huge, but the installers have disappeared. I understand that National Energy Action was able to get involved in that case and put in the appropriate work. I will not go into the report that I have had, which is rather long, but the case of Fishwick might set a precedent for residents not being held responsible. I would be glad if the Minister could say something about that now or in writing.
I do not know if any of this is possible. Whatever is done is long overdue. Is it not time to establish a quick independent inquiry into the botched CWI scheme, and for that to be the basis for early and full remedial action, whatever that might be? People are still suffering. As I said, I made my first speech in this place on the issue in 2014 and, though things have changed to some extent, there are still victims, and I think they are the people least able to fight their own cause. Somebody needs to take responsibility.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)
It is a great pleasure to serve under your chairmanship, Mr Henderson. I thank the hon. Member for Arfon (Hywel Williams) for his passionate speech and for his case studies reminding us of the individuals affected in these houses, who have to live with these issues daily. I thank him sincerely for raising the matter.
As the Minister responsible for energy affordability and fuel poverty, I have often said that the greenest energy is the energy that is not used. That is why insulation is so important. We must ensure that customers do not see their money vanish literally through their walls while they are living in cold properties. Improving the energy efficiency of homes is central to the Department, as are helping people out of fuel poverty and achieving net zero.
When correctly installed, cavity wall insulation can reduce the amount spent on keeping a house warm, which is critical to alleviating fuel poverty. It can also make homes readier for a clean heat source. Insulation is one of the most cost-effective means of improving household efficiency. The Government have an ambition to reduce by 15% on 2021 levels the UK’s final energy consumption from buildings and industry by 2030. We also plan to ensure that as many fuel-poor homes as possible achieve an energy performance certificate rating of C by 2030.
I will cover three areas—schemes, safeguards and standards—and the questions that have been posed. Cavity wall insulation has been installed under previous Government schemes and continues to be installed under the home upgrade scheme, the social housing decarbonisation fund, the energy company obligation and the great British insulation scheme. According to the great British insulation scheme’s final impact assessment:
“At the end of December 2022, it is estimated that there were around 5.1 million homes without cavity wall insulation in Great Britain, of which 3.8 million are easy to treat standard cavities”.
I turn to safeguards. As the hon. Member quite rightly pointed out, we debated cavity wall insulation in 2017 and 2020, with many examples occurring before the change to consumer protections.
Stephen Kinnock (Aberavon) (Lab)
The Minister is being generous in giving way. Several of my Aberavon constituents are fighting to get justice after cavity walls have been incorrectly or inappropriately installed, and real damage has been done to their homes. The companies have disappeared and no longer exist, and this Cavity Insulation Guarantee Agency does not seem to be working at all. It has cost my constituents tens of thousands of pounds, and years of stress and worry. Will the Minister set out what is going wrong with the CIGA and what steps the Government will take to help my constituents to sort out this absolutely appalling problem?
Amanda Solloway
The hon. Member makes an important intervention. Although it is not within my portfolio, I will absolutely get back to him with as much detail as I can on individual cases and pass them on to the relevant places.
I am sympathetic to the points raised by the hon. Member for Arfon and others about the need for a better understanding of the scale of the problem. At the moment I do not have those figures, and in all honesty I am not sure whether I will be able to get them, but I will certainly endeavour to find out the number of people affected by the issue.
As hon. Members have rightly mentioned, the issues have arisen as a result of poorly executed installations of cavity wall insulation, of which I am very much aware. Unfortunately I do not have a full view of the number of failed installations. Our understanding is that it is a relatively small proportion, but that does not justify it; even if it is a small amount, we should be looking at it. We need to take on board the situation and think about how we can improve. I will refer later to what we have done to make improvements so that this does not happen again.
I want to address the genuine concerns raised by the hon. Member for Bradford South (Judith Cummins). Claims management companies and firms of solicitors have contacted consumers offering to represent them in return for compensation for the damage caused to their homes by the installation. It should be noted that not all those companies have the consumer’s best interests at heart, and some have left consumers facing extensive legal fees. I thank the hon. Member for bringing that to my attention.
To assist consumers who suspect that they have had faulty cavity wall insulation installed in their homes, the Department published guidance in October 2019. I urge customers to follow that guidance to avoid becoming victims of fraudulent cavity wall insulation claims, and for information on organisations that can offer support if a problem arises.
We have put standards in place for the protection of consumers. Energy-efficient measures installed under current Government schemes include the energy company obligation and the great British insulation scheme, and they must comply with the requirements outlined in the British Standards Institution’s good practice standards, set out in the PAS 2035 document. That requires installers to be certified to PAS 2035 standards for any energy-efficient measure including cavity wall insulation, demonstrating a high level of competence. Those standards will help to ensure that an installation is suitable for the property, as the hon. Member for Arfon described when he talked about the way the wall was facing. They will ensure that it is to the highest standards, while also improving the service provided to the consumers.
Hywel Williams
I commend what the Minister is saying and what has been done. One of the problems that has bedevilled this matter is the unwillingness of anybody with any power to look at historical cases. The 2016 Bonfield report specifically said that it was not looking at historical cases, but it is the historical cases that are egregious and difficult. I commend the Minister, but eventually we must look at historical cases as well.
Amanda Solloway
I thank the hon. Member for making that point. Where consumers have concerns or are unhappy with work that has been carried out, they should contact the installer, although I recognise that some of the installers in the historical cases that we are talking about no longer exist. The insurance-backed guarantee provider offers a second layer of protection, for example in cases in which the installer has ceased to trade. We agree that the industry does not always get it right, and I encourage the industry to provide appropriate remedy for the affected customers.
By mandating the requirement for installations under Government-backed schemes, and ensuring that TrustMark and PAS 2030 businesses undertake the work, we have helped to improve the quality of installations since 2019. We are fully committed to protecting all consumers who have insulation products installed in their homes, as well as improving the overall consumer journey regardless of housing tenure or how installation work is funded.
I thank the hon. Member for Arfon for raising questions about individual cases. I will follow them up in writing; if there any we could look at specifically, I am happy to take them away. I encourage other hon. Members to raise such cases.
I also welcome recent research by the Competition and Markets Authority and other organisations such as Which? and Citizens Advice on consumer protection in this sector. Today the CMA published an update to its report on consumer protection in the green heating and insulation sectors. In response, the Government have announced the work that we are undertaking to improve consumer protection in the green heating and insulation sectors.
I thank the hon. Members for Arfon, for Bradford South and for Aberavon (Stephen Kinnock) for their contributions. As I say, we must remember that these are people’s houses that we are talking about—they are the homes that people live in. If there are any individual cases that we should look at, I encourage hon. Members to send them on to me.
Hywel Williams
I thank the Minister for taking on what is not an easy brief. This is a complicated, long-standing problem. I am grateful for her remarks, and I look forward to hearing from her colleague in another place with more direct responsibility.
I am also grateful for the Minister’s offer to look at historical cases. I was going to raise some, but time has defeated us somewhat. My constituents Mr and Mrs Williams, from Penisa’r Waun outside Caernarfon, have been fighting for 10 years to get their cavity wall insulation sorted out. I am sure that I will be coming to the Minister with their case and possibly others.
The hon. Member for Bradford South (Judith Cummins) made a point about legal help, which is problematic. It is a specialised field, but there are no legal resources in my area. Possibly there are none in south Wales or the north of England—that is perhaps a wider question. I am glad to say that the law department at my own university in Bangor will hopefully be providing a pro bono service. That will certainly not solve the problem, as they are not qualified lawyers, but we have to look for help wherever we can find it.
Thank you, Mr Henderson, for chairing the debate. I thank other hon. Members for taking part.
Question put and agreed to.
Independent School Fees: VAT
(9 months ago)
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Andrew Lewer (Northampton South) (Con)
I beg to move,
That this House has considered independent school fees and VAT.
It is a great pleasure to serve under your chairmanship, Mr Henderson—I think for the first time. I put on the record my thanks to the Independent Schools Council and its superb chief executive Julie Robinson, not only for the tireless campaigning that it does for the independent education sector but for its work as the secretariat for the all-party parliamentary group on independent education. I have been the chair of that group since founding it in 2017, after moving from being an MEP to an MP. A number of independent schools serve my constituents, including Quinton House, Bosworth School, Northampton High School for Girls and OneSchool Global.
More than 600,000 children are educated in the independent schools sector in the UK, saving UK taxpayers more than £4 billion each year because those pupils are not educated in the state sector. In addition, the independent sector has a total economic footprint that amounts to £16.5 billion, supporting 328,000 jobs and £5.1 billion in tax revenue. Why is it that the sector often gets bad press, despite its contribution to society both economically and educationally? For many people, when they hear the terms “independent school” or “private school”, they immediately associate them with elitism, isolation and privilege. Nothing could be further from the truth. Independent schools today are modern, diverse and inclusive places that often provide education and specialist provision where the state sector does not go. Furthermore, independent schools are more connected to society now than ever before, working with the state sector in partnerships and widening access through bursaries.
Dr Neil Hudson (Penrith and The Border) (Con)
I congratulate my hon. Friend on securing this really important debate. Our independent schools do vital outreach work with access bursaries and access to sports facilities. Many hard-working families up and down the land make huge sacrifices saving to send their children to independent schools. Does my hon. Friend agree that the short-sighted Labour policy on VAT on independent schools will compromise these schools, force some parents to take their children out of them, and ultimately put more pressure on our local state schools?
Andrew Lewer
I thank my hon. Friend for that question, which is indeed the major thrust of what I have to say. As chair of the all-party group, I am delighted every year to sponsor the Independent Schools Council’s annual “Celebrating Partnerships” report, which gives parliamentarians and stakeholders from across the sector the opportunity to come together to celebrate the fantastic work that the independent sector does in partnership. Three quarters of independent schools are now in partnerships with state schools. That is not the old swimming pool every other Tuesday afternoon for an hour or two; they are embedded, mutually beneficial partnerships.
Given how influential and impactful the sector is for wider society, it is in disappointment that I stand in opposition to the Labour party’s policy position on independent education—the introduction of a 20% VAT fee on independent school fees. I urge the current Government and my Conservative party colleagues to be robust in their stance of not imposing VAT on school fees. I look forward to the Minister’s analysis of that, but given that the Opposition are currently well ahead in the polls, and it is at least possible that they could form a Government in the next Parliament, it is important that this debate has been granted. It is important that we take the time to scrutinise what I believe is an ill-thought-out policy. Although I welcome the fact that Labour’s plans for independent education under the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) are not as draconian, undemocratic and questionable in law as they were when he served in the shadow Cabinet of the right hon. Member for Islington North (Jeremy Corbyn)—when it looked like the party was trying to abolish the sector entirely—they are still very worrying indeed.
The principle of parental choice is supported by article 2 of the first protocol of the European convention on human rights, which was incorporated into domestic law by the Human Rights Act 1998. It says that
“the State shall respect the right of parents to ensure such education and teaching in conformity with their own religious and philosophical convictions.”
However, is that right to choose being assisted, if said choice is made increasingly difficult by a huge tax rise? I do not think it is. It is also a fundamental principle that we do not tax the supply of education, and the Value Added Tax Act 1994 exempts education, including nurseries and universities, alongside independent schools. That principle is international in scope and the UK would be an outlier if Labour abandoned that policy. For example, EU nations, Australia and the USA do not apply sales taxes to education.
Beyond the core principles, there are many reasons why the policy could be harmful and doomed to fail. First, parents residing in the UK who make the decision to send their children to independent schools already contribute to the state education sector by paying their fair share of taxes. I have made that very clear in the Main Chamber when debating this subject, and the repeated use of terms such as “tax breaks” and “tax reliefs” should be avoided. Independent schools are taxed in the same way as other education providers and charities, and they provide more than £5 billion in tax annually, which is more than three times what Labour thinks it will raise from VAT. UK parents who pay school fees do so from already taxed income.
Now that the Labour party has put this policy forward, I am sure we will hear today that it has done so because it believes in educational excellence for everyone and not a reserved few. However, by introducing the policy a Labour Government would simply make independent schools even more elite than Labour already perceives them to be by pricing out hard-working parents who can just about afford to pay the fees to invest in their children’s futures. Those who can easily absorb the 20% will do so, and perhaps that is what the Labour party wants: to make private schools more elite so that it is more difficult for politicians like me to make the case for them.
I will use the jacuzzi and private jet analogy to demonstrate my point. Many of us will never have a jacuzzi in our gardens, but could probably afford to install one if we chose to do so. On the other hand, a private jet is, for virtually everyone, an unobtainable fantasy for a distant elite with no connection to our lives. That is what Labour wants independent education to be—the private jet, not the jacuzzi. Of course, that is purely figurative as a parallel and not related to the crucial importance of educational choice.
It has been said that these are not issues we should worry about, and that independent schools can simply absorb the VAT increase so that they do not pass it on to parents. That is a naive view, with many independent schools up and down the country being very small, operating on tight margins and unable to do that. A quarter of all schools in the Independent Schools Council have fewer than 155 pupils. They are not wealthy institutions that are able to absorb VAT.
Mr Jonathan Lord (Woking) (Con)
I congratulate my hon. Friend on securing this important debate. Several headteachers of independent schools in my constituency of Woking have come to me and said that they are worried that many parents will not able to afford to keep their children at their schools with the VAT increase, and one or two are worried about the future of their schools. My hon. Friend has had conversations with the independent sector and the groups representing it; has Labour taken into account that there might be a massive increase in students having to go to the state sector due to schools closing, which would completely kibosh any potential financial gains it is claiming?
Andrew Lewer
It would. My hon. Friend’s point leads me nicely into my belief that the naivety of Labour’s position is underlined by a hidden agenda to have smaller schools in the midlands and the north closed and absorbed by the state. Underlining that is perhaps the fact that the shadow Education Secretary, since taking up her post in 2021, has not visited an independent school with at least the aim or willingness to discuss the impact of her policy. My hon. Friend has spoken to people in the sector, as have I and many other people here.
The unwillingness to engage speaks volumes. Who would propose massive changes to the chemical industry or the high street retail industry without taking the trouble to speak to people involved in that sector to assess the impact? It is quite unthinkable. I also question why the policy is aimed only at taxing the supply of children’s education, which is arguably the most pivotal, and not at education for adults via universities, for example, or other forms of education such as private tutoring, which is the alternative private education leg-up provision of extra advantage that many on the left as well as not on the left utilise. There are no plans for VAT there; I wonder why.
Perhaps most important of all is the effect that the policy would have on independent schools’ ability to operate. If independent schools cannot absorb the VAT increase or parents cannot afford the fees, many of them would have to close. That would be disastrous for two important reasons. First, we would see the children go into the state sector, increasing the burden on other children and teachers. The Opposition believe that that can be offset by funds raised by the policy, but we are yet to see any consensus on the true impact.
The Institute for Fiscal Studies states that the policy will raise half a billion pounds less than Labour has committed in spending pledges. The education specialist think-tank EDSK puts the likely revenue even lower, leaving Labour more than £1 billion overdrawn on its spending plans. Most worrying is the IFS finding that the evidence of impact on children and families is “quite thin”—alongside 30-year-old data, it relied on the experience of Catholic schools in America—so it is tax first and repent later.
I am sure we will hear that this is a bogus claim and that there might not be a mass exodus, and that might be evidenced by the fact that as inflation has risen and independent school fees have gone up, we have not seen many children leave the sector. However, the ISC has found that 20% of parents who currently send their children to independent schools say they will be priced out and have to educate their children in the state sector. Those are the parents who will be making a difficult choice and might be forced into pulling their children out of the schools they have been educated in, and when they are at a key stage in their education. Perhaps most strikingly, the Baines Cutler report has calculated, using real data from schools and parents, that the predicted income-related drop-off if the policy is enacted would be nearly 100,000 children—one sixth of all the children educated in the sector who need somewhere to be educated.
Even more crucial is the impact on independent schools that provide specialist provision where the state sector does not go—independent specialist schools with small budgets that educate children with particular needs. Department for Education data shows that there are more than 100,000 pupils receiving special educational needs support in independent schools, some with education, health and care plans and some without. Moreover, many independent schools provide specialist faith schooling or provision for military families—something I saw the benefit of in my own education.
When it comes specifically to special educational needs and disabilities provision, what we will see is that parents who can no longer afford to pay the fees will seek out an EHCP if they do not have one, which will lead to more pressure on families, on local authorities at tribunal and on local authority budgets. I am interested to know whether there has been any realistic impact assessment of that.
If schools were to close as a result of the policy, the children would not have the provision they need. It will very much be the case that the schools will have to stop the excellent partnership work they do in order to cover their costs, or reduce their offer of bursaries to disadvantaged pupils, thereby reducing social mobility and making these institutions even more elite. That is the point. Such a regressive tax will seek to harm independent schools on the tightest of margins.
Even if the policy’s impacts are not seen immediately, I fear that the long-term negative consequences will be dire. It is the schools that Labour are not thinking about that will be hardest hit—small faith schools and special needs schools. That capacity sees some special needs support for 96,000 children who are not on an EHCP. Labour has exempted the EHCP pupils from VAT on fees, but not other students with special educational needs. That is 96,000 children facing disrupted education, with state provision further stretched and worse for all those who need it. Families are therefore incentivised to apply for EHCPs. Labour should exempt all pupils with special educational needs from VAT on fees. If it does not, the pressures will be laid at its door.
Similarly, small faith schools up and down the country could not be further from the stereotype that has been presented. They often charge low fees—often lower to the taxpayer than the cost of local state schools, because they are supported by local congregations and voluntary efforts. They are frequently very small, they cannot absorb VAT, and their families and supporters cannot find 20% more at a moment’s notice. They will face deficit and closure, and will be harder hit than the better-known schools that I am sure many have in their heads when proposing this.
There is a slow-burn issue as well, whereby parents perhaps persist for an extra year or two for a child who is in the middle, but then decide not to go ahead for a child who has not entered the system yet. There is also a danger of smaller schools becoming insolvent—having to assess that the increased risks of becoming technically insolvent prevent them from struggling on and pushing through. This needs to be considered in the round and not just as a standalone. Given that we have heard hardly anything else about supporting education from the Labour party, I am not sure voters are being presented with very much.
To conclude, independent schools play a vital role in educating our children. They provide specialist provision and excellent partnership work. The Labour party wants to pull all that up and put it at risk, for the sake of raising a questionable £1.5 billion, which is not enough to offset the damage it will inflict. I hope those listening who are in positions to influence this will take these points away. I look forward to the Treasury Minister’s further thoughts about the VAT details. We need to ensure that this ill-thought-out policy does not put unnecessary strain on hard-working families who want a better future for their children.
Several hon. Members rose—
Gordon Henderson (in the Chair)
Order. I remind hon. Members that they should bob if they wish to speak. I will have to impose a time limit of three minutes, as I will have to call the Opposition spokesman at 5.15 pm.
Sally-Ann Hart (Hastings and Rye) (Con)
It is a pleasure to serve under your chairmanship, Mr Henderson. I congratulate my hon. Friend the Member for Northampton South (Andrew Lewer) on securing this important debate.
Labour’s plans to charge VAT and end business rate relief for independent schools is based on the politics of envy, from a party that wants to crush aspiration and ambition. Labour says its primary motivation is to generate revenue to invest in the state education system and that the policy might raise £1.7 billion for that purpose. Well, Labour had better get building more schools, because it intends to implement the policy as soon as the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) enters Downing Street, with no consultation or risk analysis. What a nonsense. The policy will harm both the state and the independent sector, and there will be an exodus of pupils into an increasingly stretched state system, with some independent schools closing altogether.
We must not trust Labour with our schools. About 12 years ago, the OECD “Education at a Glance” report found that expenditure on schools as a percentage of GDP increased from 3.6% in 1995 to 4.5% in 2009. The OECD average was 4%. Billions of pounds of spending went into schools under the last Labour Government, but that huge increase in spending led to no improvement in student learning outcomes. UK teenagers slipped down the league tables in crucial subjects, while our schools became the most segregated in the world, with Britain’s immigrant children clustered in the most disadvantaged schools. Primary school class sizes were bigger only in places such as Turkey and Chile, and there was an alarming rise in children not in education, employment or training. Taxpayers failed to get value for money and Labour’s policies had little impact.
Labour will never understand that it is not just about money; it is about leadership and structure. We have some amazing headteachers in Hastings and Rye. I will not name them, but they know who they are, and they work best with the support of positive and effective Government policy, and with the support of their academy trusts. In Hastings and Rye, 32% of schools were rated as being good or outstanding in 2010, compared with 82% in 2022. There is more work to do, but it can be done, as we have seen from the Conservative Government’s record, without destroying our valuable independent sector.
I have two independent schools in my beautiful constituency of Hastings and Rye: Claremont and Buckswood. Buckswood boards about 50 pupils from 48 different countries and has 200 local day-school pupils. Both schools have lower fees for local children, and they have a diverse mix of children, which contributes to a rich cultural environment—one that would not normally be expected in a coastal community. Thos schools enrich our communities, to the benefit of all our residents.
Gordon Henderson (in the Chair)
I apologise to Munira Wilson and Jim Shannon for calling them earlier.
Munira Wilson (Twickenham) (LD)
Thank you very much, Mr Henderson; it is a pleasure to serve under your chairmanship. I congratulate the hon. Member for Northampton South (Andrew Lewer) on securing this debate.
My Liberal Democrat colleagues and I aspire to a scenario in which the offering in all our state schools is so high—so superior—that parents do not feel compelled to send their children to the independent sector. It would be an education system that enables every individual, no matter their background or their needs, to flourish, succeed and fulfil their potential, wherever they are educated. But as liberals, we are also a party that has always championed choice, and it is important that parents are able to choose where their children are educated, and independent schools should always be one of those choices.
Let me be clear: we do not support ending the VAT exemption for independent schools, for the very simple reason that we do not support taxing education. As we have already heard, all education provided by an eligible body, including university education, music lessons and tutoring sessions, are exempt from VAT, and we would not want VAT or any other tax to be charged on any of these things. However, there needs to be a quid pro quo. Independent schools should give back to their local community, in order to retain that right; and, as we have heard, many already do. There are many excellent examples of collaborative work around the country. In my own constituency, Hampton School and Lady Eleanor Holles School have an exemplary partnership with Reach Academy in Feltham, sharing staff time, and mentoring and coaching of pupils for medical school and other university places. The relationship is about partnership and sharing not just swimming pools and theatre spaces but, as I have said, specialist teachers and specialist facilities.
That sort of ingrained partnership work benefits both the state sector and the independent sector, and it needs to become the norm for all. Removing the VAT exemption from independent schools would reduce partnership work and also hit parents who have felt that, for whatever reason, the state sector cannot meet their children’s needs, especially if they have additional needs but do not have an EHCP. I know of many examples of parents who have scrimped and saved, or used a little bit of inheritance that they may have had from their own parents, to send their child, who is not thriving in a state school, to the independent sector, where they are able to thrive. As we have heard, many independent schools are not the Etons, the Winchesters or the Harrows; many are small schools with fewer than 400 pupils.
We should all aspire to make the best investment we can in education and to make every school as good as possible. Taxing education is not the way to achieve that goal.
Paul Scully (Sutton and Cheam) (Con)
It is a pleasure to serve under your chairmanship, Mr Henderson. I congratulate my hon. Friend the Member for Northampton South (Andrew Lewer) on securing this debate.
I draw the attention of the House to my entry in the Register of Members’ Financial Interests. I will declare an interest of three types: my partner is the headteacher at a prep school; she also owns a house that backs on to one of the best-performing state schools in Surrey, so inevitably her house price will go up when selection for that school becomes selection by house price rather than by academic achievement or fees; and I myself went to an independent school—my father paid a fortune for this accent.
I would say two things about this. Economically it is not sensible, and educationally it is not sensible either. Prep schools in particular are already a fragile ecosystem, and most have around 150 to 250 pupils. My hon. Friend the Member for Northampton South talked about an impact assessment of what happens if a few pupils drift away. I will tell hon. Members what happens if 10 or 15 pupils leave a fragile prep school. That school is perhaps not paying market price for its teachers’ salaries, and it has already opted out of the teachers’ pension scheme, which accounts for around 28% of salaries.
Independent schools are the only ones paying in—it is a Ponzi scheme—and some actuaries predict that that figure will go to 40% because there will be more failures. If 10 or 15 pupils leave that sort of school, it collapses. There will then be 150 pupils who have to get educated under the state system in that area, which may be a rural area with a small state school. There may be 1.1 million vacancies in state schools around the country, but they are not equally distributed: something like 20% of secondary schools are over capacity. Those are the best ones—the ones that people want to get into.
Prep schools are already fragile. Those that go up to 13 are already having to change their business models. This policy would be another nail in the coffin of pupils’ aspiration, as we have already heard. It would not lift life chances; it would just set one group of children over another. The small amount of money that that broad change will raise will not be as meaningful as the Labour party thinks. It is better to look for other, more collaborative ways, but let us not destroy the partnership working that we have heard about. Let us not destroy the work around using different sites, sporting facilities, expertise and skills.
The IFS report states that private schooling tends to be concentrated among those with the most income and wealth, but “tends to” is doing a lot of heavy lifting there. A lot of people struggle to ensure that their children get a better education, and we should reflect on that. The shadow Secretary of State for Education, the hon. Member for Houghton and Sunderland South (Bridget Phillipson), should go out and meet some headteachers.
Jim Shannon (Strangford) (DUP)
Congratulations, Mr Henderson; it is a pleasure to serve under your chairship. I also congratulate the hon. Member for Northampton South (Andrew Lewer) on raising the issue.
In Northern Ireland, schooling is slightly different, in that we still have a transfer test that allows entrants into grammar schools. For that reason, there is not as great a preference for private schools as there would be were grammar schools to be removed. However, I am thankful that the DUP, with a now-working Assembly, has a Minister in place to protect the education system and retain grammar education for people of all classes and backgrounds.
To declare an interest, back in the ’60s—I probably go back further than nearly anybody in the Chamber—my mum and dad sent me to a boarding school in Coleraine, which gave me five years of good education. I am incredibly indebted to my mum and dad. In the ’60s especially, we had no holidays, and our car was an old banger that was kept forever—just so that their sons could have an education. I thank them for that. It gave me a great chance in this world, and I appreciate it.
Taxing private schools out of existence is not the route to take. The education of children is charitable in the extreme, and the only profits that are made are found in well-rounded children and well-paid teaching staff, which should be the goal of every school. That is what we should be looking at—nothing else. We should not achieve that goal by raising fees to such an extent that only the most elite can afford schooling, as in schools in Switzerland, for example.
The boarding school on the periphery of my constituency of Strangford is Rockport School, in North Down constituency. It draws a number of international students to its doors. That can only be good for the local area. It also generates money, cultural exchange and social engagement. I would hate to see that great school—its headteacher, Mr George Vance, cut his teeth at our local grammar school, Regent House, in my constituency —left in a position in which fees rise at an exorbitant rate and the benefits of the school are lost. That would be a tragedy.
There are 16 private schools registered in Northern Ireland, and there is a role for the sector. The work that they do deserves support; we should not set out to tear the sector down by stealth taxation. I am a believer in the public school system. My boys all went to Glastry high school, my granddaughters go to the local integrated school and my grandsons are in the local primary school. I have faith in the schooling system, but that does not mean that I want to abolish the smaller subsidised schools. The VAT proposal is not only aimed against the ultra-wealthy. It will go much further than that, which concerns me. With great respect to what Labour is putting forward, I am concerned that it will have a detrimental effect on the education and economy of this great nation of the United Kingdom of Great Britain and Northern Ireland.
Darren Henry (Broxtowe) (Con)
It is pleasure to serve under your chairship, Mr Henderson. I thank my hon. Friend the Member for Northampton South (Andrew Lewer) for bringing forward this debate.
I will focus on the consequences of removing the current VAT exemption for independent schools. It is clear that this change would lead to a rise in school fees, as schools are forced to pass on the cost to parents in order to keep running. That would immediately mean that many parents, who may only just be able to afford the fees as they stand, would no longer be able to continue sending their children to private school. In fact, I calculated that one of my local Nottinghamshire high schools would lose around 20% of its children. Smaller schools would struggle to survive at that rate and may close. That would mean job losses and loss of choice for local parents regarding their child’s education.
I was recently contacted by my constituent, Dr Sharmini, a local school governor who is incredibly concerned about the potential change. She emphasised that it is not the most wealthy and their children who will be affected, but parents who work incredibly hard and make sacrifices to send their children to independent schools.
It is important to emphasise that this change would also have a knock-on effect on non-fee-paying schools, which would see an increase in pupils. That could mean larger class sizes and greater resources being required in non-fee-paying schools. It may also result in children having to move schools in very short time spans.
I am a veteran, and this is the sort of thing that would affect military families. They may have to move mid-school year, and they make good use of independent schools and boarding schools because of that. This change will have a large effect on the lives of children who will have to move. We are removing children from their teachers and friends, and for many that will be very distressing.
My team spoke with the head of a local private school in Nottinghamshire today. He had huge concerns about the use of the school’s facilities. As it stands, sports facilities and facilities such as halls are given over to a huge variety of local clubs at no cost. He stated that if VAT came in, the school would be forced to look at more economical ways of renting out those spaces and would not be financially able to continue lending them out for free.
That head also emphasised the difference between the big private boarding schools and smaller independent day schools. It is the small independent schools that will be hurt most by this change, and many may not survive the loss of students. The focus of all Members in this House must be on ensuring that every child has the best possible education; that is what I will be focusing on in Broxtowe.
Sally-Ann Hart
On a point of order, Mr Henderson. I neglected to say earlier that I might have an interest to declare, as my husband is a governor of an independent school.
David Simmonds (Ruislip, Northwood and Pinner) (Con)
It is a pleasure to serve under your chairmanship this afternoon, Mr Henderson. I, too, congratulate my hon. Friend the Member for Northampton South (Andrew Lewer) on securing the debate.
I represent a constituency with five thriving independent schools of the traditional private school variety; state schools that, as academies, are independent schools; a significant number of private special educational needs and disabilities schools; and private nursery provision. My children have benefited from state, private and privately funded state provision over the years, so I have a direct interest in the subject the debate.
I want to focus particularly on the impact that the VAT change would have on the very large sector of small independent schools, on which so many parents rely. Ofsted has a rule that any setting with two or more children present for the purposes of their education must be registered as a school. In my constituency, I have a stables—an equine centre—that provides equine therapy for mute, autistic children. Those children are reliant on it, because it is an environment in which they can gain educational benefit. They have been placed there and funded by the local authority, and that is simply not to be found in any other form of schooling.
Across the country, there is a huge number of such schools, which are legally registered, with an Ofsted number, and privately funded. Many are not charitable trusts; in some cases, they are businesses providing a particular type of apprenticeship or educational experience for a specific set of special educational needs. The impact of introducing VAT on the fees paid by local authorities and parents for that huge variety of provision would be absolutely enormous. A number of my constituents who have children with quite profound special educational needs are deeply concerned about the impact that this change would have on not just their household budget but the availability of the specific specialist provision on which they depend.
I have some sympathy with the argument that the element of education that is hotel costs in boarding schools is not strictly an educational purpose, and I have heard it advanced across the sector. However, it is clear that the availability of highly specialised private provision would be jeopardised profoundly by imposing a policy of putting VAT on all fees. The cost would directly hit the taxpayer and mean that so many of our constituents who feel that they have at last found the right setting for a child with profound needs, often after many years of searching for it, would see that put at risk by a policy of introducing VAT. I commend the Government on strongly resisting such a policy, and I hope the Minister will restate that resistance this afternoon.
Suella Braverman (Fareham) (Con)
I thank my hon. Friend the Member for Northampton South (Andrew Lewer) for leading the debate. Frankly, this Labour party policy is a viciously cynical ploy to allow Labour to masquerade as class warriors and as the working-class heroes taking on the elite. However, the reality is that they are champagne socialists pretending to be social justice champions. This policy is not about education, outcomes, the welfare of children or supporting the British people: it is about division and removing choice. It will harm educational outcomes and cause hardship. Far from being the class warriors of our age, Labour will become the party that kills off social mobility through this tax on aspiration, personal choice and responsibility, and social mobility.
There are three reasons why the policy is misguided. First, independent schools are positive for the economy. They contribute £16 billion to the economy, support 300,000 jobs contributing £5 billion in tax revenue, and save the taxpayer £4 billion by educating pupils outside the state sector. All of that would be put at risk by this ill- thought-out policy. Secondly, special education schools will be hard hit by this punitive policy. There are 96,000 pupils at SEND schools who are not on an EHCP and, simply put, they will be put at risk by the policy. Where will those children go when these special schools are put out of business? Many specialist schools in the state sector are already over-subscribed. Lastly, this tax on aspiration will simply push many poorer pupils out of good-quality schools, and parental choice will be destroyed.
I feel passionate about this policy. I stand against it because of my own personal educational journey. We will all have personal experiences and views informed by our own education, but mine is apposite. My parents were working-class people; they were migrants who came here with nothing. They themselves had poor educations in Mauritius and Kenya, so they valued the opportunity to give me a good chance at getting educated. I started in a local state school, where the teachers would go on strike every week, outcomes were poor and discipline was bad. However, my parents had a choice. Through scrimping, saving and sacrifice, they got me into a small independent private school. From that school, I got into Cambridge, I practised as a barrister and I made it to Parliament. I would not be here if it were not for their sacrifice and the great small private school that my parents had the choice to send me to.
Mr Robin Walker (Worcester) (Con)
I congratulate my hon. Friend the Member for Northampton South (Andrew Lewer) on securing this important debate. I speak in my capacity as the Chair of the Education Committee.
This is slightly awkward, because we do not, of course, look at policy proposals that are not from the Government. However, we had a debate about a year ago in the Chamber of the House of Commons where the Labour party proposed to bypass my Committee and appoint their own to look at this policy proposal. What was interesting in that debate, as in this one, was how few Labour Back Benchers turned up to support what is supposed to be their flagship policy. This issue has not been raised by any of the Labour members of the Education Committee during my time as Chairman. In the circumstances, I find that very surprising.
I am concerned about this issue primarily because of its impact on our publicly funded schools. I seriously worry that Labour has not done its sums properly and has not brought the impact of the £6,000 a year required for the revenue funding, let alone the capital expense of expanding those schools, into its calculations. My county council is in the process of commissioning a £40 million secondary school to meet the demand for places that we already have. No calculation appears to have been conducted of what the cost would be of the extra places required by this policy.
When it comes to SEND, I expect the Labour Front-Bench spokesman to say that Labour will exempt specialist settings from its VAT proposals. I certainly hope that that is the case, and that is what was indicated in our previous debate. However, I do not think that the revenue calculations carried out by the Treasury some years ago on the basis of imposing 20% VAT on all charges for independent schools have taken that into account. I would love it if the Labour spokesman could update us today on what reduction in income Labour expects if it does exempt specialist settings from this policy and on whether that will apply to all of them, including the alternative provision settings that my hon. Friend the Member for Ruislip, Northwood and Pinner (David Simmonds) referred to. I recently visited one at the Gloverspiece Mini Farm in the constituency of my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), which would like the assurance that it will not be clobbered by a 20% increase in VAT and in fees.
When it comes to SEND pupils, we are talking not just about those in specialist settings. Many of my mainstream independent schools in Worcester provide support to pupils who have identified special educational needs but not an EHCP. If those people are driven out of the independent sector by higher fees, they are likely to seek EHCPs, putting pressure on our health system and our local authorities, which are already overloaded—I will campaign, along with colleagues, to try to increase the resources for them.
As Chairman of the Education Committee, I want our state education system to be one of the best in the world—it already is, but we can make it even better. We should focus on doing that, rather than on creating the misleading impression that clobbering the independent sector by imposing VAT, which no Labour Government in the last century have ever proposed to introduce, and which none of our European or English-speaking peers apply to independent education, is somehow the solution.
Helen Hayes (Dulwich and West Norwood) (Lab)
It is a great pleasure to serve under your chairmanship today, Mr Henderson. I congratulate the hon. Member for Northampton South (Andrew Lewer) for bringing forward this debate on independent schools and VAT. Many Members have made contributions about the role that independent schools play in their communities. In my own constituency, thousands of children receive a high-quality education at independent schools including Dulwich College, James Allen’s Girls’ School, Herne Hill School, Alleyn’s School and others besides.
I will address some of the comments made by hon. and right hon. Members this afternoon. On the analogy made by the hon. Member for Northampton South about private schools and the difference between private jets and jacuzzis, we would want every school to represent and fulfil the aspirations that parents have for their children. That is at the nub of this debate, which is about the quality of education received by the 93% of children who attend state schools in relation to the quality of education received by a privileged 7% of children. [Interruption.] I am going to make some progress, I am afraid—I will not take interventions right away.
We all want the best education for our children; every single parent wants the best education for their child. That is why the next Labour Government will do what previous Labour Governments have done: drive up standards in our schools and put education back at the centre of our national life so that we can break down the barriers to opportunity across our country. This debate is focused specifically—[Interruption.] I do not know who was chuntering from a sedentary position about what happened last time, but as a London MP I can tell them exactly what happened last time: it was called the London Challenge and it transformed education in the state sector in my constituency and across London. We went from a situation where our schools were failing under the Conservatives to a situation where they are now delivering brilliantly for all our children.
As many hon. Members have mentioned, the Labour party is committed to levying VAT on independent schools and ending their business rates exemptions. We have committed to doing that because we believe in driving high and rising standards in all our schools. Across this country, more than nine in 10 children attend state schools. The independent Institute for Fiscal Studies reported last year on policies in relation to VAT and tax exemptions for private schools. In brief, it found that our proposals would have little effect on the number of children being educated in private schools, but would lead to a net gain to the public purse of at least £1.3 billion per year. I appreciate some of the concerns raised in the debate today, but I urge right hon. and hon. Members to look in more detail at the IFS report’s findings.
Neil O'Brien (Harborough) (Con)
I just want to press the Opposition Front Bencher on a specific point. There are some brilliant special schools in my constituency. The Opposition are saying that they will exempt children with an EHCP from their tax, but they are not saying that they will exempt all children at special schools from the tax. Why not?
Helen Hayes
There is a very simple reason for that. It is the way we avoid a loophole whereby any school can claim that it is a special school. Without there being an independent test of the places that are provided, any school could claim that it was a special school, and that would provide a loophole that we do not—
Helen Hayes
I will not give way again. It would provide a loophole that schools could use to evade the policy.
The share of pupils being educated in private schools has consistently remained around 6% to 7%, despite fees increasing above inflation year on year for many years. Indeed, independent school fees are 55% higher in real terms now than 20 years ago. Although we do not believe the scaremongering that there will be an exodus of pupils into the state sector, our state schools would be able to cope with an increase in their numbers. Across England, overall pupil numbers are due to decline by at least 100,000 per year until 2030; the total drop is higher than the number of children currently attending private schools.
Mr Walker
That is very kind; I am grateful to the hon. Member for giving way. I just want to make the point that, yes, the overall numbers are declining, but that is primarily in primary. The demographic bulge, as she well knows, is coming through into secondary schools, and secondary schools in many areas of the country are full. How does the Labour party plan to deal with that?
Helen Hayes
As the hon. Member rightly points out, what happens in primary flows into secondary, so secondary schools across the country, including secondary schools in my constituency, are absolutely aware of the drop in numbers that is coming down the track, and we are seeing secondary schools in London closing—two of them this year—because that flow is starting to affect them.
The Labour party believes in parental choice, but the conversation today has to take place with fairness in mind. In 2022-23, average independent school fees were £15,200, but average state school spending per pupil was £8,000. The gap in funding between independent and state school spending has more than doubled since 2010. With the £1.3 billion of funding that would be raised each year from our measure, we could significantly increase school spending, allowing the Government to drive high standards across our state schools too. The Government are consistently missing their targets for teacher recruitment and face teachers leaving the profession in droves. We would use that money to recruit and retain more than 6,500 additional teachers.
There is considerable evidence of the need to improve and the benefit from improving teacher training, so Labour will work with schools to deliver a teacher training entitlement, throughout every stage of a teacher’s career, to deliver evidence-based, high-quality professional development.
We need to look again at school inspection and improvement—
Gordon Henderson (in the Chair)
Order. I need to stop you there, Ms Hayes, and call the Minister.
The Financial Secretary to the Treasury (Nigel Huddleston)
It is a pleasure to serve under your chairmanship, Mr Henderson. Please allow me to start by congratulating my hon. Friend the Member for Northampton South (Andrew Lewer) on securing the debate. What a pity we have only 60 minutes, because there was so much more to say here. We heard some fascinating and thoughtful contributions on the matter of independent school fees and VAT.
It will not surprise anyone present to hear that I agree wholeheartedly with Government Members, and I am very pleased to hear from our Lib Dem and DUP colleagues, who support the Government’s policy to allow independent school fees to be exempt from VAT for the many valid and obvious reasons expressed by hon. Members and right hon. Members today. Those include the incredible impact that they have on communities, the partnering, their impact on so many people’s lives, and the fundamental principle of choice.
I am afraid that what we have heard from the Opposition is what we hear consistently. Perhaps we might all be sighing with relief soon when we get the inevitable flip-flopping on this policy—I do not believe for one minute that it is wholeheartedly supported by Opposition Members. It is just virtue signalling of the highest order. It is complete left-wing populist virtue signalling by the Opposition, but the British public see straight through it. This Government understand the vital role that education plays in all our lives. Just this year, school funding will total about £57.7 billion, and next year it will be £59.6 billion. I am very proud to say that that will be the highest ever real-terms spending per pupil under the Conservatives.
Sir John Hayes (South Holland and The Deepings) (Con)
I am grateful to the Minister for giving way; I learned as a shadow Minister and a Minister that it is better to be gracious. The Minister will understand that one of the best arguments for independent schools is that they often innovate. My right hon. and learned Friend the Member for Fareham (Suella Braverman) was involved in establishing a school that innovates and breaks new ground. From Steiner schools to Bedales to Summerhill, those schools could only exist in the independent sector. How does the Minister think that the Labour party perceives that, or does it not perceive it at all?
Nigel Huddleston
My right hon. Friend, as always, talks very sensibly about this. The independent sector is a major contributor to our ecosystem. Of course, many teachers flip flop between the different sectors; the innovation in the private sector can also help the state sector, which is one of the many benefits that we have heard about today. In terms of the broader performance in the education system, not only do the Opposition consistently talk down the economy, our constituencies and our businesses but they also talk down our teaching profession. Actually, it is incredibly successful and we should be proud of what teachers have achieved.
Our commitment to quality education has seen 89% of all schools achieve “good” or “outstanding” at their most recent inspection, an increase from 68% back in 2010 under Labour. In the programme for international student assessment, our rankings for reading and maths improved by 10 places from 2015 to 2022 to ninth and 10th across the Organisation for Economic Co-operation and Development countries. Within that mix, as we all know, England performed better than Labour-run Wales or SNP-run Scotland, despite their higher funding. If we want to see what would happen in education under Labour, all we need to do is look to Wales—it is not an impressive performance. In the latest paediatric adverse childhood experiences and related life-events screener assessment of reading for 10-year-old students across 57 education systems, England ranked fourth internationally. I think we can all accept that those are good things.
This Conservative Government believe that there is a broad public benefit in the provision of education. That is why many education and training services are exempt from VAT, which includes an exemption on independent school fees. Labour does not seem to recognise the public good, as my right hon. Friend the Member for South Holland and The Deepings just mentioned. It wants to charge VAT on school fees and end business rates relief for private schools, taxing aspiration and inevitably putting more pressure on state schools.
Brendan Clarke-Smith (Bassetlaw) (Con)
I am very blessed to have two excellent independent schools in my constituency, Worksop College and Ranby House, and I speak as a former head of an independent school myself. We also have some excellent state schools at the Outwood Grange Academies Trust that give outstanding opportunities to local pupils. Does the Minister agree that the knock-on effect of this is not spoken about enough? Labour is actually adding to the capacity problems and neglecting the state sector in what it is doing to the independent sector.
Nigel Huddleston
My hon. Friend makes a really important point that has been repeated by many colleagues today. An introduction of 20% VAT can have two impacts: it will either push up prices or lead to cutting costs somehow. It is intuitively obvious that, if we push large numbers of pupils from the private sector into the state sector, it will inevitably put pressure on the state sector and therefore cost members of the public even more. The numbers suggested by the Opposition simply do not stack up. It is an ill thought out policy. The full knock-on impact has not been properly considered. VAT is an incredibly complex area. It is not simple to make blanket policy without considering the full impact.
Not every private school is some kind of Eton—a point made by my hon. Friend the Member for Worcester (Mr Walker) and several other hon. Members. There are exceptionally vulnerable people in very deprived areas of the country who rely on our private schools to provide the type of education they cannot get in the mainstream system.
Sally-Ann Hart
It is well known that many of our major independent schools such as Eton and Harrow give 100% bursaries to children from disadvantaged areas to give them a chance to skill up and to benefit for their own communities. That is amazing.
Nigel Huddleston
My hon. Friend is absolutely correct; the broader societal benefit of many of our private schools is considerable. That is one of the reasons why many, although not all, have charitable status. They provide all sorts of benefits, including through opening up for sports provision.
The Government are not alone in having concerns about Labour’s current policy. Labour’s own shadow Chief Secretary to the Treasury, the hon. Member for Bristol North West (Darren Jones), spoke out against its planned tax rise before he joined the Front Bench, telling students that he did not believe the policy would bring in the money that his party was promising. Of course, that has not stopped Labour from spending the money several times over already, and it does not have a plan to pay for the potential incremental costs.
I will bring my comments to a close, but I must express a slight disappointment: much as it is always a pleasure to have the hon. Member for Dulwich and West Norwood in this Chamber, I am normally faced in these debates by my opposite number, the hon. Member for Ealing North (James Murray). I must share an irony in that situation: I stand here today as a proud product of a comprehensive state school education nevertheless supporting the role of private schools in the UK and the principles of freedom of choice, aspiration, opportunity and social mobility.
My Labour counterpart is a product of the private school system yet is advocating a policy that could potentially restrict access to the very system from which he has himself benefited, as indeed have many Members on the Opposition Benches. I find that quite ironic and hypocritical, but I will never criticise somebody for the choices made by their parents. We do not do that on this side of the Chamber, but a little bit of humility in this debate might be appreciated. A good education for all is a priority for this Government, and I hope hon. Members from across the House will work with us to deliver it.
Gordon Henderson (in the Chair)
Andrew Lewer, you have two minutes to wind up.
Andrew Lewer
I want to express my sincere thanks to so many colleagues. I had thought about having an Adjournment debate on this subject but I am so pleased that, rather than standing in the Chamber talking to myself, I have a large number of people in Westminster Hall to take part in the debate and make such useful and constructive contributions.
The proposed policy fails on the principle of freedom of choice and the principle of education being free of VAT. The idea of saying, “Well, we don’t want VAT on education apart from on the bits that don’t we like—apart from on the bits that we can give a bit of a class-warrior go at,” also fails in practice. For every report in one direction, there are others: the EDSK report and the Baines Cutler report are both independent and carefully researched reports that prove that this money, which has been spent dozens of times already, does not actually exist in the first place.
To me, the issue feels like the current Leader of the Opposition’s version of foxhunting. He needs to come up with something red-meaty to throw at his left to say, “Look, we’re still socialists and we’ll bash the rich and the elite.” Tony Blair did it with foxhunting, and now it is independent education. The difficulty is that this issue is so much more profound and more damaging than even that issue, which did cause problems for rural communities. This is much worse, much more broadly based and much more damaging.
I am delighted that so many colleagues have been able to pick up so many key points. The point about special educational needs that was made by several colleagues is particularly potent, and I shall certainly try to take that up in my ongoing work as chair of the all-party parliamentary group on independent education.
Question put and agreed to.
Resolved,
That this House has considered independent school fees and VAT.