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David Burton-Sampson (Southend West and Leigh) (Lab)
Alex Baker (Aldershot) (Lab)
Ashley Dalton (West Lancashire) (Lab)
The Secretary of State for Business and Trade (Jonathan Reynolds)
small businesses are the beating heart of our high streets and communities, and they are essential to economic success and our growth mission. We want growth in every part of the UK, and small businesses have an enormous role to play in that.
David Burton-Sampson
In Southend and Leigh, there are over 7,100 small and medium-sized enterprises, and in areas like Leigh Road, the Broadway and London Road, very few units are empty. Will my right hon. Friend meet me and representatives of the local business community to understand the challenges they face, and to discover some of the opportunities that businesses have taken to really capture the market?
Jonathan Reynolds
I welcome my hon. Friend to his place. I have always enjoyed my visits to his constituency, particularly enjoying an ice cream at Rossi’s ice cream parlour. Those visits had a serious purpose: they helped us to build our programme for small business, which recognises not only issues such as late payments, which this Department will deal with, but the need for the whole Government to tackle access to finance and retail crime—the things that make a difference. I will be delighted to make sure that my hon. Friend gets the meeting that he requests with my officials, so we can continue to do that important work.
Alex Baker
Small businesses in my constituency are keen to play their part in the Government’s growth agenda, but they tell me that they have been priced out of trading in Farnborough town centre because of rising costs. Will the Secretary of State join me in congratulating the Federation of Small Businesses, which this September celebrates its 50th year of supporting small businesses in the UK? What is his Department doing to ensure that small businesses that want to trade on the high street are supported to do so?
Jonathan Reynolds
I also welcome my hon. Friend to her place. I was pleased to meet her at the Farnborough air show, of which I am sure her community is extremely proud. I also extend birthday wishes to the Federation of Small Businesses, with which we work very closely, particularly on policies on issues such as late payments. I am always aware of the FSB’s incredible coverage; it has over 150,000 members across the country. Of course, the FSB began in Blackpool, so it is another great thing that the north-west of England has given this country.
Ashley Dalton
West Lancashire is rich in small and medium-sized enterprises and boasts several markets, but local business owners and market traders tell me that a lack of access to cash banking services is a major obstacle to growing their businesses and is placing additional costs on trading. How are the Government planning to support SMEs’ access to cash banking services, especially in rural areas?
Jonathan Reynolds
This issue is important to Members in all parts of the country, but I recognise my hon. Friend’s particular point about prosperous rural economies. Access to banking and financial services is a prime example of the fact that the Government will work across every Department to make sure we are giving businesses what they need. I am not nostalgic, and I understand that banking has changed, but small businesses need to be able to deposit cash on the high street. The key policy in this area will be run by the Treasury, but this is about changing the eligibility for banking hubs, so that we have more of them. We will see at least an additional 350 in this Parliament, including in my constituency; tomorrow, I will take a sneak peek at the new banking hub in Stalybridge.
Mr Louie French (Old Bexley and Sidcup) (Con)
Under the Labour Mayor of London’s proposals, many small businesses that drive vans via the Blackwall tunnel will soon have to pay charges of up to £40 a day—the congestion charge, the ultra low emission zone charge, and the Mayor’s new tunnel tax. Do the Government agree that this is neither fair nor good for economic growth?
Jonathan Reynolds
I thank the hon. Member for raising a matter that is important to his constituency. My Department works very closely with a range of devolved arrangements around the UK, and it is important to work with them with respect and good faith. This question is clearly for the Mayor of London, but I recognise the hon. Member’s point. We always take heed of the aggregate impact on business of everything at every level of government, which is why having an industrial strategy and a small business plan is key.
Sarah Dyke (Glastonbury and Somerton) (LD)
Small businesses in the south-west have a huge role to play in growing the economy. However, the latest south-west small business index score, which measures the confidence of small businesses, has declined by 23%—there has been a fall of 30 points since the last quarter. Will the Minister meet me to discuss how we can support small businesses across the south-west?
Jonathan Reynolds
Business confidence was strengthened considerably across the United Kingdom as a whole following the general election and the return to some political stability, which businesses of every size have sorely missed over recent years. However, I hear the hon. Lady’s point about her area and region, which is an important priority for me. I will ensure she gets the meeting she needs, so we can have a conversation about how we can work together to give people in her area a platform for success.
Mr Peter Bedford (Mid Leicestershire) (Con)
What action is the Government taking to support small and medium-sized businesses in getting access to finance, so that they can grow for the future?
Jonathan Reynolds
I thank the hon. Member for that question. That is a key issue. There have been positive developments in recent years, particularly through the work of the British Business Bank. The Government feel that the landscape for public finance institutions is now quite busy. The key policy is to ensure that the national wealth fund aligns with priorities in this area, expands the work that has been done, and ensures consistency, so there is a ready way for businesses to understand what can sometimes be a confusing landscape. Also, policies such as that on growth hubs will continue, so the interface for businesses is straightforward and simple, and, fundamentally, the product to access finance will be there when they need it.
Sarah Olney (Richmond Park) (LD)
It is a pleasure to see the Secretary of State at the Dispatch Box. Recent years have seen our SMEs struggling with reams of red tape when they attempt to trade with the rest of the world. Reporting this week has detailed the chaos and extortionate expense that small businesses in the agrifood industries have been dealing with since April’s introduction of the common user charge. I appreciate that this is yet another occasion on which the Government must deal with a mess not of their making, but what concrete steps is the Minister taking to support and empower our small businesses to trade internationally?
Jonathan Reynolds
I thank the hon. Lady for her kind words. I recognise that the Liberal Democrat manifesto shows that we have many common areas of interest, particularly on industrial strategy and trade. Under this Government, trade policy will match our domestic, economic and business priorities. We will be able to reset our relationship with the European Union because, to be frank, we are unencumbered by some of the internal politics of the last Government. We believe that we can make the most of opportunities around the world. Businesses tell me, as I am sure they tell every hon. Member here, that for many years, politics has been driving the agenda, rather than what businesses need. That will change, and has already begun to change. We will work with anyone in the House who is keen to provide a platform for success on knocking down barriers and getting businesses what they need.
Sarah Coombes (West Bromwich) (Lab)
Luke Myer (Middlesbrough South and East Cleveland) (Lab)
Melanie Onn (Great Grimsby and Cleethorpes) (Lab)
Lauren Edwards (Rochester and Strood) (Lab)
Anneliese Midgley (Knowsley) (Lab)
Rachel Hopkins (Luton South and South Bedfordshire) (Lab)
The Secretary of State for Business and Trade (Jonathan Reynolds)
It is lovely to see you in the Chair, Madam Deputy Speaker, and it is great to see so much interest in the industrial strategy from my hon. Friends. However, I believe Members in all parts of the House can and should support the strategy, and we will seek to make cross-party arrangements. The need is great. We must improve on the UK’s poor business investment performance, which has been the lowest in the G7 for some time. We must recognise that so much chopping and changing of policy in recent years has been to our detriment. That will come to an end under this Government and this industrial strategy.
Sarah Coombes
The Black Country has long been a manufacturing heartland, home to numerous businesses, large and small, that support thousands of good-quality local jobs. Given the Government’s commitment to supporting British manufacturing, will the Minister set out how the upcoming industrial strategy will support manufacturing businesses in the west midlands?
Jonathan Reynolds
It is wonderful to hear a strong and authentic voice from the Black Country making a charge for industrial strategy; I thank my hon. Friend for her comments. The purpose of the industrial strategy is to capture a much greater share of the big international investment cycles, to explain straightforwardly to investors what those are, to provide consistency and to choose sectors. That does not mean the sectors that are not part of the strategy are not important, but is simply because the strategy must have priorities in it. I think my hon. Friend will support our choices, which will be revealed in the forthcoming weeks. Her area will play a major role in the success of the strategy for the whole of the country.
Luke Myer
A key plank of our industrial strategy must be green jobs, which Teesside is perfectly positioned to deliver. Inward investment is important—I had a positive meeting this week with a company that wants to invest millions in green fuel—as is backing British manufacturers, which will require the development of the country’s skills base. Will the Minister provide assurances about his work with the Department for Education to ensure vocational education is protected, and British manufacturing is protected as well?
Jonathan Reynolds
I thank my hon. Friend for his question. Teesside is a hugely exciting part of the country. There is so much to be proud of there, and so much to be excited about for the future, because of its advantages and the offer that it can make. He asks about green jobs. I have said many times that decarbonisation cannot be deindustrialisation; that is very important. We must recognise that the policy mix that we have inherited is not the right one for delivering decarbonisation, so changes will have to be made. For any business at any level, skills and access to talent in the labour market will always be the foundational issue. We work very closely with our colleagues in the Department for Education. The creation of Skills England and a better link between the skills system and immigration are key parts of that. Moreover, changing the apprenticeship levy to the growth and skills levy, which we co-designed with business, shows that we are addressing this agenda in a comprehensive way for the step change that is required to make our policy a success.
Melanie Onn
The Secretary of State will be aware of Air Products, which intends to invest £2 billion in northern Lincolnshire and green hydrogen projects. Does he agree that that investment would not only transform the south bank of the Humber, including my constituency of Great Grimsby and Cleethorpes, bringing 1,400 new jobs, but be an ideal project to include in the global investment summit? Perhaps he would be interested in meeting representatives of Air Products and me at some point.
Jonathan Reynolds
Let me say how wonderful it is to see my hon. Friend back in her place, representing her community and bringing with her even more expertise from the roles that she has held and the work that she has done in her time outside Parliament. It is a key priority for me to ensure that good jobs in the supply chain come with the transition that we all now support. I can tell her not only that we are interested in Air Products, but that my colleague, the Minister of State for Industry, already has a meeting with it scheduled in the next few days, and we look forward to working with my hon. Friend not just on that, but on many issues in the weeks and months to come.
Lauren Edwards
The voluntary sector had a strong voice under the previous Labour Government, and partnership with it was key to our achievements in office. How will my right hon. Friend ensure that the voluntary sector has a strong voice once again under Labour, so that we can deliver the Government’s industrial strategy, particularly as it relates to the creative industries and the mission to ensure high-quality care for all?
Jonathan Reynolds
It is also great to see my hon. Friend in her place. I enjoyed working with her in her previous role in local government, and she brings all that expertise and achievement with her to this House.
I wish to embed our industrial strategy for the long term. I want to focus it on long-term, sustainable, inclusive and secure growth that will cover many sectors of the economy, as my hon. Friend has mentioned. That will mean the Government having to work in partnership not just with business, but with civil society, trade unions and local and regional leaders in a way, to be frank, that we have not been doing for some years. We will make sure, as she requests, that that is a priority, and is visible in the work that we do.
Anneliese Midgley
A Labour Government brought secure, well-paid working-class jobs to Knowsley with Ford Halewood. My dad getting a job there changed my family’s life and lifted us out of poverty. It did the same for thousands of families like ours. Does the Secretary of State agree that any successful industrial strategy must provide good-quality, unionised jobs to lift living standards in areas such as mine?
Jonathan Reynolds
It is also a pleasure to welcome my hon. Friend to her place, and I thank her for those comments, with which I thoroughly agree. This is what it is all about—good work and good wages in every part of the country. I will work with anyone to deliver that. Her personal story shows the difference that such a policy can make. I often reference, for instance, the difference that Nissan’s investment made to communities in Sunderland. When such investment is made and got right, it delivers long-term benefits for communities and for the UK—more so perhaps than any other policy area. If we want to address, as I do, the UK’s profound regional inequality, policies such as these are so important, so I thoroughly endorse her comments. The industrial strategy is only one part of the growth mission, but it is at the heart of the pro-worker, pro-business agenda not just of my Department, but of the whole Government.
Rachel Hopkins
I welcome our Labour Government’s commitment to decarbonisation, particularly for Britain’s automotive industry. It is a vital step in securing the sector’s future and safeguarding high-quality jobs, which are critical for the Vauxhall plant in my constituency of Luton South and South Bedfordshire. Will the Secretary of State update the House on how his Department is working across Government, including with the Treasury and the Department for Energy Security and Net Zero, to drive innovative decarbonisation solutions, to ensure the success of our growth mission?
Jonathan Reynolds
My hon. Friend is not a new colleague, and her advocacy of the automotive sector, particularly given her constituency interest in Stellantis, is well known and welcome. This was a challenging area, particularly for her constituency, that we inherited. The previous Government had neglected engagement with the business. Since we took office, we have had extensive engagement with Carlos Tavares and the Stellantis team. The journey that the automotive sector has to go on for decarbonisation presents challenges, and there is a challenging picture across all of Europe, but the neglect of the previous Government has ended. Not only am I closely engaged on the issue, as are my ministerial team, but so is the Secretary of State for Transport, particularly in relation to the zero emission vehicle mandate—a key area of policy for the business. We will continue that work, and I will continue to keep my hon. Friend, and any other local MPs, updated, as we have done to date.
George Freeman (Mid Norfolk) (Con)
I welcome the Secretary of State and his team to what I think is one of the most important Departments in Government. As a sometimes lonely voice on the Conservative Benches advocating for industrial strategy, I signal support for his intention. I am sure that he agrees that the big challenge is to convert our phenomenal science and technology leadership into sovereign industrial supply chain leadership around this country. Having led the strategy for life sciences—quantum, engineering biology, fusion—may I ask whether he agrees that the key to this is cross-departmental Whitehall work, and ensuring that we do not end up with endless earnest, well-intended committees, but actually engage the small businesses, entrepreneurs and investors who are driving these sectors of tomorrow?
Jonathan Reynolds
I genuinely thank the hon. Member for those comments, because I am serious when I say that I believe that industrial strategy should command support across the political spectrum. That is the norm in a lot of comparable countries to ours. I recognise not just the work that he did, but the number of times he did it; he was called back repeatedly by the last Government to do that work. I am often struck by the comments that Lord Willetts made in the Policy Exchange pamphlet about the lack of a supply chain for offshore wind really benefiting Scandinavian economies, rather than ours.
There are common areas of interest, and to make this industrial strategy more successful than the very credible approach taken by the Conservative Government when Theresa May was Prime Minister, we need it to last longer, and for it to have consistency and permanence. I know that the advocates and designers of that policy wanted the chance to do that. The strategy must also be cross-departmental. It will be led by my Department, but it cannot be solely my Department that is engaged. I can tell the hon. Member that all my Cabinet colleagues share our objectives and a keenness to make this work. We do not just want strategies put on the shelf for the short or long term; we want the strategy to make a difference in the communities that everyone in the Chamber represents. I welcome that cross-party support.
Tim Farron (Westmorland and Lonsdale) (LD)
A successful industrial strategy obviously has to include a wise workforce strategy. In the lakes and dales of Westmorland, the workforce is far too small for our needs and is sadly shrinking—66% of hospitality and tourism businesses in the second busiest visitor destination in the country are working below capacity because they do not have enough staff. There are two main issues: a lack of affordable places for people to live, and an inability to bring people in from overseas. Will the Secretary of State support the extension of housing grants to build more social rented homes in Westmorland, and a youth mobility visa deal with the European Union, which would allow us to bring in people to supplement our far-too-small workforce?
Jonathan Reynolds
The hon. Member makes a really important point. We all have common areas of concern about the United Kingdom economy as a whole—the poor productivity since the financial crisis, the level of growth not delivering the living standards and public services that we want, and the low investment figure—but there are also specific challenges in each part of the country. The relationship between national policy, local policy and local leadership is the way to address those issues.
The hon. Member is an extremely skilled parliamentarian, and he added on a couple of issues that are clearly beyond the remit of the Department for Business and Trade—he did it very well. On the reset of the relationship with the European Union, there are practical, pragmatic measures that I will ask all Members to support, particularly on the recognition of professional qualifications, which I think could have been part of the deal, and what we are planning for food and agricultural products, if we can be successful in that negotiation. Those are our asks. There will be asks from the other side, and we will have to work with our partners to negotiate these things, but I recognise the hon. Member’s key point: yes, there are UK-wide needs, but there are specific needs in each area, and we have to get them right—for his area, for mine, and for everyone’s present.
Martin Vickers (Brigg and Immingham) (Con)
Further to the question about Air Products asked by the hon. Member for Great Grimsby and Cleethorpes (Melanie Onn), she and I met the company last night; as is often the case, business wants to move faster than the Government. Will the Secretary of State give an assurance that he will do his very best to ensure that his Department meets the deadlines that Air Products hopes for? In a wider context, as the hon. Lady said, northern Lincolnshire is a prime area for the renewables sector, and the Air Products development is key to that.
Jonathan Reynolds
The hon. Gentleman is right to say that business is often frustrated by the pace at which the Government can go. We are doing a considerable amount of work on how business interfaces with the Government as a whole, how that is managed as a relationship, and how we can assemble the different parts of the state in the way needed to respond to some of our big investment opportunities.
Frankly, in the past, we have often seen the UK miss out, particularly to, for instance, the French. The “Choose France” policy has been fairly successful from their point of view by taking some investments that I believe should have come to the UK. They have got ahead of us. We have to understand that the competitive environment that we are now in is extremely challenging and we have missed out on things. We have to change and get it right and better. I will work with the hon. Gentleman— I have already highlighted the meeting scheduled with my Minister of State—and he makes a fair point that we all recognise has to be addressed.
Jim Shannon (Strangford) (DUP)
I welcome the Secretary of State to his place and wish him well in the position he now controls. In Northern Ireland we have many businesses that can excel, but when it comes to an industrial strategy I particularly highlight the defence sector and the cyber-security sector. Just last Friday, my right hon. Friend the Member for Belfast East (Gavin Robinson) and I had a chance to visit Thales in east Belfast. Staff there explained to us that they employ almost 700 people on the site, and they also have an apprenticeships plan that is in action and are taking on another 25 apprenticeships. When it comes to expertise, they have the skills, experience and success, but they do not have the defence contracts, as they have in the rest of the United Kingdom. Will the Secretary of State say some words into the ear of the Secretary of State for Defence to ensure that Northern Ireland can play a bigger part when it comes to accessing those contracts?
Jonathan Reynolds
I absolutely agree with the strengths that the hon. Gentleman identified; he will know that I visited Northern Ireland as the shadow Secretary of State, partly to make that point. We are responsible for the promotion of the defence trade, so the relationship with the Ministry of Defence and the Secretary of State for Defence is very strong. I will absolutely do as the hon. Gentleman requests.
Gareth Bacon (Orpington) (Con)
The Government have repeatedly stated that securing economic growth is their fundamental mission, and that is, of course, an entirely laudable aim, but the fact is that more red tape will have the opposite effect. In the light of the right hon. Gentleman’s plans to introduce radical new labour laws, what would he say in response to the Federation of Small Businesses, which has made it clear that firms are increasingly worried about the Government’s proposals, fearing that they will drive up the costs and risks of doing business and thereby reduce their competitiveness and financial stability?
Jonathan Reynolds
I welcome the hon. Gentleman and the new shadow ministerial team to their posts. I have sat on those Benches in many questions sessions and understand how it can be at times.
Businesses of all sizes overwhelmingly supported the Labour party at the general election. How we behave in government will be exactly how we behaved in opposition, and we will co-design policy to ensure that. There is nothing in what we call the plan to make work pay—the new deal for working people—that is not already in the public domain. We had a manifesto with all that in it.
It is important to recognise—[Interruption.] There is a bit of chuntering coming from the Opposition Front Bench; again, something that I am not unfamiliar with. Look at the success of businesses in this area. Look at the businesses that already recognise trade unions and that already pay the living wage—look at that success. We are going to raise the employment floor, but it will be to a level above which many UK businesses are already operating. It is important to talk about the really successful things that businesses are doing to make sure that their workforces are treated with dignity and respect and get the living standards and prosperity that Members on this side of the House are all about delivering more of.
Alistair Strathern (Hitchin) (Lab)
The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
The decline of too many high street businesses was one powerful example of the failure of the last Government’s economic record and the cost of living crisis they caused. Working with business and others, we are determined to breathe new life into our high streets. In particular, we will stamp out late payments, tackle soaring levels of retail crime and create a fairer business rates system.
Alistair Strathern
High street businesses such as Rose’s café in Shefford and Jamie’s Shoe Repairs in Hitchin do so much to bring joy and life to their high streets and make the towns and villages in my constituency so special, but far too many high street businesses right across my constituency have been feeling the squeeze over recent years and just did not feel that the previous Government had their back. What will we be doing differently to make sure that we will always be on the side of the high street businesses that make our communities such fantastic places to live?
Gareth Thomas
First, let me take this opportunity to say how much of a pleasure it is to see my hon. Friend back in this House; I went up to his constituency during the by-election campaign, and his result was one of many on election night that brought us all great pleasure.
We set out a five-point plan when we were in opposition to support businesses on high streets. At the heart of that was a plan to introduce a fairer business rates system, which I know colleagues in the Treasury are working very hard on. We also want to tackle the high levels of retail crime that scar too many of our high streets, and we will be bringing forward proposals on that in due course too.
Josh Babarinde (Eastbourne) (LD)
To grow, high street businesses in Eastbourne are relying on Government investment through initiatives such as the towns fund, of which my town was selected to be a beneficiary. Our towns fund board is fired up and ready to go, but still awaiting further instructions from Government on how to proceed. Will the Secretary of State, working with his Ministry of Housing, Communities and Local Government colleagues, urgently update me on whether Eastbourne’s high street businesses can still expect to benefit from the £20 million towns fund investment that they need and deserve?
Gareth Thomas
As the hon. Gentleman may know, the towns fund is the responsibility of colleagues in MHCLG. I will happily draw his comments to the attention of the Minister who has responsibility for it. But we are determined to work across Government to breathe new life into our high streets, and I am sure that the Minister will be very interested to meet the hon. Gentleman and take forward his concerns.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
Whether it is better buses, more policing or city centre living, support for our high streets ought to be a cross-Government approach, because of the many levers that are available. Can the Minister say a bit more about what conversations he is having with other Departments to ensure that support for high streets stretches across every facet of this new Labour Government?
Gareth Thomas
My hon. Friend is absolutely right to say that there are policies across the whole of Government that impact on small businesses and particularly on high street businesses. One of the most significant issues is the need to see a fairer business rates system that creates better incentives for businesses to invest in the high street, in comparison with the competition from online giants, so we are working with colleagues in the Treasury on that. We are working with colleagues in the Home Office to address retail crime—there has been a huge surge in shoplifting—which my hon. Friend knows has scarred too many high streets. We are also working with other colleagues, as I referenced in response to the previous question, to try to bring forward a stronger offer to small businesses.
Sir Ashley Fox (Bridgwater) (Con)
Small and medium-sized enterprises are the lifeblood of our high streets, and there are many such businesses in my constituency of Bridgwater. I understand, though, that SMEs now face paying thousands of pounds in fines if they do not uphold the Government’s new French-style employment reforms. Will the Minister consider exempting SMEs from any financial sanctions by the new fair work agency?
Gareth Thomas
I congratulate the hon. Gentleman on his election to this House. I gently say that he will have heard from my right hon. Friend the Secretary of State that we have already consulted widely with the business community about our plans to improve rights for employees. We did that when we were in opposition and we have continued to do it in government. I am struck by the support that our plans have from small businesses and high street businesses, but we will continue to work with small businesses on the details of those plans.
Madam Deputy Speaker (Judith Cummins)
I call the Liberal Democrat spokesperson.
Sarah Olney (Richmond Park) (LD)
For too long, our high streets have been hostages to an outdated and damaging business rates system. Empty shopfronts and shuttered windows should never become the norm in our town centres. Small businesses in desperate need of a helping hand will have been deeply concerned not to see any mention of business rates system reform in the King’s Speech. Can the Minister assure us that business rates system reform is coming soon and that, when it does, it will be a comprehensive replacement of that damaging system?
Gareth Thomas
As I have said in response to previous questions, we are looking at that with Treasury colleagues. In opposition, we made commitments to introduce a fairer business rates system. Work on that is being led by Treasury colleagues, who will bring forward proposals in due course.
Helen Hayes (Dulwich and West Norwood) (Lab)
Becky Gittins (Clwyd East) (Lab)
The Minister for Trade Policy and Economic Security (Mr Douglas Alexander)
Forty-seven per cent of the United Kingdom’s total trade is with the European Union, and improving trade is a central part of the Government’s ambition to reset our relationship with Europe. Ministers have already been engaging positively on trade issues with our EU and member state counterparts, including EU Executive Vice-President Dombrovskis, German Vice-Chancellor Habeck and Italian Minister Tajani. The Government are seeking the practical changes needed to ensure smoother trade between the United Kingdom and Europe—for example, on mutual recognition of professional qualifications, which have already been mentioned.
Helen Hayes
Goods exports to the European Union are still 11% lower than in 2019, before the Brexit agreement took effect. Can the Minister confirm that, in seeking to grow the UK economy, the Government will take an evidence-based approach to the UK’s trading relationship with our nearest neighbours, and will take all possible measures to remove the barriers to trade that are holding our country back?
Mr Alexander
I thank my hon. Friend for her question and her observation on the character of trade in recent years. There has been better performance on services than on goods, but she is absolutely right to recognise the fall in goods trade with the European Union. Overall trade since 2018 has essentially flatlined. That is why the Government are determined to reset our relationship with the European Union more broadly. Within that broader objective, we will look specifically at the border in order to achieve less friction for trade.
Becky Gittins
Farmers in Clwyd East continue to raise concerns with me about trading barriers with the EU. They feel that the current arrangements disadvantage them, and that not enough has been done since we left the EU to facilitate trade between British farmers and EU countries. Will the Minister outline what steps his Department is taking to remove those barriers and get a better deal for the farming community of Clwyd East?
Mr Alexander
My hon. Friend is already establishing herself as a powerful voice for all constituency interests in Clwyd East. Alas, the concerns that she raises are not limited to that constituency. That is why, as part of the broader resetting of our relationship with the European Union, we are determined to tackle barriers to trade such as those she describes in relation to farmers, including through the negotiation of a UK-EU veterinary agreement that will help to reduce unnecessary border checks.
Mike Wood (Kingswinford and South Staffordshire) (Con)
I welcome the Minister back to the House and back to the Government Front Bench. On the final sitting day before recess, the Secretary of State slipped out an announcement that he expected trade talks to begin with a number of countries this autumn, and the Minister has just confirmed the intention to open talks with the European Union. When can we expect the Government to publish their negotiating objectives for scrutiny by the House ahead of those talks, as demanded by the Select Committee and committed to by the previous Government?
Mr Alexander
I am grateful to the hon. Gentleman for his kind words of welcome both to this House and to the Dispatch Box. I hope that we will be able to exchange in exactly this kind of constructive dialogue in the months and years ahead. Clearly, we inherited a number of open negotiating mandates from the previous Government—not least in relation to the Gulf Co-operation Council and to India—and we are carefully reviewing those mandates, but we have already been clear that, as well as resetting the relationship with the European Union, we are keen to pursue essentially a twin-track strategy, whereby we take forward the work in relation to those free trade agreements.
Yuan Yang (Earley and Woodley) (Lab)
The Minister for Industry (Sarah Jones)
I thank my hon. Friend for her question, and welcome her and her expertise to this House. As she knows, investment by private corporations was the lowest in the G7 for almost all of the last Parliament, and the new Government are determined to reverse that decline. That begins with economic stability, something every business we talk to is crying out for. It involves the development of our industrial strategy, the levers to encourage investment, the national wealth fund, the British jobs bonus and the Industrial Strategy Council, which will provide the infrastructure that investors can understand and deal with. Next month, we will host the international investment summit with 300 industry leaders, demonstrating our mission of long-term growth, and because there is not a moment to lose, I am going to Italy tomorrow to meet key Italian investors to the UK and show that Britain is back.
Yuan Yang
I thank the Minister for her remarks, and wish her the best of success on her trip tomorrow. One of Europe’s best-performing sites for foreign direct investment in the life sciences is the Thames valley, including my constituency of Earley and Woodley, and our local hospital trust—the Royal Berkshire NHS foundation trust—recently became the first in the country to be awarded for world-class excellence in its clinical research. Will the Minister meet with me, local life science businesses and hospital staff to discuss how to accelerate investment in our life sciences industrial cluster?
Sarah Jones
I thank my hon. Friend for championing such a vital sector—our most recent data shows that UK life sciences employs over 300,000 people, generating a turnover of over £100 billion. With the NHS back on its feet under this new Government, working hand in hand with life sciences, research institutions and others, we can drive the development of new treatments and help grow our industries. Of course, I would love to meet with my hon. Friend.
Robin Swann (South Antrim) (UUP)
The Minister has expressed the importance of life sciences. Can I seek her assurance that Northern Ireland is part of that trade mission as well, especially as it relates to my constituency? Also, regarding the Minister for Trade Policy and Economic Security’s statement about removing barriers to trade, can I ask this Government to ensure that there are no EU barriers to trade when it comes to promoting businesses in Northern Ireland? Those businesses want to thrive, flourish, and be part of this United Kingdom’s outreach in regards to business and investment across the United Kingdom and, indeed, the world.
Sarah Jones
Of course, Northern Ireland is incredibly important to our plans and to us. In opposition, many of us went to Northern Ireland and met with businesses. I certainly did: I met with the Chamber of Commerce and talked about the opportunities for the future in Northern Ireland. I will meet with the Secretary of State for Northern Ireland next week to talk about some of these issues, and I hope the hon. Gentleman will be reassured that we will do what we can to grow jobs, skills and investment and make sure there are no barriers to trade.
Adam Jogee (Newcastle-under-Lyme) (Lab)
The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)
We have already taken a number of steps to improve employment rights in this country. We have written to the Low Pay Commission to ask it to end the discriminatory age bands, so that all adults will be paid the same minimum wage rates. We have also asked it to look at including the cost of living when setting future wage rates, and have announced that we will repeal the unconscionable and unworkable Strikes (Minimum Service Levels) Act 2023, but there will be more. We will transform workers’ rights in this country, and will introduce the employment rights Bill within 100 days of taking office, as we promised.
Adam Jogee
I thank the Minister for setting out just how much this Government are on the side of workers in our country. Can I ask him to gently remind the Secretary of State that there is a pint waiting for him at the Bridge Street Ale House in Newcastle-under-Lyme from the owner, Grum Newbury? The people of Newcastle-under-Lyme believe in hard work, decency, respect and dignity at work, so can the Minister set out what this new Government are doing to end the exploitative use of zero-hours contracts in north Staffordshire and across our country?
Justin Madders
My hon. Friend is right: the explosion of zero-hours contracts in this country has been shameful. Over 1 million people are now on zero-hours contracts, and one in five of those people report that they would like to be able to get more hours of work, so we are going to end the uncertainty of zero-hours contracts. We are going to make sure that work pays, and we are going to give those people a legal right to a contract that reflects the number of hours they regularly work over a 12-week period.
Madam Deputy Speaker (Judith Cummins)
I call the shadow Secretary of State.
Kevin Hollinrake (Thirsk and Malton) (Con)
I welcome the Secretary of State and his Ministers to their places. The Secretary of State seems to imply that businesses are comfortable with his changes to the workplace, but this morning I and my fellow shadow Ministers met business representative organisations that are far from comfortable with the changes he is making, such as day one employment rights, a four-day week, a right to switch off and a higher and broader national living wage, as well as changes to business taxes, including in relation to business property relief, and the fair work agency. Does he not realise—do his Ministers not realise—that until he brings forward the detail on these plans, businesses’ recruitment and investment plans are completely on hold? When will he bring forward those plans?
Justin Madders
I thank the shadow Secretary of State for his question. I just remind him that he has to direct the question to the Minister responding—I am sure we will get there in the end.
I also remind the shadow Secretary of State that during the general election, the front page of The Times had 120 businesses supporting the Labour party in full knowledge of our plans to make work pay. We are consulting regularly and frequently—almost on a daily basis—with businesses about how the plans will work. I am afraid that the shadow Secretary of State has spent the summer putting out scaremongering statements about what this all means. In fact, the only statement he made over the summer on which I agreed with him was that his party deserved to lose the general election.
Kevin Hollinrake
The Minister talks about statements, so I will read him some. The Federation of Small Businesses says its members view these measures with “trepidation”. The Institute of Directors says that confidence is fizzling out, with the biggest one-month drop on record. The Recruitment and Employment Confederation says that these changes
“risked fuelling long, complex litigation”
for businesses defending themselves at employment tribunals. Will he—and the Secretary of State—at least consider exempting small and medium-sized enterprises from these ruinous, French-style regulations?
Justin Madders
Again, I have to point out that I am not the Secretary of State—perhaps one day.
We heard all these arguments 20 years ago with the minimum wage. Conservative Members were wrong about that, and they are wrong about this. I just hope they are a bit quicker to come round to realising that this country is going to prosper with improved workers’ rights, working in partnership with businesses to improve the economy for the benefit of everyone.
Gregory Stafford (Farnham and Bordon) (Con)
The Minister for Industry (Sarah Jones)
China’s role in the automotive industry is growing, and that invites risks and opportunities. We are working closely with other Government Departments, as the hon. Gentleman would expect, to analyse how this impacts the UK. Where we need to act, we will do so, and any action taken on Chinese electric vehicles has to be the right one, including for our UK industry.
Gregory Stafford
I thank the Minister for her response, but could she outline the Department’s wider strategy on challenging China’s global monopoly on critical minerals, including lithium, much of which is extracted by forced labour?
Sarah Jones
I thank the hon. Gentleman for his supplementary question. As I said, we are working closely with our colleagues across Government to make sure we have the right intelligence and can make the right decisions where we need to act. He will be aware that other countries are introducing tariffs and taking a range of measures. Our sectors are very different from those of other countries—we are not the same as the US or the EU—and we need to respond in the right way when it comes to electric vehicles. For example, 80% of the vehicles we manufacture in the UK are exported, so our challenges are different.
However, the hon. Gentleman is right to raise these important issues, including the need to look at critical minerals and supply chains, and at how we can ensure we are getting as many parts as possible from countries with which we want to have a different relationship. That is why we have set up things such as the solar taskforce to ensure that when it comes to solar panels, for example, we are using the supply chains as best we can to make sure there is not a global monopoly and that we are economically secure as a country.
Greg Smith (Mid Buckinghamshire) (Con)
What we have this morning is another chapter in the growing theme of what the Government said before the election and what they are doing after the election being entirely different things. The Chancellor of the Exchequer talked in May about reliance on Chinese EVs undercutting British workers and leaving us exposed, but by July she was talking about the benefits of trade with China. What we have seen in this Chamber this morning is that, while the rest of the world—the United States, Canada, the European Union—is acting on Chinese dominance in the EV market, the United Kingdom Government continue to dither. What is it to be: clear action on behalf of the UK automotive sector, or continued dither and failing to make a decision?
Sarah Jones
I do not know whether the hon. Gentleman is aware that until recently his party was in government, and inward investment from China grew over four times since 2014, so I will take no lessons from him on these issues. The automotive industry, which I work with closely and meet regularly, has not asked for what he suggested—
Sarah Jones
No, it has not. The hon. Gentleman is chuntering again from a sedentary position. It has not asked for that. This is something we are monitoring. We will work closely with the industry and do the right thing, and if we need to intervene we will intervene. As I said, the UK’s economy and industry differ very much from those of other countries, and 80% of UK auto production is exported. It is not that we have the risk of EVs in the other direction. The hon. Member for Mid Buckinghamshire (Greg Smith) needs to recognise the part that his Government played in the development of these matters over many years, and be reassured that we are working closely with our colleagues to make sure we do the right thing.
Patrick Hurley (Southport) (Lab)
The Secretary of State for Business and Trade (Jonathan Reynolds)
My Department’s four priorities are to reset our trade relations, deliver a new deal for working people, support small business and implement a mission-focused industrial strategy. In just a few short weeks, we have begun preparing no fewer than four Bills for the King’s Speech. I have attended the G7 trade summit, and set up the Horizon convictions redress scheme. We have ensured UK Export Finance support for the defence of Ukraine, changed the remit of the Low Pay Commission and organised an international investment summit for 14 October. I have spoken to my international counterparts, to all my colleagues in the devolved Administrations and to several hundred business leaders. That is how we will build the pro-innovation, pro-worker, pro-business economy that the British people voted for.
Patrick Hurley
I thank my right hon. Friend for that reply. This Government were elected on a platform to embed economic growth and break down barriers to opportunity. In the past couple of weeks, I have spoken to colleges and businesses across my Southport constituency, including our rightly famous Silcock’s family entertainment centre, to see how we can develop our skills policy to ensure that for towns such as Southport, the best days lie ahead. How will the Department work to support the next generation of entrepreneurs to ensure that our economic mission is furthered?
Jonathan Reynolds
I hope you will allow me, Madam Deputy Speaker, to pay tribute to my hon. Friend after what his community has been through, and the incredible way that he stepped up to represent that community. That is something we would all like to acknowledge.
The points that my hon. Friend makes are right: small businesses, entrepreneurs and start-ups are essential to our economic success, in Southport and in every part of the UK, and the support we will give them covers advice, guidance and training. On his point about skills, that is why we have established Skills England. If we want entrepreneurs to take real risks with their own property and income, we must give them stability. We cannot change policy every year; we cannot elect Liz Truss as Prime Minister and expect people to take those risks. The stability and consistency we will bring is as important as the policy environment we will create to do exactly what my hon. Friend says.
Jerome Mayhew (Broadland and Fakenham) (Con)
When dealing with the Post Office Horizon scandal, does the Secretary of State understand that by sitting on the letters informing Horizon victims that their convictions have been quashed, the Department is exacerbating the trauma of this terrible injustice? After two months in office, I understand that fewer than one in six letters have been sent. When does he plan to get a grip on the situation?
Jonathan Reynolds
I welcome the hon. Gentleman to his place. We have been in office for two months, and we have already set up the Horizon convictions redress scheme. Indeed, I was pleased to work with the former Minister, the hon. Member for Thirsk and Malton (Kevin Hollinrake), on creating the legal environment necessary to do that. The letters are an issue for the Ministry of Justice and its database. We have not sat on anything, and we have moved at pace to give people the compensation they deserve. We will continue to do that, and to work with those on the Opposition Front Bench to deliver what we all want to see.
David Pinto-Duschinsky (Hendon) (Lab)
The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)
The introduction of the minimum wage was one of the proudest achievements of the last Labour Government, but for too long the UK’s labour market enforcement system has been fragmented and ineffective. That is bad for workers and bad for the majority of businesses that want do to the right thing and comply with the law. That is why we will create a fair work agency to bring together employment rights enforcement, including of the minimum wage.
Madam Deputy Speaker (Judith Cummins)
I remind Members that these are topical questions, so can we have short questions and short answers?
Sir David Davis (Goole and Pocklington) (Con)
Jonathan Reynolds
I thank the right hon. Member for his role, which I have referred to in the past and has been important in these matters. I am not passing the buck to anyone; I am simply saying that it is the Ministry of Justice, rather than me, that sends those letters out. As of 30 August, 130 letters have been sent out, quashing more than 370 convictions. I think that is real progress since the election. It is not fast enough for me, and we will continue to push that. We are working closely with the Northern Irish and Scottish Administrations, because of the devolved nature of justice, exactly as he would expect. I can assure him that this matter was a priority for me in opposition, and it will continue to be a priority for me in government.
Mike Amesbury (Runcorn and Helsby) (Lab)
The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
I would be happy to meet my hon. Friend to discuss the question about a banking hub in his constituency. As he will have heard in answers that I gave earlier, reform of the business rates system to tackle some of the egregious disincentives in respect of the need to invest in our high streets and the competition from online giants is something we took seriously in opposition and continue to take seriously in government. Colleagues in the Treasury are working hard to bring forward proposals to reform the business rates system.
Madam Deputy Speaker (Judith Cummins)
I remind Members to speak through the Chair.
Helen Morgan (North Shropshire) (LD)
The Minister for Trade Policy and Economic Security (Mr Douglas Alexander)
I assure the hon. Lady that the SPS agreement—the veterinary agreement, as it is called—is one of the priorities we are pursuing. That matter is being led by the Cabinet Office, as is the reset with the European Union. I assure her that dialogue is under way between the Department for Business and Trade, the Cabinet Office and the Department for Environment, Food and Rural Affairs. It is a priority. It will take time to reset, but I assure her that we are fully aware of the urgency.
Melanie Onn (Great Grimsby and Cleethorpes) (Lab)
Jonathan Reynolds
Good product regulation and public confidence in our system are important across the board for every sector of the economy. My hon. Friend will have seen the Product Regulation and Metrology Bill in the King’s Speech. It will give powers to the UK Government to regulate in a range of fields. What she raises is exactly the kind of area we will be able to consider and debate in more detail.
Dr Neil Shastri-Hurst (Solihull West and Shirley) (Con)
Jonathan Reynolds
I thank the hon. Member for his interest in this incredibly important issue and the work, which he will be aware of, that ensured that we got to this point. I think this is the biggest miscarriage of justice in British history, and the moves to provide some form of redress are extremely important.
We have moved at pace to put the scheme in place. We were able to do so because of the legislation we got through in the wash-up at the end of the last Parliament. The hon. Member will have heard what I said about the letters that we got out to get that information to people. [Interruption.] What was that? We will take that up offline. I welcome his interest and will continue to work with him on it.
Joe Powell (Kensington and Bayswater) (Lab)
Mr Douglas Alexander
The reset, of which we have spoken today, is fundamentally about turning the page and reinvigorating our alliance with our friends, neighbours and partners in the European Union. As well as securing a broad-based security pact and tackling barriers to trade, we aim to build stronger and wider co-operation in a whole range of areas including foreign and defence policy, irregular migration, law enforcement and judicial co-operation, while promoting climate, energy and economic security.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I ask this question on the basis that I am sanctioned by the Chinese Government for having raised the evidence of genocide and slave labour in Xinjiang. We know that the vast majority of polysilicon is now produced in Xinjiang using slave labour. Will the Secretary of State give the undertaking that, as required under section 54(11) of the Modern Slavery Act 2015, there will be no use of any solar arrays that have polysilicon in them made under slave labour in Xinjiang?
Jonathan Reynolds
I give the right hon. Gentleman an absolute assurance that I would expect and demand there to be no modern slavery in any part of a supply chain that affects products or goods sold in the UK. He is right to say that under the Modern Slavery Act, which was put in place by a previous Conservative Government, any business with a turnover above £36 million needs to have a reporting regime around that. I promise him that, where there are specific allegations, I will look at those to ensure that. It is an area where we have existing legislation, and indeed we would go further if that was required.
Paul Waugh (Rochdale) (Lab/Co-op)
Jonathan Reynolds
I am grateful to my hon. Friend for that question. I meet businesses every day, and my most recent engagement was the breakfast we did on our plans to make work pay, where businesses themselves were pointing out the things they are doing because they value and care for their workforce and will invest in them. The issue in Rochdale he refers to is close to my heart as a Member of Parliament from just down the road in Tameside. I will of course have that meeting with him and continue to work closely with him to deliver on his objectives.
Sammy Wilson (East Antrim) (DUP)
As part of the Government’s net zero strategy, car manufacturers are expected to produce 22% of their cars as electric vehicles and face a £15,000 penalty for every car by which they fall short of that. The target is expected to be missed by 100,000 cars this year because of consumer resistance. The effect on the car industry is that producers are restricting supplies of petrol cars to retailers, and some are threatening to pull out of the UK market altogether. In the light of consumer resistance, will the Secretary of State look again at the target set, since consumers are clearly not going to be forced to purchase cars they do not want, and producers will be forced to try to get rid of cars they cannot sell?
Jonathan Reynolds
I am grateful to the right hon. Member for that question. The policy to which he refers—the zero emission vehicle mandate—and its penalties as we ramp up to the phasing out of petrol and diesel vehicles is actually a Department for Transport policy of the previous Government. We supported it, because there is no point in having an objective to phase out petrol and diesel vehicles without a corresponding ramping up of regulation to do that.
There is an issue with consumer demand, which affects all of Europe. We are working closely on that. Under the policies of the last Government, there are flexibilities—things that can be transferred from one financial year to the next. We keep everything under close review, but we are committed to the transition. That is essential to industry and consumer confidence and making sure that that happens. Every country in the world has similar policies. This is an ongoing transition, and we are absolutely going to make it work for British industry.
Dan Carden (Liverpool Walton) (Lab)
Jonathan Reynolds
I thank my hon. Friend for his question and for hosting me when I visited after the riots. I extend all my sympathies to the businesses affected. There is no excuse under any circumstances for looting shops, or in this case burning down a library. I was very much affected by my visit. He knows that we work very much in collaboration with the Association of British Insurers to ensure that claims are processed quickly. By now, I hope that businesses are aware that if they are underinsured or uninsured, help is still available to them under the Riot Compensation Act 2016, the details of which are on the gov.uk website.
Munira Wilson (Twickenham) (LD)
One Air is a small and growing cargo airline based in my constituency, which is having to deal with huge amounts of additional red tape and costs as a result of the Brexit deal and the end of reciprocal arrangements with the EU. Can the Secretary of State give an assurance that, when Ministers negotiate mutual recognition of professional qualifications, the aviation sector will be included?
Jonathan Reynolds
I can give the hon. Lady that reassurance. The aviation sector often complains about the lack of recognition, particularly relating to pilots. There is mutual interest in this area, and it could be a solid basis for negotiation. We can never promise the outcome of negotiations, but I can promise her that it is a priority for us.
Chris Vince (Harlow) (Lab/Co-op)
I welcome my right hon. Friend to his place. Before the election I met fruit growers in Nazeing and more recently farmers in Hatfield Broad Oak, both in my constituency, who raised concerns about hiring seasonal workers caused by Britain’s exit from the EU. What can his Department do to address that issue?
Jonathan Reynolds
I recognise the point that my hon. Friend raises. Our reforms to zero-hours contracts will not affect seasonal labour—we recognise that it is an important part of the labour market. Additional burdens have been placed on businesses because of Brexit, as he outlined. We do not want to relitigate the arguments of the past, but we believe that we can make tangible improvements for businesses in his area and for everyone.
Antonia Bance (Tipton and Wednesbury) (Lab)
My right hon. Friend will be aware of the disgraceful union-busting tactics and intimidation employed by Amazon against GMB members seeking union recognition at the Amazon warehouse in Coventry. Despite more than 1,000 votes in favour, union recognition was lost by just 28 votes. What steps is he taking to ensure that workers, such as the brave and determined GMB activists at Amazon, can more easily win union recognition?
Justin Madders
I draw the House’s attention to my proud membership of the GMB trade union. We believe that businesses work best when they give workers a voice through a recognised trade union. I would be very interested to hear more about what has happened at the Amazon warehouse in Coventry. The Government will look closely at that as part of our plan to make work pay. We will simplify the process and laws around statutory recognition.
Matt Western (Warwick and Leamington) (Lab)
Last weekend, hundreds of thousands of Oasis fans were left angered by the notion of dynamic pricing—a concern that we are seeing across the wider economy. Does the Minister agree that we need an urgent review of such price gouging systems?
Justin Madders
That certainly took the nation’s interest in more than one way. The Department for Culture, Media and Sport has already announced a review into it, and we will look at secondary pricing. The whole system needs urgent reconsideration, and we understand that the Competition and Markets Authority is looking into the matter, too.
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
What thought has the Secretary of State given to attending the Williams inquiry? The Post Office scandal is unfinished business. It is now vital that we not only learn the lessons, but accelerate redress for the innocent and, crucially, punish the guilty fast.
Jonathan Reynolds
I am very grateful to my right hon. Friend for that question. As a new Secretary of State, the inquiry and the whole issue has affected deeply how I believe accountability and power should be considered in the roles we have as Ministers. It comes on the back of what we heard about Grenfell yesterday, and what we have heard about Bloody Sunday and Hillsborough. I believe that, although this is essentially a legacy issue, it is exactly the agenda that we have on coming into these jobs. The future of the Post Office must be linked to the inquiry not just in terms of redress, but in how the business model works better for sub-postmasters. I do not believe that this has been put into the public domain yet, but I have received a request to attend the inquiry. I will, of course, do so, and believe it is an essential way to put across what we will take from that inquiry and our plans for long-term reform in the future.
UK Steel Manufacturing
(3 months, 2 weeks ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
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Martin Vickers (Brigg and Immingham) (Con)
(Urgent Question): To ask the Secretary of State for Business and Trade to make a statement on the future of steel manufacturing in the UK.
The Minister for Industry (Sarah Jones)
The inheritance the Government received from the Conservative party was nothing short of a disgrace on steel: over a decade of lurching from crisis to crisis, with no clear plan to safeguard the future of a competitive domestic steel industry. This Government are determined to change that. We have been working hard over the summer to set a clear forward direction on steel and resolve a number of complex issues that were only made worse by the indifference of the last Government.
Steel has been one of my Department’s priorities since our first day in office. We are standing by our commitment to spend £2.5 billion to rebuild the steel industry. That is in addition to the £500 million for Tata Steel. The funding will harness public and private investment to secure jobs and boost growth. We will take action to improve the wider business environment for the sector, including reducing energy bills and enabling more green UK-made steel to be used in our infrastructure projects. The Government are clear, as the Secretary of State for Business and Trade, my right hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) has made very clear, that decarbonisation must not mean de-industrialisation.
Discussions regarding the transformation of Port Talbot have continued at pace over recent weeks, involving the company, the workforce and the Welsh Government. We are also in ongoing talks with British Steel in a similar vein.
More widely, in our first days in office we hosted steel union leaders to join us around the table and discuss our shared commitment to achieving a sustainable, profitable UK steel industry. The Secretary of State and I also met regularly with key industry stakeholders.
We know that this is not easy, but we are determined to create a brighter future for steel than the one we inherited.
Martin Vickers
I thank Mr Speaker for granting the urgent question. I will ignore the Minister’s political comments and focus on what is more important: the future of thousands of workers, in particular at the Scunthorpe works, part of which falls within my Brigg and Immingham constituency and where many hundreds of my constituents work.
There have been widespread media reports suggesting that coke will stop being imported from October, which would mean production would stop in Scunthorpe by Christmas. There are rumours concerning the fact that employees will be given notice very soon. That is obviously creating great anxiety among those directly employed by British Steel and those in the supply chain, which in northern Lincolnshire extends to many thousands of people and many businesses.
I accept that much of this is media speculation, but if you and your family are reliant on an income from British Steel or a business that supports the sector, it is a very worrying time. Many people who have worked in the steel industry all their lives, and people who know about the market for steel, have a genuine concern that turning off the blast furnaces would see the end, or at least the beginning of the end, of steel manufacturing, certainly in Scunthorpe and possibly more widely. If we allow Scunthorpe’s furnaces to close, we will become more dependent on world markets, and effectively the best outcome that can be delivered from that is Scunthorpe ending up rolling steel produced in countries across the world, which would leave this nation vulnerable to price and supply volatility. Unions have said that that would be devastating. Charlotte Brumpton-Childs, a GMB national officer, has been quoted as saying:
“Early closure of the blast furnaces at Scunthorpe would be devastating for the community and workforce”
—and so it would.
“Unions have been assured throughout the process that the blast furnace operations would continue throughout the construction of an electric arc furnace. There has been no consultation over an early closure.”
Indeed, when the Minister visited Scunthorpe earlier this year, she said—according to the Scunthorpe Telegraph, so it must be true—that the UK needs to maintain capacity to produce primary steel. Is that the Government’s policy?
Madam Deputy Speaker (Judith Cummins)
Order. I am sorry, but the hon. Gentleman has exceeded the two minutes allotted to him. I do not know whether he wants to give us one final sentence.
Martin Vickers
I will bring my remarks to a conclusion, if I may, Madam Deputy Speaker, by saying that if the UK is to maintain a domestic steel manufacturing capacity, the Government must accept that there will always be a burden on the taxpayer.
Sarah Jones
I thank the hon. Gentleman for his questions. Let me say a couple of things in response.
First, the hon. Gentleman talked about being political. It is not being political to say that the last Government allowed the steel industry to decline; it is a statement of fact. It is also a statement of fact to say that they left a £22 billion black hole in our finances, and a statement of fact to say that the money they committed to Port Talbot came from the reserves that they had spent three times over. I am ashamed to tell the House that the £500 million was not real money: it was in the reserves that the last Government had spent three times over in the first three months of the year. In contrast, there will be real money for our investment in steel, drawn from the national wealth fund.
Secondly, the hon. Gentleman is, of course, right in his analysis of the concern and unease that people are feeling given the importance of these jobs, and about the worry they must be experiencing as a result of what they are reading. All I can say to him is that we are talking regularly to the trade unions, as he would expect us to, and to British Steel and the local community. I am sure he will understand that I cannot comment on those commercially confidential conversations. He also made a point about virgin steel that we made regularly in opposition. We are looking into how we can secure primary steelmaking in this country through our £2.5 billion investment in UK steel.
Greg Smith (Mid Buckinghamshire) (Con)
Thank you, Madam Deputy Speaker.
“British steel is integral to growth and prosperity”.
Those are not my words, but the words of the now Prime Minister less than a year ago.
“The drive for green steel must mean more jobs, not fewer.”
Again, those are not my words, but those of the now Secretary of State less than a year ago. During the election campaign, he said:
“We cannot…lose the ability to make primary steel.”
But now we see, quite clearly, that Labour’s plans for decarbonisation do in fact mean de-industrialisation, and that the drive for green steel will mean fewer jobs, not more. Under the last Labour Government output fell by 47%, and, similarly, the promises that this Government made just weeks ago to steelworkers in Scunthorpe, Port Talbot and Teesside, and across the country, have been broken.
For weeks the Government have allowed rumour and speculation about the future of British Steel to run rife, while thousands of workers question whether they will have jobs by Christmas. Contrary to what the Minister has said, when we were in government we worked to deliver a more sustainable, long-term future for the steel industry across the United Kingdom, including Wales, through our £500 million commitment to building an electric arc furnace in Port Talbot. Now we risk being the only G7 economy without the ability to produce virgin steel.
I ask the Minister the following questions. Has British Steel indicated to the Government that it will halt its import of coking coal later this year? If so, when did the Government become aware of that? Are they committed to seeing electric arc furnaces in Scunthorpe? What discussions has she had with the owners of British Steel about the possibility that it will switch to foreign imports from China to fulfil its supply chain obligations here in the United Kingdom? What meetings has she had with stakeholders, including Ben Houchen and the Welsh Government, regarding the impact of future announcements on other steelworks across the United Kingdom, including on primary steel production? Communities and supply chains across the United Kingdom need certainty from this Government.
Sarah Jones
It is hard to know where to begin in responding to that. The previous Government allowed steel to run down. The previous Government did not believe in an industrial strategy. The previous Government did not believe in boosting our supply chains. The previous Government did not understand the importance of the steel industry to our national security and the communities we serve across the country. This Government do understand the importance of steel: that is why we are committing £2.5 billion from the national wealth fund, on top of the £500 million set aside for Port Talbot, and we will develop a strategy that enables the steel industry to grow.
The shadow Minister knows that I cannot comment on commercial and confidential conversations that we are having. I can reassure him, however, that we are talking regularly with British Steel, that we are talking regularly with Tata, that we are in deep negotiations with them, that we are talking with the local community, that we are involved with the trade unions—something that the previous Government did not believe in but suddenly seem to think important—and that we will get the best deal for workers and for the steel industry.
It is a shame that we were not in government five years ago, because we are where we are with some of these conversations. The way the previous Government approached industry was to wait for things to get so dire that they had to spend millions of pounds of public money trying to booster something, whereas our approach is to build the industry up and put the right levers in place, and we will see success that way.
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
President Biden has just vetoed the foreign acquisition of US Steel, because he understands that it is vital to have sovereign capability in ensuring the manufacture of virgin steel. The reality is that at the end of the last Parliament we were unable to establish clarity around that objective from the last Government. Can the Minister tell the House today whether it is the policy of this Government to seek to ensure that this country carries on with its ability to make virgin steel?
Sarah Jones
I thank my right hon. Friend for his important question. We believe very firmly that a successful steel industry is critical to a vibrant and secure future. Crude steel production in the UK has declined by over 40% since 2010; that is a great shame, and we will be trying to reverse it. Virgin steel is incredibly important, which is why we have the £2.5 billion fund. We are looking at direct reduced iron production and other possibilities for the UK. We are working on it at pace, and I am happy to talk further about our thoughts.
Madam Deputy Speaker (Judith Cummins)
I call the Liberal Democrat spokesperson.
Sarah Olney (Richmond Park) (LD)
The steel industry has been left in a mess after years of mismanagement. The abandonment of the industrial strategy by the previous Government has been a disaster right across our economy, but nowhere more so than in strategic heavy industries such as steel, which face many complex and interconnected challenges. We can all agree on the vital importance of steel production, whether that is in terms of national security or of providing the materials that we need for a green economy. It is equally clear that the steel industry needs to be supported to move towards greener methods of production and a more sustainable footing, while ensuring that jobs are protected.
The sector desperately needs the certainty of a new industrial strategy. Can the Minister give a clear timeline for exactly when we will see that industrial strategy? Can she confirm that when the Industrial Strategy Council is rebooted, it will be placed on a statutory footing through legislation so that it is properly empowered to support our industries in the long term?
Sarah Jones
I thank the hon. Lady for a very sensible and thoughtful list of questions. We will be putting the Industrial Strategy Council on a statutory footing, which is important. The points she makes about decarbonisation and support for the industry are really important. The previous Government supported the aims of dealing with the climate crisis and the need for decarbonisation, but they did not put in place any strategy to help anybody do anything on that front. We need a proper industrial strategy and, alongside that, a proper industrial decarbonisation strategy. How will our heavy industries decarbonise in a way that does not de-industrialise and does not mean that they shut up shop and go elsewhere? How will we make sure that we enable all these industries to thrive? The hon. Lady is right to say that it is not just about the steel industry. We are looking at a much broader range of industries by sector and by geography, to work out the best way to get this done in a way that protects jobs and protects our industry.
Bill Esterson (Sefton Central) (Lab)
Steel is a strategically important industry for this country, as my hon. Friend has made very clear, and I welcome her commitment that decarbonisation must not mean de-industrialisation. We must avoid the mistakes of the past. One of the mistakes made by the previous Government was the delay in developing grid capacity and grid connections. How are this Government working with British Steel and Port Talbot to make sure that the grid capacity and connections are in place to enable electric arc furnace production to be started as soon as possible?
Sarah Jones
My hon. Friend has hit the nail on the head, as I would expect him to. We face many challenges, but the grid is at the heart and soul of so many of them. When we met industry representatives in opposition, it was top of the list for everybody, and my hon. Friend knows that many companies are saying to us, “We’ve been told we can’t get a grid connection until the late 2030s.” This issue is a priority for us, and we are tackling it and working at pace. We have a whole range of policies to speed up the grid connections, to prioritise what we deal with first, and to work with the companies involved to make sure that we are going at pace. Steel is incredibly crucial, particularly in Scunthorpe, and we have to get it right.
Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)
In order for most plants in the United Kingdom to make virgin steel, they need to be able to bring in coking coal. The Labour Government’s policy is to ban bringing in coking coal, which means that thousands of jobs will be lost. What is the Minister going to do to reverse that decision so that jobs can be saved?
Sarah Jones
I thank the right hon. Gentleman for his question. As I said, we are looking at DRI and other ways of making virgin steel that mean we can both—[Interruption.] I am happy to have further conversations with the shadow Minister, rather than shout across the House at each other. I am happy to have conversations about how we can make sure that we both retain virgin steel production and adhere to our climate commitments.
Torsten Bell (Swansea West) (Lab)
The steel industry is a cornerstone of the south Wales economy as a whole, and the Minister will know that there is concern right across the Swansea bay communities about these developments, and I am visiting the plant in Port Talbot tomorrow to hear more about them. Will the Minister give us reassurance that the hard work she is doing will continue to be hand in glove with the Welsh Government and local councils? They are working day in, day out to make sure that there is a future for the steel industry and all these communities.
Sarah Jones
I thank my hon. Friend and welcome him to his place. I can absolutely reassure him that we are working hand in glove with the Welsh Government and local leaders. I have talked to the Welsh Secretary, as has the Secretary of State, who is not able to stay for the whole of this UQ, because he has a meeting about steel. That is how important this issue is to us, and we will make sure that we keep those working relationships. I welcome conversations with my hon. Friend and will meet any other local people whom he thinks we should be meeting.
Sammy Wilson (East Antrim) (DUP)
I have some sympathy with the Minister’s comments about the last Government’s record. Of course, under previous Conservative Governments, tens of thousands of jobs were lost in aluminium, oil refining and steel as a result of the obsession with decarbonisation and net zero. Unfortunately, I do not think we will see a different approach from this Government.
The Minister promises an industrial strategy, but can she assure us that there will be provision for steel to have a supply of coking coal produced in this country and that damaging and expensive decarbonisation requirements will not further detriment the steel industry?
Sarah Jones
I thank the right hon. Gentleman for his question. Of course, if we do not take measures to decarbonise and tackle the climate crisis, the costs to this country will be infinitely higher. This is not a choice. [Interruption.] The hon. Member for Orpington (Gareth Bacon) disagrees, but we need to make sure we can decarbonise in a way that supports our industry to make that transition, which is exactly what we are doing.
The point of an industrial strategy is to lay out a plan so that the industry gets the support it needs, so that investors understand the plan and so that, by working together, we can make sure we decarbonise. The Government are supporting that where we can and pulling the levers we can. We are supporting the industry to do the opposite of what happened under the previous Government, which is grow.
Sarah Champion (Rotherham) (Lab)
It is a real pleasure to see you in the Chair, Madam Deputy Speaker. I thank the hon. Member for Brigg and Immingham (Martin Vickers) for securing this important urgent question.
Rotherham has a proud history of steelmaking, but I have been fighting against Governments for the last 12 years for it to have a proud future. Will the Minister commit to addressing the underlying issues, to making sure all Government procurement goes to British steel- makers, and to addressing the punitive business rates and high energy costs that are hampering our development?
Sarah Jones
I thank my hon. Friend for making those important points. Our energy-intensive industries are hammered by energy costs, which are at the heart of this. Although the previous Government provided relief, we need a longer-term solution. We need to bring down those energy costs. That is why we are pushing for clean energy by 2030, which will be cheaper, and why we want to produce more energy in this country so that we are not reliant on Putin or affected by international events.
I have talked about business rates, and my hon. Friend is absolutely right that we need to look at that. Government procurement is very important, so we are looking at our supply chains and all the levers of Government to see what we can do proactively to make sure that, where we can, we are making, building and using in the UK.
Nick Timothy (West Suffolk) (Con)
I do not think the Minister answered the question asked by the right hon. Member for Birmingham Hodge Hill and Solihull North (Liam Byrne), so let me repeat it. Do the Government consider the manufacture of primary steel to be a strategic domestic industry that must be protected, yes or no?
Sarah Jones
Well, the previous Government did not. We have a £2.5 billion fund and, as I said, we are looking at DRI to make virgin iron. To be clear, we are having to deal with a mess that we inherited. Virgin steel is important, and that is what we are looking at. I am not going to say to the hon. Gentleman right now that this is what we are spending our £2.5 billion investment on, because this is being worked on at pace. We will come back to the House as soon as we have something to announce.
Derek Twigg (Widnes and Halewood) (Lab)
The defence industry manufacturing base is, of course, vital to this country, not least in the engineering jobs it provides. We know that steel is crucial to building armoured vehicles and ships, for instance. It is very important that we have a regular and guaranteed supply of steel, and we want to see more UK steel used in defence manufacturing.
Sarah Jones
I completely agree with my hon. Friend, who has much expertise in this area. The Department is working closely with the Ministry of Defence and the Secretary of State for Defence to make sure we are maintaining our defence. We are building as much as we can in the UK, with as many contracts in the UK as we can. We are using the power of Government to deliver that.
Richard Tice (Boston and Skegness) (Reform)
The hypocrisy of this debate is utterly extraordinary. Everybody agrees that steel is of strategic national importance, yet the obsession with net zero of both main parties, led by the Conservatives, is leading to the removal of our blast furnaces by both British Steel and Tata. That obsession is killing our steel industry and steel jobs, and leading to our inability to produce primary steel. Over 75% of all new steel generating capacity in the world is in Asia, and over 90% of that is produced in blast furnaces. Our obsession with net zero—
Madam Deputy Speaker (Judith Cummins)
Order. I am sure that the hon. Member is coming to his question.
Richard Tice
Given the obsession with net zero, will the Minister guarantee that if Tata is subsidised with more than £500 million to produce new electric arc furnaces, the money will be linked to the construction as opposed to Tata taking the money early and then not building the furnaces?
Sarah Jones
The hon. Gentleman talks about our obsession with decarbonisation and producing green steel, but we also have to go with the market. The market and big companies are now saying to us, “We want to buy green steel”. That is what they are demanding and what we will produce. If we do not, we will not be selling it on the same basis. We will use the money we are investing through the national wealth fund to develop a steel strategy that will enable us to bring new entrants into the UK, which the previous Government did not try to do, so that we can have a vibrant, competitive steel economy in the UK and create good, highly paid jobs in the green industries of the future. If we fall behind, others will come before us and take our jobs.
Matt Western (Warwick and Leamington) (Lab)
Everyone agrees that steel is a crucial strategic foundational industry for this country, but it suffers from very narrow margins. It is one of the least profitable sectors of all. In this country, we suffer from a real cost disadvantage because of energy prices. Other countries, such as France and Germany, have much lower energy costs. They have a lot of nuclear, which meets net zero requirements. Does the Minister agree that underlines the importance of why this country urgently needs an energy strategy?
Sarah Jones
My hon. Friend is absolutely right. We need to ensure we are producing cheap, clean energy in this country. As he rightly says, that means nuclear, as well as solar, wind, offshore wind and everything else in our armoury. This Government have been unbelievably proactive, with the Secretary of State for Energy Security and Net Zero ending the ban on onshore wind and agreeing to some of the solar panel installations we need. We had an enormously successful contracts for difference round that will allow floating offshore wind and other types of energy, and we are talking in detail about where we will take nuclear. Together, all those things mean that the country will have lower energy costs, that we can be more competitive and that our industry can thrive.
Mr Richard Holden (Basildon and Billericay) (Con)
The Minister was asked a question by the right hon. Member for Birmingham Hodge Hill and Solihull North (Liam Byrne), which was repeated by my hon. Friend the Member for West Suffolk (Nick Timothy), about whether this Government will commit to virgin steel making in the UK. At the third time of asking, will she commit to what the Secretary of State committed to before the general election?
Sarah Jones
I welcome the right hon. Member for Croydon South (Chris Philp) to his place.
As I have made clear, we have been landed with an inheritance in which steel has declined by 40% and we are in very late-stage negotiations in Scunthorpe and Port Talbot. We are dealing with the consequences of that, which the previous Government failed to do. We will be putting a £2.5 billion investment into steel, and we are working at pace looking at DRI, which produces virgin steel, and at other options. We are looking at how we can introduce competition and new entrants into the market. We will work a lot faster and harder than the previous Government, and we will ensure that the steel industry thrives.
Chris McDonald (Stockton North) (Lab)
The global steel industry is investing many billions of pounds in new green technology that is more productive than current steel technology. Does my hon. Friend agree that our plan for steel will allow us to attract that private sector investment here, in great contrast to the previous Government’s policy that saw our steel industry decline to a size smaller than that of Belgium?
Sarah Jones
My hon. Friend, who is an expert in this area and with whom I have talked many times, will know that I agree with him. We need to introduce new entrants into the market, to stimulate the market and to encourage competition. The previous Government had a hands-off approach until an industry was about to collapse, and then they suddenly had to intervene with hundreds of thousands of pounds of taxpayers’ money. That was completely the wrong approach. As it turns out, the hundreds of thousands of pounds of taxpayers’ money that the Government put aside for Port Talbot came out of their reserves, which they spent three times over and was not real money. This will be real money. We will develop a proper steel strategy, and I very much look forward to working with my hon. Friend on devising it.
Jim Shannon (Strangford) (DUP)
I thank the Minister for her answers. Whether we like it or not, we have to deal with the reality before us. She may be aware that KME Steelworks in Lisburn has reduced costs and its carbon footprint by introducing a new, on-site nitrogen generation system. What financial aid is available to other companies to help to meet their environmental goals when they are facing costs like never before and there is pressure on the industry?
Sarah Jones
I thank the hon. Member for that question. We need to be technology agnostic and look at what the new industries, the new developments and the new research are telling us. We are doing that, which means some companies taking risks, with the Government needing to intervene when we see a new market in need of support. We will have that approach in Government. We are technology agnostic—we need to look at what will work, what will make our country thrive, and also what other countries are doing.
Joe Morris (Hexham) (Lab)
The previous Government’s plan for steel was to pay half a billion pounds to Tata Steel to not make any steel for years, while placing thousands of highly paid and highly skilled workers at risk of redundancy with no guarantee of jobs in the future. Can the Minister reassure me that she is taking steps to secure the future of our strategic industries?
Sarah Jones
I thank my hon. Friend for that question. Steel is an incredibly important strategic industry for the UK and it will be saved under this Government from the decline that we saw under the previous Government. The £2.5 billion that we are investing alongside the £500 million for Port Talbot will ensure that our industry thrives. We are working closely with industry, the unions and local communities, and we will work with our regional metro mayors and others, to make sure that we have the right industries in the right places and that we see success where previously we have seen decline.
Business of the House
(3 months, 2 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Chris Philp (Croydon South) (Con)
May I take this opportunity, Madam Deputy Speaker, to congratulate you on your elevation to the Chair and to welcome you to your place?
Will the Leader of the House give us the business for next week?
The Leader of the House of Commons (Lucy Powell)
The business for the week commencing 9 September is as follows:
Monday 9 September—Consideration of a motion to approve the Russia (Sanctions) (EU Exit) (Amendment) (No. 3) Regulations 2024, followed by consideration of a motion to approve the Syria (Sanctions) (EU Exit) (Amendment) (No. 2) Regulations 2024, followed by consideration of a motion to approve the draft Renewable Transport Fuel Obligations (Sustainable Aviation Fuel) Order 2024, followed by consideration of a motion to approve the draft Human Medicines (Amendments Relating to Naloxone and Transfers of Functions) Regulations 2024.
Tuesday 10 September—Debate on a motion relating to the Social Fund Winter Fuel Payment Regulations 2024, followed by Opposition day (1st allotted day, first half). Debate on a motion in the name of the official Opposition—subject to be announced.
Wednesday 11 September—General debate on building safety and resilience.
Thursday 12 September—General debate on matters to be raised before the forthcoming Adjournment.
The House will rise for the conference recess at the conclusion of business on Thursday 12 September and return on Monday 7 October.
Members may also wish to know that, subject to the progress of business, the House will rise for the short November recess at the close of business on Wednesday 6 November and return on Monday 11 November; rise for the Christmas recess at the close of business on Thursday 19 December and return on Monday 6 January 2025; rise for the February recess at the close of business on Thursday 13 February and return on Monday 24 February; rise for the Easter recess at the close of business on Tuesday 8 April and return on Tuesday 22 April; rise for the early May bank holiday at the close of business on Thursday 1 May and return on Tuesday 6 May; rise for the Whitsun recess at the close of business on Thursday 22 May and return on Monday 2 June; and rise for the summer recess at the close of business on Tuesday 22 July.
Chris Philp
A warm welcome back to everyone following the summer recess. I thank the Leader of the House for setting out those recess dates. That will make her popular with everybody across the House. She has just saved me from booking a flight that I would have had to cancel, so I am personally very grateful to her.
I also thank the Leader of the House for confirming a debate on building safety. I know that the whole House sends our heartfelt sympathy to the victims of the Grenfell disaster and their families. I have personally heard harrowing testimony directly from survivors who lost loved ones. What they experienced was truly horrific. We must ensure that it never happens again, and that those responsible, including the cladding manufacturers who lied and covered up evidence, suffer the consequences, including criminal sanctions. Governments must never again ignore safety warnings, as happened over a period of decades.
Like many MPs, I have been contacted by constituents —[Interruption.] The hon. Member for Blyth and Ashington (Ian Lavery) is clearly being contacted by constituents as we speak. My constituents are desperate with worry about Labour’s planned removal of the winter fuel payment from almost all pensioners. I am glad that there will a debate and a vote on that next Tuesday. Labour Back Benchers may be less glad at the prospect of being whipped to vote to remove winter fuel payments from pensioners on less than half the minimum wage. Under the proposals, 84% of pensioners in poverty will lose the winter fuel payment. Is that Labour Members’ idea of a Government of service—leaving pensioners in poverty shivering at wintertime?
Yesterday, the Prime Minister refused to explain why he is choosing to fund huge pay rises for train drivers and other state sector workers while slashing benefits for impoverished pensioners. That is not the kind of change that Labour voters thought they would get from a Labour Government, is it? The Prime Minister also refused to say yesterday how much less energy support an 80-year-old on just £13,000 a year would receive this winter, compared with last. Perhaps he does not know the answer. Perhaps he does not care. Will the Leader of the House confirm that the answer is that an 80-year-old on £13,000 a year will receive £600 less energy support this year?
One pensioner wrote to me saying:
“the allowance meant I could turn the heating on. Now I fear hypothermia during the coming winter months”.
No wonder the public oppose this policy by a margin of two to one. Several Labour Members agree, and have already signed a motion condemning it and will, presumably, vote against it. I hope that all decent Labour MPs do the same, but will the Leader of the House confirm whether, if they do, they will lose the Whip, like their rebellious colleagues last July? At this rate, it will not just be pensioners’ heating gone by Christmas; it will be Labour’s majority as well.
I call on the Leader of the House to arrange a debate on ethics and integrity in the Government. The independent civil service commissioner—a former Labour MP—has had to initiate an inquiry into improper appointments by this Government. A “Government of service”? It turns out they mean service to their cronies and donors. It is just wrong to stuff party donors and cronies into what are supposed to be impartial civil service positions. Can Members imagine the howls of protest if the previous Government had done that? [Laughter.] To the civil service? No. The Times reports that the Chancellor did not disclose to her permanent secretary the fact that she had appointed a Labour party donor to a senior civil service position, which would be a breach of the ministerial code. Will the Leader of the House tell us whether The Times report is true?
We have even seen a Labour party donor, Lord Alli, receive a Downing Street pass for no apparent reason—other than being a donor, of course. Who gave him that pass? Was it the Prime Minister, whose clothes Lord Alli apparently pays for? That is extraordinary. Has anyone else here had a donor pay for their clothes? I certainly have not. Or maybe Sue Gray issued the pass, perhaps forgetting to declare that Lord Alli also contributed to her son’s election campaign.
Will the Government now come clean and disclose all the politically affiliated appointments that they have made to the civil service? Will they confirm whether the conflicts were disclosed, as required by the ministerial code? Will they provide a list of all passes to Government buildings issued to anyone other than Ministers, civil servants and special advisers? I strongly suspect that this self-proclaimed Government of service will not admit to any of those things, so later today I will write to the adviser on ministerial interests and the civil service commissioner, asking that they investigate independently these important questions.
A lot has happened this summer—a lot has gone down, as they say—but the main thing that has gone down is the Government’s approval ratings. Just last week, More in Common found that the Prime Minister’s approval ratings have plummeted by 27 percentage points in a matter of a few weeks, plumbing a new low of minus 16%. It turns out that parading around in £16,000-worth of expensive suits paid for by Lord Alli, subverting civil service independence by stuffing the service with cronies and donors, and stripping impoverished pensioners of their benefits is not that popular. Even the Leader of the House will now have to admit the truth: this has been an exceptionally poor start to government.
Lucy Powell
I, too, welcome everybody back for the new term. I knew that my announcing the recess dates would be the big news of this morning. I am pleased to be able to help everybody with their family and holiday arrangements.
I thank the House staff who have worked away to ensure that many new colleagues now have their own office in this place; I congratulate our Olympic and Paralympic athletes, who have done our country proud in this golden summer of sport; and I thank the police and the criminal justice system for how quickly they curtailed the thuggery and needless rioting in some of our towns and cities over the summer.
I welcome the publication of the second report of the Grenfell inquiry. The findings are devastating—particularly the statement that the deaths of the 72 victims were completely preventable. Now, justice and accountability will follow. The report raises some profound challenges for building safety regulations and recourse for residents and lease- holders—something with which I am very familiar in my constituency. We have made time for a first debate on building safety next week, and further time will be made available. The Government will come to Parliament with their full response and action plan in due course.
We have had a big first week back, delivering on our packed legislative agenda for change. We have taken our first steps to bring our railways into public ownership and enhance fiscal responsibility—the bedrock of economic stability—to ensure that the Truss mini-Budget can never happen again; the Second Reading of the Great British Energy Bill begins the drive to lower bills and increase energy independence; and today we introduce the Water (Special Measures) Bill to clean up our waterways and make water companies accountable, and the House of Lords (Hereditary Peers) Bill will begin to honour our commitment to constitutional reform. This is a Government of service, delivering on our manifesto.
As part of the change that people voted for, we have had to clean up the mess left to us by the Conservatives and take the difficult decisions that they ducked. We have a £22 billion black hole that was covered up from the British people and from the spending watchdog. We have full prisons, and that clogs up the criminal justice system. Thankfully, we had already begun to act before we had to take swift action to lock up rioters and thugs over the summer. On the previous Government’s watch, there was an asylum overspend of nearly £7 billion, shoplifting was effectively decriminalised, crippling strikes cost the country dear, and unresolved pay awards sat on Ministers’ desks.
The right hon. Gentleman might want to give us a lecture, but only two years ago, we saw what happens when massive, unfunded spending commitments are made against the advice of Treasury experts and in the face of what is best for our financial institutions: the markets lose all confidence, the price of Government borrowing soars, interest rates hike and inflation gets out of control. That was two years ago under Liz Truss, whom the right hon. Gentleman backed for leader. Nothing damages the real incomes of ordinary people, including pensioners, more than an economy crashing—a crash caused by his Government’s recklessness. Has he learned nothing? That was his party’s approach, but this Government will fix the foundations and restore economic stability.
The legacy that the Conservatives have left us means that we have had to make some really difficult decisions—decisions that we did not want to make, like means-testing the winter fuel payment—but we are doing all we can to support pensioners this winter. We are protecting the triple lock, which means that the state pension will go up by £900 this year—it is likely to rise by several hundred pounds next year—and the warm home discount, which is worth £150. We are also extending the household support fund and have a huge campaign to get eligible pensioners on to pension credit. Yes, we have scheduled a vote on the winter fuel payment next week, because we are not afraid to have the debate about how we got to where we are. That vote would not have happened under the Conservative party, but we respect Parliament and doing things properly.
The right hon. Gentleman talks about the pay awards for our hard-working public servants. Those pay awards were sat on the desks of Conservative Ministers, who knew that they would be honoured, but did not allocate the funds for that. Frankly, we will take no lessons on cleaning up politics from the Conservative party—the party that partied in Downing Street while the rest of the country was locked down. He knows that we all strive to get the best talent into Government, which is why there is a policy of “exception” appointments. Of the 80,000 appointments to the civil service under the previous Government, does he know how many were made under that regime? It was 9,000. We had a series of by-elections in the last Parliament because of members of his party. I refer him to Hansard to read a speech I gave that included a list of all the reasons for those by-elections; it makes for pretty horrifying reading.
The Conservatives have gone from being the party of government to being the party that gave up on governing. They would have done better to spend the summer reflecting on why they lost so badly, instead of trying to tell us that we have never had it so good. The one poll rating that the right hon. Gentleman should be focusing on is the one that says that the public really do not care who the next leader of the Conservative party is.
Karl Turner (Kingston upon Hull East) (Lab)
I welcome my right hon. Friend to the Dispatch Box and congratulate her on the wonderful job she is doing in government. I am very concerned that Post Office Ltd plans to close the post office counter in Morrisons on Holderness Road in east Hull. Many constituents have contacted me, and a petition on the subject has gathered, I think, 350 signatures in the last two days. Is the Leader of the House prepared to allow a debate on the subject in Government time? This issue affects Members from across the House and across the parties, and most Members would accept that it is about time that Post Office Ltd started to put people before profit.
Lucy Powell
I thank my hon. Friend for that excellent question. I am very familiar with that issue, as Post Office Ltd has also closed the historic Spring Gardens post office in Manchester city centre. I think it would get wide support if he were to apply for an Adjournment debate and, hopefully, get a petitions debate because the future of our Crown post offices is an important matter to the House.
Madam Deputy Speaker (Judith Cummins)
I call the Liberal Democrat spokesperson.
Wera Hobhouse (Bath) (LD)
Thank you, Madam Deputy Speaker; it is very good to see you in your place. I thank the Leader of the House for announcing the forthcoming business, and I welcome everybody back to this place following summer recess. May I also associate myself and the Liberal Democrats with everything that has been said this morning about the Grenfell tragedy?
Energy bills are set to rise again this winter. Following the Government’s announcement that they will means-test winter fuel payments, Age UK has estimated that 2 million pensioners will struggle to pay their bills. Many pensioners in Bath are worried sick that they will not be able to heat their homes this winter. Many of them are included in the 1 million pensioners who will just miss out. We Liberal Democrats acknowledge and recognise that the last Conservative Government left the country’s finances in a mess, but pensioners should not be paying the price for the Conservatives’ incompetence. Politics is about choices. Pushing those cuts through when measures to mitigate their impact will come in only in April 2025 is just not the right way to go about it.
I have heard from two constituents who live in a housing association flat in a listed Georgian building with poor insulation. They get no support with their bills and have no means of insulating their home. Insulating homes and pension rises must come before we cut the winter fuel allowance. I hope that the Government will listen to our side of the argument. In the light of the Government’s plans to take the support away, will the Minister of State make a statement about the pace of home insulation measures, which would make a long-term difference in reducing bills? As I say, the winter fuel allowance should not be put away before we have measures to mitigate the impact.
Lucy Powell
I welcome the hon. Lady back to this place and thank her for her thoughtful comments. She is aware, I am sure, of the woeful inheritance that we have been trying to deal with. This is not a situation that we wanted to find ourselves in. It means that we have had to take some difficult decisions, including on means-testing the winter fuel payment this winter. I hear what she says, but the protection of the triple lock, to which the Government are committed, means that this year the state pension is worth £900 more than last year, and it is set to rise further in subsequent years. That will raise the value of the state pension over the course of this Parliament, not just in cash terms but in real terms.
We are bringing in the warm homes discount for the 3 million most vulnerable properties, and extending the household support fund. We have had a huge campaign this week to get all eligible pensioners on to pension credit—that is something that we want to do. The hon. Lady is right to say that, in the end, we must reduce the demand on people of their bills. That is why we have ambitious home insulation plans, and I am sure that the Secretary of State will come to the House to talk about them. We are roaring ahead with our plans for energy independence in order to make us a clean-energy super- power free from the global markets in gas and fossil fuels, which will keep people’s bills lower for longer. That is all part of our plans.
Madam Deputy Speaker
Before I call anyone else, Members will be aware that over 50 people want to ask a question, so please keep questions short. I call Jo White.
Jo White (Bassetlaw) (Lab)
Like my right hon. Friend, my constituent spent hours on Saturday queuing to purchase Oasis tickets. He got two at the hyper-inflated price of £800, tickets that were originally on sale for £150 each. Lengthy queuing puts people under significant pressure to purchase tickets and potentially make rash financial decisions that they may later regret. The insurance industry is required to provide a 14-day cool-off period to give people space for reflection. Will the Minister consider widening the forthcoming consumer protection Bill to include such a clause dealing with dynamic pricing ticket sales?
Lucy Powell
I know that my hon. Friend speaks for many millions, myself included, who over the weekend shared the experience of spending hours in a queue—a very British thing that we like to do—only to find that the tickets we were able to get came at a hugely inflated price. I am pleased that Oasis have now announced further dates, and that there will be a non-queuing system and a fixed price for those tickets, but she is absolutely right. This Government are committed to putting fans back at the heart of music, which is why we will have a consultation on secondary ticket pricing and ticket touts this autumn. The Culture Secretary has made it clear that, as part of that consultation, we will look at the issue of technology as it relates to queuing systems and the dynamic ticket pricing that my hon. Friend has talked about.
Dame Caroline Dinenage (Gosport) (Con)
The Leader of the House understands more than most the value of the British film and high-end TV industry to our economy and to jobs. She will know that, in this year’s spring Budget, the previous Government introduced tax credits for UK independent film and tax relief for visual effects costs. I am a bit worried, as is the sector, because the Leader of the House’s party did not support the finance Bill that introduced those measures. Could we have a debate about the new Government’s commitment to our world-leading creative industries, during which they would be able to restate their commitment to those much-needed tax incentives for growth and the timescales for their implementation?
Lucy Powell
I thank the hon. Lady for that excellent question. She has long pursued these issues as the former Chair of the Select Committee on Culture, Media and Sport; I know she is standing again for that position, and I wish her good luck in that election, which I think takes place next week. She is absolutely right: the tax credit system, which was introduced by the last Labour Government, has been vital to securing the film industry and other creative industries, the huge talent that we now have, and the support this brings to our economy and the wider creative economy. We have long been committed to those measures, but obviously, any future announcements will be for the Chancellor in the forthcoming Budget.
Jon Trickett (Normanton and Hemsworth) (Lab)
Thank you very much, Madam Deputy Speaker—I did not quite catch you calling me. May I say how delighted I am to see you? You helped me to establish my parliamentary office 20 years ago, and I am so proud to see you in the Chair. I also welcome my great right hon. Friend to her position as Leader of the House.
I am one of many Members who represents mining communities. Miners provided power, light and heat to our country and helped to create our wealth, but they did something else: they created a massive pension fund, which the Conservative party sat on for 14 years. That party allowed it to accumulate and ripped off hundreds of millions of pounds, leaving miners and their widows in poverty on low pensions. As the Leader of the House knows, our manifesto promised justice for the mineworkers’ pension scheme, especially the £1 billion that is in a reserve fund. Can I encourage her to ensure there is an early statement or a debate on this matter? That money would be very well received in miners’ pockets, and those of their widows too.
Lucy Powell
My hon. Friend is a long-standing and powerful advocate for mining communities in his constituency and beyond, and is absolutely right to say that we have a clear manifesto commitment to put this injustice right. I will ensure that the relevant Minister has heard his question and that he gets an appropriate response, and I am sure we will have further announcements in due course.
Sir John Hayes (South Holland and The Deepings) (Con)
It is a delight, Madam Deputy Speaker, to serve under your benevolent stewardship.
The House may know that I am not an advocate of unbridled, anarchic freedom. I know the harm men can do with unfettered free will. Nevertheless, the ability to speak freely is the mark of a civilised, open society, which is why the last Government introduced a higher education Bill in the light of woke tyranny. I am disappointed that the right hon. Lady, who I know is a diligent servant of this House, would allow such legislation to be rescinded, yet the Government have said that that is exactly what they will do. They are going to reverse the advance we made, so will she allow a debate on free speech? For George Orwell, as she may know, said:
“If liberty means anything at all it means the right to tell people what they do not want to hear.”
Lucy Powell
I thank the right hon. Gentleman for that question. This Government have been clear that, in support of our world-leading global university sector, we want to end the culture wars that have ensued against our fantastic universities. As the MP for two globally leading universities, I know that that message and change of tone have been widely welcomed in the sector. I am sure that, at Education questions next week, he may want to raise the issue of the Bill.
Tonia Antoniazzi (Gower) (Lab)
My constituent’s daughter Lily Lucas died two years ago on Monday on Milton ward at Kewstoke hospital. Lily’s death was avoidable. Following the inquest, which ruled that Cygnet breached eight out of nine of the regulations, Kewstoke is not safe and, as evidenced, there was a lack of basic care. I welcome very much that the Secretary of State has made a clear commitment to address the issues regarding mental health provision in England, but can I ask the Leader of the House for a debate in Government time on how private healthcare providers such as Cygnet are held to account in order for our vulnerable young people like Lily to be safe in their care?
Lucy Powell
I thank my hon. Friend for that question. I am really sorry to hear of Lily’s death. She will know that mental health and suicide is one of the biggest challenges facing our young people, and that is why this Government are absolutely committed to supporting mental health provision and to getting it on parity of esteem with physical health provision, with all the extra support that is going into our schools. She raises a really good question about private healthcare providers in this space, and she may want to raise it at Health questions after the conference recess.
Sarah Dyke (Glastonbury and Somerton) (LD)
Tomorrow marks the start of the big river watch, when people are encouraged to take part in a UK and Ireland-wide survey of their local rivers. River pollution and high phosphate levels in rivers such as the Brue and the Parrett, which flow through my constituency of Glastonbury and Somerton on to the Somerset levels and moors sites of special scientific interest, have stopped much-needed house building. So can I ask the Leader of the House if we can have a debate in Government time on the health of our rivers, nutrient neutrality and the impact of river pollution?
Lucy Powell
I thank the hon. Member for that question. I am absolutely delighted to point her to the fact that, with the Water (Special Measures) Bill in the other place, we are introducing today our first step in cleaning up our rivers. It is a groundbreaking Bill that will include criminal sanctions as well as stopping the bonuses we have seen in many of our water companies. I know that a debate on the general topic that she talks about is one the whole House will want to take part in should she apply for such a debate.
Paulette Hamilton (Birmingham Erdington) (Lab)
Hospices provide a crucial role across the UK in supporting people at the end of their lives and alleviating the pressure on our NHS. However, because of the cost of living crisis, costs are rising and fundraising is falling. It is simply not fair that access to hospice care is a postcode lottery in our country and it is high time that the funding model was changed. So will the Leader of the House please grant time to debate this crucial issue?
Lucy Powell
I thank my hon. Friend, who I know has been a doughty campaigner on health issues, issues around hospice funding and other issues over many years, and I thank her for bringing those to this House. The Minister of State for Care has recently met NHS England, and discussions have begun about how to reduce inequalities and variation in access to and quality of palliative care and end-of-life care across England. Funding issues, which I know are very important, will be considered as well and I am sure she would get a great deal of support for a general debate on hospice funding.
Bob Blackman (Harrow East) (Con)
On Monday the Secretary of State for Housing, Communities and Local Government refused to rule out changes to council tax, and refused to rule out the abolition of the 25% discount for single person occupancy. I understand that this morning she has made announcements on what may happen with the right to buy. Given that that is a major change of policy, and Mr Speaker has always requested that major changes of policy should be announced in this place rather than in the media, will the Leader of the House arrange for the Secretary of State to make a statement on her proposals, so that we can hold her to account on them? While I am on my feet, may I gently remind the Leader of the House that the pre-recess Adjournment debate should be entitled the Sir David Amess pre-recess Adjournment debate, as was agreed cross-party?
Lucy Powell
I thank the hon. Gentleman. I am happy to put on record that we are granting the Sir David Amess debate next week, and I will ensure that business is amended to reflect that. As he will know, all Budget matters relating to tax and other issues are announced first to this House in a Budget, and we will be having a Budget on 30 October. I work hard across Government to ensure that big announcements are made first to this House, and that is why we have seen a record number of Government statements since we took office.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
E-bikes and e-scooters are popular with many people, but in London Fields in my constituency I am working with residents and councillors because some are going very fast, and there are issues of safety and regulation. Will my right hon. Friend grant a debate in Government time on the regulation, safety and enforcement of e-bikes across the country?
Lucy Powell
My hon. Friend raises another important question, which I know has been raised in these sessions and elsewhere on a number of occasions. E-bikes are fast moving—excuse the pun; they are not that fast moving, but these are fast moving issues in the sense that they are new technologies and new vehicles. I am sure that a debate on that issue would be widely supported should she apply for one.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
In his 2023 report, the chief medical officer said that cold homes and fuel poverty are directly linked to excess winter deaths. My constituents are worried, and I am concerned that Labour’s policy to restrict the winter fuel allowance will lead to the unnecessary ill health and death of elderly people. Will the Leader of the House arrange for a debate on the specific subject of the effect of Labour’s removal of the winter fuel allowance from elderly people on their health and wellbeing?
Lucy Powell
As the hon. Lady will have heard, we will be having such a debate next Tuesday, and the Government have brought that forward to allow for a debate and a vote on those issues. I gently say that perhaps she might want to talk to colleagues in her party about the woeful inheritance that we found, and the £22 billion black hole not for future years but in this year, which the Office for Budget Responsibility was appalled that it did not know about. That has seen higher borrowing and excess spending, particularly on asylum, and we had to do something to fix those broken foundations in-year to stabilise the economy.
Andrew Pakes (Peterborough) (Lab)
Good public transport, especially buses, is important for so many things in my constituency and the country, from accessing a GP to visiting friends, getting to college and going to work. The Labour and Co-operative Mayor of Cambridgeshire and Peterborough has just launched a consultation on taking back control of our buses. Despite public support for better buses, the franchising model and enhanced partnership model is still bureaucratic and difficult for communities to engage with. Will the Leader of the House join me in welcoming our local consultation, and make time in the House for Members to debate further improvements so that communities can take control of our bus services?
Lucy Powell
I thank my hon. Friend for that excellent question. He is right to make the point that the current bus franchising system is incredibly bureaucratic and lengthy. That is why in the King’s Speech we announced a better buses Bill, which will come before the House and will significantly reduce the time and bureaucracy that such things take. I hope that the Peterborough mayor will take time and ensure that that legislation is in place before he embarks on the necessary taking back control of buses in his area.
Mr Lee Dillon (Newbury) (LD)
Since November 2021, the custody suite at Newbury police station has been closed, leading to greater travel times and more time when police are not on the beat. Can the Leader of the House allow Government time for a debate on the provision of custody suites across the UK and the impact of the closures under the last Conservative Government?
Lucy Powell
I thank the hon. Member for raising that important matter. Over the summer, with the acts of thuggery and the disorder that we saw in the riots, we found real problems in our criminal justice system. We have good people doing good work, but a system creaking at the seams. Police custody suites are very much part of that challenge. We will have to do a lot of difficult work to get our criminal justice system fit for purpose so that we can quickly bring people to justice and ensure that those convicted of crimes are kept away from the public.
Jessica Toale (Bournemouth West) (Lab)
May I join my right hon. Friend in congratulating our Team GB Paralympians and Olympians on their success over the summer in Paris? In particular, I congratulate Bryony Page, who trains at Poole gymnastics and trampolining club in my constituency, on her gold medal in the women’s trampolining. All these athletes rely on local clubs, coaches and volunteers along their journey. In the light of Team GB’s success, may I ask for a debate on how we support grassroots sports to develop the next generation of champions?
Lucy Powell
I join my hon. Friend in congratulating Bryony Page. I am sure the whole country remembers that moment, watching the fantastic display she put on for the trampolining gold medal. It is, I think, the first we have ever won. Supporting grassroots sport is a total priority for this Government, and we will continue to do all we can. My hon. Friend might be aware that there was a debate this week in Westminster Hall on some of these issues, but Department for Culture, Media and Sport questions are coming up straight after the conference recess, too.
Ellie Chowns (North Herefordshire) (Green)
Five peaceful climate protesters are serving clearly excessive jail sentences made under the last Government’s profoundly undemocratic Police, Crime, Sentencing and Courts Act 2022, with one given five years in jail. That is two years longer than a man who pleaded guilty to violent disorder and assaulting an emergency services worker during the riots in Southport. The United Nations special rapporteur on environmental defenders, Michel Forst, has made clear statements to the effect that the sentences violate the UK’s legal obligations under the Aarhus convention. Will the Leader of the House please make time for Members to discuss the urgent need to repeal this repressive anti-protest law that fundamentally undermines the UK’s obligations under international law?
Lucy Powell
What the hon. Member describes is that in recent years we have seen some actions that go way beyond acceptable protest and that are highly disruptive to local people, to those trying to get hospital, to those in need and to our wider economy. On the technical legal matter that she raises, she might want to know that Justice questions will be next week, and I am sure that the Secretary of State for Justice will be happy to answer her question.
Ian Lavery (Blyth and Ashington) (Lab)
Today, it is two years since the right hon. Liz Truss became the leader of the Conservative party. She became the Prime Minister the following day. What happened over the following 49 days crashed—destroyed—the economy and created misery for many millions of families and businesses in the UK. Can we have a debate in Government time to scrutinise those chaotic, disastrous decisions that caused so much misery to people in our communities, so that no Government in the future will ever make the same mistakes?
Lucy Powell
I could not have put it better. I am sure that many others will want to make such points as the anniversary comes about in the coming couple of weeks, because it is really important that we learn the lessons from that disaster and do not allow history to repeat itself. What happens when the Government of the day make a huge amount of unfunded spending and tax-cutting commitments with no idea of where the money will come from, and ignore the advice of Treasury and other experts, completely flying in the face of our much-valued financial institutions? As my hon. Friend recalled, we see soaring rates of Government borrowing costs and interest rates having to be raised very quickly. It is mortgage payers, ordinary families and those on fixed incomes who pay the heaviest price when the Government of the day make such a reckless choice with the economy.
Dr Luke Evans (Hinckley and Bosworth) (Con)
In Leicestershire, we have fantastic optometrists and opticians. Will the Leader of the House ask the Prime Minister whether it is just glasses that they need to give to get a full-access pass to No. 10, or do they need to give suits as well?
Lucy Powell
This is a Government of service, and we are working hard to turn the page on an era of scandal and sleaze under the previous Government. We expect the very highest standards of all those in government, which is why we quickly brought in measures such as raising standards and expectations for MPs, raising standards and expectations for Ministers, being completely transparent about declarations, and ensuring that all the proper processes for appointments are followed at all times. We will continue to do that.
Rachael Maskell (York Central) (Lab/Co-op)
The Government have stated and rightly continue to state that prevention will protect our NHS and protect lives. Being cold at home can lead to stroke, heart attack, hypothermia, pneumonia and other such illnesses. Will the Leader of the House encourage the Government to read the work of Professor Sir Michael Marmot and Sir Chris Whitty in this area so that we can take a public health approach to people being warm at home to mitigate the cost that could come without the right mitigations on winter fuel payments?
Lucy Powell
I thank my hon. Friend for that question and for continually raising these important matters. The decision to means-test winter fuel payments was not one that any of us wanted to take. It was a decision that we had to take to balance the books. As we have just discussed, it is those on the lowest incomes who pay the heaviest price when the economy crashes and the real cost of living goes through the roof. That is why delivering on living standards, getting growth in our economy, delivering lower energy bills and getting energy independence are core to the Government’s agenda. That is what we will see over the Parliament.
Ben Maguire (North Cornwall) (LD)
Local communities in and around Port Isaac in my constituency have been left angered and frustrated at the lack of consultation by the Marine Management Organisation relating to applications for huge seaweed farms in their area. Will the Leader of the House give us a debate in Government time about making sure that the Marine Management Organisation properly informs, involves and consults communities when processing applications for marine licences for seaweed farms?
Lucy Powell
The hon. Member raises a really important issue about seaweed farms, which I did not know a lot about until recently. He will know that the Marine Management Organisation is required to consult local people. I know that he has been active in that consultation. I hope that the organisation listens to what he has said—it has a statutory obligation to do so—and that he can deal with the issues that his local community are worried about with the proliferation of seaweed farms in his area. If he continues not to make progress in that regard, I will ensure that the appropriate Minister gets him a response.
Dr Lauren Sullivan (Gravesham) (Lab)
The Leader of the House will know that on the Government Benches we value adult education and community learning, and we know that there are many paths in education and skills, not just schools. In Gravesham, the Tory-controlled Kent county council is proposing to close a long-standing adult education centre, the Victoria centre, which has been at the heart of the community for years. Could we please have a debate on the support that local councils give to such community provision and how they should enhance it, not close it?
Lucy Powell
My hon. Friend raises an important issue. In recent years, adult education was belittled and let down by the previous Government, and local government funding was cut to the bone. That is why so much adult education provision is being lost from our communities. This Government will try to ensure that education, including adult education, is once again at the forefront of national life. I am sure that she will want to raise this matter with the Secretary of State at Education questions next week.
Dr Andrew Murrison (South West Wiltshire) (Con)
Is the Leader of the House concerned that those who will suffer as a result of the Government’s decision to cut the winter fuel allowance live in remote, rural locations, in homes that often are difficult to insulate and off-grid? Could we have a debate in Government time on how the Government’s early priorities will disproportionally impact those people living in the countryside in remote and rural locations?
Lucy Powell
Like many, I am furious that this Government have had to take these difficult decisions, because the Government the right hon. Gentleman supported over many years left a huge gaping hole in the public finances. Had we not dealt with that, it would have affected his constituents and left those living in poverty and in homes that are difficult to heat much worse off. He should reflect on that. Under the Conservative Government, the home insulation schemes previously in existence were largely scrapped, and they failed to take action to insulate new homes and improve building regulations, so we will not take lectures from them. We have a hugely ambitious home insulation plan. As the right hon. Gentleman will know, the basic state pension is increasing in real value over the course of this Parliament. Living standards for everybody fell under his Government for the first time in our history. We will ensure that they go up for people right across this country.
Harpreet Uppal (Huddersfield) (Lab)
Thank you, Madam Deputy Speaker, and as a fellow Yorkshire woman I welcome you to your place.
On a recent walk around Huddersfield town centre, I found that tackling antisocial behaviour and retail theft were important priorities for my constituents and small businesses. Could the Leader of the House allow time for a debate on tackling those important issues?
Lucy Powell
My hon. Friend will know that under the previous Government, retail crime was effectively decriminalised. Those seeking to shoplift, sometimes on an industrial scale and in a very organised fashion, were completely let off the hook. That is why we are committed to rectifying that situation in our forthcoming criminal justice Bill, to tackle the scourge of retail crime.
Mike Wood (Kingswinford and South Staffordshire) (Con)
The last census showed that the population of South Staffordshire grew by just 2.2% over the previous decade, yet the Government think that the district needs 14% more houses over the next decade. Please could we have a debate in Government time on the methodology behind the Government’s ludicrous housing targets?
Lucy Powell
The hon. Gentleman’s Government failed to meet the challenge of the housing crisis. This Government are unashamedly pro-house building, to make sure that we meet demand and everyone can live in a safe and secure home of the future. He will know that one of the ways that we drive that forward is by having ambitious house building targets. We make no apology about that.
Afzal Khan (Manchester Rusholme) (Lab)
My right hon. Friend will know of the important role of the Carlton Club community interest company in Whalley Range in my constituency, as well as across Manchester. It is not just a social club but an important venue that supports grassroots music and arts. The company that owns the building has now threatened to end the CIC’s use of the site. Will the Leader of the House join me in calling for the building owners to reconsider their decision, and will she provide Government time to debate the importance of social clubs and small venues such as the Carlton Club to our local communities?
Lucy Powell
I thank my hon. Friend for raising that important issue. I know how much the Carlton Club is valued in Whalley Range and in Manchester. I was there recently at a very good 50th birthday party, which perhaps should stay private at this stage. I fully support his endeavours to keep this valuable asset alive. He will, I hope, know that the Government are committed to community ownership of such buildings and to empowering communities to keep them alive and run those buildings where that is in the interests of the community. I hope he will be successful in his endeavours.
Nick Timothy (West Suffolk) (Con)
In his recent letter to local councils, the Minister for Housing and Planning, the hon. Member for Greenwich and Woolwich (Matthew Pennycook) appeared to kill off the previous Government’s plan for Cambridge. Will the Minister come to the House and make a statement on the urgent need for improved infrastructure linking Cambridge to various communities, including Haverhill in my constituency, which desperately needs a rail link to Cambridge?
Lucy Powell
The hon. Gentleman will know that Housing Ministers and the Secretary of State for Housing, Communities and Local Government, my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner) have already given a number of statements to the House—and will continue to do so—on the national planning policy framework and our house building programme, which is ambitious and will be a challenge to deliver, but we are determined to do that. He will also know that in the King’s Speech we announced a planning and infrastructure Bill, which will address some of these issues. Strategic local plans will deliver for a place—not just homes, but the infrastructure that areas need.
Matt Rodda (Reading Central) (Lab)
I thank the Leader of the House and the Government for their swift action to tackle the large bonuses being paid to the bosses of water companies. My residents in Reading have suffered from appalling problems with water pollution, both in the River Thames and the River Kennet; from the disconnection of family homes from the water supply; from potholes created in local roads; and from a series of other problems. Will the Leader of the House ensure that if we have a debate on water companies, the mismanagement by senior leaders at the top of the industry is included?
Lucy Powell
I thank my hon. Friend for that question. I am delighted that today we are introducing the Water (Special Measures) Bill in the other place. It is a really important step on the way to cleaning up our waterways, making water bosses and water companies accountable, and stemming the tide of, frankly, awful pollution and discharges into our rivers, lakes and elsewhere. We are putting in place the tough accountability action that has long been required to do that job.
Mr Gideon Amos (Taunton and Wellington) (LD)
Wellington in my constituency, a town of 15,000 people, has had no post office for several years. The threat to post offices is a concern shared across the House. Imagine the delight of the people of Wellington when they heard that a hub was being opened by an organisation called the Post Office, with a Post Office logo on the outside, only to find later that it will not be providing any Post Office services. Does the Leader of the House agree that that sounds like something out of “Yes Minister”? Will she grant time for a debate on the roll-out of banking hubs and the provision of postal services alongside them in towns that do not have any post offices?
Lucy Powell
As has already been raised in this session today, the provision of local post office services is a matter of wide interest across the House. I am sure that if the hon. Gentleman and other colleagues put in for a debate, they would get a great deal of support. Let us be honest: with the Post Office, we have seen an organisation that has left serious questions about how it has been run and its governance. What we do not want, as a result, are our vital post office services disappearing from our high streets and town centres, so I will ensure the relevant Minister has heard his question.
Anna Dixon (Shipley) (Lab)
I join my right hon. Friend in congratulating Team GB. A blind runner and his guide who live in Bingley, in my constituency, have won a medal at the Paralympic games, competing under the refugee flag. Junior and Donard are role models, showing courage and resilience as well as fantastic sportsmanship, and we are very proud of them. May I ask my right hon. Friend to make room, in Government time, for a debate on how we can support future Paralympians, including refugees who settle in this country?
Lucy Powell
I share my hon. Friend’s congratulations to Junior and Donard on their tremendous bronze medal at the Paralympics. I think we have all engaged in the issue of athletes who compete under the refugee flag in both the Olympics and the Paralympics when they are essentially residents of this country. My hon. Friend may wish to raise that during questions to the Secretary of State for Culture, Media and Sport, which will take place just after the conference recess.
Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)
Stone has a large number of disabled residents who simply cannot gain access to a railway station, and I know that the same problem exists in many other constituencies throughout the country. May we have a debate about what can be done to ensure that disabled people have good access to railway stations? It is vital that we have a new scheme to replace the Access for All scheme that we used to have, so that we can serve our disabled residents.
Lucy Powell
I think we have all been made especially aware of this issue over recent weeks, given the horrific story from Tanni Grey-Thompson of her recent endeavours on our transport network. I can assure the right hon. Gentleman that we are committed to addressing the matter, and that we are currently considering the best approach in respect of the Access for All programme. I know that a number of other Members will be raising these issues, and I am sure that a Backbench Business debate, or something similar, would be widely subscribed to.
Alex Baker (Aldershot) (Lab)
Home artificial nutrition awareness week took place in August. My constituent Victor Day is able to lead a normal life at home because he has a feeding tube and the benefit of artificial nutrition. Will my right hon. Friend join me in commending the work of the healthcare professionals, home care services and product suppliers, alongside the support of friends and family that allows Victor and many others receiving home artificial nutrition to live their lives outside a hospital setting, and may we have a debate about how we can help more people to leave hospital settings?
Lucy Powell
I pay my respects to Victor, and I thank my hon. Friend for highlighting an important matter of which many of us would not otherwise be aware, but for home artificial nutrition awareness week. The Government are absolutely committed to providing healthcare in the community, outside hospitals, and innovations such as this are critical to that endeavour.
Luke Taylor (Sutton and Cheam) (LD)
One of my constituents is the sibling of a victim of the infected blood scandal, and he has asked me to raise the issue of access to the compensation scheme for the siblings of victims, as well as the lack of punitive damages in the proposed scheme and the concern about the schedule for implementation of the proposals. Might time be made available for us to debate these issues?
Lucy Powell
Fortuitously, my right hon. Friend the Paymaster General is sitting beside me. As the hon. Gentleman may know, the Government worked apace over the recess to meet our statutory deadline for setting up the compensation scheme, and my right hon. Friend has already made two statements on the matter during the three or four short weeks during which the House has sat since the election. I know that it is a personal commitment of his to ensure that those affected have justice and compensation, and I know that he has heard what the hon. Gentleman has said today.
Lee Pitcher (Doncaster East and the Isle of Axholme) (Lab)
At an advice surgery that I held recently in Moorends, I heard yet again about the perils of the 30-minute rush to get a GP appointment. I hear the same desperation throughout my constituency. Not only is the system not inclusive, but it is unfair. Many people are commuting at that time, or dropping children off at school, and those who are unable to telephone must rely on others who cannot always be there at 8 am. What action can my right hon. Friend take to stop this anxious 30-minute race?
Lucy Powell
All of us, and many of our constituents, are familiar with the 8 am scramble for a GP appointment. It is no way to access our primary healthcare system, which is why my right hon. Friend the Health Secretary and the Government are committed to the creation of 40,000 more GP appointments each week over the current Parliament. My right hon. Friend is dedicating a large amount of his time to delivering that, and I am sure he has heard what my hon. Friend has said today. However, my hon. Friend may wish to raise the matter again during Health questions after the conference recess.
Mr Andrew Snowden (Fylde) (Con)
Let me first thank the Leader of the House for the correspondence following my question about the cable corridor in my constituency, which is causing great concern to residents. I appreciated the quick response.
Will the Leader of the House ask the Cabinet Office to send a Minister to the House to make a statement on whether Sir Laurie Magnus is still the Prime Minister’s special adviser on ministerial interests, and, if not, whether a new appointment timeline can be arranged, and to confirm that the Prime Minister will abide by any rulings on the part of that special adviser?
Lucy Powell
Sir Laurie Magnus is very much still the Government’s adviser on such matters. It is not our intention to mess around and make political appointments of that kind. We will take this very seriously, much more seriously than the last Government, who—let us be honest—ignored many of the recommendations and findings of their own adviser in this regard. I can assure the hon. Gentleman that the Prime Minister takes behaviour and standards extremely seriously, and has zero tolerance when misdemeanours are identified.
Sojan Joseph (Ashford) (Lab)
I recently paid a visit to the William Harvey Hospital in my constituency, and saw 19 patients being treated by staff in corridors. Will the Leader of the House find time for a debate on overcrowding in hospitals, and on what the Government are doing to fix the broken NHS that the Conservatives have left to the country?
Lucy Powell
My hon. Friend has raised an important issue. We are all familiar with what is happening in our hospitals, including our A&E departments. My husband is an A&E doctor, and I hear these stories on most evenings at home. The waiting lists, the waiting times, the chronic understaffing and underfunding and the lack of support for our NHS have left it on its knees, and one of the Health Secretary’s first acts was to resolve the junior doctors’ dispute so that strike action did not blight our attempts to deal with that. Getting waiting lists down, which is going to be tough, and restoring our NHS to a service on which people can rely are a key mission for this Government.
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Shorter answers will be appreciated.
Martin Vickers (Brigg and Immingham) (Con)
During the exchanges that followed my urgent question about steel manufacturing earlier today, it was evident that the Minister was unable to give a detailed response in respect of, in particular, maintaining the capacity to produce virgin steel in the UK. In view of the many unanswered questions, will the Leader of the House arrange a debate, in Government time, on the future of the UK steel industry?
Lucy Powell
I congratulate the hon. Gentleman on the granting of his urgent question. I can assure him that the Government are working apace to secure the future of British steel production, which is a key priority for us, and that when there are developments, Ministers will come to the House and ensure that the House hears about them first.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
BTecs provide a vital route to higher and further education for thousands of learners throughout the country, and it was welcome news that the Education Secretary has announced a pause and review of the ad hoc cancellation programme initiated by the last Government, but may I gently remind my right hon. Friend that colleges need to know now what qualifications they can offer next September? Could she, through her office, arrange for a statement to be made by the Education Secretary, and for a general debate to take place in Government time so that we can all celebrate the BTec courses that our young are people taking in our constituencies?
Lucy Powell
My hon. Friend raises the important matter of BTecs and their future, which has also been raised with me as a constituency MP and, I am sure, with many other Members. If answers are not found at Education questions next week, I will ensure that the relevant Minister comes to the House to provide them.
Dr Neil Shastri-Hurst (Solihull West and Shirley) (Con)
There are many excellent military charities in this country, including Troop Aid in my constituency. Given their vital work, will the Leader of the House set aside Government time for us to debate what further support can be provided to them?
Lucy Powell
Our military charities and armed forces charities do immense work. Remembrance Sunday and the poppy appeal are often marked in this House with a debate or statement. I am sure that if the hon. Gentleman put in for one, it would be well received.
Several hon. Members rose—
Madam Deputy Speaker
Order. We have 10 Members still to speak and 10 minutes left. If Members each keep their question to a sentence, I can try to squeeze them all in.
Claire Hughes (Bangor Aberconwy) (Lab)
Community energy projects such as Ynni Ogwen in my constituency already play a vital role in the energy mix, and with GB Energy we will see a huge increase in clean power projects. Will the Leader of the House make time for a debate on the important topic of community energy?
Lucy Powell
Community energy projects are vital to our clean energy superpower mission, and Great British Energy, which will be debated this afternoon, is an important step towards that. I am sure that my hon. Friend will wish to raise those matters then.
Sir Ashley Fox (Bridgwater) (Con)
There are 141,000 children living in kinship care in England and Wales. Some 47% of those children have special educational needs and disabilities. Will the Leader of the House ask a Minister in the Department for Education to make a statement on improving support for children in kinship care?
Lucy Powell
The hon. Gentleman is absolutely right. Kinship carers play a vital role and special educational needs are vital in our mission to ensure opportunity for all. Special educational need has been the poor relation for the last few years, and that is something that we are going to put right. We will have Education questions next week and I hope that he will ask a question then.
Jim Shannon (Strangford) (DUP)
I thank the Leader of the House for this opportunity to ask an important question that has been on the radar of Members who care about protecting the freedom of religion or belief. I would like to turn the House’s attention to Nicaragua, where since 2018 the regime of Daniel Ortega has unleashed relentless attacks on the Catholic faithful. Viewing them as the last hurdle of opposition in the country, they have systematically targeted religious leaders, imprisoning bishops, priests and seminarians on baseless charges and forcing them into exile.
The closure of Catholic media outlets, the confiscation of Church properties and the suppression of religious education echo the darkest days of history in communist countries and the dictatorships of the past. Will the Leader of the House join me in condemning such violations of the freedom of religion or belief? Will she ask the Foreign, Commonwealth and Development Office to raise these important issues with its counterparts in Nicaragua?
Lucy Powell
As ever, the hon. Gentleman raises in this House the important issues of the freedom of religion or belief. I share his concern about the arbitrary detention of members of the Church in Nicaragua. We welcome the release of seven priests in August, but we are alarmed by their expulsion from Nicaragua. What is happening there is unacceptable; I thank the hon. Gentleman for raising it on the Floor of the House.
Mrs Sarah Russell (Congleton) (Lab)
May I associate myself with the comments that have been made about freedom of religion? I am here today to raise the matter of accessibility at Sandbach station. Unfortunately, the Manchester platform cannot be accessed by those with luggage, those with disabilities, those with buggies or those with bikes. I join the calls made earlier for a debate about station accessibility.
Lucy Powell
So many people are raising the issue of station accessibility. My hon. Friend raises important points about Sandbach station. If she joins forces with the right hon. Member for Stone, Great Wyrley and Penkridge (Sir Gavin Williamson) and applies to the Backbench Business Committee once its Chair is in place, I am sure that there will be a lot of support for a debate.
David Baines (St Helens North) (Lab)
The Turks Head pub in my constituency is once again in the running for the Campaign for Real Ale’s pub of the year. Will the Leader of the House join me in congratulating it and wishing it luck? Does she agree that pubs and all small businesses play a vital role in our economies and communities? Will she allow Government time for us to give due consideration to their importance?
Lucy Powell
As the Member of Parliament whose constituency has the most pubs, I wholeheartedly share my hon. Friend’s support for his local pubs in St Helens North. Every time they are raised in this House, there is widespread support for our great British pubs. Any time he wants a debate, I am sure he will get one.
Deirdre Costigan (Ealing Southall) (Lab)
Every night of the week, vulnerable people sleep outside in the rough in front of Southall community college, in the bins of the Havelock estate and in other corners of my constituency. Indeed, rough sleeping in England has doubled since 2010 because of the policies of the last Government, including a broken asylum system and a mental health system in crisis. Will the Leader of the House allow time for a debate so that we can look at the multiple causes of rough sleeping and the potential solutions, including taking a cross-departmental approach to the issue?
Lucy Powell
My hon. Friend raises an important matter. The Deputy Prime Minister has already set up and chaired an inter-ministerial group working with mayors and councils to end homelessness. My hon. Friend will be aware that we will shortly bring forward our renters reform Bill, which will abolish section 21 no-fault evictions. There will be plenty of time to debate that and other matters in due course.
Mr Mark Sewards (Leeds South West and Morley) (Lab)
Councils up and down the country are still facing impossible financial decisions. In my constituency, Leeds city council is closing Knowle Manor, one of the last care homes in the whole of Leeds. Residents of Morley have made their feelings very clear; over 3,000 have signed a petition to keep the care home open. Does the Leader of the House agree that we need a debate on the introduction of neighbourhood health centres: organisations that bring together doctors, nurses, care workers, physio- therapists and other health professionals? I think Knowle Manor would be a prime candidate.
Lucy Powell
I am really sorry to hear about the closure of my hon. Friend’s local care home. He is absolutely right. Our commitment to neighbourhood health services is how we will begin to tackle these issues. It is a key part of the health mission of this Government to get our health and care service back on its feet.
Laura Kyrke-Smith (Aylesbury) (Lab)
My constituency has experienced extensive house building in the past decade. My constituents are very understanding of the need for new homes, but their patience has been tested again this week by horrible traffic—the result of the previous Government’s haphazard approach to house building. Will the Leader of the House allow a debate on our future house building plans to ensure that they are accompanied by the necessary infrastructure and services?
Lucy Powell
My hon. Friend is absolutely right. We are unashamedly for house building, and we are unashamedly for delivering it through local strategic plans, with infrastructure and services at the heart of the house building programme in places such as Aylesbury and elsewhere. I am sure that debates on that issue will be forthcoming shortly.
Joe Morris (Hexham) (Lab)
My constituent Michael Parry is currently fighting pancreatic cancer. He has raised the issue with me on numerous occasions. Will the Leader of the House give us a debate in Government time on screening for pancreatic and other high-mortality cancers?
Lucy Powell
I am sure that the thoughts of the whole House are with my hon. Friend’s constituent Michael during this difficult time. He is absolutely right that cancer patients are waiting far too long for diagnosis and treatment; that is why we will double the state-of-the-art MRI and CT scanners in the NHS. My hon. Friend will be aware that Health questions are coming up after the conference recess.
Shaun Davies (Telford) (Lab)
Can we have a debate in Government time on veterans affairs? Whether it is through access to health and housing, support for veterans’ children or veteran cards being used as an acceptable form of ID for voting, can we have a debate about how we can make this country the best place in the world for a veteran to live?
Lucy Powell
My hon. Friend raises an important matter. We have committed to legislating to establish an armed forces commissioner to champion our armed forces and improve their service to this country. That will be forthcoming soon.
Jonathan Davies (Mid Derbyshire) (Lab)
Sixth-formers at Belper school in my constituency tell me that they face inordinate waits to take a driving test. May I ask the Leader of the House to work with her Cabinet colleagues to address this issue as part of the new Government’s plans to get this great country back on the road to recovery?
Lucy Powell
I am sure the Transport Secretary will come to this House at some point to address driving tests for young people, which I know are a real issue. We support young people being able to get the independence that they need through driving. We have Transport questions on my 50th birthday—I know I do not look old enough—which is 10 October, and I am sure my hon. Friend will want to raise it then.
Madam Deputy Speaker
That is a very early birthday present. We are going to get the last Member in, so well done everybody.
Josh Newbury (Cannock Chase) (Lab)
Care leavers all too often face a postcode lottery of inconsistent support, leading to wide disparities in accessing vital services such as social housing, financial advice and mental health support. Will the Leader of the House make time for a debate on the development of a national care leaver offer, so that all our care leavers can get the support they need and deserve?
Lucy Powell
Care leavers really have had the poor end of the deal in recent years. They have poorer outcomes than others, and their lives are more difficult as a result of having been in care, which is why we want to see a strategic approach. In the King’s Speech, we announced a children’s wellbeing Bill, which will allow us to take forward some of the legislative changes that we need to address this issue.
Madam Deputy Speaker
I thank the Leader of the House for taking everybody’s questions.
Bill Presented
House of Lords (Hereditary Peers) Bill
Presentation and First Reading (Standing Order No. 57)
Pat McFadden, supported by the Prime Minister, Secretary Angela Rayner, Nick Thomas-Symonds and Ellie Reeves, presented a Bill to remove the remaining connection between hereditary peerage and membership of the House of Lords; to abolish the jurisdiction of the House of Lords in relation to claims to hereditary peerages; and for connected purposes.
Bill read the First time; to be read a Second time on Monday 9 September, and to be printed (Bill 7) with explanatory notes (Bill 7-EN).
The Speaker’s Absence
Ordered,
That the Speaker have leave of absence on Monday 9 September to attend the funeral of Monsignor Michael McKenna in Chorley.—(Lucy Powell.)
Great British Energy Bill
Thursday 5th September 2024
(3 months, 2 weeks ago)
Commons ChamberRead Full debate Great British Energy Bill 2024-26 View all Great British Energy Bill 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts
16:59 - The House having divided: - Ayes: 94 / Noes: 348 - Question accordingly negatived.
17:15 - The House divided: - Ayes: 348 / Noes: 95 - Question accordingly agreed to.
Madam Deputy Speaker
The reasoned amendment in the name of Claire Coutinho has been selected.
The Secretary of State for Energy Security and Net Zero (Ed Miliband)
I beg to move, That the Bill be now read a Second time.
May I congratulate you on your elevation to your new role, Madam Deputy Speaker?
At the general election, the British people voted for change, and they voted for our party’s promise of the first new national, publicly owned energy generation company in our country for more than 75 years: Great British Energy. Today, with this Bill, we deliver. British public ownership is back at the heart of our energy system. To every right hon. and hon. Member behind me, I say that it is thanks to each and every one of their victories in their constituencies that today we can start to create a lasting legacy for the country, which breaks from 14 years of failure—14 years of leaving Britain exposed to fossil fuel markets, which led directly to the worst cost of living crisis and energy bills crisis in generations.
Graham Stuart (Beverley and Holderness) (Con)
Will the Secretary of State give way?
Ed Miliband
Not at the moment. [Interruption.] The right hon. Gentleman needs to calm down a little bit; I know he gets very angry.
We have had 14 years of blind faith in free markets and a refusal to have an industrial policy, which offshored clean energy jobs, and 14 years of a Government who were perfectly happy with state ownership of our energy system, but with one crucial overriding condition: that it would be state ownership by any country except Britain. That is the reality of what we inherited.
We already have widespread state ownership of Britain’s energy assets by other countries—Denmark, Sweden, Norway and France—through their state-owned companies. Indeed, the city of Munich owns more of our offshore wind capacity than the British Government. Following the auction results I announced on Tuesday, the largest two offshore wind projects to win a contract will be built by Ørsted, a Danish state-owned company. I strongly welcome its investment, but the question before the House today—the question at the heart of this Bill—is simple: do we think there should be a British equivalent of state-owned energy generation companies such as Ørsted, Vattenfall, Statkraft and EDF investing in our infrastructure?
We have a simple proposition: if it is right for the Danes, the French, the Norwegians and the Swedes to own British energy assets, it is right for the British people to do so as well. That is why we fought the election on the crucial principle that the British people should have a right to own and benefit from our natural resources. To every Member of the House who is considering their vote on this Bill this afternoon, I urge them to vote for that principle. To those thinking about voting against the Bill, I ask them how they will defend to their constituents the idea that other countries should own our national energy infrastructure, but Britain should not.
Graham Stuart
I am grateful to the right hon. Gentleman for giving way. He is normally a fair man, but what he did not mention was the risible state of renewable energy when we took power in 2010. It accounted for less than 7% of electricity, and we increased the figure to nearly 50%. We are a country that has led the world in this area. It was the Conservatives who transformed our energy system to remove coal from the system. I am sure I am just setting up the Secretary of State, which I am happy to do, but what will state ownership do? Our system is arguably one of the most effective in the whole world at delivering green capacity, and has been the most successful in cutting emissions. What will state ownership do, other than simply put the state and its complicated mechanisms into programmes that need to be speeded up, not slowed down?
Ed Miliband
The right hon. Gentleman surprises me; he is a brilliant set-up man, and he is welcome any time. I will now explain to him what state ownership will do. Here is why it is the right idea for our time. It is the right idea for energy security, because Great British Energy will invest in home-grown, clean energy that we control, and speed up its delivery. It is the right idea for jobs—this is the learning from all those other countries I mentioned—because Great British Energy will partner with the private sector to create jobs and make sure that we build the supply chains and jobs that the British people deserve.
It is the right idea for creating wealth for Britain. This is what I do not understand about the Conservative party, because state-owned companies from other countries are not investing in these assets as a charitable endeavour; they are doing so to generate wealth for their countries—wealth that flows back to their taxpayers. State ownership is the right idea for creating wealth for Britain, because Great British Energy, through its investments, will help generate return for the taxpayer. To answer the right hon. Gentleman directly, it is right for energy security, it is right for jobs, and it is right for creating wealth for our country.
Sammy Wilson (East Antrim) (DUP)
I will not support this Bill tonight. The Secretary of State claims that it will put the British people in ownership of the renewable electricity supply market, but that market is estimated is £50 billion a year. He is proposing to invest £1.6 billion a year. Can he not see the difference that £1.6 billion will make to the overall investment? The infrastructure will still not be owned by the British people.
Ed Miliband
The right hon. Gentleman and I have a long history on these issues, which makes me rather old. Indeed, we used to spar about them 15 years ago. He is wrong about £1.6 billion; it is £8.3 billion of investment over the Parliament—a significant sum. Great British Energy will not become EDF overnight—of course not —but the point is that this Government believe in creating a lasting, long-term legacy for Britain, which is what GB Energy will do.
Several hon. Members rose—
Ed Miliband
I am going to make some more progress.
Let me go through what Great British Energy will do. First, it will invest in and own clean energy projects, particularly leading-edge technologies such as floating offshore wind, by working with the private sector and taking stakes in the projects it supports. The truth is that we need to accelerate the deployment of wind, solar, tidal, hydrogen, carbon capture and nuclear, and we need to face the reality that frontier technologies carry risk. That is why there is a particular role for the Government in helping to de-risk projects by investing in them in partnership with the private sector, and in doing so capturing value for Britain.
GB Energy will invest across a range of clean energy technologies, using its £8.3 billion capitalisation. The chair has been appointed by the Government, but the company will be able to move at pace with operational independence. I am delighted that Jürgen Maier, who has a great record of achievement and is a champion of UK manufacturing and good jobs, has been appointed as start-up chair.
Grahame Morris (Easington) (Lab)
I completely agree with the basis of my right hon. Friend’s argument for ending the offshoring of jobs, energy assets and employment opportunities. Almost all solar panels are currently sourced from China. Power Roll, a company in my constituency, has developed a lightweight, flexible and cost-effective solar module and is eager to establish its first gigafactory. Does he agree that, to secure our energy future, Great British Energy should be supporting and investing in innovative start-ups such as Power Roll in east Durham?
Ed Miliband
My hon. Friend is a brilliant champion of his constituency and these issues, and he is absolutely right that part of the challenge we face is to expand our supply chains in Britain. I am very interested in the example he gives.
Matt Rodda (Reading Central) (Lab)
The Secretary of State talks eloquently and powerfully about the physical investment coming from this new measure. Will he elaborate on some of the benefits to our workforce, particularly the training and development opportunities for younger people through a wider range of apprenticeships, and the amazing multiplier effect that will have for our economy?
Ed Miliband
My hon. Friend anticipates my point about how we build the supply chains, and about the lessons we have learned from what state-owned companies in other countries have done to help catalyse a supply chain of jobs and to work with the private sector.
Ed Miliband
I will give way one more time before making some more progress.
Mr Perkins
I am very grateful to my right hon. Friend. We heard the right hon. Member for Beverley and Holderness (Graham Stuart) suggest a few moments ago that things were going wonderfully under the Conservative Government, but does my right hon. Friend agree that the Climate Change Committee warned a few weeks ago that only a third of the emissions reductions that we need to achieve the 2030 target are currently backed by a credible plan? Is the reality not that we need a step change? Thank God we have a Labour Government to deliver it.
Ed Miliband
My hon. Friend is absolutely right, and it is part of what this Government have done. In less than two months, we have overturned the onshore wind ban, consented large amounts of solar power and, on Tuesday, had the most successful renewables auction in British history.
Ed Miliband
I will not give way to the right hon. Gentleman again. We have heard quite enough from him.
Secondly—I know this is a concern of the Liberal Democrats and of other Members on both sides of the House—Great British Energy will deliver our local power plan, working with local authorities, combined authorities and communities to deliver the biggest expansion of support for community-owned energy in history.
Clean energy is not just about large-scale infrastructure. If we look around the world, so many countries have a lot to teach us. In Denmark, around half of wind capacity is citizen-owned; and in Germany, almost half of solar capacity is citizen-owned. Our local power plan will learn from other countries.
Generating clean power, and embracing it as a way to generate a return for local people, to help tackle fuel poverty, to unleash the dynamism and resources of local communities and to win the consent of local people, thousands of projects across Britain are tapping into that energy and enthusiasm.
Ed Miliband
I will make a bit more progress.
I had the chance to visit the Lawrence Weston turbine in Bristol, which Members may know about. It is England’s tallest onshore wind turbine, and it is 100% owned by the local community, powering at least 3,000 local homes and reinvesting revenues into local projects.
Ed Miliband
I have caught the eye of an infrequent contributor to this House, so I will give way.
Jim Shannon
I thank the Secretary of State for what he is putting forward. It seems logical for the UK to manufacture this process, rather than others doing it for us. The question for my constituents, I say respectfully to the Secretary of State, is, what will the price of energy be at the end? A LucidTalk poll for National Energy Action evaluated the impact of rising energy prices on households in Northern Ireland. It found that 41% of households were spending more than 10% of their income on their home energy costs. How can we make sure that my constituents, and indeed all our constituents, can have energy they can pay for?
Ed Miliband
The hon. Member is absolutely right. This is a massive concern for all our constituents, and Great British Energy is a crucial tool to bring down prices for our constituents. The truth is that every Member in this House has to make a judgment on this. Do they believe that business as usual, staying on fossil fuels, will give us the energy security we need? We discussed this in the House on Tuesday. The truth is that we had the worst cost of living crisis in generations because of our exposure to fossil fuels. We are seeing prices rise again on 1 October, not because of Government decisions but because of our dependence on international gas markets. The argument for clean energy 15 years ago was a climate argument; it is now as much an energy security argument as a climate argument.
Several hon. Members rose—
Ed Miliband
I am going to make a bit more progress.
Thirdly, Great British Energy will work with industry to develop supply chains across the UK to boost energy independence and create good jobs. The reality is that the last Government spectacularly underdelivered on the promise of creating jobs in clean energy. It is true that British waters are home to one of the largest floating offshore wind farms in the world: Kincardine, just 15 km off the coast of Aberdeen—[Interruption.] The right hon. Member for East Surrey (Claire Coutinho) nods, but where was it made? Its foundations were made in Spain and its turbines were installed in the Netherlands, and it was then simply towed into British waters. How can that be right?
This Government are not neutral about where things are made. We want the future made in Britain. Clean energy is the economic and industrial opportunity of the 21st century, and the truth is that other countries are seizing this opportunity. Britain is being left behind. The facts are extraordinary: Germany has almost twice as many renewable jobs per capita as Britain; Sweden almost three times as many; and Denmark almost four times as many. That is the previous Government’s legacy.
What our friends and neighbours have realised is that a domestic national champion is a crucial tool to help deliver economic success. The success of the Danes, for example, cannot be divorced from the role of Ørsted in helping to make it happen. That is why Great British Energy will work alongside our national wealth fund and the British jobs bonus, partnering with industry, to build supply chains in every corner of the UK, delivering the next generation of good jobs, with strong trade unions, and reindustrialising Britain.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I congratulate the Secretary of State on his appointment. May I draw attention to the letter he wrote to Fintan Slye, the chair of National Grid ESO, in August, and the response he has given in his open letter to the industry, alongside a question about the cancellation of the offshore co-ordination support scheme, which was coming up with viable alternatives for better delivery of the Norwich to Tilbury project? Mr Slye says that the plan the ESO will develop will be
“a whole systems spatial view of what is required to deliver a clean, secure, operable electricity system by 2030.”
Does that include all the work that ESO has already done in its review of the Norwich to Tilbury project, which includes many viable options that could speed up the process and make it more viable for the long term?
Ed Miliband
I looked carefully at that issue before we made that decision. I have great respect for the hon. Gentleman, but we cannot justify spending public money on a scheme that will not work and will not deliver for the British people, which is why we did not go ahead with the second phase. All the advice and all the evidence was that it just would not be value for money.
I am glad that the hon. Gentleman draws attention to 2030. For the first time in this country since the last Labour Government were in power, we are going to have a proper plan. We did not inherit a proper plan, and we need a proper plan to give certainty to industry.
Fourthly, Great British Energy will support project development, leading projects through their early stages to speed up delivery, while capturing more value for the British people, in particular through our partnership with the Crown Estate, announced just two weeks into our period in Government. The partnership will co-ordinate planning, grid and leasing for the seabed and, importantly, help speed up the roll-out of offshore wind and other technologies. It has the potential to help leverage up to £60 billion of private investment and deliver up to 30 GW of offshore wind leases.
The truth is we have huge potential as a country: the chance for offshore wind to drive investment in coastal areas from Cornwall to Grimsby, opportunities for ports from west Wales to north of Scotland to lead the world in the industries of the future, and opportunities for supply chain companies all over the world. That is what this Bill is about.
Ian Lavery (Blyth and Ashington) (Lab)
I am terribly excited about the ambition of the Labour Government for GB Energy. In my constituency, Blyth port is thriving. We have Energy Central on the Blyth estuary, Catapult UK, the offshore energy research centre, and Lynemouth power, a biomass power station. May I invite the Secretary of State to see the issues in my constituency for himself, and show businesses and residents how they can participate in the fantastic opportunity Government are offering?
Ed Miliband
My hon. Friend is a great champion for his area and he is right. I am sure he reflects the feelings of every right hon. and hon. Member, whatever side of the House they are on, that there are huge opportunities in this sector. We intend to exploit them. I look forward to seeing his constituency.
Ed Miliband
I will make a bit more progress. I have set out our case—a case that the British people overwhelmingly support. According to post-election polling by More in Common, Great British Energy was supported by an overwhelming 73% of voters and opposed by just 8%. It appears from the Conservative’s reasoned amendment—so-called—that Conservative Members will vote against the Bill today. If they do that, they will do something remarkable: they will go one step further than refusing to listen to the people who did not vote for them by refusing to listen to the people who did vote for them—quite a remarkable feat by an Opposition—because Great British Energy was supported not just by Labour voters, but by Conservative voters by a majority of four to one—56% to 14%.
Ed Miliband
I will make a bit more progress. [Interruption.] Conservative Members are still in the “the show was great but the audience was poor” stage of Opposition. Let me give them some advice—they will get out of that over time, but they are in the early stages now.
Because I get my kicks in strange ways, for a bit of light entertainment, I have been reading what the Conservative party leadership candidates have been saying. It is really interesting, honestly; it is quite fun reading. [Interruption.] Yes, somebody has got to do it. The right hon. Member for Tonbridge (Tom Tugendhat) said that people
“will never vote for a party that they have stopped taking seriously.”
Well, that is true. He said they should be
“given credit for seeing the errors that we may make and correcting them.”
Correct. The right hon. Member for North West Essex (Mrs Badenoch)—I believe the shadow Minister, the right hon. Member for East Surrey (Claire Coutinho), is the mastermind for her campaign—said it was no good
“having the same policy arguments from the last Parliament.”
The shadow Minister should take those words to heart.
I agree with those candidates that the Conservative party needs to move on. I am in a generous mood, Madam Deputy Speaker. I have been involved in leadership campaigns, so I have some advice. I have a free idea for the not very famous five still left in the Tory leadership competition: back an idea that the public support. Back an idea that Conservative voters support; back an idea that Labour voters support; back an idea that Reform voters support—Reform Members are not here. Back an idea that Liberal Democrat voters support. They should move on from the arguments of the last Parliament, show a bit of bravery—even break the Whip and stand out from the crowd. They should break from the past and back our Bill today.
Wera Hobhouse
The Secretary of State knows I share his passion and ambition to get to net zero. One big concern about GB Energy is that it will crowd out, rather than crowd in investment. Will he enlarge on how he intends to crowd in investment into green energy?
Ed Miliband
I am very surprised by the Liberal Democrats saying that. It is slightly “orange book” Liberal Democrats, if I may put it that way, for those old enough to remember. I say respectfully to the hon. Lady and all Members of the House: look around the world at what is happening before our eyes. There is catalytic public investment—public investment levering in private investment. The whole old fashioned, free market 1980s argument about crowding out turns out to be wrong. Just look at what is happening in America. Why is the money flowing to the United States? In part, because of the catalytic public investment. [Interruption.] I can see Opposition Members are going to be slow learners.
Great British Energy is at the heart of our long-term plan to accelerate the transition to clean energy and ensure we are never at the mercy of volatile fossil fuel markets again. It will speed up delivery, create good jobs and protect family finances, and we will reap the benefits for generations to come. I commend the Bill to the House.
Madam Deputy Speaker (Ms Nusrat Ghani)
Before I call the shadow Minister to the Dispatch Box, I remind hon. Members that questions to the Minister are taken through the Chair, so they must make eye contact with the Chair and not the Minister.
Claire Coutinho (East Surrey) (Con)
I beg to move an amendment to leave out from “That” to the end of the Question, and insert:
“this House, while recognising the need to cut household energy bills for families, accelerate private investment in energy infrastructure, and protect and create jobs in the energy industry across the UK, declines to give a Second Reading to the Great British Energy Bill because Great British Energy will not produce any energy, will not reduce household energy bills by £300, does not compensate for the amount of investment in energy projects that will be deterred by the Government’s plans to prematurely shut down the UK’s oil and gas sector, and involves an unjustified use of taxpayers’ money at a time when the Government is withdrawing the Winter Fuel Payment from 10 million pensioners as energy bills rise.”
I welcome you to your place, Madam Deputy Speaker. It is a pleasure to be back. I know the Secretary of State will have had a busy summer settling into Government, having the eagle-eyed civil service now screen all his comments and a hungry press pack on his tail about every promise he has made. He even slotted in a trip to Brazil, a place very dear to my heart, but perhaps he should have spent a bit more time on the Bill. If the Bill does everything he and his team have promised, I will be impressed. Let me remind the House what is on the record. If it saves £300 off bills by 2030, if every project it invests in is guaranteed to turn a profit by 2030, if it can get new innovative energy prototypes off the ground and create 650,000 jobs, even I will be impressed. But here is the rub: the Bill is four pages long—there is barely anything in it.
I do not want to oppose the Bill just for opposition’s sake, but the Secretary of State has provided no detail on how the Bill will deliver any of his promises, let alone all of them. It is a four-page Bill in which he is asking for £8 billion of taxpayers’ money, while setting out no investment plan, no figures for the energy that will be produced, no numbers for energy bill savings or carbon emission reductions, and not even a timeline. I doubt it can deliver any of the things he has promised. He is asking for £8 billion of taxpayers’ money—a completely blank cheque—for an energy company that will not cut bills or turn a profit by 2030. I will come back to those promises.
Several hon. Members rose—
Claire Coutinho
I will give way in a second.
The Secretary of State is setting up a new body when our energy sector is not short of state-run bodies. We have Ofgem, the National Energy System Operator, the Climate Change Committee, Great British Nuclear and, of course, the UK Infrastructure Bank, with £22 billion to provide debt, equity and guarantees for infrastructure finance to tackle climate change, set up by the former Prime Minister.
At this point, the taxpayer might well ask why they are coughing up twice for programmes that do the same thing. Here is why. When I read the Bill, tiny as it is, it rang a bell and, lo and behold, it is a carbon copy of the Infrastructure Bank legislation, so why do the same thing again? Well, there are a few important omissions and tweaks. First, while the Infrastructure Bank legislation sets out directions for governance by directors and non-executive directors, the Bill does no such thing. While the Infrastructure Bank legislation appoints an independent person to carry out a review of the effectiveness of the bank in delivering its objectives, the Bill does no such thing.
Lastly, while the Infrastructure Bank legislation gives special powers to direct investments to the Treasury—to independent civil servants—the Bill gives powers to the Secretary of State, who, as far as I am aware, has no investment background and no financial training and whose only period in the private sector, if I have this right, was as a researcher at Channel 4.
Graham Stuart
My right hon. Friend is absolutely right. The Bill sets out huge powers for the Secretary of State—he will be like the slim controller of the energy system, as he tries to interfere. But he has a track record in such cluelessness—the 2030 decarbonisation target. “We need more ambition,” he said. We had therefore hoped that the self-confessed nerd would know how to do it, but we had the letter in August to Fintan Slye of the Electricity System Operator, which set out the fact that the Secretary of State did not have a clue about how to deliver 2030 decarbonisation. The answer from Fintan Slye, if he were not in such an impossible position, would have been short: “It can’t be done. You need to do your homework.”
Claire Coutinho
I thank my right hon. Friend for his intervention. It is always a pleasure to see him in the Chamber making excellent points.
The question that I have is this: why has the Secretary of State set up a duplicate programme with no instructions for governance, independent review, investment plans or consumer savings that he can be judged by? Why should taxpayers’ money fund a similar entity when the only difference that I can discern is that it gives the Secretary of State unchecked power? What is it about the £8 billion of taxpayer money that he can direct without checks or balances that first attracted him to the idea of GB Energy? These are fair and reasonable questions for us as the Opposition to ask, and he must look to improve the governance in this Bill.
Let me turn to the promises that he made. The Prime Minister, the Chancellor, the Secretary of State and at least 50 Labour MPs promised their constituents in the July election that GB Energy would save them £300 a year on their energy bills. They said it on their election literature, on social media and in hustings. They said it because they were told to do so by the Secretary of State, but I listened very closely to his speech today and I did not hear him make a promise that GB Energy will save them £300 on their energy bills.
In a debate just before the summer recess, the Under-Secretary of State for Energy Security and Net Zero, the hon. Member for Rutherglen (Michael Shanks), would not repeat the promise either. That is because they all know that it is not true. In fact, one of Labour’s first acts in government has been to take away up to £300 from 10 million pensioners this winter, including two thirds of pensioners in poverty. It takes some nerve for the Labour party to say that it never wanted to do this, because the winter fuel payment was in the manifesto of the Secretary of State’s party when he wrote it in 2010. It was in there when he was leader in 2015, it was in there in 2017 and in 2019, but in 2024 it was omitted. There was no mention at all for the first time in 14 years.
I will give credit to the right hon. Gentleman—something that I do not always do. When he was leader in 2015, he put it in his manifesto that he would take the payment away from the top 5% of pensioners. He will remember that. He had the courtesy of telling the public his plans, but, professional politician that he is, I suggest that he would have clocked that it was not included this time round. He has been in politics for 30 years and would have known what that meant, so I hope that he can confirm today whether he had any conversations with the Prime Minister, the Chancellor or Morgan McSweeney before the manifesto came out. If so, he sent out those Labour candidates—all the people on the Benches behind him—with this false promise of the £300 energy savings when someone clearly knew that they were going to take that amount away from millions of pensioners this winter.
Sir Bernard Jenkin
My right hon. Friend referred to the letter that was sent by the Secretary of State to Fintan Slye, the head of National Grid ESO and, curiously, there is nothing in the Secretary of State’s letter that refers to the need to lower electricity prices. The term “electricity prices” does not appear in the letter and neither does the term “security of supply”. Does she agree that those are the two great concerns about rushing the 2030 decarbonisation target?
Claire Coutinho
I absolutely agree with my hon. Friend, and I will come on to that point.
There will be a vote next week on the winter fuel payment—I think the Government have confirmed that. Everybody heard the Secretary of State speak today, so I say to those on the Opposition Benches that, if they want to break the Whip, if they want to stand out from the crowd, I am sure that they will have his encouragement.
Let us come back to those savings. The Secretary of State has promised bill savings by 2030 through GB Energy —I believe that is correct. The question is how. Does he have any serious energy expert who thinks that that is possible with an investment of £8 billion over five years? That is a drop in the ocean when it comes to energy investment. It is a fraction of the amount of investment that he is deterring from the private sector into clean energy with his plans to shut down the North sea. He talked about offshore wind, nuclear and hydrogen in his founding statement, but none of those things get built in five years. Let us be honest, the likelihood of his plans bringing any power online by 2030 is tiny. The idea that it will be enough to lower bills across households is, frankly, for the birds. When we asked his Department how much energy he wanted to enable through the Bill, his Department said that it would be looked at in due course. That is just not good enough.
The second promise is clean power by 2030. GB Energy was supposed to be the silver bullet to reach the Secretary of State’s target of a decarbonised grid by 2030. We will come on to whether that is a good idea a bit later. To do that, he said that he needed £28 billion a year. His Chief Secretary to the Treasury talked about hundreds of billions of pounds, and he has in fact secured from his Chancellor £1.6 billion a year. He talked about national ownership. This is not enough money to do that, and he knows it. He himself thought that his plans would cost vastly more, yet he is promising to do it all now with 6% of the funds. That is just not credible.
Then we come to promise No. 3. The Government say that
“in every single project”
that GB Energy invests in
“there will be a return for the British taxpayer”.—[Official Report, 26 July 2024; Vol. 752, c. 937.]
That is what the Under-Secretary of State for Energy Security and Net Zero, the hon. Member for Rutherglen said on 26 July—it is in Hansard if Members want to check. It says “in every single project”.
What Labour is telling industry is very different. It says that it will use that money—£8 billion of taxpayers’ money—to de-risk its projects. I believe that the Secretary of State said that in his speech today. What does that mean? That means that it will be investing in the parts of those projects that the energy companies do not expect to be profitable. May I ask this: what is it about the Secretary of State’s vast private sector experience, which he gained as a researcher at Channel 4, that makes him think he can turn a profit, when experienced, multimillion-pound energy companies cannot? He has not set out an expected financial rate of return, any risk profile or a timeframe for these returns. Those are the minimum things that anyone seeking investment should set out, and I say that as someone who is financially trained. I know that the right hon. Gentleman is not, but this is basic stuff.
Here is the problem. If the Secretary of State’s goal is to give taxpayers a good deal, he should be investing on commercial rates, which would just displace private sector capital and would not speed up his decarbonisation targets, produce more energy or lower bills. But if his goal is to de-risk more speculative projects—that is the line that he is giving industry and the thing that he said today—then by definition he will be throwing taxpayers’ money into the least attractive parts of investments, by which I mean the parts that multimillion-pound companies do not want. The risk is that GB Energy, far from generating any profit for taxpayers, will become a skip for all and everyone to put their problems and their failures inside. This is crucial, because we cannot let the Government repeat at a national scale what Labour councils have done at a local level. [Interruption.] Labour Members groan, but they should think about what local taxpayers have had to face.
Robin Hood Energy in Nottingham, which collapsed, left residents with debts of £38 million. Bristol Energy, which failed, cost residents £43 million. Warrington’s stake in Together Energy left residents with a potential liability of £37 million. These were small-time projects with budgets in the tens of millions.
Sir Bernard Jenkin
On a point of order, Madam Deputy Speaker. I cannot hear what the shadow Secretary of State is saying because there is so much noise coming from those on the Government Front Bench. They do not want to hear what she is saying, because it might be true.
Madam Deputy Speaker (Caroline Nokes)
I thank the hon. Member for that comment. He will know that that is not a point of order. Would the shadow Secretary of State please proceed?
Claire Coutinho
This is really important, because we are talking about taxpayers’ money. Those were small-time projects with budgets in the tens of millions, but the Secretary of State is asking for a budget of billions of pounds with no plans. He mentioned a couple of companies in his speech, including EDF, which made a loss of €17 billion in 2022, and Ørsted, which made a loss of €2.7 billion in 2023, so I think it is right that we ask some of these questions.
Ms Polly Billington (East Thanet) (Lab)
The right hon. Lady mentions Robin Hood Energy and other local energy companies that were in fact supply companies. We are talking about a Great British Energy company that will be generating energy. She simply does not understand that. She is making a mistake about our plans, and failing to understand what is actually going on. She is suggesting that something is going to happen that is not going to happen.
Claire Coutinho
If the hon. Lady would bravely like to say that the company will generate energy, I am sure that she would like to tell us how much, because no one else seems able to.
Claire Coutinho
I am sorry, but I will make some progress.
Finally—this is really important—the Secretary of State pays lip service to nuclear, but we know that when Labour was last in power it did not start a single nuclear power plant in all its 14 years. All summer, there has been an eerie silence. On the capital raise for Sizewell C, which should be out by now—nothing. On the small modular reactor competition, which should be deciding its final projects now—nothing. We committed to a third large-scale nuclear power plant at Wylfa—again, nothing. We wrote to the Under-Secretary of State for Energy Security and Net Zero, the hon. Member for Rutherglen, but once again he has refused to confirm any detail or, with regard to Wylfa, whether those plans are even in place. Can the Secretary of State say whether the creation of GB Energy is slowing down those projects and causing the timetable of these programmes, which will provide clean, cheap energy, to slip?
Claire Coutinho
I will not; I will continue.
Once again, we simply have no answers. I find all this very strange, because at our last encounter in this House, the Secretary of State was keen to confess that he was a “super-nerd”. As someone who has been a lifelong mathlete, I am the first person to want to champion a fellow super-nerd, but when I meet super-nerds they normally like evidence, facts and numbers. Whenever we look at what the Secretary of State has set out, there are no numbers attached. He talks about decarbonising the grid by 2030, but he has not set out the full system costs of that. He promises profits and bill savings from GB Energy, but he cannot tell us by when or how much.
When it comes to the Bill and its 2030 target, it is clear that the Secretary of State does not have the numbers, because two weeks ago he wrote a letter to the director of the Electricity System Operator. I have it here. Do you know what he said, Madam Deputy Speaker? He asked the director to please
“provide practical advice on achieving clean power by 2030”,
including a
“High-level assessment of costs”.
Given that we are talking about people’s energy bills, I think the public would like a detailed look at what this is going to cost them. To top it off, he asked the director to advise what actions his Government should take
“to enable delivery…clearly setting out where further work is required.”
The evidence could not be clearer. He went into a general election with a pledge and no idea how to achieve it, what it will cost or whether it is achievable at all.
Dame Caroline Dinenage
That is the exact point that I wanted to make; I was very keen for the Secretary of State to take my intervention on that point. The key practical, tangible thing that my constituents want to know is when they will see the £300 saving that he promised them during the general election. That is what really impacts families and households up and down this country. When a Minister comes to sum up the debate, will they restate that commitment to households about a £300 saving?
Claire Coutinho
That is a very fair question. I hope that the energy Minister, who I assume will wrap up the debate, will be able to provide some detail.
Far from being a super-nerd, the truth is that the Secretary of State is the ultimate career politician. He comes up with big titles and makes big promises to the public, but he has no idea how to deliver. My big fear—[Interruption.] He should listen, because it is an important point. My big fear is that he is losing focus on all the amazing technologies that will come online after 2030, whether it is fusion energy, the next generation of nuclear reactors or carbon capture. These are the innovative new technologies that will not just deal with the 1% of emissions in the UK but the 99% produced overseas. In Government, I focused a lot of my time on speeding up the development of those technologies. We launched the £1 billion green industries growth accelerator specifically to reduce any supply chain constraints, for example on cables. We provided almost £200 million to help the UK become the first commercial producer of advanced nuclear fuel outside Russia. We were making Britain one of the most exciting places in the world for fusion energy development, with £600 million of funding.
Wera Hobhouse
I thank the right hon. Member for giving way—finally. She is criticising the Government for the rushed target of decarbonising the grid by 2030. Can she enlighten the House on when the Conservative party would do it?
Claire Coutinho
I will. This is a critical point, which I have made in recent weeks. The point about having longer to decarbonise is that it gives time to develop British supply chains. That is exactly what I was doing. The green industries growth accelerator and some of the other things that I have talked about gave us time to set up British companies. Those things cannot be done in five years. There is a need to get project finance, to hire workers and train them, and to get planning permission. There is a huge amount that needs to be done. The fact that the Secretary of State wants to rush the transition and make it happen at breakneck speed is risking British jobs and livelihoods, and making us dependent on Chinese supply chains.
The Secretary of State has promised many things with the Bill, but he simply cannot set out any detail about the things that he wants to deliver. It would be a blank cheque for £8 billion of taxpayers’ money, with no plan, no evidence, and no numbers for the bill savings or profits that he has been promising the British public. That is why we cannot support the Bill as it stands.
Madam Deputy Speaker (Caroline Nokes)
I call Becky Gittins to make her maiden speech.
Becky Gittins (Clwyd East) (Lab)
Much like one of Clwyd East’s famous sons, John Prescott, who hails from Prestatyn, I do hope my maiden speech packs a punch. Given that the custom in a maiden speech is for the new Member to talk about some of the best bits of their constituency, coming back from a summer of attending carnivals, fêtes, agricultural shows, a classic car festival, a duck race, fun days and dog shows has made my job today a little easier.
Today, I am going to take the House on a whistle-stop tour of Clwyd East, a place that it is my great privilege to represent. It is apt that I give my maiden speech in a debate about Great British Energy, as Clwyd East boasts on its coastline the port of Mostyn, with Gwynt y Môr wind farm, a UK leader in offshore wind power, and North Hoyle offshore wind farm, off the coast of Prestatyn. Both demonstrate the transformative nature of offshore wind for our country, through the energy that they generate and the local employment that they provide. Great British Energy will see that go even further, tackling the climate crisis and creating good-quality, long-term, sustainable skilled jobs in north Wales and across the UK.
Prestatyn’s beautiful stretch of coastline is not just useful for producing clean energy; it is also a hub of tourism, with its blue flag beaches, beautifully kept station and public gardens, and high street with lots of brilliant local businesses. Though I am proud to be the first MP for the new constituency of Clwyd East, I pay tribute to my predecessor in this part of the seat, Dr James Davies, the former MP for the Vale of Clwyd constituency. From Prestatyn, James used his time in Parliament to be a dementia champion, and served his country in Government.
Holywell is the next major town along the coast. St Winefride’s well, the Lourdes of Wales, brings in thousands of visitors a year. There is the old water mill at Basingwerk Abbey, based at Greenfield valley, famed for its cotton and textile mills in the 19th century, and latterly for its brilliant heritage trails, wonderful dog walks and very challenging parkrun. Holywell High Street is also home to Holywell Area Community Museum, which features my great-grandfather’s St John Ambulance uniform and my great-uncle’s mining helmet from the Point of Ayr colliery. Clwyd East has a proud mining heritage, with most families near the coast having links to the Point of Ayr or Bettisfield collieries. That heritage also formed an important part of my upbringing, and is the reason I am so proud of Labour’s commitment to end the injustice of the mineworkers’ pension scheme.
As the 684th woman to be elected to Parliament, I would like to pay tribute to Eirene White, a trail-blazer and—like yourself, Madam Deputy Speaker—a Deputy Speaker who was integral to Labour’s commitment to equal pay, as the 58th woman elected to Parliament.
Clwyd East has a vast and diverse geography, containing coastal towns, the Clwydian mountain range and the many unique villages at its base. These villages provide much in terms of innovation and activity, through the brilliant initiatives they champion and fantastic events that they hold—from community-owned pubs and shops to agricultural shows and music festivals. Hailing from the small village of Bagillt, I am immensely proud to have such a wealth of impressive, small and mighty villages in my constituency.
Farming is central to the economy and culture of Clwyd East, with 68% of the constituency serving as agricultural land. In May, I headed to Clawdd Offa farm, near Northop, to meet National Farmers Union county chairman David Williams and his family on their dairy farm. After a brief chat, we headed out into an enclosed field full of cows. In one of the more surreal moments of being a parliamentary candidate, I looked out in front of me and could not help but observe aloud, “Why would anyone want to spend their days in an enclosed space with hordes of rowdy, lowing mammals?”, to which David replied, “I quite agree Becky—you must be mad!”
Moving south, Clwyd East’s smallest town is Caerwys, which played host to the very first Eisteddfod, and is also the home of Dr Tim Erasmus, chair of the Caerwys Historical Society and my very much admired former politics teacher.
Next is the historic market town of Mold, a town very close to my heart as it is where I spent many summers performing with my dance school at Theatr Clwyd and where I went to sixth form at the Alun school. The Alun school worked to give its students the best opportunities to succeed—something that I am firmly committed to.
Maximising opportunities for young people is a passion that I know I share with one former predecessor from the Delyn constituency, David Hanson—after all, I first came to Parliament on work experience with David 13 years ago. So committed is David to providing opportunities for young people that he is continuing to monitor and support my development by joining the other place as Lord Hanson. I am so proud and excited to work alongside a political hero of mine under a new Labour Government, whose resolve to do the very same thing 32 years ago paved the way for me and a generation of young people to access opportunities and succeed.
Between 2019 and 2024, Delyn was served by Rob Roberts. I am heartened by Rob’s local roots and close ties with the community that brought him up, as well as his keenness to work with community councils and his proud use of the Welsh language, having gone to the Welsh-medium school Maes Garmon. Fel mae nhw dweud, “Cenedl heb iaith, cenedl heb galon.”
As well as having educated two MPs, Mold is also the home of Daniel Owen square; Bailey Hill, or Mold castle; and a thriving number of independent shops and businesses. With a summer recess of sampling cakes at local fêtes having taken its toll on my waistline, I am grateful to the brilliant independent clothes shops that have saved the day, including Simmi, where I found the perfect outfit to make my maiden speech in. [Hon. Members: “Hear, hear!”] Thank you; that is very kind! As is the case throughout the constituency, people in Mold take great pride in their town and contribute to the rolling series of events and festivals throughout the year.
I am also privileged to represent the beautiful town of Ruthin, with its rich history and enduring architecture. As well as Ruthin castle and its resident peacocks, the local community has worked to make sure that Ruthin’s old courthouse, jail and market hall are restored and open to the public. Ruthin also hosts the incredibly popular Ruthin festival, a fantastic annual event run by local volunteers and proudly conducted yn Gymraeg.
Heading over the horseshoe pass, the final large town of the constituency is Llangollen. As the host of the annual Llangollen International Musical Eisteddfod, Llan is proud to be the place where “Wales welcomes the world”. I did have tickets to the Eisteddfod this year—a night of west end musical numbers on 4 July—but clearly the right hon. Member for Richmond and Northallerton (Rishi Sunak) had other ideas.
With Llangollen in my constituency, I must hold the title for the constituency with the best and most varied days out. Where else could you expect to ride on a heritage steam train in the morning and head just 10 minutes down the road to kayak across an aqueduct with UNESCO world heritage status in the afternoon? Llangollen railway and the Froncysyllte aqueduct are only part of what Clwyd East has to offer. If you are feeling a bit dizzy at this point, Madam Deputy Speaker, that is because you have just travelled about 40 miles in—hopefully—around eight minutes.
Whether it is supporting local businesses to thrive, improving public transport, keeping our communities safe, improving people’s rights at work or helping young people to fulfil their potential, I will do all I can for the people of Clwyd East, and I will work tirelessly to repay the trust that they have placed in me.
Wera Hobhouse (Bath) (LD)
I congratulate the new hon. Member for Clwyd East (Becky Gittins) on a wonderful whistle-stop tour of her constituency, from wonderful dog walks to rowdy cows in fields and fascinating museums that testify to the history of her constituency. We lived in Liverpool for 10 years, many years ago, and we visited her constituency many times and had wonderful days there. I know how beautiful it is.
Championing renewable energy is in our DNA as Liberal Democrats. Renewables are clean, cheap and popular. We welcome the fact that the new Government are turning around the damaging attitude taken by the Conservative Government and are attempting to make the UK once more a global leader in getting to net zero. We are absolutely on the side of the Government when it comes to the ambitious targets that are being set to get to net zero. We are pleased that through the Bill new steps are being taken to restore British investment in the green economy. The Bill must ensure that renewable energy and home insulation can be rolled out at speed so that we meet our climate targets, bring down energy bills and provide green, well-paid jobs in the future.
The previous Conservative Government’s obsession with oil and gas left us in a mess. The dithering, delaying and even denying of the Tory Government held us back. I have often said that net zero is not like a bus that we can miss and say, “Whoops! We’ll get the next one.” This is a target that we cannot miss, and delaying is just as bad as denying that climate change is happening at all.
Wera Hobhouse
I am happy to give way; the right hon. Gentleman and I have had many discussions on this issue.
Graham Stuart
I wonder whether the hon. Lady knows of a single major economy on the planet that went faster than the previous Conservative Government in cutting emissions.
Wera Hobhouse
I am happy to respond to that, because I do believe that the UK was a global leader. There was cross-party agreement about net zero, but the last Government broke that agreement. That is our problem. Each year and each month matters when it comes to setting the pace to get to net zero. Instead of producing our own renewable energy, we were left reliant on fossil fuels—the energy of the past—and on dictators such as Vladimir Putin. In this unstable geopolitical environment, that was a death sentence and led to the catastrophe of the recent energy crisis.
Families are once again worried about another dramatic energy bill increase—we say that honestly to this Government and want to work with them on this issue—this time of £140 on a typical family’s annual energy bill. Pensioners are also rightly concerned about the Government’s plan to cut the winter fuel allowance for millions of the poorest and most vulnerable people. I raised the matter in business questions earlier and said what is important to us. We of course recognise that through the pension increase next April there will be relief for pensioners, but this winter, when things have become really difficult for pensioners, the Government should not make cuts before we have seen the benefits. We have been making that point and hope to work constructively. It is a political choice and, in our view, it is the wrong one, but it is pretty rich of the Conservative party to complain.
It is clear that if we are to hit our net zero targets, we must drive up investment in renewable energy. The Climate Change Committee’s 2024 progress report found that policy reversals and delays, together with inconsistent messaging, hindered progress just when acceleration was needed. Only around one third of the emission reductions required to meet the 2030 target are covered by our current plans. I challenged the shadow Secretary of State on what the Conservatives’ plans for decarbonising actually are, but we have had no answers. We must, for example, at least triple the operational capacity of offshore wind installations to meet our 2030 targets—and we Liberal Democrats absolutely believe in the 2030 targets.
New first-in-class renewable energy technologies are coming on the scene thick and fast, and the Government must find better mechanisms for funding them than we currently have in place. One example, if I may bring it up, is DRIFT Energy, which is based in my Bath constituency. I hope the Secretary of State is listening. DRIFT uses sailing ships to travel to the deep sea to harvest deep ocean wind and generate green hydrogen. Interesting technology is coming on board, but these new technologies still face many investment problems. The green hydrogen is then delivered to ports around the world—they are essentially fishing ships for energy. Truly novel technology like this does not fit neatly under a Department, so it becomes exceptionally hard to win grants, let alone multimillion-pound grant support. It is important that we are aware of that.
Max Wilkinson (Cheltenham) (LD)
Does my hon. Friend agree that we need the Bill to look at and include schemes like the Cheltenham green deal, run by Cheltenham borough council, through which local organisations that could not otherwise fund green schemes are able to access funding borrowed by the local council? Such schemes will then make money and provide a return for the taxpayer so that local areas can start producing more renewable energy for themselves—for example, through the investment in solar panels on the roof of Cheltenham Town football club.
Wera Hobhouse
As I progress with my speech, my hon. Friend will hear that our focus on local authorities, local decision making and local involvement is crucial. Let us ensure that our emerging technologies, which have the potential to be hugely valuable, are not overlooked or forced to seek support from abroad.
Mr Gideon Amos (Taunton and Wellington) (LD)
Does my hon. Friend agree that the Secretary of State should take on board one of the emerging technologies that could deliver the most for Great British Energy: the potential for tidal range energy? In a previous life, I was responsible for the consenting of the Swansea tidal lagoon, which unfortunately the previous Government failed to fund. It is the second biggest tidal range in the world and could be a massive success story for Great British Energy and the UK. Does she agree that the Secretary of State should take that on board as a key objective of Great British Energy?
Wera Hobhouse
I totally agree, and I am sure that the Government will agree too. A lot of these decisions are ultimately about value for money; as these tidal range technologies come on board, they can become cheaper. I hear the Government are saying that this is exactly the plan: that, where it is currently expensive, Great British Energy can come in and provide support. We understand and support that principle.
This new Government must ensure that they have clear and consistent messages. Delays to the phase-out dates of fossil-fuel vehicles and boilers, as we saw under the last Government, have sent mixed signals to investors, businesses and consumers. We hope that GB Energy will go some way in providing confidence to other investment bodies and the wider industry that Britain’s green economy is open for business.
We Liberal Democrats realise the importance of community buy-in. The new Government must put local voices at the centre of the journey to deliver net zero. We need to win hearts and minds to persuade people that net zero projects are good for their communities, for their pockets and for our future national economy.
Sarah Dyke (Glastonbury and Somerton) (LD)
The Government have said that they believe communities that host renewable energy infrastructure should benefit from it, but there are currently no ways to force developers of on-ground mounted solar panel farms to provide community benefits. Does my hon. Friend agree that the Government should use this Bill to make provisions for guaranteed community benefits in these circumstances?
Wera Hobhouse
We have already had some detailed discussions about what we are doing with communities that have to host vital infrastructure, and it is important that the Government assure local communities and the Liberal Democrats that this will happen. As the Bill progresses, we need to discuss how we can get legal assurances and whether the Bill is the right place for this.
As I have said, we need to win hearts and minds to persuade people. Only with local consent can we successfully deliver the path to net zero, which is why we have called for communities living near large-scale infrastructure projects to receive community benefits—for example, through reducing energy costs and funding local initiatives. We are keen to work collaboratively to ensure that these benefits are in place in legislation.
We Liberal Democrats welcome the inclusion of clause 3, which lists specifically all the objects of GB Energy. Although those aims all have their merits, the Government have failed to include anything on community energy. That is especially disappointing—[Interruption.] May I continue? I will lay this out as I understand it—I worked on the all-party parliamentary group for community energy, and I will get to my point. It is especially disappointing that the new Government have failed to include anything on community energy, given their welcome words in the House about how important it is to enable community energy—I hear it again and again. It is no longer about words; we now have a Bill before us in which we can make this happen.
I will lay out what I think is necessary. Without the inclusion of community energy, the Bill will be a major missed opportunity. In the past, the now Secretary of State and his Ministers have been vocal champions of community energy. In a previous debate on making Britain a clean energy superpower, the Under-Secretary of State for Energy Security and Net Zero, the hon. Member for Rutherglen (Michael Shanks), stated:
“One of the missions of GB Energy will be around the idea of community-owned power.”
He has also advocated for local communities to have
“some sense of ownership of the assets”—[Official Report, 26 July 2024; Vol. 752, c. 942.]
that they generate. Last year, the Secretary of State himself tabled two enabling amendments on community energy to the then Energy Bill; his new clause 53 specifically would have required large-scale energy suppliers to offer a special agreement to small-scale energy companies. He has spoken at length about Labour’s local power plan, much of which we are in agreement with, but where is the commitment to community energy in this Bill?
The biggest issue we identify is that energy supply licensing conditions hinder small community energy projects from selling directly to consumers. In turn, this makes it difficult to retain advantages for local communities—discounts on their energy bills, for example, or raising new money to invest in new projects. The high burdens and costs currently involved in being a licensed energy supplier mean that not a single community energy project in all the UK can sell its power directly to local people. Locally sourced energy does not travel further across the nationwide grid, and therefore reduces that constraint on it, but the cost-benefits of selling locally produced energy to local consumers are not going to community projects and nor do they benefit the consumer. That must change. Regulatory changes are required; the Government must put them in place or stop talking about their support for community energy.
Community energy schemes need to receive a guaranteed, discounted price for the clean electricity that they contribute to the energy system. If the costs of selling their power to local households and businesses were proportionate, many more community energy schemes would become financially viable and we would get many more than we have; I urge the Government to really look at our concerns and what we can include in the Bill to make these regulatory changes. Clause 3 is the ideal place to add community energy and ensure that it is one of Great British Energy’s objects.
To conclude, we Liberal Democrats welcome the steps being taken to restore British investment in renewable energy after the mess left by the previous Government. These steps will help us to bring down energy bills, create high-quality jobs, increase our energy security and, of course, reach net zero. However, there is a clear gap in this Bill for community energy, despite Labour’s manifesto committing to it, and we urge the Government to listen to our concerns.
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
I call Mike Reader to make his maiden speech.
Mike Reader (Northampton South) (Lab)
I have had the opportunity to hear some amazing maiden speeches in this House. Following such fantastic speeches, I must admit that I feel a bit nervous standing here, but I am also deeply honoured to be in the House. I thank my hon. Friend the Member for Clwyd East (Becky Gittins) for her fantastic maiden speech and for graciously meeting my family when they visited last year; they are her constituents. It is clear to me that the talent, enthusiasm and fresh thinking that the new cohort of MPs are bringing into this House will help to restore our country’s fortunes and deliver the change that the country voted for.
I am delighted to make my first speech in the debate on GB Energy. For many years, it has not sat right with me that our neighbours and trading partners around the world have benefited from the investment of UK plc in clean energy. Whether it is wind farms built in Scandinavia, or investment in nuclear by our French Government partners, the UK public has been sold short on clean energy investment. It is right that the Labour Government are taking forward plans for sovereign, safe and secure energy in the UK—that is very welcome in my constituency.
I will use this speech to introduce myself and my constituency to the House, recognise the careers of my predecessors, and to set out my vision for the future of Northampton. Despite coming from a family of teachers and educators, and despite the best efforts of my dad, who joins me today from the Public Gallery, and my mum, who is watching from home, school and exams definitely did not come naturally to me. After a difficult results day, I managed to get to university via a foundation degree, and I found my passion in civil engineering.
I have been fortunate since then to have progressed through the industry—from engineering to commercial and project management—and then into senior leadership roles. I am really proud to have been recognised as a global leader in my field by my peers in the profession, despite a less-than-ideal start in life—one of my own making—and to have had my career shaped by amazing experiences, projects and people around the world. I thank in particular my friend and mentor, Jon Williams, who has helped me the whole way through my journey, and my very good friend and former podcast co-host, Jeremy Brim, for all their guidance. I also thank my former bosses, Jason Millett and Davendra Dabasia, and my amazing former work-winning team, for giving me the space and support that I needed to pursue my political passions alongside a demanding day job.
I come to this place as an advocate for the built environment. To be honest, I could not be in a better place now, with a Government focused on growth and on transforming and future-proofing our energy, housing and transportation infrastructure. Many of my friends and industry colleagues asked why on earth I would want to stand for Parliament, but my journey into the world of politics has been shaped by my time in industry. I first saw the impact of austerity on my public sector clients, with school programmes cancelled, infrastructure investment stalled and hospitals left crying out for funding. That drove me to join the Labour party and find my political voice, determined to ensure that our public sector gets from Government the support and funding that it desperately needs.
When the opportunity came to stand and make a difference, I chose to stand where I live: Northampton. I met my wife Katie, who also joins us from the Public Gallery, just down the road in Wellingborough, and Northamptonshire has been my home for nearly 20 years now. I still have a place in my heart for my home town of Romsey, which is well represented by you, Madam Deputy Speaker. [Hon. Members: “Hear, hear!”] But I am proud to call myself a Northamptonian and to represent the town that I live in and love.
Northampton South is a vibrant constituency. From Duston and Upton in the west, the Hunsburys and Shelfleys, Wootton, Collingtree, Hardingstone and Great Houghton in the south, and areas such as Weston Favell, Billing and Rectory Farm in the eastern district, each area of my beautiful constituency has its own individual identity. In the centre of my constituency remains the legacy of the shoe-and-boot trade that was once the main employer in my town. The Church’s shoe factory remains in St James, and the surrounding terraces in Far Cotton and Delapre are still standing strong nearly 200 years after they were built. As my hon. Friend the Member for Northampton North (Lucy Rigby) noted yesterday, Church’s holds the honour of being the chosen cordwainer of a renowned former Member for Sedgefield.
Great institutions such as our university, our general hospital, our football club and our Premiership-winning rugby club sit in Northampton South. [Interruption.] I was expecting a “Shoe army!” then, but that’s fine. My constituency includes Brackmills, one of the most successful business improvement districts in the UK. Thousands of people are employed at Brackmills, which plays host to over 330 brilliant businesses, spanning food production, logistics and fulfilment, manufacturing, healthcare, and research and development. I look forward to working with the BID team to ensure that it continues to be a major employment hub in Northampton South for years to come. Anyone who has visited my constituency or grew up there will know that we are the home of the national lift tower, which stands at over 400 feet high—taller than the Statue of Liberty.
The formation of the newly shaped Northampton South constituency means that I have had the opportunity to take over from two former Members of Parliament who had had very different experiences and careers in this House, and I would like to pay tribute to them both. Andrew Lewer, the previous MP for the former Northampton South constituency, was focused on parliamentary business and tackled the challenges that he saw as the most important to the UK. He championed the Motor Neurone Disease Association, which is headquartered in Northampton, as well as independent schools and house building. Locally, he will continue to be recognised through the annual Spencer Percival debate that he helped to set up in the town. He is also the only person to have held the positions of leader of a council, Member of the European Parliament and Member of this House—a testament to his public service.
I also take over in part from Dame Andrea Leadsom, the former Member of Parliament for South Northamptonshire. Many of the southern villages that have now joined Northampton South were in her constituency. Dame Andrea served as a Secretary of State under the previous Government, and had a formidable record of championing parents and children, including by establishing the Northamptonshire Parent Infant Partnership in my county. Many of the people who have written to me since my election have praised her advocacy for them as their constituency MP. It is clear that she made a massive difference not only in this House but in our county.
Northampton may hold the accolade of being the largest town in the UK—I will take that up with hon. Members for Reading after the debate—but our town has had a continual lack of investment, and a lack of vision and drive to make it better. Unfortunately, we have had no shortage of Conservative scandals: public loans to our football club went missing, our county council was made bankrupt, the former police, fire and crime commissioner stood down over misogyny complaints, and alleged domestic abuse meant that that the leader of the council resigned and now stands as an independent. Trust in politicians in Northampton is at an all-time low, but there is hope for Northampton, and it comes with a Labour Government.
This Labour Government will make Northampton a place to be proud of. We will tackle our chronic air quality challenges; fix our roads; improve our bus network; ensure that housing is affordable, of good quality and highly sustainable; make work pay and a route out of poverty; grow the co-operative, social enterprise and mutual sector in our town; bring NHS dentists back to Northampton; end the 8 am scramble for GP appointments; face head-on the funding gap left in our public services; and address the special educational needs and disabilities crisis that is rocking our county.
It is clear that there is a lot of work to do, but as I said in my acceptance speech at the count, the hard work starts here, and I really mean it. I cannot wait to get started.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
Let me be the first to congratulate the hon. Member for Northampton South (Mike Reader) on his maiden speech. He has demonstrated in two ways that he is quite a rare beast. Being an engineer is not a widely held profession in this House, and he will no doubt bring great value with that expertise and experience, but his business experience is also extremely valuable. I am afraid that if he looks around him on the Labour Benches, he will see precious few people with any business experience—as the Secretary of State has shown with his Bill.
The Bill is about setting up a shell company. That is it. The idea that that constitutes an energy policy is a complete myth. In fact, the Government have not even produced an energy policy. There has not been a White Paper on UK energy policy under this Government. There are no pages full of data and numbers to give us any confidence that the Government know what they are trying to achieve, how they will achieve it, or what the risks are.
In fact, that was given away in an astonishing letter that the Secretary of State wrote to the director of the electricity system operator, asking for all the information that one would expect the Government to have given that this was a major platform in their manifesto. [Interruption.] The Under-Secretary of State for Energy Security and Net Zero, the hon. Member for Rutherglen (Michael Shanks), shakes his head—I will give way to him if he wants to intervene—but where are the numbers? Where is the data backing up this wild assertion that just going all out for renewables will provide security of supply and lower energy costs? It is a mantra that Labour Members keep repeating to themselves with increasing enthusiasm and vehemence to make up for the fact that they have no numbers to back up their assertions.
Let me be clear about one thing: I am an advocate of achieving net zero. I believe in the target of net zero by 2050—indeed, I am a member of the net zero all-party parliamentary group. When Members hear me speak, they are not listening to some luddite or climate change denier. I want this policy to work, but there are very considerable risks, which are evidenced by reading between the lines for what is not in the Secretary of State’s letter and what is clearly flagged in Fintan Slye’s response to it.
Wera Hobhouse
Does the hon. Member not recognise that under the previous Government, the UK was falling badly behind on investment, when other countries— particularly the US—had transformed the investment that they were drawing in by making very big Government commitments to some projects, particularly nascent ones? Does he not recognise that that sort of Government support makes a big difference to business confidence?
Sir Bernard Jenkin
I do not agree with that, simply because we have seen massive investment in renewables over the past 14 years, as the former Minister, my right hon. Friend the Member for Beverley and Holderness (Graham Stuart), and the shadow Secretary of State, my right hon. Friend the Member for East Surrey (Claire Coutinho), set out. We have been making fantastic progress with bringing renewables on stream, but there are considerable questions to ask. I wish it were as simple as setting up a shell company and saying, “We are going to get the state to do everything”, but I am afraid it is not. As the shadow Secretary of State pointed out, Ørsted and EDF make massive losses, and either the taxpayer has to pay for those losses or those costs go on to electricity bills.
The Secretary of State announced on Tuesday that we have got all this renewable capacity coming on stream—enough to power 11 million homes. That is if we match the maximum capacity of the renewables with the average annual demand of those homes, but of course renewables are intermittent. It seems such an obvious thing to say, but we have to say it: sometimes the sun is shining, sometimes the wind is blowing, and sometimes we have enough water for hydroelectric power, but sometimes not. In the winter months, solar makes very little contribution—it makes no contribution in the dark, at night. [Interruption.] It may seem obvious, and the hon. Member for Stroud (Dr Opher) may laugh, but we need to point these things out, because when the Secretary of State says that renewables are cheaper than fossil fuels, he is comparing the strike price with the cost of buying marginal supply capacity when we need that extra marginal supply.
The strike price will not be reflected in our electricity bills, because we have to add in other things, such as system balancing costs. We have to add in grid infrastructure costs, because renewables require massive investment in grid infrastructure. We have to add in the costs of importing through interconnectors when we do not have enough domestic supply. We have not begun to factor in storage costs—the storage capacity of our electricity system is still miniscule. Members should read the Royal Society paper on creating electricity storage in this country: it is going to be astronomically expensive, and will probably still not be enough. Then there are constraint payments—oh, yes, the constraint payments. This year, we are paying £500 million to renewable producers under the contracts for difference scheme not to produce electricity when they can produce it, because that is how the system works. That is how we have attracted so much investment, but those payments are going to be about £1.5 billion next year.
I would like the Government to produce some forecasts. How much will the balancing costs be in each year over the next 10 or 15 years? How much grid infrastructure investment will need to be funded? That appears on our electricity bills—it is the standing charge, and boy, that charge is going to go up with all the infrastructure investment that we will require. How much will we have to spend on importing electricity? The two interconnectors coming into East Anglia as part of the Norwich to Tilbury programme will be importing electricity. They are not for exporting, because the only security of supply we will have if we have shut down all our combined cycle gas power stations by 2030 is from other places.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
indicated dissent.
Sir Bernard Jenkin
The Minister shakes his head, but if we have shut down all that capacity—if we cannot generate the electricity ourselves—we will have to get it from other places. There are phenomena called wind droughts, which can go on for very long periods. What are we going to do when the wind turbines are not turning and the sun is not shining during a very cold spell in the middle of winter? We had one or two close scares this winter. The generating margin that we used to enjoy has gone. The great risk of accelerating the decarbonisation of the electricity system is that there will be more appeals for voluntary or compulsory restraint from industry, because industry is the hidden customer that is shut off when we are short of electricity, or we risk more brownouts or even blackouts. That not impossible, so where is the data that the Minister is placing so much confidence in that shows these forecasts to be wrong? I am not making them off my own bat—there are plenty of people out there making them.
That brings me to the final brief point I want to make. I understand the logic that the Minister explained in his letter to me.
Mr Amos
I am sure that a Member with the experience of the hon. Gentleman will know that Britain returned to being a net exporter of electricity last year, so assuming that there will be additional costs from importing electricity due to the transition to renewables simply does not stack up. Does he also recognise that when the sun does not shine and the wind does not blow, the tide still rises and falls twice a day, 365 days a year? A future resting on renewable energy is possible, and we need to have that ambition for the United Kingdom.
Sir Bernard Jenkin
I absolutely share that ambition, but the question is how quickly we can get there. At the moment, tidal power produces almost nothing as a proportion of our electricity requirement. It is also intermittent, by the way: four times a day, there is a period during which it does not generate anything and we need to replace that supply with other things. The real challenge is how we get to the objective that the hon. Gentleman and I share in a rational way that carries the British public with us. It is noticeable that what people are complaining about most is the price on their electricity bills. Today, the constraint costs, balancing costs, infrastructure costs and import costs that I mentioned make up perhaps 50% of domestic electricity bills. If that figure is wrong, let the Minister produce some figures of his own that explain what proportion of consumers’ bills arises from all those factors, because it is not explained. There is no transparency on our electricity bills.
On the hon. Gentleman’s point about the objective of decarbonisation, we are not going to get there at all if we lose the public—if the lights start browning out or going out, and we find that we cannot meet demand. To some extent, we are piling up that demand by decarbonising transport and other parts of the system, including decarbonising building heating through heat pumps. The demand for electricity will rise, but our capacity to produce it reliably at all hours and in all conditions is being reduced.
On the question of imports and exports, we might become a net exporter of electricity, but perhaps the hon. Gentleman can explain how the price at which we are exporting compares with the price at which we are importing. The difficulty is that we will be importing when the wind is not blowing or the sun is not shining, and it is likely that the wind will not be blowing across the entirety of the North sea, so we will be importing fossil fuel-generated power at a very high cost to compensate for the fact that we have got rid of our own gas production and gas-fired power stations. I am not sure that situation will be very good.
If the hon. Gentleman would look at the Arup report on the Tarchon interconnector, which will come into my constituency under the present plans, he will see that that interconnector will not actually contribute very much to security of supply, but will be used almost entirely to export when there is too much wind. It will export at below the strike price because there is too much wind and it will export at a loss, and the cost will finish up on the bills of the British consumer. So the British consumer is paying for all the investment, paying for the strike prices, paying for the infrastructure and then paying to subsidise the exports to the Germans, who will be the beneficiaries of all this investment.
I appeal to the Minister to just read the Arup report and look at this. That is why I asked about the offshore co-ordination support scheme work that has been done. I am not going to ask for the impossible and ask him to revive the OCSS, but I would like from him an assurance that the work ESO has done will not simply be thrown away and wasted. Please can he assure the House that that work will be incorporated into the spatial plan that ESO says it wants to produce? Some very interesting innovations came out of that work, but there was also a lot of work discrediting the long-term viability of Norwich to Tilbury and, looking on a different timeframe—in the longer term—that could produce a much more viable alternative than is currently on the table. There is still work to be done on that, but I have no doubt that Fintan Slye will want to do that work as part of his project for the Government.
I would like to know that the Minister is going to support the holistic approach to which the Secretary of State referred, because Norwich to Tilbury is certainly not the product of a strategic approach to electricity grid upgrading. We need a much more strategic approach, and I am looking for that from this Government, but it certainly will not come from this Bill.
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
Order. You will all be able to see—and you can all sit down while I am speaking—that a huge number of Members are seeking to catch my eye. For those not making their maiden speech, I intend to introduce a six-minute time limit. That should give those preparing their speeches plenty of time to chop out the extraneous words.
I call Chris Hinchliff to make his maiden speech.
Chris Hinchliff (North East Hertfordshire) (Lab)
Thank you, Madam Deputy Speaker, for the opportunity to give my maiden speech in this important debate. The ongoing transition of our energy system is having a profound and, sadly, often harmful impact on many of the communities in my constituency, so I am very hopeful that the provisions in the Bill will begin at last to put the future of renewable energy in the service of those I represent. I warmly commend to my hon. Friends on the Front Bench the proposals, of which I am sure they will be aware, for Great British Energy to be given a duty to deliver nature recovery alongside its other objectives.
I begin this speech by paying tribute to my predecessor, who served our constituency and this House faithfully for many years. The clear proof of the diligence with which he carried out his duties and the respect he earned from his constituents was plainly obvious from the feedback on the doorstep throughout the general election. I especially want to thank my predecessor for the work he did to support the campaign for Hugh’s law to secure better financial support for parents caring for seriously ill children, and also for his work fighting for the restoration of the several internationally significant chalk schemes that flow through North East Hertfordshire. I look forward to doing what I can to further both of those important projects during my time in this place.
Although the many years of my predecessor’s incumbency have all but erased it from our memory, I am not in fact the first Member of my party to represent communities in North East Hertfordshire. The late, great, trailblazing Shirley Williams, when she was first elected as a Labour MP, represented many of the areas that make up my constituency. Despite the intervening 60 years, I found reading her maiden speech from 1964 very helpful in preparing for this moment, for, as she said then, the constituency I represent is in “many ways…a microcosm” of much of our country.
North East Hertfordshire from Hinxworth to Bayford contains many small rural communities full of important history and culture—from the home of George Orwell in Wallington to the stained-glass windows designed by William Morris and pre-Raphaelite artists in Waterford. In Baldock, Buntingford and Royston, we have quintessentially English market towns, home to fantastic independent businesses as well as nationally significant companies such as Johnson Matthey. In Letchworth, we have the world’s first garden city, built on the principles of the common ownership of land, which to this day offers a radical example of how to better design and build the communities of the future. Surrounding it all, we have some of the best agricultural land in the country, with local farmers such as those near Groundswell in Weston and Finches farm in Benington spearheading the ecological innovation we need to grow fantastic food in harmony with nature.
Yet in my experience of speaking to residents right across North East Hertfordshire, the recurring theme is of communities dispirited and frustrated at having their needs put aside in the interests of what others have called progress, so I will close by mentioning one debt of honour that I want to bring to hon. Members’ attention at this time. I have been asked to keep the following story anonymous by the family in question, but I believe it illustrates powerfully how the communities outside our urban centres are too often treated.
During the general election, as I reached the last road canvassing in a particularly idyllic village in my constituency, I came to knock on the final door in a quiet row of terraces. After initially waiting without answer, I was about to leave when I was called over by a voice from the passenger seat of a nearby car. The gentleman sat there was not old and was keen to speak, but was clearly very ill. Between painful coughing and laboured breathing, he explained to me how in the construction of new housing in the meadow beyond his street, agricultural sheds containing asbestos were demolished with almost incomprehensible recklessness in a single afternoon by workers who were themselves equipped with virtually none of the necessary protective equipment. Rather than the asbestos being carefully removed, it was smashed up on site, creating large clouds of hazardous dust right next to the existing homes.
The gentleman I was speaking to had, tragically, subsequently contracted asbestosis, which had ruined his health and left him barely able to travel from his front door to his car. Despite the concerns he raised at the time, no one was ever held to account for these actions, and he urged me passionately to raise the dangers associated with the rushed and unsafe demolition of agricultural buildings containing asbestos at the earliest opportunity if I was elected as his MP. I am sorry to inform the House that when I returned a few weeks later to speak to him about honouring his request and including this story in my maiden speech, I was told by his widow that he had recently passed away. The chance for any meaningful justice for this family has now gone with him. Meanwhile, developers have no doubt pocketed a return on investment that much fatter for having fatally cut corners at the expense of local residents.
Whether it is profit-led developments, the cancellation of bus routes, or the closure of banks and village schools, the fundamental experience of towns and villages like those in North East Hertfordshire has too often been one of being done to and expected to endure, rather than one of being looked after, worked with and empowered to contribute. It is this, above all, that I hope to chip away at in my contributions in this place. I thank the House for listening patiently to my first attempt, and my constituents for giving me the opportunity to do so.
Liz Jarvis (Eastleigh) (LD)
Thank you, Madam Deputy Speaker, for giving me the opportunity to make my maiden speech during the debate on this important Bill. I welcome efforts to provide renewable energy, bring down heating bills and support the growth of our green manufacturing industry. I hope the Bill will make clear provisions for GB Energy to engage with local communities such as mine in Eastleigh. I would also like to congratulate the hon. Member for North East Hertfordshire (Chris Hinchliff) on his excellent speech.
I am incredibly humbled and honoured to be the Liberal Democrat Member of Parliament for Eastleigh, and grateful to all those who put their trust in me to represent them. I am also grateful to everyone who encouraged me on my journey to Westminster, but particularly Baroness Floella Benjamin, the former MP for Eastleigh Mike Thornton and the family of David Chidgey. Lord Chidgey was committed to fighting to keep our precious chalk stream, the River Itchen, free from sewage and pollution. As my constituents know, I am continuing his legacy. I also thank my predecessor and his team for their prompt response to hand over casework.
My constituency is a vibrant community of towns and villages. The town of Eastleigh grew up around the railway line between Southampton and Winchester, and was named by local author Charlotte Yonge. Eastleigh became a local point of aerial efforts during the first and second world wars, with Spitfires taking off from the airfield, which is now Southampton airport. We have beautiful green spaces including Stoke Park wood in Bishopstoke, Flexford nature reserve in Valley Park, and Hiltingbury lakes in Chandler’s Ford. West End is home to the Utilita Bowl cricket ground, where the late great Shane Warne captained Hampshire, a proud part of our sporting tradition. We are also incredibly proud of our Spitfires, Eastleigh football club, who play in the national league.
We have all been inspired by our extraordinary athletes competing at the Olympics and Paralympics this summer. I hope the House will join me in congratulating Eastleigh-born three-time Paralympic champion David Smith on his recent bronze medal win in Paris, and on his tireless championing of boccia. Eastleigh’s Olympic heritage stretches back to 1932, when local hero Tommy Green, who was unable to walk until the age of five due to rickets, went on to win a gold medal in the men’s 50 km walk.
My constituency is also home to the fantastic Point theatre, with its brilliant programme of cultural events all year round, including the always popular Unwrapped festival, and we are lucky to have many fine pubs and craft breweries, including Steam Town in Eastleigh town, and Steel Tank Alehouse in Chandler’s Ford. I also recommend the luscious Victoria sponge at Fountain café in Fair Oak.
Eastleigh has a proud history of helping to support refugees and evacuees. In May 1937, children and adults fleeing the Spanish civil war were housed at a refugee camp in North Stoneham. Eight-five years ago this week, Eastleigh communities welcomed evacuees from Gosport, and in 1940, refugees from Southampton. More recently, our local council was one of the first authorities in England to house refugees fleeing the Taliban during the 2021 Afghanistan evacuation, and people across the constituency threw open their doors to families fleeing the war in Ukraine. Earlier this summer, Eastleigh hosted the always popular annual Mela, organised by our Asian Welfare and Cultural Association, and in a few weeks, it will be Eastleigh Pride. We have a warm, inclusive community in Eastleigh, which is very important to me, as is fighting to ensure that everyone in our community can access the NHS services they need, including GP and dentist appointments, and mental health care when they need it.
My mum died in March after a seven-year struggle with Alzheimer’s, and as anyone who has experience of caring for a loved one with dementia will know, with that awful disease you lose the person twice. Mum was the daughter of Irish migrants, a member of the women’s liberation movement who took me on my first march when I was a toddler, and a member of the Labour party who knew MPs Joan Lestor and Tom Cox well. She would go on to become a senior social worker. My dad was from Hampshire and a former officer in the British Army who served his country for 16 years. Although my mum and dad were diametrically opposed politically, they shared a strong sense of compassion, and they raised my sister and me with those same values.
Unfortunately, my parents were never in a position to own their own home, so I grew up in rented accommodation with all the insecurity and uncertainty that goes with it. When my dad died suddenly before my 21st birthday, my mum found herself in the position that far too many people are facing today, with spiralling rents and the prospect of eviction looming over them. Since becoming the MP for Eastleigh, I have received letters from residents facing eviction through no fault of their own on an almost daily basis. I am proud that my party has been pushing for higher standards for renters so that everyone has a safe and secure home.
As a comprehensive-educated single mum who skipped meals to feed my son and keep a roof over his head during the so-called great recession, I know all too well how easy it can be to fall through the gaps. After 14 years of the previous Government, far too many families in Eastleigh simply do not have any kind of safety net and are living hand to mouth. It is incredibly important that we do everything we can to support those who continue to struggle with the cost of living and to lift children out of poverty, including by scrapping the two-child benefit cap, as well ensuring that all children have access to the education they deserve, including those with special educational needs.
I am passionate about ensuring that all children and young people in Eastleigh and across the UK are given the support, resources and opportunities to thrive and fulfil their full potential. I will conclude by acknowledging the vital role that our local charities play in supporting families in Eastleigh, including Citizen’s Advice Eastleigh, Pavilions in the Park, Youth Options, and many more. I promise I will do everything I can to support everyone in our community during my time in Westminster, and to be the strong voice in Parliament that the people of Eastleigh deserve.
Sarah Champion (Rotherham) (Lab)
Thank you Madam Deputy Speaker, and may I congratulate you on being in the Chair? It is pleasing to me and a benefit to the House to have three strong women in that position. I also congratulate the hon. Member for Eastleigh (Liz Jarvis), who used her personal experience to speak of her pleasure and pride in her constituency. Her personal, lived experiences will make her a much stronger MP in this House; I welcome her to her place.
Rotherham is a hub of innovative green energy research and production, which is integral to the UK’s energy transition. Our Advanced Manufacturing Research Centre—AMRC—boasts expertise in nuclear, fusion, hydrogen and the construction of offshore wind turbine blades. That creates good, skilled jobs for Rotherham and contributes more than £55 million to the South Yorkshire economy every year. The AMRC is also home to the UK’s first sustainable aviation fuel facility, and therefore I welcome the SAF Bill which is coming soon.
Rotherham’s renewable production does not stop there. Our fusion technology facility works with industry and science, to pioneer fusion energy as a major source of low-carbon electricity. Templeborough power station, a biomass plant, sustainably converts waste wood into energy. It uses recycled sawdust, wood chippings and scrap that would go into landfill, and is used in my constituency by Esken Renewables to fuel the power station. In doing so it saves 150,000 tonnes of carbon dioxide every year. The research and innovation taking place every day in Rotherham gives it a unique role to play in this Government’s ambitious energy plans, and there is an open invitation to the Secretary of State and Ministers to visit the opportunities in my constituency. I ask the Minister to include community energy as one of the specific objectives in clause 3 of the Bill.
An inquiry by the Environmental Audit Committee outlined the enormous contribution that community energy schemes can bring, while reducing dependency on international energy imports. I express my gratitude to Ministers for not pursuing the legal challenge on the closure of the Rosebank oilfield. When the Conservatives were in power they granted new oil and gas licences to sites such as Rosebank, but over a third of licences granted overlapped with marine protected areas and failed to consider the impact on biodiversity and marine health. MPAs are intended to protect rare, threatened and important species from damage caused by human activities. Instead, innumerable careless decisions by the last Government led to 215 spills over the previous 12 years, resulting in 308 tonnes of oil being spilled and a devastating biodiversity decline in the very areas we should be protecting the most.
Like many in the Chamber I believe that solar energy has a key role to play in our transition to a low-carbon economy. However, I am concerned that without incorporating human rights mechanisms in the Bill, the transition will not be clean or just. It is well documented that solar photovoltaic supply chains have a sinister dependency on forced labour programmes in the Xinjiang autonomous region of China, where the Chinese Government are systematically persecuting millions of Uyghur, Turkic and Muslim- majority people on the basis of their religion and ethnicity. The People’s Republic of China’s global market share across the solar PV supply chain exceeds 80%. The Uyghur region has become the dominant global sourcing location for critical inputs for the solar industry. An estimated 35% of global polysilicon—used in almost all solar panels worldwide—is produced in Xinjiang. China’s rapid success in the industry has been achieved with low-cost, subsidised, dirty coal, completely undermining the green credentials it boasts.
As early as 2021, the US enacted the Uyghur Forced Labour Prevention Act, which placed a ban on the importation of products from the Uyghur region, including shipments of solar panels with connections to Xinjiang. The legislation has been highly effective, with the market responding with new, ethical supply chains. Canada, the EU and Mexico have followed suit with similar regulations, but we have fallen behind. I urge the Minister to address that failing, now that evidence has emerged of global supply chains bifurcating, with tainted solar goods being redirected to countries with weaker regulation, such as the UK. Our nation has become a dumping ground for dodgy solar. With this Bill, it is vital that we make a U-turn on the mistakes of our predecessors.
I welcomed the Secretary of State for Business and Trade saying this morning that he expects and demands
“no modern slavery in any part”
of our solar supply chain. He expressed a willingness to extend legislation to help tackle the problem. We must raise standards with this Bill by committing to the production and supply of clean energy that is free from slavery and state-imposed forced labour at any stage of the supply chain, and I will be tabling amendments to that effect. In tandem, we must seriously consider implementing an import ban. Like the US prevention Act, it would need to ban renewable energy products made in whole or in part with state-imposed Uyghur forced labour. I hope the Minister will meet me to discuss that further.
Harriet Cross (Gordon and Buchan) (Con)
It is hard to overstate the importance of the energy sector to my constituents and, indeed, to the whole of north-east Scotland, so I am grateful to be called today. First, I must address the reports that Great British Energy might be headquartered in Aberdeen. The Government are still yet to confirm that, saying that it is speculation, but the manner in which they have managed this announcement speaks volumes. The ambiguity and the joking about when an announcement might be made, and then just saying that the headquarters will be in Scotland, do absolutely nothing to help the speculation and delayed decisions or give the industry any confidence. These layers of uncertainty are driving away investment and creating a less secure job environment in north-east Scotland. Aberdeen has always been the energy capital of Europe. It has been that way for half a century, so it is the most logical choice for the headquarters.
I have significant reservations and concerns, which I will outline today. The North sea oil and gas industry is not just part of the economy in Aberdeenshire, but the bedrock on which our communities and my constituents in Gordon and Buchan have built their livelihoods for generations. It is not just about the direct jobs in the industry and the associated services in the hospitality sector, for example. An overall economic ecosystem has developed, and that is why it is critical that we manage the energy transition properly, so that the north-east of Scotland does not become the next region to suffer industrial decline as the mining areas did. I am sure that the Secretary of State, the Minister and the Labour party do not want that on their record.
The Government’s plan for Great British Energy, coupled with the energy profits levy, puts the industry at risk at this vital time. The proposed increases and the removal of the investment allowances could be a death knell for investment in our area. Let me be clear: this is not about protecting the profits of large companies just for profits’ sake; it is about protecting the jobs and skills and futures of our communities. Offshore Energies UK has warned that the tax increase could see investments in the UK cut, and that they might fall from £14.1 billion to £2.3 billion between now and 2029. That is not scaremongering; it is what the industry is facing.
We can take today’s figure of £14.1 billion of private investment and compare that with what the Government are suggesting: £8.3 billion of public investment into GB Energy just to create an investment vehicle. We already have an investment stream in the north-east of Scotland. It is not Government money that is needed, but a stable, fair, globally competitive market for our national and multinational companies. They will do the business. Public money to create GB Energy while simultaneously introducing these punitive taxation and other measures that are projected to drive away investment just does not make sense, because the same investment in capital, skills and personnel that we need for our energy security today are also vital for an effective and efficient transition to clean energy.
I have a number of questions for the Government about Great British Energy, and I will start with job security and creation. How will Great British Energy protect existing jobs in Aberdeenshire’s energy sector? We have already seen a significant loss of jobs due to the oil price downturn and market uncertainty. The Government boast that Great British Energy will create 650,000 new jobs, 69,000 of which are projected to be in Scotland, but we need specifics. Figures have been provided at a regional level across England, but we have only one figure for the whole of Scotland.
The distribution of jobs in Scotland is currently heavily weighted towards Aberdeen, Aberdeenshire and the north-east, so no matter how many jobs might or might not be generated by GB Energy in Scotland, my constituents want and need to know where those jobs will be. Can the Minister confirm when he sums up how many of the jobs will be in Aberdeenshire and the north-east, what types of roles they will be and when they will be created? Already, oil and gas workers are losing their jobs and moving abroad to maintain or progress their careers. They are the workers we need for the transition.
Secondly, we must consider the economic impact on our local communities. For example, how will the wealth that flows into our local infrastructure and economy and community projects be replicated in the future under Great British Energy? Looking at the national picture, the Oil and Gas Authority estimates that the total revenue from oil and gas production in the five years to 2024 was £5.3 billion. Are the Secretary of State and the Chancellor willing to sacrifice that in the pursuit of an accelerated transition? That would be a significant dent in the £8.3 billion of public investment.
We need a balanced approach. We are not against the energy transition, and we recognise that the transition will take time, but rushing it could have severe consequences for communities such as mine in Gordon and Buchan. We are after net zero, not absolute zero. They are different things, and we do not need to banish oil and gas from our energy mix immediately in order prematurely to be on the road to net zero.
The people of Gordon and Buchan and indeed all of north-east Scotland are not against change. We have been at the forefront of energy innovation for decades, but we need the transition to work for our communities and to build their strength, rather than dismantle them. We must protect jobs. I call on the Government to provide clear answers, not just high-level projections, on how we expect Great British Energy to benefit, not harm, the existing industry in Gordon and Buchan. Our communities have so much to lose if we get this wrong, and they deserve our help with a comprehensive plan, not ideology.
Madam Deputy Speaker (Caroline Nokes)
I call Uma Kumaran to make her maiden speech.
Uma Kumaran (Stratford and Bow) (Lab)
I am grateful for the opportunity to make my maiden speech with my parents and husband in the Gallery today. I congratulate the hon. Member for Eastleigh (Liz Jarvis), who gave an impassioned speech showing how deeply she cares for her community, its heritage and in particular the history of caring for refugees. She spoke so lovingly of her late parents.
It is the honour of my life to be elected as the first ever MP for Stratford and Bow. I was born in east London, and I have lived in Stratford and in Bow. I studied at one of our brilliant local universities, Queen Mary. To go from local student to local MP in 20 years has been quite the homecoming. Not getting our declaration result until nearly 6 am really did bring back memories of stumbling home from uni.
I pay tribute to the force of nature Lyn Brown, who served her home West Ham as the Member of Parliament for 19 years, and for a total of 36 years of selfless service to communities in Newham. A true east London girl, her guidance and support have been invaluable. I have no doubt that her contribution to the east end and public life will continue. I also inherit Bow from my hon. Friend the Member for Bethnal Green and Stepney (Rushanara Ali). She is another trail-blazer, as the first Bangladeshi-origin woman elected to Parliament. She has inspired a generation with the promise of what is possible.
Although Stratford and Bow is a new parliamentary constituency, its history is old and rich. The Woman’s Hall at Old Ford Road in Bow was home to Sylvia Pankhurst and Norah Smyth and the headquarters of the East London Federation of Suffragettes from 1914 until 1924. It was the beating heart of the east end suffrage movement, and the home of the matchgirls’ strike and the largest union of women and girls in the country. Every corner is filled with the history of the struggle for women’s rights and for our voices to be heard; a history that I will work every day to honour. As a proud grand- daughter of a trade unionist and a member of the GMB union, I go forward in their memory and will continue to fight for working people.
Parts of my constituency have been represented by illustrious political figures including Charles Key, Keir Hardie, Lansbury and Clement Attlee, who led the Labour Government that created our beloved NHS—so no pressure on this new Member. Our stunning Victoria park with its breathtaking canals opened to the public in 1845 and became the people’s park: a centre for political meetings and rallies with speakers such as William Morris and Annie Besant.
It is not just political history that we are blessed with in Stratford and Bow. I am sure that many hon. Members in the Chamber love nothing more than going home after a long day sitting in the Chamber and putting on their favourite grime playlist. They can thank Bow for playing an integral part in the origins of grime music, with Roman Road and its once-beloved record shop producing artists and crews such as Roll Deep and Skepta to name just two. Over in Newham, we have our top boy Kano.
I can see that I have completely baffled some hon. Members—[Laughter.] For those whose tastes are a bit more retro, we are also home to ABBA Voyage. My constituency is a place where people can come and spend their money, money, money in some of our brilliant local and international businesses. Of course—it cannot be missed—sitting at the heart of my constituency is the London stadium: a place of joy and wonder from the 2012 Olympics and some of our most wonderful sporting achievements. As this generation of Team GB Paralympians competes in Paris, I send my wishes to them.
The ability to bring people together that sport possesses is like nothing else, so it is a privilege and honour to be the Member of Parliament for the greatest club in world football—sorry, Keir—West Ham. As a Hammer since 5 July—[Laughter]—I am proud to be forever blowing bubbles. I know that there are several Hammers fans on the Government Benches and throughout the parliamentary estate—probably more of us than Members on the Opposition Benches.
Stratford and Bow is a wonderful, vibrant and diverse constituency, and our current heritage lives up to that history. Forest Gate is the home of independent cafes and shops and Forest Gayte Pride, overlooking the nature and beauty of Wanstead Flats. There are the bustling shops of Green Street serving communities throughout east London, alongside mosques, temples, synagogues, gurdwaras and churches. It is a place that is truly representative of the rich tapestry of cultures and people that make up our great capital city, London.
People from all over the world have come to Stratford and Bow to make the UK their home. My constituency is a prime example of Britain at its best, with pearly kings and queens, and white, European, Indian, Bengali, Pakistani, Chinese, African, Asian, middle eastern, Caribbean communities and more living side by side and working together to make a better society for everyone. Wherever someone is from, they are welcome in Stratford and Bow.
I am proud, too, to have origins as an east London girl born in Homerton hospital, but I was born here but by fate. I am the daughter of Tamil refugees and the child of a community that knows what it is like to endure prejudice and persecution. My parents, proud and patriotic British citizens, came to Britain over 40 years ago, but they did not simply come here; they fled for their lives, forced to leave behind everything and everyone they knew and loved, torn from a good and prosperous life in their prime to start from scratch in an unfamiliar country, working multiple jobs day and night to give me the chances that were taken from them.
Britain welcomed my parents with open arms so that they could rebuild their lives and flourish, and it was the east end that they first chose to call their home. This is the London that I know and love, and it is the story of Britain and British values at its best: outward looking and compassionate; a country where people can work hard and triumph. Mum and dad, thank you for everything: your endurance and your will to succeed—[Hon. Members: “Hear, hear!”] You are part of the success story of Britain, and that is a story that can be found in every corner of Stratford and Bow and in every part of Britain, with the hope and aspiration for a better tomorrow that all parents have for their children and the dreams of a safe and secure life.
It is that hope and determination to fight for a better future that this Labour Government will work hard every day to deliver. Whether the people of Stratford and Bow were born here, came here in search of a better life or just moved to the best bit of London—whatever their start in life—I will ensure that their voices are heard and valued. I pledge to work day in, day out to tackle the root causes of poverty, to fight for more police on our streets so that women and girls feel safe to walk home at night, parents do not have to worry about knife crime and young men are not having to look over their shoulders when they walk home after dark, and to fight for an NHS that is here for us in our time of need, where patients can be seen in wards, not corridors.
Delivering my maiden speech during the GB energy debate is apt. Climate change remains one of the greatest challenges of our time, and we must redouble our efforts. Before I came to this place, I worked internationally on climate action with cities around the world, the United Nations and civil society to help stop our world going past the point of no return and ensure that generations who come after us have a world that has not been destroyed because of our failure to act or our fear of being bold.
I feel deeply the responsibility that I have to repay the faith that the people of Stratford and Bow have placed in me and the duty that I have to be their voice here in Westminster. I will work every day for that and for the values and pledges that I was elected on. Thank you.
Madam Deputy Speaker (Caroline Nokes)
I call Tom Morrison to make his maiden speech.
Mr Tom Morrison (Cheadle) (LD)
Thank you very much, Madam Deputy Speaker. I congratulate the hon. Member for Stratford and Bow (Uma Kumaran) on that incredible maiden speech. Her pride in her community really shone through and was incredibly infectious.
I am truly honoured to be given the opportunity to deliver my maiden speech in this House. I begin by paying tribute to my predecessor, Mary Robinson. Despite our political differences, I had a good working relationship with her and was fortunate to work with her as part of the Cheadle towns fund board, where we helped to deliver much-needed investment into the constituency, including developing plans for Cheadle train station. I know that Mary took great interest in local business, and her work on the board was testament to that. I wish both her and her husband Stephen all the best in their next chapter.
I will also take this moment to pay tribute to my Liberal Democrat predecessors for Cheadle. The incredible Patsy Calton is very much missed and was held in a great deal of respect across both sides of the House. Mark Hunter served Cheadle for 10 years as its MP and served in government as an assistant Whip. I have huge shoes to fill following both Mark and Patsy, who are legends in the constituency. I hope that I can build on their legacy.
I will also take a quick moment to thank my incredible team for leading such a brilliant and hard-fought election campaign, and my family for their support. Most of all, I thank my incredible partner Louise for all her love and backing over the years. It is here, however, where I must confess to breaking my first election pledge. Not long before the general election was called, Lou and I found out that we were to be expecting our first child. While we were, of course, over the moon, that news came off the back of a very hard local election campaign and amid Lou experiencing extreme morning sickness. So, being the supportive partner that I am, I assured Lou that this would be a first trimester of absolute peace, tranquillity and calm as there was absolutely no way that the Prime Minister would call a general election in the summer. We all know how that turned out. I put on record my apologies to Lou for breaking that promise. I will endeavour to ensure that is the first and last time I break my word to a constituent.
Cheadle is truly a brilliant place. We have wonderful green spaces, brilliant schools and some fantastic high streets, but what makes the constituency so special is the people. The area is built on the foundations of so many community groups and organisations, all campaigning and working to make our community a better place for everyone. There are allotment groups such as Billy’s Lane who invite local schools to learn about growing food and healthy eating. There is Cheadle Civic Society, led by the inspirational Phillip Gould-Bourn, who protects Cheadle’s heritage and historic character. There are many faith groups including Cheadle Masjid, Grove Lane Baptists and Yeshurun Hebrew Congregation who provide support for our most vulnerable residents, and there are hundreds of community organisations and friends’ groups such as the Friends of Carr Wood who are the guardians of some of our most precious green spaces and rightly challenge those who would do them harm. Those are the people who make Cheadle so special, and I thank them for putting their faith in me as Cheadle’s Member of Parliament. I have always said that I would be their voice in Westminster, not Westminster’s voice in Cheadle. That will always be my goal.
There is much to do. Our local hospital, Stepping Hill, is in dire need of investment. For too long, staff and patients have had to make do with a hospital that is literally falling apart. The out-patients building was condemned and is now demolished, and in March the intensive care unit, which looks after some of the most critical patients, was temporarily closed because the ceiling was coming in. Nurses have even told me about bucket squads—for the uninitiated, this is a term they have coined for an extra duty they now have on shift, where they each have a bucket to place down when it rains to catch the water coming through the roof. This is a disgrace.
No hospital, let alone one as busy as Stepping Hill, should operate in those conditions. That is why my first act as the Member of Parliament for Cheadle was to write to the Secretary of State for Health and Social Care, asking for the funds that Stepping Hill desperately needs for repairs. I am pleased that the Government have since said that funding will be made available, but until we get the detail and the money, I will keep fighting to ensure that Stepping Hill, its staff and its patients get the funding they deserve.
I will also keep fighting to get my residents the support they need during the cost of living crisis. This is an issue of huge importance to me. When I was 13, my mum, brother and I were threatened with homelessness because mum, who worked several jobs to make ends meet, could not afford the private rents. We faced relying on friends who could offer couches or spare rooms to help us. The idea was sold as a fun holiday to me and my brother, but I can remember how anxious and worried my mum looked and how conversations between adults would suddenly stop as I walked into the room. Life felt unsettled, and I could tell that my mum was scared and needed help.
It was a Lib Dem councillor called David Bruce who that helped us, by fighting and getting us a council house. Because of him, we had a home, giving us the security and stability to get on in life. Home was no longer an anxious place. Mum was happier, and my brother and I could focus on our schoolwork. That experience inspired me to get into politics, because I saw at first hand the positive impact that it can have on people’s day to day lives. Without that councillor, I can honestly say I would not be standing here today. But that was not the end of our story. We still struggled. Faced with rising bills, mum would sometimes have to decide whether to put money into the electric meter or food into the cupboards. If I think about it, I can still hear the clunk of the pay meter going off and plunging the house into darkness. Mum would often joke that that was the cue for us to go to bed.
Sadly, I know from speaking to my constituents that this story is still being lived out all too frequently. The choices that many families have to make are horribly familiar. The choice to heat their home or feed their children should never be forced on anyone, yet thousands of families across Stockport face that choice every day. I was proud that the Liberal Democrats on Stockport council led the way by establishing a warm spaces programme, supporting community organisations with the funds to help shelter vulnerable residents who could not afford to heat their homes during the winter months. Many authorities are now doing that across the country, but as wonderful as that is, we cannot sit back and accept this situation.
Great British Energy is a step in the right direction. I welcome the move to restore British investment in clean energy, and if Great British Energy actually brings down costs for my constituents, that will be nothing but a good thing. I will do all I can to help my residents in Cheadle. When it comes to the cost of living, I will hold this Government to account when I believe they are not doing enough to support those who need it. Better health services, support for the cost of living crisis and championing my amazing community—those are some of the things that I will do as Cheadle’s Member of Parliament. It is truly the honour of my life to be standing here working for the place I call home—the place I am now raising my family. I hope I will do Cheadle proud here.
Madam Deputy Speaker (Caroline Nokes)
I call Jayne Kirkham to make her maiden speech.
Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)
Thank you, Madam Deputy Speaker. I pay tribute to the hon. Member for Cheadle (Mr Morrison), whose experience and passion will be of great benefit to both his constituents and his local hospital, and to my hon. Friend the Member for Stratford and Bow (Uma Kumaran), who will be a very worthy successor to those suffragettes.
It is a real honour and a privilege to be standing here as the MP for Truro and Falmouth. I arrived in Cornwall quite by accident nearly 20 years ago, having been swept off my feet by a naval pilot who tempted me away from life as a London trade union lawyer, with images of beaches and sunsets. He flew search and rescue helicopters at Culdrose naval station. Unfortunately, as is often the case, our military marriage was short, and I was left as a single mum with a small son. But I chose to stay and bring him up in Cornwall, and it is very much our home. Becoming a single parent was sudden and difficult, but I was fortunate. I benefited from the opportunities offered by the last Labour Government and was able to get back on my feet. I retrained and took a job as a teaching assistant working in a local secondary school for seven years, first in special educational needs and later as an unqualified teacher, which shows the journey that education has been on.
I pay tribute to my predecessor, Cherilyn Mackrory. She served in a number of roles in this place; she showed her passion for the environment in her work on the Environmental Audit Committee and as chair of the ocean conservation all-party parliamentary group. She also drew on her own personal experience to help others. She did a huge amount to shape the women’s health strategy and maternity safety awareness, and was integral in introducing the new pregnancy loss certificate. Both Cherilyn and her predecessor, Sarah Newton, worked to secure a new women and children’s unit at Treliske hospital in Truro, one of the previous Government’s 40 new hospitals or units. It is desperately needed and a long time coming. I had my son in the existing unit nearly 19 years ago, and the building was not fit for purpose then. I really want to ensure its speedy completion.
Truro and Falmouth has existed as a constituency only since 2010. It sits in the middle of the Duchy of Cornwall, spreading from Falmouth on the south coast to Crantock on the north coast. Falmouth is my home, and where I have sat as a councillor for the past six years. It is a vibrant and welcoming town enveloped by the ocean. Falmouth has played its part in the history of Great Britain. In the late 1600s, the town was appointed the Royal Mail packet station, receiving and sending mail and messages all around the globe, making Falmouth —for 150 years at least—the information superhighway of the British empire.
However, Falmouth is more than its seafaring past. We still have two splendid castles, Pendennis and St Mawes, protecting the entrance to the Carrick Roads, but the constituency is also the site of Falmouth University, built on the legacy of the famous art school that is still found on Woodlane, but now anchored across the border in the state-of-the-art Tremough campus in Penryn, which it shares with the University of Exeter. The area brims with creatives, scientists and engineers—whom Dawn French, the university’s chancellor, described as “enterprising dreamers”.
If we follow the River Fal upwards, we reach Truro, Cornwall’s capital and only city, with its impressive cathedral and award-winning theatre Hall for Cornwall. It has Lys Kernow, the home of Cornwall Council, as well as Treliske, the acute hospital. The constituency also has a large rural element, with an array of beautiful villages and areas such as the Roseland peninsula, where farming and fishing are still vital industries.
When researching for this speech, I was struck by the words in the maiden speech of one of Cornwall’s most well known and loved Members of Parliament, David Penhaligon. Exactly 50 years ago in this House, he referred to an economy that relies on tourism, traffic conditions in the summer months that strangle much of the industry that keeps the place going for the rest of the year, tremendous pressure on hospital services, sewage problems, pressure on housing, the problem of summer lets and the lowest average wage in Britain. I am pleased that the measures in this Government’s programme—a real living wage, the water Bill, devolution and renters rights—will help to address some of those issues, but it is shocking that many of the issues that he mentioned then are, sadly, still very much in evidence today, half a century on. For a place on the edge of the map, Cornwall is too often at the edge of our thoughts in this place. Like Penhaligon, I believe that Cornwall, with its proud and independent heritage, deserves better.
Turning to the topic of this debate, there is so much to be excited by. As well as Cornwall’s potential for onshore wind, we have 20% of Europe’s requirement for critical minerals and geothermal energy beneath our feet, buried in our granite. We only have to look at a horizon dotted with the ruins of engine houses to know that the people of Cornwall are more than happy to dig for their treasure. Falmouth is a town with its face turned to the sea. The port still has a very busy harbour and docks, which have businesses servicing both military and commercial ships, as well as hosting cruise and leisure vessels. But there is potential for so much more, and the port of Falmouth is poised to take advantages of a new generation of offshore wind production in the Celtic sea. With the support of the new energy company GB Energy, the £1.8 billion ports fund and investment in the skills training we so desperately need, our young people will be able to grasp with both hands the well-paid jobs of the future, while securing our own home-grown energy and facing down the challenge of climate change—a challenge that is so important to a place like Cornwall, which stares the impacts of the changing climate in the face every day. We were the first large rural authority to declare a climate emergency and the 2030 net zero target. Now, we will play our part in getting the country to meet a similarly ambitious target. Falmouth’s time truly has come again as part of the Government’s mission to become a clean energy superpower.
Truro and Falmouth is the most magical place to live. It well and truly hooked me and my small family, and has become part of me. My journey, despite its ups and downs, has been a charmed and happy one. Truro and Falmouth has given so much to me, and it is overflowing with promise and brilliant, independent-minded enterprising dreamers. I am determined to serve my home as well as it has served me. A bright future lies ahead for it.
Dave Doogan (Angus and Perthshire Glens) (SNP)
I congratulate the hon. Member for Truro and Falmouth (Jayne Kirkham) on a really wonderful maiden speech. It is heartening to see how much love and passion she has for her adopted home in Cornwall—and who does not like Cornwall? I am sure her constituents will be tremendously well served by the passion we saw just now.
The Government must accept that the messaging around GB Energy was muddled at the very least during the election. It was almost as though it was rushed through as a manifesto headline, rather than resulting from the strategic development of careful, thought-out, optimised planning, but there we are. We understand that there will be limited co-production from the company, no retail arm and no public sector comparator role. It will be a provider that does not do much provision and a decider that does not make any decisions. Talk about net zero—there is zero detail in the Bill to give us an indication of what will actually happen on the ground. It was going to sell energy to the public, and then it was not. It was going to generate energy. Then it was not, and now it will again. I think we are still in that space.
I heard in the Secretary of State’s opening remarks that there has now been a modification to the brand: it is now GB Energy generating company. The “generating” bit has been shoehorned in there at the last minute to try to make it a little bit more believable. It that will not own any assets outright, but will make a return on the sale of energy from the wholesale market by the principal operator of the energy schemes it latches itself on to. Well, I can see why the Labour part never put that on a leaflet—goodness me. Why is it not considered a Government trading fund? It is not a company; it is a Government trading fund that they are branding as a company. It absolutely meets all the criteria of the Government Trading Funds Act 1973, so it would be interesting to know why that is.
I do not doubt the Secretary of State’s commitment in this area. I have seen it over the past five years. I am sorry that his initial, much more ambitious plans for £28 billion have been torpedoed by the Treasury and his right hon. Friend the Chancellor. If he is feeling sorry for himself, he can speak to the millions of pensioners around these islands whose ambitions for the future have also been torpedoed by the Chancellor and the Treasury.
On a substantive note about the lack of detail in the Bill, it is a great pity that the Government want us to believe that clean energy means energy produced from sources other than fossil fuels. It is hard to imagine a more one-dimensional analysis and qualification than that. It is narrow and incoherent, and out of step with the science and the public. It does not really matter where or what carbon is locked into. If you burn it to release carbon dioxide in the process of making energy, then you are a carbon emitter contributing to the climate crisis. It is as simple as that. We should not be hostage to a technology where hundreds of millions of pounds in Government subsidies are used to create millions of tonnes of CO2 a year.
We know that subsidies for large-scale biomass generators in England will end in 2027—I know the Minister is up to speed on that—and the Government claim they are reviewing evidence on potential support beyond this. Will the Minister, in summing up, be clear with Parliament today? Does he believe that chopping down millions of trees on the other side of the world and shipping them to England, to then burn them to make electricity, is acceptable? If not, will he commit to ending public subsidies for large-scale biomass in 2027?
Sammy Wilson
I am glad to hear the hon. Gentleman is concerned about the chopping down of trees. Does he accept that in Scotland 13 million trees were chopped down to put up windmills?
Dave Doogan
I hesitate to thank the right hon. Member for his intervention—[Laughter.] I will need to fact check his 13 million figure—I will get back to him on that. But let us be really clear—I will touch on onshore wind in a minute—that once those trees are burned in a former coal-fired power station, the only products are CO2 and electricity, but where trees have been cleared to create onshore wind in Scotland, there is a lifetime of renewable, clean cheap energy coming out the other side, so it is a false comparator if ever I saw one. Do the Government believe that waste to energy is also clean energy? That does not seem to be what GB Energy should pursue, and I am not certain there is much support for that in the country.
Maybe the right hon. Gentleman should have made his intervention in a minute, because I remain unclear on this point. The Bill sets out that it applies to Scotland, Wales, Northern Ireland and England. However, constitutionally and administratively, in policy terms I do not see how it can apply to Northern Ireland. If the Minister could update us on what possible role GB Energy has in the entirely different energy market that exists in Northern Ireland, that would be helpful.
Community energy is essential to how we make our journey to net zero, but like much else there is scant detail on that. If the Government had properly consulted the community energy sector—they can probably still do that—they would know that access to consumers is one of the principal drawbacks to developing these schemes. It is disappointing that no lateral thinking is being applied on how to connect the will to create community energy with the market. Ofgem has created an environment where one can deliver an extraordinary example of community electricity generation, but trying to connect with consumers is almost impossible. GB Energy, if it is nothing else—and it does appear to be not much else—could have been part of the gig economy. It could have been the Uber of retail energy. We could have bought community energy and passed it on to the consumer base, but that is not going to happen.
The Government want to mirror the ambition of Vattenfall or EDF, but those companies, which are actually companies, sell to the retail market. Will the Government update us on the paltry amount that the previous Government allocated to community energy? It was £10 million just for England. What will GB Energy deliver?
Pushing ahead, zonal energy is one of the most important transformations that can come into the energy market on GB. The Government advised that electricity market reform is key—
Madam Deputy Speaker (Caroline Nokes)
Order. We now come to a maiden speech. I call Perran Moon.
Madam Deputy Speaker (Caroline Nokes)
I call Perran Moon to make his maiden speech.
Perran Moon (Camborne and Redruth) (Lab)
Thank you, Madam Deputy Speaker, for the opportunity to make my maiden speech during a debate that is so relevant to my own wonderful constituency of Camborne, Redruth and Hayle, in the heart of Cornwall. I come to this place—and I am disappointed that the hon. Member for Harwich and North Essex (Sir Bernard Jenkin) is not present to hear me say this—with 30 years of business experience in the automotive sector and, latterly, in the renewable electricity sector. I thank all those who have given their maiden speeches today; they were all truly heartfelt, wonderful speeches. My own inspiration for being here comes from my three children, my daughter and my two sons, who join us in the Public Gallery today.
I want first to pay tribute to my predecessor George Eustice for his work on animal welfare as Secretary of State for Environment, Food and Rural Affairs, as well as his support for local projects in Cornwall such as Kresen Kernow, the Cornish archive, and—despite our profound differences on our relationship with the EU—the honourable way in which he was prepared to criticise trade arrangements made by the Conservative party.
It is an unparalleled privilege to represent one’s home constituency, and the ties that bind Cornish men and women to our homeland are woven into every sinew of our being. The constituency of Camborne, Redruth and Hayle is a truly remarkable place: the place where I was born and grew up and where I live. To understand Camborne, Redruth and Hayle, I respectfully ask you, Madam Deputy Speaker, to transport yourself in your mind to the summit of a single rocky hill, smack bang in the middle of the constituency. This rocky hill is called Carn Brea, which is, in fact, Cornish for “rocky hill”. At the summit of Carn Brea sits the Basset monument, looking down from 750 feet across the constituency. The monument was funded by public subscription in 1836 after Basset himself petitioned the other place against slavery in 1828.
To the north of Carn Brea, just 4 miles away, the Celtic sea sparkles in the sunlight and laps the beautiful beaches of Gwithian, Portreath, Porthtowan, St Agnes and Perranporth—the Celtic sea, which offers the prospect of vast quantities of electricity generated from offshore wind, an opportunity that I dearly hope this Government will grasp. Looking to the west from Carn Brea we see the town of Camborne, pronounced “Kammbronn” in Cornish, meaning “crooked hill”. It is a town that, along with its near neighbour Redruth, is synonymous with our tin mining heritage. The two towns were once among the wealthiest in Britain, helping to drive the economy for more than four centuries. Nestled in front of Camborne, a large flag of St Piran flutters in the breeze. This flag sits at the top of the South Crofty tin mine. There can be no finer physical symbol of the potential for the return of the Cornish economic powerhouse than South Crofty—the last tin mine to close, in 1998.
The economic winds have dramatically changed since then, and tin, which is used in the production of virtually every electrical device, is now also being used in the production of solar panels and, along with lithium, forms the cornerstone of our critical mineral industry. We import tin from as far afield as China and Australia, with all the damaging environmental impacts that come with such imports, yet in Camborne and Redruth we sit on the third highest-grade tin deposits in the world, and there is plenty of it. Our sense of pride in our mining heritage, which was mentioned by my hon. Friend the Member for Truro and Falmouth (Jayne Kirkham), and the possibility of our tin mining renaissance are a constant source of hope and optimism for an area that has been damned by industrial decline for decades.
But back to the summit of Carn Brea and Basset’s monument. Further over to the west, on the horizon behind Camborne, is Hayle, the third largest town in the constituency. Although the official title of my constituency is Camborne and Redruth, woe betide me if I do not mention Hayle in the same breath. Hayle is a vital natural seaport, ready to serve the new opportunities in the Celtic sea, and it includes a very large estuary. Indeed, the Cornish word for estuary is hayl. I have strong familial ties with the town, where my great-uncles, the Slade family, once ran a steel engineering business on South Quay.
Let us look directly south from Carn Brea now, to the gentle rolling hills leading down through the beautiful Cornish granite villages of Stithians, Mawnan Smith and Constantine, and then on to the two stunning subtropical gardens of Glendurgan and Trebah, which, in turn, lead down to the Helford river, from where thousands of American troops set off on D-day to free Europe from fascism.
To the east of Carn Brea lies Redruth, the Cornish meaning of which is “red ford”, the Cornish word for “red” being “ruth” and the word for “ford” being “red”—obviously! Redruth is rapidly becoming a cultural hub, and I strongly recommend visits to Krowji creative hub, Kresen Kernow—the aforementioned archive centre—the Buttermarket, and the Ladder arts and culture hub. Our former prosperity is evident throughout the centre of Redruth, with imposing granite buildings that are awakening with new life after a deep slumber.
Further to the east, beyond Redruth, can be found the villages of Carharrack and St Day, which served as a hub for the one of the world’s wealthiest copper mining districts from the 16th century to the 1830s. Just beyond them is United Downs, where Cornish Lithium, Geothermal Engineering and ground source heat pump companies are based. These businesses have the potential to play key roles in Britain’s economic transformation. We have tin, lithium, geothermal and ground source heat, but we are also blessed with the opportunities of offshore wind in the Celtic sea, onshore wind, solar and tidal. There are very few places in the UK in which renewable energy and critical mineral opportunities are so abundant.
The renewable energy opportunities are not the only factors that make this land so distinct. Let me quickly give three other examples. First, 10 years ago Cornwall was granted national minority status under the European framework convention for the protection of national minorities. Our language, our culture and our heritage, as well as our economic potential, mark us out on this island. Secondly, the positive reaction received by all six Cornish MPs on both sides of the House for taking our oaths in Cornish is telling. Almost half our children and young people consider themselves first and foremost Cornish. Finally, on Saturday my brother Dickon will be made a bard of the Gorsedh, the highest honour that can be bestowed on a Cornish man or woman. This is an honour awarded to people who have given exceptional service to Cornwall by a manifestation of the Celtic spirit or by service to Cornwall.
It is these cultural differences that mark us out. It has been clear on the doorstep over the past two years that there is a strong desire for a non-mayoral model of governance arrangement with Westminster. My hope and my focus in coming weeks and months will be to persuade the Government that the most appropriate devolution arrangement for Cornwall is an Assembly similar to that of our Celtic cousins in Wales.
In terms of economic development, culture and governance, the time has come to throw open the cage door and unleash the Cornish Celtic tiger. For my part, I will put all my energies into representing the people of Camborne, Redruth and Hayle to the best of my abilities. To do so will be the honour of my life. Meur ras—thank you.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Because so many Members wish to contribute, I ask those making maiden speeches to keep them shorter than five minutes if they can manage it. The time limit for Members with a bit more experience, who are not making their maiden speech, is now reduced to five minutes.
Adrian Ramsay (Waveney Valley) (Green)
I have been enjoying the maiden speeches today, particularly those of the hon. Members for Truro and Falmouth (Jayne Kirkham) and for Camborne and Redruth (Perran Moon). Having enjoyed a week’s holiday in Cornwall last week, I have enjoyed hearing even more about Cornwall today.
I am pleased to speak in this debate and to have the opportunity to welcome the Bill, particularly the commitment that it shows to achieving net zero emissions from the electricity grid by 2030. An exciting revolution in the way we produce and use energy is taking place. It is vital that there be new support and incentives to directly accelerate renewable development, giving the sector the confidence to invest and innovate that comes from the long-term predictability that we need.
The Bill is an important step in the right direction. I hope that as it progresses through Parliament, we can have a constructive debate about being even more ambitious, in line with the climate science, and, crucially, about how we take the public with us. I am sure that we will return to that subject in future discussions, but today I will highlight three particular gaps that I hope the Minister will address in his winding-up speech.
The first gap, which has already been referred to, is the opportunity to reflect that the climate and nature crises go hand in hand. I know that the Secretary of State recognises that point and recognises that renewable energy development can go hand in hand with protecting carbon-rich habitats and delivering more nature-based solutions on land and at sea, so it is disappointing that the Bill does not give Great British Energy a remit to contribute to nature’s recovery alongside accelerating the scale and pace of renewable energy delivery. A nature recovery duty would mean meeting climate targets and contributing to biodiversity targets set under the Environment Act 2021. It would mean automatically baking wildlife-friendly design into renewable energy project development from the outset. I also highlight the need to bake farming-friendly design into renewable energy developments.
The second area on which I invite the Secretary of State or the Minister to respond is the glaring and gaping hole in the proposed legislation—namely, the failure to use the opportunity to more explicitly and definitively rule out the drilling and burning of new fossil fuel projects. A net zero carbon plan has to involve ceasing to use fossil fuels, not just increasing renewables. Put simply, fossil fuels increase carbon emissions. We have heard from the UN Secretary-General that fossil fuels are literally cooking our planet, and far more needs to be done to remove their use. Although we have recently seen some encouraging developments from the Government in making it clear that they will not defend the legal challenges to, for example, the Rosebank oilfield, they could go far further, so why not use this Bill to further reduce the UK’s exposure to price volatility and households’ exposure to energy price shocks by making it crystal clear that Great British Energy will not be allowed to facilitate, encourage or participate in any projects based on fossil fuels?
The third area I want to highlight is community energy, to which other Members have drawn attention today. Like other Members, I have a community project in my constituency; it is in the village of Palgrave, where there is a community-owned wind turbine on the playing fields. I heard the Secretary of State talk about community energy earlier, so perhaps we just need clarification of the Government’s intention, but the legislation does not appear to explicitly mention community energy, despite its huge potential. I hope that this is an unintended omission, and that the Minister or the Secretary of State can confirm that there will be community energy representation on the governance structures of Great British Energy, notably from the co-operatives that are such a big part of the sector.
I put on record my support for the excellent Local Electricity Bill, which won significant support in the last Parliament. I very much hope that the proposals in it are taken forward, including by enabling renewable energy generation schemes to sell directly to local people and making sure that that is acted on without delay.
In conclusion, I welcome this Bill and commend the Government for bringing it forward. Great British Energy has the potential to make a game-changing difference, but I would welcome clarification on the level of ambition needed in the areas that I have highlighted.
Madam Deputy Speaker
Thank you for respecting the time limit. I call Dr Simon Opher to make his maiden speech.
Dr Simon Opher (Stroud) (Lab)
Thank you, Madam Deputy Speaker. I thank the hon. Member for Waveney Valley (Adrian Ramsay) for his support for this really exciting piece of legislation—one of the most exciting in our manifesto. I am delighted to be making my maiden speech during a debate on renewable energy. Stroud has been a centre for sustainability and the environment for many years.
I thank my constituents for supporting me. I have been a GP in Dursley, which is part of Stroud, for 30 years. I have looked after my patients there through thick and thin, through the most heart-rending moments and through the most joyous moments, and it has been an absolute privilege. To be honest, I slightly miss them in this place.
I would like to pay tribute to my predecessor, Siobhan Baillie. Siobhan was always so cheerful and positive, and I really admired her for that. She also squeezed the last Government into introducing what was probably their best bit of legislation, which was about childcare. This Government are continuing that and making sure that we deliver it. People who knew Siobhan will know that she also had a lot better hair than I do. [Interruption.] Thank you very much—I will move on hastily.
I would also like to pay tribute to my Labour predecessor, David Drew, who was probably the best constituency MP I ever met. He is still very well loved in the area, and is still involved in local politics. He has given me lots of pieces of advice. One of them is to be yourself, which is good advice for all of us. I thank him for that.
My father actually said that there are quite a lot of similarities between being an MP and being a GP. He said, “First of all, both of you have surgeries, don’t you?” I thought about this more, and I thought about what I tell the doctors I train: “As a GP, you have to know the first three things about everything, which is true for MPs as well. You do not have to be an expert on anything, but you have to know a little bit about everything.” I have certainly learned a lot about that. Both GPs and MPs also need to be embedded in their community. But probably the most important thing to being a good doctor and a good MP is listening, not talking. The best doctors and the best MPs are the best listeners.
Stroud is the most beautiful area, and its hills and valleys were made famous by Laurie Lee in “Cider with Rosie”, which Members may have read. A previous GP in the area, about 200 years ago, was Dr Edward Jenner. He was in Berkeley in my constituency, and he discovered vaccination. He saved the most lives in history, so we must honour him. Vaccination is transformative for health. One of the big benefits of the pandemic is that we developed mRNA vaccines, which in the future will be used to treat cancer. This new therapy is really exciting.
Stroud is also home to cutting-edge companies, including Renishaw in the engineering industry. Ecotricity, owned by Dale Vince, has been at the cutting edge of sustainable energy for many years.
We also have the fantastic Forest Green Rovers, the world’s only carbon-neutral football club. They are also vegan. Sadly, they were relegated from the football league this year, but I promise they will be back. I hope they will be, anyway.
Dale Vince built the first wind turbine on Tinkley Lane in 1996, and there is a lesson there, because there was incredible local opposition to it for years. People did not like it, but now it has come to be accepted. This is the future. Many of us have spoken about community energy, which we have been developing in Stroud. We now have six projects. Waitrose will have solar panels on its roof, and we are going to cover the hospital with solar panels. There is a scheme to put solar panels on every public building, which will save having to put them on farmland. I recommend such schemes.
A number of my constituents are currently in prison for climate activism. Although I do not condone their protests in any way, I ask the Home Secretary to review their really excessive sentences, and I ask organisations such as Just Stop Oil to get behind us. We are the greenest Government this country has ever seen, so will they stop protesting and start building with us?
Community is really important in Stroud. We have community hubs throughout the constituency. One of the best is GL11 in Cam, run by Indigo Redfern. Its volunteers look after vulnerable people. We have the country’s oldest community agriculture scheme, and we have a big scheme that buys community shops. When pubs close in little villages, we buy them, too. We are also looking at buying land to protect it for people to use.
I worked in May Lane surgery for so long, and I praise the doctors, the nurses and all the reception staff for continuing to deliver extraordinary care to patients. General practice is delivering extraordinary care throughout the country, but we are in a certain amount of crisis. We have very low morale, and everyone is complaining about not being able to get a GP appointment, so I am proud that this Government will fix general practice by investing, innovating and making sure that patients receive the service they received in 2010.
Another thing I would like to say on innovation is that, about 25 years ago, I introduced an artist in residence at my surgery to treat patients with mental ill health, and I managed to prove that it was incredibly effective. We then expanded into green prescribing, getting people to take walks. We have poets in nursing homes, and we started prescribing allotments. These non-medical prescriptions are crucial, and they save the NHS money, because people realise they do not need medicine to make them better. The arts are crucial. We must support this country’s world-class arts sector, and we must use it to make ourselves better.
I will come to a conclusion. When I first arrived in the House, I was talking to some of the wonderful parliamentary staff who looked after new MPs so well. One of them said, “It is strange, because it is like there has been a generational change in the Commons. A wind has blown through the Commons and replaced what we had before with much younger Members”—not me, by the way—“and many more women. It is really ethnically diverse and there are LGBT people as well. It is like a fresh wind has come in.” I feel that offers a real opportunity for us to deliver real change in this country.
My father is 90. He was going to be here today, but he could not make it, which is really sad. He has been a lifelong socialist and Labour party member. He said in 2019, “I will probably never see another Labour Government,” but he has got to see one. Let us make this work and work hard to deliver renewable energy, so we can bring down the cost of power and change the whole environment of the country.
Madam Deputy Speaker (Ms Nusrat Ghani)
I think I was stuck on the vegan football club!
Sammy Wilson (East Antrim) (DUP)
The first two months of this Labour Government have not been good news for electricity consumers. First, the promise to save £300 per year on bills was demoted in the King’s Speech to, “We will do it in due course.” Then, during the recess, there was the announcement that the £300 for pensioners to help with winter fuel costs would be removed because the Government placed the importance of rewarding their trade union paymasters above the needs of vulnerable pensioners.
Just this week, the Government announced they would help the big energy companies and fill their pockets with extra money, guaranteeing those energy companies prices that are currently above the market rates for electricity. The companies will be guaranteed those prices for x number of years, but if the rates change to their benefit in the future, they can change the contracts and they will be guaranteed a market for their dear electricity. Who will pay for that generosity? The consumer.
Today we are debating a Bill that sets up a quango. Despite the fact there is a £20 billion black hole in the budget, the Government can find enough money to finance a new quango. All of this will be paid for by the electricity consumer. In his impassioned speech, the Secretary of State told us that it would be impossible to envisage anybody voting against the Bill and that, in fact, the country is clamouring for it. I have to say I have not had any constituents hammering on my door telling me, “Be there on Thursday, Sammy, and vote for this Bill.” In fact, I suspect if many members of the public were asked about GB Energy, they would probably think it is a new drink rather than some important Government Bill.
The Government have promised that they will create 17,000 new jobs in Northern Ireland, even though, as the hon. Member for Angus and Perthshire Glens (Dave Doogan) pointed out, the constitutional jurisdiction of the Bill does not even cover Northern Ireland. If one considers the Windsor framework and the fact that Northern Ireland is still under single market rules, many of the provisions in the Bill and the subsidies the Government are claiming could not be applied in Northern Ireland. Will the Minister confirm what role the Bill will have in Northern Ireland?
The Government’s main point is that the creation of Great British Energy will bring down prices for electricity consumers. The fact is that this Bill is all about having to spend money on new infrastructure to generate power well away from the centres of population, as well as putting in infrastructure to take that power to the consumer. That will require billions of pounds of investment. The Government say it will be done by the private sector, as if that solves it all. Of course, if the private sector puts in that investment, it will require a return. Where will that return come from? It will come from the consumer.
We already know, as it has been pointed out, that, according to Ofgem, two thirds of people’s electricity costs in the first quarter of this year were as a result of non-fuel costs. They included the cost of the infrastructure, the environmental policies, and the administration and the operating costs of the grid. Extending the grid, which we will have to do, will incur further costs and put up the price of electricity. That is why the Minister could not guarantee that the £300 saving will be delivered. He knows that the massive costs of changing our system will be borne by the electricity consumer. Whether we regard net zero as good or bad, let us not hide from the fact that it will cost people right across society. It will lead to industry facing higher costs, and consumers facing higher costs and greater fuel poverty.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Michelle Scrogham to make her maiden speech.
Michelle Scrogham (Barrow and Furness) (Lab)
I am grateful to be making my maiden speech in this debate on the Great British Energy Bill. Given my constituency’s links to energy production at the Morecambe Bay gasfields, it is in a unique position to be a leader in clean green energy with offshore wind and tidal power. Spirit Energy has ambitious plans to convert our depleted gasfields and onshore terminal into a world-class carbon storage cluster. This project will support our net zero ambitions, along with providing thousands of highly skilled green jobs in Cumbria, supporting the transition from oil and gas. The plan will bring a multi-billion-pound investment locally, promoting growth and further regional investment that will assist us in making our local economy more sustainable.
I congratulate all those who have made their maiden speeches today, including my hon. Friend the Member for Stroud (Dr Opher). It has been inspiring to witness so many incredible maiden speeches over the past few months. It has been fascinating to hear those gems of information about people and places, as Members speak about their constituencies with such passion, and the many varied paths and often moving stories that have brought them to this House.
I pay tribute to my predecessor, Simon Fell. We disagreed on many matters over the years, but his commitment to BAE Systems and the nuclear deterrent was clear and something on which we could both very much agree. His kind and generous advice during the election campaign was gratefully received and I would encourage everyone in this House to behave in a similar manner.
I wish my grandma could be here to see me today, as she would, like the rest of my family, be bursting with pride. She would no doubt remind me of the time that she took me to the cinema when I was a toddler. I had decided to make myself comfortable, so I kicked off my shoes to watch the film. Part way through, I climbed off my seat and, with instant regret, found that I had stepped on an ice cream lid. The cold and sticky ice cream quickly seeped through my socks. So angry was four-year-old me that I turned to face the whole audience, and, with hands on hips, loudly demanded to know who was responsible, declaring that whoever it was should come and pick it up. My grandma was understandably mortified by my outburst during the film, and it was 20 years before she confessed that it was her ice cream lid.
I could not be prouder to be not only the first local to be elected as MP for Barrow and Furness, but the first ever female to hold this very privileged position. I started my career in banking way back in the ’80s, but found very quickly that my passion would take me elsewhere. With an insuppressible drive to call out injustice, my mouth soon ensured that I was elected as our union rep, and within a couple of years I was asked to take on that role for the north-west region. I will never forget how I felt when my manager took me aside to tell me that, if I accepted that responsibility, I could kiss goodbye to my career in banking. I did not need time to think about it; I took the job. There is nothing in this world more likely to make me dig my heels in than a bully.
My constituency is well known for many things. We have been world leaders in ironworks, with the founders of Barrow exporting railways to the world. They understood that, for a secure economy, we needed more than one industry and created the jute manufacturing business that became a world leader in its own right. The ironworks eventually became a shipyard where we now build our nuclear deterrent, the most complex piece of engineering on the planet, and we are the only place in the UK that is capable of doing that. We protect our nation—a source of great pride to us locally—with the industry that is the backbone of the economy in Barrow and Furness, and many other towns across the UK, in a supply chain of tens of thousands of jobs.
Our coastline is home to many areas of natural beauty and protected habitats—from Ravenglass, where people can explore on a mini steam train, visit Muncaster Castle with its rich history and birds of prey, or enjoy the truly unspoiled area that is the western Lake district; all the way down to Walney Island nature reserve, with its adorable grey seals and stunning views, not least of which is its view of the island of Piel, which hosts its own king no less. Tradition holds that the landlord of the sole pub, while sitting in an ancient chair, carrying a sword and wearing a helmet, is crowned by the pouring of alcohol over their head. Shout out to John Murphy, our local historian and former Mayor of Burrow, for his fantastic walking tours to Piel.
Morecambe bay and the Duddon estuaries are our playgrounds, and my hometown of Ulverston, which earlier this year was reported to be one of the most vibrant towns in the UK, is known as the festival town, and has well and truly earned its title. There are festivals for everything from walking, Walkfest, to printing, Printfest; comedy and music, with a tenuous link to Laurel and Hardy’s “Another Fine Mess”, Finefest; and my favourite, the one I help to organise each year, Dickensian. The hashtag for that one made headline news in Japan, and I will leave Members to work it out for themselves. [Laughter.]
I have been incredibly lucky that I was able to take time out when my children were little and build a business on the high street with my sister. Those 20 years, through recessions, online shopping, out-of-town retail and covid, were a steep learning curve, but one that I would not change for the world. Our high streets are one of my passions. They are the very heart of our communities and Britain’s biggest employer—worthy of nurturing, protecting and revitalising. I very much welcome our plans and the opportunity to support them in this Government.
We have many famous sons and daughters from Barrow and Furness. Stan Laurel, comedy giant and half of the duo Laurel and Hardy, was born in Ulverston. My apologies to my hon. Friend the Member for Bishop Auckland (Sam Rushworth); his town has been trying to claim Stan Laurel for years, but he was definitely an Ulverston lad. Dalton, the ancient capital of Furness, was birthplace and early home of famous painter George Romney, and Tommy Johnson, the third-highest goal scorer for Man City, who made five appearances for England and scored in every single match. That might be a bit too far back for most to remember, because he was born in 1901, but other Barrow-born football heroes are Emlyn Hughes, whose statue now graces Abbey Road in Barrow, and Georgia Stanway, who I believe is now overdue her own statue for her achievements in the England squad. While we are on football, I have to say good luck to the Barrow Bluebirds in their upcoming match against Chelsea—you have great football genes on your side, so let’s have it!
Sir John Barrow, famous son of Ulverston, became the second secretary to the admiralty—to you and me, that is in charge of the Navy. He wrote the report that became the basis for what we now know as the mutiny on the Bounty. He was the last man to shake Lord Nelson’s hand as he departed on HMS Victory for Trafalgar, and was a great promotor of Arctic voyages of discovery, with many places around the globe now named after him, including Barrow strait, Cape Barrow and Point Barrow in Alaska, but oddly not Barrow-in-Furness.
I have fought long and hard to give a voice to our residents as their councillor and mayor, and I have often been angered by decisions that cost our communities dearly. Next week, our Lib Dem council will decide the fate of one of the busiest libraries in Cumbria—the last remaining community space that is free to use, where many community groups ensure that a vital safety net is provided, and where no matter what someone’s background or financial position is, they have a safe place to learn and achieve. I hope that the council will listen to the 3,000-plus people who have signed a petition to save it, and decide to work with me and local businesses to secure its future.
Our local community groups and third sector organisations have proved vital in recent years, and I am a strong believer that most problems have a solution at grassroots level, through community groups such as the Roxy Collective, Drop Zone, Women’s Community Matters, the Ulverston Resilience Group, Community Solutions, and Furness Refugee Support to name just a few—or Love Barrow Families, whose work is so life changing for some that they return as volunteers to give that same gift to others. In my role as MP for Barrow and Furness, I want to give their voice more power. I want to bring community groups together with residents and businesses, big and small, as that is how community works at its best, for the betterment of everyone in it.
Many MPs make unique claims in their maiden speeches. If I was a gambling woman, I would bet that I am the only MP to be married to a lighthouse keeper—I am hoping the weather is okay back home, because he is sat in the Gallery now. [Laughter.] My better half is the senior lighthouse keeper in charge of the Sir John Barrow monument, a copy of the Eddystone lighthouse that stands on top of Hoad hill and welcomes the people of Furness home.
Finally, I encourage all hon. Members to come and visit Barrow and Furness—but with a fair warning that several of them will, of course, feel obliged to return to this Chamber and correct the record on which is the best constituency.
Richard Tice (Boston and Skegness) (Reform)
I congratulate the hon. Member for Barrow and Furness (Michelle Scrogham) on that excellent speech. The vision of a landlord with a sword serving alcohol is an interesting one. I also congratulate the others who have made maiden speeches, and in particular the hon. Member for Northampton South (Mike Reader). Northampton South is where I grew up and first went to school, and I am still a passionate supporter of the Northampton Saints.
I have long been a critic of the excessive levels of overseas ownership of our key public utilities thanks to the failures of the previous Conservative regimes. Some 80% of our offshore wind industry is overseas-owned, so I have some sympathy, the House may be surprised to hear, with some of the aims and ambitions of GB Energy. Indeed, it may be that the Secretary of State was listening to me a couple of years ago when I talked about this issue.
In the spirit of being constructive and helpful to the Minister and the Secretary of State, I wish to put forward a couple of suggestions. My model of joint-venture partial public ownership of monopoly, critical public utilities is a 50:50 model. In opening the debate, the Secretary of State referred to the Danish company Ørsted, which is 50% owned by the state and 50% owned primarily by pension funds with private sector management. That is a win-win joint venture. I urge the Secretary of State and the Minister, when they make investments through GB Energy, to focus almost exclusively on 50:50 joint ventures in which the other 50% should be private sector investment, preferably from British pension funds on behalf of British pensioners. That way we will get the best of all worlds, with the quality of private sector management, because the truth is that Governments can be good at funding things but are generally very bad at managing things. I therefore urge the Secretary of State and the Minister, when they consider the investments to be made through GB Energy, to adopt the model of investing only up to 50% and always ensuring that there is private sector investment alongside.
Of course, the Secretary of State passionately believes that renewable energy will be cheaper, so he should have no problem at all with inserting into the conditions for investment a requirement for confirmation that within the business plan for investments there is a clear goal for the investment to result in cheaper energy for British consumers and taxpayers. I urge the Secretary of State and the Minister to adopt that 50% restriction and consider the need for private sector investment.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Noah Law to make his maiden speech.
Noah Law (St Austell and Newquay) (Lab)
Thank you, Madam Deputy Speaker, for allowing me to make this, my first speech to the House. It is a pleasure to follow my hon. Friend the Member for Barrow and Furness (Michelle Scrogham).
It is the honour of my life to have the chance to represent St Austell and Newquay, the stunning heartland of Cornwall that touches both of our beautiful coastlines and that has so greatly shaped my life. That ranges from the springboard that I was given at Fowey community college, to learning to play the violin in Par and to ride the waves at Newquay, or by inspiring me to craft a career in financing the kind of natural resources that we are fortunate to have there—I am always available with that experience for Opposition Members who cannot quite spot it—and as a campaigner these past few years, where I have heard so many inspiring voices that helped me to build the grassroots platform that brought me to this House. It is with deep gratitude that I take my place here, mindful of the trust and responsibility placed in me by the people of St Austell and Newquay.
I pay tribute to my predecessor, Steve Double, for the work that he did for St Austell and Newquay during his five years in office. Steve was a hard-working MP who championed, among many other things, the Cornish railways and Cornwall’s pioneering model of tri-service safety officers, both of which I look forward to taking up with vigour.
St Austell bay, Newquay and the clay country that lies in between mean that we are perhaps the most diverse and therefore representative of Cornish seats. From the tributaries of the White river that shipped our clay to the world, down on the eastern side from Roche, Bugle, Stenalees, Penwithick, Trethurgy and Tregrehan, down past St Blazey and Tywardreath to the great harbours of Par, Charlestown, Mevagissey, Fowey and its peninsula, and to the numerous namesakes of St Columba and her parish, Quintrell Downs, St Colan and the village and parish of St Enoder, with Summercourt, Fraddon and Indian Queens. In the west, we have St Stephen-in-Brannel, Grampound, Creed, St Ewe, Sticker, Polgooth, Trewoon, Lanjeth, Foxhole, Nanpean, Treviscoe, St Dennis and Whitemoor—to name a few.
With such a patchwork of ancient settlements across this powerhouse of the Cornish economy, the House will forgive me for seldom referring to the constituency as rural, despite our wealth of prime farmland that feeds our Cornish nation, Britain and beyond. Not only does St Austell and Newquay feature well-known agrifood, beverage and tourism industries; it is also the industrial heartland of Cornwall, boasting many of the industries we need to build a greener future, including renewables, critical minerals and the supply chain that sits behind them. Our constituency stands as a testament to Cornwall’s resilience and ingenuity, blending traditional industries with modern innovation, and I am committed to ensuring that this balance continues to flourish, so we can ensure that this once powerhouse of the Cornish economy is restored.
Beyond our unique economic challenges and opportunities, which demand a right to local decision making, we have a distinct Celtic heritage, language and national minority status, and a national pride: a pride that is inclusive, whether of families resident here for generations, those of proud northern stock or Windrush stock—or all of the above, like my own family—or those who have chosen to make their home in Cornwall more recently. Cornwall’s heritage is not just a relic of the past but a living, breathing part of our identity, shaping our values and aspirations as a community. It is therefore vital that we preserve and promote that heritage for future generations, ensuring that it remains a cornerstone of our cultural and social fabric.
This new parliamentary Session under the Labour Government offers real promise, and I am particularly pleased that they will deliver the largest increase in social homes in a generation. That will change lives, particularly the lives of my generation and the next, and give hope to those who never had it. It is also important to ensure that the right kind of homes are built, and that local people can afford to live and work in Cornwall—a reality that has long been impossible because of the vicious cycle of low wages and housing unaffordability. I will work tirelessly to ensure that Cornwall’s interests are represented and the voices of my constituents are heard at the highest levels of Government, and I will advocate policies that will bring tangible benefits to our people.
I am entering Parliament alongside three other Cornish Labour MPs, who reflect a sea change in the political landscape there. With Cornish Labour MPs in a Labour Government, I am thrilled to provide the strong voice in Westminster that we have so seldom had. But our political culture remains consistent: in people’s rightful expectation of our service; in our egalitarianism; and in our healthy scepticism towards established politics and the centralisation of power, whether that be in Westminster, in single individuals or in out-of-touch bureaucracies that fail to deliver for working people.
In that spirit, I pledge to serve with integrity, to listen to all voices within our community and to champion the values that make Cornwall so special, ensuring that our future is as bright and prosperous as our history is rich and storied. No more shifting the deckchairs: we are going to get Cornwall building again—to a blueprint built of the voices of those who put me here.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Angus MacDonald to make his maiden speech.
Mr Angus MacDonald (Inverness, Skye and West Ross-shire) (LD)
Thank you, Madam Deputy Speaker. That was a very heartfelt speech from the hon. Member for St Austell and Newquay (Noah Law). Cornwall and the highlands of Scotland share our westerly reaches and Celtic background.
I am very proud to have been elected to serve the people of the west highlands and Inverness in this Parliament. Following the Electoral Commission’s mistaken decision to cut the number of highland constituencies from three to two, I have, to a large extent, replaced two former MPs in Ian Blackford and Drew Hendry, who represented to the best of their ability Ross, Skye and Lochaber, and Inverness, Nairn, Badenoch and Strathspey respectively.
To say that my constituency is geographically challenging would be an understatement. It takes four hours to drive from east to west and from north to south. The highlands of Scotland are bountiful in their beauty—from the miles of sandy beaches in Gairloch and Lochaber, the mountains of Ben Nevis, and the Skye Cuillins and Torridon, to the castles of Urquhart on Loch Ness and Eilean Donan in Wester Ross. Our oaks and Scots pine trees are bent over as a result of the prevailing westerly wind. We have beautiful lochs and large, powerful rivers around every bend in the road.
Astonishing though the beauty is, it is the people of the highlands that I—like my amazing predecessor Charles Kennedy—love and am delighted to represent. Although the highlands are beautiful and the people wonderful, the region struggles financially. The Highland council is burdened with debts of £1.2 billion. Inverness’s population has increased rapidly, but the three-and-a-half hour drive from our highland capital to Scotland’s capital is not dualled and is not safe. The rural west faces severe fuel poverty, long journeys for NHS treatment, public service cuts, and a lack of essential services, with many young people leaving for cities.
Would it not be wonderful if a fairy godmother came along and bestowed a wonderful asset on the highlands—something that generated serious money for the area over generations, and a long-term provider of great employment? There is such an asset. The west highlands is the wettest area in Europe, and the wind is virtually unceasing. We have the most fantastic land to benefit from the move to renewables. That opportunity has not gone unnoticed: utilities and infrastructure firms from all over the world are queueing up to install 200-metre-high wind turbines on our hills; our hydro schemes are getting upgraded; and there are £5 billion pump storage sites at various stages of development in my constituency. Major construction projects abound across the highlands. Thousands of workers are brought in and accommodated in temporary modular housing.
Peak electricity use in Scotland is 3 GW, while our peak production is 10 to 14 GW. Scotland may add as much as another 10 GW of production capacity by 2030. We will be producing seven times more electricity than we use. Like for prospectors to a gold rush, the rich opportunities are accompanied by challenges. There are two important issues to which we need to pay attention. First, there is a cost to that for the highlands: the industrialisation of our countryside. What was a beautiful view of the mountains is now rows of 200-metre-high whirling turbines, and large new pylons marching across the country to the cities, where the demand is. Secondly, what is in it for the locals? The turbines and generators are manufactured overseas, the developer and utilities firms are from outwith the UK, and the workers are shipped in. Last year, our total community benefit from that multibillion-pound industry was an estimated £9.1 million in the highlands, and £26.4 million across Scotland as a whole. It should be a multiple of those figures. We in the highlands pay 50% more for electricity connection than people in the south of England, yet increasingly, the highlands is where that electricity is generated. The Government are releasing the restrictions on onshore wind farms in England, so what is an issue for Scotland now will become an issue for many rural areas across Great Britain.
What can be done about this? I propose that 5% of revenue from all newly consented renewable energy generated both onshore and offshore should be paid to community benefit funds. For onshore projects, two thirds of that should be paid to the affected council ward, with one third paid to a council infrastructure fund; for offshore projects, all of that 5% of gross revenue should go to council infrastructure funds. Existing renewable projects over 1 MW should pay 2%, as per the split already outlined. For transmission lines and substations, the Irish have an excellent community benefit plan that we can learn from—I would like the energy Minister to listen to this, rather than do his emails. The Norwegians handled the revenue from the North sea oil boom well, and their sovereign wealth fund is now valued at $1.7 trillion. Britain saved nothing, and we are in real danger of repeating that mistake with the renewables bonanza.
I close by saying there is considerable disadvantage to the people of rural Britain in taking on the downsides of hosting our move from a carbon-based economy to a renewable electric alternative. It is only fair that we make it beneficial to the people affected. It is great that the Great British Energy Bill will be further strengthened to include enabling community energy—that is really important.
Finally, Inverness is the centre of onshore and offshore wind, the existing hydropower industry, and massive pump storage projects. I am glad that GB Energy is going to be headquartered in Scotland, and I believe Inverness would be the right place for it. Irrespective of that, one of its first jobs should be to look at my proposals and to ensure that the benefits of Scotland’s renewables can be properly shared, because this is an opportunity that we cannot afford to miss.
Mr Toby Perkins (Chesterfield) (Lab)
It is a great pleasure to follow the hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald). I congratulate him on that excellent speech. In particular, when he speaks of Charles Kennedy, who is still tremendously missed in this place, he speaks of a political giant we all reflect on very fondly. It is also a great pleasure to follow my hon. Friend the Member for St Austell and Newquay (Noah Law), who I also congratulate on an excellent speech.
I speak today in support of a Bill that has the potential to be a real game-changer in the fight to decarbonise our energy supply. I applaud my right hon. Friend the Secretary of State on his determination in bringing this Bill before the House so soon after the general election. It is hugely encouraging that the Government have got straight on with the business of setting up GB Energy, following hot on the heels of the excellent auction that we heard about just this week. GB Energy’s task—working hand in hand with the private sector to power an ambitious expansion of renewable energy—is a crucial one. The task of decarbonising our energy supply could not be more urgent. Scientists have made it clear that the warming of our climate due to carbon emissions is having disastrous consequences that are already being felt. We are not heading towards a climate emergency: we are already living in one.
We should reject the voices that say that China’s growth means that anything we do is futile. That is an excuse never to take the steps needed to decarbonise. Of course, there is a role for international negotiation and bringing pressure to bear on other nations, but we do that more convincingly when our own house is in order. That is why I am so pleased to support GB Energy. We have also seen the danger of being reliant on other nations for our energy security. Energy supply chains are increasingly fraught with geopolitical tensions and, in the case of Russia’s senseless invasion of Ukraine, outright conflicts. That lays bare just how vulnerable we can be when we cannot provide for ourselves. Make no mistake, energy security is national security.
We should benefit from the great natural riches this country is endowed with, yet the last Government’s inconsistency of approach detracted from the investment in renewable energy that we need. From the ban on onshore wind to the downgrading of feed-in tariffs and the disastrous, failed contracts for difference round 5 auction, the renewables sector has not previously had a consistent partner to maximise the potential for renewable energy.
Dave Doogan
I am fully aligned with the hon. Member’s priority for national security in energy not to rely on other nations. Of course, within the UK, Scotland generates vastly more energy than we can consume. Although we are in the same state—in the United Kingdom—Scotland is a different country and a different nation. Does he think it is appropriate that Scotland should reap no benefit whatsoever from its energy endowment relative to anywhere else on these islands?
Mr Perkins
I do not recognise the hon. Gentleman’s description at all. We are part of a United Kingdom, and we all make contributions and we all receive benefits. The people of Scotland were given an option to vote to leave, and they chose not to. I know that is a result he bitterly regrets, but that is the choice the people of Scotland made. It is absolutely true that Scotland produces a large amount of renewable energy and of energy more generally, and it also gets many other benefits in many other ways. That is why I suspect the number of Members on the Benches next to him is so much smaller than it was previously, because people have recognised, overall, the benefits of being part of this great Union.
As I say, we should benefit from the great natural riches that his country is endowed with, but the previous Government’s approach withheld those opportunities. What today’s Bill offers, alongside the astonishingly successful round 6 auction, is a strong signal that the new Government are taking the generation of renewable energy far more seriously. It is imperative that the sector knows it has a Government who are a reliable partner, without constant knee-jerk changes in policy: not a pushover or a Government who give away taxpayers’ money thoughtlessly, but one setting out a fair and reliable basis for firms to invest.
Alongside the imperative to reduce emissions and bills, GB Energy can be crucial for our economy. I am pleased that the Government have announced that GB Energy will be headquartered in Scotland. Scotland is proportionately the leading nation in the UK for renewable power. However, I caution the Secretary of State not to ignore the contribution of coalfield communities such as those that he and I represent. In north Derbyshire and across the north midlands and south Yorkshire coalfields, communities that were created to power the nation with coal from the dawn of the industrial revolution should be central to the Government’s thinking in this arena.
This Government have laid down demanding targets to double energy generated by onshore wind farms, triple solar power and quadruple offshore wind. Those objectives are a vital part of decarbonising the grid by 2030, but we should not be in any doubt about the challenge they represent. There are still many legitimate questions about the operation of this new enterprise and where the balance will sit between being a conduit to private investment and being a provider in its own right, but criticism of the Bill from Opposition Members has been wildly overblown. The truth is that this small Bill is introducing the company—it is not the entire energy policy of this Government—and much of the criticism has been fanciful. However, I would be interested to know from my hon. Friend the Minister how the new company will work across Government to unlock the planning system while taking communities along with us.
I am extremely pleased to speak in support of this Bill, and I will be voting for it with great enthusiasm. Yes, there is lots more work to do, but this Government have made a damn good start.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Ann Davies to make her maiden speech.
Ann Davies (Caerfyrddin) (PC)
Diolch yn fawr, Dirprwy Lefarydd—thank you very much, Madam Deputy Speaker. It is a pleasure to follow the hon. Member for Chesterfield (Mr Perkins), to hear so many maiden speeches here today—especially from our fellow Celts in Cornwall and, of course, the hon. Member for Clwyd East (Becky Gittins)—and to contribute to this important debate. The climate crisis and the need to decarbonise our energy generation are among the most pressing challenges of our time, and how we choose to respond will shape the future of all our communities, including those in Carmarthenshire I have the privilege to represent.
I am deeply honoured to have been elected to represent the newly formed constituency of Caerfyrddin, which was created from the previous seats of Carmarthen East and Dinefwr, and of Carmarthen West and South Pembrokeshire. Although new in this Parliament, the constituency has historical roots, having existed under similar boundaries between 1918 and 1997.
I would first like to pay tribute to my immediate predecessors, Jonathan Edwards and Simon Hart. Jonathan served our community diligently for 14 years, demonstrating the essence of being a constituency MP, which is to work hard, serve all and be rooted within our communities. Simon also served for 14 years with dedication, and I acknowledge that to the western parts of Caerfyrddin.
Our constituency has a proud history, and it is impossible to speak of it without mentioning Gwynfor Evans, who won the seat back in 1966 as the first ever Plaid Cymru MP. His victory was a watershed moment for Welsh nationalism, and I am acutely aware that I would not be standing here today without Gwynfor, so his name might make a few appearances in this speech. It is in part thanks to him, and those who worked alongside him, that Plaid Cymru today represents our highest ever proportion of Welsh seats in this esteemed organisation, and we do not take that responsibility lightly. It is also thanks to Gwynfor that today we are able to take the oath of allegiance in Welsh, and in Cornish as was mentioned earlier, within this establishment. He was the first MP to attempt to do so in 1966, and was rebuked by the then Speaker. We have, of course, moved on since those days.
I also want briefly to mention Megan Lloyd George, who was the first female MP for Carmarthen—I am the second—between 1957 and 1966. It was a surreal moment, on the morning that I was sung off from the train station in Caerfyrddin, to find when we landed in Paddington that I was on the Megan Lloyd George train.
In many respects, Caerfyrddin is a microcosm of Wales. We have the lush green Tywi, Taf and Teifi valleys, rich in natural beauty, and to the south and east we have a proud industrial heritage with the coalmines of Cwm Gwendraeth and Dyffryn Aman. Those communities, like so many across Wales, still bear the scars of that industrial past—poor housing, low-paid work, and poor health outcomes are legacies that we must all address. We are all too aware of the effects that that extractive economy has had on Wales. Our land produced vast mineral wealth, yet much of the economic benefit was extracted for the profit of others, leaving our communities to bear the human cost.
Renewable energy now presents an historic opportunity for the Welsh economy, similar to the role that coal once played. However, I fear that history has little regard to our communities, and is in danger of repeating itself. Under this Government’s Great British Energy Bill, private companies will be encouraged to build wind farms and develop tidal energy, solar, hydropower and carbon capture projects under leasing agreements with the Crown Estate.
Let us mention the Crown Estate for a moment—a company that holds assets in Wales valued at more than £853 million in 2023. Despite having powers over Welsh natural resources, the Welsh Government have no powers over the Crown Estate, so the profits from leasing to private companies go straight to the UK Treasury, with a cut for the royal family. Those powers were devolved to our friends in Scotland in 2017, so why not to Wales? The large often multinational companies that the Government will be encouraging to lead development under GB Energy will mean, yet again, profits flowing out of Wales, with little gain for our communities. Ironically, some of those companies are state-owned enterprises, but it is citizens of other nations who will benefit, rather than our own.
I mentioned the lush valleys that I represent, the Teifi and Tywi. Under the current plans of Green GEN Cymru and Bute Energy, a 90 km long, 132 kV dual circuit overhead line is being proposed, which has been met with widespread local resistance. Local people are passionately in favour of decarbonisation, but we simply ask that the Welsh Government’s policy is implemented, which is that,
“electricity transmission cables should be placed underground where possible, not just in designated landscapes but where possible.”
We know that undergrounding is already commonplace in many European countries, particularly using developing cable plough technology. The UK and Welsh Governments should be placing greater emphasis on developers incorporating such undergrounding into their proposals. Landowners across the Tywi and Teifi valleys are prepared to allow access to land if an undergrounding commitment is made by Green GEN Cymru. Unfortunately, despite many attempts by me and others, the company refuses to make that commitment. It would undoubtedly save developers time and money if they would just fully engage meaningfully with our communities.
In his maiden speech, Gwynfor Evans described Carmarthenshire as
“a county of very great natural wealth”.—[Official Report, 26 July 1966; Vol. 732, c. 1499.]
He said it was home to the only anthracite coalfield in Britain, steelworks and ports, and that it had vast agricultural potential, but he added that people
“see no evidence of this prosperity. What they see is mines closing, railways closing, steel workers being made redundant”—
as we have now—
“and a decline in agriculture.”—[Official Report, 26 July 1966; Vol. 732, c. 1498.]
It was as true then as it is today. Rural depopulation remains an impending crisis in Caerfyrddin.
I was born and raised in Llanarthne. I have moved only four miles in my entire life. I farmed there. I have a tenanted dairy farm unit with my husband Gareth, who is up in the Gallery with my family and friends. I am a mother of three daughters and a mamgu of seven. I know I do not look it—you all should have jumped in there. You lost your opportunity, boys.
I am all too aware of the shift among many of those in our younger generations away from agriculture, with many moving to cities to work. If we allow global corporations to treat Wales as a playground for their activities, without ensuring that local communities benefit economically, socially and ecologically, we only exacerbate the depopulation of our countryside. We have already seen large international corporations buying up farmland in Carmarthenshire to plant trees to offset their own carbon footprints, but without changing any of their commercial practices. That is not the path to a sustainable future for our communities, and it is not the path towards food security or the best use of land. We need legislation that ensures that local communities derive the greatest benefits from renewable energy investments.
Climate action cannot succeed while we continue to encourage an extractive economy, and it is our responsibility to develop our rural economy to be locally focused. That creates well-paid jobs for local people and regenerates wealth within our communities. As the Member for Caerfyrddin, I want to see a different economic model for Wales that is locally owned, where the benefits are retained within our communities and where development is driven not solely for profit, but for the wellbeing of our people. We should adopt a distributed, decentralised model of energy generation that spreads ownership and benefits broadly across our communities. Those two aspects—ownership and benefit—must go hand in hand.
To return to Gwynfor’s words from his maiden speech, he said that
“the Welsh are beginning to take their country as seriously as the English take their country and as seriously as the Danes and Swedes take their countries.”—[Official Report, 26 July 1966; Vol. 732, c. 1498.]
Thanks to Gwynfor and the foundation he laid, the people of Wales take their country seriously. We have our own lawmaking Parliament, and our two languages—Welsh and English—officially have full equal status in public life. There is much we can still do and much we can learn from other nations. Denmark has rooted its decarbonisation efforts in local ownership, which has accelerated its progress, because it has garnered widespread public support. In Denmark, there has been a legal requirement since 2009 for at least 20% of renewable energy projects to be offered to local ownership. The Institute of Welsh Affairs has recently suggested a similar threshold of around 15% as a minimum for Wales. That is the kind of forward thinking that we need.
During the election campaign, many people kept saying to me, “You’re not a normal politician.” My response was, “Why aren’t I? I am a mam, a mamgu, a farmer, a business owner—running a children’s nursery that we started from scratch—a former teacher and a lecturer. And there isn’t a training module for this job, is there? It’s just life experience.” I am determined in this new role to show women in Carmarthenshire that we all belong in the rooms where decisions are taken, absolutely.
I carry with me the voices of those who have been overlooked for far too long: farmers who toil the land; families who strive for a better future; and communities who deserve far more than crumbs from the table. The path forward must be one where Wales controls its own destiny, where the wealth of our natural resources enriches our people and where the decisions that shape our future are made not in boardrooms far away but by the very people who live and work in our communities. That is how we will ensure protection for our environment and our society for the years to come. Diolch yn fawr.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Elaine Stewart to make her maiden speech.
Elaine Stewart (Ayr, Carrick and Cumnock) (Lab)
I begin by congratulating the previous speaker, the hon. Member for Caerfyrddin (Ann Davies), on making an excellent maiden speech. I also congratulate all new Members who have made interesting and inspiring contributions today. I am delighted to be making my maiden speech as part of the debate on the Great British Energy Bill. GB Energy will, of course, be headquartered in Scotland. With clean energy infrastructure already in place and the workforce to match, Ayrshire would be an ideal setting. However, regardless of where it is located, GB Energy will create thousands of jobs and deliver energy security and lower prices for consumers throughout the UK.
As it is customary, it is right that I pay tribute to my direct predecessor, Allan Dorans, who served his constituents well through the last five years. Politics aside, it is important to acknowledge the hard work and dedication that is asked of us elected Members. We carry out our duties and represent all constituents to the best of our ability. In his maiden speech, my predecessor said he hoped that voters in Ayr, Carrick and Cumnock would never again elect an MP to go to Westminster. On that point, I am glad to say he was wrong.
I also pay tribute to my Labour predecessor, Sandra Osborne. Sandra was the first Labour and first woman MP for Ayr from 1997 until 2015. Sandra was an outstanding MP and is still remembered fondly by many throughout the constituency. I also pay tribute to her predecessor as MP for Carrick, Cumnock and Doon Valley, George Foulkes, who now sits in the other place as Lord Foulkes of Cumnock.
Madam Deputy Speaker, allow me to say a few words about my constituency of Ayr, Carrick and Cumnock. It runs all the way from Pinwherry to my beloved Dalmellington, with many rural and coastal towns and villages in between. Ayr is the county town of Ayrshire and hosts vital services such as Ayr university hospital and the University of the West of Scotland campuses, as well as a first-class racecourse that hosts the Scottish grand national.
The constituency is also famous as the birthplace of Scotland’s national bard, Robert Burns. Robert Burns is a global icon. His poems and songs are renowned across the world. It would be difficult to pin Burns down on his politics, but our shared admiration for the red, red rose fills me with quiet confidence.
Carrick lies to the south of the constituency. Maybole and the seaside town of Girvan both look out on to the Ailsa Craig—yes, I have an island, too. Ailsa Craig is famous for granite, which is quarried to make curling stones worldwide. There is a joke that Scottish women make champion curlers because they are used to sweeping around dead weights.
Cumnock and Doon Valley consists of former mining areas, and Cumnock was a home to Keir Hardie, the founder of the Labour party. When critics take a pop at the Labour party, they say, “Keir Hardie would turn in his grave.” They do not realise that he was, in fact, cremated in Maryhill in Glasgow. A fine marble bust of Keir Hardie sits outside Cumnock town hall. It is a popular spot for a photo for leading Labour figures visiting the area. Even Michael Portillo felt obliged to have his picture taken for his travel documentary. He, too, will be happy that this Government have been so quick to act to improve the great British railways.
When hon. Members decide to travel to my constituency, they will also find the magnificent Dumfries House in Cumnock. Saved by an intervention in 2007 from the Prince of Wales, now His Majesty King Charles, the project has developed much-needed educational, research and employment opportunities across the area, with great success.
There are many gems to be found across the constituency. However, my fond memories are of growing up in a small village called Dalmellington and being born and raised in Bellsbank, as part of a scheme built to house the miners moving into the area. Picnics at the spectacular Loch Doon, pit parties with all the miners’ weans and playing kerby in the street—it was a simple life, but filled with joy. I am the proud daughter of a miner and an NHS worker. Given that, I was delighted to stand on a manifesto to end the injustice of the mineworkers’ pension scheme, and I was proud to ask about that very issue in my first question to the Government yesterday.
As the youngest of four siblings, times were tough growing up in our house—it was a case of first up, best dressed. These humble beginnings make my journey to this place even more remarkable. The journey was made easier by my two beautiful children, who have supported me all the way. My friends keep me grounded every day, and I thank them for that. I have always been keen to push and challenge myself, which is why I decided at the age of 18 to move to New York, where I worked as an au pair. If someone had told my younger self where I would be standing today, I simply would not have believed it. The odds were stacked against me—back then, the glass ceilings were still very much in place. Around that time, I assume a young Kamala Harris felt the same.
Thankfully, progress has been made. I am thrilled to sit as an MP in this place alongside a record number of women. I am thrilled to see a Government with a record number of women in Cabinet. I am thrilled that this Government have appointed the first female Chancellor in history. Yes, progress has been made. In November, I am sure that the whole House will welcome the prospect of yet another glass ceiling being smashed in the world of politics.
I returned from the United States to become a youth worker. Through my work in the third sector, on projects such as the Zone initiative and the Coalfields Regeneration Trust, I have supported communities to help them flourish. Over the years, I have worked tirelessly in those communities to give children and young people the opportunity to socialise and to champion them. It is about providing vital training and employment opportunities to deprived areas. My work in this place and in my constituency will continue in the same vein, as it always has—supporting communities through public service. My direct experience of how local communities are suffering is exactly why I am standing here today. The chance to change the lives of people, who are often vulnerable and feeling left behind, is a passion that lies deep in my soul.
I will end with this: the day before his tragic, untimely death, the late leader of the Labour party John Smith ended his last speech by saying:
“The opportunity to serve our country—that is all we ask.”
I promise to serve my constituency to the best of my ability.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Anna Sabine to make her maiden speech.
Anna Sabine (Frome and East Somerset) (LD)
Thank you, Madam Deputy Speaker. I thank the hon. Member for Ayr, Carrick and Cumnock (Elaine Stewart) for her speech, particularly what she said about women in politics and smashing the glass ceiling. All the maiden speeches today have been fantastic, but in particular I mention that of the hon. Member for Stroud (Dr Opher), because he talked about developing vaccines for cancer. That was rather poignant for me, because while I have been in the Chamber I have learned that a good friend of mine has died of bowel cancer, which she had had for many years. I pay tribute to her and her young family.
The Great British Energy Bill is particularly important to the residents of Frome and East Somerset, many of whom, especially in more rural areas, live in fuel poverty. Frome and East Somerset is a wholly new constituency created by the recent boundary review, which means I have the very great privilege of being its first ever MP. Frome has a reputation as a cultural and arts hub for the south-west, home to the Cheese & Grain, the Mark Bruce Dance Company and the renowned Frome Independent market. It also has the dubious honour, I am told, of being the most mispronounced town in the UK. Given the number of mispronunciations of my own surname, Sabine, clearly my constituents were looking for someone who sympathises with their linguistic challenge. For the House’s information, it is definitely “Froom” not “Froam”.
I do not think my constituents would mind my describing Frome as feisty. The town is free spirited and forward thinking, often pioneering new ways of doing things, whether having a proudly independent town council, starting the UK’s first community fridge or sharing best practice on social prescribing in GP surgeries. Frome is awash with local groups doing incredible work for the environment, such as Friends of the River Frome and Frome Families for the Future, with which I have already had the pleasure of working. I look forward to championing their causes throughout my time in this place.
Until July, Frome was represented by my hon. Friend the Member for Glastonbury and Somerton (Sarah Dyke), and I hope to be able to emulate her energy and enthusiasm in serving this very special place. The East Somerset half of my constituency comprises the settlements of Midsomer Norton, Radstock and Peasedown St John. These areas have a proud coalmining history dating back to the 1700s. They also share a fantastic sense of community, some wonderful local schools, and plenty of walks and open countryside to enjoy. Midsomer Norton is also home to a section of the Somerset and Dorset railway, with one mile of track running from Midsomer to Chilcompton. My late father was both an ardent Lib Dem and a massive steam train enthusiast, so I think he would have been delighted to see his new MP daughter being given a tour of the railway by the trust’s wonderful volunteers during its 150th birthday celebrations this summer.
Until July, East Somerset was represented by Sir Jacob Rees-Mogg. I know from my time in the constituency the high regard in which he and his team were held by local people, particularly when it came to responding to and resolving casework. That commitment to supporting local residents, shown by both Sir Jacob and my hon. Friend the Member for Glastonbury and Somerton, is one I aim to emulate.
Dotted throughout the constituency are a whole host of other villages, hamlets and communities, many with farming and rural traditions at their heart and with a real sense of community spirit. If I have made it sound like my constituency comprises three distinct parts, then hon. Members should know that they are linked by many factors, such as a proud industrial heritage, a sense of community spirit and, of course, a love of Somerset cider. However, there are constituency-wide issues, which I will work hard to resolve, such as a lack of access to dentists, serious challenges around safety on our A roads, and a need for better bus services to help link up all the different settlements. I moved to Somerset over 20 years ago and intend to spend my time in this place working hard on the issues I know matter to the people in Frome and East Somerset.
Finally, let me say a word on my journey to Parliament. I am technically not the first member of my family to be found on the parliamentary estate. My great, great aunt, Helen Fraser, was a Scottish suffragist and her picture is part of the display on the wall in the admissions office. In 1922, she was the first woman to stand for Parliament in Scotland—of course she stood for the Liberal party—but sadly she did not make it to the Chamber herself.
I attended a state comprehensive school in Hampshire, where I grew up with my mum and brother. I won a county music scholarship that enabled me to join my amazing local youth orchestra and have a whole range of experiences I would not otherwise have been able to take part in. I managed to secure a place at Oxford University and I can well remember feeling like a fish out of water when I arrived there, absolutely bemused by its architecture and traditions, and often wondering if Oxford was really a place for someone like me. Fast forward 26 years and many of those emotions welled up again as I wandered around the parliamentary estate and grappled with the intricacies of its systems and procedures. As a single mum now myself, I am acutely aware that many of the ways in which this place works were not designed with parenting in mind, and they do not always feel accessible to many of us—although I should mention that I am grateful for all the support, as I am sure all new Members are, from the extraordinarily kind and helpful House staff.
Part of the reason I stood for Parliament was to give my wonderful children some faith in our political system and to show them that anyone can be an MP. I am absolutely determined that in my time here I will always have one eye on ensuring that the young people of Frome and East Somerset are not made to feel that anywhere is out of their reach. I want young people from all backgrounds in my constituency to know that the great institutions of this country, be they our universities, our scientific bodies, our civil service, our orchestras or indeed this place, are institutions where they are not only able to participate, but are actively welcomed.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Julie Minns to make her maiden speech.
Ms Julie Minns (Carlisle) (Lab)
Thank you for calling me, Madam Deputy Speaker. I also thank the hon. Member for Frome and East Somerset (Anna Sabine) for her maiden speech, made on what I understand is a very difficult afternoon for her. I am sure that everyone in the House would join me in sending condolences to her and to the family of her friend.
This has been a most entertaining and enjoyable debate. Any debate that marries ABBA, Stan Laurel and Shane Warne is one that I want very much to be part of, so I am delighted to have the opportunity to make my maiden speech in this context. It is also apt that I make it during a debate on Great British Energy. It is apt not just because the transition to clean energy and tackling climate change are critical to Carlisle—flooding has already decimated our city twice during this century, and local villages are too often cut off by localised flooding—and not just because we need to remove the obstacles that prevent Cumbria’s farmers from connecting their solar and wind farms, but because people right across Carlisle and north Cumbria tell me that they are desperate to see that cut in their energy bills.
It is also personally apt that I speak on this topic. My great-grandfather, a Conservative alderman and councillor for Carlisle, was a man of unusually progressive thinking. In 1909, he urged our city’s industries to set aside coal and instead harness the hydroelectric power of the three rivers on which our great border city stands. I like to think that, whatever our political differences, my great-grandfather and I would have agreed that Great British Energy is not just right, but essential for Carlisle, for Cumbria, and for our country.
I am the first Carlisle-born Member of Parliament since 1918, and the very first woman to represent England’s most northerly city. It is a city of many little-known facts. For example, in the 1830s, it was home to Britain’s first black police officer. In 1916, David Lloyd George nationalised all our city’s pubs and breweries, declaring that their intoxicating effect on munitions workers was doing more damage to the British war effort than the entirety of the German submarine fleet. In 1963, the Beatles were thrown out of Carlisle’s Crown & Mitre Hotel after a complaint from the local golf club that the young Liverpudlians were too casually dressed. My predecessor John Stevenson is himself a keen golfer, and I like to think that while he might be a stickler for the rules, he would have recognised the fledgling talent of the Fab Four, and would not have been so hasty in demanding their removal. I say this because John was a strong advocate for the potential of our young people, and played an important role in securing the new Pears medical school at the University of Cumbria, which will open its doors next year.
In over 2,000 years of city history, the University of Cumbria is a relative newcomer, and its creation is testimony to the work of the last Labour MP for Carlisle, Eric Martlew, who did so much to secure a university for our city. I look forward very much to the opening of the new medical school, and the contribution that it will make to our Government’s mission to rebuild our NHS and train the next generation—like my own daughter—of home-grown doctors, nurses and paramedics.
My constituency lies between the Lake district and Hadrian’s Wall. It is plentiful in sheep and cattle, and is populated by folk known for good craic and a love of XL crisps. For the uninitiated, let me explain that the XL crisp is a savoury, cheesy—no onion—delight, whose availability in the catering outlets of this House I shall passionately campaign for. I shall also campaign for more critical matters, such as the completion of our flood defences—defences that were promised but not delivered by the last Government—the rebuilding of NHS dentistry across north Cumbria, and the growth of Carlisle’s night-time and visitor economies.
Carlisle and north Cumbria already have much to offer visitors. I challenge Members to name another UK city than can boast not only citadels, city walls and a Norman castle, but a Victorian railway station, a cathedral, and original Turkish Baths. At this point I must declare an interest, as chair of the charity working towards the refurbishment and reopening of Carlisle’s historic Turkish baths. It is one of only 12 original baths still in working order in the UK, the only one left in the north-west of England and the only one with a tiled interior made by the company responsible for the exquisite tiles here at the Palace of Westminster.
We are also blessed with a rich industrial heritage. Over the years, Carlisle has been a hub of food manufacturing, with the sweet manufacturer Teasdale, famous for its liquorice Nipits; Cavaghan & Gray, which produces not just any ready meals, but M&S ready meals; and Carr’s biscuits, home of the Table Water and employer of generations of cracker packers.
I could not be prouder to represent the city where I was born and raised. I owe a debt to Robert Ferguson school and Trinity school for helping a working-class child from Denton Holme to become the first in her family to go to university. Without university, I would not have become involved in politics and would not have had the privilege of campaigning for John Smith, a great parliamentarian, to become leader of our party. Nor would I have realised the ambition of my distant cousin Ernest Lowthian, who was Labour’s first parliamentary candidate for Carlisle back in 1918.
In conclusion, I return to my great-grandfather. At the opening of one of the bridges that cross the rivers whose energy he sought to harness, he said:
“Our job as servants of our great border city is to leave it a little better than we found it.”
That, Madam Deputy Speaker, is the task that I have set myself.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. To allow time for one more maiden speech, the next speaker has agreed to speak for two minutes. Thank you so much, Llinos Medi.
Llinos Medi (Ynys Môn) (PC)
I congratulate the hon. Member for Carlisle (Ms Minns) on her maiden speech. I thank her for sharing her passion and for her mention of the delicatessens in her area after a long afternoon.
Ynys Môn is known as the energy island because of its rich natural energy potential, its powerful, predictable tides and the proud history of nuclear production on the island. The Wylfa site has been a political game for over a decade. Back in 2019 we were so close to the finish line, but the site lacked political support from the Government at the time. The community has witnessed the false dawn of Wylfa Newydd, and there is uncertainty regarding site under this Labour Government. The Government’s fact sheet for the Bill says that Great British Energy’s functions will include
“exploring how Great British Energy and Great British Nuclear will work together”.
The people of Ynys Môn do not want more consideration; they want clear commitment and timelines. I urge the Government to give Ynys Môn a straight answer about the future of the Wylfa site, and a clear timeline.
I was pleased that the HydroWing tidal project won 10 MW in the latest contract-for-difference auction. This technology will produce energy for the community-owned Morlais project off the coast of Holyhead. However, Wales received only 1.63% of the total auction allocation and no contracts were awarded to Welsh floating offshore wind projects. We were promised that a Labour Government in Westminster and a Labour Government in Wales would benefit Wales. This is yet to be seen.
A commitment for GBE to massively expand local and community ownership energy alongside devolution of the Crown Estate would ensure that ownership and profits from energy projects are in the hands of the people of Wales and could help lower bills. I urge this Government to make sure that those decisions are put in local hands, but not to rush the decisions on large solar panels, because food security is paramount and losing valuable agricultural land could mean a decline in the economy of Ynys Môn.
Ultimately, the immense natural energy potential of Ynys Môn and the rest of Wales can be truly realised only if control of Welsh natural resources is held by Welsh communities, backed with sufficient public investment to meet our climate and economic goals. I hope I was within the time limit, Madam Deputy Speaker.
Madam Deputy Speaker
That was magnificent. To make his maiden speech, I call Mark Sewards, who has five minutes.
Mr Mark Sewards (Leeds South West and Morley) (Lab)
Thank you, Madam Deputy Speaker. In the interest of saving time, I am sure you will grant me permission to skip to the part of my speech where I celebrate my great constituency of Leeds South West and Morley.
It is the greatest responsibility and honour of my life to stand before you as the Labour MP for Leeds South West and Morley. Alongside being a husband and a dad, this is the most important job I will ever do, and I give sincere thanks to my constituents and neighbours for sending me to this place.
It has been nine years since Morley and Outwood, the old constituency, sent Dame Andrea Jenkyns to represent us, and I would like to give sincere thanks to my predecessor. Dame Andrea is a ferocious campaigner for the issues she passionately believes in. During her time as our MP, she was a strong advocate for animal welfare and always stood up for the people of Ukraine. She will always speak her mind and her truth to power, as Members of this House will be able to confirm. While the list of things that we agree on is reasonably short, we were in broad agreement, prior to the general election, that there needed to be change in Prime Minister. I sincerely thank Dame Andrea Jenkyns for her service to her constituents and this House.
Leeds South West and Morley is steeped in history and tradition, and it is made up of some of the best and proudest communities in the country. The town of Morley is in the centre, and I am proud to say that I was raised there. However, some of my constituents will hear me say that and take issue, because I was in fact raised in Churwell, a village that is geographically attached to the town of Morley. While I will always call myself a proud Morleian, the truth is that there are distinct differences in each part of my constituency. Each one has its own proud history and its own stories to tell.
Part of Morley’s history is that it was once home to the penultimate Liberal Prime Minister, Herbert Asquith. You can find his name on buildings and in streets, including, I am sorry to say, the infamous Asquith Avenue, which is in desperate need of resurfacing. I know that some of the historians among us will never forgive Herbert Asquith—not for the quality of the roads in his name, but for the shell crisis of 1915, which saw the British Army left without the munitions it needed during world war one. This ultimately brought down his premiership, but given that the crisis was abated when the state stepped in to provide a solution, it stands as a reminder that, as powerful as the free market can be, at times there are problems and crises that require the power of the state to solve.
While I am sharing a snippet of the history of my constituency, it would be remiss of me not to talk about the place of the mills and the mines in the history of Leeds South West and Morley. Whether it was the role of Morley, Tingley, Gildersome or East Ardsley in the heavy woollen trade, or the mines in the villages of Lofthouse and Robin Hood, these industries have shaped our constituency and the home that we know and love today. But it is not just the history of my constituency that makes it great; it is the people. It is the people at Drighlington village’s Coffee Pot Memory Café, who do outstanding work for people with dementia. For their efforts, they were recently awarded the King’s award for voluntary service—one of the highest honours that such an organisation can receive. I commend them for their work.
While I am talking about Drighlington, I must also pay tribute to not one but two Olympic medallists who live in the village: Jack Laughter and Lois Toulson, who both won bronze in the 3-metre and 10-metre synchronised diving events in Paris. I congratulate them on their incredible success. It is Lois’s first medal and Jack’s fourth—he now has one of every colour.
In Churwell village, we are blessed with the environmental action volunteers, who keep the community looking outstanding. In Farnley, we have the 8th South West Leeds scout group, who work in conjunction with our litter pickers to keep our community looking outstanding. In Wortley, residents have gone to great lengths to protect and restore the TV Harrison football field. Leeds United legends have trained there, including Paul Reaney and David Batty, and I look forward to working with residents and the Leeds Schools Sports Association, which has responsibility for the site, to restore it to its former glory.
Although Farnley and Wortley are new additions to the constituency, it is a place that does not have its own community hub or library. But what it does have are some outstanding sports teams that make up the community hub for our community in Farnley and Wortley. These are Wortley FC, the Farnley Falcons, West Leeds RUFC and, of course, New Farnley Cricket Club. Wortley is the place where I am raising my own children, Oscar and Arthur, who will never be able to call themselves Morleians, I am sorry to say.
Finally, Madam Deputy Speaker—I know that my remaining time is very short—I want to reference the work of WF3 Kindness, which works across Tingley, Ardsley, Thorpe, Lofthouse and Robin Hood. Its sole aim is to help people in those communities to live stronger and better lives, and I look forward to supporting the charity in that work.
These organisations and constituents have sent me here to return politics to public service once again. They have sent me here to restore stability to our country and our economy. They have sent me here to plug the gaps that they have often had to fill themselves. My constituents have stepped up for their community time and again, and it is my turn to do the same for them.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
It has been a great privilege to listen to so many maiden speeches this afternoon, with so many Members of Parliament, pretenders to the throne, representing what they claim to be the most beautiful constituency in the country. Everybody, of course, knows that is West Aberdeenshire and Kincardine, but listening to everybody was a great reminder of the fact that there is so much more that unites us than divides us. We are all privileged to serve in this place, and we are all privileged to serve the constituents who sent us here for however long or short.
However, reading through the list of the 18 constituencies whose Member gave their maiden speech today felt like reading the list of all the parts of the country where I either spoke or campaigned over the last year. The fact they are now all represented by parties not my own perhaps says something about my campaigning ability: Clwyd East; Northampton South; North East Hertfordshire; Eastleigh; Stratford and Bow; Cheadle; Truro and Falmouth; Camborne and Redruth; Stroud; Barrow and Furness; St Austell and Newquay; Inverness, Skye and West Ross-shire; Caerfyrddin; Ayr, Carrick and Cumnock; Frome and East Somerset; Carlisle; Ynys Môn; and Leeds South West and Morley—all fantastic maiden speeches. Welcome to the House of Commons. It is just unfortunate that, on such an auspicious and a proud day for those Members, we had to spend our time talking about an unnecessary and costly gimmick that will not improve our energy security and will do nothing to reduce consumers’ bills or our carbon emissions.
We heard the Liberal Democrats claim that we left a mess for the Government to clean up when it comes to energy. Well, if having the first to fifth largest offshore wind farms in the world, the fastest reduction of carbon emissions in the G7, an end to coal-fired power production and net zero in law is a mess, I would like to see a good job well done.
We heard great claims from the Secretary of State that GB Energy will incentivise investment and speed up the deployment of new technologies while scaling up more mature ones, all of which is debatable to say the least. As the public out there watch their bills go up again, the Labour party claimed through the election that creating this company will automatically lead to lower bills. We heard again and again that bills will be £300 lower. Funny that we do not hear that figure bandied around as frequently today. That is the most questionable claim.
If not £300, as the Secretary of State used to claim, by how much will bills fall as a result of establishing this company, and by when? How will this company speed up deployment? What will it do differently, given that we already have the first to fifth largest offshore wind farms generating power here right now without this costly gimmick? Although I respect the ambition and agree that we need to see more jobs for British workers and the establishment of a UK-based supply chain, which is why we created the sustainable industry rewards that will come in at allocation round 7, does the Minister acknowledge that this will take time and that we are hundreds of thousands of workers short of the plans that we have to build right now, and that this will make no difference to the Government’s 2030 plans?
The Secretary of State’s claim not to be neutral about where things are made rings hollow to the supply chain in and around Aberdeen, which is worried about the future of North sea oil and gas because of his Government’s decisions. The announcement, with much fanfare, that GB Energy will establish an unprecedented partnership with the Crown Estate is fantastic, but what does that mean for Scotland, where the Crown Estate is devolved? The private sector projects are, in the Secretary of State’s words, guaranteed to return a profit, so why do they need to be de-risked by the taxpayer? What will be the cost to the taxpayer when, inevitably, some of these new technologies fail? What will be the company’s final bill for taxpayers?
Although £8 billion is a large amount of money—just think how many pensioners could heat their home for that amount, for example—the TUC, no less, conducted an analysis last year that found that GB Energy will need around £61 billion to £82 billion of investment between 2025 and 2035 to scale it up to the level needed to do all the miraculous things that the Government claim.
This initial £8.3 billion capitalisation, large when we have such pressure on public finances, seems a little on the low side if the Government really want to create a British Ørsted or EDF, bailed out annually by the taxpayer, especially given that £3.3 billion is planned to fund local authorities and provide low-cost loans to communities, leaving £5 billion to do everything else. When does the Minister expect his boss, the Secretary of State, who has returned to the Chamber, to go cap in hand to the Treasury asking for more money? What exactly does he think the Chancellor’s response will be?
How will the establishment of GB Energy impact the independence of GB Nuclear? Will GB Energy now have the final say over the small modular reactor drawdown process? How is that process progressing anyway? Do we have a timeline for a final decision on that or on a third gigawatt-scale reactor at Wylfa?
Josh MacAlister (Whitehaven and Workington) (Lab)
I thank the hon. Gentleman—apologies, the right hon. Gentleman—for giving way. Some 18 years ago, a younger Member for Doncaster North approved land at Moorside, next to Sellafield, for new nuclear use, but 18 years on we are now at the eleventh hour, thanks to the indecision, chaos and confusion of the last Government, who were unable to make long-term decisions about the nuclear future of our country but are now lecturing this Government. Why is the shadow Minister defending the last Government’s approach when it is so apparent that a new approach is needed?
Andrew Bowie
I thank the hon. Gentleman for his question. He was right the first time—hon. Gentleman, not right hon. Gentleman. I was very pleased to visit Sellafield and Moorside in his constituency, and I was proud to be the first Minister for nuclear in the history of this country. I was proud to launch Great British Nuclear, and to announce the small modular reactor drawdown scheme, our route to market for alternative energy, that we would build a third gigawatt-scale reactor at Wylfa and that we would carry on with things at Sizewell. Now it is in the hands of the hon. Gentleman’s party to take the decisions necessary to move the nuclear industry to the next level, moving forward on our proud, world-leading agenda for reinvestment and our revolutionising of this country’s nuclear industry, of which he is rightly proud.
Andrew Bowie
I will not, because that will eat into his own Minister’s time to respond. Oh, maybe I will as it is the hon. Gentleman who is asking.
Mr Perkins
The shadow Minister is such a generous man. He is listing all the commitments he made, but we all know that his Government made £22 billion-worth of commitments that they had no idea how they would pay for. Why does he not tell the truth?
Andrew Bowie
“Truth” is quite an interesting word coming from the party that has decided to prioritise train drivers over pensioners and that, on the very day it announced a 22% increase in junior doctors’ pay, told the pensioners of this country they would be going cold this winter.
To go back to the matter at hand, what will be the relationship between GB Energy and UK Industrial Fusion Solutions or the International Atomic Energy Agency? How will that affect the plans for STEP—the spherical tokamak for energy production—at West Burton? The Secretary of State wants the UK to export more energy, but has he done an analysis of the impact on bill payers of building the required infrastructure and interconnectors? Will GB Energy and not Ofgem now be the final decision maker when it comes to the approval of new international interconnectors to the continent? If so, how will it be held responsible for those decisions by the Department and by Parliament?
I know the Minister is a respectful person, so I ask him sincerely to please end the disrespect being shown to the people of Aberdeen, with the “will they, won’t they” game being played around the location of GB Energy’s headquarters. Politics aside, that area of the country is already worried about its economic future. My plea to him, as my hon. Friend the Member for Gordon and Buchan (Harriet Cross) asked earlier, is to end that situation and make an announcement as soon as possible.
Ultimately, the simple question the Minister will have to answer, after having considered all the points made by hon. Members this afternoon, is why? Why are the Government doing this? Britain is already a world leader in clean energy production. We are already leading the world in cutting our carbon emissions. We already export energy. We are building new technologies at unprecedented rates. We have halved our emissions and done so while growing the economy.
The Secretary of State regularly, and rightly, claims that it is Britain’s over-reliance on gas that has led to bill payers here paying higher bills than in other countries. As I say, he is not wrong. It is acknowledged by the Climate Change Committee that we will be reliant on gas for a significant proportion of our energy supply for many years to come, so his decisions for the North sea will leave us, in the short term, even more reliant on foreign imports and on the countries and regimes he claims he wants to free us from, and there will be a lower tax return for the Treasury from a smaller sector. Jobs, capabilities and skills will be lost overseas, and bills will not fall, certainly not by the £300 he claimed during the election.
So if there is nothing in GB Energy for bill payers, it does not have the capital to enable it to be an Ørsted or an EDF, we are already a world leader, it will open the taxpayer up to huge risk, investing in emerging technologies might fail and it will not increase our energy security, the question is why do it? What is the point in GB Energy? Surely the Secretary of State is not that desperate to have something to put on his “Ed stone” or to have a new plaque to unveil. It may well be about the “Ed stone”, but the Secretary of State should be aware that this Bill could be the Government’s tombstone. We have seen how these projects end up: Robin Hood Energy collapsing, leaving Nottingham City council with a bill of £38 million; and the same with Bristol Energy. What will the bill for the country be if GB Energy follows the same path?
Great British Energy will not produce any energy, it will not cut household energy bills by £300 as the Prime Minister, the Chancellor of the Exchequer and the Secretary of State for Energy Security and Net Zero have all stated, and it will not compensate for the amount of investment in energy projects that will be deterred by the Government’s plans to prematurely shut down the UK’s oil and gas sector. It is an unjustified use of taxpayers’ money at a time when the Government are withdrawing the winter fuel payment for 10 million pensioners as energy bills rise. I echo the words of the Secretary of State and urge Members on the Government Benches to ignore their Whip and vote for our amendment this evening.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
May I begin by thanking right hon. and hon. Members who have participated in this extremely wide-ranging debate this afternoon? I particularly pay tribute to all Members across the House who made their maiden speech in this debate. Thankfully, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) has already run through all the constituency names, so I do not need to do that again. However, I do want to highlight specifically some of the really emotional contributions that we heard from hon. Members, particularly my hon. Friends the Members for North East Hertfordshire (Chris Hinchliff) and for Stratford and Bow (Uma Kumaran) and the hon. Member for Eastleigh (Liz Jarvis), who spoke so passionately, as many did, about their pride in their communities and the importance of this moment and this decisive decade in tackling irreversible climate change. There will come a point in this Parliament when we will not have debates that are dominated by maiden speeches, and I will really regret that, because every time I sit here I learn a lot more about the country in which we live. I thank all those Members for sharing their communities with us this afternoon.
This has been a thorough and interesting discussion about the principles behind this Bill and the establishment of Great British Energy. The UK faces immense challenges, from energy insecurity and our over-reliance on volatile fossil fuel markets to the cost of living crisis and climate crisis. This Government are determined to address those challenges with clean energy being a key part of the solution.
Other countries have already seized the opportunity of publicly owned energy generation companies, which has left Britain behind. Unlike previous Governments, this Government are committed to the benefits of public ownership in the UK, and we want UK citizens and taxpayers to own parts of our infrastructure, too.
Great British Energy will drive clean energy deployment, boost energy independence and generate benefits for all parts of the United Kingdom. It will deliver for the British people, creating good jobs, delivering profits and demonstrating international leadership.
Michael Shanks
I will carry on just now, because we have a very short time before we finish.
I wish to address the reasoned amendment tabled in the name of the right hon. Member for East Surrey (Claire Coutinho). I shall address many of these points in more detail, but, in short, Great British Energy will produce clean energy, protect bill payers in the long term, and invest in projects that expect a return on investments, generating revenue and delivering for the people of this country in the process. We will manage the transition in the North sea in a way that is prosperous and just and enables our offshore workers to retrain into the industries of the future in a long-term sustainable way. I urge the House to vote against this so-called reasoned amendment tonight.
I turn to some of the specific points that have been raised. I am sorry that I will not be able to get to all of them, because I have very little time. We have already announced a substantial amount of detail on GB Energy beyond this Bill, including publishing its founding statement, announcing the first major partnership with the Crown Estate, confirming that it will be headquartered in Scotland, and appointing Jürgen Maier as the start-up chair. This Bill is the next stage of Great British Energy’s journey, giving it the statutory footing that is needed to deliver on our ambitions. It is drafted to help establish Great British Energy and sets out the necessary legal framework.
GB Energy will be an operationally independent company, just as Great British Nuclear and the UK Infrastructure Bank are. It will be accountable to Parliament, not run by Ministers as some Members have claimed today. It will be overseen by an experienced board, benefiting from industry-leading expertise and experience right across its remit, bringing the most skilled and experienced individuals to the heart of the decisions that it will make.
GB Energy will not be a trading fund, as suggested by the hon. Member for Angus and Perthshire Glens (Dave Doogan). Instead, as I have already said, it will be an operationally independent energy company that owns, manages and operates clean energy projects. I suppose the confusion arises from the fact that the SNP’s commitment to set up a publicly owned energy company has not come to anything at all. I think it has been seven years since it was announced. Only this week, the Scottish Government drew down even more money from the ScotWind inheritance to plug the gaps in their day-to-day spending.
Michael Shanks
We have heard from the hon. Gentleman already.
There were multiple questions in this debate about how Great British Energy will lower bills and when taxpayers will see a difference. That features in the reasoned amendment tabled by the Opposition. Conservative Members want to raise the issue of bills as if they have been nowhere for the past 14 years. Their record is why people up and down this country are paying more in their bills, and the people will not forget it.
Michael Shanks
I will not give way; I am very short on time.
In an unstable world, the only way to guarantee our energy security and protect bill payers from future energy shocks is to speed up our transition away from fossil fuels and towards home-grown clean energy. We have been clear that we cannot flick a switch and fix 14 years of dither and delay overnight, but we have set about starting to do so, and we will continue. Throughout supporting the transition, Great British Energy will save families money by ensuring that electricity bills are no longer exposed to those kind of price shocks—[Interruption.] If Conservative Members want to put a number on this, let us just ask them to go back to their constituencies and ask their constituents how much more they are paying in their bills thanks to 14 years of Conservative government.
On the question of jobs, a number of hon. Members rightly raised the importance of investing in our supply chains and in the skills of the future. Great British Energy will create thousands of good jobs and build supply chains in every corner of the UK through the projects that it supports, as well as at its future head office in Scotland. Its investments will support companies across the energy industry, providing opportunities for high-quality, well-paid work rebuilding the UK’s industrial heartlands.
Several Members raised the question of community energy, which is at the heart of the Bill. Local power generation is an essential part of the energy mix, ensuring that energy projects deliver not just a community benefit but the social outcomes that local communities need. Many Members mentioned that.
Michael Shanks
I have said that I do not have time. The hon. Gentleman gave a speech in which he raised a number of points, and I am happy to come back to him at another time.
Community energy also reduces pressures on the transmission grid and the need for expensive investment, so community ownership will be critical. Great British Energy will deliver a step change in investment in local and community energy projects, putting local authorities and communities at the heart of the energy transition.
Finally, I will address a few points on devolution, which was raised by the hon. Member for Angus and Perthshire Glens, the right hon. Member for East Antrim (Sammy Wilson) and my hon. Friend the Member for Camborne and Redruth (Perran Moon). Great British Energy is intended to support all parts of the United Kingdom, and will help to ensure that every part of this country has a role to play in delivering our energy independence. Since we came into government, we have been engaging regularly with the devolved Governments, on this Bill and a range of other issues, to reset the relationships with them. I hope that soon the devolved Governments will indicate their support for the Bill by passing motions of legislative consent.
One of the Government’s five driving missions is to make Britain a clean energy superpower, and at the heart of that mission is Great British Energy. This is a bold idea, overwhelmingly backed by the British people—not only by people who voted Labour, but by people who voted SNP, people who voted Conservative and even people who voted Reform. Surprisingly, there were people who voted for those parties. This is an idea that has the public’s support. It will speed up the delivery of the clean energy that we need. It will deliver the next generation of good jobs, with strong trade unions, helping to re-industrialise all parts of our nation. It will protect family finances. It will learn the lessons of the past and allow the British people to reap the rewards of this transition. I urge the House to support the Bill and bring a fully operational Great British Energy one step closer to reality. I commend the Bill to the House.
Question put, That the amendment be made.
The House proceeded to a Division.
Madam Deputy Speaker (Ms Nusrat Ghani)
Will the Serjeant at Arms investigate the delay in the No Lobby?
Rail and Road Connectivity: Northern Lincolnshire
(3 months, 2 weeks ago)
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Melanie Onn (Great Grimsby and Cleethorpes) (Lab)
I am delighted to welcome the Minister to her place, and I am pleased to be able to raise these important issues on behalf of my constituents in Great Grimsby and Cleethorpes and also the wider region.
The Minister will be aware that road and rail connectivity to Great Grimsby and Cleethorpes has been a long-standing issue, which many before us have tried and failed to resolve, but I am hopeful that we will be able to move things on substantially for the greater wellbeing and economic benefit of northern Lincolnshire and the Humber generally.
The Minister knows that despite being out on the coast, northern Lincolnshire plays a critical part in the nation’s energy and fuel generation, being the country’s centre of offshore wind operational management and repairs. We produce omega-3 rich food for the country’s dinner plates and eco-fibres for our clothes. We host the world’s largest port by tonnage. We are the hub for new vehicle distribution around the UK. We are the star coastal beachy getaway—someone in the Chamber may want to challenge me on that at some point—for hundreds of thousands of visitors each year, delivering excellent hospitality. We deliver national training in offshore wind and high-skill engineering. As a thriving and proud footballing town, we draw crowds weekly from all over the country, keen to support their team down at Blundell Park.
My point, in highlighting all these activities, is to demonstrate the economic importance of the Humber, and the south bank in particular, not only to those locals who benefit from the work and the products, but to the whole country. We know that being easily able to access places is key to securing additional inward investment, growing economic prosperity for and on behalf of the people who live there. It dispels some of the sense of being separate or isolated from the rest of the country.
Currently, despite the fact that we have a busy dual carriageway linking us to the central spine of the country; regular-ish direct rail services across to Liverpool in 3 hours 26 minutes via Doncaster, Sheffield and Manchester and to Leicester in 2 hours 36 minutes via Lincoln and Nottingham—the Minister will be pleased to know that—and a brilliant little airport in Kirmington that has flights direct to Schiphol and Aberdeen, we are still considered hard to access. Add in some roadworks or rail replacement services, and somewhere with better, faster transport links tips the balance and ends up getting the investment.
The current situation for an away fan driving to support their team at Blundell Park—let us say Bradford; there was a recent match that we were triumphant in—down the A180 on to Cleethorpe Road and then Grimsby Road is an inexplicably loud, juddering journey along a 50-year-old concrete road. The urban myth of the road is that an American firm were contracted to lay experimental surfacing and rolled it the wrong way, so the friction is higher and more pronounced as the cars drive the opposite way to how they do in the States, so it generates much more noise. But, whatever the history, the fact of the matter is that, today, despite some patchy resurfacing in short stretches, the noise for drivers is so loud that speaking at a normal volume to a passenger sat right next to them is impossible and hearing travel alerts on the radio is also impossible. I am convinced that it must be damaging to the hearing of people who regularly drive on that road for work, education or leisure purposes.
As for the trains, I absolutely defy anybody who says they have not experienced a delay at Doncaster. Usually they come later on, in the evening. For more regular travellers, perhaps that results in just a roll of the eyes and settling down in the waiting room for an hour or more to wait for the next connection, or, as the hon. Member for Brigg and Immingham (Martin Vickers) will know, heading outside to join a lengthy queue and eventually clamber into a shared taxi with other fed up and rather confused passengers. For those who do not use the trains often, the lack of information, the lack of updates and the paucity of any assistance with luggage or perhaps mobility struggles really puts them off using the railways, especially when they pay a premium for the privilege.
With most international business travellers flying into London airports, the route between Grimsby and Cleethorpes and London is an absolutely essential one. One of our refineries is owned by the Americans, the fabric company Lenzing is Austrian, Ørsted is Danish, RWE is German, Knauf is also German, and Sofina is Canadian. Companies from all over the world are basing themselves in Grimsby, Cleethorpes and the surrounding northern Lincolnshire area. Bringing senior executives to our richly experienced and active corner of the country is essential, but it is really embarrassing to send them on delayed trains or a two-coach, 50-year-old chugger with no modern amenities on it.
Richard Tice (Boston and Skegness) (Reform)
The hon. Member is making an extraordinarily powerful and important point. Lincolnshire has a huge footprint from the north, which she represents, to the south— I would suggest that it is not a corner but a massive footprint. The Government want to create growth and to build 1.5 million new homes over this Parliament. The key to that is infrastructure, because if we do not have a good road network to enable people to get across Lincolnshire and if they cannot get to new homes, the house builders will not build them. In my constituency, we have been talking about a bypass in Boston for about 20 years—so long that no one can remember. I therefore support her and say to the Minister that actually the whole of Lincolnshire—north and south—needs extra investment in road and rail infrastructure to secure the growth that the Government are rightly so keen to ensure for the nation.
Melanie Onn
I thank the hon. Gentleman for his intervention. He makes an important point. We cannot grow one area of—I will not say “corner” again—our patch, our kingdom of Lincolnshire without growing the other. The ability to travel across the county is incredibly important.
Robin Swann (South Antrim) (UUP)
I support the subject of the hon. Lady’s debate. She mentioned the United Kingdom; it is important that we look at the connectivity of the entire United Kingdom. In the constituency that I represent, there has already been an all-Ireland rail review, in which both the Northern Ireland Executive and the Irish Government have looked at the opportunity of improving rail links. One of those links was from Antrim town through to Lisburn, and connecting Belfast international airport via rail. The hon. Lady is worried about the state of her rail link to the airport in her constituency; I have Belfast international airport in mine, and no rail link. Could the Government work with the Northern Ireland Executive on the all-Ireland rail review to look at how that could progress?
Melanie Onn
I admire the hon. Gentleman’s ability to get South Antrim into a debate about northern Lincolnshire, and I support his opportunity to do that.
It is totally unsuitable to have such antiquated amenities. It is no surprise that instead of coming to Grimsby, Cleethorpes or Immingham, businesspeople will instead go direct from London to Hull from King’s Cross. As Humber-based businesses, they stay in accommodation there, perhaps with a trip over the Humber bridge for half a day. That is not enough for us to be able showcase our whole northern Lincolnshire offering.
In June, my predecessor—and my successor, actually—announced on social media that a direct train would be up and running by Christmas. I wonder if the Minister could enlighten us on the background of that assertion? I have been unable to find much more than a hope from the previous Transport Minister. I am concerned that, perhaps, false hope has been provided to residents in my constituency.
I am conscious of time, and I want to let the hon. Member for Brigg and Immingham (Martin Vickers) speak for a few minutes because I know that he is keen to contribute, but I will finish by saying that back in 2003, the then MP for Cleethorpes, Shona McIsaac, had a debate on exactly the same issue relating to the A180. At that time, a 10-year resurfacing programme was in place, promising action between 2002 and 2005. Here we are again. Please, will the Minister assist me in making some progress for my constituents?
Martin Vickers (Brigg and Immingham) (Con)
I congratulate my constituency neighbour, the hon. Member for Great Grimsby and Cleethorpes (Melanie Onn), on securing this debate. It is an important one and, as she knows, an issue that I have been campaigning on. Indeed, when she was previously in this House we held numerous meetings with Ministers and the like about it.
The new Brigg and Immingham constituency has 11 railways stations, the largest port in the country and an international airport, yet we are still struggling to get the A180 resurfaced and a direct train service to London. This afternoon I was looking at when I first raised this matter in the House—it was in 2011, on a debate about High Speed 2, ironically. My understanding is that the previous Secretary of State had approved the start of the direct service from Grimsby and had instructed LNER to incorporate it in its negotiations with Network Rail about the forthcoming winter timetable. As the hon. Lady said, it would be nice if the Minister could confirm that that is the case.
The A180 is an issue that has been rumbling on—no pun intended—for at least the 14 years that I have been a Member of the House. In 2018, I held a public meeting in Stallingborough village hall, and Highways England—as it was called at that time—said that resurfacing would commence and be completed during the 2020-21 financial year, which was subsequently confirmed in a letter from the Minister. The situation at the moment as I understand it is that a programme exists to spend £9 million in the current financial year to deal with particularly dangerous stretches, but I am told now that complete resurfacing from Barnetby Top to Grimsby, which is essential, is now in the £300 million-plus category, and will need authorising as a major capital project.
Very briefly, there are a couple of other points worth mentioning. The train service that runs through Brigg, the Sheffield-Gainsborough-Brigg-Cleethorpes train service, was until fairly recently a one day a week service, with three services on a Saturday. That has now changed to a five day a week service, but it gives only 90 minutes in either Grimsby—if people want, as they should, to stop there to do their shopping in Freshney Place—or Cleethorpes. It gives them a mere 90 minutes to explore the beach and all that Cleethorpes can offer. Let us get something sorted. A regular service on that stretch of line would be greatly appreciated.
My final comment is on the Cleethorpes to Barton service, which is a bit of a Cinderella service. There are so many cancellations and the timings are not good for commuters who want to use it. It needs to be fully restructured, so I urge the Minister to look at that.
Madam Deputy Speaker (Ms Nusrat Ghani)
I cannot allow another speech, but interventions on the Minister, if the Minister chooses to accept them, are permitted.
The Parliamentary Under-Secretary of State for Transport (Lilian Greenwood)
I congratulate my hon. Friend the Member for Great Grimsby and Cleethorpes (Melanie Onn) on securing today’s debate and on returning to these Benches. I know she will represent her constituents wonderfully well, as she always did, and speak passionately, as we have just heard, about issues in her constituency and across northern Lincolnshire—an area she is rightly proud of and ambitious for. I am grateful for the opportunity to discuss transport in this region today.
There were certainly some attempts to broaden out the debate beyond north Lincolnshire. I understand the desire to talk about Lincolnshire, but I will perhaps stay clear of Northern Ireland, where transport is a devolved matter. Nevertheless, I am impressed with the determination of the hon. Member for South Antrim (Robin Swann) to speak for his constituents. Let me assure hon. Members that the Government understand the importance of transport to the people, communities and businesses powering local economies across the country, including on the south bank of the Humber.
I will begin with the A180. I am very aware that my hon. Friend and her Labour predecessor have previously raised the issue of road noise on this vital road for those travelling to and from her constituency. Assessments of road noise on the A180 have been undertaken by National Highways. Those assessments were carried out near Stallingborough—I hope I have pronounced that correctly—in May 2024, ahead of proposed concrete repairs. The noise levels recorded were between 65.9 and 82 dB, which I understand is reasonably loud for a driver over a sustained journey. However, I am afraid that they are also consistent with the expected amount of noise to be generated, given the volume of traffic the A180 supports. The age of the road is also an important consideration here, as wear and tear increases the level of noise generated. That being said, I fully understand the frustration that can be caused by sustained road noise for both drivers and those living near the road.
In the last year, National Highways has carried out three road surface improvements on the A180, with a fourth planned to commence this October—in just a few weeks’ time. Those works have and will reduce noise and improve road safety. Subject to confirmation of funding, additional surface treatment work is planned for the third roads investment strategy period and, when finished, it should substantially reduce noise levels along the route. The works will be of significant benefit to the lives of my hon. Friend’s constituents, and those of other hon. Members, both those living close to the A180 and those who regularly drive along the road. I completely understand my hon. Friend’s desire to make the journey to her coastal community as smooth and pleasant as possible, both for her constituents and for those making the important business journeys that she described.
Let me turn to the introduction of a direct train to London from Cleethorpes and Grimsby. The benefits of having direct links to the capital are clear: that is why we are working with industry to address the timetabling, financial, operational and infrastructure issues that need to be resolved before a service to Cleethorpes can be introduced—all of that once the east coast main line timetable change has been implemented. Assessments made by LNER and Network Rail have confirmed that LNER services can call at Cleethorpes and Grimsby, but in order for LNER trains to serve Market Rasen station, significant changes to platform length and height are required, as well as a new foot crossing to allow safe access to platforms.
My noble Friend Lord Hendy, the Minister for Rail, will consider the proposals that have been made, with final approval subject to funding and a thorough business case process. That was the case before the general election, and it is still the case now. The previous Rail Minister talked of an ambition to introduce the service, but I am sure that my hon. Friend and other Members understand that an ambition is not the same as a promise. In the meantime, addressing the performance of rail services in the region in advance of any decision on direct services between London and Cleethorpes and Grimsby will significantly improve journeys and reduce delays. My hon. Friend painted a picture, very effectively, of the impact on rail travellers when the integration between services is not working properly.
I am pleased that TransPennine has improved its service significantly over the last year, but it is clear that there is still room for improvement, and, as my hon. Friend knows, my right hon. Friend the Secretary of State has wasted no time in holding train operators to account for poor performance. In her first month in the job, she met the managing director of TransPennine Express and Network Rail representatives to demand action. Between 21 July and 17 August, only about 50% of all trains on the route ran to time, with fewer than 80% arriving within three minutes of timetable. During that period cancellations stood at 3.4%, with an increase attributed to problems with the Keadby swing bridge on 1 and 5 August, along with several Network Rail incidents. I will say more in a moment about how bringing track and train together under Great British Railways can help to drive improvements, because they are very much needed.
Northern’s performance over the last few months has been unacceptable. Between 17 July and 21 August, trains on the Doncaster-Scunthorpe route arrived on time only 78% of the time. The proportion of total cancellations was about 4%, although, depending on the day and conditions of travel, passengers may have experienced a better or worse service than that. In July, the Rail North Partnership, through which my Department and Transport for the North jointly manage Northern’s contract, served it with a breach notice which compels it to produce a formal recovery plan. It will be required to explain how it will tackle the underlying issues that are holding back performance, resulting in the current unreliable service. The plan will be scrutinised by my Department and by Northern leaders through Transport for the North’s Rail North Committee. We will ensure that the needs and expectations of passengers, including those in north and north-east Lincolnshire, are put at the heart of Northern’s recovery and development.
Let me now address the daily—well, five days a week—Sheffield-Cleethorpes service. I remember when the Brigg line service ran only on Saturdays, and I am probably among a select group who have actually travelled on the service; but the hon. Member for Brigg and Immingham (Martin Vickers) already knows that, because we took the trip together and stopped for a cuppa in Cleethorpes. The service is primarily intended to maintain route knowledge on the Brigg line in case of diversions. Although I appreciate the appetite for services to spend more time in Grimsby and Cleethorpes, Northern’s turnaround at Cleethorpes is necessitated by other demands on the network, including from freight services, and by crew rostering. Adding an additional service on the route could create clashes and would cost between £400,000 and £900,000 a year, depending on staff and rolling stock demands.
Naturally, the Department requires operators to match their services to demand. Demand remains low on the existing services from Sheffield to Cleethorpes, which reach only about 30% of their capacity even during the busiest times. Most of the demand on the service is driven by passengers joining at Worksop and Retford for Sheffield, or by Northern’s competitive leisure pricing between Sheffield and Cleethorpes, although TransPennine trains also offer services over a similar route. Demand on the route is also very seasonal; I know from my Nottingham constituency how much city residents enjoy a trip to the east coast in the heights of summer, but they find it less appealing on wet and windy days in the winter.
Martin Vickers
I take the Minister’s point about the small number of passengers on the route, but that is partly because there is only one service a day. If there were a regular service that people knew was there—even every three hours, shall we say—they could spend the day in Cleethorpes. It would encourage more passengers on to the route.
Lilian Greenwood
The hon. Member makes an important point that we will certainly look at, but I am sure he understands that, given the capacity and given the other ways in which people can travel, it is challenging.
Indicative modelling of an additional service suggests an industry revenue uplift of approximately £35,000 a year, although most of that is achieved by improving the service between Worksop and Retford and Sheffield. It would increase Northern’s subsidy requirement and would therefore raise costs significantly. This money is not available in Northern’s current budget.
This Government have been clear that performance on the railways must improve, and we are committed to delivering a unified and simplified rail system that focuses on improved services for passengers and better value for taxpayers. As my hon. Friend the Member for Great Grimsby and Cleethorpes knows, just this week the House of Commons passed a Bill to bring passenger services back into public ownership. By ending years of fragmentation and waste, we will ensure that the railway serves the needs of passengers and the taxpayer, rather than lining the pockets of private sector operators.
Bringing train operations into public ownership is just the first step in the Government’s plan to improve the railways for passengers and taxpayers. We will bring forward further legislation to create Great British Railways, a new arm’s length body that will act as a directing mind for the railways. This will ensure the highest standards of customer service and operational performance, with a relentless focus on delivering for passengers and freight customers. To achieve our goals, rail must become part of a reliable and efficient integrated transport network, including in the region that hon. Members here represent.
Improving bus services is also a top priority. My right hon. Friend the Secretary of State has been clear that buses are the lifeblood of our communities. We have not discussed them much today, but they can improve access to education, jobs and leisure opportunities, as well as connect us with our friends and family. As the Government strive to kick-start the economy, buses will be central in addressing regional inequalities and delivering growth. That is why we have set out an action plan to deliver better bus services, grow passenger numbers and drive opportunity to underserved regions. A core part of the plan is passing the better buses Bill, which will be introduced in this Session.
Am I running short of time?
Lilian Greenwood
I will cut to the chase. The Bill will give local leaders the tools to deliver better bus services and will ensure that networks meet the needs of the communities who rely on them. However, I need to say that this Government, as the Chancellor has clearly set out, have inherited an extremely challenging financial situation, with a £22 billion public spending gap left by the previous Administration in this year alone. The gap between promised schemes and the money available to deliver them has been abundantly clear.
I know that this is not the first time that these issues have been raised. My hon. Friend the Member for Great Grimsby and Cleethorpes has made a strong argument on behalf of her constituents. I reassure her that this Government have heard clearly the case that she and other hon. Members have made, and that we will continue taking action to address the issues that have been debated today.
Question put and agreed to.
Petition
Mill Field Housing Development proposals in Market Deeping
Westminster Hall
(3 months, 2 weeks ago)
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Waste Crime: Staffordshire
(3 months, 2 weeks ago)
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Adam Jogee (Newcastle-under-Lyme) (Lab)
I beg to move,
That this House has considered waste crime in Staffordshire.
It is a pleasure to speak in my first Westminster Hall debate as the Member of Parliament for Newcastle-under-Lyme. I am delighted to see you in the Chair, Mr Vickers, to share this special moment with me. Yesterday my dad had some serious surgery, and I want to start by thanking the NHS staff who looked after him and thousands of other cancer patients like him in Newcastle-under-Lyme and across our country. I welcome the Minister to her place. She is going to hear a lot from me in the weeks and months ahead, just as she and the Secretary of State have since the election.
The debate is focused on and around waste crime in Staffordshire, so I will touch on that and then focus on the disgraceful situation of Walleys Quarry landfill in my constituency. The true scale of waste crime is by its nature difficult to quantify. Those who are actively involved in waste crime normally seek to evade detection and leave the rest of us to pay the price.
In July 2023, the Environment Agency found that approximately 18% of all waste is illegally managed, equating to 34 million tonnes. As others will know, that is enough waste to fill Wembley stadium 30 times over. My view is simple: we cannot allow these criminals—because that is what someone is when they commit a crime—to get away, enrich themselves and ignore the law any longer.
The previous Government’s resources and waste strategy defines waste crime as
“anything that intentionally breaks the law relating to the handling and disposal of waste.”
Waste crime can be motivated by landfill tax evasion, and generally covers activities including illegal exports of waste, large-scale fly-tipping, illegal burning of waste, illegal operation of waste sites, non-compliance with the waste duty of care, the misclassifying of waste, and falsifying records. I hope the Minister in her response will set out whether she agrees with that definition, whether it is fit for purpose and whether she will look to update the resources and waste strategy.
The Environment Agency’s national waste crime survey 2023 report stated that waste crime cost the economy in England—or rather, cost my constituents in Newcastle-under-Lyme, and people in the county of Staffordshire and across England—an estimated £1 billion per year through evaded tax, environmental and social harm, and loss to legitimate business. That represents a 55% increase since 2015 and an estimated extra £604 million a year. I know the Minister will share my anger at the current situation, and I look forward to her setting out what we will do as a Government to get a grip of the situation.
There is a relatively long list of offences that constitute a waste crime, and I urge colleagues to have a look. I had originally planned to read them out, but it was a full side of A4 and I did not want to detain the House any longer than necessary. We have a long list of offences, but waste crime continues to blight communities at pace.
Sarah Edwards (Tamworth) (Lab)
I thank my hon. Friend for securing such an important debate. Last year the Environment Agency released its national waste crime survey results for 2023, which found that 86% of farmers surveyed were affected by fly-tipping. In my Tamworth constituency, residents have raised frustrations about the damage it causes to the countryside and the harm it can cause to nature. Does my hon. Friend agree that we need more collaboration between land managers, local authorities, police and the Environment Agency to better protect farmers against fly-tipping, which for many of our constituencies is a prolific example of rural crime?
Adam Jogee
My hon. Friend rightly speaks of the importance of cross-agency working to get those issues addressed. I represent a number of farmers in Newcastle-under-Lyme, and I know that my farmers will share her farmers’ concerns. I thank her for raising that point. We all have examples of waste crimes that have taken place, yet there are plenty of examples where there is no enforcement or prosecution. Has the Minister assessed the adequacy of the long list of offences, and if so, is she happy with them? If she is not, what is the plan to ensure that we get that right?
The impacts of waste crime are widespread, with adverse effects on our constituents, businesses, public services, the environment and the economy. For example, illegal waste sites can pollute the environment through the release of noise, dust, surface or groundwater contamination, or through unauthorised fires and burning. This applies to Walleys Quarry, formerly Red Industries RM Ltd, in Newcastle-under-Lyme, both in terms of dangerous and unacceptable levels of hydrogen sulphide being pumped into my community and of the fire that took place on the evening of 4 August 2024. Sites such as Walleys and other relevant landfills are unlikely to treat the waste in compliance with environmental best practice. Those companies divert waste from legitimate businesses, reducing their potential income streams, viability and competitive advantage. The cost of ameliorating fly- tipped waste falls to public services and our constituents.
I am grateful to Keep Britain Tidy for its helpful briefing ahead of this debate—I suspect that colleagues who are here would have enjoyed that briefing, too. I acknowledge all the work that Keep Britain Tidy does to reclaim our green spaces, to clean our streets and roads and to keep our communities safe and clean.
Dave Robertson
I thank my hon. Friend for initiating such an important debate on this most pressing issue. Does he agree with me that voluntary organisations such as those in my constituency, Burntwood Litter Heroes and Lichfield Litter Legends, really deserve the support and respect of their Members for all the work they do to keep our communities tidy, alongside the work of Keep Britain Tidy?
Adam Jogee
I thank my hon. Friend for that intervention. I, too, pay tribute to the organisations in his constituency that do so much important work. I very much like the alliteration of Lichfield Litter Legends, so he can pass our collective best wishes on to them.
Fly-tipping is the top environmental challenge faced by many communities, not least in Staffordshire, as we have heard from my hon. Friends the Members for Lichfield (Dave Robertson) and for Tamworth (Sarah Edwards)—neighbours, in fact. Despite resources going into tackling fly-tipping—education, monitoring, enforcement and removal—incidents of fly-tipping continue to increase. The education point for real people in the real world, as opposed to rich criminals in the waste crime world, is so important. This must be about pride—pride in our communities, in our homes, towns and villages—and this new Government, our Government, must lead by example and help to restore that.
In a previous life, I worked for the then shadow Minister for waste crime, my hon. Friend the Member for Newport West and Islwyn (Ruth Jones). She often raised in debates—I know, because I wrote many of the speeches—the high levels of recycling in Wales, so what discussions has the Minister had with the Welsh Government about best practice, and what lessons can we learn from the Labour Government in Wales? I see that my hon. Friend the Member for Vale of Glamorgan (Kanishka Narayan) is here.
This issue is of particular concern to residents on The Paddocks in Cross Heath in Newcastle-under-Lyme, and I am working with Councillor John Williams and Councillor Gill Williams on how we can hold the borough and county councils to account. Fly-tipping is also an issue for many residents in Bradwell. I thank one particular resident, Jane Rushton, for her tenacity and her commitment to keeping her community clean and free of fly-tips— I was at her house quite recently; she makes a very good cheese sandwich and an even better date loaf. I know that she is working with Councillor Andrew Fox-Hewitt, Councillor Lesley Richards and Councillor Annabel Lawley to do just that.
The Environmental Services Association—the trade body representing the UK’s resource and waste management industry—published back in 2021 a report entitled “Counting the cost of UK Waste Crime”, and these figures are relevant to now. It broke down the estimated financial impact of waste crime in England from 2018 to 2019 as follows: fly-tipping cost £392 million, illegal waste sites £236 million, misclassification £120 million, exemption breaches £87 million, illegal exports £42 million and waste fires £22 million. That was then and this is now. They are extraordinary sums, so can the Minister let us know what assessment has been made of the financial impact of waste crime in the last year, 2022-23? I suspect that she will have to write to me; I do not expect her to have all those figures now, but I will appreciate a written response.
Back in January 2018, the last Conservative Government published their 25-year environment plan, which set an ambition to eliminate waste crime and illegal waste sites over the lifetime of the plan, so by 2043. There is no evidence of that in Newcastle-under-Lyme, and while I urge the Minister to commit to eliminating waste crime and illegal waste sites, I urge her to give us deeds and not just words. Can she confirm that the Government will update the 25-year environment plan to make it fit for purpose?
In 2018, the Environment Agency was given new powers to tackle the problem of illegal waste sites. That included the power to lock up sites, to block access to them and to require rogue operators to clean up their actions, so I ask the Minister the following questions: how many illegal waste sites have been locked up since 2018? How many illegal waste sites have had access to them blocked? What does the requirement on rogue operators actually look like?
Turning to the disgraceful story of Walleys Quarry, I pay tribute to every local who has expressed their concern and tried to fight for the clean air and safe environment that everyone in our country and our constituencies deserves. I thank all who have campaigned to “stop the stink”. I first met Dr Scott, a GP in Silverdale, back in 2021. The situation facing local people has only got worse since then, when he made the health impacts clear, as he did last month at the public inquiry that the council held. I also acknowledge Dr Mick Salt for his tireless commitment and sheer tenacity—the theme here is that there are tenacious people aplenty in Newcastle-under-Lyme—and every local person who cares about getting the issue resolved.
I am pleased to welcome two of my constituents, Sheelagh and John, who made it down from Newcastle-under-Lyme to be in the Public Gallery for this debate. We are also joined by the deputy mayor of Newcastle-under-Lyme—the shadow Minister will be pleased to know that Councillor Robert Bettley-Smith is a Conservative —and Councillor Jacqueline Brown, a good friend of mine and an excellent Labour councillor in Silverdale.
Finding a way through on Walleys cannot be party political. For too long, the previous Conservative Government refused to engage meaningfully with the Labour Opposition— I know, because I worked for the shadow Minister at the time. For too long, in the council chamber at Castle House in Newcastle-under-Lyme, good ideas tabled by Labour councillors were voted down by the Tories purely because they were Labour ideas. That is no way for us to deliver for the people who sent me here. I welcome both members of the council to this debate, and I appreciate their support for my efforts to get the blight that is Walleys closed, capped, and safely and securely restored.
That will not be easy—if it were, surely to God it would have happened already. My constituents have had enough. They want to know what actually has to happen for action to be taken. How bad do things have to get? How many people need to be stuck in their homes, unable to open their windows, sit in their gardens or breathe without inhaling toxic fumes? They want to know why Newcastle feels like a dumping ground for other people’s waste. They want to see real action from those with enforcement powers to clean their air, to hold the operators to account and finally to rid our town of the disgusting, disgraceful and toxic levels of hydrogen sulphide.
My first words in the House after taking my oath were on Walleys. I promised local people that I would hit the ground running and that I would champion their determination for clean air and healthier lungs, heads and hearts. I have tried to do exactly that.
In August, Newcastle-under-Lyme borough council held a two-day public inquiry into Walleys Quarry. I share my opening remarks with the House. These words were said on behalf of those who live, learn and work in my constituency:
“Like so many of the people who live, learn and work in Newcastle-under-Lyme, I am angry—angry that nothing has changed, angry by the failures of the Environment Agency to give local people what they need—which is action not words.
I have been the MP for Newcastle-under-Lyme for almost 6 weeks”—
or had been then—
“and there isn’t a day that this disgraceful situation isn’t raised with me. I will work every day to get justice for local people and give us the chance to finally move on.
Just this morning, I was with local businesses and heard the impact and pressures they face.
Over the last week, I have heard from many local people terrified by the fire that took place on Sunday 4th August.
And I note that we still wait”—
or at least we did then—
“for the results of the fire investigation—we need to know what happened, why it happened and what lessons will be learned to make sure that it doesn’t happen again.
And hours after the fire, the site was accepting waste again—that is completely and utterly unacceptable in my view. No operator who wants to be a fair and good neighbour, who had regard for the impact on residents would have accepted waste so quickly.”
Jim Shannon (Strangford) (DUP)
It is an honour to be here to support the hon. Gentleman; he and I were friends long before he became an MP. I support his actions on behalf of his constituents, with those who are present today. Does he not agree that the complexity of addressing waste crime means that, in situations in his constituency and other parts of the United Kingdom—including my own—urgent action is difficult? We need new legislation and punitive fines that will hit offenders hard. What must be central is that the hon. Gentleman’s constituents and their opinions are key to any change. We must ensure that their viewpoints are not forgotten.
Adam Jogee
In a parliamentary context, I feel that I have come of age, having been intervened on by the hon. Member—
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
You never forget your first time.
Adam Jogee
You never forget your first time with the hon. Member for Strangford (Jim Shannon)—there we are. My wife is indeed from Northern Ireland—but we will stop that one there. I am, however, grateful to him for his intervention, because he makes an interesting point. Lots of people in my constituency were told that everything had been done within the law, so the simple response for me is: let us change the law. The Minister already knows some of my thoughts on that. Although we have a very busy legislative programme following the election, it is something I will push strongly and proactively.
My remarks to the inquiry continued:
“The investigation into the fire concluded that it was most likely caused by a lithium battery, but two things on this, Chair—no battery was found, which raises some very serious questions and Walleys’ permit doesn’t allow for lithium batteries to be disposed of.
My call is simple—we need the site closed, capped and restored. And we need that done now. I have made that point to anyone who will listen and will keep doing so.
Today, I am here as the Member of Parliament for Newcastle-under-Lyme, and I am here to give voice to all the people who have raised this issue with me directly over the last couple of years.
We now need the Environment Agency to honour its responsibility to the people who live, learn and work here.
Simply put, Chair”—
that chair is in the Public Gallery, Councillor Bettley-Smith—
“enough is enough.
I look forward to answering your questions.”
I acknowledge the work of the cross-party committee leading the inquiry, and I welcome the invitation to speak before it, because I wanted Newcastle’s MP in the room helping to shape the way forward and delivering the results that local people want and desperately need. The stress, concern and fear about hydrogen sulphide emissions coming from the site cannot be overestimated. It is having a real impact on people’s lives and has done for many years now. There have been more than 100 breaches of the permit held by Walleys. Mr Vickers, imagine a citizen breaking an agreement, breaking the law or getting caught speeding more than 100 times? Imagine if there had been more than 100 parties in Downing Street. There must be real penalties and real enforcement.
In advance of this debate, the chief executive of Newcastle-under-Lyme borough council provided me with the number of complaints received by the council from 2019 to the end of August 2024: 32,315. Some 32,315 of my constituents have shared their rage, anger and frustration. Residents are also encouraged to report complaints to the Environment Agency, so I suspect there will be many more complaints. More than 30,000 people over five years have said that enough is enough, and we—the relevant agencies, from borough and county councils to the Environment Agency and Whitehall—must listen.
I acknowledge the work of the former Tory MP in my constituency for his work on this issue, but the simple fact is that the people of Newcastle-under-Lyme have been let down and left behind, and that must change.
Dr Allison Gardner (Stoke-on-Trent South) (Lab)
Will my hon. Friend give way?
Dr Gardner
My constituency of Stoke-on-Trent South adjoins my hon. Friend’s, and the smell from Walleys Quarry has extended into the Northwood region of my constituency, which itself has experienced repeated fly-tipping that has caused harm to farmers. I want to reiterate the impact Walleys Quarry has had in Newcastle-under-Lyme and further afield on the quality of residents’ day-to-day lives and, crucially, their health, especially that of young children. There is also the impact on the saleability of homes, which means that residents are stuck and cannot move on. That cannot carry on.
Adam Jogee
I am grateful to my hon. Friend. The fact that my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell) is sitting next to her speaks to the collective experience and frustration that we feel in north Staffordshire. I am grateful not only for their support in the fight to get this problem sorted, but for the support of constituents in Stoke-on-Trent South for mine. I thank my hon. Friend for her intervention.
People have been let down by the Environment Agency, the last Government and those who could help us get this sorted. However, I would like to acknowledge the tireless and passionate work of local councillors in our community.
Can the Minister let us know what assessment she has made of the work of the joint unit for waste crime? I know we are in the early days of the new Government, but we need to see and know that these agencies are being held accountable and have the powers required to get things done.
Talking of agencies, let me turn to the Environment Agency. My view is simple: it is simply not fit for purpose. Its responsibilities are far too wide and, in our case, people locally have lost faith in its ability to stand up for us against landfill operators who act like cowboys and who have no regard for the health and wellbeing of their neighbours. I base that on what has happened in my constituency with Walleys Quarry, the land at Doddlespool and Elms Farm and what might well happen at the Bradwell West Quarry.
With all the criminal activity that seemingly, and indeed knowingly in some cases, takes place—or that seems to surround certain elements of the waste industry—something is wrong. Under the Conservative Government, we had a perfect storm: major cuts to local government, savage cuts to the Environment Agency’s staff and budget, and an apparent disregard for how serious waste crime is. That must change. Although I acknowledge that we inherited a financial crisis, we can and should use the law to give my constituents the clean air and healthy lungs they need and deserve.
I do not know what discussions my predecessor had with Ministers in the Conservative Government, so I cannot speak to what happened before 5 July; that is why I secured this debate. I welcome the fact that the Secretary of State signed off on the council’s ability to take action against Walleys—I believe that the previous Conservative Minister left the issue sitting on their desk. I urge the Minister to think about introducing a fit and proper person test for those seeking a permit to operate a landfill site, which would go some way to ensuring that those who have taken the mick can no longer do so. I would be happy to meet the Minister to talk about that in detail.
In January 2024, the now Secretary of State for Environment, Food and Rural Affairs came to Newcastle-under-Lyme to meet local campaigners and Councillor Jacqueline Brown in Silverdale. He smelled, he listened and he understood the situation we face.
As my hon. Friend the Member for Stoke-on-Trent South (Dr Gardner) noted, this is a health crisis as much as an environmental crisis. There is major concern in the community about the fact that the health impacts have not been acknowledged properly. I ask the Minister to meet me and the relevant Health Minister to address the health impact of this waste crisis in Newcastle-under-Lyme.
We need a closure notice, and I urge the Environment Agency to grant one immediately. The site must be properly and safely capped, and we need a restoration plan that is fit for purpose. In recent weeks, we have heard calls from the borough council and the county council about the financial element of the restoration plan. I have a simple question: what on earth is going on? What happened to the financial modelling behind the restoration plan? Why are we now realising that it requires external support? Why was that not raised before? This did not just become an issue after 5 July.
Those who could and should have had their eyes on the ball and their fingers on the pulse have been found wanting. My constituents should not be paying for the failures of the state at all levels, so will the Minister go back to the Department with my suggestion to look at what the Environment Agency does with the money it receives from enforcement action? How much money does it collect from enforcement each year, and how can we ensure that it is used to right the wrongs? The Environment Agency is responsible for upholding the law, and those who break it should pay for their mess.
Walleys Quarry Ltd has a bond with the Environment Agency of, I think, about £1.8 million. I have been told by some of those who should know that the safe, secure restoration of the site could cost as much as £20 million. That is not a revelation; the right people have known about it, and it simply has not been addressed.
After my election, I submitted a range of written parliamentary questions asking to see communication between the Department for Environment, Food and Rural Affairs and Staffordshire county council, between the Department and the Environment Agency, and between the Department and the borough council. I was told that it would cost too much to process those requests.
Dr Gardner
Given the difficult economic situation the country is in, does my right hon. Friend agree that although cost and finances are an important consideration, we must be careful of false economies? Chronic obstructive pulmonary disease is a major issue in areas such as Newcastle-under-Lyme and Stoke-on-Trent South, and the impact of poor air quality on the NHS can be expensive, so actions to address air quality and waste can save money in the long run in terms of health. [Interruption.]
Adam Jogee
I am winding up my remarks, Mr Vickers. My hon. Friend makes a really important point: a healthy workforce is an active workforce, and an active workforce will contribute to the growth that the Government seek to bring to communities such as mine and hers, and to those up and down the country, including Keighley. We need to tackle toxic air pollution—we need clean air—so I thank her for making that point. I also thank her for promoting me to right hon.—I did not get that through the Whips.
I was told that it would cost too much for me to see the correspondence between those three bodies and the Department, so I say to the Minister: I am happy to come to the Department any day, any time to look at anyone’s computer. We need to shine a light on the collective failures that have got us into this mess—not the Minister’s failures, but the failures we now have to clean up. My constituents deserve to know, and I need to know. The Minister knows I will not rest until we see a closure notice, and I hope that the Environment Agency is listening to me today. I call on it to share its correspondence with the county council and the borough council with me too.
Walleys Quarry Ltd has written to me several times asking to meet, and it is important to put that on the record. However, it is also important to put on the record that if it had turned up to the cross-party public inquiry at the council, we could have met there. Walleys Quarry could have taken part in an evidence-based democratic process with clear transparency for my constituents.
We are now looking to fill a £20 billion black hole in the national finances, so what discussions are taking place across Government to make sure that landfill operators pay their fair share? I urge her to raise the issue of landfill tax levels with the Treasury. I know that increasing the tax on landfill operators would go down very well in my constituency.
The people of Newcastle-under-Lyme have had enough. They simply want to get on with their lives and to be free from the horrendous and dangerous impact of Walleys Quarry. That cannot be too much to ask, and I will keep fighting—alongside all those who want clean air and healthy lungs, healthy hearts and healthy minds right across Newcastle-under-Lyme—until we get the closure notice that we desperately need and the proper restoration plan to go with it.
Martin Vickers (in the Chair)
I remind Members that they should bob if they wish to speak in the debate.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Vickers. I congratulate my hon. Friend the Member for Newcastle-under-Lyme (Adam Jogee) on securing such an important debate in Westminster Hall so early in what I know will be a long and illustrious parliamentary career.
Although the hon. Member for Strangford (Jim Shannon) may have left, I want to pick up the point he made. Waste crime is often seen as an almost harmless activity and as something that does not hurt anybody, so the urge to deal with it does not necessarily manifest itself in immediate action. The hon. Member talked about the necessity of having significant fines that are robustly levied and vigorously collected, which would be a huge deterrent for rogue operators. Whatever form their action took, they would know that there was a penalty for the blight they cause to communities and the damage they do to people.
I will constrain my comments, first, to the Walleys Quarry site, which my hon. Friend the Member for Newcastle-under-Lyme mentioned. Starting 14 years ago, I had the pleasure of being a district councillor in the neighbouring authority of Newcastle-under-Lyme. The very first piece of casework I had was about Walleys Quarry—the smell emanating from it, the activities happening on site, and the questionable content of lorries driving up Cemetery Road on quiet mornings, with flocks of seagulls feasting on what was deposited. There have been several operators since then, but even at that time it was impossible to get to the bottom of what was going into the site and what was happening there. The situation was opaque, with obfuscation and sleight of hand by people who, I believe, simply tried to tell the community, “It’s all good. It’s all fine. By the way the landfill fund that your community can bid for offsets the fact that we’re here.” One day, they tried to blame the smell on the neighbouring sewage treatment plant, directing me and my ward colleagues to talk to Severn Trent Water about what they said must obviously be a faulty sewerage outlet.
Unfortunately, that attitude summed up any interaction I had with the operating company for many years. The concerns of residents were secondary, and as long as the company was bringing in the waste and able to put it in a hole, cover it with a layer of clay and say that it was capped off properly, it was not particularly worried about the impact. That has gone on for years and years, so I genuinely congratulate my hon. Friend the Member for Newcastle-under-Lyme on bringing the issue to the attention of the House.
I am no longer resident in my hon. Friend’s constituency or the councillor for Silverdale. When I moved to where I live now, my lung health improved dramatically. I am asthmatic. I lived in Silverdale for about 15 years, and every day my Ventolin inhaler was glued to my pocket because at some point I would have some sort of triggering event requiring me to take a reliever. When, about three years ago, I moved a mere three miles away to where I am now, my lung health dramatically improved. I no longer need my Ventolin inhaler as frequently as I did. My lifestyle has not changed; if anything, my burgeoning waistline has put me in a slightly less healthy position. The only common factor that has impacted my health is the air that I breathe daily.
I am glad that we are discussing this issue, and I am glad that we are doing so in a Westminster Hall debate where we can consider it at length. However, I say to the Minister—my friend whom I have known for many years now—that the local debate on it has gone on for a while. What we seek, and I have great faith that she will deliver, is the action that was missing under the previous Government. Although my constituency is three miles away, there are some mornings—particularly cold, crisp weather mornings—when, much like my hon. Friend the Member for Stoke-on-Trent South (Dr Gardner), I can open my front door, walk to the bottom of my street and smell the landfill site three miles away. It is a smell you do not forget if you have lived there and know the area. It does not matter where you are in north Staffordshire, if you can smell it, you can smell it, and you know what it is. It is the same scent wherever it manifests.
Up until only a couple of years ago, my daughter still went to school in Silverdale. If we drove towards the school, the smell would get stronger and stronger. We would get to the crossroads at the bottom of Cemetery Road and Silverdale Road, and we would hope with all our hearts that the lights were on green. The last thing we wanted to do was sit there while the rotation went through at the traffic lights, knowing that we would be stuck in a puddle of foul-stenching air that was almost certainly coming from Walleys Quarry. What may have been only four or five minutes as the traffic lights cycled through would feel like an age as we breathed in what was undoubtedly harmful, somewhat poisonous gas from the operating site. I welcome the fact that we are debating this issue, but, as I said to the Minister, now that we have a new set of Members of Parliament for north Staffordshire and a new Government, I hope that there is an opportunity to reset national action so that we can get the outcome that local people need.
I want to expand my speech to include wider waste crime issues across north Staffordshire. Although Walleys Quarry is undoubtedly a national disgrace, other parts of north Staffordshire have equally found themselves at the mercy of reprehensible individuals who have undertaken to make a fast buck on the back of local communities through the way they have dealt with waste. One such site was the old Twyford factory in the middle of Etruria in my Stoke-on-Trent Central constituency. I first raised the issue with the then Minister back in 2018, when it was quite clear that the factory was stuffed to the rafters with illegally accepted industrial waste. The chief fire officer for Staffordshire at the time, Becci Bryant, made it quite clear that not only would a fire on the site be devastating to the immediate area, where businesses were trying to operate, but, because the site was next to the west coast main line, a fire would shut the line down for months. Significant public investment would be required to make the railway safe, and the untold health implications would not be known for many years.
What waste was in there, nobody knew. How much was in there, nobody knew. All anyone could see as they drove around the A500 in Stoke-on-Trent was this once-proud factory that had such manufacturing history, and, through its graffitied windows, polythene bales of unknown materials stacked one upon the other. I was told by the chief fire officer that a genuine concern was spontaneous combustion, because tightly packed, unknown materials in plastic can sometimes simply set themselves on fire. That was in the heart of my constituency next to a residential housing development of several hundred people.
To his credit, the right hon. Member for Newark (Robert Jenrick), who was the Minister at the time, was happy to look at how we could use funds from the Department for Environment, Food and Rural Affairs to try to clear the site. The former Secretary of State, Michael Gove, met us to discuss the matter and we had a plan. To her great credit, my successor and predecessor, Jo Gideon, fought hard to get the site cleared. She made it a priority for her constituency and her constituents. The site was cleared at a cost to the public purse of around £10 million. That is £10 million of public money to clear one site in one constituency. It took a very long time, not because of intervention from the Government or for any local reason, but because every time we got to a point at which an enforcement notice could be raised, the owner would promise to clear up the site and the enforcement notice would not be taken forward. We then went down the cost recovery route for proceeds of crime, which took an inordinately long time. A fine was levied against the owner to have it cleared, and he was given six months to raise the money to pay for that. During all that additional time, the site remained a huge fire, health and safety risk to the neighbouring businesses, one of which closed up and moved for its own safety. The site was an eyesore in the middle of Stoke-on-Trent.
I know the Minister takes a huge interest in our environment and how we can make communities such as mine better, more prosperous and more sustainable. We are talking about a prime development site where development was slowed down because we were wrangling with one individual who had made an obscene amount of money by accepting illegal waste on to the site, and who did not want to use any of that money to clear it up. The fact that we had to clear it up not only represented a waste of taxpayers’ money, but slowed down the economic regeneration and development of Etruria and Hanley in my constituency. To this day, although it has now been cleared, the site stands vacant. The opportunities that it presented would have been game-changing for my constituency. We are talking not just about the cost of cleaning sites up, but about the opportunity costs in cities where huge buildings are misused by individuals who seek to make a fast buck.
Dave Robertson
I thank my hon. Friend for raising the issue. Around seven years ago, piled-up waste was disposed of in a similar site in Lichfield city—the old GKN site. My understanding is that the waste was fly-tipped. It caught fire, and arson was suspected. It was the fourth such incident in Staffordshire that year, and it took eight appliances and 65 firefighters to deal with the fire. Like the site my hon. Friend is discussing, it has been cleared but still awaits development. This is endemic across Staffordshire.
Gareth Snell
I thank my hon. Friend for his intervention—and I am grateful to be able to call him my hon. Friend; last time I was in the Commons, I never thought I would have the opportunity to call a Member who represented Lichfield my hon. Friend, and doing so fills my heart with glee. He is absolutely right. This debate could easily have been about waste crime anywhere in the country, because duplicitous operators who seek to make money off the backs of our communities without any care or attention are everywhere. I am sure that the new Minister will be clamping down on them hard.
I turn to how we do that. While we can all air our grievances about the sites in our constituencies, I want to spend a few moments focusing on what comes next. I tend to agree with what my hon. Friend the Member for Newcastle-under-Lyme said about the fitness for purpose of the Environment Agency, but I will be slightly more generous to it than he was. He rightly has a grievance with it over the operation of Walleys Quarry, but I think there is a bigger problem about the way we do regulatory enforcement in this country. The Environment Agency is an example that we can use to demonstrate that.
Every so often, Unchecked UK produces a document about the enforcement gap, looking at how regulatory organisations and agencies have done less and less enforcement over time. In its 2020 enforcement gap report, Unchecked UK found that between 2010 and 2020, the number of staff working for the Environment Agency decreased by 32%, so one in three staff disappeared. It also found that over the same period of time, the Environment Agency’s budget decreased by 63%. As a result, the number of prosecutions it could undertake decreased by 88%. The number of enforcement notices it was able to levy went down by 69.5%, and it could only take 44% of them through to prosecution because it lacked the capacity to undertake the necessary regulatory enforcement work.
While we must not excuse the actions of those who perpetrate waste crime around our country, it is not impossible to see why they think it is a lucrative way to spend their time and energy. The likelihood of their getting caught, of an enforcement notice being levied upon them or of a prosecution being brought has gone down and down over the past 10 years.
It is not just the Environment Agency that has had this problem. Local authorities around the country, which have a really important environmental health role and can quite often take small-scale actions in communities to prevent much larger destructive activities, have suffered the same blight. Over the past 10 years, 32% of environmental health staff in local authorities have been lost. That means that many enforcement and regulatory agencies react to problems, but they are unable to take proactive and preventive work to avoid things becoming problems in the first place.
Dr Gardner
Further to what my hon. Friend has said, we have to think about the involvement of other agencies. In Staffordshire, and I am sure elsewhere, fly-tipping and the illegal dumping of waste are often linked to organised crime. Therefore, the points that he made about local government, the Environment Agency and regulators also extend to preventive policing.
Gareth Snell
I thank my hon. Friend for that intervention. It is almost as if she has read the script in front of me, because she has perfectly lined me up for my next point, which is about the link between illegal dumping, fly-tipping in communities and the wider connection to organised crime and money making. Another report from Unchecked UK, published in 2022, pointed out that enforcement against fly-tipping was at a 10-year low, while the number of incidents of fly-tipping was at a 10-year high. There is a growing chasm between what is happening on the ground and the activities that perpetrators are being punished for and prevented from carrying out.
Rachel Taylor (North Warwickshire and Bedworth) (Lab)
I am in the neighbouring county of Warwickshire —we share many borders with Staffordshire—and fly-tipping is at an all-time high in my constituency. Much of that is from organised crime from the neighbouring boroughs of Tamworth, Coventry and Birmingham. They come along the M42, the M6 or the A5 and dump waste in the entrances to farms in the middle of the night.
That was the biggest issue that was raised when I recently met the National Farmers’ Union in my area. It is also the No. 1 issue raised by our local rural crime service, but it is not taken seriously by the police and crime commissioner for Warwickshire, and neither is any funding spent on advising people not to use the white vans that parade the streets offering to remove their waste. Reports of fly-tipping are the No. 1 thing I see every day on my local Facebook page. Because no money is spent on publicity, people have no idea where they should report these crimes—whether it is the local authority, the Environment Agency or the police. There has to be more joined-up working, and I would like to see the Minister leading that.
Martin Vickers (in the Chair)
Order. I remind hon. Members that interventions should be a little shorter than that.
Gareth Snell
I agree with everything that my hon. Friend has just said. We should not think about fly-tipping simply as community blight. It is not just about the sofa abandoned down the back alley; it is about cross-country, cross-border organised crime that is making millions of pounds for people in our communities who, frankly, have no interest in our communities. She made the point rather eloquently about the requirement for our police and crime commissioners to understand that this is an important issue that they must prioritise and tackle.
On the fly-tipping point that my hon. Friends the Members for Newcastle-under-Lyme and for Stoke-on-Trent South raised, I return to its longer-term impact. Fly-tipping is a waste crime that takes place in Staffordshire, and the House of Commons Library note that accompanies the debate gives the rather sad fact from the 2022-23 figures that almost half of all fly-tipping incidents across the whole of Staffordshire took place in Stoke-on-Trent. That is not a record that I am particularly proud of or would want to be associated with my city. That is why I am glad that upon its election in 2023, under the expert leadership of Councillor Amjid Wazir, the deputy leader of the council, the city council launched a clean-up campaign against illegal dumping in our towns under the moniker of “IDIOT”. “Don’t be an IDIOT” was the line. The council said, “Don’t dump in our towns. Don’t allow our community to be used by those criminal gangs that want to ruin our cities.”
The outcome has been spectacular: we now have considerably fewer incidents of fly-tipping. That is not only because the council makes a concerted effort to clear it up, but because it has invested in an environmental crime unit that seeks to prosecute and fine those people who dump waste in our towns and cities. The council has tripled the number of fines it hands out, and it pursues people through the courts where they refuse to pay the fine. It makes it clear that if people wish to undertake illegal activity related to waste in Stoke-on-Trent at a community level, the council is coming for them and will fine them. I personally would like a name-and-shame campaign, but I have not quite won the battle with the council yet; give it time.
What I would not want to be taken away from this debate is the idea that Staffordshire is the nation’s dustbin, and that it is strewn with all these terrible activities; because while we have these incidents, most of the people in our communities who live in Stoke-on-Trent and Staffordshire want to see clean neighbourhoods. They go out every day and do a little bit of work to make their community better. They clean up fly-tipping, report an illegally dumped sofa, report the smells to the Environment Agency, and report to the police abandoned buildings that suddenly start having industrial waste put near them. They do that because they want—as does everyone else in my constituency, county and city—to live in a clean, tidy and safe place. When the Minister winds up, will she give me some sense of hope to take back to Stoke-on-Trent that this Government, with this Minister, will deliver on that aspiration for clean, safe streets in every community, and that she will let us know how we can help her achieve that?
Olly Glover (Didcot and Wantage) (LD)
I congratulate the hon. Member for Newcastle-under-Lyme (Adam Jogee) on organising the debate. It is an important topic, and I commend the research he has put into his speech, illuminating the scale of the problem. Thirty-four million tonnes, or 18%, of waste being illegally disposed of and £1 billion in costs, with a 55% increase since 2019, shows what a significant problem this is, and it is important that we work collaboratively to tackle it.
The hon. Member also showed the passion that his community has for dealing with waste while working collaboratively. It has been good to hear praise for predecessor MPs of other parties, from him and from the hon. Member for Stoke-on-Trent Central (Gareth Snell), which again shows the value of working cross-party on this topic.
Some key themes have emerged from the debate. We have heard about the impact on the environment and nature, especially from lithium dumping in landfill sites, with the consequent risk of fire. Indeed, it is not just a risk: fires of a significant nature have been highlighted in a number of contexts.
There is also a health impact on local residents, who are affected by the facilities near residential areas. The hon. Member for Stoke-on-Trent South (Dr Gardner) rightly highlighted the benefits and importance of having a healthy workforce, so that our economy can grow and productivity can be improved. Various speakers have highlighted the economic impact of the problem and the issues in various constituencies, including a lack of land available for development because previous waste facilities have not been cleared up. The workforce productivity challenge was also mentioned.
We heard of the importance of cross-party and cross-agency working to tackle waste in Staffordshire and nationally, and many agencies have been cited. Local authorities clearly have a role, as do the police. A number of Members mentioned the importance of strengthening the Environment Agency’s resources, powers and ability to enforce. Many businesses are affected. Within my constituency in Oxfordshire, a landfill operator has been causing problems similar to those discussed, including by producing significant odours and not always being as transparent and proactive in its engagement and communication with local communities as we might wish.
A key outcome of this debate will, I hope, be recognition of the importance of tackling the root causes of the waste problem that we face. Our recycling rates in the United Kingdom remain lower than those of comparable European countries, although they have been improving. The more we can all do to help businesses and households to tackle those root causes, the more it will reduce the need for some of these waste facilities.
Adam Jogee
The hon. Member rightly talks about recycling rates in the United Kingdom. I noted in my remarks the example of Wales. Although we are very proud English MPs, it is important to note that Wales had the world’s third highest rates of recycling, so we can see examples of where this works. There was talk before of about 7 or 8 million bins, but that is not what we are talking about. Through education, proper engagement and support for local authorities, it is really possible to make headway, and the Welsh have shown that.
Olly Glover
I thank the hon. Member for that; it is very good to hear of Welsh good practice in reducing waste demand. It is clearly important that we work to create an economy in which we envisage the whole life cycle of products and produce, including how they will be disposed of effectively and in an environmentally friendly manner.
We have also heard of the impact that waste facilities have on house prices within Staffordshire and how that affects people’s ability to move. The debate has been helpful in highlighting some of these wider impacts and challenges. This is not just about fly-tipping or local nuisance; it has real consequences for people’s lives. We heard very useful comments from the hon. Member for Stoke-on-Trent North about how some operators of these facilities are sometimes inclined to misattribute the cause of odours, trying to blame them on things such as sewage. That is why it is important to have engagement with and listen to local residents. The Environment Agency must have the resources to collate that data and intelligence, so that the problems can be properly mapped and anticipated and interventions can be made.
In conclusion, today’s debate has been useful for highlighting the problems of waste management within Staffordshire, but it has also highlighted how these themes are relevant across the country. I look forward to hearing the Minister’s thoughts and remarks on how the new Government will attempt to tackle these problems.
Robbie Moore (Keighley and Ilkley) (Con)
It is a pleasure to serve under your chairmanship, Mr Vickers. I thank the hon. Member for Newcastle-under-Lyme (Adam Jogee) for securing this important debate, and I welcome him to the House. I also send him and his father best wishes following his father’s surgery yesterday. It is good to see the Minister in her place for our second debate this week. I would like to use this opportunity to put on the record my thanks to all the officials who worked with me when I was lucky enough to be in what I think is the best Department in Government, specifically on the waste and resources strategy. I should be grateful if she would not mind passing on my thanks, particularly to Emma and Clare in the waste resources team.
I shall start my speech by echoing comments made by colleagues throughout this debate on the dangers of the costs of waste crime to local communities, which are undoubtedly huge. The Environment Agency’s national waste crime survey 2023 report stated that,
“the waste industry estimate costs to the English economy total £1 billion annually through evaded tax, environmental and social harm, and lost legitimate business.”
That impact is of course not only monetary; waste crime in its many forms poses a significant threat to our environment. Illegal dumping and the improper disposal of hazardous waste contaminate our land, water and air. Those pollutants can take years—if not decades—to break down, causing long-term damage to ecosystems and biodiversity. They poison our water supplies, degrade our soils and harm wildlife, leaving a legacy of destruction that future generations must deal with. Most pressing is the extremely negative impact on communities up and the country that are forced to deal with the damaging consequences that harmful pollutants and emissions can have. As we are all constituency MPs, we know that we have residents who are being directly impacted in our constituencies, whether that be from fly-tipping or waste crime of a more serious nature. That is something that my constituents unfortunately experience in Keighley, Ilkley, Craven and the wider Worth valley.
I shall devote the rest of my speech specifically to Walleys Quarry in Newcastle-under-Lyme, on which I completely sympathise with the residents, businesses and wider community of not just Newcastle-under-Lyme, but Silverdale and the wider Stoke-on-Trent area. They have been fighting this issue for a significant number of years—far too many years—and I commend the predecessor of the hon. Member for Newcastle-under-Lyme, Aaron Bell, on his tireless campaigning, over the four years that he was lucky enough to be in this House, in search of a solution. Aaron Bell worked with his constituents to seek a way forward by trying to hold to account not only the operator of Walleys Quarry but the regulator and enforcer, the Environment Agency. He was also instrumental in working with the Stop the Stink campaign, and I am sure that the new hon. Member for Newcastle-under-Lyme will continue the good work of his predecessor, as he has done by securing this very debate.
I was lucky enough to be a Minister in what is probably the best Department in Government for a short time, from November 2023 to the general election. In that time, I visited Newcastle-under-Lyme and Silverdale to meet campaigners, local councillors, residents and the previous MP, to hear directly from them about the negative consequences that Walleys Quarry was having, and I deeply sympathised with the points that they made. As a result of those meetings, I made it clear that the Environment Agency over a period of time had failed in its duties and failed local residents. On the strength of what has been said today and despite the, to be frank, repeated warnings given to the Environment Agency by many, including myself when I was lucky enough to be in the Department, it seems that the agency’s attitude is that the operator will clean up its act by itself—which is simply not the case. Residents’ concerns about toxic fumes have been raised since 2012, albeit largely ignored by the Environment Agency as the regulator, meaning that the ongoing situation continues to have a substantial negative impact on the community, not just economically but on its health and wellbeing.
The reality is that the Environment Agency’s actions have gone nowhere near far enough, and in my view the landfill site needs to be closed altogether. The Minister will know that those are exactly the points that I was trying to put across to the Environment Agency during my short time in the Department. As she will also know, given that she seems to have been sufficiently briefed on the previous meetings, I was so disheartened by the Environment Agency’s actions that I requested weekly meetings with its team to understand sufficiently what actions it was taking as the regulator and the enforcer. Public hearings held in July demonstrated the serious public health issues arising from fumes from the site, with Staffordshire’s director of health and care highlighting the negative impact on public health and the risk that the noxious gases pose for health, both in the short and long term.
When I met residents, one of the other huge concerns they rightly raised, along with the direct negative impact on them, was the impact on the local economy, not just in Newcastle-under-Lyme but across the wider Stoke-on-Trent area. Businesses, cafés, shops, a sports centre, a sports club that I was lucky enough to visit and even a local school are all being negatively impacted. Again, had the Environment Agency taken robust action, it could have reduced the financial, environmental and social impacts.
Adam Jogee
I thank the hon. Gentleman for his kind comments to me and my family. I was going to be a bit meaner to him than I may now be—I am my father’s son—but I do want to ask him two questions. First, in February 2024, a few weeks after the current Secretary of State, my right hon. Friend the Member for Streatham and Croydon North (Steve Reed), visited Newcastle, the hon. Gentleman also quite rightly visited, and he said that no options were off the table. What did that mean? Secondly, does he think the Environment Agency has the powers it needs to properly get this sorted?
Robbie Moore
I distinctly recall saying from the Dispatch Box that no options were off the table, and that specifically meant that, in my view, the site should be closed. Officials will know that those points were being made to officials in the Department and at the Environment Agency, but officials will present other challenges, to do with legal implications and the processes that need to be followed. I am sure that the current Minister will have to deal with those challenges before the Environment Agency is able to take any further action, but there was clear advocacy from the previous ministerial team that Walleys Quarry should be closed. I wish the Minister well and am prepared to work with her to ensure that that solution can be reached.
The Environment Agency also singularly failed to find a solution to sufficiently safeguard the local community against the hazard presented by hydrogen sulphide, a gas released when waste breaks down on the site. For far too long, residents have had to put up with a strong eggy smell, which I experienced for myself when I visited the site. In my view, urgent and decisive action from the Environment Agency is required right now. I certainly made those frustrations known when I was in the Department, as I have indicated.
The Environment Agency has expressed its sympathy for local residents, but now is not the time for sympathy; it is time for action, not words. The Environment Agency put in place regular inspections to monitor levels of hydrogen sulphide. However, the latest data suggests mass under-reporting of the extent of the gas, and that the levels at the site were on average 80% higher than reported by the Environment Agency over a two-year period. The Environment Agency’s response to that latest failure on its part has been to apologise again and to announce another public meeting—yet again, words not actions. We all know that data collection is incredibly important for an enforcer to be able to take action, but the Environment Agency has failed in this simple task and, in my view, has failed to put monitoring points in appropriate locations around the Walleys Quarry site.
Gareth Snell
Further to the point made by my hon. Friend the Member for Newcastle-under-Lyme (Adam Jogee), there have been 10 years of data. I know because I used to ring the EA frequently in 2010, when I was in my constituency surgeries in the library in Silverdale and we could smell the smell. What more does the former Minister believe he would have needed in order to give a closure notice? Given that we all seem to agree that there has been a decade of failure by the Environment Agency, when he was Minister, what did he do to try to work out what the internal failings were, so that other communities that may have these problems do not have the long period of terribleness that we have had?
Robbie Moore
As I said, monitoring is incredibly important, because we need the data to be able to hold those who pollute to account, and the regulator needs the data to be able to take appropriate enforcement action, as the Environment Agency should do. But that data has to be collected appropriately, which the EA has not done, in my view, and the datasets have to be accurate. Looking back, there was a calibration issue with the datasets that were being collected, which meant that the Environment Agency had to issue a further apology. In my view, it is completely unacceptable.
That raises the bigger question, which the hon. Member for Newcastle-under-Lyme has already asked, whether the Environment Agency is fit for purpose in its current format. All the challenges that I am laying out today are things that I experienced in my short months at the Department. This is simply not good enough action by the Environment Agency. As I have stipulated, the site should be closed. Again, that is something that I advocated while in the Department. As the hon. Member said, this leads to the bigger question: is the Environment Agency fit for purpose?
In the debate earlier in the week I put some questions to the Minister and sought a response, and I will do so again today. If she is not able to give me an answer now—I quite appreciate that she may not be—I kindly ask that she puts her responses in writing, for the benefit of all of us in the Chamber and the residents of Newcastle-under-Lyme. I note that I have previously put similar questions to officials.
Will the Minister update the House on the current situation at Walleys Quarry, and is she content with the advice that she is being given by the Environment Agency? Does she agree that Walleys Quarry should be closed with immediate effect, as has been strongly advocated by previous Ministers in the Department?
Gareth Snell
The hon. Gentlemen is in a position of unparalleled knowledge compared with all of us, having been the Minister, at which time he advocated for immediate closure. I think the quarry should be closed immediately, and he has said that he does. What was he missing as the Minister? What lever that was just out of reach would have immediately brought about the closure of the site? If legislative change is needed then we can write that Bill here and now and take it to the House and try to get it passed, but the hon. Gentleman has been there and knows why it could not happen. What else would he have needed to get the job done?
Robbie Moore
In my view, it came down to process. There is a process that needs to be followed, with a suspension notice being served in the first instance to reasonably give the operator the chance to sort itself out. In my view, that process is not sufficient to satisfy residents, businesses and the wider community, but it was advocated to me that the process needed to be adhered to before we could get to the position of issuing a closure notice. I wish the Minister extremely well, and she will have my full support in trying to achieve a closure notice at speed. That is the only way of issuing a clear warning to the operator that if it pollutes, it cannot get away. The taxpayer should not have to pay for it.
Coming back to my questions, how many other landfill sites are being impacted by illegal waste dumping? How many other sites are there where local residents are being negatively impacted by pollutants and emissions?
Robbie Moore
I will not, because I think the Minister needs 20 minutes to sum up, and it is only fair to give that to her.
Does the Minister agree that when landfill sites, or sites of a similar nature, are given initial planning permission, a bond should be put in place to deal with remediation costs and compensation payments, for example, so that if a dodgy operator like the one we have seen at Walleys Quarry does not adhere to the conditions it has signed up to or goes bust, local residents in Newcastle-upon-Lyme or elsewhere are not exposed to the costs?
Robbie Moore
I apologise—it is because I worked in Newcastle-upon-Tyne for a long time.
I believe that such a bond was not put in place when John Prescott awarded the initial planning consent for the site. Does the Minister agree that the taxpayer should not have to pay a penny towards the costs associated with the remediation or clean-up works, or indeed the enforcement programme that the Environment Agency should carry out when we know an operator is in the wrong? It must be the polluter that pays, not the constituents of the hon. Member for Newcastle-under-Lyme or the local council. Further, does the Minister agree that when we talk about “polluter pays”, any fine that the EA imposes should include an element of compensation for those who have been impacted? Finally, does she think that the Environment Agency is fit for purpose in its current format as a robust regulator and enforcer?
I genuinely wish the Minister well on this issue. She has my full support in seeking a closure notice for the site.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mary Creagh)
It is an honour to serve under your chairmanship, Mr Vickers. I congratulate my hon. Friend the Member for Newcastle-under-Lyme (Adam Jogee) on securing this debate and on his ongoing work for his constituents. I extend my best wishes to his father and wish him a speedy recovery. I pay tribute to my hon. Friend for the work he did on this issue before coming to this place, alongside my hon. Friend the Member for Newport West and Islwyn (Ruth Jones).
Everybody’s environment starts outside their front door. We have heard today of issues outside the front doors and on the school playing fields and sports grounds of Newcastle-under-Lyme, Stoke-on-Trent and Staffordshire more widely. We have heard some powerful speeches and interventions, in particular from my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell), whom I am delighted to see back in this place.
The Government will ensure that those who illegally dump their waste are brought to justice. Waste crime and poor-performing waste sites threaten our environment and, in some cases—as my hon. Friend the Member for Newcastle-under-Lyme said—our health. The truth is that the system we inherited is broken. We have heard of the perfect storm of cuts to councils, police officers and the Environment Agency, and a system that has had no new policy for 14 years and is based on paper-based notes kept in people’s drawers. That is an anachronism in the 21st century and, as we have heard, it is being exploited by waste criminals up and down the country.
Waste crime costs this country £1 billion a year. We know that 18% of waste may be handled illegally at some point in the waste supply chain. We have to plug the gaps and fix the system—we pretty much have to rebuild it. At the end of March 2024, there were 320 known active illegal waste sites, and 141 of them are high risk.
Waste crime is hugely under-reported: only 25% is reported. The Environment Agency deals with a huge number of reports of waste—it received 9,000 in 2022—and has only 240 officials to process them. We do not need to do the maths—we have some young people in the Public Gallery, and I am sure they are better at maths than me anyway. It is impossible for the agency to follow up every single crime. We need to start tightening up the system and seeing the patterns, and we need different agencies to work together.
This situation cannot continue. In our manifesto, as part of our crackdown on antisocial behaviour, we committed to forcing fly-tippers and vandals to clean up the mess they have created. We will take our country back from the fly-tippers and waste criminals who disgrace and despoil our communities, damage our environment and undermine legitimate businesses that do the right thing, play their part and fully comply with the regulations.
My hon. Friend the Member for Newcastle-under-Lyme asked me whether the system is fit for purpose. My answer is that it is not, and we will take action at pace to tackle this. As a mission-led Government, we will achieve our aims by focusing on ambitious, measurable and long-term objectives that will provide our driving sense of purpose. We will be publishing a circular economy strategy to move us to a future in which we keep our resources in use for longer and reduce waste. That will increase investment in critical infrastructure and green jobs. Of course, waste crime, whether in Staffordshire or elsewhere, threatens that circular economy because it takes out resources and undermines businesses that are doing the right thing.
There is an important distinction to be made between waste crime, which is often associated with serious and organised crime and organised crime groups, and permitted but poorly performing waste sites, of which Walleys Quarry is the pre-eminent example in this country. The approaches to mitigating the impacts are very different. Over the past four years in Staffordshire, the Environment Agency has ensured that four illegal, high-risk fire sites have been cleared of waste—more than 40,000 tonnes of baled waste—which was sent to suitably permitted facilities, reducing the fire risk and protecting more than 12,000 properties from the impact.
I must also say something about batteries. Every supermarket has a battery collection point, but the little lithium-ion batteries are tiny, and we cannot be bothered, we do not want to collect them or we just forget to take them to the supermarket; it is very easy just to chuck them in the bin. The problem, however, is that when the waste is crushed in the machinery, the battery can spark. When thinking about such issues, it is incumbent on every single person in this room or watching at home online to ensure that we do not put our batteries into our household waste.
There is a big education piece to be done on that. I pay tribute to the councils that have taken that to heart. I was reflecting as I was listening to the speech about Stoke-on-Trent Central and what had happened there. I asked for fixed penalty notice stats from all the authorities in Staffordshire. In 2022-23, Newcastle-under-Lyme borough council issued only three fixed penalty notices for fly-tipping, with zero prosecutions, but under Stoke-on-Trent city council’s “Don’t be an IDIOT” campaign, there were 875 fixed penalty notices for fly-tipping and nine prosecutions. That probably puts that city council at the top—certainly in the top half, maybe the top 10%—among local authorities in the country. I pay tribute to the work of that Labour-led council.
Adam Jogee
I thank the Minister for her initial remarks in response to this debate. I echo the point she made about the leadership being shown by Stoke-on-Trent. I dearly wish that Conservative-led Newcastle borough council would follow that example of cleaning up the streets and the “IDIOT” campaign, which would give my constituents the benefits they deserve.
Mary Creagh
We all have a lot to learn from each other. I offer those statistics in the spirit of co-operation and encouraging good practice.
Between January 2023 and 2 August 2024, there were 21 substantiated illegal waste sites in the Staffordshire area, and all 21 of them have been stopped from operating, the vast majority within three months of being reported to the Environment Agency. Five have been fully cleaned up, while the risks posed by the remaining sites are being managed and monitored.
The Environment Agency regulates more than 10,000 waste permits, the majority of which are in the top compliance bands. However, I am aware that 3%, or about 300, of those permits attract public interest because they are not in compliance. Those disproportionately take up resource, energy and regulatory activity. I stressed to the Environment Agency officials whom I spent time with today ahead of this debate that my top priority is to take action to bring those sites back into compliance and, where necessary, to embark on criminal investigations.
Walleys Quarry, one such non-compliant site, has been a source of concern for residents over several years, as we have heard. This morning, I was informed that it is the worst-performing waste site in the country. My hon. Friend the Member for Newcastle-under-Lyme asked for a meeting with me, and I am only too happy to meet him. I shall ask Environment Agency and Department for Environment, Food and Rural Affairs officials to be in the room for that meeting, so that we can have a full discussion and get to the bottom and the heart of what is going on.
The Environment Agency has carried out significant activity since 2021—more than for any other regulated site—and a criminal investigation is also under way, about which I cannot say more for fear of prejudicing those inquiries. However, the local residents and councillors who are in the Public Gallery today have had to put up with unacceptable levels of hydrogen sulphide. Interestingly, that substance comes from the plasterboard that we all have; it happens when it is broken down and smashed up. As we try to design in a circular economy, we must think about what materials we use in our home and what happens to them, because there is no such place as “away” at their end of life. It is not acceptable for odours to reach a level that causes serious offence to local communities. I am pressing the Environment Agency to keep all regulatory options under review and look at its enforcement and sanctions policy.
Robbie Moore
Could the Minister pick up my specific question about the closure of the site? In his shadow role before the election, I believe the Secretary of State wanted to advocate for closure, as I do. What is the Minister’s view on that?
Mary Creagh
I have not had specific advice on closure. It is clear that there is a criminal investigation under way, and we have to let that take its course.
Let us look at waste crime. In recent years there has been an increase in the involvement of serious and organised criminal gangs in the waste sector. That is of the greatest concern to me; it goes back to the perfect storm of a broken waste system. The joint unit for waste crime brings together the Environment Agency, His Majesty’s Revenue and Customs—because in our experience, criminals never break the law in just one area; they always break it in several areas—the National Crime Agency, the police, waste regulators from the UK and other partners to share intelligence, and disrupt and prevent serious organised waste crime. There has been progress to target organised crime groups, and this model is respected internationally. The issue is not unique to the United Kingdom.
The unit has supported or led more than 90 operations since April 2020 and has worked with 133 partner organisations. It has had 301 days of action, which have resulted in 174 associated arrests by other agencies. The Environment Agency recently announced the formation of its national enforcement service—a new economic crime unit that targets the money and assets of waste criminals. It will target the financial motivation behind offending and use financial mechanisms to inhibit the ability of offenders, including OCGs, to operate. It has all gone a bit “Line of Duty” there; I will crack on.
I also urge members of the public: it is incumbent on every one of us to report waste crime where we see it in our communities. It is under-reported. When someone comes and says, “I can take that waste away for you for 20 quid,” it is so important that we ask to see their waste permit. When someone asks a farmer or a landowner, “Can I store these bales on your land?” and says it is just a bit of plastic or a bit of soil, I urge them to be curious: have they actually got a permit? Is it really soil or is it shredded down plastics? The money is moving from legitimate waste operators and going to these organised crime groups.
We know the impact that this issue has on people’s lives. We are determined to reform this sector. That starts with reform of the waste carrier, broker and dealer regime, which means those transporting or making decisions about waste must demonstrate that they are competent to make those decisions, face background checks when applying for permits and display permit numbers on their advertising. We will make it easier for regulators to take actions against criminals, and easier for us as householders to identify legitimate waste businesses.
The reform will remove three exemptions, which is critical because these are the highest problem areas. Those exemptions are for dismantling end of life vehicles, treating end of life tyres—again, the risk of fire is huge—and recovery of scrap metal dealers. I remember a case in my former constituency of Wakefield where a scrap metal dealer went bust owing His Majesty’s Revenue and Customs £60 million. To my grievous disappointment, not a single person was prosecuted or went to prison for essentially theft from the taxpayer. We will introduce greater record-keeping requirements for all waste exemption holders, and impose limits and controls on how exemptions can be managed on site.
To conclude, this Government are clear: we are committed to bringing waste criminals to justice. We have long-term ambitions to rebuild the waste sector and to create a circular economy, and we are committed to tackling both waste crime and, as exemplified by Walley’s Quarry, poor performance at regulated sites.
I know that the Environment Agency is committed to continuing its work with partners nationally and locally, and I thank it for working against the odds and in a very difficult funding environment over the last 14 years. The crime that we are discussing today is predominantly an urban crime and I think that under the previous Government there was a neglect of urban areas.
My hon. Friend the Member for Newcastle-under-Lyme asked for deeds not words. We will follow the principle that the polluter pays. We will find the polluters; we are coming for them and we will track them down.
Adam Jogee
Thank you, Mr Vickers, for calling me to speak again.
I am grateful to the Minister for her response to this debate and to the points that a number of colleagues raised. I note that the Chamber is now much fuller than it was at the beginning of this debate, so I encourage all colleagues who are now present to join our campaign to get Walleys Quarry closed, capped, and safely and securely restored. The Minister used the word “justice” in her response, which I think is very important indeed, because my constituents in Newcastle-under-Lyme want exactly that—justice.
I would like to press the point about what we can do to make sure that the Environment Agency uses the money that it secures from fines to help to pay for the mistakes that its inaction has caused.
I will also address a few points that were made in the debate. First, I will touch on what the shadow Minister, the hon. Member for Keighley and Ilkley (Robbie Moore), said. Although he was very nice about me and my family, there were some things he said that I think it is important we note, given that he once had a ministerial job in this area. He said that the people of Newcastle-under-Lyme should not pay, and I agree; for far too long, they have paid and in far too many difficult ways. But I urge him to speak to his Conservative colleagues on Newcastle-under-Lyme borough council who, since the general election on 4 July, believe that the Government should pay for the mistakes and the restoration plan that is required. In my view, it should be the Environment Agency that pays or indeed the people who caused the mess. I look forward to that message being communicated to the Conservative group on Newcastle-under-Lyme borough council.
There was also mention of Lord Prescott and how he signed off planning permission. I studied history at university, but it is not difficult to find out that the legislation that he had to approve went through at the end of the previous Government. As the shadow Minister will know— as he has been a Minister; I have never been a Minister and probably never will be—when officials make suggestions, Ministers must make decisions based on what is put before them, as no doubt he did in discussions about Walleys Quarry. Let us focus on the facts and not play partisan games, because it is my constituents who are paying the price for the recent failures.
My hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell)—he is not the Member for Stoke-on-Trent North, as the Liberal Democrat spokesperson called him—made several important points. He will know, having been a councillor in Silverdale, just how important this issue is to my constituents, and I know that it is important to him, too. I add my support to the “Don’t be an IDIOT” campaign, which I think is an example of how in north Staffordshire we say it how it is.
My hon. Friend the Member for Stoke-on-Trent South (Dr Gardner), who is my other constituency neighbour, talked about the health implications of toxic gas and fumes, particularly those we are getting from Walleys Quarry, and the impact on her constituency. I thank her for doing so.
My hon. Friend the Member for North Warwickshire and Bedworth (Rachel Taylor) made a really important point about the role that police and crime commissioners can have in ensuring that we hold these offenders to account and help to support our constituents.
It is also worth noting, once again, the Lichfield litter pickers—[Interruption.] I mean the Lichfield Litter Legends—the alliteration is the point—for what they do. My hon. Friend the Member for Tamworth (Sarah Edwards) also raised the issue of supporting communities.
This has been an important debate. I will not stop going on about Walleys Quarry until we get the site closed, capped and properly restored. I am glad that the shadow Minister now agrees with me that it should not be my constituents who pay for that but the Environment Agency and the people who caused the mess in the first place.
Question put and agreed to.
Resolved,
That this House has considered waste crime in Staffordshire.
SEND Provision
(3 months, 2 weeks ago)
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Richard Burgon (Leeds East) (Ind)
I beg to move,
That this House has considered SEND provision.
It is a great pleasure to serve under your chairship, Mr Betts. I am delighted to have secured this debate and to see such a packed Westminster Hall. I start by thanking all the parents and campaigners who have rightly put this issue high on the agenda, all the organisations that have provided briefings for MPs, and of course all the MPs here in a packed Westminster Hall.
Nearly 50 MPs have applied to speak today; I cannot recall anything like that for many other Westminster Hall debates. I hope that the Government and all those with a say over the parliamentary agenda take note and ensure time for a much longer debate on this vital issue very soon. This is an essential debate. The crisis in SEND provision is one of the biggest messes left by the previous Government—one that the new Labour Government will have to start to clear up quickly, as SEND needs are likely only to increase. That will require a radically different approach from the one currently failing so many children.
We cannot have this debate today without acknowledging how the crisis was deepened by an austerity agenda that tore up much of the social fabric that once would have offered pupils and their families much of the support needed. That dangerous idea has hollowed out councils’ budgets and severely restricted the services that they can provide. It has caused long-term harm to the NHS, including huge waiting lists for assessments and massive backlogs in mental health services. It has placed unbearable pressure on schools, which are asked to do more and more with fewer and fewer staff and resources. It has caused key public workers to leave due to stress, simply impossible workloads and low pay, further weakening services.
Sarah Edwards (Tamworth) (Lab)
I congratulate my hon. Friend on securing such an important debate in such a full Westminster Hall. Since 2010 schools have been grappling with chronic underinvestment by former Conservative Governments. We know that those with special educational needs and disabilities have borne the brunt of that. Schools are expected to pick up the pieces without the proper support. Does he agree that we need to build capacity and expertise in the mainstream system so that more children can access the universal and targeted support that they need?
Richard Burgon
My hon. Friend puts it very well; I could not agree more. There is an old saying that it takes a village to raise a child. Well, so many of the key services that we had in our communities to help support child development are on their knees due to austerity, and children are paying the price.
Every MP in this House is aware that the special education needs and disability system has gone beyond crisis and is in emergency.
Sir David Davis (Goole and Pocklington) (Con)
The hon. Gentleman will remember that we had a debate like this one in the main Chamber, and there was record demand—that tells the Government something. He is right that there is not enough money for SEND generally, but it is also distributed very badly. In my constituency we get £900 per child from central Government versus, let us say, Camden’s £3,500. That means that we have delays of two, three or four years—education, health and care plans not delivered, places not delivered and therapy not delivered. If we do not solve both issues, we will not solve either of them.
Richard Burgon
I very much agree with the right hon. Gentleman, who makes the point—among other points—that this is a holistic issue: unless we solve all the interconnected root causes of the SEND crisis, we will never solve the crisis at all.
We have all had so many heartbreaking constituency cases. For this debate, I asked on social media for people to send in their case studies, and I was inundated with cases from right across the country. I will not be able to cite them all today, but I have read them all and they form the basis of what I will say today.
Jim Shannon (Strangford) (DUP)
May I congratulate the hon. Gentleman and suggest that, given the turnout, this debate could well be held in the main Chamber and should last at least three hours? I commend him on bringing this issue forward. I support him in doing so.
Obviously, the Minister does not have to respond for Northern Ireland, but in Northern Ireland, SEND pupils form some 20% of the school population and the budget that we spend is in excess of £500 million per year. It does not go anywhere near meeting the demand, so does the hon. Gentleman agree that we need more placements, more teachers, more places in school as well and, ultimately, better funding? We must not leave behind the SEND children whom we all represent in this Chamber.
Richard Burgon
The hon. Gentleman puts it very well indeed.
This crisis is a result of many factors, which others will no doubt give more detail on in today’s debate, but at its core is the mishandling, I would argue, of the Children and Families Act 2014. Its aims—the widening of access to SEND support and the promotion of a more integrated approach, involving health, education and social care—were laudable, but the reality has proved otherwise. Since 2014, the number of pupils with special educational needs and disabilities has increased to 1.7 million. That is one in six pupils.
Shaun Davies (Telford) (Lab)
I congratulate the hon. Gentleman on bringing this debate forward. As well as more money, better use of money is key. We have seen a huge reduction in the amount of money being spent in primary schools for speech and language therapy, which then costs the system far more in secondary school, as well as, of course, meaning worse outcomes for children across our country. Does he agree?
Richard Burgon
I certainly agree with my hon. Friend, because early intervention is so important, both in giving adequate and timely support to young people and, in the long run, in keeping the costs down; without early intervention, the problems that children face can only get worse and worse. The number needing more support through an education, health and care plan has more than doubled, but the required resources have, as others have said, simply not followed.
Marie Goldman (Chelmsford) (LD)
I thank the hon. Gentleman for this debate about an issue that is so important and has filled my inbox over many months, as I am sure is the case for other hon. Members here. The hon. Gentleman mentioned that the eligibility changed in 2014 with the Children and Families Act; it added an extra 11 years when it comes to the children and young people who could be included. Does he agree that it was a complete failure of subsequent Governments not to put in the extra resources to match the additional number of years? That has led to a perverse system in which we now see local authorities battling with parents—using not just normal barristers but King’s Counsel, so sure are they of their righteousness in their battle. With the help of barristers, including KCs, they are battling parents who are often not represented legally and have to represent themselves. Does the hon. Gentleman agree that that is perverse and should never have happened?
Richard Burgon
I thank the hon. Member: that is a very important point, and I certainly agree. I will turn later in my speech to the subject of the tribunals. When we look at the statistics on the outcome of the tribunal hearings, that underlines her point very strongly indeed.
I will make a bit of progress if that is okay. If others wish to seek to intervene, I will take some interventions again later, before the end of my speech. Greater need and inadequate funding are a recipe for disaster, and a disaster is exactly what has happened. In my 10 minutes, I cannot touch on every example of this crisis—
Ian Lavery
I congratulate my hon. Friend on bringing this really important issue to the Chamber. Does he agree that, despite the huge increase in EHCPs, investment in mainstream and special educational needs schools has been drastically cut? That is having a huge impact, mainly on mainstream schools that are trying to back-fill the provision for special educational needs pupils in our areas. Society is often measured by the way—
Mr Clive Betts (in the Chair)
Order. A lot of people are down to speak, so please keep interventions brief.
Richard Burgon
My hon. Friend makes his point well and passionately. He is correct; that is what parents and people who work in our schools have been saying to me.
I will highlight some of the most appalling statistics. More than half of SEND pupils have been forced to take time out of school due to a lack of proper provision, and some children are missing years of schooling. Two in three special schools are at or over capacity; there are 4,000 more pupils on roll than the reported capacity. There are eye-watering delays for children to get their education, health and care assessments and plans, and fewer than half of the plans are issued within the 20-week legal limit.
Nearly a third of parents whose children have special needs have had to resort to the legal system to get them the support they need, and many have spent thousands of pounds to do so. Seven out of eight teachers and 99% of school leaders say that SEND resources are insufficient to meet the needs of our children, according to National Education Union and National Association of Head Teachers staff surveys. Councils face huge SEND deficits, which now stand at £3.2 billion but are expected to reach £5 billion by 2026. The core £10,000 sum that special needs schools receive on a per-pupil basis has been frozen since 2013, despite spiralling inflation. That cost them hundreds of millions of pounds last year alone. I could go on and on, but that alone is a damning indictment of the system.
Child neglect is defined as:
“the persistent failure to meet a child’s basic physical and/or psychological needs, likely to result in the serious impairment of the child’s health or development.”
That is what this failure is, and we should be deeply angry that children are being neglected in such a way.
The SEND crisis is part of the wider crisis in education. There are too few teaching assistants, too few educational psychologists, too few special school places, and Sure Starts have been closed. All that and more means that schools are unable to provide the support that children need. It means that effective early interventions are not possible; that can deepen children’s needs with the result that they require more costly support. When schools face such difficulties, talk of bringing more children into mainstream schools, rather than specialist provision, is just empty rhetoric. All that is exacerbated by national curriculum changes, a much more rigid, prescriptive focus to learning and a greater emphasis on performance measures that simply do not provide the flexibility needed for genuinely inclusive education. We cannot solve this crisis by looking at the SEND system in isolation; we have to consider the wider education system as a whole.
Jen Craft (Thurrock) (Lab)
My hon. Friend mentions the staffing crisis in the SEND system, but I want to note that there is also a crisis in recruitment and training for teachers of the deaf. From my experience, I know that is a key role for a number of deaf children, particularly in my constituency. There is a real crisis in back-filling those positions and recruiting across councils, particularly at a unitary level. The need for teachers of the deaf is not reflected in those coming through the system, which often results in children not having the resource and help they need to succeed in school.
Richard Burgon
My hon. Friend is exactly correct, and I am delighted that she has put on record the contribution of teachers of the deaf and the situation in terms of their recruitment.
The current situation is working for no one; not for children, not for parents, not for teachers, not for children without SEN and not for local authorities. The last Government’s approach pitted parents against local authorities, and they failed to take responsibility. That has created a completely adversarial system, with ever more cases going to tribunal—there were 14,000 cases last year alone, up fourfold since 2014. Parents win in 98% of cases, but it is exhausting and often traumatic for them, as well as a complete waste of money.
Even then, the right support often does not follow. At times, that is due to local authorities being cut to the bone and their lack of effective mechanisms to hold schools to account, especially since academisation. Of course, that is only the tip of the iceberg, as so many parents simply do not have the time, energy or money to undertake legal action. The Government have a duty to end that blame game by addressing the root causes of the crisis: the failed policies that got us here.
As I draw to a close, I want to make a point about increasing attempts to shift the blame to parents, with stories blaming so-called pushy parents, a former Minister accusing parents of abusing the SEND tribunal scheme, and other powerful people calling for parents to make fewer demands.
Matthew Patrick (Wirral West) (Lab)
My hon. Friend mentioned that 98% of parents who make an appeal are successful. Does he share my concern that that suggests that parents who should be supported are instead encountering a system that layers uncertainty and stress on an already difficult and stressful situation? On the Wirral, we do not need to see inspection results to know that parents feel failed and let down. Does my hon. Friend believe that we need to do more to support and challenge councils, to ensure that there is a better system for parents and their children who, in a time of need, feel that they are too often met with rejection and failure?
Richard Burgon
My hon. Friend makes that point very well on behalf of his constituents in the Wirral, and I completely agree. What a trauma! It is trauma piled upon trauma, as parents are forced through this adversarial system, with all they are going through, struggling to get the best for their children—and the best is what our children need and deserve.
I suspect that the blame game of unfairly calling parents “pushy” was all part of a strategy by some in the last Government to blame the system breakdown on too much demand for special education provision and to claim that that demand must somehow be suppressed rather than met. I fear that those who promoted that view could even have been looking to water down the legal entitlements of children with education, health and care plans. Our new Government need to ensure—as I am sure they will—that that demonising of parents is challenged.
To conclude, the dire picture I have painted today is not inevitable; the system can be fixed and children can get the education they need and deserve. That requires improvements in SEND training for teachers, and special educational needs co-ordinators having time to focus on doing their job. It requires many more support staff in school, which means proper pay. It requires changes to the curriculum and to the way in which our education is so focused on tests and league tables, which means that there is pressure to off-roll SEND pupils. It requires genuine early intervention, including the restoration of Sure Start. It requires the scrapping of the safety valve scheme and the writing-off of local authority debts. And, of course, it requires cash. I note that the f40 group believes that the high needs block alone requires an additional £4.6 billion a year just to prevent the crisis from getting worse.
I know that many hon. Members want to speak today. I am delighted that the new Education Secretary has recognised that there is a crisis in SEND provision, because the first step in solving a crisis is to recognise that there is one. I hope that this exercise—going into this debate, continuing through this debate and following this debate—can be part of getting a grip and turning the page on a situation in which so many children are not getting the support and education they deserve in order to fulfil their potential for a happy life, which is something all our children deserve.
Mr Clive Betts (in the Chair)
Obviously, a lot of Members want to get in. We have 40 minutes, so I am going to impose a time limit of three minutes. Please do not take more than one intervention, because that lengthens the time. Interventions should be to the point; they should not be speeches. If you make an intervention, you will not get called to speak as well. Off we go: I call Dr Neil Shastri-Hurst.
Dr Neil Shastri-Hurst (Solihull West and Shirley) (Con)
It is a privilege to speak under your chairmanship today, Mr Betts. I thank the hon. Member for Leeds East (Richard Burgon) for tabling this important debate.
I wish to place on record my gratitude to all the teachers in my constituency for the work they do and—in the spirit of this debate—to the teachers and staff at Hazel Oak and Reynalds Cross, the two maintained special schools in Solihull West and Shirley. I particularly want to single out the parents of children with special educational needs, who often strive so incredibly hard to achieve the best for their children. In January 2022, there were 2,023 Solihull residents with an EHCP—a 16.1% increase on the year before.
Aphra Brandreth (Chester South and Eddisbury) (Con)
Despite legislation requiring a final education, health and care plan to be in place within 20 weeks of an initial assessment, Cheshire West and Chester council is putting in place just 6.5% within that time, which is fewer than one in 15 children. Too many children in my constituency are being let down by the Cheshire Labour councils, so I want to highlight the work of the CWaC SEND Accountability group in bringing families together on this issue. Does my hon. Friend agree that a more efficient EHCP system is crucial in delivering for SEND children and their parents?
Dr Shastri-Hurst
My hon. Friend is entirely right; the delays in EHCP assessments are a hindrance to a child’s access to the national curriculum. We are failing them by not doing those assessments in a timely manner, and we need to improve on that. I agree with her comments entirely.
A constituent has told me that the nearest school with the necessary facilities for her son is 31 miles away. That means that she and her child have had to settle for a school that is not fully equipped for his needs, simply due to geography. My constituency surgery, like those of other Members, is regularly visited by parents with similar cases. Evidently, the current system is not working.
Therefore, I wish to propose three changes that I believe will lead to a significant improvement for schools and families affected by SEND provision. The first is something that everybody in this room is already leading on: raising awareness of SEND. It is heartening to see so many Members engaging with this topic, and it is only by doing that, and by educating ourselves and others, that we can hope to make a change for the better.
The second is identifying children with special educational needs at an early age, which is vital to maximising their life chances. That is why I would like to see better training and resources provided to teachers to help with earlier detection.
Dr Shastri-Hurst
I will not give way, purely because of the amount I have to get through in the time.
Aside from family members, children spend most of their developing lives with their teachers. It is important that the teaching curriculum is sufficiently flexible to enable children to reach their true potential.
I would also like to make special reference to those military families whose children suffer from special educational needs. Having served in the military myself, I know of several families who have encountered adverse effects as a result. With regular school moves, often between different local authorities, there is an inevitable need to reapply for an EHCP, thereby delaying access to the provision that is so desperately needed.
My final request to the Minister comes as no surprise: to achieve all these improvements, it is important that local authorities receive the funding they need. In particular, I ask that my own council receive its fair share of funding, because Solihull council presently takes in SEND children from Birmingham but receives much less funding per pupil. That matter needs to be rectified.
Those three things—awareness, training and funding—will have a real, tangible impact on young people, their families and their life chances.
Rachael Maskell (York Central) (Lab/Co-op)
It is a pleasure to serve with you in the Chair, Mr Betts. What a mess—young people broken by a broken system. The Children and Families Act promised so much, but without people, money and the rest of the system to back it up, it could never deliver. When the wait for the diagnosis is over, the battle for the EHCP is won and masses of resources have been spent, the demand is still not being met. Staff do their very best, but still people are falling out of the system.
I have spent the past year digging deep, looking at the local, the national and the international to bring best practice to this space. I have looked at the environment, the community and the child. On the environment, I say to the Minister, “Go back to the Department and rip up the behaviourist approach to education. It creates a world where neurodiverse children—those with anxiety or mental illness—and even the timid cannot survive.”
Instead, we should adopt a therapeutic, nurturing approach so that all children can thrive. In York, where schools have done so, all gain from recognising the need for every child to be safe, valued and included. It is a happy place where a child will strive for excellence and the whole child will be able to navigate their way through this world, rather than an obstacle course of micro-traumas, stress and anxiety. Let us not build bigger and bigger schools, but create more therapeutic and intimate spaces that belong to the children and where they can thrive. We should bring children out of home schooling, out of their bedrooms, off the streets and back into the classroom. School must be safe for all those children.
We also need to recognise, as the Government do, the failed nature of the curriculum. Let us build space for our brains and our bodies. Are we really shocked that young people are failing when only half of them is engaged? We have cut out arts, music, sports, nature, dance, play, exploration, wonder and fun. Yet all children, especially those with SEND, benefit from that balance.
When I visited Sweden, I went into schools to hear about what they were doing. They brought people into the heart of the school, not prescribing from an EHCP but taking a whole-child and a whole-school approach, using the skills of psychologists, teachers, occupational therapists, physios and speech therapists for all children. Let us recognise that school community and ensure that we value its members. Our teaching assistants do so much of the work, yet their pay is so poor—that must be addressed.
Rachael Maskell
I am going to continue.
As for parents, I have seen them pushed away and gaslit, when they should instead be integrated into the heart of the school, as they are in Sweden, leading on what their child needs. When it comes to the children themselves, let us review the purpose of education: preparing children for the world today, not breaking and testing them. Children with SEND struggle in that environment just to satisfy the need for data for Governments and to meet different goals. We need every child to flourish, and that is why we need to think again.
Dame Caroline Dinenage (Gosport) (Con)
It is a pleasure to serve under your stewardship, Mr Betts, and I congratulate the hon. Member for Leeds East (Richard Burgon) on securing the debate. I suppose that the best place to start, in the time permitted to me, is the beginning. For a child who needs targeted, tailored support, early identification can make a world of difference, because the impact of failing to spot a child with additional needs can be severe and far-reaching. Early intervention means life-altering adaptations in the way teachers interact and communicate with them and in the way they are supported, reducing the need for EHCPs and one-to-one support and improving academic outcomes, life chances, wellbeing and happiness, which are obviously crucial.
Spotting children with SEND—particularly autistic children and especially autistic girls—can be difficult, and there is insufficient training at the moment to enable teachers to do that. There are around 200,000 autistic children in England. The majority are in mainstream education, but the National Autistic Society reports that, staggeringly, only a quarter feel happy at school. That is why some parents take the drastic step of paying for private education that they can ill afford, because they need education that addresses their child’s needs.
The effect on a neurodivergent child of being in the wrong education setting can be devastating. In March, The Guardian reported that nearly 20,000 autistic children are persistently absent from school, with Ambitious about Autism reporting that four in five of them experience mental health issues.
I have a suggestion for the Minister. According to the National Autistic Society, three quarters of parents said that their child’s school place did not meet their needs. Teachers do a remarkable job, but they need to be equipped with the very best tools and advice to give their pupils the very best possible chance of learning in a happy, safe, well cared-for environment. Currently, only one in seven schoolteachers have received any form of autism training, and 70% of children say school would be better if teachers understood them.
There are not enough SEND school places, but as a Health and Social Care Minister I started work on introducing the Oliver McGowan mandatory training for health and care staff, which the Minister knows about. It equips health and care professionals with the skills, knowledge and understanding of autistic people and those with learning disabilities. It is delivered by autistic people and people with learning disabilities—experts by experience who get paid to do it. It is really effective, with 84% of participants saying they feel more confident in their work. Today, it was shortlisted for an NHS parliamentary award. Will the Minister meet Paula McGowan and look at whether this could assist teachers? Using that training in an educational setting would improve the way in which teaching professionals can support autistic children and those with learning disabilities.
Amanda Martin (Portsmouth North) (Lab)
I thank the hon. Member for Leeds East (Richard Burgon) for securing this vital debate. As a former teacher, I have witnessed everything heard in today’s debate, and I will not need to repeat it. I will make a few points in the time that I have. In my city, like others, we have had a 30% increase in our EHCPs. Somebody mentioned extending the 11 years of provision; at 16, those kids just drop off. What happens to them, and how do we support them?
The EHCP increase has led to a constituent’s child waiting 40 weeks for their EHCP to be turned around, which has left them with no secondary school place in the first week of term. We should be allowing these children to select their secondary school places a year earlier to give them time to transition, meet the staff, and grow their awareness of and engagement with the school community. As I was a teacher before coming into this role, I always look at solutions; that is one of them.
Another solution involves the Government using the resources raised from ending the tax break for private schools to fund evidence-based early speech and language support in our primary schools. We must ensure that Ofsted’s new report card has inclusion as part of the report, so that we can see what our schools are doing. We must ensure that teacher training entitlements and annual CPD—continuing professional development—for all staff in education include SEND. Mental health support should be increased. If we are really going to look at EHCPs, pupils’ records should be kept properly so that they follow them when they move on to their next phase of life, whether that is education or the workplace.
Finally, I want to highlight Trafalgar school in my constituency, which is a fully restorative practice school. We need to look at using innovative projects such as that around the country to let children have an inclusive education that is also inclusive for them personally.
Esther McVey (Tatton) (Con)
I thank the hon. Member for Leeds East (Richard Burgon) for securing this important debate. I know time is tight, so I will keep to a couple of very specific points. One such point is on the Government’s plans to add VAT to private schools and how that will affect SEND provision. My first question to the Minister is this: what impact assessment did the Government carry out, with regard to the VAT changes to private schools, of the effect on children with special educational needs and on SEND school places? If the Government have done an impact assessment, will they publish it, and if they did not, why on earth not? I appreciate that the Minister might not be able to answer that question here and now, but I see the officials are in the room behind her, so I am happy for that to be sent to me.
As I understand it, the Government policy is not to impose VAT on private school places where the school place is allocated on the basis of an EHCP. However, there will be very many children with special educational needs who have not yet secured such a plan, and so VAT will apply.
Esther McVey
Not at the moment.
We know that families have to go through a rigorous set of tests to obtain an EHCP, often ending in an appeal or taking many weeks to be finalised. In those cases where the plan has not been finalised, parents will have to make the difficult decision whether to send their child to an independent school. In those instances there will be a significant uplift in those pupils’ fees—a massive worry for parents. Some will now no longer be able to afford the fees. We can only imagine their guilt and concern. What are they going to do? Will they have to stop their child’s progress at that school? Will the child need to leave that school?
How can it be fair that a child who is delayed in the education, health and care plan process, through no fault of their own, faces VAT costs, while another child who has secured their EHCP in time does not have that burden? Could the Minister explain that unfairness that the Government have now introduced into the system, and whether they plan to put a stop to it as soon as possible? In light of that unfairness, I urge the Government to look at what steps can be taken to reduce the time that the assessments for an EHCP take, more generally.
There are three local authorities in my constituency, all of which consistently go beyond the legal timeframe. I asked Cheshire West SEND accountability group for parents how long the EHCP process takes. Legally, it should take only 20 weeks, but some have waited more than 60 weeks. Anecdotally, they say on average it is taking 30 to 50 weeks—
Mrs Sharon Hodgson (Washington and Gateshead South) (Lab)
It is a pleasure to serve under your chairmanship today, Mr Betts. I congratulate my hon. Friend the Member for Leeds East (Richard Burgon) on securing this very important debate.
It has been widely noted that SEND provision came up significantly on the doorsteps during the general election. The statement from the then Conservative Education Secretary earlier this year that SEND provision had reached a crisis point only further reinforced what we already knew—but it was under their watch.
No one wants to say, “I told you so,” but as the shadow Minister during the passage of the Bill that became the Children and Families Act 2014—the Act that brought in education, health and care plans—I did, many times. This crisis is exactly what I, as shadow Minister, along with many from the education, voluntary and charity sectors who supported me with many amendments, all predicted. The crisis we are in now was entirely predictable. It is a damning indictment that, after 14 years in power, this is the state that the Conservatives left SEND provision in.
Between 2019 and 2023, the number of EHCPs issued rose by 72%, but shockingly, dedicated SEND funding only rose by 42%. That is just one stat of many that I could give. The lack of funding, the delays and the de-prioritisation of children with SEND is a stain on our society.
I know from the challenges I face in my own family that the impact on children’s self-confidence, self-esteem and education can be life-changing. I, like many here, have had first-hand experience of the impact that underfunded and disjointed SEND support can have, because my son Joseph is severely dyslexic. His experience opened my eyes and has given me a lifelong passion, throughout my 19 years as an MP, to do something about the challenges that children with SEND experience in accessing support, and the variation in the quality of support that children experience across the country. It really is a postcode lottery.
Joseph was eventually statemented aged 10. I will not go into his journey, but two decades on, children who are now entering the education system are having the same experiences as he did. Nothing has improved. I have had many conversations with the British Dyslexia Association recently—I was chair of the all-party parliamentary group for dyslexia and other specific learning difficulties. One of the reasons that teachers struggle is the lack of training. Due to time I cannot expand on that, but I am sure others will.
Victoria Collins (Harpenden and Berkhamsted) (LD)
I thank the hon. Member for Leeds East (Richard Burgon) for securing such an important debate.
An Ofsted report for Hertfordshire deemed that there were widespread systemic failings in the county, and that the area had not acted with the necessary urgency to address long-standing, systemic and significant weaknesses in the area of special educational needs and disability provision. This is reflected again and again in the heartbreaking stories of families across Harpenden and Berkhamsted being let down by a broken system.
One of my constituents, Charlotte, is a parent to three children, all with EHCPs and complex SEND needs. Being in constant battle mode has become the norm for Charlotte and her family in securing educational support, and it has resulted in her eldest child having to travel almost 100 miles a day to get to school. The emotional wellbeing of Charlotte and her children has taken a toll, and her youngest child has barely attended school since October 2023.
Although progress is being made, there is still much more work to do. We have been let down by not only Conservative-led Hertfordshire county council but a flawed national funding formula inherited from the previous Conservative Government. The formula means that children in Hertfordshire receive far less funding per head than in neighbouring Buckinghamshire. Hertfordshire is the third-lowest-funded authority per head for higher needs funding and would receive £85 million more per annum if funded at the same rate as its neighbour.
Jess Brown-Fuller (Chichester) (LD)
With only 3.6% of EHCPs in Conservative-led West Sussex county council being delivered within the statutory 20-week framework, does my hon. Friend agree that funding, which is currently a postcode lottery, needs to be reviewed across the country?
Victoria Collins
My hon. Friend took the words right out of my mouth. At the current rate in Hertfordshire it would take 15 years to achieve parity between the two counties. This is a lost generation. A three-year-old in Hertfordshire today with SEND needs would have to finish all their formal education before they would get equal funding to a similar child in Buckinghamshire. The formula has created a postcode lottery for pupils with special educational needs, and it is unacceptable.
Most importantly, we should listen to the experience of local families to truly understand the human cost of the outdated formula. Unfortunately, stories such as Charlotte’s are not isolated cases, as goes for much of what will be shared today. The formula has pushed many families away from their local communities and support networks and into the minefield that is SEND provision. The funding formula must move with the times. It must be updated to reflect the present, increasing demand. So I ask the Minister: when will the Government change the funding formula to reflect the current need?
Fred Thomas (Plymouth Moor View) (Lab)
I thank my hon. Friend the Member for Leeds East (Richard Burgon) for securing this important debate. We have heard from many Members how dire the situation is in their constituencies, but can we for a second celebrate the incredible staff who already put so much effort and passion into the provision they arrange for children? My first visit as an MP was to Mill Ford school in Ernesettle in Plymouth, which supports children and young adults with complex needs. I have to pay tribute to the incredible staff there and congratulate Mill Ford school on recently being rated as “outstanding” by Ofsted.
I am pleased that we are moving away from one-word Ofsted ratings, because it is impossible to capture what Mill Ford does for people in just one word. While visiting Mill Ford, we stopped by their daily singalong in the hall. Pupils from all age groups were having an incredible time, singing in various tunes and volumes and quite literally jumping for joy. It was a fantastic scene. Despite this, huge challenges remain. For example, at that school the corridors are so narrow that two wheelchairs cannot be wheeled past each other.
The situation in Plymouth is similar to that in many hon. Members’ constituencies, but some statistics we have already heard do not match quite how dire it is. In Plymouth, 18.5% of pupils have a SEND need—well above the national figure of 13%. The number of children and young people with an EHCP in Plymouth has increased since 2010 by 125%—more than doubled. We know that there is no quick fix for the crisis in SEND. Special educational needs are complex and wide-ranging, so they require complex and wide-ranging solutions. We need to listen carefully to education professionals, support staff and especially those with lived experience of SEND as we move forward. I am proud that I ran for Parliament on a manifesto that pledged to take a community-wide approach to special educational needs, improving inclusivity in mainstream schools as well as ensuring that special schools are fit for purpose.
Anna Dixon
As in my hon. Friend’s constituency, in Shipley the number of pupils with SEND has increased again this year. It is putting huge pressure on our teachers and teaching assistants in mainstream schools. Does he agree that the cuts to school funding under the previous Government have contributed to the problem, and that further steps need to be taken to ensure appropriate training for all our school staff, particularly those in mainstream schools?
Fred Thomas
I completely agree with my hon. Friend’s point about the funding cuts. I was going to respond to a point made by the right hon. Member for Tatton (Esther McVey), but I removed it from my contribution due to the time constraints. She asked earlier whether the Government had conducted feasibility studies on the removal of VAT exemptions from private schools. I would respond by asking whether the previous Government, which we had since 2010, conducted feasibility studies on SEND when they made deep cuts to education.
I started by speaking about the fantastic Mill Ford special school in Plymouth Moor View. Expanding capacity at Mill Ford is central to Plymouth city council’s plan to address the SEND crisis, but it is much harder to access funding to replace or rebuild a school than it is to build new schools. Will the Minister commit to working with me to help expand capacity at Plymouth Moor View’s special schools?
Claire Young (Thornbury and Yate) (LD)
I thank the hon. Member for Leeds East (Richard Burgon) for securing this debate. Before I start, I draw attention to my entry in the Register of Members’ Financial Interests, as I am still a South Gloucestershire councillor.
Right across the country, children with special educational needs and disabilities are being let down, and parents are at their wits’ end trying to navigate the system. The SEND funding model is utterly broken, leaving local councils and schools unable to provide the learning environments our children need.
I want to highlight three particular problems. The first relates to the safety valve agreements put in place to support local authorities that are struggling the most to deliver these important services. I know as the former leader of South Gloucestershire council that the targets that were set pre-pandemic fail to reflect the massively rising demand we have faced since, meaning they are no longer fit for purpose and need to be reviewed. I look forward to hearing the Minister outline what steps the Government will take immediately to do that.
Secondly, I want to highlight the punitive approach taken to school absence in this country. If a child’s needs are not being met at school, it can lead to their being unable to attend. Parents who have been fighting hard to get their child the support they need can then face the added burden of threats of fines or even imprisonment—talk about adding insult to injury. Imagine the impact that has on parents who are already under huge stress, who may be under financial pressure due to their employment being affected by their additional caring responsibilities, and who may feel compelled, against all their parental instincts, to physically force their child into a situation that is harming them. Above all, think of the impact on the child, pressured to go into an inappropriate environment and worried that bad things may happen to their parents.
Finally, I want to highlight the increasing use of alternatives to exclusion, such as isolation and temporary moves to other schools—measures that are not recorded and published in the same way exclusions are, and not subject to the same safeguards. A child who is struggling to learn in a classroom with a subject-specialist teacher is highly unlikely to be able to do so when sat in a room with a supervisor and some worksheets. A neurodivergent child who thrives on routine will be distressed by such a change, especially if it involves a move to an unfamiliar school. In some schools the list of behaviour that is sanctioned in this way could easily have been drawn from a diagnostic list for ADHD or autism, so it seems inevitable that children who do not have appropriate support in place will be subject to such sanctions. There needs to be an urgent review of the use of such measures, which can easily go under the radar.
In conclusion, we need action now from the Government to fix these problems before the house of cards comes tumbling down, starting with fixing the funding formula and reviewing all existing safety valve agreements.
Peter Swallow (Bracknell) (Lab)
On Saturday, I joined a group of SEND families in Bracknell to hear their experiences of operating within a broken system. The stories I heard from them, and those I have heard on the doorstep and from Members here today, are heartbreaking. Children are stuck on assessment waiting lists for months longer than they should be. Parents have to juggle work around caring for kids who are off school or find themselves repeatedly excluded because their needs are not being met, and are then left struggling to pay the bills.
There is inadequate provision in mainstream education, and there are far too few state-maintained special schools to meet the demand. As the previous Conservative Education Secretary admitted, the system is “lose, lose, lose”; it is desperately in need of reform.
Sam Carling (North West Cambridgeshire) (Lab)
Does my hon. Friend agree that one of the very serious consequences of the issues he is outlining is the problem of non-elective home education, where parents feel forced to take their children out of school entirely and feel they have no option other than to educate them at home? Does he, like me, welcome the measures in the proposed children’s wellbeing Bill that will require local authorities to set up and maintain registers of children not in school so that we get a better sense of the problem?
Peter Swallow
Absolutely. I was proud to highlight in my maiden speech the issue of ghost children, who are missing out on education and too often fall off the radar. That is a really important part of the puzzle.
The Government have rightly placed education at the heart of their programme for change and have a national mission to break down the barriers to opportunity for all children. Nobody needs that more than our SEND kids, who face significant barriers to inclusion. This is a question of social mobility. How can we ensure that, no matter a child’s needs or background, they thrive in school and into their adult life?
I could focus on many areas where improvement is desperately needed, but one issue that is raised time and again by the families I have spoken to in Bracknell—it has been raised by Members here today, including the hon. Member for Gosport (Dame Caroline Dinenage) and my hon. Friend the Member for Washington and Gateshead South (Mrs Hodgson), and I experienced it in my previous career in education—is the lack of adequate training about SEND in schools, both in initial teacher training and as part of a teacher’s continuing professional development. That is why I was proud to stand on a Labour manifesto that committed to introducing a new teacher training entitlement to give teachers the time they need to learn skills that will help them better support SEND kids. When I was a teacher, time was always the most precious resource. I would like to see the pledge include more targeted support for SENCOs and input from SEND families at all stages.
Let me be clear: there are many more areas where this broken system is in great need of reform, and we have heard many fantastic contributions to that effect today, but if we ensured that more SEND kids were supported within the mainstream system—if they were able to attend school and were not shut out of education—we would reduce the pressure on heavily oversubscribed special schools and would be one step closer to fixing the SEND system and breaking down the barriers for all children.
Gregory Stafford (Farnham and Bordon) (Con)
In Farnham and Bordon, which I proudly represent, we are fortunate to have many excellent special educational schools, such as the Ridgeway school, the Abbey school, More House, Undershaw school and Stepping Stones in Surrey, and Hollywater in Hampshire. However, Surrey is a special case that requires urgent and increased Government action.
Nationally, SEND education affects about 18% of pupils, but in Surrey the figure rises to a staggering 39%—double the national average. Hampshire largely aligns with the national figures, yet both counties face rising demands. Surrey’s situation highlights the need for immediate, targeted intervention from the Government. Although I remain equally committed to supporting SEND pupils and parents in Hampshire, Surrey’s unique pressures cannot be ignored. Those families need more support, not only from their local councils but, crucially, from central Government.
The Conservative Government made significant strides in addressing the challenges. For more than a decade, Conservative Chancellors increased the annual funding to meet the rising demand. Since 2015, we have seen a 283% increase in EHCP agreements, which demonstrates the Government’s responsiveness to the growing number of diagnoses. Despite that progress, there is much more to be done, and the strain on services continues to grow. I have seen the profound impact that early detection and diagnosis can have, particularly in SEND, where identifying needs early is crucial to a child’s long-term success. While local authorities such as Surrey and Hampshire are doing their best, they need more resources to manage the increased demand without delays.
I am deeply concerned by the Government’s decision to raise VAT on independent SEND schools. That policy risks pushing many children who are not funded by local authorities, such as 40% of the children at More House, back into the state sector, which is already struggling with larger class sizes and fewer resources. A 20% increase in fees will be devastating for those families, particularly given the long waiting times for EHCPs. The Government must rethink their VAT strategy for these schools.
Parents in my constituency have shared with me the immense stress and frustration that they face, not just from navigating the system but from the delays that impact their children’s education and wellbeing. These families are already stretched, and the uncertainty takes an untold toll on both the children and their families. There is an urgent need for more trained educational psychologists and special educational needs co-ordinators, and the Government must step up to provide them.
It is also critical that MPs across all parties stop using SEND as a political football, as we have seen recently in Surrey. The blame game helps no one. It only serves to confuse and frustrate parents further. We must work together to provide clear, accurate information and focus on delivering the support that families in Surrey and Hampshire so desperately need. We need action now.
Kim Leadbeater (Spen Valley) (Lab)
I congratulate the hon. Member for Leeds East (Richard Burgon) on securing this important debate.
Support for children with special educational needs and disabilities is an issue that has been raised with me consistently since my election three years ago. In Batley and Spen and now in my new Spen Valley constituency, I have had countless conversations and emails, held roundtables and had meetings with families, headteachers, teachers and teaching assistants, councillors and charities about the anger, frustration and, in many cases, deep trauma they have experienced trying to navigate the broken system that is SEND.
All any of them want to do is get our children and young people the help and support they need and deserve, because, as our new Secretary of State for Education has said, every child should have the support they need and deserve. Instead, we have amazing children and young people being prevented from being the very best that they can be, not enjoying their education, struggling in school and falling behind, which often has a deeply detrimental impact on their mental health and wellbeing.
It is not just the children themselves. I have had parents in tears in my office feeling like they have failed, as they have not been able to get an EHCP for their child. They have given up work so that they can support their child, meaning their own sense of identity and self-worth has suffered, and they feel guilty that they are not contributing to society and the economy. I have had headteachers and staff in schools feeling that it is their fault that they cannot ensure that every child in their care gets the education they deserve. The reality is that they are so desperately under-resourced and the system is so broken that they simply cannot do their jobs in the way that they want.
It is not just schools; as a former college lecturer, I know that there are challenges there too. Colleges are often a lifeline for students with SEND, but, as the association of college lecturers says, there are real challenges in the way that the SEND system fits together through funding and student transitions.
This is just not right. Like with so many other issues, this new Government are having to pick up the pieces of a broken system that is the result of years of schools and local councils being chronically underfunded and under-resourced. The previous Government did not give our education system the care and attention it needed. Ministers were just not listening to the sector and not providing the resources and funding that it so desperately needed.
I have been supporting parents and schools over the last three years. Laura Riach, a mum of two, recently got in touch. Her children are both academically bright, but cannot cope with sensory overload and cannot be in a mainstream school setting that is noisy and bright. The parents are getting very little support to home-educate the children and the situation got so severe that one of the children tried to commit suicide. After battling with the SEND system, they are getting only six hours’ support per child per week, when they should be getting 25 hours.
Many parents have contacted me about this issue. Children are losing vital education and the stories show just how broken the system is. I am very pleased that the new Government have already started to give SEND the care, compassion and understanding that is needed to address the crisis.
Several hon. Members rose—
Mr Clive Betts (in the Chair)
I will have to move on to the Front-Bench speeches now. I am sorry to disappoint so many people, although it was pretty inevitable. For the information of new Members, I did not call anyone who had not applied to speak in advance, and I tried to take account of the time that they applied when deciding the order in which I called people. That is the only way we can do it, really.
We move on now to the Front-Bench spokespeople, who will have 10 minutes each. If you could leave a little time at the end for the mover of the motion to respond, that would be helpful. I call the Liberal Democrat spokesperson, Munira Wilson.
Munira Wilson (Twickenham) (LD)
It is a pleasure to serve under your chairmanship, Mr Betts. I congratulate the hon. Member for Leeds East (Richard Burgon) and pay tribute to him for securing this incredibly important debate. The fact that it is such a packed Chamber—standing room only—is testament to both the passion with which he set out his case and the stories that we have heard. We have so many new Members, but those of us who have served one, two, three or more terms know that inboxes and postbags are bulging with stories and heartbreaking cases across the country. In the time available, and given the number who wish to speak, I will not do the customary paying of tribute to the various speeches, but I may refer to various contributions as I go. I would particularly like to recognise those new Members who were formerly teachers. It is so good to have more teachers in the House and it is important that we hear their voice. I thank the hon. Member for Plymouth Moor View (Fred Thomas) for paying particular tribute to the hard work of staff up and down the country who have to battle in this system alongside parents and pupils.
As we have heard, too many vulnerable children who should be receiving crucial support to learn, play and thrive are being let down by a system that is broken. According to the latest Government data, more than 1.6 million children in England have a special educational need—that is almost one in five of our pupils. We have heard of the huge growth in the level of demand in the past few years, with the number of pupils with an education, health and care plan growing by almost 12% in the past year alone. More than half a million children are now on EHCPs. Despite the best efforts and dedication of everyone involved in the sector, including teachers, parents and charities, it is clear that services are struggling to keep up with demand. As a result, too many children with SEND are being left behind.
The new Government have an immense challenge on their hands and, for all their rhetoric, education was not a priority for the previous Conservative Government once they were left to their own devices from 2015 onwards. I have no doubt that the shadow Minister today will point to a plethora of announcements on SEND and promises to build special schools in response to the overwhelming and growing need. Actions sadly never met the rhetoric. The evidence is crystal clear, as has been backed up by the stories we have heard from across the House today: we know that parents and children are stuck in an adversarial system, fighting, and waiting many months—sometimes even years— to get the support to which their children are entitled. The previous Government’s own SEND review in 2022 stated that the system was
“failing to deliver for children, young people and their families.”
As we have heard, the former Education Secretary, Gillian Keegan, even described it as “lose, lose, lose”.
We also know that headteachers are at their wits’ end, with teachers and teaching assistants being driven out of the classroom because of the strain on them. Last year, on a visit to Harrogate, my hon. Friend the Member for Harrogate and Knaresborough (Tom Gordon) and I met the SENCO for Coppice Valley primary school, who was leaving because he felt he could not meet the needs of his pupils and provide the support that they deserved. In my own constituency, I have heard about serious safeguarding incidents in schools involving children with SEND who are not getting the support that they desperately need and deserve. It is unfair not only on those particular children, but on the whole class, and it is unfair on the teaching staff who are doing their very best to provide a good education for all.
With school budgets so stretched, I know that many schools are struggling to offer the inclusive education they want to. Many are laying off teaching assistants to deliver the cost savings they need, and it is often those teaching assistants who are providing the support for a child with special educational needs to remain in a mainstream classroom. At the same time, local authorities cannot possibly plug the funding gaps from their own budgets, given the parlous state of council finances.
Marsha De Cordova (Battersea) (Lab)
I commend the hon. Lady on the speech she is giving, and she rightly points out the challenges around the laying-off of teaching assistants. Does she agree that in all the reforms that the Government need to look at, we really must not go back to a special schools approach but should always focus on having an inclusive education system with the right support for those children to learn alongside their peers?
Munira Wilson
I thank the hon. Member for her intervention and I agree that, where possible, we need to be as inclusive as possible. Equally, there are children whose needs cannot be met in a mainstream setting and we need to have special provision for them—I will touch on that in a moment.
The funding for special needs has fallen so far short of what is needed that local authorities across the country now have a cumulative high needs deficit of approximately £3.15 billion. Many local authorities’ financial viability is being put at risk by these growing deficits. Although the safety valve programme that my hon. Friend the Member for Thornbury and Yate (Claire Young) mentioned, of which my own borough of Richmond upon Thames was an early member, has provided some relief, it is a sticking-plaster solution, kicking the can down the road. Once the agreements run out, those local authorities are projected to start racking up big deficits again.
As well as the cost of providing the support to which children are legally and morally entitled, councils are also seeing their SEND transport bills skyrocket. As my hon. Friend the Member for Harpenden and Berkhamsted (Victoria Collins) pointed out in the case from her constituency, we know that the number of children having to make long journeys has increased by almost a quarter over the past five years. Vulnerable children are having to travel ever further distances because specialist provision is not available locally for many.
Two thirds of all special schools are full or over capacity. The last Government was incredibly slow in building the special schools that they promised, and they turned down many applications from councils to build and open their own SEND schools to make that provision available. Councils face a double whammy: not only are they paying transportation costs, but they are having to buy in private provision.
Many independent SEND schools are brilliant not-for-profit charities, but there is also obscene profiteering from some special schools run by private equity firms, which are bleeding councils up and down the country dry. I hope the Labour Government will look at that because my calls to the Conservative Government fell on deaf ears.
I want to pick up a point made by the right hon. Member for Tatton (Esther McVey) about the many families whose children are not eligible for EHCPs or who cannot face the gauntlet of trying to secure one. They turn to mainstream, small independent schools to better support their child because larger mainstream schools cannot support that need, but those families will be penalised by the new Government’s plan to slap VAT on independent school fees from January. Those who will not be able to afford the additional cost will turn to the state sector, putting more pressure on, as we have heard, a system in crisis.
Furthermore, the proposal to have a VAT exemption for those with EHCPs will incentivise even more parents to apply through the system. I have heard from a constituent just this week who will probably have to do that, which will put yet more pressure on a system that cannot cope with more. I look forward to hearing what the Minister has to say about the 100,000 children who have SEND and are in the independent sector.
All of us recognise that SEND provision is an enormous challenge that will not be resolved overnight despite what the Secretary of State hopes to be able to do. I stand ready to support her in any way I can to make sure that we tackle the issue. The recent Liberal Democrat manifesto set out several ideas that I hope the Minister will look at.
First we propose that a new national body be established for SEND that would be responsible for funding the support of children with very high needs. The national body for SEND would pay for any costs above £25,000 for children with high needs. It would reduce risk for local authorities and help to tackle the postcode lottery that we have heard about.
Max Wilkinson (Cheltenham) (LD)
Will my hon. Friend give way on that point?
Munira Wilson
I am not sure I have the time; I am so sorry. The national body for SEND would also act as a champion for every child with special needs or disabilities and promote widespread inclusive practice. Additionally, Liberal Democrats would like to see councils funded to reduce the amount that schools pay towards the cost of a child’s education, health and care plan. The current £6,000 threshold acts as a disincentive in the system, which can hinder schools from identifying and establishing a need before it impacts the child’s schooling. We cannot wait for things to go wrong before we fix them.
As the hon. Member for Gosport (Dame Caroline Dinenage) said, early intervention is key. That is why, as we have heard from many Labour Members, boosting training for teachers and for early years practitioners, so that we can identify needs early and support early, is so crucial.
Behind every statistic and case study we have heard about today, there is a child who is struggling, with parents and carers who are under stress. We have a duty to act. Liberal Democrats believe that every child, no matter their needs and background, deserves the opportunity to thrive. I look forward to hearing the Minister’s comments and to working with the Education Secretary to fix our broken SEND system. The children deserve it.
James Wild (North West Norfolk) (Con)
It is a pleasure to serve under your chairmanship, Mr Betts. I congratulate the hon. Member for Leeds East (Richard Burgon) on securing this popular debate. I am pleased to have the opportunity to respond on behalf of the Opposition. The fact that this is the third debate on the same subject in this Chamber this week—the Minister must have a season ticket—underlines the amount of casework that we all have to deal with, as I did in the last Parliament, to help parents and children get the support that they need. That is exactly what this debate is about.
We all want an education system that helps children and young people with SEND to fulfil their potential and live fulfilling lives. I pay tribute to all those working in schools, including my sister who is a SENCO in a Norfolk school, to support those children. Everyone has spoken about demand and the challenges that that is causing, and the pressure on funding. The number of EHCPs and statements of SEN have more than doubled since 2015. In my county of Norfolk there has been a 33% increase in the last five years alone, and my hon. Friend the Member for Farnham and Bordon (Gregory Stafford) referred to the real pressures in Surrey.
In recognition of the growing demand, the last Conservative Government increased the high needs budget to £10.5 billion this year, which is 60% higher than in 2020. To help increase much-needed capacity, £2.6 billion was invested to fund new places and to improve existing provision. Nonetheless, as everyone has heard today, the level of demand continues to grow. It was the need for more consistent support and outcomes that led to the SEND and alternative provision improvement plan published last year. The review came after a long period of discussion with the sector—with parents and schools—to understand what was needed, and it aimed to ensure that every child gets the right support in the right place at the right time. At its core was an attempt to deal with the feeling that parents have to battle a system, which too many of them have, as every MP present knows. The hon. Member for Portsmouth North (Amanda Martin) talked about the challenge of getting EHCPs done in time and had a suggestion about how to address that.
Mike Amesbury (Runcorn and Helsby) (Lab)
Under the previous Government, in 2023, 98% of appeals to tribunal were upheld. Does that not demonstrate the utter failure that, under the watch of the previous Government, has created this broken SEND system?
James Wild
The hon. Gentleman makes his point. It underlines the need for reform of the system, which is precisely why mediation was part of the proposals that we brought forward.
The reforms were based around national standards so that there was a consistent approach. The first area we were going to bring forward was developing standards for speech and language, which is so important, and improving the timeliness of the EHCP process by introducing a standardised approach. As part of our focus on SEND, the last Government opened 15 new free schools, approved a further 40 and invested in training—which again is so important—for over 5,000 early years SEND practitioners. I know that the Minister is committed to delivering better outcomes, so can she confirm whether the Government have committed to implementing the national standards and the approach that we put forward in those reforms?
Funding in the SEND sector remains a significant challenge, increasing pressure on councils; the recent County Councils Network and Local Government Association report set that out clearly. As other hon. Members have referred to, in government we set out the safety value and delivering better value programmes, which 90 local authorities are involved in. Additionally, the statutory override was introduced to prevent SEND-related deficits from overwhelming council budgets. However, that override is set to expire in March 2026, and without clear direction, local authorities face the prospect of making significant cuts. Can the Minister clarify the Government’s intentions, and whether the statutory override will be extended to give councils the flexibility to work with schools and families to make the necessary changes? Local authorities are also seeing huge pressures from home-to-school transport costs. In Norfolk alone that is £60 million, with more than 80% allocated to SEND pupils. That is money spent on journeys rather than delivering better education, so improving mainstream education and specialist provision closer to where children live is vital.
One of the first of over 40 visits that I undertook in my first term as an MP in my constituency was to Greenpark academy, where the head raised the issue of speech and language therapy and access to therapists, which has been referred to. The Conservative Government made progress in improving access, recognising the long-term benefits of early intervention, but there is still much more to do, which I concede readily. I welcome the Government announcement in July that they will continue the Nuffield early language intervention programme this school year, and I hope that it will continue beyond that. However, there is still considerable disparity of access, so what steps will the Government take to address that, so that every child with speech and language needs gets the support that they deserve?
Charlie Dewhirst (Bridlington and The Wolds) (Con)
Does my hon. Friend agree that it is a travesty that a child with SEND in the London borough of Camden receives more than three times the funding of a child with SEND in my constituency? Every child should have access to the same support, funding and opportunity.
James Wild
Absolutely. My hon. Friend makes the point that our right hon. Friend the Member for Goole and Pocklington (Sir David Davis) made earlier, as well as in a debate in the previous Parliament. I am sure the Minister will touch on that in her response.
Shaun Davies
The LGA and the CCN have assessed that the safety valve is worth about £3 billion. Had the Conservative party stayed in power, what would their solution have been to fill that black hole?
James Wild
The hon. Gentleman will be aware from his presence in the Chamber that we did not win the election, so it is for the Government to come forward with what they will do. They are now in power and must take decisions and take responsibility—that is the difference between Opposition and Government.
Finally, I must highlight the impact of the Labour Government’s plans to impose VAT on independent schools from January and what that will mean for SEND provision. More than 100,000 children and young people without an EHCP are educated and receive specialist support in independent schools. My right hon. Friend the Member for Tatton (Esther McVey) made the point well. She highlighted the fact that putting VAT on their fees will disrupt education for thousands of those pupils and place further strain on SEND provision in the state sector. By bringing the changes in partway through the academic year, Labour’s plans seem designed to cause maximum disruption to those children’s learning and to the state school system. Are the Minister and the Government listening to schools and parents, and will they act to ensure that those vulnerable children do not bear the brunt of that policy?
David Baines (St Helens North) (Lab)
The hon. Gentleman is talking about disruption to children and their development. Under the previous Government, in the past 10 years, investment in early intervention such as children’s centres fell by about 44%. What effect did he think that had on young children?
James Wild
We need to look at such things in the round. We put record amounts into childcare and we have just seen the latest roll-out of our childcare plans, which I think the Government now support, albeit a little sotto voce.
To conclude and to leave the Minister time to respond, there is unity across this Chamber—I hope—about the desire to ensure that the SEND system provides the support and outcomes that children and young people deserve. To help to achieve that, the last Government set out a path of comprehensive reform. It now falls to the new Government to continue to drive improvements, to tackle the challenges set out in this debate by Members from all parties and to deliver the very best for children and their families.
The Minister for School Standards (Catherine McKinnell)
It is an honour to serve under you as Chair, Mr Betts.
I congratulate the hon. Member for Leeds East (Richard Burgon) on securing a debate on this incredibly important subject. The fact that it is so well attended shows how important it is. I pay tribute to all hon. Members who have managed to make their contributions today, ensuring that their constituents’ voices are heard. I would like to be able to respond to all the individual points, but the sheer volume of speakers will make that challenging. I also pay tribute to those present who have prepared speeches but have not been able to deliver them. I know their constituents want their voices to be heard in this debate as well, and I pay tribute to the effort that Members put in to attend and to show such a level of support.
Catherine McKinnell
I will give way in a moment.
The strength of feeling on this issue is clear. Most of all, I reassure the Chamber that this Government are absolutely committed to tackling it. It is key to breaking down the barriers to opportunity to give every child the best start in life, and that includes all those with special educational needs and disabilities, to give them the right start in life to have a successful education and to lead happy, healthy and productive lives.
I warn the Chamber that I will not be able to take many interventions, but I will take one from my hon. Friend the Member for Derby North (Catherine Atkinson), who got in so fast.
Catherine Atkinson
My constituent, Hayley, wrote on my social media,
“After years of being unheard or ignored, I feel a small sense of relief that this is now being taken to parliament and discussed, even though I understand there is a long way to go”.
I thank the Minister for her speech. Can I share with her, another time, the testimonies of the many constituents who have contacted me ahead of this debate?
Catherine McKinnell
I thank my hon. Friend for that intervention. I think she speaks for many here today, and many of those watching this debate as well. We are listening; we are committed; we want to work across the sector and with everyone here in order to turn this around. More than 1.6 million children and young people in England have special educational needs, and we know that, for far too long, too many families have been let down by a system that is not working. As mentioned already, the former Secretary of State for Education described the system as “lose, lose, lose”, and I know there is agreement in this room that that is very much the case.
Matt Rodda (Reading Central) (Lab)
I thank my hon. Friend for giving way; she is being very generous with her time. Would she agree that a part of the serious problems in many of our local areas was the delay in building new SEND provision under the previous Government? That certainly had a serious effect in Berkshire, and there are huge pressures on families and vulnerable children in my area. I just wanted to relay that point to her again.
Catherine McKinnell
I appreciate my hon. Friend’s concern, and this Government are absolutely committed to strengthening children’s entitlement to excellent provision that meets their needs and that is readily available, locally wherever possible. That is a key focus of any changes that we wish to see made in this area.
Ashley Dalton
I thank the Minister for giving way. This is an issue that has not been raised enough today: the previous Government’s SEND and alternative provision improvement plan, published just last year, contained no specific proposals for rural communities such as mine. Can the Minister confirm that the Labour Government will consider the specific needs, particularly around access, for SEND pupils in rural areas?
Catherine McKinnell
I appreciate the issue my hon. Friend is raising, and I will come on to that, because I appreciate that there have been a lot of comments from Members today on the national funding formula and how it works. I would like to make some progress, so if hon. Members will allow me, there are a number of issues that I would like to respond to, particularly in relation to the hon. Member for Leeds East, who tabled this debate.
Despite the fact that high needs funding for children and young people with complex special educational needs and disabilities is rising to higher and higher levels, confidence in the system is low, tribunal rates are increasing and there are increasingly long waits for support. Far too many children with special educational needs fall behind their peers. They do not reach the expected level in fundamental reading, writing and maths skills, with just one in four pupils achieving expected standards at the end of primary school. That is a system that is “lose, lose, lose”, as the former Education Secretary described. Families are struggling to get their child the support they need and, more importantly, deserve. So many hon. Members have spoken on behalf of families that they represent and demonstrated that struggle today.
After years in which parents have been frustrated by reform programmes being delayed and by promises not being delivered, this Labour Government want to be honest with families. We are absolutely committed to improving inclusivity and expertise in mainstream schools, as well as to ensuring that special schools can cater to those with the most complex needs. We want to restore parents’ trust that their child will get the support that they need to flourish.
We know that early identification and intervention is key to ensuring that the impacts of any special educational need or disability is minimised, or reduced, for the long term. That is why we very quickly announced the continuation of funding for the Nuffield Early Language Intervention—NELI—programme, to make sure that it can continue for 2024-25. We know that early speech and language intervention will help these children and young people to find their voices.
We also know that there are no quick fixes for these deep-rooted issues. After 14 years, I can scarcely see a system that is so broken or in such desperate need of reform. That is why we are absolutely determined to fix it, and we have started work already. It is a priority for this Department to fix our SEND system, but we know that we cannot do it alone. We have to work with the sector and valued partners, and we have to make sure that our approach is fully planned and delivered together with parents, schools, councils and expert staff—we know they are already going above and beyond for our children, but we can do so much better.
As I have already mentioned, many Members have raised concerns about the national funding formula, so the Government acted as quickly as we could to respond to some of the immediate cost pressures in the SEND system. We know that they are causing incredible financial difficulties in some local authorities, so before the parliamentary recess we announced a new core schools budget grant to provide special and alternative provision schools with over £140 million of extra funding in this financial year, to help with the extra costs of the teacher pay award and the outcome of the negotiations about increased pay for support staff as well. That money is in addition to the high needs funding allocation for children and young people with complex special needs and disabilities.
However, despite those record levels of investment, I know that families are still fighting the system, because it is not delivering. The Department for Education’s budget for 2025-26 has not yet been decided, and how much high needs funding is distributed to local authorities, schools and colleges next year will depend on the next stage of the Government’s spending review, due to be announced in October.
That means that the high needs allocations have not been published within the normal timescale, but we are working at pace to announce next year’s funding allocations. We are acutely aware of the pressures that local authorities face, not only because they are supporting the increasing needs of young people and children, but because of the financial pressures that the Government as a whole face because of the economic climate we have inherited.
It will not be easy or quick to solve those problems, but we really want to work on long-term solutions and we want to work together with others on these important issues. That includes looking at the national funding formula. We will take time to consider whether to make changes to it. We will of course consider the impact on any local authorities and, as my hon. Friend the Member for West Lancashire (Ashley Dalton) mentioned, on particular areas that have made representations in relation to the formula.
Catherine McKinnell
I really am short of time.
On inspection, we welcome the publication of the Big Listen response this week. We want to work with Ofsted to consider how outcomes for children with SEND can better demonstrate inclusion, and we want every school to be driving to be as inclusive as it can be, so that mainstream provision is provided for as many children as possible.
In the interests of fairness, I will give way just one more time.
Ben Maguire
I thank the Minister for giving way and for her comments about reviewing the funding formula. May I take this opportunity to urge her to finally address the per-pupil funding deficit for pupils in Cornwall, who receive thousands and thousands of pounds less per pupil than pupils in the rest of the country? I hope she agrees that pupils in Cornwall, including in my North Cornwall constituency, particularly those with special educational needs, are no less valuable than children in other parts of the country.
Catherine McKinnell
I will say again and again that we are absolutely committed to ensuring that every child’s entitlement to have the best education possible, in their local area and where they need it, can be delivered under our system.
Nothing says more about the state of our nation than the wellbeing of our children. However, one of the great casualties of the last 14 years has been our children’s wellbeing, their development and their opportunities. Under the last Government, we saw relative child poverty soar, the rates of children presenting with mental health conditions skyrocketing, and more and more children languishing on waiting lists.
It now falls to the Labour Government to rebuild opportunities for our children. That is why we have bold ambitions and why we are determined to deliver on them. I thank hon. Members for bringing this matter forward today and all Members who have contributed to this debate.
However, most of all I want to acknowledge the hard work being done by so many people working in education, health and care who support our children and young people with special educational needs. We know that work is challenging, but we thank them for their commitment and their service.
Mr Clive Betts (in the Chair)
I call Richard Burgon to respond—very briefly—to the debate.
Richard Burgon
Thank you, Mr Betts, for calling me to speak, and I thank all hon. Members who have taken part in the debate today. Given that demand to speak has exceeded supply today, I particularly hope that new Members who had written their speeches in advance, but were unable to make them in the debate, will consider publishing them online.
I thank the Minister for her response—her statement of intent. This debate today can only be the beginning. We need to recognise that there is a crisis in SEND provision. We need to ensure that SEND provision is properly financed and funded. We need to ensure that SEND provision is not seen in a silo and that instead there is a holistic approach to it. We also need to move forward, so I hope that we can find more time in the main Chamber to take this debate forward and tackle this challenge.
Question put and agreed to.
Resolved,
That this House has considered SEND provision.
Written Statements
(3 months, 2 weeks ago)
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Border Security and Asylum
(3 months, 2 weeks ago)
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The Minister for Border Security and Asylum (Dame Angela Eagle)
This Government are committed to tackling irregular migration. The tragic incident in the channel earlier this week is a reminder of why the work to dismantle these dangerous and criminal smuggler gangs and strengthen border security is so vital. The number of asylum seekers crossing the channel in small boats surged under the previous Government. Criminal smuggling gangs are making millions out of these crossings, undermining our border security and putting lives at risk. We will tackle the root of the problem by going after these dangerous criminals and bringing them to justice. That is why this Government are implementing a practical plan to tackle the small boat chaos.
The Home Secretary has already launched the new border security command to strengthen Britain’s border security and smash the criminal smuggling gangs. The BSC will be led by a new border security commander who will provide the cross-system strategic leadership and direction across several agencies, drawing together the work of the National Crime Agency, Border Force, policing, the UK intelligence community, immigration enforcement and the Crown Prosecution Service, to better protect our borders and go after the smuggling gangs facilitating these crossings.
The BSC will work with colleagues across Government and with international partners to disrupt the activity of criminal smuggling gangs and ensure those profiting from people smuggling are brought to justice.
As set out in the King’s Speech, this Government will introduce swift legislative measures to restore order to our border. Work is advancing on the planned border security, asylum and immigration Bill which will be introduced at the earliest opportunity. The proposed new legislation will include provisions to give the border security system, including law enforcement partners, stronger powers to disrupt, investigate and prosecute organised criminals facilitating organised immigration crime.
On 21 August the Home Secretary announced the recruitment of up to 100 new specialist intelligence and investigation officers at the NCA, to target, dismantle and disrupt organised immigration crime networks. This comes alongside the 50% uplift in the number of NCA officers stationed in Europol. These officers have been immediately deployed to support European operations to disrupt the activity of criminal smuggling gangs making millions out of small boat crossings.
The Government have also established a new returns and enforcement programme to ensure that asylum and immigration rules are properly respected and enforced. Thirteen bespoke returns flights have now departed since we took office on 5 July, returning individuals to a range of countries including Albania, Poland, Romania, Vietnam and Timor-Leste. Those returned have no legal right to be in the UK and include foreign criminals, failed asylum seekers and other immigration offenders. More than 400 people with no right to be here were flown to one destination country, with more than 200 leaving on a single flight—the largest number of people ever returned on a flight. These flights demonstrate the new Government’s ambition to take quick and decisive action to speed up removals and secure our borders.
The Home Office is also expanding the detention estate to bolster our capacity for swift, firm, and fair returns. The Government are increasing detention spaces to support the higher pace of removals including reopening and adding initially 290 beds across immigration removal centres at Campsfield and Haslar, with further expansions in the future. This increase will ensure there is additional capacity to facilitate higher levels of enforcement and returns so that rules are properly respected.
We are rapidly expanding the work across Government and with law enforcement partners to target, investigate and enforce penalties on unscrupulous employers who illegally employ those with no right to work here. Intensive immigration enforcement operations over the last few weeks have targeted rogue businesses suspected of employing illegal workers. Over the course of the operation, more than 275 premises were targeted, with 135 receiving civil penalty referral notices for employing illegal workers. In addition, 85 illegal migrant workers were detained for removal.
We are also improving value for money in asylum accommodation. The latest review of the proposed Scampton accommodation site has concluded that costs have risen significantly, compared to the initial estimates. Costs of £60 million have already been incurred on the site at Scampton as a result of work done and commitments made by the previous Government. In addition, the estimated costs of opening the site and running it from this autumn until the end of planned occupancy in March 2027 has now risen to a further £122 million—taking the total cost for using this single site for a short time as asylum accommodation to nearer £200 million. This is an unacceptable cost.
Taking into account these additional costs and projected occupancy levels, this clearly fails to deliver value for money for the taxpayer. This Government are mindful of their inherited financial position and are determined to ensure that we deliver the best services at the best value for money for the taxpayer. We have also listened to community feedback highlighting the concerns about the history of the site and alternative development plans.
Although my officials have investigated other potential uses for the site, it is now better value for money to exit the site and avoid all future service provision costs where these have not yet been committed. We will dispose of this site within the rules laid down for Crown land. Although there will be some additional costs of holding and managing the site while this takes place, this still represents a better financial decision.
The Government’s intention is to return to using long-standing dispersed asylum accommodation and will do so as soon as is practicable, once we have made progress on clearing the backlog. Any decision regarding the use of accommodation sites will be fully considered, with a firm focus on value for money and ensuring proper standards are in place.
[HCWS73]
Imprisonment for Public Protection: Changes to Licence
(3 months, 2 weeks ago)
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The Lord Chancellor and Secretary of State for Justice (Shabana Mahmood)
It is right that imprisonment for public protection sentences were abolished. We worked constructively in opposition to progress IPP reforms in the Victims and Prisoners Act 2024, which represent sensible changes to help rehabilitated offenders serving the IPP sentence on licence in the community to move on from their sentence in a safe and sustainable way. That is why I wish to inform the House of my intention to bring into force the IPP measures in the Act.
Section 66 amends sections 31, 31A and 32 of the Crime (Sentences) Act 1997, which provide for the termination of licence for those serving sentences of imprisonment or detention for public protection and setting their licence conditions. Section 67 requires the Secretary of State to prepare and publish an annual report about the steps taken to support the rehabilitation of IPP and DPP offenders and their progress towards release from prison or licence termination, and to lay the report before Parliament.
I am clear that, in commencing these reforms, public protection must come first. To ensure that HM Prison and Probation Service can effectively manage these changes, the measures will be commenced in a phased approach, starting on 1 November 2024 and with all measures commenced by 1 February 2025.
Phase 1 will commence on 1 November 2024, when sections 66 and 67 will come into force. This includes measures to:
Include a statutory presumption that the IPP licence will be terminated by the Parole Board at the end of the qualifying period. In practice, this will mean strong justification on public protection grounds would be needed not to terminate the licence; introduce a provision where an IPP licence will terminate automatically in cases where the Parole Board has not terminated the licence at the end of the qualifying period and where the offender has spent a further two continuous years on licence in the community—i.e. they have not been recalled to prison in that time.
Create a new power for the Secretary of State to release a recalled IPP offender—without the need for a release decision by the Parole Board—following a process known as risk assessed recall review.
Allow the Secretary of State to determine that, for the purposes of the two-year automatic licence termination period, the prisoner’s licence is treated as having remained in force as if it had not been revoked, where it is in the interests of justice to do so. This means that for an IPP or DPP offender released by the Parole Board or the Secretary of State, the Secretary of State can disapply the impact of the recall on the two-year automatic period which will not reset upon the prisoner’s re-release from prison.
Require the Secretary of State to lay an annual report before Parliament about the steps taken to progress those serving IPP sentences towards a safe release.
From 1 November 2024, the qualifying period will be two years for DPP offenders and three years for IPP offenders for the purpose of the automatic licence termination but will remain 10 years for other purposes.
Phase 2 will commence on 1 February 2025 where the qualifying period for all other purposes, including when the Secretary of State must refer a DPP or IPP licence to the Parole Board for consideration of licence termination, will be two and three years respectively.
I want to make progress towards a safe and sustainable release for those serving the IPP sentence, but not in a way that impacts public protection. Commencing these measures is the first step in doing so. I will continue to monitor progress in this area, and the Government plan to consult expert organisations to ensure that the right course of action is taken to support those serving IPP sentences.
[HCWS72]
Machinery of Government: Union and Devolution Policy
(3 months, 2 weeks ago)
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The Prime Minister (Keir Starmer)
I am making this statement to bring to the House’s attention the following machinery of government change.
Responsibility for Union and devolution policy across Scotland, Wales and Northern Ireland will move from the Ministry of Housing, Communities and Local Government to the Cabinet Office. This change will support cross-Government coordination and engagement with the devolved Governments which will be led by the Chancellor for the Duchy of Lancaster as Minister for Intergovernmental Relations. Responsibility for devolution policy in England and engagement with Mayors and local government will remain with the Deputy Prime Minister and the Ministry of Housing, Communities and Local Government.
This change is effective immediately.
[HCWS71]
Grand Committee
(3 months, 2 weeks ago)
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Arrangement of Business
(3 months, 2 weeks ago)
Grand CommitteeRead Full debate Read Hansard Text
The Deputy Chairman of Committees (Lord Haskel) (Lab)
My Lords, as noble Lords can see, the annunciator is not working. Staff are working on it. If there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
Bank Resolution (Recapitalisation) Bill [HL]
Thursday 5th September 2024
(3 months, 2 weeks ago)
Grand CommitteeRead Full debate Bank Resolution (Recapitalisation) Bill [HL] 2024-26 View all Bank Resolution (Recapitalisation) Bill [HL] 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 2-I Marshalled list for Grand Committee - (3 Sep 2024)
Member’s explanatory statement
This amendment seeks to ensure that the bill applies primarily to smaller banks, using Minimum Requirement for Own Funds and Eligible Liabilities (MREL) as a definition.
Baroness Bowles of Berkhamsted (LD)
My Lords, I am pleased to open the Committee stage of this Bill. I expect this to be the only longish speech that I will make, so noble Lords should not worry about getting six of this length.
I have two amendments in this group but, first, for the benefit of anybody following these discussions either now or later, I shall mention the scope issue that has reared its head for several noble Lords in trying to formulate amendments. The Long Title, which defines scope, is:
“A Bill to make provision about recapitalisation costs in relation to the special resolution regime under the Banking Act 2009”.
The Bill’s provisions have effects that reach into resolution decisions, bail-in and capital structures, but various amendments’ attempts to take that into account in other relevant ways have been ruled out of scope. Indeed, in the light of this amendment-drafting experience, I wonder whether all the bits of the Bill pass the scope test; that may become clearer as we work through the amendments, in particular my Amendment 22 in this group and Amendment 23 in the final group.
I turn to my Amendment 1 and the similar amendments in the rest of the group. They have a common theme: making sure that the provisions really are limited in application to small or smaller banks, which is what we have been told they are about following on from the actions taken for Silicon Valley Bank. However, there is no such small bank limitation in the Bill. Clearly, the question arises: how small is “small or smaller”? Like other noble Lords, I have taken the view that the only clear distinction is for non-systemic banks—that is, those required to hold MREL, bail-in bonds or whatever you wish to call them, which represent the only regulatory division we have.
Of course, as raised by me and others at Second Reading, we then have the issue that the PRA has extended the MREL requirements far lower down the bank size range than systemic banks, well into the “smaller bank” range. This may well be the reason that there is no differentiation in the Bill: so that, in theory, the Bill applies to any bank and everything rests on the Bank of England’s decision. It seems that the majority of us here disagree with that and think that it should be limited by a defined measure; the obvious one is the level at which MREL is required. If the PRA causes the resolution provisions to be impeded by its MREL choices, that will be something for it and the Bank of England to consider and live with.
My Amendment 1 has another little tweak, in which I suggest that the cutoff is linked to the index-linked value of the net assets at which MREL was originally set in 2016: £15 billion. In numbers, that would mean the size now would be £22 billion if it were index linked, not £15 billion, and it would not continue to dwindle, relatively speaking, as is happening with the PRA MREL threshold. My amendment therefore overlaps with regimes that can do bail-in, although my real hope, as I have already suggested, is to make the PRA see that, for various good reasons, it should increase the MREL threshold at least by indexation, and ideally to the level where it applies only to banks that have full capital market access, so that bail-in instruments are not disproportionately expensive for them. However, if we want to coalesce around MREL as the dividing line, I am not going to rock the boat. Indeed, I tabled an amendment to that effect, but it got lost somewhere. I think the Bill Office thought that my other amendment was an amendment to my amendment.
I turn to my Amendment 22. This deletes Clause 4(3), which is not needed in the event that there is limitation to application only to non-MREL banks. I will explain how I came to that conclusion. The subsection references Section 12AA of the Banking Act 2009, which in turn references Article 47.3(b) and (c) of the EU’s Resolution and Recovery directive. Most compliance with EU directives has been put into the 2009 Act.
I happen to think, especially nowadays, that it would be much better to say more clearly what we actually meant in Clause 4(3) than to have to pedal all the way back to a European directive. I have another amendment on it, Amendment 23, right at the end of our considerations next week. I will let noble Lords know what it is all about. Article 47.3(b) of BRRD is the amount by which the authorities assess that common equity tier 1 items must be reduced to the relevant capital instruments written down or converted, pursuant to Article 61. The latter gives the order of writing down priority. Article 47.3(c) is the aggregate amount assessed by the resolution authority, pursuant to Article 46. To save noble Lords the misery of me reading out Article 46, it is the sum of write-down and recapitalisation.
To cut this long story short, the subsection refers to things that happen only when you are in a bail-in situation. So, if we limit it to non-MREL banks, it would seem to be superfluous, because there cannot be any bail-in as they are not required to hold MREL. Of course, if we use my Amendment 1 with the index threshold of MREL, we might need it or need to rewrite it.
However, thinking about it further, I also query whether this subsection is properly in scope as it seems to relate to changing bail-in requirements and not to recapitalisation. That is made clear in the Explanatory Notes, which state that Clause 4(3) basically amends the bail-in sequence and conversion of capital instruments to allow adjustment to the contribution of shareholders and creditors when exercising the bail-in write-down tool. We should bear in mind that there are other parts of legislation that tell you the sequence in which you must do one, and how you exhaust the first before you move on to the next, and all those kinds of measures.
The end result that it has a knock-on effect of increasing recapitalisation costs that are then to be met by the FSCS. As I said, that seems to depart from what I envisaged was the purpose of the Bill. I did not have in my mind that it was about levying banks to help rescue shareholders or bail-in bond holders of another bank. I understood that it would be more like the Silicon Valley Bank rescue, where the point would be to rescue unprotected depositors.
Overall, we can do without this clause in all circumstances and I wait to hear the Minister’s explanation. It would be useful, before we get to Report, if we could have some kind of laid-out worked examples of where this might come in and what might happen. I understand why the Government wish for flexibility but it is a flexibility that goes way beyond what I have understood to be the intents of the Bill. I beg to move.
Baroness Noakes (Con)
My Lords, I have Amendment 5 in this group, to which I will speak. I regret that I was unable to take part at Second Reading in July, but I have read the Hansard report of the debate and I can see that there is a lot of common ground on the Bill between those of us not on the Government Benches.
As this is the first time that I have spoken in Committee, I draw attention to my interests as recorded in the register of interests, in particular that I hold shares in banks which, under the terms of the Bill, will end up footing the bill if the bank recapitalisation power is used.
My Amendment 5 is slightly different from Amendment 1 in the name of the noble Baroness, Lady Bowles, and slightly different from Amendments 8, 10, 12 and 18 in the names of other noble Lords. Those amendments basically seek to confine the use of this power to small banks—typically using MREL as the deciding point. Mine does not rule out using the power for larger banks but instead inserts the requirement for Treasury consent.
The Government clearly sold this legislation, as the noble Baroness, Lady Bowles, explained, as being about smaller banks, referring to it as being a better route for a better outcome compared to using the bank insolvency procedure, which is the current default assumption for smaller banks. As is often the case with legislation, however, the stated aim then gets converted into a very broad power. This power is so broad that if the RBS failure happened again it could cover the recapitalisation of RBS, which, I remind noble Lords, cost £45.5 billion in 2008. The Bank would have that power with nothing in the Bill to prevent it.
There is a constraint on the amount of annual FSCS payments set by the PRA, which I think is £1.5 billion a year, but that can be changed by the PRA at any time, and the PRA is not, of course, independent of the Bank of England; it is fully part of it.
I am not surprised that the Treasury does not want to narrow the drafting of the Bill to cover only those banks that do not have MREL. The Government have themselves talked about wanting to cover the case where MREL has been set but the banks are on a glide path and have not yet achieved the full amount of their MREL. It seems reasonable for the power to be used in those circumstances, but the Government have not even offered to amend the Bill to confine it in that way.
I broadly accept that there may be a good case for using recapitalisation schemes beyond non-MREL banks or those that have not yet raised their full amount of MREL, because it is genuinely difficult to predict circumstances where such a power would be extremely useful. However, when the Government draft broad and unconstrained powers, they have a duty to put checks and balances in place, and there are none in the Bill. If they do not put checks and balances in place, we must take that on as part of our duties in scrutinising legislation. My amendment has opted for Treasury consent, but there could well be better ways of putting guard rails in place. Treasury consent is not an onerous requirement when the Bank of England is handling a potential bank failure. It inevitably works closely with the Treasury; the Treasury has to be consulted whenever a stabilisation power is used, and we should be in no doubt that when, for example, SVB UK was in trouble, the Treasury was intimately involved in the arrangements to deal with HSBC very rapidly. Therefore, obtaining Treasury consent need not cause a delay or any other real problems.
Lord Vaux of Harrowden (CB)
My Lords, as we have heard, this group of amendments, including my Amendment 10, probes the reasons for including all banks in the scope of the Bill, rather than just the smaller banks, as originally envisaged in the consultation that started in January. The first sentence of the consultation was very clear:
“This consultation sets out the government’s intention to enhance and keep up to date the UK’s Special Resolution Regime … providing a new mechanism to facilitate use of certain existing stabilisation powers to manage the failure of small banks”.
But, as we have heard, it is not restricted to small banks. Most of the amendments in this group would remove from the scope of the Bill those banks that are required to hold MREL and would be subject to bail-in procedures using those MREL resources. I think the number of separate but similar amendments that we seem to have is probably down to the fact that this all happened in recess, and we did not have the opportunity to get together. I am sure that if the Minister is not able to satisfy us, we will be able to coalesce around something in common.
It is worth quoting from paragraph 7 of the Explanatory Notes:
“This means taxpayers are exposed if a small bank failure is judged to require resolution action but the firm in question does not possess sufficient MREL resources to provide for recapitalisation, unlike larger banks that do possess these resources”.
If larger banks possess those resources, as they are required to do, why do we need them to be subject to the process envisaged by the Bill? The noble Baroness, Lady Noakes, talked about the glide path situation where a bank has not quite got there—yes, I see that point—but for those that are there, does this not imply that we are not confident that the existing MREL scheme is sufficient? If there is a problem with the MREL scheme, surely it would be better to fix that rather than adding a new process on top of it.
So could the noble Lord please clarify under exactly which circumstances he sees the recapitalisation process in the Bill being used for a failing MREL bank? Is there a concern that the MREL resources are insufficient? Other than glide path situations, that is the only logical reason I can see to include big banks in the scope of the Bill.
Secondly, not having the expertise of the noble Baroness, Lady Bowles, I do not really understand how the two processes would work together. Is this an either/or situation; is it either a bail-in using MREL resources or a recapitalisation? If that is the case, surely there is a risk that the industry would be required to fund the recapitalisation of banks with large balance sheets instead of the costs being borne by the failed bank’s shareholders and subordinated debt holders. That would create a potential moral hazard. Or is it a combined process where the MREL resources would be used first and, if insufficient, the recapitalisation would follow on top? If that is the case, it implies that there is a concern that the MREL funds are insufficient. The best way forward would be to fix that problem rather than add another process, as I said before.
So could the noble Lord please clearly explain how he sees the two processes working together? I am drawn to the suggestion by the noble Baroness, Lady Bowles, of a worked example between now and Report to help us see how that could work. In particular, can he clearly confirm that the recapitalisation process can never be used to reduce the losses of a failing bank’s shareholders or creditors?
In the absence of a strong explanation of why, contrary to the originally stated intention, the scope of the Bill has been extended to larger banks, I would be minded to support amendments on Report that restrict its scope to exclude MREL banks.
Lord Eatwell (Lab)
My Lords, my Amendment 11 also—I think rather neatly—confines the Bill to what are defined as small banks. However, my concern is somewhat different from those voiced by noble Lords until now. It is that the whole approach to the resolution regime suggests that banks fail one at a time and not all together. Anyone who went through the experience of 2007 to 2009 knows that, in a systemic crisis, it is possible for all the banks in the country to be suffering major problems at the same time. In the circumstances of a systemic crisis, I fear that the mechanism proposed in the Bill could be a source of contagion, in the sense that the cost of the collapse of a bank, or of many banks together, would be seen by the market as imposing costs, which are now unbearable, on other parts of the banking sector.
This comes down to two issues—that of contagion and, I am afraid, that of persistent complacency. The Treasury and the Bank of England refuse to face up to the fact that, in the end, it is the taxpayer who will pay in a systemic crisis.
I will deal first with contagion. The levy links the financial failure of a bank or number of banks to the banking sector as a whole. Does this create a contagion effect? It must be remembered that much of contagion is created by the expectation of a cost, not just the reality. Expectation then becomes the parent of reality. It can reasonably be expected that the failure of a small bank would be manageable under the resolution regimes set out by the Bank of England and discussed in this Bill and its explanatory documents.
However, there are two fundamental problems where one could have significant contagion. One would be multiple failures, an issue I will address in a moment. The other is the potential failure of a big bank, because the Bill and the Explanatory Notes explicitly refer these mechanisms to big banks as well as small ones.
I will take the issue of the failure of multiple banks or a big bank. I wrote to the Financial Secretary about this and he very kindly wrote back a very valuable explanation. I presume that his letter has been circulated to the people who took part—no, I see that it has not. Well, I will quote a bit of it, because it seems to reveal the problem that I am identifying. He refers to multiple bank failures, but I would apply the same thing to a big bank failure. He says that there will be levies when the bank fails and adds:
“These levies are subject to an affordability cap”—
I did not know that—
“by the Prudential Regulation Authority based on how much the sector can safely be levied in a given year. This cap is currently set at £1.5 billion. If multiple firm failures resulting in a recapitalisation requirement is under £1.5 billion, the Government would expect the FSCS to borrow from its commercial borrowing facility and be able to safely levy from the banking sector and repay that commercial borrowing within 12 months. However, if the amount exceeds £1.5 billion, or if it is below £1.5 billion and the PRA has determined that the FSCS is unable to raise the levy on affordability grounds, the Government would expect levies to repay any borrowing from the National Loans Fund to be spread out over multiple years”.
But, no, you do not have multiple years in a systemic banking crisis; you have to operate now.
The cap of £1.5 billion is worth comparing with the measures that the Government had to take in 2007-08—Lloyds Bank, £20 billion and NatWest, £45 billion. So the failure of one of those banks could be somewhat above the affordability cap, as set out in the Financial Secretary’s letter to me. Indeed, today, those numbers could be multiplied by a factor of roughly five.
Even when MREL is taken into account, the £1.5 billion cap seems to me to expose the fact that this scheme is not applicable to large banks. For example, if we look at the largest MREL plus required capital, it is that of Barclays, which is 30% of risk weighted assets—the largest of all the major banks. That leaves 70% of risk weighted assets to which the taxpayer is exposed. There would not be a collapse of all of those, but there can be very large numbers very quickly. So the idea that with an affordability cap of £1.5 billion, one could handle the Lloyds Bank situation or the NatWest situation as the Government confronted them in 2007-08 is, it seems to me, fanciful.
This brings me to my final related point. There is a persistent reluctance in all the documents concerning the resolution regime to admit that the resolution of a large bank will always fall on the taxpayer. Given the need for the maintenance of confidence in the banking sector, this persistent reluctance and the pretence that MREL has eliminated the taxpayer from exposure is damaging to confidence. It would be valuable for the Purple Book to make clear that, in extremis, Bagehot’s rule comes into effect, the Bank lends without limit and the Treasury will step in to resolve those banks that are “too big to fail”. My amendment clears away a dangerous ambiguity in the Bill. The threat of multiple small failure will continue to exist, but it takes away the ambiguity that this could be involved in the resolution of a big bank in the circumstances of a systemic crisis similar to that which we have faced in the past.
Baroness Vere of Norbiton (Con)
My Lords, it is a great pleasure to be back in this Room—sadly, standing on this side. Nevertheless, it is an interesting experience being in opposition and doing my first Committee—a learning experience. I am grateful to all noble Lords who have participated in scrutinising the Bill. I recognise that we are at the beginning of the Session and sometimes it takes a while for things to get into place. There has been quite a lot of work done and I think we have made some very good progress. I, too, did not speak on Second Reading, and I blame that entirely on the Prime Minister, because he extended Parliament and I was already on holiday, so therefore I could not do that. I am very grateful and put on record my thanks to my colleague, my noble friend Lady Penn, who did it in my stead.
The Bill was originally developed by the previous Government and was waiting for parliamentary time, so I think my role today is to test the thinking of the new Government to make sure that they are still on the same page. I am very grateful to the noble Baroness, Lady Bowles, for kicking off this debate so eloquently and knowledgeably. I note her concerns about the scope of the Bill. I would love to say that she did not slightly lose me, but she did, so I will come back to that if it seems to be a problem that we need to look at.
I want to go back—to be helpful, possibly to me—to first principles on this. Having listened to the contributions that have gone before me, I think I have got it right that there are three groups of financial institutions. I am going to call them “banks”, because “financial institutions” is long and it takes a while to get my tongue around.
The first group are the MREL—the big eight banks. These are the ones that have been directed by the Bank of England to hold MREL, and they must also submit a resolvability assessment framework, or RAF, to regulators. The RAF is structured so that these firms can think about how their business works and what capabilities they need to achieve the three resolvability outcomes: having adequate financial resources; being able to continue business through resolution restructuring; and effective communication and co-ordination.
I read somewhere that the 2024 assessment of these documents was due to be published in September, and I should like an update as to whether it has been published. Can the Minister comment on the outcomes of this scrutiny: is the system working? I understand that one bank was not quite there yet. Let us see whether we are going to try to exclude the largest banks from the scheme or whether we follow the suggestion of my noble friend Lady Noakes of getting the involvement of the Treasury. We need to test whether those banks which are deemed too big to fail have a coherent and funded plan in place should they get into financial difficulty. If that were the case, there would be some argument for potentially excluding them from the Bill, but there should at least be some safeguards in place.
Then there is the second group. This was raised with me by UK Finance, and this is why my amendment is slightly different to those of other people. There are those banks in the second group that are on the glide path to full MREL status. These institutions will get there, but it would be helpful to get an update from the Minister as to how many institutions make up this second group so that we can consider further whether there is a substantial risk and where that risk might reasonably lie—and so how long they will take to reach their destination.
Finally, there is the third group. These are the important ones. They are the ones that the Bill should be focused on. These are the smaller banks, and they are often innovative, they are often very high growth and sometimes that in itself can lead to challenges. It is these banks that the Bill seeks to target. Indeed, it was my understanding, as it was that of the noble Lord, Lord Vaux, that they would exclusively benefit from this scheme.
If things start to go awry, due to either a business-specific issue or wider market turmoil, these proposed powers would create this mechanism where the banking sector itself, in its entirety—all three groups—would fund the recapitalisation of the relevant bank or banks, and the taxpayer would be relieved of that burden. So that all makes perfect sense to me.
Then we come to the reasonable worst-case scenario, which I think is what the noble Lord, Lord Eatwell, was referring to. It is not beyond our imagination that things could get very bad very quickly, with a number of small or even medium-sized banks getting into trouble at the same time. The first group would, I hope, have their MREL in place; they would have their plan, which has been approved by the regulators to make sure that they continue.
I am slightly less clear what would happen to the second group—those on the glide path to MREL—were there to be a market-wide event. These are significant institutions and if they are to be included in this mechanism, we get into issues of how the banking sector then repays that through the levy, which I will come on to. There might well be a situation where one, two or more quite substantial institutions need recapitalisation from the FSCS in the same financial year. Have the Minister’s officials done any sort of assessment of how bad that could possibly get and any thinking about what the plan would be if it were to get that bad? Also, what would the hurdle be for declaring this sort of state of emergency?
While the FSCS might have a looming potential liability from the second group, there is also the third group to be considered. These ones are the potential future lifeblood of our financial sector in the United Kingdom and they would most likely need a relatively small amount of recapitalisation funding to get them through the turmoil. This is why parity is needed around the applicability of the scheme proposed in the Bill, but also the circumstances in which the scheme would reasonably and rationally be used—and, frankly, the circumstances in which it would not be, because it would just not work. In a reasonable worst-case scenario, how is anyone going to decide which ones get saved and which do not? One has to rely upon the amount of funding that could be affordable over several years of a levy applied to the UK banking sector, but that is not going to be enough money. How would that resolve itself and what would that process look like?
As mentioned by the noble Lord, Lord Eatwell, which I picked up in one of the briefings as well, the FSCS will have significant powers to apply the levy, not only in the financial year when the event or events take place but in subsequent financial years. If I am in the UK banking sector and things have gone pretty bad, and I suddenly have this massive weight of a levy going over several years to repay the events of one financial year, that to me is concerning.
It is also concerning because, of course, things are done differently in the EU, so you would get a slight mismatch from a competitiveness perspective. I would be worried about that. Has the Minister done an assessment of the impact of this potential multiyear hit, once we have an idea of the reasonable size and then the potential maximum size? Has he assessed the competitiveness of the UK banking sector, should this multiyear levy suddenly be required? How much could the UK’s system cost our banking sector and over what period of time? Are there circumstances, and in which circumstances, when rationally there is a systemic failure and the only person who could step in would be the taxpayer? I do not want the taxpayer to step in, trust me, but that would prevent permanent damage to one of our most important sectors.
The other key consideration is the impact on the FSCS and its ability to meet its obligations under the deposit guarantee insurance scheme, because if that has all gone to recapitalisation funding, there will be nothing left. I believe we will come on to that later in Committee.
This is a range of thoughtful amendments tabled by noble Lords and I am grateful for them. As many noble Lords pointed out, they very much go along the same sorts of lines. I look forward to hearing the Minister’s response to them. I will not go into a great amount of detail on them, but I note that my Amendment 8 takes into account those on the glide path, which we need to recognise. I am grateful to the noble Baroness, Lady Bowles, for the fine case she made for Amendment 22; I will move quickly on from that.
That brings me to the remaining amendment in the group: Amendment 18, which is in my name. Here, in essence, I am probing whether the Minister is content with the current imbalance between the banks liable to pay the levy versus the ones that, realistically, will make use of the new powers. Does he feel it is fair that the entire banking sector pays to recapitalise what, I feel, the Committee hopes will be smaller banks only? Does he accept and is he comfortable with the largest banks paying twice, in essence—particularly as they will have to have limited or no input in or influence on many of the events that might cause a resolution event or events? These largest banks will pay twice: once for their MREL and associated requirements, and again in the event of a resolution event or events of which they would not be able to take advantage.
Context is important here. We will come back to costs again but banks already pay a plethora of taxes, levies and charges, both to regulators and directly to Treasury funds. There is the bank levy, the bank corporation tax surcharge, the economic crime levy, the FSCS levy and the FCA/PRA fees. That is a lot—and let us recall that these costs are never borne by the banks themselves; they will always be borne by the businesses and consumers who use them.
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
My Lords, I am grateful to all noble Lords for taking part in this debate on the first group of amendments. I note that the scope of the mechanism is a key and central issue, both for noble Lords and for the wider banking sector. I hope to offer some reassurance to the noble Baroness, Lady Bowles, and other noble Lords regarding this concern.
I start by addressing Amendment 1, tabled by the noble Baroness, Lady Bowles, which would prevent a recapitalisation payment involving a bank that has issued minimum requirements for own funds and eligible liabilities, otherwise known as MREL. I stress that the Government’s strong policy intention is for the mechanism provided by the Bill to be used primarily to support the resolution of small banks. The Government therefore do not generally expect the mechanism set out in this Bill to be used on the type of firms that these amendments would seek to exclude.
The principal issue here is whether that intention should be set out in the Bill. The Government’s considered view is that it is right for the Bill to contain some flexibility for the Bank of England to be able to use the mechanism more broadly in some circumstances. That is because firm failures can be unpredictable and there could be circumstances in which it would be appropriate to use the mechanism on such firms.
For example, this may be relevant in situations where a small bank has grown but is still in the process of reaching its end-state MREL requirements. Firms in this position would have at least some MREL resources to support recapitalisation but the new mechanism could be used to meet any remaining shortfall if judged necessary. Without the proposed mechanism, there would be a potential gap in this scenario, creating risks to public funds and financial stability.
Ultimately, the decision to use the mechanism would rest with the Bank of England, having assessed the resolution conditions. The Bank of England is required by statute to consult the Treasury before any use of resolution tools, providing an effective and legally binding window for the Treasury to raise concerns if it had any.
I also point out that, during the Government’s consultation period, more respondents were in favour of the scope set out in the Bill than opposed. I appreciate noble Lords’ concerns about this issue and am happy to commit to exploring how to provide further reassurance on the Government’s intent via the code of practice.
The noble Baroness, Lady Bowles, asked whether the Bank of England should reduce MREL requirements in the knowledge that it could instead use FSCS funds. The Bank of England sets MREL requirements independently of government but within a framework set out in legislation. Any changes to firms’ MREL requirements would therefore be a decision for the Bank of England. The Bank of England will consider, in the light of this Bill and wider developments, whether any changes to its approach to MREL would be appropriate.
I turn briefly to Amendment 8, tabled by the noble Baroness, Lady Vere, which similarly aims to exclude from the new mechanism those firms that are required to hold MREL. I hope that I have already fully responded to her concerns in that regard; the Government are clear that this Bill is primarily intended for small banks, but that it is right to retain flexibility.
Lord Vaux of Harrowden (CB)
Just to clarify, is there anything in the Bill that changes the effect on shareholders and creditors compared with if it had been done by just the bail-in approach?
Baroness Bowles of Berkhamsted (LD)
I know that the notes have no effect, but those regarding Clause 4(3) say that it
“amends section 12AA … to allow the Bank to take into account the funds provided by the FSCS when they are calculating the contribution of shareholders and creditors required when exercising the bail-in write-down tool”.
That says that you will be able, and consider it positive, to adjust the contribution of shareholders. That is because you are using incoming capital. I think that the shareholders and bail-inable creditors should be written down as they are supposed to be, then, when you still do not have enough money for capitalisation, there is the money from the Financial Services Compensation Scheme. I understood that and have no problem with it, apart from the size issues. Saying no to the question just put by the noble Lord, Lord Vaux, contradicts what is written in paragraph 26 of the Explanatory Notes.
Lord Livermore (Lab)
It may be best if I write to noble Lords to clarify this point.
Amendment 11, tabled by the noble Lord, Lord Eatwell, would exclude from the scope of the new mechanism those firms whose MREL requirement exceeds their minimum capital requirement. This would include both firms expected to be transferred to a private sector purchaser and those bailed in when they fail.
I stress to the noble Lord, as I have to others, that the Government’s intention is for the mechanism to be used primarily for small banks. That is ultimately central to the Bill’s purpose, but I emphasise the importance of having flexibility in the legislation for the Bank of England’s ability to respond effectively in a crisis. As I have noted, this may, for example, be relevant if a firm is still in the process of building up its MREL requirements to be able to fully implement a bail-in strategy.
I also note the amendment from the noble Baroness, Lady Noakes, which intends to ensure that, if the Bank of England seeks to use the new mechanism on a bank required to hold bail-in liabilities, it must first get the consent of the Treasury.
I am conscious that there are other amendments related to the subject of Treasury approval for the use of the Bank of England’s powers and that we will turn to this matter more substantively later. What I will say now to the noble Baroness is that the Government consider it important for the Bank of England to be able to take decisions in a resolution independently and decisively.
I will mention two important safeguards. First, as required by statute, the Treasury will always be consulted as part of the Bank of England’s formal assessment of the resolution conditions. Secondly, if using the mechanism on larger banks had implications for public funds, such as requiring the use of the National Loans Fund, this would be subject to Treasury consent. But I repeat that the Government’s strong policy intention is ultimately for the mechanism to be used primarily on small banks.
Amendment 18 was tabled by the noble Baroness, Lady Vere. It seeks to clarify the rationale for the scope of financial institutions liable to pay the levy for the new mechanism delivered by the Bill, given the expectation that the new mechanism would apply primarily to small banks. The Government believe there to be benefits to mirroring the existing process for recouping the costs of paying out depositors in insolvency and maintaining a broad-based levy. In particular, as noted in the Government’s cost-benefit analysis, the exclusion of larger banks would raise concerns about the affordability of the levy for other banks, which would in turn increase risks to public funds and the overall viability of the new mechanism.
In addition, in cases where the new mechanism may be used, the counterfactual would be for the failed bank to enter insolvency. As a result, the sector would already be liable to contribute to the costs of a small bank failure. As set out in the Government’s cost-benefit analysis, while highly case-specific, the upfront costs of an insolvency are generally expected to be greater than those under the new mechanism delivered by the Bill. The Government therefore feel it is right to mirror the arrangements in place for an insolvency and to maintain a broad-based levy.
The noble Baroness asked about the Bank’s resolvability assessment framework. I am told that the latest update was published in August. She asked how many firms were on the glide path. I will write to her with specific details, and if any of her other questions are not answered in my speech today, I will write to her also on those points.
Baroness Vere of Norbiton (Con)
One concern was raised in the document that has been published, so I would be grateful for the Minister’s comments on that.
Lord Livermore (Lab)
I will write to the noble Baroness on that point.
I turn finally to Amendment 22 in this group, tabled by the noble Baroness, Lady Bowles, which concerns the use of the bail-in resolution tool. Section 12AA of the Banking Act 2009 sets out the principles by which the Bank of England calculates the shortfall amount when the bail-in tool is used and, as a consequence of that calculation, how much of a failed firm’s resources needs to be bailed in. The addition to Section 12AA in Clause 4, which this amendment seeks to prevent, ensures that any available funds from the Financial Services Compensation Scheme via the new mechanism could be taken into account when calculating the shortfall amount and, as a consequence, how much of a firm’s resources would need to be bailed in when the new mechanism is used alongside the bail-in tool.
This change to Section 12AA is important as there are some circumstances where bail-in may be the preferred tool for the Bank of England to use as a precursor to transfer of the firm to a bridge bank or private sector purchaser, even if the bank is small. This is because the bail-in tool permits the writing down of subordinated debt or other liabilities, to which mandatory reduction under the bridge bank or private sector purchaser tools does not apply. There may be circumstances in which it is appropriate to write down the subordinated debt or other liabilities of a small bank. The intention is therefore for the bail-in tool to be available alongside use of the new mechanism.
In such circumstances, this amendment would preclude the Bank of England, when calculating the shortfall amount, from being able to take into account any funds that were available from the Financial Services Compensation Scheme under the new mechanism. As a consequence, when determining how much of the firm’s subordinated debt and other liabilities should be bailed in, the Bank of England would be obliged not to factor in those external funds and would have to write down more of the firm’s resources than it needed to. In certain circumstances this would be undesirable and could undermine the wider goals of a resolution process. The noble Baroness, Lady Bowles, and the noble Lord, Lord Vaux, suggested worked examples. We will of course take that idea away for further consideration ahead of Report.
I hope that these explanations have been helpful and that I have provided some reassurance on these points. I will of course write where I have indicated that I will do so. In the circumstances, I hope that the noble Baroness will withdraw her amendment.
Baroness Noakes (Con)
My Lords, before the noble Baroness decides what to do with her lead amendment, I will raise two points. The first is that the noble Lord referred fairly briefly to the code of practice. Could he explain, first, how he sees the code of practice being used for the issues that we have identified in this group of amendments? Secondly, will he update the Committee on when we expect to see a revision to the code of practice? At Second Reading, my noble friend Lady Penn asked whether she could have sight of the draft updates. The noble Lord responded very positively to that, but clearly no draft updates have yet appeared. My additional question is: are we likely to get those draft updates? Clearly they have not arrived before Committee; will we get them ahead of Report? Seeing codes of practice, or updates of codes of practice, helps us to understand exactly what the Government are doing.
The second point I wish to address is a mechanical one. The noble Lord has already said he will write on a number of things; I expect he will say that quite a lot as we go through Committee. It would be very helpful if those letters were copied to all the Members who are taking part in Committee, or that the mechanism of “will write” letters on the publications page of the Parliament website is used promptly so that all noble Lords who have an interest in the areas get an opportunity to see the correspondence.
Lord Livermore (Lab)
On the noble Baroness’s first point, we are committed to updating the code of conduct, to doing so swiftly and to consulting with industry thoroughly on it. I cannot give her a timescale today. On the commitment to write letters, of course I will make sure those letters are copied to all noble Lords.
Baroness Bowles of Berkhamsted (LD)
I thank everybody who has spoken in this debate. Not surprisingly, we have had quite a lot of good points. I am still not reassured that the Bill’s scope is right. I understand entirely wanting to give the Bank of England flexibility. Ultimately, it is in the best place to judge what is the best thing to do, taking into account public interest, not setting off a systemic failure and all those kinds of things. At the same time, I have this instinctive dislike of something that enables the Bank to do something that I think it definitely should not be allowed to do, which I have said is in paragraph 26 of the Explanatory Notes. I will not repeat it.
I noticed, as the Minister spoke, that he very carefully said “primarily small banks” the whole time. There is this issue of “primarily” and where it stops. There could be other ways to include up to medium-sized banks. The code of practice could be one way of doing it, or a strategy, as the noble Lord, Lord Vaux, had as part of one of his amendments. I do not think it can be passed in this case which, as was said by the noble Lord, Lord Eatwell, could start a whole systemic issue. It is really built for the idiosyncratic case, or maybe for a couple of small banks, but that is it. It is basically about saving the uninsured depositors and people like that, in the public interest, rather than, as unfortunately it says, saving the shareholders and creditors. We have to look carefully at which creditors and at the definitions. I would like to see that laid out, because my reading is that, when we looked at the sections I quoted that date back to the BRRD, we looked at the bail-in things that happen in big banks, not at the other liabilities generally held by small banks. I might have got that wrong, but I would really like to see this properly laid out.
So I still have some issues. There needs to be something in the Bill that takes account of the concerns raised, however that is done. I can be flexible about it, but I think that my Amendment 23, when we get to it, would be one way to do it.
I am afraid that I will withdraw my amendment at this stage, but I expect to return afresh on Report. We have all been hampered by the fact that this has been a first-up Bill after vacations—and this will happen again on Report, when we will have been back for only one week. That makes it very difficult to have communications and meetings with the Minister.
The Deputy Speaker (Lord Haskel) (Lab)
My Lords, I have to inform the Committee that the annunciator will not be repaired until this evening. Apparently, there is a fault with a cable and the carpet has to be taken up to get to it. We will have to manage without the annunciator this afternoon.
Amendment 2
Baroness Noakes
Member’s explanatory statement
This amendment probes the nature of “other expenses” and the persons other than the Bank which could incur expenses.
Baroness Noakes (Con)
My Lords, Amendment 2 is a probing amendment. It would delete new Section 214E(2)(b) of FSMA. Under new subsection (2), a “recapitalisation payment” includes the cost of recapitalisation; that is at new paragraph (a). There is clearly no issue there because that is what the Bill is about. However, new paragraph (b) would allow the Bank to include
“any other expenses that the Bank or another person has incurred or might incur in connection with the recapitalisation of the institution or the exercise of the stabilisation power”.
This raises a number of questions.
First, who are these other persons who can incur expenditure in connection with the recapitalisation? The Government’s consultation referred to the Treasury, the Bank of England and a bridge bank. If that is the case, it seems that the paragraph ought to be confined to those persons, as I could not think of any other person who could make a case for receiving money under the auspices of the recapitalisation payments power.
Secondly, why is there not more precision about exactly which costs could be covered? Again, the response to the Treasury’s consultation gives the sorts of expenses that could be covered—legal fees, consultancy fees and the like—but is virtually silent on what should not be covered. The only example cited for what is not covered is the cost of preparing in parallel for an insolvency process, but that leaves a huge swathe of costs that could well be brought within the ambit of the recapitalisation payments. As drafted, it could certainly include many expenses that no one could reasonably label as being related to recapitalisation.
The Minister will be aware that UK Finance has expressed very real concerns that the banking sector will be left exposed to litigation or regulatory costs that emerge once a failed bank is in a bridge bank. In a bank insolvency procedure, such litigation or regulatory action would lead nowhere, as there would almost certainly not be any spare funds to cover any costs arising in that way. However, once the possibility of financing via the recapitalisation power arises, a new deep pocket appears, which could act as a magnet for litigation. Does this legislation mean that the banking sector is writing a blank cheque for whatever litigation emerges and which the Bank then chooses to engage in? Can there be any constraints on the Bank’s decision to fight or concede litigation? What are the incentives for the Bank to seek the optimal outcome, which may or may not be to concede a case in litigation? How is the banking sector to be protected in these circumstances?
Costs arising from regulatory action is even trickier. Let us assume that, following a small bank failure, the FCA decides to take regulatory action in relation to non-compliance with the consumer duty prior to the failure. As anybody who has been involved in one of the regulatory actions taken by the FCA, or indeed the PRA, will know, these are long, drawn-out and very expensive processes. Who should decide whether to fight regulatory action or concede and pay fines or redress? These could end up being funded by the recapitalisation payments. If the PRA were involved in regulatory action, rather than the FCA, how can the conflict of interest within the Bank be dealt with so that the costs falling on the banking sector are seen to be fair?
Lastly, new paragraph (b) allows the Bank to include costs that “might” be incurred. I completely understand why, when the recapitalisation calculations are made at the outset, that will involve an element of forecasting, because the formulation is not confined to, say, costs that are reasonably expected to be incurred. Instead, the Bank is allowed to include any costs that “might” be incurred, however improbable that might be. An overly conversative approach to working out what costs might be incurred will result in the banking sector bearing too much cost up front. It is not good enough to just say that, if there is a surplus left at the end of the day, it will be returned via the FSCS.
To sum up, the formulation in new subsection (2)(b) is simply too wide. As I said at the outset, this is a probing amendment and I shall listen carefully to what the Minister says, but my instinct is that new subsection (2) needs some guard-rails drafted into it. I beg to move.
Baroness Bowles of Berkhamsted (LD)
I only need to say briefly that I am in agreement with the noble Baroness. This is drafted too widely. Part of me thinks that some of this should be covered by the ordinary banking levy, and that the PRA and the Bank of England have to manage their budget, as anybody else would have to, in expectation of sometimes having adverse effects, rather than there being some bottomless pit, or pool, of money into which they always have access. The truth of the matter might need to be somewhere half way in between, but it is too open at the moment.
Lord Vaux of Harrowden (CB)
My Lords, I briefly add my support to what the noble Baronesses have said. This is drafted extraordinarily widely. The words
“another person has incurred or might incur in connection with the recapitalisation”
could theoretically include the legal costs of the shareholders of the bank that is going bust, for example. We have to find some way of reducing that scope. I had attempted to deal with this in Amendment 12 on reporting, but having heard what the noble Baroness said I do not think that does it. We need to find some way of narrowing it.
Baroness Vere of Norbiton (Con)
I am grateful to my noble friend for tabling this amendment and I added my name to it. I am also grateful for the comments made by my noble friend Lord Moylan. He is not in his place but he raised this issue during Second Reading and set people thinking about it.
I do not have a huge amount to add. I agree with the comments made by my noble friend Lady Noakes, the noble Baroness, Lady Bowles, and the noble Lord, Lord Vaux, but I would also say that this will have to be a double-edged attack. Not only must we potentially do something on this but the reporting of it will have to be clear and go into great detail.
When it comes to expenses, all noble Lords will be aware that the costs of financial lawyers and other professional financial advisers are not de minimis. The total cost of expenses may well exceed the cost of the recapitalisation of the bank, so it is important that we ensure that there are some guard-rails around this, recognising as ever that these costs will end up falling not on the banks but on the people who bank with the banks.
Does the Minister have any view as to roughly how large an expense bill might be? I do not even want to guess, because I hope that he will be able to give me some idea of what we are looking at.
The noble Lord, Lord Vaux, mentioned the expenses incurred by another person. I think that all noble Lords who have spoken so far agree that that is extraordinarily broad, and we will need to consider what we might do about that. Potentially, one could put something in the code of practice but, again, is that sufficient? We might also protect ourselves by requiring Treasury consent—who knows? Again, we might want to think about that. Going back to the point raised by the noble Lord, Lord Eatwell, it is tempting to think about these things as a single event, and we might be talking about £10 million-worth of expenses, but if a whole bunch of such events happened at the same time, we could very soon be talking about real money. We need to get to the bottom of this. I look forward to the comments from the Minister.
Lord Livermore (Lab)
My Lords, in response to the amendment from the noble Baroness, Lady Noakes, I hope to explain and provide some clarification around the expenses within scope of the mechanism under the Bill, as well as clarify the Government’s rationale for our approach.
The key purpose of the Bill is to ensure that there is a source of funding for recapitalisation of a bank in resolution, where that bank does not hold the necessary resources to allow it to be bailed in. In addition to the core expense of the recapitalisation payment, other expenses are likely to be incurred. There are two in particular.
First, there are likely to be a number of ongoing expenses incurred by the Bank of England, or by a Bank of England-owned holding company or operating company, when running a bridge bank, beyond those concerned with simply injecting new capital into the failed firm. This could, for example, include additional staffing costs and advisory fees incurred by the Bank of England to support its ability to operate a commercial bank.
Secondly, there will likely be a set of ancillary expenses incurred by both the Bank and the Treasury in undertaking a resolution of this type. As set out in the Government’s consultation response, this could include, for example, the costs of receiving professional advice, such as on legal or accountancy matters. It may also include the costs of appointing an independent valuer, as required under the Banking Act. As such, the persons other than the Bank of England referred to in the legislation whose expenses could be met using the new mechanism are expected to be the Treasury and any other Bank of England-owned legal entities that are not the Bank of England itself. The noble Baroness asked why the full set of costs are not specified. It is important that the Bill is not overly prescriptive, allowing the Bank to respond flexibly when costs arise.
The noble Baroness, Lady Noakes, also raised concerns about the treatment of litigation costs. As the noble Baroness, Lady Vere, noted, this arose at Second Reading as well. Depending on the circumstances, these again may be covered by the relevant part of Clause 1 addressed by this amendment—for instance, where the Bank of England is subject to litigation concerning the resolution and recapitalisation process. Given the fast-moving and unpredictable nature of bank failures, the Government believe that it is prudent to ensure that there is broad provision to cover these potential additional expenses incurred by both the Bank of England and other persons such as the Treasury. Ultimately, the alternative is that the cost of such expenses may need to be met by the taxpayer.
I wish to reassure noble Lords that in determining whether to include certain ancillary expenses in its request for funding to the Financial Services Compensation Scheme, the Bank of England is subject to the usual obligations under public law to act in a way that is reasonable and it will need to factor this into any assessment of what is in the public interest. In addition, the legislation does not allow the Bank of England or any other person to claim expenses that arise exclusively for preparing for bank insolvency.
I hope this provides the noble Baroness with a helpful explanation of the Government’s approach, and I respectfully ask her to withdraw her amendment.
Baroness Noakes (Con)
My Lords, first, many thanks go to the noble Lords who supported my amendment. I thank the Minister for his response but, with the greatest respect, he did not go much beyond what is in the Treasury’s response to the consultation document. He reiterated that the Bank and the Treasury, or the Bank and its entities, are likely to be the ones that have their costs covered. I have no real problem with that—put it in the Bill.
Similarly, the Minister talked about the Bank needing to be reasonable but I am not sure that being reasonable about the kinds of expenses that could occur via litigation is going to satisfy the banking sector, which fears that judgments working significantly to its disadvantage are going to be made and that it will have no way of influencing those decisions. There is not even the kind of protection that you get in insolvency, where you get, for example, creditors’ committees that act as a constraint on what liquidators can do. So I do not think that the Minister has really given a proper response on how the sector, which is going to pick up the tab—ultimately borne, as my noble friend Lady Vere pointed out, by the customers of banks—can be satisfied about the judgments made about the huge range of costs that could emerge during the course of handling a failed bank using the recapitalisation power; and how those costs can be seen to be properly incurred and not acting against the interests of the banks.
The Minister also did not engage with the issue of whether, in estimating future costs, you should constrain the costs to those that are reasonably foreseen, which is a natural formulation in legislation. Frankly, “any costs that might be incurred” is too big a definition to be used reasonably. I think that that formulation needs to be used again.
I will read carefully what the Minister has said in Hansard but my instinct is that he has not added to anything that is already in existence via the Treasury’s response to the consultation. I suspect that we will want to return to this on Report but obviously, for now, I beg leave to withdraw.
Baroness Noakes
“(2A) The Bank may not exercise the power in subsection (1) more than once in respect of the same financial institution without the consent of the Treasury.”Member’s explanatory statement
This amendment requires the Bank to obtain Treasury consent before it can require the FSCS to make a second (or subsequent) recapitalisation payment in respect of an individual bank.
Baroness Noakes (Con)
My Lords, it is me again, I am afraid. That is the trouble with getting enthusiastic about amendments during recess—you pay for it when you get back.
Amendment 3 is a probing amendment to find out the Government’s approach to using the recapitalisation power on more than one occasion. The amendment uses the technique of requiring the Treasury’s consent to the use of the recapitalisation power more than once in respect of the same financial institutions. My purpose in this amendment is not to debate the formal involvement of the Treasury, as I will return to that broader topic in a later group. I am using the amendment as a technique to find out whether there are any constraints at all on the use of the recapitalisation power on multiple occasions.
When the Bank of England decides to use the recapitalisation power, it works out what sum of money it needs to put the bank in a position where it can be sold on. We discussed in our debate on the previous amendment the kinds of expense that can count as recapitalisation costs for the purposes of the power. My own view is that the Bank must try at the outset to reach as clear a view as possible on the amount of the whole that the recapitalisation payment is designed to fill because, if the Bank does not do that properly at the outset—making a good, honest assessment of what the total cost will be—it cannot reach a realistic judgment about whether to proceed with a bridge bank or to initiate an insolvency process.
So I find it disturbing that the drafting of new Section 214E seems to allow the Bank to double-dip into the FSCS without any other process or consideration. If the Bank runs out of recapitalisation cover, it probably means that it did its sums wrong in the first place or that additional facts have emerged, increasing the costs in ways that were not anticipated at the outset. In either event, that can call into question whether the initial decision to use the bridge bank instead of the bank insolvency procedure was the correct one. It may also raise the question of whether the bridge bank strategy should be continued or replaced with the bank insolvency procedure.
It also brings into question the nature of the additional hole in the finances of the failed bank, which is covered in part in the previous amendment. It may not be clear that the incentives are in the right place for the correct judgments to be made about whether any additional costs arising from regulatory action or litigation should be accepted or challenged. If the costs are down to PRA action, there are clear conflicts of interest involved.
I completely understand the need for flexibility in legislation. I hope that the Minister will also appreciate that the open-ended nature of the Bank’s powers in the use of the recapitalisation payment technique carries particular problems when a second or subsequent attempt is made to obtain a recapitalisation payment. I hope that the Minister can explain how the Government see this power being used, if it is to be used more than once, and whether—including to what extent—there are mechanisms in place to ensure that the way in which the Bank uses that power is fair to the banking sector.
The Bill makes the banking sector pick up the costs. The sector itself will probably have had no involvement whatever in the failure of a bank yet it has to pick up the tab, ultimately borne by its own customers; that is whenever the Bank decides to use the recapitalisation powers. So it is only fair and reasonable that there should be some checks and balances in return. I hope the Minister can reassure the Committee that there are checks and balances and that, when the Bank uses the power in what has to be quite an unusual situation—for example, it has got the sums wrong or something else has caused a requirement for more to be put in—it raises the need for additional safeguards in order to satisfy the banking sector that the costs that will be loaded on to it are reasonable.
I beg to move.
Lord Vaux of Harrowden (CB)
My Lords, I rise again briefly. The noble Baroness has made some really important points. Once again, I have attempted to deal with this as a reporting question in Amendment 12, which states that a report would be required each time a recapitalisation payment was made; that should stand anyway.
This can become quite significant if, for example, there is a situation where the Bank of England expects to be able to sell a bank immediately but that falls over and then goes into a bridge bank for two years—or, indeed, more—and picks up all those costs along the way. One can see a situation where you could have, for example, an annual payment covering the costs of the bank until the Bank eventually decides to put it into insolvency. The critical factor must be that, any time a recapitalisation payment is being considered, whether it is the first one or a subsequent one, the insolvency route is reconsidered at each point and this does not become an open-ended default drag on costs—but the reporting point, which we will come on to later, stands as well.
Baroness Bowles of Berkhamsted (LD)
The noble Baroness, Lady Noakes, made a good point. I agree entirely with what the noble Lord, Lord Vaux, said.
I raised double-dipping at Second Reading and got the answer, “Well, yes, you could double-dip”. Of course, if you go from thinking that you are going to do the bridge bank or whatever to having to move into insolvency, there will be another dip if there are deposits to cover; I have a later amendment on that but it is all part of the same conversation. I am sure that the noble Lord, Lord Vaux, knows a lot more about this than I do because he is an accountant, but things always get worse than you expect. How is the Bank going to deal with that? Initially, it is probably going to have to ask for more than it thinks it could possibly ever need.
Some kind of structure around this, with points at which it is revisited and good reporting, appears to be the only solution. I initially thought, “Yes, maybe HMT intervention is the solution”, but I take the point that the Minister made earlier on about HMT intervention and independence. The fact is that, really, they are all in it as a club taking the decisions together already, so I am not sure that that would necessarily be the decisive factor one would want. It is about what the procedures are; the way things are being done and being understood; and how the reviews and reporting happen so that, when the worst happens and another dip comes along, one is not totally taken by surprise.
Baroness Vere of Norbiton (Con)
I rise only to celebrate the fact that my noble friend Lady Noakes had so much time during recess in which to draft all these marvellous amendments because they certainly get the little grey cells going. I appreciate her eloquent explanation of her amendment and the very practical example of what could happen that was provided by the noble Lord, Lord Vaux. This goes back to a topic that was raised earlier about there being a certain feeling of a blank cheque in terms of certain elements of the scheme and wanting to ensure that there are appropriate guard-rails.
I will not go much further; I will come on to my observations about the sharing of powers and responsibilities between Ministers and regulators in due course. I look forward to hearing from the Minister.
Lord Livermore (Lab)
My Lords, I note that this amendment from the noble Baroness, Lady Noakes, is one of several concerning whether Treasury consent is needed when the Bank of England is exercising its powers—in this case, when the mechanism is used more than once for a particular institution.
Addressing the specific case of the amendment, although I think we can agree that it would usually be desirable to have to use the mechanism only once in respect of a particular institution, this may not always be the case. As an example, if a failed bank is transferred to a bridge bank, there is a risk of further deterioration in its balance sheet over time. It is foreseeable that, if that were the case, the Bank of England may need to use the mechanism again in order to recapitalise the institution; this would allow the Bank of England to maintain confidence in the firm, promoting financial stability.
The Government believe that it is important for the Bank of England to have reasonable flexibility to do so, reflecting that the full implications of a bank failure are hard to anticipate in advance. In addition, if further approvals are required, this may undermine market confidence in the original resolution action given that such approvals cannot be presumed in advance.
However, I note a few important pieces of context to this broader position. First, as required by statute, the Treasury is always consulted as part of the Bank of England’s formal assessment of the resolution conditions assessment. In practice, there is also frequent and ongoing dialogue between the authorities. Therefore, the Government are confident that there are proper and robust channels by which it could raise concerns if it had any.
Secondly, given that the new mechanism is ultimately funded by industry, we would expect the Bank of England to consult the Prudential Regulation Authority on any additional request to use the new mechanism. This is important as the Prudential Regulation Authority determines what is considered affordable to be levied on the sector in any given year.
Finally, if additional use of the mechanism had implications for public funds, such as requiring use of the National Loans Fund, provision of this additional funding would be subject to Treasury consent. Overall, the Government believe that this strikes the right balance in preserving the Bank of England’s freedom of action while ensuring the appropriate level of Treasury input into decision-making.
I hope that this provides some comfort to the noble Baroness and respectfully ask that she withdraw her amendment.
Lord Vaux of Harrowden (CB)
The one thing the Minister did not cover there was the question of whether, on a second or subsequent recapitalisation payment, the Bank would have to look again at whether the insolvency route is the one it should go down, rather than a secondary payment.
Lord Livermore (Lab)
It would always look at the situation at the time and make each individual decision on that basis.
Lord Vaux of Harrowden (CB)
It would always do so or it would always have to do so?
Baroness Noakes (Con)
Okay. We understand that the Bank has to make these decisions. The issue is what there is to provide a check or balance on the Bank. That has not been addressed by the Minister.
I thank noble Lords who supported this amendment. I agree with the noble Lord, Lord Vaux, that there has to be something that allows a proper judgment to be made if there is a second go. It is also important to consider at each stage whether the bank insolvency procedure should be the right route. It is not clear that that is written into the legislation. It appears not to be very transparent after the initial use of the powers. I think the Bank is required to consult the Treasury on the initial use of the powers, but it is not required to consult the Treasury on any subsequent use of the stabilisation powers or of the bank recapitalisation power itself. I think the Minister referred to the fact that there was a lot of contact between officials. I know that, but the issue is what is formally required.
The Minister’s response in respect of guarding the finances of the industry seemed to be that the PRA has to be consulted, but the PRA is not overinterested in the finances of individual institutions. Indeed, a big conflict of interest exists between the Bank of England and its component part of the PRA. The governor chairs both the Bank of England and the PRA and the deputy governor sits on the Court of the Bank of England. This is all very intertwined, so consulting the PRA does not provide a mechanism that gives comfort to the banking industry that its interests are being dealt with. This is another bit of unfinished business.
I have one question for the Minister: is any of this territory, such as using the mechanism more than once, likely to be covered in the code of practice?
Lord Livermore (Lab)
We can certainly take that away and look into doing so.
Baroness Noakes (Con)
That means you were not thinking about it, but you might think about it, so I will leave that for the time being.
I remain uncomfortable at the scale of the powers that the Bank has without any real practical constraints on how they are used. Given that we are using the banking industry to avoid amounts falling on taxpayers, which is reasonable and accepted by the industry up to a point, I think we need to make sure that it is protected in that, and I cannot see where the protections are.
I need to think about this further. I will certainly read what the Minister has said, but I suspect we will return to this in some way when we get to Report. I beg leave to withdraw the amendment.
Baroness Noakes
“(2A) The Bank may not exercise the power in subsection (1) in respect of a financial institution which meets the condition in subsection (2B) without the consent of the Treasury.(2B) The condition is that the financial institution is a subsidiary of a company based outside the United Kingdom.”Member’s explanatory statement
This amendment requires the Bank of England to obtain Treasury consent before it can require the FSCS to make a capitalisation payment in respect of a bank which is a subsidiary of an overseas body.
Baroness Noakes (Con)
My Lords, this is another probing amendment. In this, I want to probe the circumstances in which the Treasury believes it would be appropriate for the UK banking industry to stump up for the recapitalisation of a foreign-owned bank. This amendment uses the technique of Treasury consent, as some of my other amendments do, but this is not what I am trying to talk about in this amendment. I am trying to probe the substance of using the recapitalisation power for the subsidiary of a foreign company.
Of course, I know that SVB UK was a foreign-owned bank and the simple answer to my question might be that this gives the Bank another way of avoiding what happened in that case: SVB was gifted to HSBC with the additional present of permanent exemptions from the ring-fencing regime. If we accept that we should avoid being held over a barrel by HSBC in future, this would be a good use of the power. So can the Minister say whether, if presented with the same facts as those relating to SVB UK, the Bank would have preferred to recapitalise SVB via a bridge bank and then sell it on a timescale consistent with achieving better value for money from the UK? The heavens are opening as we are discussing these important things.
More broadly, is it not the case that the Bank should satisfy itself that the foreign subsidiary banks are either adequately capitalised in their own right or parts of groups that are expected to be resolvable via bail-in-able capital, in line with international expectations? In general, the regulatory system for banks following a financial crash is designed to ensure that they hold capital or bail-in liabilities, which avoids the need for extraordinary support. When a UK bank subsidiary of a foreign company fails and requires money to keep it going, there has been at least a prima facie case that there has been some element of regulatory failure, either in the UK or elsewhere. There should not be an expectation that the failure of a foreign bank would impose costs on the UK banking sector—nor, indeed, the UK taxpayer, if that is the alternative.
It would be helpful if the Minister could explain in what circumstances the Government would consider it appropriate for the Bank to use the recapitalisation power in relation to foreign-owned banks and, perhaps more importantly, when the Government would not consider it appropriate to use the power. Can he also say whether any of this is likely to be covered in the code of practice? I beg to move.
Lord Vaux of Harrowden (CB)
My Lords, this weather sounds like the reason I ended up tabling a load of amendments in south-west Scotland: I had nothing better to do for a few days.
Again, the noble Baroness, Lady Noakes, raises a really important point. I have tried to attack it in a different way in Amendment 16, where I look at the recovery of money from shareholders. I will be interested to hear what the Minister has to say. I had in mind the sort of scenario where a foreign company sets up a bank in the UK, it does not go very well and it decides just to walk away from it, having perhaps removed all the assets in the meantime. Clearly, it does not seem fair that the costs of sorting that out should fall on the industry or, indeed, the British taxpayer. It would be really interesting to understand how we can ensure that foreign shareholders behave properly and how, when it does go wrong, we can recoup the money from them.
Lord Eatwell (Lab)
My Lords, I am somewhat puzzled by the amendment in the name of the noble Baroness, Lady Noakes, in this case. Surely, under the Basel accord, the UK regulator is responsible for the regulation of a subsidiary that is legally established in the UK. If “subsidiary” were changed to “branch”, the foreign regulator would indeed be responsible for regulation in that case. It seems to me that this particular amendment would violate the Basel accord to which His Majesty’s Government are committed.
Baroness Bowles of Berkhamsted (LD)
I will just comment that we have seen capital being sucked out of subsidiaries and taken back to the States and have been left with the collapse here. Basel accord or not, there ought to be some kind of mechanism of group support. I wonder whether there has been any international progress on that. What other mechanisms could be used to ensure that those kinds of things do not happen? Ultimately, it is going to be quite difficult to do this unless you somehow put on some extra capital requirements–and then you then start to get into all kinds of international difficulty. Perhaps the Minister could say something about what levers, if any, are available.
Baroness Vere of Norbiton (Con)
I rise briefly to build on the comments made by previous speakers. This is an important issue. Again, it is worth recalling that this will not just be the recapitalisation funding; there might also be associated expenses. I note the point made by the noble Lord, Lord Eatwell, about the Basel accord and it being a subsidiary et cetera, but it strikes me that this is of a different level of political salience than a purely domestic collapse might be, where one has established structures. It could get incredibly uncomfortable for the Government if we do not have a better and fuller understanding of what safeguards exist already to make sure that banks are appropriately capitalised by their parents abroad and of how we avoid the perception of the Bank of England acting in interests which are not necessarily aligned with those of Daily Mail readers—let us put it that way. It is not that they have to align with Daily Mail readers, but one might imagine that this could be very problematic.
I would like some reassurance about what we would do if it were to be a significant amount rather than the very small amount for Silicon Valley Bank and how we would seek to address the concerns that would inevitably arise from the general public.
Lord Livermore (Lab)
My Lords, in response to the amendment tabled by the noble Baroness, Lady Noakes, I hope I can provide some clarification on how the resolution regime operates currently with respect to subsidiaries of international banks, and therefore how the Government have approached the design of the new mechanism with respect to those banks.
One of the strengths of the UK’s banking sector is that a number of international banks seek to operate within the UK, including by setting up subsidiaries. These are often providers of critical banking services, such as current accounts, business accounts and sources of working capital to businesses. It is therefore important that a robust system of regulation is in place to ensure that such subsidiaries can operate safely within the UK. This includes ensuring that in the event of their failure they can be managed in an orderly way. The resolution regime does not currently make a distinction between domestic UK banks and subsidiaries of international banks in terms of which authority is responsible for taking resolution action in the UK. In all cases, this responsibility falls to the Bank of England, except where there are implications for public funds. The Government continue to believe this is appropriate.
While the failure of banks is rare, the most recent example, and the genesis of this Bill, was Silicon Valley Bank UK, itself a subsidiary of an international bank. The Government consider that there were two key lessons from that event. First, it is critical that the Bank of England has the flexibility to move decisively during a crisis. Secondly, it is important to introduce the new mechanism delivered by the Bill in those cases where there is not a willing buyer. The Government do not therefore believe that there is a strong justification for treating subsidiaries differently from domestic UK banks and requiring a further set of approvals. To do so would create additional obstacles to efficient resolution decisions, which recent experience suggests can be necessary.
The noble Baroness asked whether the Bank would have used the mechanism on SVB. I cannot comment on an individual case or decision that it may have taken, but the case showed the usefulness of the option of having a mechanism provided to the Bank.
The noble Baroness also asked whether this issue will be covered in the code. The code updates will cover a broad range of issues following the Bill’s passage. We will progress and publish that code swiftly.
The noble Baroness further asked whether a parent company should be able to support the failure of a subsidiary. While the parent company may be able to recapitalise its subsidiary outside of resolution, there may be circumstances where that is not possible, as was the case with SVB UK. It is important that the Bank of England has the necessary tools to deal with a failing firm regardless of its home jurisdiction. In practice, the mechanism uses the Bank of England’s transfer and writedown powers, so the parent company would suffer losses on its investment in a subsidiary.
I therefore respectfully ask the noble Baroness to withdraw her amendment.
Baroness Noakes (Con)
I thank noble Lords who have taken part in this debate. I found what the Minister said very helpful. What the noble Lord, Lord Eatwell, said, was also helpful, although I had understood that, where there are large groups, the group parent will be responsible for ensuring the capitalisation of the subsidiaries, in particular by holding MREL at the top level, but I may need to check my facts on that. I thought colleges of regulators would be working among themselves towards the health of the group overall, so I did not I think it was entirely located in the UK, but I will check that out.
What the Minister said is very helpful and I will reflect carefully on it. If the case is that there is no difference between a UK-owned and a foreign-owned bank, no issue arises. But if there are any differences in the way that a foreign-owned bank is treated in the UK, then that would be a case. I will go away and think about that further and I beg leave to withdraw the amendment.
Baroness Noakes
“(2A) The Bank may not exercise the power in subsection (1) without the consent of the Treasury.”Member's explanatory statement
This amendment requires the Bank of England to obtain Treasury consent before it can require the FSCS to make a capitalisation payment.
Baroness Noakes (Con)
I rise to move Amendment 6. Noble Lords will be pleased to know that I get a bit of a break after this one.
This amendment would require the Bank of England to obtain Treasury consent before it uses the recapitalisation power. When I introduced my last two amendments, which contained a requirement for Treasury consent, I explained that they were a device to probe issues about the use of the recapitalisation payment power. In this amendment, my use of Treasury consent is not a probing device and I am focusing on the role of the Treasury in the broader context of accountability.
The Minister is a newcomer as far as the passage of financial services legislation in your Lordships’ House is concerned; some of us are older hands at it. When the Financial Services and Markets Act 2023 went through this House, accountability was one of the key themes which was debated on and off throughout its passage. This amendment and a later amendment return to that theme of accountability.
The Bank of England has been given huge powers by successive Governments, which we debated at length in passing the 2023 Act, but, like many other bodies which have accumulated in the public sector, it has relatively weak accountability. The governor may need to turn up to the Treasury Select Committee for an uncomfortable couple of hours from time to time, but that is just about it. One great outcome from the 2023 Act has been the creation of the Financial Services Regulation Committee in your Lordships’ House, which is chaired by my noble friend Lord Forsyth of Drumlean and on which several noble Lords on this Committee sit. I hope that our new committee will add significantly to parliamentary scrutiny of financial services quangos, but neither House of Parliament has any real powers in relation to these public sector bodies that have been given very significant powers.
This problem is not confined to the Bank of England or to financial services. The Industry and Regulators Committee of your Lordships’ House produced a report earlier this year, Who Watches the Watchdogs?, which will be debated in this House next week. One of its findings was that regulators, as a particular kind of public sector body
“exercise substantial powers on behalf of Parliament and the public, but are not subject to the same forms of accountability as ministers; to quote one witness, ‘the people can replace their elected representatives, but they can’t vote out bad regulators’”.
That applies, mutatis mutandis, to many other forms of public sector body.
The report noted that there was a
“widespread perception … that regulators’ accountability to Parliament is insufficient”.
It went on to recommend that there should be a new independent statutory body to support Parliament in holding regulators to account. All of this will sound familiar to those of us who took part in debates on the 2023 financial services Bill, because my noble friend Lord Bridges of Headley tabled amendments trying to set up something similar for the main public sector bodies in financial services—the PRA, the Bank of England, the FCA and so on. I hardly ever support setting up new public sector bodies, so I did not support my noble friend last year, and I would not support the Industry and Regulators Committee’s recommendation either. It does not form an approach that I think is the right one, but I wholeheartedly agree with the analysis that accountability is a real issue for these public sector bodies.
By enjoining the Treasury in any decisions as to the use of the recapitalisation power, Parliament gains the additional ability to question Treasury Ministers about the use of the power and the circumstances that surround the use of it. At the moment, it is easy for the Treasury Minister to say, “Nothing to do with me; it’s all down to that lot up in Threadneedle Street”. We have had many frustrating exchanges with Treasury Ministers along these lines, including when SVB UK was given away to HSBC. Treasury consent would be an important enhancement of the process of parliamentary accountability.
As I said in the earlier group, I do not believe that getting Treasury consent is necessarily an onerous part of the process, but it would be a small price to pay for an increase in accountability, so I regard this as a modest addition to the framework created by the Bill. Obviously, I have drafted this in connection with a specific power in the Bill, but it is a principle which could be applied to many uses of significant powers by the Bank of England, the PRA and the FCA.
The use of the power by the Bank of England could be entirely straightforward, in which case it is unlikely to engage the interest of Parliament, but there are likely to be some cases where the use of the power is controversial or where there are questions to be asked about whether bank failure is associated with some form of regulatory failure. Parliament should be very much engaged in cases of this nature, and my amendment would provide the platform for such engagement.
I know that the Minister will be briefed by his officials to resist this amendment, and I am sure that it suits the Treasury to be able to operate behind the scenes with the Bank of England but in a largely deniable way. I appeal to the Minister’s instincts, which I am sure are sound, about the need for effective parliamentary accountability. I beg to move.
Baroness Vere of Norbiton (Con)
My Lords, I am incredibly grateful for all the amendments from my noble friend Lady Noakes, but particularly this one. It gives the Committee the opportunity to consider the overarching balance of power and I think it is right that we start to do so—or continue to do so, as my noble friend pointed out.
I am the poacher turned gamekeeper. I am no longer a Treasury Minister. I have just spent many glorious months at the Treasury and prior to that I spent eight years as a Minister in government. I was in the Department for Transport for a long time and a Lords Whip, which many noble Lords will know puts one in touch with all sorts of government departments and various people giving you briefings and all sorts of things. One learns quite a lot about things and it is all very interesting. I am grateful for the opportunity to touch on the bigger picture, which my noble friend has allowed us to do.
The scrutiny and accountability of regulators is somewhat lacking. It was possibly the biggest surprise that I had as a Minister over the years. Having said that, each regulator is very different, and I have worked with a wide variety of them. Each wears the independence cloak in a different manner: some regulators, despite claiming independence, will actually work very closely with and listen to the Minister; other regulators, when I tried to ask them a question, literally slammed the door. It is really not on. Something needs to change.
It is entirely natural that operational decisions, based on a set of detailed regulations, should sit with regulators. Of course they should; that is unarguable. Ministers do not really have the time or the knowledge. They could do it, because they could have the knowledge as Ministers can be briefed, but they would not have the time to do it and it would gum up the system. That is fine. However, the balance between who takes the operational decisions and the broader operations of regulators is somewhat awry, in my view.
We have handed over a large amount of policy-development, policy-making, regulation-drafting, code of practice-drafting and consultation-issuing activities to regulators, over which Ministers have no insight. I know that officials from the Treasury will recall some issues that happened under the last Government fairly recently, when one of the regulators just took off on a path. I asked, “Why are you going down that path? That’s not a path you should be on. Come back”. They replied, “But we’re independent”.
How are we going to fix this? I have a niggling feeling that the Bill continues a trend to which I see no end. Fairly broad-brush powers are being given to a regulator or regulators that are then subject to interpretation and implementation. Often that interpretation and implementation cause the problems. There is mission creep. The regulators add another team of officials; the Minister never sees these officials and does not know what they do. They interpret the policy slightly differently, because they were not involved in its original development and so on. All this happens with little or no oversight.
I used to sit on the other side and would happily stand up to say—my goodness—the best thing that a Minister can say: “I’m sorry; I cannot comment on that. Regulators are independent”. It is really easy. The second thing I would say, if that did not wash, is that, “Ministers are accountable to Select Committees in Parliament”. Are they really? No, they are not really. I have appeared before Select Committees and it can be a bit uncomfortable for a while. They might ask you a couple of difficult questions, but it is not going to cause you to lose more than a couple of nights’ sleep.
Quite often, by the time you get to a Select Committee appearance by AN Other head of a regulator, it is too little, too late. The policies have already been devised, developed and put in place. The damage has already been done.
Furthermore, there seems to be no mechanism by which recommendations from these accountability sessions in Parliament are mandated for action by the relevant regulator. Many regulators can be told or asked by the Select Committee, “Please can you do X, Y and Z”, but they can basically take no insight from that at all.
I feel this quite personally, having recently lived through it, because throughout my time as a Minister I had the fear that if things go horribly wrong—sadly, sometimes they do—it is not the regulator that feels the heat. It is the Minister. One cannot go to the media and say, “The regulator is independent. I had nothing to do with it”. That does not wash with the public. Now that we have broken the connection between Ministers and regulators, we are in a very difficult situation. The Minister has no power—and that is why the fear exists—to make sure that things cannot go horribly wrong, even if they spot things that need to be improved.
This is but one amendment in a whole series. Yes, it was a useful device for getting amendments down for other elements for debate, but this is serious. My noble friend Lady Noakes is trying to take back control from the regulators and rebalance the system to enable Ministers to input at an appropriate point. She has a point.
Lord Livermore (Lab)
My Lords, I note that a number of other amendments have touched on the topic of Treasury consent before the Bank of England exercises its powers. I hope to fully address the Government’s position on that matter now.
I start by addressing the amendment laid by the noble Baroness, Lady Noakes; I will touch briefly on some points that I have made previously. The Government believe that the existing division of responsibility between the relevant authorities in resolution works well. It is important to maintain the position that the Bank of England can take decisions on the appropriate resolution action independently, guided by the objectives given to it by Parliament under the Banking Act and in line with relevant international standards.
There would be two key risks if that system were to change. First, it would confuse the lines of accountability for resolution decision-making, in effect making the Treasury the de facto resolution authority in the case of certain banks that may be subject to the new mechanism. This would undermine the Bank’s role as the resolution authority and may be seen as out of step with the intent of the relevant international standards. Secondly, a resolution is more likely to succeed when it is conducted by a single decision-maker backed by the right resources and expertise. The Bank of England is ultimately best placed to make those judgments and, therefore, to ensure that there is market confidence in resolution action.
However, there are safeguards to ensure that the Treasury can engage with the Bank of England’s decision over resolution matters, including any use of the new mechanism. As I have noted before, the Bank of England must consult the Treasury during any resolution action as part of its assessment of the resolution conditions, which are required by statute. This is an important legal requirement and ensures that the Treasury is meaningfully engaged in the Bank of England’s decision-making process. The Treasury and the Bank also maintain a productive ongoing dialogue.
Finally, the Treasury retains absolute approval in any resolution with implications for public funds, ensuring that the interests of taxpayers are appropriately reflected in resolution decisions and the Chancellor’s ultimate accountability for public funds to Parliament. The Government view this as an appropriate and proportionate framework in the context of the new mechanism.
The noble Baroness, Lady Noakes, asked about the Bank’s accountability to Parliament. I note that the Bank must inform the Treasury and share copies of legal instruments when taking resolution action. The Treasury must lay those in Parliament. The Bank must also report to the Treasury on the use of those powers; in some cases, the report must also be laid in Parliament.
I turn to the amendment in the name of the noble Baroness, Lady Vere—I note what we might describe as a slight change of heart from her position in government over the past 14 years. Her amendment would require the Financial Services Compensation Scheme to seek the approval of the Treasury in circumstances where it has to levy in subsequent financial years after the mechanism under the Bill has been used. I should clarify that, in principle, the mechanism provided by the Bill could be used to manage multiple firm failures at once; of course, the Bank of England would carefully consider the implications of doing this when assessing the resolution conditions, having regard to the special resolution objectives.
Moreover, any levies would be subject to the affordability cap set by the Prudential Regulation Authority, based on how much the sector can be safely levied in a given year; currently, that is £1.5 billion. In the event that multiple failures resulted in a recapitalisation requirement under that cap, the expectation is for the Financial Services Compensation Scheme to be able to levy safely for the funds within 12 months. It would not do that only if the Prudential Regulation Authority considered that it would carry issues of affordability, in which case the levies could be spread over a longer timeframe. In the event that the amount exceeded the £1.5 billion cap, the Government would expect the Financial Services Compensation Scheme to levy over multiple years, ensuring that it remains affordable for the sector.
It is important also to note that, in these circumstances, the Financial Services Compensation Scheme would be able to turn to the Treasury and request a loan under the National Loans Fund. The levies charged over multiple years would then be used to repay such a loan. Of course, borrowing from the National Loans Fund remains at the sole discretion of the Treasury.
I hope that I have been able to provide noble Lords with some reassurance on these points, and that the noble Baroness is able to withdraw her amendment as a result.
Baroness Bowles of Berkhamsted (LD)
I did not speak earlier because all the points I wanted to make were picked up, but there are two things on which I wish to comment. We have a change now in that, before, the Treasury would be more involved when the matter involved use of public funds; now, that has been transferred to the industry, so the Treasury is less involved and perhaps less concerned. Yet the Treasury remains the only possible constraint around and is far from perfect.
For the PRA and the FCA, there are plenty of powers to instigate reviews by government. The big mistake, apart from us not having proper oversight of regulators in general—there are various mistakes—is that those reviews have not been used a lot more often. They should be done almost on a rolling regular basis, not just when there has been a big disaster.
The other thing we have done differently is that we have made the central bank the resolution authority. Therefore, you cannot hold the central bank to account, because of its independence, in the same way that you could if you had constructed an independent resolution authority. That is, as you might suppose, the subject of a big debate that went on in Europe when I was ECON chair. There is an independent resolution authority there; it is not the central bank. That was one of the big considerations, because you cannot really hold a central bank to account. Ultimately, the sort of change that is envisaged in this Bill may move us further towards considering whether we need to do that.
Baroness Noakes (Con)
My Lords, I thank all noble Lords who have taken part. The predictions made by my noble friend Lady Vere on the content of the noble Lord’s response were pretty accurate in places. The noble Lord has not really engaged with the weak accountability that exists. The noble Baroness, Lady Bowles, is absolutely right about the use of the Bank of England as the resolution authority and giving it all those powers with almost no constraints whatever, other than consultation. Whoever chose to do that back in 2009—whichever Government were in power then—did not set up the right accountability environment for the use of those powers to exist. Once you put something inside the Bank of England, it is very difficult to engage in those issues, because it guards its independence on practically everything.
This is one of the big issues that will need to be addressed at some stage. There may not have been an instance yet that has caused people generally to realise how dangerous it is to have large, unaccountable bodies in the public sector with huge powers but relatively weak accountability. That is because we are still muddling through, and it is frustrating to some people who are dealing with these regulators, including Ministers, that they cannot fully engage. We have not had one of those big instances where everybody says that we have the wrong model. In a sense, I know that my pleas for a greater level of accountability to be included in statute are not really being heard, but that will not stop me raising them at every single opportunity I can. Indeed, I have some more amendments through which to talk about accountability further.
This has been a useful exchange. I will think about it further, having read the Minister’s response in Hansard. I will think further about whether I take this forward again on Report. For now, I beg leave to withdraw the amendment.
“(2A) The Bank of England may only exercise the power in subsection (1) if it assesses that the use of the power would support the public interest, which may include but need not be limited by—(a) supporting market competitiveness, or(b) retaining or growing smaller banks.”
Baroness Bowles of Berkhamsted (LD)
The point that I am trying to get to with Amendment 7 is, again, more transparency around what the public interest issues are. It is fairly reasonable to say that, of course, the Bank will do things that are broadly what it considers to be in the public interest, but there are quite a range of factors involved. They include the specific ones that were utilised in the Silicon Valley Bank case because of the potential loss of the float that companies had for paying their workforce and all those kinds of things. I did not object to that; I thought it was jolly good.
We also have the issue of wanting to encourage market competitiveness while retaining and growing smaller banks, which is always trumpeted as an issue, so I put those in as possible factors. But my real call is to say, again, that we need more things to be put into the documentation, whether that is a strategy, a code of conduct or even discussion documents, about the types of things that can be contributory factors to this public interest. Something may always happen that is a surprise. Maybe the Silicon Valley Bank and the large amounts of payroll in a particular sector of the economy was a surprise.
We need some kind of expectation and oversight of how these things are to be weighed up. That is the main force behind me putting this particular amendment in. Can we specifically mention, somewhere in the Bill, that it is in the public interest? As I said, it is accepted but I do not think that it is written down. I beg to move.
Lord Livermore (Lab)
My Lords, before I turn to the specific amendment from the noble Baroness, Lady Bowles, I note that the Government fully recognise the importance of market competitiveness and the critical role played by small and growing banks in serving customers across the UK.
On the specifics of this amendment, I note that, before undertaking resolution, including when using the new mechanism, the Bank must be satisfied that the resolution conditions in the Banking Act have been met. The third resolution condition is that resolution is necessary having regard to the public interest in the advancement of one or more of the special resolution objectives. Those objectives are set out in detail in the Banking Act and are intended to reflect the key objectives of the resolution regime across all in-scope firms. For instance, this includes maintaining financial stability, protecting public funds and enhancing confidence in the stability of the financial system.
The objectives do not explicitly reference market competitiveness or supporting small banks. This reflects how, in undertaking resolution, the Bank of England should be appropriately focused on managing the significant risks to financial stability that can arise in a highly unpredictable scenario. As set out in their consultation response, this has informed why the Government believe that the broader resolution framework works well, including the existing balance of special resolution regime objectives, and why we have not proposed to change them.
I note, however, that the Government actively considered both the role of small banks and market competitiveness when developing the policy approach for this Bill. In particular, market competitiveness is a key reason the Government chose to pursue a solution whereby banks must contribute to the costs of recapitalisation only after a failure has occurred. Crucially, this means that the new mechanism does not create any upfront costs for the banking sector.
As noted at Second Reading, the Government have also committed to updating the code of practice to ensure there is a clear process by which the Bank of England calculates the costs that could arise for industry if the new mechanism is used. In addition, the Government believe that the new mechanism supports the UK’s small banks. It ensures that there is a robust system in place for resolving them and maintaining continuity, when that is judged to be in the public interest. This should help support wider confidence in the regulation of the sector.
The mechanism in the Bill is also designed to be proportionate. This is why any levies associated with recapitalisation will be spread across the entire banking sector, ensuring that it is affordable for small banks. Overall, the Government believe this strikes the right balance in that these wider policy issues have influenced the design of the Bill, but that in using the mechanism the Bank of England is ultimately guided by the existing special resolution objectives. I therefore respectfully ask the noble Baroness to withdraw her amendment.
Baroness Bowles of Berkhamsted (LD)
I thank the Minister for that response. Again, I make the point that, through the Bill, we are changing from an inherent public interest in public money into using private money to do the rescue. I am not sure that the Banking Act was drafted with that in mind and I doubt that we could amend relevant sections through the Bill. It is just worth having another look with those eyes, maybe after a period of time, to see whether some kind of adjustment is needed because this safeguard check that exists around the use of public money has been taken away. It has not been replaced by anything; it has not even necessarily been replaced by more transparency. With those comments I beg leave to withdraw my amendment.
Lord Sikka
“(3A) Before exercising the power in subsection (1), the Bank and the scheme manager must assess whether they consider that there should be a clawback of executive pay and bonuses from the previous 12 months.”Member’s explanatory statement
This amendment seeks to address potential moral hazards through requiring the Bank and scheme manager to take directors’ pay and bonuses into consideration when a recapitalisation payment is made.
Lord Sikka (Lab)
My Lords, Amendment 9 deals with moral hazards, which, if anything, are multiplying. The amendment seeks to restrain excessive risk-taking by imposing possible personal penalties on bank directors.
The recent legal developments have actually multiplied financial moral hazards and the related risks. For example, the Financial Services and Markets Act 2023 reintroduced the secondary regulatory objective to promote the growth and international competitiveness of the finance industry. In effect, it dilutes the regulator’s remit to protect customers. On 12 August, the Chancellor said that she and the Economic Secretary to the Treasury were constantly asking regulators, “What are you doing in practice to meet that secondary objective?” The meeting of that secondary objective will necessarily increase moral hazards.
Secondly, further deregulation is coming in—reforms of Solvency II, for example—with the claim that this will somehow conjure up an additional £100 billion of investment by reducing capital requirements. There is no pot of gold sitting in a corner in any bank boardroom that people can simply empty and get £100 billion out of. All of that is underpinning bank resilience and insurance company resilience. All of that is invested in some safety buffers. All of that will have to be liquidated. Yet the consequences for how the directors might behave have not really been outlined.
The cap on bankers’ bonuses has been lifted, so there are now economic incentives for bank directors to be reckless and take excessive risks, as that would maximise executive pay and bonuses—all done in the full knowledge that the bank would be rescued, restructured, recapitalised or bailed out, be it through the mechanism of the Financial Services Compensation Scheme or, eventually, some reconstruction. There are no great pressure points on bank directors to be risk-averse and prudent or to act in a responsible manner.
The risk-boosting effects of moral hazards are ignored by this Bill, yet they are highly relevant to any form of stability. We have a whole history showing how this happens. In the 2007-08 banking crash, attention was drawn to moral hazards or conflicts of interest between the interests of shareholders and managers, debt holders and the public purse. Bank directors took on excessive leverage because the state incentivised them to do so. It continues to incentivise them to do so, for example by giving tax relief on interest payments, which reduces both the cost of debt and the weighted average cost of capital while increasing shareholder returns, providing a justification for greater executive bonuses and remuneration.
Numerous studies have shown that shareholders were, and remain, focused on short-term returns. In any case, they still do not get good-enough information to invigilate directors; perhaps at some point, when we are discussing the world of accounting, I will point out how almost useless company accounts are in enabling shareholders or anybody else to invigilate directors. Back at the time of the last crash, directors accepted excessive risks from not only financing the organisation but risky investments. For example, numerous varieties of derivatives and complex financial bets were made because of explicit guarantees about depositor protection, central banks providing liquidity and support, and, ultimately, publicly funded bailouts.
If the bets made with other people’s money paid off, directors got mega payoffs; if they did not, somebody else picked up the loss, leading ultimately to rescue bailouts—now we are using the term “recapitalisation”. This Bill adds another string to publicly funded bailouts—though it likes to use different language. Yes, the cost of the FSCS levies is borne ultimately by the people, as has already been pointed out, and not necessarily by other banks.
If the Government succeed in persuading the banks to lend more to facilitate additional investment, as they are trying to do, that will add to the risks and strain the capital adequacy requirements of those banks. In boom times, banks tend to lend more freely, because they do not want to miss out on the opportunity to make more profits, and they relax credit standards, but there are inevitably consequences, as we saw with the last crash. Directors are rarely held personally liable, and that remains the position today.
Amendment 9 would address this gap by requiring the Bank of England and the scheme managers to consider a clawback of directors’ pay and bonuses paid during the previous 12 months. In case the Minister might refer to other clawback arrangements, let me pre-empt those. Paragraph 37 of the UK Corporate Governance Code states:
“Remuneration schemes … should include … provisions that would enable the company to recover and/or withhold sums or share awards and specify the circumstances in which it would be appropriate to do so”.
That is of no help whatever, because such codes do not apply to large private companies, of which Wyelands Bank, which came to an end recently, is a good example. The codes are also voluntary and cannot be enforced in the courts. They do not empower stakeholders in any way; they do not require the clawed-back amounts to be handed to regulators or to be used for recapitalisation of banks.
The FCA handbook also has a section on possible clawback, but it applies to what it calls “variable remuneration”, which is generally taken to mean bonuses. It states that in certain circumstances the clawed-back funds need to be handed back to the institution. This does not cover entire remuneration; it does not require that the clawed-back amounts be used for the recapitalisation and reconstitution of banks. So, in the interests of clarity and certainty, a statutory approach to clawbacks is needed, not a mishmash of voluntary arrangements. I beg to move.
Lord Vaux of Harrowden (CB)
My Lords, I shall speak to Amendment 16, which would do a certain amount of what the amendment from the noble Lord, Lord Sikka, would do, but in a slightly different way. It is intended as a probing amendment to obtain clarification on what ability there would be to recover all or some of the costs of failure from either management or shareholders of the failed entity when it is recapitalised rather than being put into insolvency—there seem to be two different things there.
It is possible to imagine a situation where members of the management team responsible for the failure are paid large bonuses or dividends prior to that failure. As the noble Lord, Lord Sikka, pointed out, that is more possible now that the cap on bonuses has—rightly, in my view—been lifted. Can the Minister clarify in what circumstances it would be possible to recoup those bonuses or dividends to offset the recapitalisation costs? In an insolvency situation, where there is fault—for example, in cases of wrongful trading—it may be possible to recoup those payments, but I cannot see how that would work if the bank was recapitalised. To me, it must make sense that management should not see the risk of having to repay bonuses or dividends as being lower than it would have been if the bank had been put into insolvency just because the bank has been recapitalised.
Lord Livermore (Lab)
My Lords, I turn first to the amendment tabled by the noble Lord, Lord Sikka, which seeks to ensure consideration is given to a clawback of executive pay and bonuses from a failed firm before using the new mechanism. I note that while the bank resolution regime does not set out powers allowing the Bank of England to claw back money from shareholders or management, it does provide an extensive and proportionate set of powers to the Bank of England to impose consequences on the shareholders and management of a failed firm in resolution.
First, on placing a firm in resolution, we expect that any existing shareholder equity would be cancelled or transferred. This is an important principle that ensures the firm’s owners must bear losses in the case of failure. In many circumstances, this will affect directors and management who hold shares or other instruments of the failed firm.
In addition, the Bank of England has the power to remove or vary the contract of service of its directors or senior managers. The Bank of England exercises its discretion in deciding whether to use this power. However, as set out in the Government’s code of practice, the Bank of England generally expects to remove senior management considered responsible for the failure of the firm and to appoint new senior management as necessary.
Finally, as reflected in the code of practice, it is a key principle of the resolution regime that natural and legal persons should be made liable under the civil or criminal law in the UK for their responsibility for the failure of the institution. This is delivered by Section 36 of the Financial Services (Banking Reform) Act 2013, which provides for a criminal offence where a senior manager of a bank has taken a decision which caused the failure of a financial institution, if the conduct of the senior manager
“falls far below what could reasonably be expected of”
someone in their position. Overall, this ensures that, as appropriate in the circumstances, there are material consequences for shareholders and senior management when a firm goes into resolution.
More broadly, I can further reassure the noble Lord that the Government recognise the importance of high standards in financial services regulation. The senior managers and certification regime supports high standards by ensuring individual accountability for senior individuals within firms, and by promoting high standards of conduct and governance. The Prudential Regulation Authority sets rules on remuneration and applies these to medium-sized and large banks, ensuring they are proportionate, and there are clear requirements in the PRA’s rules for firms to ensure they have policies on malus and clawback in place to align management incentives with that of the bank.
I should also note the intention of the amendment of the noble Lord, Lord Vaux, to ascertain under what circumstances the Bank of England may be able to recover all or part of remuneration to management and shareholders, or require a shareholder to cover all or part of the recapitalisation costs. If recoveries were made from management or shareholders of the failed firm, the amendment would make it clear that these types of remuneration could count towards these recoveries.
I hope I have addressed the broader point about the treatment of shareholders and former management in my earlier remarks. As a point of detail, I would add that the Government expect any recoveries not otherwise specified in the clause to be covered already by the catch-all phrase “or otherwise” at the end of proposed new subsection (2)(a). I hope that addresses the points raised and I respectfully ask the noble Lord to withdraw his amendment.
Lord Vaux of Harrowden (CB)
I think the Minister has answered the point about management, and I recognise that the words “or otherwise” are at the end of the new subsection. Where I am not sure that he has answered the point is on the inappropriate dividends paid to shareholders beforehand—the Thames Water situation, and how that would be dealt with. Just saying that the equity would be written down makes no difference; in this situation, the equity is already worthless. We are talking about recouping the costs of the recapitalisation rather than the fact that the worthless company is worthless.
Lord Livermore (Lab)
I have managed to get through several groups without promising to write, but on this occasion I will write to the noble Lord.
Lord Sikka (Lab)
I thank the Minister for his reply. I will divert slightly to the point made about dividends. The legislation is a complete mess on distributable dividends. The previous Government were going to table legislation about some disclosures of distributable reserves, then just a day before—without any notice to Parliament—they withdrew that, because most companies do not have a clue what their distributable reserves are. This raises all sorts of questions about what are realised or unrealised profits. I will not go into the technicalities at the moment. Any time I hear a Minister talk about dividends or say, “We are going to control dividends”, whether it is about water companies or any others, that is just a no-go area at the moment. It cannot be sorted out without major primary legislation.
The Minister said that there is already legislation in place for civil criminal prosecution. I am afraid that legislation delivered hardly anything after the last banking crash. Countries such as Iceland and even Vietnam prosecuted far more bankers for their negligence than the UK did, though we managed to elevate some afterwards to some very senior political positions, so that legislation is not really effective. I take it from the Minister’s reply that he is not prepared to consider legislation specifically saying that there will be a clawback of executive remuneration. That is the point—in the absence of it, who knows whether the management concerned will bear any personal cost at all? Is my interpretation of the Minister’s reply correct?
Lord Sikka (Lab)
I thank the Minister. I withdraw my amendment for the time being, though I may bring it back at the next stage.
Lord Vaux of Harrowden
“(6) When the Bank of England exercises its power in subsection (1), the Bank must make a report to the Chancellor of the Exchequer within 28 days of the date of any recapitalisation payment being made.(7) The report must comply with any requirements as requested by the Treasury, but must include—(a) the reasons why the Bank decided to make a recapitalisation payment in preference to allowing the financial institution to go into insolvency;(b) a breakdown of the costs referred to in subsection (2);(c) a comparison of the expected recapitalisation payment or payments that will be paid by the Financial Services Compensation Scheme, compared with the expected costs to the Scheme in an insolvency process.(8) The Bank must make further reports to the Chancellor of the Exchequer within three months of the date of the sale of the institution to a private sector purchaser, or the sale, closure or winding up of the bridge bank, providing such information as the Treasury may require, including the breakdown of the actual recapitalisation payment or payments and the reasons for any differences to the expected costs referred to in subsection (7)(b). (9) The Chancellor of the Exchequer must lay a copy of each report under subsection (7) or (8) before Parliament.”Member’s explanatory statement
This amendment is intended to ensure that the reasons for decisions of the Bank to follow a resolution process in preference to an insolvency process are explained and the explanation laid before Parliament, both at the time of the decision and once the resolution process has been completed, and that the costs can be compared to what would have been expected if the institution had been placed into insolvency.
Lord Vaux of Harrowden (CB)
My Lords, as we have heard several times already, the area of accountability around financial services Bills seems to always come to the fore, as the noble Baroness, Lady Noakes, pointed out. She referred in a recent group to the weak accountability that exists in the Bill. My Amendments 12 and 24 in this group aim to improve that.
One of the main concerns raised at Second Reading was to ensure that the Bank of England explains why it has decided to follow a recapitalisation process rather than allowing a failing bank to fail and go into insolvency, which was the previous default. In particular, several respondents to the consultation raised concerns that the costs of the recapitalisation should not be greater than those that the FSCS would face under an insolvency process. Concerns were raised, not least by the noble Baroness, Lady Penn, that recapitalisation might become the default approach to a failing bank, rather than insolvency. At Second Reading, the Minister then referred to the strong expectation that
“any reports required under the Banking Act to ensure ex-post scrutiny of the Bank of England’s actions when using the new mechanism would be made public and laid before Parliament ”. —[Official Report, 30/7/24; col. 933.]
My Amendments 12 and 24 aim to strengthen the required reporting and to make it a requirement that those reports will be made public and laid before Parliament. Amendment 12 adds some detail around the contents of the report. In particular, it would require the Bank to explain why it chose recapitalisation over insolvency; to provide a breakdown of the expected costs, which we talked about in an earlier group; and to provide a comparison of the expected recapitalisation cost with what would have been expected to have been the cost under an insolvency situation. It allows the Treasury to stipulate other matters but, importantly, it also sets a shortish timetable for that report of 28 days. This really does have to be done on a timely basis.
Also, importantly, the requirement to report—again, we discussed this earlier—will apply to any subsequent recapitalisation payments made to the same failing institution. Again, this overlaps with Amendment 3 in the name of the noble Baroness, Lady Noakes, which we have already debated. As I said at the time, it is critical that, any time we further recapitalise, we look again at whether that is the appropriate thing to do or whether insolvency is the appropriate option.
To cover the ex-post scrutiny that the Minister referred to at Second Reading, the amendment also requires further reports to be issued and laid before Parliament once the resolution process comes to an end, whether that is through a sale or through an insolvency process. The whole process could be two years after the resolution process starts—indeed, it can be extended beyond two years—so it is important that what actually happens is scrutinised after the event and that any differences to what we were originally told was going to happen are explained.
Amendment 14 laid by the noble Baroness, Lady Noakes, does something similar but leaves the detail of what must be included in the report up to the Treasury. I would be keen to provide the Treasury with some minimum requirements for the report; what I have laid out are the important aspects.
Amendment 24 in my name simply tries to fix an anomaly, as I see it, in the Banking Act 2009. Under Section 80 of that Act, if a failing bank is transferred to a resolution company, the Bank of England must make a report to the Chancellor of the Exchequer and that report must be laid before Parliament. However, rather oddly—the Minister referred to this previously—according to Section 79A of the Banking Act, if all or part of the failing bank is sold to a private sector purchaser, the Bank of England must still report to the Chancellor but that report does not have to be laid before Parliament.
The eagle-eyed among you in this Committee may have noticed that my initial version of this amendment simply stated that the report had to be laid before Parliament. We are getting to the point of the scope issues that the noble Baroness, Lady Bowles, referred to in her opening of the debate. That amendment was, at the last minute, ruled as being out of scope of this Bill. I find that hard to understand, particularly given that I felt that the Minister rather firmly put it in scope in his Second Reading speech, but it was decided that it was too broad to be in scope. I had to change it so that it refers only to the situation where a recapitalisation payment has been made. I ask the Minister to consider seriously whether he can use his influence to change that. It seems mad to do it only in this circumstance and not in the wider circumstance of a bank being sold to a private sector player. The officials have perhaps been a little overzealous with their interpretation of scope in this case—and in this Bill, more generally.
As I said, in his Second Reading speech, the Minister pointed out the importance of Section 79A for scrutiny of the Bank of England’s actions. He also referred to the fact that there is no requirement for reports under Section 79A to be laid before Parliament. However, he went on to say that he could
“reassure your Lordships that in any event where the new mechanism was used the Treasury would intend to ensure that any such reports were made available to Parliament and the public”.—[Official Report, 30/7/24; col. 933.]
My amendment simply makes that intention a requirement; I hope that I am not pushing at a closed door and that it is not seen as controversial.
However we go forward, it is essential that the actions of the Bank of England are subject to full scrutiny and transparency. At Second Reading, the noble Lord, Lord Macpherson, eloquently described the potential for a conflict of interest in the position of the Bank of England, pointing out that the Bank might choose to recapitalise rather than put a bank into an insolvency process
“less because it is in the national interest and more as a way of minimising the reputational damage of regulatory failure”.—[Official Report, 30/7/24; col. 914.]
Any decision to recapitalise should be explained to avoid possible creep to this process becoming the default. The noble Lord also raised his concerns that there is little incentive for the Bank to minimise the costs of resolution—after all, the industry, not the Bank, will pay. He gave the example of the Dunfermline Building Society incurring greater costs than the Treasury incurred in resolving the Icelandic banks.
So I think it is essential that we strengthen the scrutiny of the Bank when it exercises these new powers, to ensure that any decisions it takes are clearly justified at the time and examined publicly once the resolution is complete so that any lessons can be learned. These amendments, or amendments like them, would achieve that. The Minister has said he expects all reports to be made public and laid before Parliament, so I hope he will simply accept them.
Finally, I add my support to Amendment 25 from the noble Baroness, Lady Bowles, which is also in this group. We discussed in the first group the concerns around the MREL regime that are raised by the Bill, so it seems entirely appropriate that an assessment should be made of the impact of the Bill on the MREL regime. I beg to move.
Baroness Noakes (Con)
My Lords, as the noble Lord, Lord Vaux, has said, I have Amendment 14 in this group. In substance, it is the same as the noble Lord’s amendment. The only real difference, as he pointed out, is that mine is less prescriptive. I am entirely happy with either version, but it is important that we deal with the specific reporting requirements, because the existing provisions are simply not adequate. At Second Reading, the Minister basically said that the Government would use the existing reporting requirements in the Banking Act, but the time involved is simply too long. It could take at least a year after the powers have been exercised. When the recapitalisation powers are used, that deserves more immediate scrutiny and, unless there is awareness of it by way of a report, that is simply not going to happen. So I stand completely behind whichever of these amendments the Minister cares to choose.
I also completely support what the noble Lord, Lord Vaux, has tried to do with his Amendment 24. It is a pity he cannot do it more generally in relation to Section 79A, but at least it rectifies what is clearly an anomaly that Parliament should not have allowed through when the Act was brought in. When the recapitalisation power has been used, it should be a requirement to lay a report before Parliament. This is in line with what the Minister said at Second Reading would happen, so I expect the Minister to accept the amendment with alacrity.
I am not quite sure why the noble Baroness, Lady Bowles, allowed her amendment to be brought into this group. That said, I do think it is an important opportunity to look again at MREL, in particular because those banks that do not have MREL now become potentially subject to the use of the bank recapitalisation power. There ought to be more transparency about how banks can be categorised in that way and more understanding by those in the banking sector of which institutions they might have to pick up the tab for in due course.
It is generally a contentious issue in the banking sector, and the way in which banks trip from no MREL to MREL can be a deciding factor in whether they can scale up, because the cost of raising MREL when you are a very small bank, if you trip over into needing to raise it, can have a very significant impact. I have certainly heard smaller start-up institutions say that they deliberately do not grow above a certain size in order to avoid coming within the MREL provisions, and that cannot be good for the UK. So I am not quite sure about the wording of the noble Baroness’s amendment, but I completely support the principle.
Baroness Bowles of Berkhamsted (LD)
The noble Baroness, Lady Noakes, asked why I allowed my amendment to be grouped in this way. I was simply trying to expedite matters for us and I thought we did not need another whole group, which would get the Minister up and down again. I agree with the other amendments and everything that has been said on this group. They deal with issues around conflicts and so on, and transparency is one of the best weapons we have that presumably will be allowed or in scope.
My amendment is one of those that do not read as I originally wrote it, because again we came into scope issues. I could not get the exact amendment that I wanted, so this was the best that I could do. Obviously, it is a companion to the amendments in the first group, which were saying that the majority of us want to limit to a threshold equal to MREL. If you therefore want to resolve banks that are a little bigger, you would have to shift MREL. I am not going to cry over that; I will cheer.
That may be an improper tactic but we do not have any other tactics to try to focus the PRA on the damage being done to the growth of smaller banks by putting MREL where it was not intended to be. We are out of line internationally and we do not really have any good justification for that. If there is a division between those banks that can be resolved and those that cannot, I still think that it goes there and the Bank will therefore have to give its view as to why. Perhaps it wants an extension in some way, so that it can get at bigger banks. What do we get back from that? That is the thought process that lies behind my amendment.
I support all these amendments. If they are knocked into a format that is suitable for Report, they would be very good additions to the Bill.
Baroness Vere of Norbiton (Con)
My Lords, I am particularly grateful to the noble Lord, Lord Vaux, and to my noble friend Lady Noakes for thinking carefully about reporting and tabling amendments accordingly. I had to support one of these amendments and I am afraid that I picked the noble Lord’s on this occasion. This is not favouritism; I was purely trying to spread the love a little. But as we approach Report, we might want to go back and check that whatever we end up putting into the Bill is future-proofed.
Sometimes one can put in too much detail, then people can slide round the edges by saying, “Oh, you didn’t tell us to do that”. Alternatively, there is being too broad, when people slide round another edge by not putting in the detail that you want to see. There is a balance, but this is certainly worth taking forward and looking at. Obviously, the accountability element is key here.
Another thought I had around this was on timing. Again, sometimes one can go too far and have a report too far in the distance, so by the time it comes out no one remembers what the problem was in the first place. The amendment tabled by the noble Lord, Lord Vaux, says “three months”; I was thinking “as soon as practical” or, in any event, within six months. I do not know, but in very complicated and complex circumstances there might still be issues and context to resolve to produce a report that is relevant in timing terms, but also incorporates everything that stakeholders wish to see.
When I was a Minister, my heart would sink when an amendment was put down about producing a report. I would think, “Another report—are we really going to read it?” To me, the question is: we might produce a timely report in a good fashion and with the right amount of detail, et cetera, but how do we then ensure the scrutiny of that report? It goes back to the issue of expenses which, as we agreed, could be quite significant. But who is going to look at those expenses and suck their teeth? Will they look at the legal fees of firm XYZ and say, “Do you know what? That’s too much”. Who is going to do that? Is there any body at all—not anybody—which would be able to look at it and do that? It has been suggested to me that the National Audit Office might occasionally pay attention to this sort of thing. This is about trying to get us beyond “Just produce a report”. Well, just produce a report and then somebody can look at it. I am sure that these are going to be great reports, but even so it is a concern.
I am looking forward to the response of the Minister. I believe that this should be our last group today, fingers crossed, but I am not sure that many of us want to go outside, given the weather.
Lord Livermore (Lab)
My Lords, I fully understand the substantial focus on the reporting requirements that will apply when the new mechanism is used. I shall start by addressing Amendment 12 on this point, tabled by the noble Lord, Lord Vaux.
The Government agree that, should the new mechanism be used, it is right for there to be a reporting mechanism to hold the Bank of England to account for its decisions, and that this should encompass estimates of the costs of different options. However, the Government intend to achieve the principles of scrutiny and transparency in a different way; namely, through the existing requirements placed on the Bank of England under the Banking Act 2009. As set out in their response to the consultation, it is the Government’s intention to use these existing reporting mechanisms to ensure that the Bank of England is subject to appropriate scrutiny when using the mechanism. The Government have committed to updating their code of practice to provide further details on how these reporting requirements will apply when the mechanism is used; I can re-confirm that the Government intend to include in the code confirmation that, after the new mechanism has been used, the Bank of England will be required to disclose the estimated costs that were considered as part of these reports.
The Government consider that using the code of practice is an appropriate approach to hold the Bank of England to account for its actions, rather than putting these requirements in the Bill. The Bank of England is legally required to have regard to the code and the Government are required to consult the Banking Liaison Panel, made up of regulatory and industry stakeholders, when updating it. Using the code will therefore ensure that a full and thorough consultation is taken on the approach. Given the complex and potentially fast-moving nature of bank failures, this is important to ensure that any approach is sufficiently nuanced to account for the range of possible outcomes under insolvency or through the use of other resolution tools. The Government believe that amendments to the code of practice are more likely to be successful in achieving this outcome. As I committed at Second Reading, the Government will share drafts of these updates to the code of practice as soon as is practicable and will provide sufficient opportunity for industry stakeholders to be consulted on them.
I acknowledge the further amendment from the noble Lord, Lord Vaux—Amendment 24—which would make such reports available to Parliament when the new mechanism was used to facilitate a transfer to another buyer. It is the Government’s clear intention that any such reports required under the Banking Act, following the use of the mechanism, will be made public and laid before Parliament. The Government would not make reports public only if there were clear public interest grounds not to do so, such as commercial confidentiality reasons. This may particularly be the case when exercising the power to sell a failing bank to a commercial buyer. While such cases would hopefully be limited, it is important that they are allowed for.
I appreciate the intent of Amendment 14 in the name of the noble Baroness, Lady Noakes, which would require the Bank of England to report to the Treasury more swiftly than under the current requirements. The use of resolution powers is complex; in some cases, the Bank of England may be executing a resolution over a long period, particularly when placing a firm into a bridge bank. It is therefore sensible for the Bank of England to report a reasonable period of time after exercising its powers, ensuring that its report provides a full and meaningful assessment. On reporting more broadly, I repeat the points made in response to the amendment tabled by the noble Lord, Lord Vaux.
Finally, Amendment 25 in the name of the noble Baroness, Lady Bowles, would require the Chancellor to assess in the light of the Bill the appropriateness of the thresholds used by the Bank of England to determine which firms are required to hold additional loss-absorbing resources, known as MREL. As before, I should start by noting that the Government recognise the important role played by smaller and specialist banks in supporting the UK economy. I appreciate the concerns raised by the noble Baroness at Second Reading.
The Government have carefully considered the perspective of such banks in developing the mechanism in the Bill, which is intended to be a proportionate solution. On MREL, the Bank of England is responsible for determining MREL requirements for individual firms within a framework set out in legislation; that is an important principle, as the resolution authority, the Bank of England, is ultimately best placed to judge what resources banks should hold so that they can fail safely. I point out to the noble Baroness that, as set out in the Government’s consultation response, the Bank of England has committed to consider the potential case for changes to its indicative thresholds. Specifically, it has noted that it will consider whether any changes are appropriate in light of this Bill and other wider developments.
I hope that these points provide reassurance to noble Lords. On that basis, I respectfully ask the noble Lord to withdraw his amendment.
Lord Vaux of Harrowden (CB)
I will ask the Minister for one point of clarification. He referred to the reports under the Banking Act that will be provided as covering the costs and expenses. I do not think that he talked about the comparison with the counterfactual of the costs of insolvency, which is a critical aspect of this. Would those reports cover that?
Lord Livermore (Lab)
If the noble Lord does not mind, I shall add that to the letter to him.
Lord Vaux of Harrowden (CB)
My Lords, I thank all noble Lords who have spoken in this short debate and apologise to the noble Baroness, Lady Vere, for failing to thank her beforehand for signing her name to my amendment.
A number of points were raised. The noble Baroness was right when she discussed the timings. They were put in as a starting point; I would be very happy to look at what is appropriate. I still think that we need to beef up the reporting clauses in the Bill. I am encouraged by what the Minister said about the reports that exist being laid before Parliament, but, as the noble Baroness, Lady Noakes, referred to, there is more to do on the timings.
There is some merit in trying to put in the Bill at least some minimum requirements on what those reports should include. That will be important because, although I acknowledge what the Minister said about the code, we will not see it before Report. If we were able to see the proposed changes to the code before Report we might be able to take a different view. It happens quite regularly that we are told that something will be in a code of conduct, a future statutory instrument or whatever else, but we do not see it before we have to make the decisions on the amendments themselves. In the absence of that, I feel that we will probably want to come back to this on Report. In the meantime, I beg leave to withdraw my amendment.
House of Lords
(3 months, 2 weeks ago)
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Introduction: Lord Elliott of Ballinamallard
(3 months, 2 weeks ago)
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Introduction: Lord Brady of Altrincham
(3 months, 2 weeks ago)
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Oaths and Affirmations
(3 months, 2 weeks ago)
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Online Safety Legislation: Abuse on Social Media
(3 months, 2 weeks ago)
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Baroness Ritchie of Downpatrick
To ask His Majesty’s Government what assessment they have made of the ability of current online safety legislation to regulate abuse, including racism, Islamophobia, homophobia, and sectarianism, on social media platforms.
The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Baroness Jones of Whitchurch) (Lab)
My Lords, as my noble friend will know, we take these issues very seriously. The Online Safety Act will tackle illegal abuse, protect children and empower users. Regulated providers, including social media companies, must implement systems to reduce the risk that their services are used for illegal activity, including illegal abuse. Under the Act, stirring up hatred is a priority offence, requiring providers to proactively combat illegal racism, Islamophobia, homophobia and sectarianism.
Baroness Ritchie of Downpatrick (Lab)
My Lords, I thank my noble friend the Minister for her detailed Answer. What consideration have the Government given to the flourishing of hate content on smaller online platforms, which they have the power to regulate under the highest tier of regulation: category 1 under Schedule 11 to the Online Safety Act? Are the Government minded to reject Ofcom’s advice not to use the powers available to them under the Act to do so?
Baroness Jones of Whitchurch (Lab)
My Lords, we share my noble friend’s concern about the flourishing of hate crime on these sites and particularly on smaller online platforms. The Secretary of State for DSIT is carefully considering Ofcom’s categorisation recommendations and will make regulations as soon as reasonably practical. He can decide to proceed with Ofcom’s advice or divert from it. If the latter approach is taken, a statement must be published explaining why.
Lord Browne of Ladyton (Lab)
My Lords, it was reported today that the United States, the EU and the UK are all expected to sign the Council of Europe’s convention on AI, which emphasises human rights and democratic values in its approach to the regulation of public and private sector systems. The convention, which is legally enforceable, requires signatories to be accountable for any harmful or discriminatory outcomes of AI systems and for victims of AI-related rights violations to have legal recourse. In addition to the offence of sharing, is now not the time to consider criminalising the creation of sexualised deepfake images without consent? The noble Baroness, Lady Owen, called for this on 13 February in your Lordships’ House, and described deepfake abuse, which is almost wholly misogynistic and now epidemic. It is the new frontier of violence against women.
Baroness Jones of Whitchurch (Lab)
My Lords, my noble friend will know that, in addition to the implementation of the Online Safety Act, we already have plans to bring forward a new data Bill where some of these issues can be debated. We also have ambitions to bring forward a further piece of AI legislation, on which we will have the opportunity to talk about those issues in more detail. He is absolutely right: these are serious issues. They were debated at length during the passage of the previous data protection Bill, and we hope to return to them again.
Lord Watts (Lab)
My Lords, is it not the case that Ofcom is letting down the public? What we need is to review the role of Ofcom and other regulators and, if they are failing to do their duties for the public, they should be removed from office.
Baroness Jones of Whitchurch (Lab)
My Lords, Ofcom has a very wide-ranging and serious set of responsibilities. There is no suggestion that it is not carrying out its responsibilities in the run-up to the implementation of the Online Safety Act. We are working very closely with Ofcom and believe that it will carry out those additional functions that we have given it with proper scrutiny and to high standards. Yes, there is a case for looking at all regulators; we have a debate on this on Monday in the House, and I am looking forward to that, but that is a wider issue. For the moment, we have to give Ofcom all the support that we can in implementing a very difficult set of regulations.
Baroness Kidron (CB)
My Lords, the crafting of the Online Safety Act was fraught with exceptions, exclusions and loopholes, the most egregious of which is that regulated companies get safe harbour if they comply with Ofcom’s codes, but Ofcom has provided us with codes that have huge gaps in known harms. What plans do the Government have to fulfil their election promise to strengthen the OSA by ensuring that it protects all children effectively, even the very young, and that it has adequate mechanisms to act swiftly in a crisis, or with an evolving new risk, to stop abuse being whipped up algorithmically and directed at minority groups?
Baroness Jones of Whitchurch (Lab)
My Lords, I think that we are in danger of downplaying the significance of the Online Safety Act. It is a trail-blazing Act; the noble Baroness was very much involved in it. Our priority has to be to get that Act implemented. Under it, all user-to-user services and search providers, regardless of size, will have to take swift and effective action against illegal content, including criminal online abuse and posts of a sexual nature. We should get behind Ofcom and the Online Safety Act, and we will then obviously have to keep that Act under review, but we have the tools to do that.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, we will hear from the Lib Dem Benches and then from the Conservative Benches.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, we will hear from the Lib Dem Benches now and then from the Conservative Benches.
Baroness Hussein-Ece (LD)
Does the Minister agree that digital literacy is crucial, so that people are better able to identify often damaging misinformation and fake news? What is the Government’s strategy in that respect?
Baroness Jones of Whitchurch (Lab)
The noble Baroness makes an important point. Part of Ofcom’s responsibility is to heighten the role of media literacy. We are talking to the Department for Education, and obviously there is a role for schools to be involved in all this—but parents also have to take responsibility for their children, and for their access to these sites. The media literacy role that we have to play goes right throughout society; it is the responsibility of all of us to make sure that people understand, when they access these sites, what they are able to see and how all that can be moderated. Again, the social media companies have a particular responsibility to play in all that. We expect them to uphold their terms of service to make sure that children cannot access the sites that are inappropriate, and we will work with them to make sure that this happens.
Lord Parkinson of Whitley Bay (Con)
I hope that the Government will look with sympathy at the Private Member’s Bill being brought forward by my noble friend Lady Owen of Alderley Edge, which the noble Lord, Lord Browne of Ladyton, mentioned. It deals with very important issues.
The Minister will be aware of the arrest of Pavel Durov in France—the founder and chief executive of the messaging application Telegram. I do not expect her to be able to comment on an ongoing investigation, but can she tell your Lordships’ House whether His Majesty’s Government have had any contact with the Government of France in relation to this matter and whether British law enforcement agencies have been involved in the investigation? I appreciate that she may need to write after checking with them.
Baroness Jones of Whitchurch (Lab)
I pay tribute to the noble Lord for all the work that he did in getting the Online Safety Act on to the statute book. With regard to Telegram, obviously we cannot comment on issues in another country’s jurisdiction. We have regular contact with all friendly nations dealing with those issues. I cannot comment on whether there has been specific dialogue on the issue of Telegram, but we would normally expect that to be something for the French Government to deal with.
The Lord Bishop of Leicester
My Lords, I recognise absolutely the urgency and importance of legislation in this area, but does the Minister agree that equally important is the work of tackling the prejudice that lies behind online abuse, and the important role therefore of intermediate institutions such as community groups and faith groups in tackling prejudice? What are the Government doing to support those groups in that work?
Baroness Jones of Whitchurch (Lab)
The right reverend Prelate makes a very important point. I think that we were all pleased with the community reaction to the riots. It was very heartening to see that people were not prepared to have those abhorrent views coming to the fore in their communities. We need to do more to encourage that community response, and we need to work with all of civil society, including the Church, to make sure that happens. We also need to make sure that the police, as they play a community role, make clear what is illegal and take action when actions in a locality are illegal. This is a much broader issue about civil society, and I agree with him.
Ukraine
(3 months, 2 weeks ago)
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Lord Campbell-Savours
To ask His Majesty’s Government what discussions they have held with European countries regarding Ukraine and its war with Russia.
The Parliamentary Under-Secretary of State, Foreign, Commonwealth and Development Office (Baroness Chapman of Darlington) (Lab)
My Lords, Ukraine is defending itself against an illegal and unprovoked war launched by Russia, as per its right under the UN charter. UK support for Ukraine is ironclad. Ukraine was a key area of focus for the European Political Community summit at Blenheim, at which the Prime Minister brought leaders from across Europe together with President Zelensky. We are committed to working with our international partners to ensure that Ukraine gets the support that it needs to prevail.
Lord Campbell-Savours (Lab) [V]
My Lords, while I recognise the loyal support of Labour in opposition for the war but equally that it is for Members to question strategy where they disagree—in my case with regard to Ukraine in 21 debates over two and a half years in this House—is it not time for a strategy rethink, with new emphasis on conflict resolution, perhaps drawing on the developing relationship between China and Russia and the more opportunist relationship between China and America? With concerns in Europe over the war and the only talk of negotiation coming from a nightmare Trump, can we at least start to think out of the box? Ukraine’s policy of last man standing is unsustainable.
Baroness Chapman of Darlington (Lab)
My Lords, I completely accept my noble friend’s right to challenge, disagree and ask questions, both in this Chamber and outside it. I am very glad that we live in a country where that is encouraged and is possible with no consequences. It is for Ukraine to decide when it wishes to negotiate and on what terms.
Lord Stirrup (CB)
My Lords, does the Minister not find the wording of this Question rather odd, referring as it does to Ukraine and “its war with Russia”, as if there were some moral equivalence between the two? Further, in any discussions that the Government have with other European countries, will they please stress that, in combat, the only real alternative to dominant firepower is to throw more bodies into the battle? Restrictions for whatever reason on the nature and scale of weaponry supplied to Ukraine will not only imperil its tactical situation but will almost certainly ensure that even more of its citizens are killed in Russia’s war of aggression.
Baroness Chapman of Darlington (Lab)
I share the noble and gallant Lord’s thoughts on the wording of the Question from my noble friend. I too noted the emphasis on Ukraine’s “war with Russia” and I disagree with that way of looking at this conflict. The UK has provided £7.6 billion-worth of support, including £3 billion for 2024-25, and we are proud to stand alongside Ukraine as it defends its territory.
Baroness Goldie (Con)
My Lords, our support for Ukraine must be unwavering, unflinching and demonstrable. The Minister has just referred to the element of support under military assistance provided by the United Kingdom to Ukraine, but will she commit to this House that the support provided to Ukraine by the Government will, at the very least, be maintained at the same levels as that provided by the previous Government?
Baroness Chapman of Darlington (Lab)
I thank the noble Baroness for her question but also for the work that she did in government on Ukraine. It is respected, and we wish to continue to support Ukraine both militarily and with non-military assistance. We have £242 million in bilateral, non-military assistance earmarked for 2024-25.
Baroness Smith of Newnham (LD)
My Lords, in her initial Answer, the Minister mentioned the Blenheim discussions, which the Government hosted. That is a very welcome forum, but will His Majesty’s Government also move forward with closer co-operation with the European Union on security and defence? That would be another way for us to work effectively with our neighbours to support Ukraine, which Members around the House, with the exception of the noble Lord asking the Question, all support.
Baroness Chapman of Darlington (Lab)
The noble Baroness is correct to highlight the need for the United Kingdom to work closely with all our allies, and we do so particularly with our European neighbours and partners.
Lord Cromwell (CB)
My Lords, a Ukrainian drone pilot told me recently that, when they shoot down a Russian drone, they take it to bits and analyse the components. They are finding components that are manufactured in countries allied to Ukraine, including this one. Is that something that the Minister feels we should investigate further?
Baroness Chapman of Darlington (Lab)
We are of course interested in all such reports, and they will be considered fully.
Lord Skidelsky (CB)
My Lords, will the Minister assure the House that, before permission is given for British-made missiles to strike targets deep in Russian territory, Parliament is given an opportunity to debate the future British policy towards Ukraine? That policy has profound implications for our national security and ought therefore to be the object of proper scrutiny and debate.
Baroness Chapman of Darlington (Lab)
The United Kingdom Government have been steadfast in their support for Ukraine. We understand that, in order to defend itself, Ukraine has needed to strike inside Russian territory on occasions—we accept and support this. It is unrealistic to think that none of those weapons or their components could have originated here. The situation as regards the limitations placed on what weaponry is given to Ukraine and what it can do with that remains consistent with the position of the previous Government.
Lord Forsyth of Drumlean (Con)
My Lords, further to the question from the noble and gallant Lord, Lord Stirrup, how can we expect the Ukrainians to fight with one hand tied behind their back? Will the Government allow them to use the weapons that we have supplied to the best of their ability to defeat this evil Putin regime?
Baroness Chapman of Darlington (Lab)
We are completely committed to supporting Ukraine to defend itself. I just point to our commitment to provide £3 billion per year every year until 2030-31, or for as long as is necessary.
Lord Anderson of Swansea (Lab)
My Lords, we should give President Zelensky the long-range weapons that he needs, but surely we cannot give him a blank cheque politically. The war has entered a phase of attrition. Surely now we must ask ourselves: to what extent is it realistic to expect Russia to have a policy where it leaves entirely both Crimea and the rest of Ukraine? Otherwise, the war of attrition and stalemate will continue indefinitely.
Baroness Chapman of Darlington (Lab)
My view, and that of the Government, is that that assessment is for President Zelensky and the Ukrainians to reach. It is their country that has been invaded and it is for them to say on what terms, if any, they wish to negotiate.
Lord Purvis of Tweed (LD)
My Lords, there are signs that the most recent American sanctions are having an impact on the Russian dark fleet, which the Minister has previously mentioned in the House. Will the Government give an assurance that, when it come to the operation of the dark fleet or shadow fleet for oil or LNG, that there are no UK links with this, either through London, through insurance or brokering, or for landing licences or any flagging? This can have an impact on Russia and we need to make sure that no parts of the UK or overseas territories are associated with it.
Baroness Chapman of Darlington (Lab)
The noble Lord is correct to raise the issue of the shadow fleet. The UK has so far sanctioned 15 ships of the Russian shadow fleet, which is enabling Russia to evade international sanctions, as the noble Lord knows. In the margins of the European Political Community summit, 44 countries and the EU signed our call to action to tackle this specific issue.
Lord Hamilton of Epsom (Con)
My Lords, following the question of my noble friend Lord Forsyth, the Government have risked the wrath of the United States by restricting sales of arms to Israel; why do they not risk the wrath of the United States by allowing Storm Shadow to be used on Russian soil in the conflict with Russia?
Baroness Chapman of Darlington (Lab)
I am afraid the noble Lord is wrong about the wrath of the United States and the characterisation he has just relayed. In fairness, some of what I have seen reported in some elements of the media is not correct and that is not the nature of the discussions that the UK has had with the United States on this issue or the other issue he raised.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, with respect to my noble friends Lord Anderson and Lord Campbell-Savours, I reassure my noble friend on the Front Bench that it is my view that the vast majority of Labour Members in this House and in the other place strongly support the Government on their unqualified support for Ukraine against the aggressor, Russia. Ukraine is fighting not just for its own territorial integrity but for all of us in democracies.
Baroness Chapman of Darlington (Lab)
I thank my noble friend for ending this Question and summing it up quite so well. I agree with every word.
Emergency Alert Service
(3 months, 2 weeks ago)
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Lord Harris of Haringey
To ask His Majesty’s Government how many alerts have been sent using the Emergency Alert service since the national test in April 2023; and when the next national test of the system will take place.
Lord Harris of Haringey (Lab)
My Lords, in begging leave to ask the Question standing in my name on the Order Paper, I refer to my interest as chair of the National Preparedness Commission.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
Since the launch of the UK Government’s emergency alert system, the capability has been deployed twice: in February in Plymouth to aid an evacuation effort following the discovery of an unexploded World War II bomb; and in April this year as part of flood mitigation in Cumbria. At present, a second national test is not scheduled; however, the Government will continue to ensure the resilience of the system through regular technical testing and consider national tests as appropriate.
Lord Harris of Haringey (Lab)
My Lords, I am grateful for that Answer. I am sure that a further national test would be useful, both because there were one or two problems identified first time round and because it would help habituate the general public to these alerts. I am pleased to hear that there have been two cases where the emergency alert system has been used in localised areas. It could, for example, have been used with benefit to inform residents of Grenfell Tower about the change in evacuation policy had it been available at that time. What progress has been made in developing local protocols to ensure that fire services, local police services and maybe local authorities and others are ready to use that system? How quickly can the Cabinet Office authorise those?
Baroness Twycross (Lab)
Our thoughts go to everyone touched by the Grenfell Tower inquiry phase 2 report yesterday into the 72 victims of the Grenfell Tower fire. I am sure all noble Lords across the House share the determination expressed by the Prime Minister yesterday that nothing like this must ever happen again. My noble friend will be aware that alerts can currently be targeted down to electoral ward level and that, therefore, in a future incident akin to the horrific events at Grenfell Tower, the emergency alerting tool could now be an important aspect of the emergency response. I reassure him and Members across the House that all local resilience forums can both request an emergency alert and receive extensive training on this capability, which has been made available through the ResilienceDirect website. The Cabinet Office has also worked with the College of Policing’s multi-agency gold incident command programme to integrate awareness of emergency alerts.
Lord Wallace of Saltaire (LD)
My Lords, when the UK Government’s resilience framework was launched two years ago, one of its three core principles, as announced, was:
“Resilience is a ‘whole of society’ endeavour, so we must be more transparent and empower everybody to make a contribution”.
Since then, there has been remarkably little publicity, let alone any attempts to engage “the whole of society” in this endeavour. Given the likelihood of flood emergencies, heat emergencies, more pandemics and terrorist emergencies, we ought to be engaged. Will the new Government attempt to engage all of us, not just local government resilience frameworks and others, in making sure that the country is informed about and ready for these sorts of emergencies?
Baroness Twycross (Lab)
As noble Lords are aware, the Chancellor of the Duchy of Lancaster will chair a dedicated Cabinet committee to oversee the Government’s review of national resilience and preparedness. As part of this, there will definitely be a focus on this whole-society and whole-system resilience and how we can improve it. It is part of the suite of measures that the previous Government were looking at. I think it could go a lot further but it was essentially the correct idea.
Lord Cromwell (CB)
Can the Minister tell the House which companies have the contract for this service? Is Fujitsu one of them?
Baroness Twycross (Lab)
Fujitsu does have a role in the development of the UK’s emergency alert system and continues to play a small role in system maintenance. The maintenance contract is scheduled for renewal in October 2025, with the commercial process beginning in the summer of next year. At the time of retender, any potential supplier would need to bid via the Government’s procurement protocols.
Lord Hogan-Howe (CB)
My Lords, I think that the noble Lord, Lord Harris, should be commended on his promotion of this system and on making sure that it has been pursued by various Governments. I was disappointed to hear the response that the system is not to be tested regularly and frequently, not least for the reason he gave, which is that people may not understand what these texts are about. There are more likely, frankly, to believe they are being defrauded than they are being provided with genuine information by the state in the middle of an emergency. Are the Government prepared to reconsider the frequency of that testing, to make sure that people are included and understand what the system is about?
Baroness Twycross (Lab)
I will feed that point back to the department, but I did not say there will not be further testing. I said that one is not scheduled currently, but the point was very well made.
Viscount Stansgate (Lab)
My Lords, I do not know whether the House is aware that there is increasing scientific interest in the effect of heat on human beings. We are living in a world that is getting hotter, and recent studies such as that produced by the Physiological Society indicate that measures will need to be taken. Will my noble friend the Minister undertake to ensure that this Cabinet sub-committee considers the question of heat resilience and whether emergency responses of the kind we have been discussing in this exchange can be applied to situations where heat is the issue, rather than some other cause?
Baroness Twycross (Lab)
My noble friend rightly highlights the danger of heat in terms of its potential impact on the public. As he and other noble Lords will be aware, the summer of 2022 saw the highest ever recorded temperature in the UK. The capability was not in use at the time, but this is an example of the type of event in which an alert would be considered. More recent summers have been somewhat milder, but this is the type of incident that would be appropriate for the use of emergency alerts.
Lord Stirrup (CB)
My Lords, does the Minister agree that one way to ensure that the systems are effective would be to have a proper national resilience command and control structure that carried out policy development, gaming, resilience and stress testing, and ensured not only that the technical systems work but that the personnel involved in them were familiar with all the challenges that would face them in the real event?
Baroness Twycross (Lab)
Some of the issues the noble and gallant Lord refers to were highlighted by the Covid inquiry module 1. The Government have committed to respond to that within six months and I anticipate that the very valid point he makes will be addressed in that response.
Lord Harris of Haringey (Lab)
My Lords, if I might come back, following on from the noble and gallant Lord’s question, can my noble friend give us some indication as to how quickly a localised emergency alert can be authorised? I understand that a whole series of processes has to be gone through, including finding the Cabinet Office duty officer, potentially in the middle of the night. I am sure they are constantly available, but the question is: can it be done in real time, quickly? Obviously, an emergency situation develops very quickly.
Baroness Twycross (Lab)
All local resilience forums can request an emergency alert. In my experience, having chaired the London Resilience Forum, the duty officers from the Government are indeed available and able to respond and carry out this type of action very quickly, as would be appropriate given the speed of some incidents that might occur.
Lord Taylor of Holbeach (Con)
I have the good fortune to have a house in France in a small village where the mayor has collected all the mobile numbers of everybody in the village and as a result I can sit here and, were I looking at my phone—of course I am not looking at my phone when I am in the Chamber—I could tell there was a heatwave in the part of France I am living in and that I should take the following remedial steps. Does the Minister agree that perhaps one way the Government could deal with this would be by asking people to join these groups locally?
Baroness Twycross (Lab)
The noble Lord makes a valid point and what he describes is a good example of community resilience and how communities can best prepare to support each other during an emergency or an incident such as a heatwave. The Government are committed to community resilience and will consider this further as part of the wholescale review of resilience that will commence, potentially later this year.
Israel: Arms Sales
(3 months, 2 weeks ago)
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Lord Bellingham
To ask His Majesty’s Government what representations they have received following their announcement to restrict certain arms sales to Israel.
The Parliamentary Under-Secretary of State, Foreign, Commonwealth and Development Office (Baroness Chapman of Darlington) (Lab)
My Lords, as was expected and as is understandable, the range of reactions to our suspension of some export licences to Israel illustrates the depth of feeling about the conflict. Our licensing criteria state that the Government will not issue export licences if there is a clear risk that they might be used to commit or facilitate serious violations of international humanitarian law. We have concluded that there is a clear risk. Our priority remains achieving a ceasefire in Gaza with hostages released, civilians protected and aid flooding in.
Lord Bellingham (Con)
My Lords, I am grateful to the Minister for that reply, but will she reflect on the fact that this announcement coincided with the cold-blooded and barbaric murder of six Israeli hostages by Hamas? What sort of message does this send to Hamas and its backers in Iran? Also, what does it say to Israel, a democratic ally, which is basically being accused by us of being a rogue state when it is defending itself against terror?
May I ask the Minister a question about licences? Out of 350, only 30 have been suspended, on the grounds of humanitarian problems and the treatment of detainees, but surely if there was a serious legal problem, they would have all been suspended. Can the Minister confirm to the House that this decision was based specifically on legal advice and not on internal Labour politics?
Baroness Chapman of Darlington (Lab)
If the noble Lord wants to talk about internal Labour Party politics, he has come to the right place. I have spent a lot of time on this topic, and I can assure him at this Box—and he must hold me to this—that this decision had nothing to do with internal Labour Party politics, and neither should it.
On the 30 licences, as the noble Lord is probably aware, there are a number of licences. Not all the items the licences are subject to could be used either in Gaza or for actions that might compromise international humanitarian law, such as food-testing kits. That is the reason why 30 specific licences have been dealt with as they have.
Lord Blunkett (Lab)
My Lords, had all the licences been suspended, the accusation from the Benches opposite would have been valid. It is because those 320 licences have not been suspended that we are assured that we are prepared and willing to help Israel defend itself against Iran or Hezbollah, or whatever external forces may be intent on destroying the State of Israel. Does my noble friend not agree that that confirms that this process has been entirely proper?
Baroness Chapman of Darlington (Lab)
This decision came at the conclusion of a process which the Foreign Secretary initiated upon his appointment, where a review was commenced. The earliest opportunity to make both Houses aware of the conclusion of that review was on the first day we returned, earlier this week, and that is the reason for the timing of the announcement.
Baroness Deech (CB)
My Lords, yesterday the House debated a new Holocaust learning centre in Westminster and much was made of the vacuous statement “never again”. Today we hear of support for arms for Ukraine. We supply them to Turkey, Saudi Arabia and other countries that kill their opponents. Why do the Government undermine protection for a state that needs them for self-defence to combat murderous terrorists whose avowed aim is to kill Jews? Has she read the American book? Everyone loves dead Jews; the living, not so much.
Baroness Chapman of Darlington (Lab)
My Lords, the UK remains and will always be committed to supporting Israel’s security and wider regional stability. The Foreign Secretary reaffirmed this with his Israeli counterparts on a recent visit to Tel Aviv on 19 August with the French Foreign Minister, and our position has not changed in this respect. We continue to support Israel’s right to defend itself and to take action against terrorism, provided it does so in accordance with international law.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, we will hear first from the noble Lord, Lord Howard, and then from the noble Lord, Lord Purvis.
Lord Howard of Lympne (Con)
I am grateful to the noble Lord. The Foreign Secretary in his Statement said that the commitment to comply with international humanitarian law is not the only criterion in making export licensing decisions, and he justified the decision to exempt the F35 equipment on other criteria. So does it not clearly follow from that the Government could, had they wished, have decided against a ban on the ground that Israel is acting in self-defence against an organisation committed to its destruction and recognised by our own Government as a terrorist organisation? In the light of that, will the Minister now accept that when she told your Lordships’ House on Tuesday that the Government were required to suspend certain export licences, what she said was both factually inaccurate and grossly misleading?
Baroness Chapman of Darlington (Lab)
No, I do not accept that. The legal test we have is that there is a clear risk, and the advice we received was that in the case of these 30 licences it could present a clear risk—not that it has done, not that there is a breach, but that there is a clear risk. This is not an embargo on sales of arms to Israel. I am fairly confident that the noble Lord will know that the case of the F35s is different. We supply components which are part of a global supply chain, and stopping those components being provided could cause very difficult disruption and there would be an impact on global security.
Lord Purvis of Tweed (LD)
My Lords, we support the Government’s moves regarding the situation in Gaza, but I hope all parts of the House have been shocked by the extreme violence of the outpost settlers in the West Bank. The outpost settlers are acting contrary to international law but also to Israeli law. Shin Bet’s director said in August that the violence was being provided to support legitimacy and praise by extreme elements of the Israeli Government. Will the Government assure the House that they are looking at potential restrictions of licences and sanctions of those parts of the Israeli Government which are actively, under the decision by the internal security service of Israel, facilitating the outpost settler violence?
Baroness Chapman of Darlington (Lab)
All I am going to say on that for today is that we recognise Israel’s need to defend itself against security threats, but we are deeply worried about the methods that have been employed and by reports of civilian casualties and the destruction of civilian infrastructure, and by the ongoing military operation in the West Bank and the attacks there. It is in no one’s interest for further conflict and instability to spread in the West Bank. The risk of instability is serious; there is a need for de-escalation and that need is urgent.
Lord Turnberg (Lab)
My Lords, I am sure that the decision to reduce arms supplies to Israel will offer great encouragement to Hezbollah, Hamas and Iran. In view of the importance of that decision, can we see the full details of the advice that the Government received which led them to this very unfortunate decision?
Baroness Chapman of Darlington (Lab)
My Lords, I encourage my noble friend to read and consider the summary published alongside the Statement on Monday. That will probably answer many of his concerns.
Baroness Goldie (Con)
My Lords, further to my noble friend Lord Howard’s question, I recall, when I was a Minister in Defence, having to look at export licence applications and requests. You had to determine what was being supplied, make a linkage to where it was going and then make a reasoned assumption as to what it might be used for. To the best of our ability, we tried to apply these tests objectively. I do not recall any reference to other criteria entering that assessment process. When did this change?
Baroness Chapman of Darlington (Lab)
The assessment process has not changed; this assessment was made on the basis of clear risk and our ability to have sight in theatre of what was being done, alongside reports about issues of aid and treatment of detainees. I believe this is consistent with the approach taken by the previous Government. We have not had sight, rightly, of the legal advice provided to them and their decisions are for them to comment on—we make no criticism of or comment on that. The decision we made was based on the advice we received.
House of Lords: Composition
(3 months, 2 weeks ago)
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Lord Strathclyde
To ask His Majesty’s Government (1) what plans they have for the removal of excepted hereditary peers from the House of Lords and (2) whether they plan to keep the House informed on any proposed changes to its composition before the publication of relevant legislation.
Lord Strathclyde (Con)
My Lords, I beg leave to ask a Question of which I have given private notice, and I declare my interest. The question is as follows: to ask His Majesty’s Government, first, what plans they have for the removal of excepted Peers from the House of Lords and, secondly, whether they plan to keep the House informed on any proposed changes to its composition before the publication of relevant legislation.
The Lord Privy Seal (Baroness Smith of Basildon) (Lab)
My Lords, I think the noble Lord’s Question referred to excepted hereditary Peers. Today, probably as we speak, the Government are introducing a Bill in the other place to deliver on our clear manifesto commitment to bring about immediate reform by removing the right of the remaining hereditary Peers to sit and vote in the House of Lords. The Bill was included in the King’s Speech, which was debated at length in your Lordships’ House. It will complete the process started a quarter of a century ago to remove hereditary Peers from Parliament. The Government are keen to maintain an ongoing dialogue with your Lordships about this legislation and our other manifesto commitments on reforming this House.
Lord Strathclyde (Con)
My Lords, I thank the noble Baroness the Leader of the House for that Answer, but is it not a bit shoddy that she was prepared to speak to the press yesterday and had to be summoned to the Dispatch Box today rather than make a Statement to the House about one of the most important issues facing this House—namely, its composition? This is a high-handed, shoddy political act, removing some of our most senior and experienced Peers, such as the Convenor of the Cross Benches, the noble Earl, Lord Kinnoull, the Deputy Leader of the Opposition, the noble Earl, Lord Howe, and many others who have held some of the most senior positions in government and commerce.
Why have the Government and the noble Baroness not sought any discussions or consultation among the parties? Twenty-five years ago, countless debates and questions took place in the House and, ultimately, we finished up with a consensual way forward agreed among the parties. Why are there no proposals to remove those Peers from the House who very rarely come, rather than those who have shown an active commitment over many years? I hope that the noble Baroness will now engage with the usual channels to find a suitable day for a debate on the Floor of the House to discuss proper reform of the House of Lords.
Baroness Smith of Basildon (Lab)
I have always admired the noble Lord’s ingenuity, and never more so than today. It is a bit of a reach to say that a Statement should have been made to this House first. This was first debated around the hereditary Peers by-elections, it was debated following the Labour Party’s manifesto commitment, and I have had numerous conversations since the election and will continue to do so. A Bill has been introduced in the other place today; it will come to your Lordships’ House and we will have our discussions in the normal way. The noble Lord says that there was agreement previously. It was because there was no agreement during the passage of that Bill that further discussions took place and temporary arrangements were made on a transitional basis to exempt some hereditary Peers from the legislation. This will complete that process. I remind the noble Lord that my comment to the press about the Bill’s introduction—made in the normal way—started by recognising the valuable contributions that many hereditary Peers have made to Parliament.
Lord Wallace of Saltaire (LD)
My Lords, I remind the House that my party is committed to further reform of this House, including the introduction of an elected element, which we first declared as party policy in 1911. I also remind the House that, during the last Parliament, a number of Conservatives—who know very well who they are—spent a great deal of time complaining that the Liberal Democrats were overrepresented in this House because of our small numbers in the Commons. It is now quite clear that one of our most immediate problems is the overrepresentation of Conservatives compared to their small numbers in the Commons. Can the Leader of the House tell us whether there have been any discussions so far about a voluntary reduction in the number of Conservatives in this House to reflect the new situation since the election?
Baroness Smith of Basildon (Lab)
I have had no approaches from the party opposite about its numbers. On the noble Lord’s point about wider Lords reform, for the last 25 years one of the arguments has been that nothing should be done until everything can be done—but no one agrees on what “everything” is. A piecemeal approach is by far the better way. The party opposite complains about Lords reform, but in the years that it was in government the only proposal it came forward with was to move the House of Lords to York.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, could the Leader of the House advise me whether this was included in the Labour Party manifesto, what the result of the general election was and what majority was achieved by the Labour Party? On a more serious note, can she confirm that, if any hereditary Peers were thought fit to be appointed as life Peers, that could be done?
Baroness Smith of Basildon (Lab)
This was part of the Labour Party manifesto at the last election. Noble Lords may recall that the passage of my noble friend Lord Grocott’s Bill to end the hereditary Peers by-elections was blocked. Perhaps 10, 15 or 20 years ago that might have been a better way forward, but that opportunity has now passed. The election result was quite clear. I can confirm that, if Members leave this House as hereditary Peers, there is no block at all to them coming back as life Peers if their party wishes to introduce them.
Lord Forsyth of Drumlean (Con)
My Lords, on the commitments in the manifesto and what the party opposite said about House of Lords reform, what has happened to the proposal to expel everyone after they reach the age of 80? Why has that been dropped from the Bill? Is not the answer that this is a naked attempt to disable opposition in this House from a Government who have a majority in the other place, although this place is the only part of Parliament which properly scrutinises legislation? The Government are undermining our ability to carry out our duties effectively.
Baroness Smith of Basildon (Lab)
Again, the noble Lord’s ingenuity is always impressive. He knows that that is not the case. He also knows that the Labour Party manifesto at the last election was the only one I have seen in recent years that praised the work of this House—we continue to do so—and recognised the valuable work that it has done. In my answer to the noble Lord, Lord Wallace, I said that one of the important things in this House is incremental reform. As I have said before—I think the noble Lord was present when this was repeated at least twice in debate on the King’s Speech—the House will be consulted on the manifesto commitments on retirement age and participation.
The manifesto also talked about immediate actions on particular issues. The other commitments of course remain, and they will come forward in due course, after discussions and dialogue across the House.
Lord Howell of Guildford (Con)
My Lords, although the Minister is very good on these matters, she does not quite seem to understand that her party is dabbling with constitutional reform. Surely she, among many others, agrees that when it comes to constitutional reform it is absolutely essential that there is agreement between all parties, otherwise we spend years and years in useless argument, getting nowhere. Does the noble Baroness not accept on this issue, as she has just learned from some of the responses she has just had, that once you touch on constitutional issues, the time has come to try to work out a common way forward—the future common ground—in a sensible, mature and adult way, and not get lost in party ding-dong?
Baroness Smith of Basildon (Lab)
The noble Lord is being a little patronising in saying that I do not understand constitutional issues. I will be happy to reach consensus, where it is possible. As the noble Lord, Lord Strathclyde, said, a quarter of a century ago there was eventually a consensus that transitional arrangements would be made for the remaining hereditary Peers.
Baroness Deech (CB)
Would the Minister use this opportunity to end another long-standing anomaly whereby the wives of Lords and Barons have the title “Lady”, which confuses them with those who have earned the title? This should end, or change so that our husbands, or the partners of women Peers, also get some sort of honorific title.
Baroness Smith of Basildon (Lab)
I think there are mixed views across the House about this issue—I have to say that Mr Smith might not appreciate having a title. It does seem an anomaly, although not one that overly concerns the House. However, I note the noble Baroness’s comments.
Baroness Symons of Vernham Dean (Lab)
My Lords, can my noble friend remind the House how many from the hereditary Peerage in this House are women?
Baroness Smith of Basildon (Lab)
I recall the Countess of Mar from some years ago, and there may have been one other Member of the House of Lords who was a female hereditary Peer. There is none currently and, as far as I am aware, none is eligible for election in the hereditary Peers by-elections.
Lord Moylan (Con)
May I return to the extraordinary decision to use the standing orders of this House in order to avoid our statutory obligations in relation to the holding of excepted Peers’ by-elections? When I raised it before, the noble Baroness the Leader of the House said that she was confident that that move did not breach the law. However, it has since been suggested to me that the legal advice she received was more ambivalent on the matter. Is she willing to publish the legal advice on which that extraordinary decision to avoid our statutory obligations was based and, in doing so, show respect for the rule of law?
Baroness Smith of Basildon (Lab)
When that decision was taken, it was entirely and completely within the rule of law. The legislation states that the House should hold by-elections. How it holds them is a matter for this House. I was approached by Members from across the House, including from Front Benches, who said that they wished that those by-elections would not take place during the passage of the Bill. Therefore, the House made the decision, under its Standing Orders, to pause the by-elections for a period of 18 months. That is entirely within the law and was done with the full agreement of this House.
Lord McNally (LD)
My Lords, one of the benefits of this House is that some of us have been around a long time. I was much involved in the decision 25 years ago. The truth was that Viscount Cranborne, now the Marquess of Salisbury, had tied the Labour Government up in knots. The decision to allow hereditary Peers to remain was a way of untying that knot, with a solemn promise that legislation would be brought forward for proper reform of the House of Lords. I am afraid that simply to abandon the deal made 25 years ago without that substantial reform of the Lords is a sham.
Baroness Smith of Basildon (Lab)
I disagree with the noble Lord on his final point, but I would expect him to make it because he is committed to an elected House. It is interesting that, when the debate was going through the House of Lords a quarter of a century ago, there was concern from a large number of hereditary Peers who were in your Lordships’ House at the time, and in order to smooth the passage of the Bill, arrangements were made that 92 hereditary Peers would remain on a hereditary basis. On that basis, Lord Cranborne was sacked from his job as Leader of the Opposition, and I think it was the noble Lord, Lord Strathclyde, who was put in his place—he was perhaps a beneficiary of that. The noble Lord, Lord Howell, made the point that constitutional reform should be made with care and consideration, and 25 years seems a fair amount of care and consideration.
Lord True (Con)
My Lords, for the avoidance of doubt I should say that I was the one who proposed that we look at the by-election matter. I have repeatedly made clear, both from that Dispatch Box as Leader and since, that I believe the best way forward for this House certainly in areas of constitutional change is by consensus, and not on the basis of divisive and partisan legislation.
There is a further and wider point. It is a courtesy and a duty to Parliament for Ministers to come to Parliament, and certainly to an affected House, to make a Statement on novel legislative matters before they are spewed out in the Guardian, the Times and other media. I do not know whether it was a decision of the noble Baroness that the pre-spin be done in this way; perhaps she was instructed by No. 10 not to make a Statement in this House. However, it was unlike her and not typical, and the misjudgment not to make a Statement in this House did not reflect her normal courtesy. I welcome some of the things that she said, so will she repeat her undertaking to enter into discussions now in the spirit of consensus? My door is open, as is, I am sure, the noble Earl’s.
Baroness Smith of Basildon (Lab)
I thank the noble Lord for his comments on hereditary Peers’ by-elections; both he and the noble Earl, Lord Kinnoull, have approached me. In terms of constructive debate, I spoke to the Cross-Bench Peers yesterday and I would welcome an invitation to speak to the Conservatives. I do not think the noble Lord can do so as a matter of course, as it is by invitation, so I would welcome an invitation too.
There was a bit of faux anger on his part about a Statement to this House. This issue was in the Labour Party manifesto. During the King’s Speech debate, it was the subject of almost the entire content of the noble Lord’s response to my comments in the constitutional debate. When a Bill is introduced into either House, it is normal for a comment to be made. I wanted to ensure that it was on the record that we welcomed and appreciated the contribution made by hereditary Peers, and that is why it is in the Statement. It is a perfectly normal way of doing things. It did not come as a surprise to the noble Lord. It has been debated in this House on many occasions and I am sure the dialogue will continue.
Arrangement of Business
(3 months, 2 weeks ago)
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Lord Kennedy of Southwark (Lab Co-op)
My Lords, when I became Government Chief Whip eight weeks ago, I was pleased to be able to announce so soon after my appointment the recess dates up until we return after the Christmas Recess in January 2025. I am now going to announce the remaining recess dates up until we return after the Summer Recess next year. This, I believe, will be helpful to Members of the House and the staff who work here. As ever, they are subject to the progress of business. There is no need to write them down; my office has made the usual notice available in the Royal Gallery, and I will shortly email a note to all noble Lords in their parliamentary inboxes.
As I have said, I have already announced the recess dates up until the end of the Christmas Recess. If business runs as expected, the rest of the planned recess dates will be as follows. We will rise for the February Recess at the end of business on Thursday 13 February and return on Monday 24 February. We will then rise for the Easter Recess at the end of Thursday 3 April and return on Tuesday 22 April. I expect the Whitsun Recess to start at the conclusion of business on Thursday 22 May, with the House returning on Monday 2 June. Finally, I anticipate that the Summer Recess will start at the end of business on Thursday 24 July, and that the House will return on Monday 1 September next year. In future I will of course give noble Lords as much notice as I can of recess dates, but I hope noble Lords will appreciate that I have gone quite far in announcing them a year in advance.
Before I sit down, I also want to highlight the time limits for today’s debates. Given the large number of speakers for both debates, the time limits are tight for individual Back-Bench contributions. The first debate, in the name of the noble Lord, Lord Carrington, is limited to one and a half hours, and Back-Bench contributions are limited to two minutes. The second debate, in the name of the noble Lord, Lord Lexden, is limited to three and a half hours, and Back-Bench contributions should be limited to four minutes.
All noble Lords should adhere to these absolute time limits. When the clock shows two minutes and four minutes respectively, their time is up. This will ensure adequate time for Opposition Front-Bench and ministerial responses. I have asked the Whips to intervene if contributions are exceeding these limits to protect the time for the Front-Bench responses. I am sure that noble Lords will be mindful of that in their speeches.
Lord True (Con)
My Lords, we are very grateful to the noble Lord for giving early notice of these matters. I assume that there will be no fixture for Millwall in the first week of September next year.
The noble Lord sent out a recent letter about misinformation. I will not repeat what we have said about lack of information and the lack of a Statement—the Hansard record on that stands—but it would be informative and helpful in terms of building consensus if the noble Lord could consider very positively an early debate on the matter of reform of the House of Lords, which might actually inform discussions in the other place.
Lord Kennedy of Southwark (Lab Co-op)
I thank the noble Lord very much for his comments and for those points. We have just had the PNQ where we discussed reform of the House of Lords. I am sure that the House has heard the Leader; we have heard the requests, and we will obviously consider those and come back to the noble Lord through the usual channels.
Home School Education Registration and Support Bill [HL]
Thursday 5th September 2024
(3 months, 2 weeks ago)
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Listed Investment Companies (Classification etc) Bill [HL]
Thursday 5th September 2024
(3 months, 2 weeks ago)
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Baroness Bowles of Berkhamsted (LD)
My Lords, I declare my interests as a non-executive director of the London Stock Exchange and an investor in funds holding listed investment companies.
Budget Responsibility Bill
Thursday 5th September 2024
(3 months, 2 weeks ago)
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Joint Committee on Consolidation etc. Bills
(3 months, 2 weeks ago)
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The Senior Deputy Speaker
Ofsted
(3 months, 2 weeks ago)
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Baroness Barran (Con)
The improvement in our schools under the last Conservative Government reflected a combination of high autonomy—we trusted our school and trust leaders to know the answers for their school and their community—and high accountability, so that the interests of children are protected and clear action is taken if a school is underperforming. That action is led by our best school trusts, and that is why our international rankings in England in reading, maths and science have all risen, while in Labour-run Wales they have sunk. It feels like these principles, which have driven success and opportunity for our children, are being eroded, and the changes being proposed to Ofsted inspections require further explanation.
I acknowledge that the Government say standards will rise as a result of the changes they are proposing, but school leaders and parents need to know how. Can the Minister explain what will actually be new on the new school report cards? There is an enormous amount of information and publicly available data on schools, and there is obviously a great deal of detail in the existing Ofsted reports. What is the gap that the Government have identified and what is the problem they are trying to solve? What evidence does the Minister have that the regional improvement teams proposed by the Government will be more effective than strong academy trusts in turning around underperforming schools? Finally, how will decisions on interventions in underperforming schools be taken between now and September 2025?
The Minister of State, Department for Education (Baroness Smith of Malvern) (Lab)
In response to the noble Baroness’s first remarks, I agree that teachers and school leaders deserve enormous congratulation on the improvements that they have made in schools, and this Government are committed to supporting them to achieve even higher standards for all our pupils.
The announcement that the Government have made alongside Ofsted is the removal of the single headline grade for Ofsted inspections, something that provided a relatively low level of information but of course had enormously high stakes for schools. In doing that, we are absolutely committed to ensuring that parents have the information they need to be able to make decisions for their children, and that schools have the information to enable them to improve. That is why we will work with schools, parents and young people themselves, and Ofsted will lead this to help to develop the report cards that will provide more useful information.
The noble Baroness was, understandably, particularly interested in the impact on intervention. To be absolutely clear, where Ofsted identifies serious concerns with a school, the current situation whereby the Secretary of State can ensure that a maintained school becomes an academy or a failing academy is forced to become part of an academy trust remains. There is no change there but where schools could benefit from improvement, the development of regional improvement teams, apart from an early structural intervention in the management of schools, gives us an additional way to promote improvement in our schools and make sure that all children, wherever they are learning, are gaining the highest standards and schools are being held to account for delivering those.
Lord Storey (LD)
My Lords, these Benches welcome the changes to Ofsted inspections and applaud the Government for the speedy way they have acted. Following the tragic suicide of Mrs Perry, noble Lords will recall that the review of what happened found that Ofsted had acted in a way that was
“defensive and complacent rather than reflective and self-critical”.
For us, school improvement is not about wielding a big stick—it is about collaboration, support and valuing schools and helping them to get better. How does the Minister see well-being and mental support of staff being provided during an inspection?
Baroness Smith of Malvern (Lab)
The noble Lord is right to outline the comments made by the coroner in the case of the tragic death of Ruth Perry and by the Education Select Committee in another place about the impact of the single headline grade in those circumstances. That is part of the reason for the Government’s decision to remove that single headline grade, while maintaining a wealth of information from the Ofsted inspection in the report card that is being developed.
I will be frank with the noble Lord. Having been on the receiving end of an Ofsted inspection both in schools and children’s social care, I think the inspections will always bring pressure on to schools and other settings, and so they should. The point is whether they are bringing pressure to good effect. During its Big Listen process, Ofsted has also had the opportunity to consider how to maintain that rigorous inspection and accountability process but to do that in a way, as the noble Lord says, that focuses on accountability and improvement but does not put undue stress on to schools and head teachers.
Baroness Blower (Lab)
My Lords, does the Minister agree that considerable good practice is available internationally on how best to inspect and evaluate schools and that there is enormous understanding within the profession about how best to improve our schools? On that basis, I congratulate my Government on making this early decision. In response to the noble Baroness opposite about what question the Government are trying to answer with this, I think they are trying to answer that question of unrealistic, unreasonable pressure on individuals in schools from that headline judgment. If it did nothing else other than prevent any other head teacher taking their own life, it would be absolutely worth doing.
Having been a teacher myself, I know that all teachers welcome engagement with those authorities which seek to assist them to improve in their practice. I am confident—and I hope the noble Baroness agrees—that a move towards a balanced scorecard, engaging the profession and looking at best practice internationally is absolutely the way to ensure that we have an increasing number of self-improving schools for all our young people.
Baroness Smith of Malvern (Lab)
I strongly agree with my noble friend, particularly on the points about how very good existing school leaders can support school improvement more widely and about learning from international experience. I know that Ofsted, in its consideration of improvement of the education inspection framework, will reflect on that, as will the Government. One reason for saying that it is a good idea to introduce the regional improvement teams in the way in which the Government are suggesting is because that enables us to build on the expertise of leaders in academies and other schools to support those schools which need to improve to be able to do so. In some cases, it will be necessary to change the management arrangements of schools but, short of that, much can be done to bring good practice to bear on those schools that need improvement, and we should make use of that capacity across the system.
Lord Deben (Con)
Does the Minister agree that sometimes too much information makes it very difficult for people to understand what the situation is? I am not particularly one way or the other about a single word, but I think it is very important for parents to see in very short terms what they can help with. I have to say to the previous questioner that I do not believe that all teachers are always happy about pressure to improve the circumstances. Can the Minister assure me that the reports will now be written in such a way that there will be a couple of lines which emphasise the things that need to be done; otherwise, I fear we will be messed up by too many words?
Baroness Smith of Malvern (Lab)
The noble Lord is absolutely right, and I suspect Members of this House understand the danger of being messed up by too many words. This is the beginning of a process, so the removal of the single headline grade still leaves four subheadings in the important areas of quality of education, behaviour, personal development, and leadership and management. The process for developing the single report card will, as he rightly argues, involve parents alongside teachers and others in determining the information they really need and how it is presented in a digestible and understandable way. I can assure the noble Lord that this will also, as will Ofsted’s broader reports, include areas where the school needs to improve so that everybody can be clear about what needs to happen and there is that maintained accountability for schools to continue improving.
Housing: Modern Methods of Construction
(3 months, 2 weeks ago)
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Lord Carrington of Fulham
That this House takes note of the role of Modern Methods of Construction in the housing construction sector.
Lord Carrington of Fulham (Con)
My Lords, it is a great pleasure to introduce this debate and to propose this Motion. As many noble Lords will be aware, my noble friend Lord Moylan won the ballot for this debate, but he has been appointed to the Opposition Front Bench and so is unable to stand where I am standing. Fear not: he is on the list of speakers so he will get his two minutes’ worth to say what really should be said by me standing where I am. He is chairman of the Built Environment Select Committee and chaired our inquiry into modern methods of construction. I had the pleasure of serving on the committee during that inquiry, which is one of the reasons he asked me to speak today.
This debate comes at a time when our country is in desperate need of more housing. The previous Government had a target of 300,000 homes per annum. As I understand it, the new Government have a target of 1.5 million homes over the term of the Parliament, which noble Lords with a ready reckoner will quickly work out is the equivalent of 300,000 per annum, possibly back-loaded. There is considerable doubt, given the demographics of our country, whether either figure—300,000 or 1.5 million—is enough. It is certainly the minimum we need, but even so it has not been achieved in recent years. We got over 200,000 recently, but it looks as though this year the figure will be nearer 150,000. There is a strong case that we need an increase of 400,000 homes a year.
The problems in achieving this target have bedevilled housing Ministers for generations: our planning system, skills shortages in the building trades, and sometimes violent local opposition to new housing. MMC, as I shall call modern methods of construction for speed, could have a role in solving at least some of those problems. With MMC homes can be built fast, or faster than using traditional methods on-site, and it would go a long way towards resolving the dire shortage of skilled construction workers, whether they are bricklayers, plumbers, electricians, roofers or carpenters.
Perhaps I ought to explain what MMC is. Those of us of a certain age will remember prefabs, which after the Second World War were used to urgently house people made homeless by the Blitz. They were factory-built homes that could be transported on the back of a lorry to parks and open spaces, where they were then connected to the services—drains, water, electricity and gas. I remember many of them in Chiswick, where I was brought up. They were much loved by the tenants who lived in them, possibly because they were placed on public open spaces and had small gardens.
MMC is a modern version of that idea. The homes, or the components that are assembled to make up a home, are factory-built and then transported to the building site, which is preprepared with services such as foundations, sewerage, water and electricity. There are seven categories of MMC, and in ascending order they require increasing amounts of assembly on-site. I propose to concentrate only on types 1 and 2. The first is when the unit or home is fully finished in the factory and needs only to be lowered on to the foundations at the site and connected to the services. Type 2 is best described as a flat-pack version of type 1—or an IKEA tribute act—where the components of the structure are stuck together on-site. The other five MMC types have some benefits but require much more work to assemble them.
The advantages of MMC over traditional building methods are essentially that less skilled work is required on the site because the building work is done in a factory-controlled environment. This has major quality-control advantages, and therefore less snagging after completion, which is the curse of the building industry. The people building the home in the factory can be trained and supervised to a much higher standard, and use can be made of modern production techniques such as 3D printing. There are of course logistical benefits: building materials can be delivered in bulk and stored at the factory to be used as required.
However, there are problems. It requires a lot of capital investment to build the factory, train the workforce, establish reliable supply chains and buy the high-tech equipment required. If the factories can attract only small numbers of orders and no long-term commitments to place more, the unit costs of the homes are high—certainly as high as building homes in the conventional way. It is a bit of a vicious circle: high prices lead to few orders, and few orders lead to even higher prices. So it is perhaps not surprising that many of the companies that entered into this market have gone bust or just packed up and gone away.
The only way of solving this problem is to guarantee the suppliers of MMC homes a sufficiently large order book. Then we might end up with a virtuous circle, of full order books leading to highly competitive unit prices, giving speed of construction and higher quality. Why has that not happened? There has been resistance from planners, resistance from insurance companies and warrantee providers, and, in many cases, resistance from the big housebuilders. Last but not least, there has been vocal opposition from local communities concerned at dozens or hundreds of identical box homes being foisted on them.
Planning consent seems to be a major problem in some parts of the country. MMC should not find it more difficult to get planning permission than traditional housing, but there may be resistance by planners to new ideas, concern about ease of maintenance or worries about design quality. Perhaps building blocks of flats in urban areas using MMC should not cause a concern to planning authorities or to local residents, but, after Grenfell, the industry will need to demonstrate that MMC is as safe as, or safer than, conventional building methods.
The image and anticipation of tower blocks made up of factory-built units, identical and slotted together, is off-putting, so quality of design is vital for getting public acceptance. Even tower blocks need to be well designed. A beautiful tower designed by a talented architect can be a delight—you have only to look at some of the commercial and residential blocks designed by Mies van der Rohe—but, equally, housing estates or new towns of identical or near-identical homes are guaranteed to raise objections and opposition, which slows the planning process and, in worst cases, can blight a whole district. Good design makes getting planning consent easier and community acceptance more likely.
Variety of design is also important. The Built Environment Committee was told that MMC could be adapted to any finish. That may well be so, but the same unit with a brick finish, or tiles or wood cladding or whatever, will still be the same unit—rather like, in the immortal words of Sarah Palin, putting lipstick on a pig. What is needed is to incorporate brilliant design, with a wide variety of styles and floor-plans, as well as finishes, that respect the traditional materials of the region, to gain acceptance by planners and local communities.
We know from experience with MMC that the problems are not going to solve themselves, but solving them could bring massive benefits, with well-built, well-designed, varied houses and flats fitting into their communities, providing much-needed homes at a smaller price than traditional building methods and delivered much faster. It is worth noting that both the Netherlands and Germany use MMC extensively and with considerable success, so these problems can be resolved.
However, the industry cannot solve the problems on its own, nor can local authorities, with the budget and planning constraints they have. It will take a concerted effort by the Government, and perhaps Homes England, to ensure that the flow of orders for these homes allows for the capital investment required in the factories. Budget constraints must not be allowed to lose design quality and variety of floor-plan and materials, all of which will push up the cost. That will guarantee failure, through both the bankruptcy of the MMC companies and rejection by the local communities.
I guess the real question of this debate is whether the new Government are committed to acting as a midwife for this industry, helping it into the brave new world of rapid, cost-effective homebuilding, with all the financial support, design encouragement and tearing up of red tape that that entails. I look forward to this debate and, in particular, to the Minister’s reply, which I am sure will lay out the Government’s policy towards MMC.
Baroness Warwick of Undercliffe (Lab)
My Lords, the housing sector is struggling. It is universally acknowledged that the country does not have enough affordable homes. This Government have committed to solve the housing crisis for good, but how best to do that where previous Governments have failed? The shortage of labour supply means that traditional building methods cannot deliver housing targets, and traditional private builders have shown that they cannot meet the need.
There is a consensus that MMC must be a major part of the solution, but delivering MMC has been challenging. Some companies have gone bust. Against a backdrop of insolvencies across the construction sector, the perception of MMC has suffered disproportionately. There has been a lack of clear strategy surrounding MMC. A long-term housing plan could provide the certainty to invest in MMC and deliver the Government’s ambitious housing targets.
Social housing must clearly play a central role. Housing associations are planning to build, via MMC, about 10% of the new build currently forecast by the regulator. With the right mix of low-cost incentives and support, that proportion could double.
The recent National Housing Federation survey found supplier insolvency to be the biggest risk to uptake. The Government underwriting risk contracts would have an immediate effect on MMC delivery.
The House of Lords Built Environment Committee’s inquiry into MMC urged the Government to step back and set achievable goals and develop a coherent strategy. The noble Lord, Lord Carrington, gave a thorough and fair picture of what we found. The previous Government committed to a £10 million-backed MMC task force, but it never met. Will the Minister commit the new Government to a central body dedicated to research, training and promotion that will allow MMC to flourish. Will the newly established New Towns Taskforce embed MMC in its delivery plans? At the next spending review, will my noble friend press for a long-term plan for new and existing social homes, including specific policy steps to increase the use of MMC in the social housing sector?
Baroness Brinton (LD)
My Lords, I declare my interests as a vice-president of the LGA and vice-chair of the All-Party Group on Fire Safety and Rescue. I congratulate the noble Lord, Lord Carrington, via the noble Lord, Lord Moylan, on securing this important debate and on his excellent speech. I note that MMC are already used successfully in student and hotel accommodation in this country.
I shall focus on two things, the first of which is fire safety. Yesterday, the Grenfell inquiry final report was published. From these Benches, our hearts go out to those who lost family members and friends and, of course, their homes and everything in them. Fire safety standards must be at the heart of modern building methods. As importantly, the recommendations of both the Grenfell inquiry and the Hackitt report should be implemented, so that maintaining and adapting all buildings is always done in the context of fire safety.
Secondly, all new homes from now on should be built to M4(2), or lifetime, standards. This is not just about disabled people, although we certainly need to be able to live in and visit homes, whether owned or rented, that meet our needs. Shockingly, well over 90% of homes do not. I am talking about the homes we need to have as we get older. Habinteg Housing Association’s research shows that M4(2) significantly reduces the cost of care assistance, because people can manage for much longer in their own homes with level access, grab rails, wet rooms et cetera. But there is a further benefit too: staying in your own home, which is what people really want to do, delays the need for expensive residential care. There are typical savings of over £20,000 for basic home care services in unadapted homes, and considerably more in residential care. Lifetime standards would save substantial public money in the NHS, and in welfare too. The extra cost for building is well under 10% yet the quality of life and lifetime savings to individuals and the state make it an obvious thing to do.
Lord Mair (CB)
My Lords, I declare my interests as a civil engineer, both in practice and as an academic, at Cambridge University, and as a consultant to Laing O’Rourke, the company that pioneered MMC in the construction industry. I am currently a member of the House’s Select Committee on the Built Environment; I was not a member when that committee, chaired by the noble Lord, Lord Moylan, undertook its short inquiry on MMC for housing, culminating in its excellent letter to the Government.
However, I was a member of the Select Committee on Science and Technology, which in 2018 undertook an inquiry highly relevant to today’s debate, its report being entitled Off-Site Manufacture for Construction: Building for Change. That report concluded that off-site manufacture, synonymous with MMC,
“provides clear and tangible benefits which make a compelling case for its widespread use”.
Recognising these benefits, in the Autumn Budget of 2017 the Government announced a “presumption in favour” of off-site manufacture for five specific government departments: transport, health and social care, education, the MoJ and the MoD. Significantly, that presumption in favour was not stated as applying to MHCLG. For infrastructure generally, there have been many success stories: high-rise buildings, hospitals and schools are increasingly being built with MMC, demonstrating excellent design, significantly faster and higher-quality construction, and less waste.
The Science and Technology Committee heard that a significant barrier to MMC for house construction at scale was the need for longer lead times: the housebuilder has to commit to a production schedule well in advance of actual unit sales, risking that market conditions might deteriorate. This and other barriers could be overcome if there were a substantial guaranteed pipeline of MMC housing across the country—the point made by the noble Lord, Lord Carrington of Fulham. My question for the Minister is therefore this: should not MHCLG—and Homes England—confirm its wholehearted support and announce forthwith a presumption in favour of MMC, as five other government departments have done?
Lord Rooker (Lab)
My Lords, I support modern construction methods. In February 2003, Lord Prescott published a seminal document, Sustainable Communities: Building for the Future. Ministers would be well advised to look at this, rather than trying to reinvent the wheel. We then in ODPM promoted off-site construction and committed to encouraging the private sector to invest in factories and new techniques.
In an Oral Question I asked on 8 June 2023, I made the point that you cannot switch factories on and off, and a stable demand is a prerequisite. What stops a big uplift? Both off-site and onsite require new skills and techniques; they are not separate.
I once visited a factory in Birmingham and three weeks later visited a site in Stratford-upon-Avon to see the construction of what I had seen in a factory. It was made clear to me that techniques on both the site and the factory are linked. The Government need to ensure that the new skills are developed, and they need to create demand. Perhaps a density directive, which Lord Prescott used, to stop wasting land could help.
My final point concerns the Building Research Establishment. Lord Prescott and I visited it in its early years of being a Tory privatised body to see examples of modern methods. I had visited one in opposition, when it was government-owned. Given the Grenfell report, the BRE should no be longer be involved in certifying modern methods of off-site construction techniques or products. Such work should be seen to be fully independent and professional.
Lord Banner (Con)
My Lords, I declare my interest as a King’s Counsel practising in planning law. I have many clients in the housebuilding and construction sector. I am also chair of the advisory group at the property developer SAV.
There is widespread recognition that MMC have a range of important benefits, including, in particular, faster and greener construction of the new homes this country desperately needs. It is therefore both curious and regrettable that this widespread recognition has not yet translated into widespread uptake. I draw attention to the role that the planning system could play in stimulating the critical mass of pipeline and demand necessary for the MMC market to flourish.
By that I do not mean greater planning regulation; there is arguably enough of that already. Instead, I encourage the Government to look to how the planning regime has encouraged greater uptake of custom and self-build housing in recent years, through a combination of legislative targets for local authorities to deliver specific levels of custom and self-build housing; a favourable planning policy climate for that kind of housing; and relief from the community infrastructure levy and VAT for those who develop them. Those measures are generally judged to have been successful in stimulating greater uptake of custom and self-build housing over the past decade. A similar package could help do the same for MMC.
There are also good reasons for inferring that variations between local authority development plans in relation to the standards required of new housing development are having a repressive effect on MMC, the business model of which requires greater consistency. National standards, for example, through national development management policies, may be a solution to this. Such ideas would need to be worked and consulted on thoroughly. The committee’s letter has flagged that there are significant gaps in the understanding of the MMC market, meaning that rushed solutions risk unintended consequences. But there is, in my view, undoubtedly a case to answer for the planning system playing a role, and I encourage the Government to consider it.
Lord Thomas of Gresford (LD)
My Lords, I have personal experience of building and owning two houses of non-traditional construction. One was built in 2006 of larch, pine and oak with a green roof, solar panels, hemp insulation of the external walls and an internal wall forming a heat sink built of granite recovered from the burnt-out cottage it replaced. Large south-facing windows maximise solar gain and ground-source heating is carried under the floor.
Labour costs were saved by assembling large sections, built to size by expert workmen in comfortable factory conditions. Although the noble Lord, Lord Carrington, referred to the difficulty in obtaining a warranty and insurance as a barrier to the uptake of MMC, I had no problem in that regard. As Peers for the Planet pointed out in its briefing for this debate, a fireproofed wood construction brings a 25% reduction in embodied carbon emissions.
The other house, built in 2016, is a Passivhaus—the gold standard of energy-efficient construction—and there were no difficulties with a warranty or insurance. The block-built walls have an external thick layer of high-density expanded polystyrene coated with render. It looks like a traditional house, and blended without objection into a highly prized conservation area. The insulation is under the floor as well as in the walls and roof. The windows and doors are triple-glazed and there is active filtered ventilation. South-facing large windows and smaller windows facing north result in a warm house with no need for heating of any sort for eight months of the year. The solar panels take care of the hot water. The lesson, as the noble Lord, Lord Carrington, pointed out, is that modern design and innovation is everything, and the sooner the planners and builders get the message, the better.
Baroness Twycross (Lab)
My Lords, the speaking time in this debate is two minutes. I apologise for being hard on this, but it is important that we allow everybody the opportunity to speak without cutting short the Minister’s response.
Lord Best (CB)
My Lords, as a member of the Built Environment Committee under the able chairmanship of the noble Lord, Lord Moylan, which investigated this matter, I thank the noble Lord, Lord Carrington of Fulham, for introducing this debate so helpfully. Deploying modern methods of construction is obviously the way forward, yet the industry has recently been characterised by a succession of business failures and even bankruptcies. Can we still expect the modern methods of construction sector to fulfil its clear potential?
I suggest three prerequisites for success. First, the MMC industry needs a more certain and consistent pipeline of orders. The important stipulation of Homes England and the GLA that a proportion of the affordable homes they fund must be built using MMC techniques needs to be refined to provide greater certainty for the manufacturers. Will the Government’s agencies be more specific as to the appropriate categories of MMC—and, indeed, the systems that have the lowest embedded carbon emissions, such as prefabricated timber frame construction?
Secondly, to comply with the new future homes standard, developers and social landlords will be propelled into using prefabricated homes, because of the greater precision achieved in factory settings. Will the Government be firm in ensuring enforcement of the new standards that will inevitably mean more use of MMC? Thirdly, will the new Skills England give priority to workforce skills for MMC in its much-needed reforms of apprenticeships and training for the construction industry?
With attention to these issues, modern methods of construction can indeed make possible the quantity and quality of new homes this country desperately needs.
Baroness Wilcox of Newport (Lab)
My Lords, the Government have promised 1.5 million new homes for England over the next five years, which will see the biggest increase in social and affordable housebuilding in a generation.
When leader of Newport City Council, I held meetings with many MMC companies to examine how we could determine a solution for the acute social housing shortage we faced in the city. Last year the council secured Welsh Government phase 2 homelessness grant funding to increase the supply of affordable social housing, and a development of 12 new ultra-low-carbon high-quality homes on an underused council-owned car park was opened using MMC.
Linc Cymru, Newport City Council and ZEDpods developed a unique low-energy, low-carbon affordable housing scheme for the area. His Royal Highness the Prince of Wales visited the housing development in Hill Street, Newport. It was in support of Homewards, a new five-year project from the Royal Foundation of The Prince and Princess of Wales. I am pleased to inform the House that Newport is one of the six flagship locations across the UK working in partnership with Homewards to tackle homelessness and make it rare, brief, and unrepeated.
His Royal Highness said:
“In a modern and progressive society, everyone should have a safe and secure home, be treated with dignity and given the support they need”.
We now have a real opportunity to develop housebuilding at pace, supported by a Government in Westminster who fully believe in a modern and progressive society and will serve the needs of the people across the UK by fixing the foundations for a better future.
Baroness Eaton (Con)
My Lords, I thank my noble friend Lord Carrington for his insightful introduction to the debate, and declare my interest as a vice-president of the Local Government Association. The previous Government rightly identified MMC as a potential game-changer in addressing our housing needs. As their 2021 commitment to the MMC Taskforce highlighted, there was recognition that MMC could significantly improve the quality, energy efficiency and speed of housing delivery, while reducing waste and addressing the skills shortage within the sector. MMC offers numerous benefits, as we know.
However, while the recognition was there, the execution fell short. The Government’s approach to MMC was marred by a lack of co-ordination and coherent strategy. As highlighted by the House of Lords Built Environment Committee, of which I am a member, public funds were invested, but without a clear plan, measurable objectives or sufficient understanding of the challenges faced by the industry. This disjointed approach led to missed opportunities and the financial collapse of several MMC firms—firms that could have played a pivotal role in addressing our housing needs. The committee’s findings reveal a troubling picture of an industry that has not been given the support or clarity it needs to succeed, particularly in securing insurance, warranties and the necessary regulatory approvals.
Thus far, we have heard little about the detail from the Government, and I hope that the Minister, when she responds, will tell us clearly just how they will address all the particular difficulties with MMC.
Baroness Wheatcroft (CB)
My Lords, I thank the noble Lord, Lord Carrington, for his introduction to the debate, and the Committee on the Built Environment for its hard work on this important issue. Clearly, MMC is the way ahead for building, and it has been for a long time. Given the climate in this country, apart from anything else, getting as much done as possible under the cover of a factory makes sense. But, as we have heard today, there are many obstacles to making this the way in which so much building should be done.
The noble Lord, Lord Best, outlined three areas where the Government could move quite quickly to make a difference. I would add another area, and that is public confidence. There was always a potential problem over the image of prefabricated housing, but gradually that has changed. Not everybody had quite the romantic view of the noble Lord, Lord Carrington, but now prefab houses—HUF HAUS, in particular—have become much sought after. Now the biggest problem will be public confidence in modern methods of building, which will be at an all-time low after the publication of the latest Grenfell inquiry report.
I second the noble Lord, Lord Rooker, in looking for a replacement for the Building Research Establishment. The Grenfell report dismissed the BRE as
“marred by unprofessional conduct, inadequate practices, a lack of effective oversight, poor reporting and a lack of scientific rigour”.
Who is going to feel comfortable being asked to buy, or live in, a property that has been overseen by such an organisation? Can the Minister assure us today that the Building Research Establishment will no longer have a role in establishing what materials are safe and what properties are okay for people to live in?
Baroness Uddin (Non-Afl)
My Lords, I thank the noble Lord, Lord Carrington, for the details that he alluded to. I begin with my thoughts and prayers to all who perished in Grenfell Tower and I pay respect to their loved ones. Grenfell is the context of continuous neglect in social housing provision. With two major fires only last week, we may not be learning the lessons quickly enough, with thousands of family homes remaining unsafe. If we utilise MMC, it must be using material tested to the highest safety standards. Since the 1980s, thousands of homes have been built in Canary Wharf and elsewhere without proper consideration of family needs, so a national housing plan is essential. If MMC meets industry standards, we should utilise it while mandating the strictest regime for the safety and well-being of family homes.
We can look at some of the challenges. Models exist in Japan, Sweden, the Netherlands and China using MMC building cost effectively with energy-efficient homes. Housing is not a building or buildings. It is homes for families across the generations. How will the Government use a national planning framework to secure the highest-quality MMC standards if we are to use it continuously for the well-being of a cohesive community?
Baroness Miller of Chilthorne Domer (LD)
My Lords, I am very pleased to have joined your Lordships’ Built Environment Committee, but I was not a member for this report.
The noble Lord, Lord Mair, has reminded us that this is not the first report that your Lordships’ House has done into MMC, and spelled out what the 2018 report from the Science and Technology Committee concluded. There was also a 2019 report from the other place on modern methods of construction. It seems very strange that the Government did not take up any of the lessons of either of these reports. I am sure that this Government will do better.
The noble Baroness, Lady Wheatcroft, referred to one of the big problems—confidence—and I agree with her. This was absolutely underlined by the Competition and Markets Authority, which did a market study into the housebuilding sector, concluding in February 2024. On MMC, it concluded that there is a
“lingering negative stigma amongst consumers, builders, investors, and insurers”.
What will the Government do to overcome this lingering negative stigma? Without overcoming it, MMC will always be dragged down by it.
Lord Horam (Con)
My Lords, we all know that we have a serious housing problem in this country. Any serious attempt to increase supply should include modern methods of construction. They do get over the problem of a shortage of traditional skills. They do save time. They improve precision and quality, and they improve productivity. As the noble Baroness, Lady Warwick, said, they are already used extensively in Germany and the Netherlands. As the noble Baroness, Lady Brinton, said, they are used in this country in student accommodation.
I was therefore extremely disappointed to find that in the list of measures on housing in the Labour Party manifesto—a commendably long list of measures on the supply side—there was no mention of modern methods of construction. It ought to look at this again, particularly because its avowed intention is to get the private sector and the government sector working together. That is what it should do, particularly in this area.
Lord Griffiths of Burry Port (Lab)
My Lords, the noble Lord, Lord Horam, has just made precisely the points that I wanted to make. The time has come for these discordant experiences, this diffuse energy, to be pulled together. The Government must surely accept the role of ringmaster—or whatever other metaphor you want to use—pulling all this together, achieving a foreseeable path forward. I know nothing about building but I do know about homes, and it is urgent and of vital necessity that we crack this one and soon.
I am hoping to hear the Minister say what the noble Lord, Lord Horam, said was not in the manifesto, namely that as part of the solution that has to be worked out, an energetic and investing commitment to the MMC aspect of a housebuilding scheme is part of the thinking of the present Government. On the present evidence, I am hoping to hear it in order to resolve a disappointment. The noble Baroness, Lady Kennedy of The Shaws, the noble Lord, Lord Robertson of Port Ellen, and I have been working with John McAslan + Partners on a very ambitious scheme from the private sector that would provide a real, focused attempt across the country to use, among other ways, these traditional methods. We submitted a lavish document and, more than a month later, have not even had a reply of acknowledgement. Those little things that are lacking need to be made good and a positive way forward, led by the Government, needs to ensue.
Lord Fuller (Con)
My Lords, I have been talking to a number of builders and they all say the same thing: “When we build a home, standard build is cheaper, while meeting the complexity that often comes with awkward and constrained sites”. Steel frames, precast floors and other off-site techniques can speed certain aspects. Pre-manufacture always has a role in high-rise situations, where space is constrained on inner-city sites. MMC is best introduced in institutional settings such as hotels and care homes, where identikit standardisation has value. But when all is said and done, they tell me that MMC is more expensive. Let us not kid ourselves that it is cheaper; it is not.
We must not ignore cost. To meet our national targets, we need to recognise that layering ever more well-meaning but expensive burdens on building, such as CIL, GIRAMS, SANGS, nutrient neutrality, BNG, water neutrality, MVHR and EV—all worthy things in themselves—has cumulatively added £40,000 to the cost of a new family home, before we even start to consider the proposed 50% affordable housing targets on grey belt that will push housing costs even further out of reach. We must have limits on cost.
We will make rapid progress if we prevent the mortgage, warranty and insurance companies discriminating against modern rather than traditional builds. We must make it easier for smaller, family firms to finance perhaps a dozen homes a year using materials sourced locally, and we must roll back the regulatory creep from self-serving national agencies such as Natural England, not councils, that layer ever more onerous, overlapping regulations and undermine the equality of the three levels of sustainability—economy, environment and society—in pursuance of their own judicial activism.
These are the basics to focus on before we spend disproportionate attention on the shiny MMC thing, which diverts focus from getting Britain building.
Lord Teverson (LD)
My Lords, MMC can make a big difference in energy efficiency and embodied carbon in buildings. I will give a quick bit of history for 15 seconds. The previous Labour Government, and indeed the coalition Government, had targets for net-zero buildings for homes for 2016. That legislation was about to be enacted when the Government changed and George Osborne, as Chancellor of the Exchequer, stopped that process. In the meantime, we have had 1.5 million homes built below that standard that need not have been and will have to be retrofitted. That was a national disgrace and probably one of the largest bits of environmental vandalism that we have had in recent years.
The Labour manifesto says two things around this. On page 56, on fuel poverty and net zero, its “Warm homes plan”, which I hugely welcome, says:
“The energy shock of recent years has highlighted the urgent importance of improving energy efficiency in British homes”.
Page 38, on housebuilding, says:
“Labour wants exemplary development to be the norm not the exception. We will take steps to ensure we are building more high-quality, well-designed, and sustainable homes and creating places that increase climate resilience”.
I welcome that and all the aspiration behind it. We have for next year the future homes standard that has been mentioned, but that is not a net-zero commitment in terms of housebuilding. Will that aspiration be improved to return us to what we should have been doing in 2016?
Lord Birt (CB)
My Lords, we have paid a very heavy price indeed as a country for the combination of the 2008 economic shock, the pandemic and the monumental distraction of Brexit. Thus preoccupied, we have failed to grip many areas of national policy, but housing has been our most grievous and pernicious failure. We now need a holistic framework, an action plan covering every aspect of housing policy, involving all relevant departments.
First and foremost, we need once again to make a substantial investment in social housing, publicly procured. We obviously need a new building standards framework, inter alia embracing 360-degree insulation as well as fire safety. We need to embrace modern construction methods: as in other industries, modularisation and off-site construction has to be more efficient and cost effective. In 2015, China built a 57-storey skyscraper in 19 days. In under 20 years, embracing streamlined processes, China has built 45,000 kilometres of high-speed rail. A modern methods of construction taskforce was announced in the 2021 Budget; can the Minister confirm that it has never met?
We need a national plan to build homes where they are needed, with social and other infrastructure as part of the plan, but there are some don’ts. We must not in any way sacrifice the UK’s precious areas of natural beauty—and please let there be no more featureless box-houses, a hallmark of the most recent past and devoid of any aesthetic. Let us act quickly but with care.
Lord Jamieson (Con)
My Lords, I thank the committee for its report and my noble friend Lord Carrington for his introduction. I also declare my interest as set out in the register as a councillor and, previously, a member of the previous Government’s London housing task force.
As with so many issues in the development and housing market, the key is providing confidence to investors, suppliers and prospective workforce that there is a long-term market. Currently, everyone in the housing market lacks certainty, most particularly that they will be able to access land upon which to build. This is exacerbated by the ever-changing regulatory and planning environment. It is no wonder that companies seek to maximise value in the short term and are unwilling to invest in technology and training when they have no long-term visibility.
MMC has significant potential, particularly in our cities, but adoption has been limited to date and tends to focus on the limited area of timber-frame open-panel houses. To really move forward, an investor in MMC will need to be confident that there is a market, which means they are no longer hamstrung by a lack of sites and the delays and unpredictability of the planning system.
It is not that this nor the previous Government do not recognise the need for site availability. However, it is crucial that the detail of government planning proposals delivers sufficient viable sites and gives the industry confidence this will continue. I ask the Minister: how will they ensure that mandatory targets are delivered, particularly in urban areas that have previously delivered so little?
Viscount Hanworth (Lab)
My Lords, the recently elected Labour Government have proposed that there should be mandatory targets for housebuilding that local authorities must adhere to. The ambition is for 1.5 million houses to be built in the current Parliament, with annual targets of 370,000 units.
This target, which far exceeds recent levels of housebuilding, is comparable to what was achieved in the early post-war years. A large proportion of those houses were council houses, and they were subject to direct procurement, financed by local authorities. They were built mainly by small local building firms, which typically employed their labour on a permanent basis. Nowadays, a few large firms build most of the residential accommodation. They hire their labour on a temporary basis. However, the supply of such skilled labour has shrunk drastically. Moreover, the big firms do not undertake to train their workforce.
It has been widely proposed that, in order to accomplish a revolution in housebuilding and to meet the targets, it will be necessary for builders to adopt modern methods of construction. These will involve a substantial proportion of off-site construction in factories with assembly lines. Contemporary methods of housebuilding are slow and wasteful of materials. They also make inordinate demands on a scarce labour force. It is doubtful whether, if such methods were used preponderantly, any of the targets could be met.
The houses that are so urgently needed must be subject mainly to direct public procurements. Much of the new housing stock would therefore remain in public ownership, albeit that the right of the occupants to buy their houses should be preserved. It was an ideological aversion to public ownership that inspired the Thatcher Governments to promote the right to buy, while preventing councils from investing the proceeds from the sales in replacement buildings. This has been a major factor in creating the current housing crisis.
Lord Moylan (Con)
My Lords, I thank my noble friend Lord Carrington of Fulham for introducing this debate, especially when I had to withdraw due to a change of circumstances. It was a privilege for me to chair the short inquiry into modern methods of construction, undertaken by the Built Environment Select Committee. I add a word of thanks, although time precludes me from naming them all, to the clerks and the team that supported that inquiry when we undertook it.
Ten years ago, modern methods of construction were the future, particularly the top level of MMC, which is modular construction, where a whole unit—a whole home—can be built off-site, more or less, and be delivered to the site. However, in the last couple of years, most of the firms engaged in that activity have either withdrawn from the market or closed. The purpose of our inquiry was to try to find out why.
Time precludes me from explaining at great length why that is, but we certainly found disarray at the heart of government. The policy was good, but the implementation was almost totally absent. Reference has been made to the committee that never met. I also refer to the strange attitude of Homes England, which claimed that it had a strategy in the shape of the five Ss—five words that all began with S—but when we asked for the document that underlaid the strategy, it was not able to produce it. I hope that the new Government will look very carefully at that.
What is the role of government in this? It is very important for the Government to have a regulatory role that unblocks some of the things identified by my noble friend when he introduced the debate. I would be very cautious on one matter: I agree with the noble Lord, Lord Rooker, that you cannot switch a factory on and off. Many of these firms are demanding a pipeline but, as he said, every factory needs a pipeline. Why is it that the Government should supply the pipeline in this case, rather than encouraging these firms to go out and find and create their own market?
Baroness Thornhill (LD)
My Lords, I say at the outset that I am really grateful that, yesterday, the Government Whips’ Office gave the winders some extra time, but I feel that two minutes for a speech is not making use of the expertise in this Chamber. That said, all the two-minute contributions have been insightful and informative and have, amazingly, captured all the issues around modern methods of construction—and the debate has definitely bounced along. What is striking is that there is a consensus that there is a role for modern construction and agreement about the challenges and barriers to MMC but plenty of suggestions for improvement, which I hope the Minister will take back to her department.
I, too, was a member of the Built Environment Select Committee, which carried out the inquiry, ably chaired by the noble Lord, Lord Moylan, whose contribution it is a pleasure to follow today. It was a wide-ranging, if frustrating, inquiry, as the noble Lord, Lord Carrington, accurately outlined.
It was not that the Government were not putting money into tackling the problem—our usual complaint—but that they had done so in an undirected and haphazard way without a coherent strategy and measurable outcomes, although I am certain that the noble Baroness, Lady Scott, will put up a spirited and informed defence of the previous Government’s advances in modular build, and I genuinely look forward to her contribution.
I turn to the consensus that we have a housing crisis and that modular build could and should be a way to build more homes, more quickly and, more importantly, to the future homes standard. It will add diversity to provision, which is at present monopolised by the big builders.
The number one issue for the industry is the supply chain, which was mentioned by several noble Lords. There are clearly real issues of business survival when you have inconsistent and insufficient demand for your product, unpredictable delays and workforce challenges. In this climate, we have unfortunately had recent experiences of companies going out of business or struggling to continue in business. I really have only one question for the Minister: what is going to change and what plans do the Government have? Will they consider incentivising builders to use MMC by offering tax breaks, reducing VAT on modular homes, or giving tax credits to companies that invest in modular construction? We hear excellent mood music from the Deputy Prime Minister about a revolution in social housing. Will the Government consider setting targets for the construction of modular homes within public housing projects? Will the Government actively use their own land as part of a deal to create more public/private partnerships to build more modular homes and encourage and incentivise councils to do likewise?
The regulatory framework mentioned by the noble Lord, Lord Banner, and others is designed with traditional construction methods in mind, making it more difficult for MMC builders to navigate the approvals process. The regulatory maze can deter builders from opting for modular approaches, even when they might wish to use them. This applies particularly to SME builders. Could the Government consider a fast-track approval process for modular housing developments to encourage quicker construction? Creating a streamlined process aided by national policies specifically for modular homes, as mentioned by a noble Lord—I apologise for forgetting his name—would encourage plans to come forward, reduce delays and overcome the bureaucratic hurdles that are currently faced.
As we heard in the contributions by my noble friends Lord Teverson and Lady Brinton, we feel that the Government should use the future homes standard to ensure that modular-built homes are built to high environmental and safety standards and provide for more lifetime M4(2) homes. In that regard, we disagree with the remarks of the noble Lord, Lord Fuller, about building to a lower quality.
There is some disagreement about the overall costs of MMC build versus traditional build but from the perspective of housing associations, which was touched on by the noble Baroness, Lady Warwick of Undercliffe, the upfront costs are more expensive than traditional build. The upfront costs are more pertinent to housing associations than the lifetime costs as they are under considerable financial pressure now and, regrettably, environmental standards are often reduced to keep costs down. Additionally, as more accessible homes take a larger floor plan you get fewer homes for your money, a realistic dilemma that targeted grants could help to solve.
As the noble Lords, Lord Rooker and Lord Best, pointed out, there is a skills shortage in construction in general and in MMC specifically. The skill sets and technological challenges are different. The Government should encourage more investment in research and development in MMC technologies to improve efficiency, reduce costs and enhance design options. There are still too many stories of poor construction and construction failure. As we know, this does not need to be the case; we can only envy my noble friend Lord Thomas’s tenants. The risk aversion of warranty and insurance providers plus the reluctance of lenders to provide mortgages on homes built by MMC are further barriers. These issues need unpacking and only the Government can do that and offer strong clear guidance about what will be expected in future.
Finally, to make this shift needs radical change, and the current system is not being sufficiently incentivised to change. We have a risk-averse culture and are cautious in trying new methods. Therefore, the Government have a real role in being the driving force for change. I do not think we can wait for demands from clients and homeowners because for me the other significant barrier, mentioned by the noble Baroness, Lady Wheatcroft, and my noble friend Lady Miller, is public perception and the stigma left over from the prefabricated homes of the past. I remember visiting my Auntie Marion’s prefab in Tenby, south Wales. She lived in it happily until she was forcibly evicted. These two things—cautiousness and public stigma—act as barricades to change.
It seems from the debate that MMC is part of the housing crisis solution, but nobody is dewy-eyed about this. It is certainly not a silver bullet. It could contribute significantly but it needs political will and leadership to create a whole-market approach to ensure that consumers, manufacturers and lenders are all aligned in their aim of embracing MMC to create sufficient demand in the market to grow the approach. Without this alignment and subsequent demand there is no clear catalyst to drive the change needed. Will the Government provide that catalyst and be the ringmaster? If the answer is yes, how and when?
Baroness Scott of Bybrook (Con)
My Lords, the final report of the Grenfell inquiry was published yesterday. With the leave of the House, I take this opportunity to send my condolences again, and my thoughts and prayers, to a very brave and courageous community in London.
I thank my noble friend Lord Carrington of Fulham for bringing this Motion to the House, and my noble friend Lord Moylan for his chairmanship of the committee and for chairing this short inquiry. On every side of this Chamber, we know that more homes are desperately needed across the country and that it is crucial that we deliver the right homes in the right places. Ministers should consider carefully whether modern methods of construction have a greater role to play in delivering the homes we need. The Opposition want the Government to deliver enough homes to enable the next generation to get on to the housing ladder, and we will hold Ministers’ feet to the fire on the pledges they made in their manifesto at the last election.
In approaching this debate, it is important to note that we have made significant progress on housing delivery in recent years. Successive Conservative Governments have delivered 2.5 million more homes since 2010 while respecting local communities and ensuring that those homes were built in the right place. We hope that the Government will build on our success and continue to respect local people while prioritising developments on brownfield sites, as we did in government.
At the last election, the Labour Party made a solemn pledge to the British people that it would deliver 1.5 million homes over this Parliament. In doing so, it has set itself a target that people across the country are relying on. We need more homes, and Ministers need a clear plan to deliver them. We on the Opposition Benches will be watching the Government very closely, as they watched us, and pressing for the right homes in the right places, as we delivered in government.
The Labour Party manifesto focuses almost entirely on planning reform to deliver more homes, but industry experts are clear that the challenges we face go well beyond the question of planning law. One crucial challenge is labour supply. The Construction Industry Training Board states in its report Focusing on the Skills Construction Needs that the sector
“needs to recruit the equivalent of 251,000 extra workers over the next five years”,
based on existing predictions. That number is likely to rise if the Government are serious about hitting their targets.
The simple fact is that, if we want to build more homes, we will need hundreds of thousands more construction workers. Even as the party that helped 4 million more people into work since 2010, it is clear to those of us on the Opposition Benches that the supply of labour in the construction sector will be a challenge for the Government. This is where Ministers should perhaps take note of the arguments from the noble Lord, Lord Carrington, today.
In the face of labour supply challenges, modern methods of construction, which encompass a range of techniques, including off-site fabrication and the use of on-site robots in the construction process, could have an important role to play in housing delivery. Homes England has concluded that modern methods of construction are capable of driving greater efficiency and productivity, which the Built Environment Committee noted in its letter to the department.
One stark example of the impact that modern methods of construction can have is the delivery of the Grange University Hospital, in south Wales. The £350 million hospital building project was completed four months ahead of schedule—which is unusual—with parts of the hospital completed a year ahead of the projected completion date, in large part thanks to the use of modern methods of construction.
Modern methods of construction could have a bright future and an important role in housing delivery, but, as the Built Environment Committee has referenced, the sector has seen a number of businesses fail in recent years. This may be a result of those businesses not benefitting from the necessary economies of scale that other large housebuilders benefit from. Ministers should look at this closely to see whether the Government can support the sector so that it can play a full role in driving efficiency and boosting the delivery of more homes.
I have a number of questions for the Minister, which I hope can be addressed in her speech, though I am happy for her to write if not. What assessment have the Government made of the role that modern methods of construction might play in speeding up the delivery of the homes that we need? Do the Government anticipate hitting their housebuilding targets early if modern methods of construction are harnessed effectively? Will the Government consider actively supporting the modern methods of construction sector as part of their housebuilding programme? What other steps will the Government be taking to overcome the labour supply challenges faced by the construction sector? Do Ministers anticipate labour supply becoming more of a problem in the light of their new housebuilding targets?
The modern methods of construction sector is interesting and it is growing. Ministers should watch the sector closely, so that innovations can be harnessed to the benefit of the British people.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
My Lords, I am pleased to respond for the Government on this important issue. I am conscious that the debate takes place following the publication yesterday of the report on Grenfell. Our huge sympathy is with the relatives and friends of the 72 people who lost their lives in that incident, and with the brave communities that have waited seven years for that report. We will consider the issues of safety that relate to this topic very carefully, and we will learn all the lessons of the Grenfell report as we go through the further development of MMC.
I thank the noble Lord, Lord Carrington, for leading the debate, and the noble Lord, Lord Moylan, and his committee for the work they did in the inquiry into the role of modern methods of construction, which concluded earlier this year. It was a very thorough inquiry, and I am grateful for the work that was done.
I should declare an interest, having used MMC for a Housing First homeless project in my borough when I was leader of the council, and for a further affordable housing project with a housing association. Both of these were very successful, very quick, and delivered on time and to budget.
I am grateful to all noble Lords for their contributions to today’s debate. I recognise the expertise in the House—that is quite nerve-wracking for a Minister, but I am grateful for it, nevertheless. I will try to respond to the points that have been raised. I have been variously described as a ringmaster and a midwife in this debate, so I will do my best to fulfil those roles.
I start with the role of MMC in meeting housing supply, an issue rightly raised by a number of noble Lords, including the noble Lords, Lord Fuller, Lord Banner, Lord Carrington and Lord Best, and the noble Baroness, Lady Wheatcroft. As noble Lords will be aware, this Government were elected on a decisive mandate of change and national renewal, with an overriding mission to deliver economic growth and the higher living standards, good jobs, stronger public services and greater opportunities that go with that, for all parts of our country.
Getting Britain building again and tackling the housing crisis we inherited will be critical to achieving our ambition of building 1.5 million homes over the course of the next Parliament—a target referred to in the opening speech of the noble Lord, Lord Carrington, by the committee chaired by the noble Lord, Lord Moylan, and by the noble Baroness, Lady Warwick of Undercliffe. We agree with the noble Lord that modern methods of construction have an important role to play in this endeavour.
Innovation has revolutionised so many sectors and transformed the way we live, with incredible gains in productivity and living standards, yet much of the housebuilding industry continues to build in the same way it has for hundreds of years. Of course traditional build has, and will continue to have, its place. The noble Lord, Lord Carrington, referred to the historic use of prefabs, way back when, and mentioned Chiswick, where my grandmother lived, so I remember that well. The noble Viscount, Lord Hanworth, also referred to this. The noble Baronesses, Lady Wheatcroft and Lady Bowles, and others, referred to the public perception of this issue, which is vital to our consideration.
The serious challenges we face, not least in meeting our net-zero goals, demand that we take a much more ambitious and innovative approach, which is why I believe it is time to realise the great potential of modern methods of construction. That relates to the point of the noble Lord, Lord Mair, about being committed and having the commitment to drive this forward.
I am delighted to see a number of MMC firms succeeding, such as Vision Modular building Europe’s largest residential modular tower in Croydon, or a number of manufacturers delivering affordable modular homes on challenging brownfield sites. The noble Baroness, Lady Scott, referred to Grange University Hospital being built with these techniques.
The benefits MMC brings are truly impressive. It can help to deliver high-quality greener homes more quickly than traditional methods, which is good news for boosting supply and for the environment. I agree with noble Lords’ comments about the importance of good design and a variety of design, all of which are possible with MMC. It is therefore no surprise that an increasing number of housebuilders are already using off-site construction methods. Last night, I met with one who was talking to me about their innovation in this area.
MMC can help to create new well-paid jobs, attracting a wider pool of talent than traditional construction work. I recognise the challenges in the skills area, but this can attract a new cohort of talent, meaning that housing delivery is no longer held back by housing challenges. The noble Lord, Lord Best, referred to the involvement of Skills England. The noble Baronesses, Lady Thornhill and Lady Scott, and the noble Lord, Lord Carrington, all referred to skills, and I assure them that colleagues in MHCLG take that issue incredibly seriously.
MMC offers a broad range of technologies and approaches and, while much of the committee’s work focused on the category 1 market, we welcome the housebuilding sector’s increasing adoption of category 2 MMC, such as timber frame and panelised systems. Timber frame is already used in over 90% of new homes in Scotland, and a growing number of developers—such as Barratt, Vistry and Persimmon—are investing in and expanding their factories. That is in addition to both long-standing and emerging category 2 suppliers, such as British Offsite and Donaldson, investing in their manufacturing facilities to provide greater capacity and productivity. So there are reasons to be very optimistic about the future of MMC and what it could contribute to our housing and growth options.
That said, it has also undoubtedly been a challenging period for the low-rise modular market, with a number of high-profile exits over the last two years, as referred to by the noble Baronesses, Lady Warwick and Lady Eaton, and the noble Lords, Lord Carrington and Lord Moylan. This was not entirely unexpected: all innovative sectors experience failures as they develop and refine their business models, and the traditional construction sector has also been hit by a few failures over the same period.
What has happened in the MMC sector illustrates some of the key challenges of wider MMC adoption, many of which the committee considered. First and importantly, it illustrates the need for a steady pipeline of demand, which many noble Lords referred to, including the noble Lords, Lord Rooker, Lord Mair and Lord Jamieson. Large-scale MMC manufacturers will require that steady pipeline of demand, which is currently hampered by a lack of certainty in the planning system and the cyclical housing market.
The noble Lord, Lord Moylan, and the committee were also right to reflect on the significant role of warranty and insurance providers, and other noble Lords referred to the finance sector. There needs to be clarity for manufacturers and developers on requirements to ensure that they can deliver high-quality homes without stifling innovation. The closures over the past two years have demonstrated the supply chain risk that manufacturer-specific systems create, should those firms exit the market, leaving purchasers unable to complete their homes. So we need to tackle the interoperability to help restore market confidence, and we must ensure that manufacturers have access to finance to ensure that viable firms can invest and grow in the market, as referred to by the noble Lords, Lord Carrington and Lord Griffiths.
Tackling these barriers will be challenging, and it will be for both developers and government to help drive the wider adoption of MMC. The noble Lord, Lord Carrington, referred to full order books, which is what they are looking for, and we need to build the confidence to create that. But many in the sector are not letting this stand in their way, and they are blazing a trail to making MMC more mainstream. We want to accelerate that journey, and we have lost no time in getting that work going, starting with significant steps to reintroduce mandatory planning targets and release grey-belt land for development, thereby driving demand across the country and giving developers and MMC manufacturers the certainty and stability they need to invest confidently and increase their capacity.
The sector is already stepping up, with a very public commitment from 43 housebuilders to utilise, and expand their use of, MMC in response to the planning reforms we set out in July. The committee highlighted the role that the affordable homes programme plays in providing a pipeline of demand for MMC manufacturers, while also improving awareness among social housing providers. I appreciate the key point of the noble Baroness, Lady Brinton, about specialist housing provision—I will take that back.
We have clearly heard this message from manufacturers. The current £12.5 billion AHP is being implemented, and we will set out details of future investment in social and affordable housing at the spending review. Our aim is to deliver the biggest increase in social and affordable housing for a generation, and we truly believe that MMC will very much contribute to this.
The department is working with the British Standards Institution and the sector to deliver a new publicly available specification for MMC. This will bring greater clarity on the important issue of warranty and insurance providers, hopefully without squashing innovation in the sector. We are considering further options for greater standardisation, not only reducing the supply chain risk for customers but supporting suppliers to yield greater benefits from the manufacturing process, as well as protecting innovation and intellectual property. In addition, financial support is available to MMC manufacturers wanting to grow and expand through the £1.5 billion levelling-up home building fund. This is just the start; we recognise that there is a lot more to do, and we will set out further details in due course.
Our approach will be informed by support for different construction methods, in recognition of the fact that we need a diverse number of approaches to deliver on our housing targets. Not all parts of the sector will require the same types of support, and we must make sure that we do not focus simply on picking winners. This is about removing the sector-wide barriers to adoption, so that we have an MMC market that can deliver the decent homes and strong communities we all want to see. We will continue to engage with key stakeholders to develop the right approach for the sector, and I look forward to sharing more details about that in due course.
I will pick up some of the individual issues that noble Lords have raised. The publishing of an MMC strategy and the task force was raised by a number of noble Lords—the noble Baronesses, Lady Eaton and Lady Warwick, and the noble Lords, Lord Mair and Lord Birt, talked about this, as well as cross-government work on the issue. The Government are committed to delivering 1.5 million homes, and we view the adoption of MMC as key to that. We are reflecting on the committee’s recommendations and views from across the sector to establish how best to increase the use of MMC in housebuilding as part of the wider housing strategy.
Noble Lords talked about the comparative cost of MMC, including the noble Baroness, Lady Thornhill, and the noble Lords, Lord Fuller and Lord Carrington. Some stakeholders report that MMC has a higher upfront cost than traditional build, although others note that it is achieving cost parity or better. We anticipate that this will change as MMC demand and capacity continues to increase—it is a virtuous cycle. It is important to consider the whole-life cost of a building and the wider benefits that MMC can bring to a project.
I have already spoken about the affordable housing programme, and I hope that answered Members’ questions about how we will engage our own funding to drive this market forward.
On supporting supply, we are working to establish how best to address the strategic barriers to further uptake of MMC, including improved supply chain confidence, clarity for the warranty and insurance markets, and planning reform. The noble Lord, Lord Banner, raised an important point about custom-build and self-build, which I will take back to the department and let him have a written answer on that.
Before I run out of time, I want to address the issue of safety, because I recognise the concerns there will be following the Grenfell report. Many noble Lords referred to this issue. The Government take very seriously their responsibilities for ensuring that homes are safe for people. Building under factory conditions has the potential to improve consistency of finishes and details, but the level of quality achieved in both on-site and off-site construction depends on what is designed, specified and constructed. Building regulations—and this is really important—apply equally to homes built using MMC as to those built using traditional methods. Buildings must meet the safety and performance requirements in the building regulations, no matter how they are constructed or what materials are used. MMC developers and manufacturers are responsible for ensuring compliance with the regulations for any construction project, including ensuring that new techniques are used correctly.
The noble Lord, Lord Rooker, and the noble Baroness, Lady Wheatcroft, raised issues around the BRE, and I shall reply to those points in writing.
We share the sector’s ambition, and the ambition that we have heard today, for it to grow and succeed and play its part in getting Britain building, delivering the jobs, growth and opportunities that our country needs and deserves. We are hugely thankful to the sector for its support in getting us this far, for the continued efforts to realise its potential and for the exciting gains to come.
Lord Carrington of Fulham (Con)
My Lords, I am very grateful to everybody who has participated in this debate. It has been an extremely useful debate. I particularly commend the response of the noble Baroness, Lady Taylor, which answered most of our points and showed clearly that this is not a party-political issue; it is one on which there is consensus on both sides of the House. We all wish this industry to develop well. The points made in the debate highlighted the challenges that everybody involved in providing homes in this country will face to meet the demand that is there already.
I was deeply impressed by the quality of this debate and of the contributions to it. It is very sad that everybody except me and the Front-Bench speakers were limited to two minutes. The quality of the debate that we got in two minutes would, I believe, have gone up exponentially if we had had five or even 10 minutes for contributions.
With that, I thank everybody. It has been a good debate, and one that has taken forward the cause of revolutionising housebuilding in this country.
Vaginal Mesh Implants: Compensation
(3 months, 2 weeks ago)
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Baroness Cumberlege
To ask His Majesty’s Government what progress they have made in ensuring that those who have suffered complications following vaginal mesh implants receive financial compensation.
Baroness Cumberlege (Con)
My Lords, I am grateful to all noble Lords who have decided to speak in this short debate. I thank them for taking part and look forward to their contributions, as well as to the Minister’s reply. This is a subject that I feel very passionate about, and I welcome any support that your Lordships choose to give.
I was delighted to read that 140 mesh-harmed patients have received some redress, for it is long overdue. However, there are thousands of others harmed by mesh, still suffering, who are not included in the settlement. It is not just about mesh. In our report First Do No Harm, we recommended that those harmed by vaginal mesh, but also by the use of sodium valproate and by Primodos, should also receive redress.
It took me and my team two and half years to travel the country and gather the evidence, in the course of which we heard so many terrible stories of women who had been avoidably harmed. I have shared many of these stories with noble Lords during previous debates. Our report was published in July 2020, and I am sorry to say that I am still receiving emails today from women who are suffering so dreadfully, some of whom have now been diagnosed with post-traumatic stress disorder and are not being offered the support that they need. I have listened to women who have had to borrow money to have failed mesh implants removed privately and are now in considerable debt. Women who were prescribed sodium valproate and Primodos have children, many now adults, who will never be able to live independent lives after being exposed to the harm done by these drugs. These mothers bear great sadness from mis-prescribing. However, I am delighted to see that the current data indicates that there is almost no prescribing of sodium valproate during pregnancy. I hope that this means an end to ongoing harm, but there are so many who have been harmed and still need our help.
It is important to recognise that there was a failure on the part of the NHS to stop doctors prescribing sodium valproate immediately that the risks were known. I believe that the NHS must bear some of the responsibility for this. The same goes for those who were given Primodos.
The Hughes report, published in February 2024, had 10 recommendations, the first being that the Government had a responsibility to create an ex-gratia redress scheme. I believe that scheme needs to be put in place now, with interim payments being made as soon as possible. I was delighted to see how quickly the system was able to respond to the Infected Blood Inquiry. I therefore fail to see why these avoidably harmed people should be made to wait any longer.
Can the Minister say whether the Government have reflected on the role of the manufacturers of these medical interventions? The Government should shoulder the responsibility for redress and then pursue the manufacturers for their share of these catastrophes. I am pleased to see that the subject of redress is on the agenda of the noble Baroness, Lady Merron, and that she met the Patient Safety Commissioner at the beginning of August.
I am determined that all those affected by mesh, and the many others whose lives have been shattered by the effects of sodium valproate and Primodos, should receive the redress that they so richly deserve. These people have suffered enough; surely we should not be forcing them down such an adversarial route as taking action against the manufacturers when the damage done is so clear. The great majority of women cannot afford to bring lawsuits against the mighty drug companies; too many of them fail, and this was not their fault. They are not being offered the support they need.
Baroness Sugg (Con)
My Lords, I am grateful to my noble friend Lady Cumberlege for her significant work on highlighting the issues around vaginal mesh implants that have impacted at least 10,000 women, probably many more, and for her continued efforts to make some progress, in particular in tabling this Question for Short Debate. The evidence that your Lordships will have seen of women reporting severe complications from mesh implants, including chronic pain, infections, organ perforation and, in some cases, permanent disability, underlines how crucial it was that her work led to the pause on the use of vaginally inserted surgical mesh in 2018.
As my noble friend has set out, establishing a compensation scheme for women affected was recommended by her independent review First Do No Harm in 2020 and that was echoed by the Patient Safety Commissioner, Dr Henrietta Hughes, in her report in February this year. It has been a long-running concern and all the while many women are continuing to suffer the consequences of this treatment. I welcome the positive steps that were made by the previous Government, including the appointment of a Patient Safety Commissioner, but there remain many issues that, sadly, they were not able to resolve. I know that the Minister, as Minister for Patient Safety, Women’s Health and Mental Health, must have an overflowing in-tray, but I look forward to her response today in the hope that we will hear clear plans for progress.
As we heard, following a group claim, the financial settlement in August from three manufacturers of mesh implants was welcome news, but there is a clear argument that more needs to be done. Compensation is a tangible way to acknowledge the suffering of women and provide the support that they need to continue to live their lives. While that case in August was a success, and some women have pursued legal action individually, these cases have often been long, costly and emotionally draining. Many women do not have the financial resources or the legal knowledge to take on large medical corporations or hospitals.
In my research I was pleased to see that information on compensation was readily available on the NHS website, but it is clear that the existing approach is inconsistent and fragmented. Hundreds of women were prevented from making a claim due to the strict 10-year time limit that is in force from the date that the product was manufactured. I hope that the Government will consider looking at that. A national government-backed compensation fund would ensure a uniform and fair approach to dealing with claims, ensuring that all affected women have a fair chance of receiving the financial redress that they deserve without being forced into these lengthy legal battles.
I appreciate the complexities and the expense here and, of course, the importance of spending limited resources on improving health services. There are options for how compensation can be delivered and how it can be funded, and I know that other noble Lords will address that. Of course, financial compensation should go hand in hand with strengthening the regulation of medical devices and improving patient safety.
I pay tribute to the campaigners who have worked so hard to highlight this treatment over the years—the individuals, the women’s health organisations, and in particular the campaign group Sling The Mesh. I know that this work can be frustrating, exhausting and often thankless, but thanks to them, this issue, which can sometimes be seen as taboo, has been highlighted. We have seen some progress and will continue to push for more and I hope that they realise the difference that they are making.
In addition to the compensation scheme, Sling The Mesh is calling for a number of actions, from raising awareness of implant risk to tougher approval systems, regulations and oversight to protect public safety. In her response, I hope the Minister will also find time to comment on its calls for better databases to track the long-term harm of medical devices, which would help spot trends of harm, and for a sunshine payment Bill to improve transparency in the UK health sector by ensuring that the pharmaceutical and medical device industries declare all the money given to doctors, researchers, lobby groups, health charities, surgeon societies and teaching hospitals. That is not to stop that money being invested, just to be clear and transparent about what is happening.
I support my noble friend Lady Cumberlege’s call for action on implementing the recommendations in her First Do No Harm report and the more recent Hughes report. I look forward to the Minister’s response.
Baroness Berridge (Con)
My Lords, I too thank the noble Baroness for securing this debate and the panel for its review and tenacious follow-up of remaining recommendations, particularly recommendations 3 and 4 on financial compensation.
I am a member of your Lordships’ Select Committee on the Inquiries Act. With recent reports from statutory public inquiries on Grenfell and Covid-19, non-statutory inquiries such as this can be overlooked. While Grenfell and Covid-19 clearly needed the statutory model, it often comes with unhelpful TV images of banks of lawyers, looking like a courtroom. I do not want to pre-empt the publication of our report in the next few weeks, but it seems that both the noble Baroness and Bishop James Jones, who led the non-statutory Hillsborough review, managed to obtain the trust of victims’ groups, which is essential to that model. Along with my noble friend Lady Sugg, I too applaud those groups who were maturely able to see the advantages and merit of the non-statutory process and, I hope, found it less arduous than the courtroom-type hearings.
A number of recent inquiries—into the Post Office, Grenfell and infected blood—have led to the establishment of compensation schemes. Given the systemic failures outlined so clearly in this review and the avoidable harm caused, I would be grateful if the Minister could outline fully what distinguishes this request from those of the other schemes, if His Majesty’s Government’s position has changed since 4 July. Now that His Majesty’s Government are overseeing a number of these schemes, I hope there is co-ordination over the levels of compensation given, for instance over the costs of care in the home, so that there are comparable tariffs across the schemes. But the request for a redress agency, and the three separate schemes in advance of this, sits in a landscape of similar medical schemes—on variant CJD, vaccine damage and thalidomide, to name just a few. Why are these three schemes not just as worthy as those other medical schemes? I hope the Minister can justify this distinction.
In relation to vaginal mesh, will His Majesty’s Government not have had to consider how to justify on objective, reasonable grounds a decision that looks, prima facie, like indirect discrimination against women? I suspect that, more tellingly, the reason will be to do with the costs. As the review outlines, in other countries big pharmaceutical companies and the suppliers of devices contribute. Will the Minister undertake to meet these companies and ask them to bring a full assessment of the costs to them of litigation, both successful and unsuccessful? Could she also prepare a full assessment of the cost to the public purse of leaving this just to litigation?
By a full assessment I mean, inter alia, the legal costs and compensation paid out by NHS trusts in successful claims, the costs not recovered from the other side even in successful cases, the often unrecoverable lost time of medical staff having to attend court and prepare witness statements, and the costs of court time and of class actions being brought against the Secretary of State. Even if the HPT class action has been discontinued, what was the civil servant time, ministerial time, and Government Legal Department time involved in the case—and the cost to the public purse of debates and Questions in Parliament, including the private office time preparing the Minister and sitting in the Box? Could the companies and public purse assessments be compared to the costs of running a scheme similar to those I have outlined?
There are also non-financial costs borne by the victims and society. The awful testimonies of the debilitating effects of surgery are harrowing—I am so grateful that my loved ones have always had amazing NHS care. But perhaps there are women struggling with their disabilities who think, “If I had a bit extra to buy some help, I could get back to work, maybe just part-time”, or women who are managing their lives and thinking, “I could do some work, but now I have to take on litigation. That is really the final straw”.
The country needs as many people as possible in the workforce. Can the noble Baroness request any relevant information that the DWP holds in relation to these women? For instance, how many are in that situation? Would the noble Baroness be content for women who might be listening today to write to her to outline such situations—and, of course, add the civil servant cost of replying to that correspondence to the full assessment I outlined above?
Baroness Bennett of Manor Castle (GP)
My Lords, I join what I am sure will be a chorus of praise for the noble Baroness, Lady Cumberlege, both for securing this debate and for her brilliant work over many years on these issues, particularly that of vaginal mesh. I started working with the noble Baroness during the passage of the Medicines and Medical Devices Act. If we think back, many of the things the noble Baroness was pushing for have since been achieved. However, today we are addressing some of the things that still desperately need to be dealt with.
One of the noble Baroness’s achievements was the appointment of a Patient Safety Commissioner. Dr Henrietta Hughes is doing a brilliant job and, as has already been referred to, brought out a report in February urging that the compensation schemes for both sodium valproate and vaginal mesh be brought in as soon as possible. I will just do a little bit of advertising for Dr Hughes. She still has a consultation open on the principles of better patient safety and there is one more day for a chance to respond to that, if anyone would like to do so. It is such important work that it deserves to be highlighted.
I want to put this in the broader context of where we are now. We seem to be hearing weekly about a cascade of official and government failures: the Grenfell Tower tragedy, the Horizon scandal, the infected blood disaster and the Hillsborough tragedy. Obviously, we have a new Government and they do not bear direct responsibility for any of those circumstances, but it presents them with an enormous challenge: the challenge to respond sensitively, appropriately and at sufficient speed to do everything possible to ameliorate the circumstances of the victims.
These cases also throw up the challenge of acknowledging that the talk about “cutting red tape” that we have been hearing for so many years is a deeply dangerous approach. We need rules, regulations and controls to keep us safe. As the noble Baroness, Lady Sugg, drew attention to, we need to keep under control what those who make profits are doing to increase them.
We also need to listen to the people who are adversely affected when things start to go wrong. The reality is that so often—we know this is particularly the case with female patients—for years and years people said, “There’s a problem here”, and officialdom said, “No, nothing to see here; it’s all fine”, sometimes even saying that it was all in their head. The Government really need to stamp on that tendency.
I understand that it is early days for the new Government, but I have noticed—this is not directed at the Minister in particular, but at the Government more generally—that when I put down Written Questions and get the Answers, I seem to get essentially the same Answers as I got a few months ago under the previous Government. I urge Ministers, both individually and collectively, to please be curious and challenging. If an Answer was given six or 12 months, or two years, ago, ask if it is still the right one, if indeed it was the right one in the first place.
I have some specific points. A number of people referred to the recent settlement in the court case against the manufacturers. One of the issues that raised was the fact that hundreds of women were unable to make a claim due to a strict 10-year time limit from the date that the product was manufactured. Are the Government planning to do something about that?
I join the noble Baroness, Lady Sugg, in paying great tribute to Sling The Mesh and other similar campaigners. Is the Minister ensuring that her door is open not only to that group but to many other campaigning groups? It would be great to hear that that is the case.
A further point is that Dr Hughes recommended at least an interim payment scheme for vaginal mesh and sodium valproate. The question everyone is asking is, when are we going to hear about that?
The Independent reports that June Dunne, a 64 year-old, has been waiting for corrective surgery since 2019. What are the waiting lists now like?
Finally, the official government figures say that there are 127,000 mesh implants. The campaigners say there may have been many more. Are the Government looking into making sure that they have the proper records of all people affected?
Lord Mancroft (Con)
My Lords, I join other noble Lords in congratulating my noble friend Lady Cumberlege on securing this short debate on this important and increasingly troubling subject. I also want to take this opportunity to recognise the extraordinary work my noble friend has done, first in making her report and secondly, for following it up in so many ways.
One of the features of this terrible saga that has horrified me most is the way in which the health service has responded. Too many women, in seeking help, have been met not with sympathy and care but with indifference, denial, defensiveness and arrogance from those whom they believed would help them.
This is not my area of expertise, but I have been drawn into it by the experience of someone very close to my family who has suffered intolerably, has been treated appallingly when she should have been helped and has had to fight to have her health issues addressed. Following a referral in November 2014, she underwent an operation to insert mesh in December 2016. Subsequently, the mesh from her bowel travelled from her rectum to her fallopian tubes and ovaries. She has had countless infections and suffered ongoing severe discomfort and pain.
She has been pushed from pillar to post and seen four different specialists in four different hospitals. One urologist at the Royal United Hospital in Bath declined to examine her physically, as apparently, he could see simply by looking at her that she was fine. He categorically said that she did not have bad mesh. Had he taken the trouble to undertake even a cursory examination, he would have found that the mesh had perforated her vaginal wall, but he did not bother. She subsequently had to endure four operations to remove the mesh, ending with a stoma, which has recently been reversed.
Her current consultant has described hers as one of the worst cases of mesh damage she has ever seen. As far back as March 2021, this woman received a letter from the medical director of the North Bristol NHS Trust, in which he described her care and went on to write:
“I am very sorry to tell you these factors suggest the LVMR”,
the operation she underwent,
“was not clinically indicated at the time of the surgery in December 2016. … Undergoing an operation that may not have been required … is considered harmful”.
He went on to say:
“I sincerely apologise on behalf of the North Bristol NHS Trust that your surgery was not clinically indicated. This is unacceptable and we are taking this situation extremely seriously”.
Apart from the physical pain and suffering, there are practical consequences to consider. She was a fit, active, extremely competent and positive woman with a full family life and a thriving career at the top of her profession. Her condition was so debilitating that she was forced to give up her job. She lost her career and has been unable to work since 2016. The financial consequences are that she has lost her home, her savings, and now lives on disability benefits. She therefore has no credit rating, which means that the landlords she relies upon regard her as an undesirable tenant. She is unlikely ever again to have a partner or a personal relationship. That, I am sure your Lordships will agree, is a pretty horrific list of life-changing consequences.
As the trust conceded in its letter in March 2021, three years ago,
“This is unacceptable and we are taking this situation extremely seriously”.
I do not know exactly what “taking this situation extremely seriously” means, but after a period of legal wrangling, this woman has been offered compensation of £25,000, less costs of £2,500. That is compensation for pain, suffering, five operations over eight years, loss of home and career and substantial and catastrophic financial loss, leading to a life on benefits. No reasonable person could possibly conclude that this is adequate redress.
We spent the summer in this House debating the compensation to be paid to the victims of the infected blood scandal, and we are all familiar with the appalling injustices of the Post Office scandal and the levels of compensation those victims are rightly due to receive. The Government said they had no plans to set up a compensation scheme for the victims of mesh implants, but in light of the damage that has been caused to what could be as many as 25,000 women—it may be fewer, it may be more; we are going to hear from the Minister—and with the examples of the infected blood scandal and the Post Office scandal, I hope the Minister will tell us that the Government will revisit the decision not to set up a compensation scheme and will be able to tell us today how they plan to compensate these women, and within what timeframe.
Baroness Wyld (Con)
My Lords, in preparing for this debate, I went back to First Do No Harm, the original report from my noble friend Lady Cumberlege. I had read it before and I pushed the previous Government to up the pace on the appointment of the Patient Safety Commissioner because that dragged, but we got there in the end. I found the report’s contents no less shocking than they had been on the first reading. If anything, I found the testimonies of those living with harm from mesh even more upsetting this time, because these women and their families have been in limbo. I give my strong support to the call for redress from my noble friend Lady Cumberlege, and pay tribute to her work and that of the excellent Patient Safety Commissioner, Henrietta Hughes.
This was systemic failure, and we have heard a pattern of women not being listened to when they go for help, of being dismissed. Someone who gave evidence to the Hughes report said:
“I am a woman of a certain age, I’m slightly overweight, I’m a mum, not working, so I’m not given credibility”.
Let us remember exactly what happened. First Do No Harm describes women reporting excruciating chronic pain that feels like razors inside their body, damage to organs, the loss of mobility and sex life, and depression and suicidal thoughts. The report found:
“Some clinicians’ reactions ranged from ‘it’s all in your head’ to ‘these are women’s issues’ or ‘it’s that time of life’”.
Despite all this—or because of it—First Do No Harm sets out the burden of guilt felt by many women affected by mesh; risks they did not know about at the time they consented to their procedures; procedures they did not always need to have, given the degree of their incontinence or prolapse condition. As the report so sensitively said to the women at the time,
“it was not your fault”.
We should say that over and again to all the women who bravely came forward and exposed this scandal and had to talk about their most intimate and painful experiences. We should thank them.
There are three main things I want the Minister to comment on today. I would like her to set out, as others have said, the timetable for a response to the redress recommendations. I have witnessed her excellent command of her brief in opposition and now as a Minister—I will get told off for being too nice—and I have no doubt that she will put patients at the heart of her own work. Naturally, there has been some light-hearted banter in her first few weeks about timelines, and I am sure we have all been guilty of being creative with seasons and deciding when autumn might start and end, but in this context none of us can fall into that trap. It is perfectly correct for the new ministerial team to take the time properly to review this, but it is my job to push on behalf of the victims. I will not play politics, but I will push the Minister in that spirit. I have read the redress report in full, and while it acknowledges a range of complexities, it also has a range of very well-developed options, so I hope she will be able to set out a timetable.
I also want to talk about future services. The previous Government are to be commended for progress on the specialist vaginal mesh centres, but the Minister will want to focus on continuous improvement and will note that satisfaction levels are not consistent. Can she comment on what steps she will take to ensure that patient experience is captured? More widely, will she ensure that she pushes for the highest standards of maternity care for women, which, specifically relevant to this issue, must include postnatal pelvic floor rehabilitation? My noble friend’s report recommended the French model and access to specialist pelvic floor physiotherapy as soon as required. These are not niche healthcare issues; they go to the heart of how we as a society allow women to be treated at one of the most major events in their lives.
Lastly, I would like the Minister’s reflections on the experience of so many women being dismissed and not listened to. One quote in particular stuck with me:
“They would tell you there is nothing wrong with you and that you are just a hysterical woman”.
I was not surprised by that and many similar comments. Like many millions of women up and down the country, I have had excellent care in the NHS, but these testimonies reminded me powerfully of my own experience of injury as a result of childbirth. Luckily for me, it was nowhere near the scale of those suffered by these women—I would not pretend it was—and I recovered, but I was told that I could not be in any pain when I had never felt any pain like it. I was a fit and healthy young woman but I asked my husband if he could speak to someone and explain that I really was in pain because I thought they might listen to a man. I am sorry to resort to anecdote, but one hears this over and again.
I have run out of time, but I push the Minister to respond on these issues.
Baroness Brinton (LD)
My Lords, I thank the noble Baroness, Lady Cumberlege, for securing this debate and for her unstinting commitment to ensuring that victims of vaginal mesh, sodium valproate, Primodos and other medical problems and scandals continue to have their voices heard. Her report for the last Government, First Do No Harm, published five years ago now, was extraordinary and impossible to ignore, and those of its recommendations that have been implemented have started to change the way that support for patient victims is delivered. I hope—and I will come back to this later—that it is also starting the change in culture that we need to see inside the NHS. We all love our NHS and sometimes it can be hard to admit that some of the senior doctors within it are not the best people to support patients and ensure that patients feel they are getting the right help they need when things go wrong.
I am particularly pleased about the role of the Patient Safety Commissioner, which I remember us debating in 2020. Dr Henrietta Hughes is making a brilliant start, and I thank the noble Baroness, Lady Bennett, for the comments that she made about that. However, I repeat a question I asked when the post was first set up: is the office of the Patient Safety Commissioner getting enough resources to do the job that she so clearly has to? I have no doubt that she is a very able woman but I am concerned about the volume that her office is dealing with.
I pay tribute to the victims of not just vaginal mesh but sodium valproate and Primodos, who have continued to tell their stories. We know that repeatedly telling your story is painful too, but we need to hear them. I thank the noble Baronesses, Lady Sugg and Lady Wyld, and the noble Lord, Lord Mancroft, who told his friend’s personal story, all of whom reminded us of how dreadful the position is. While the difference between these problems and the infected blood scandal is that we are not seeing fatalities, we underestimate the long-term life changes that all these victims have faced, some of them the children of those who were fed medicines during pregnancy, not one of them at fault at all in any way.
There is one voice that we have not heard: that of the NHS whistleblowers. I shall mention one person of whom I had not been aware until there was an article about her in the British Medical Journal earlier this year. Sohier Elneil is a urogynaecological surgeon and an expert in women’s pain. She is the founder of the first NHS vaginal mesh removal centre and a tireless champion of supporting the victims and sorting out the problems. I was shocked to read that, after she started talking about this issue in 2005, she was excluded from events by doctors, then personally attacked and reported to the General Medical Council multiple times, mainly by fellow consultants—those who were the biggest implanters of mesh. She said:
“I was very upset. It felt like a war. They were saying I was removing mesh and harming patients unnecessarily”.
Professor Elneil continued with her campaign, and I have to say that her story did not stop there. She also uncovered some of the doctors being encouraged with financial incentives from the providers of vaginal mesh. It is good that both Henrietta Hughes’ report and that of the noble Baroness, Lady Cumberlege, said that things needed to become transparent. The last Government refused to allow those records to go on to the register at the GMC but they should be on that register, not kept elsewhere, because if a member of the public wants to find something out, the GMC will be the first place they go. Can the Minister say whether that will happen?
Others have already talked about the time limit. I shall make brief mention of the issue relayed by the noble Baroness, Lady Berridge, about the type of inquiry and the ability to make effective reports. In my portfolio I have covered virtually all these inquiries over the past 18 months, and I have heard every single group of victims say that another inquiry has provided the right response for them. None of the inquiries has yet been resolved—even those, such as the Post Office Horizon inquiry and the infected blood inquiry, which we think have been resolved. If the Government will not revisit the deadline, they will be dragged kicking and screaming into a higher level of inquiry as more cases are revealed. Please can the Government, preferably via the Cabinet Office, bring together the learning from all these inquiries about what goes wrong in government to make these things happen?
Lord Evans of Rainow (Con)
My Lords, this has been an excellent debate. I thank my noble friends Lady Sugg, Lady Berridge and Lady Wyld, the noble Baronesses, Lady Bennett and Lady Brinton, and my noble friend Lord Mancroft, who all made very powerful points in their speeches. I congratulate my noble friend Lady Cumberlege on securing this important debate. I pay tribute to her work on this issue over many years and her leadership on the First Do No Harm report of the Independent Medicines and Medical Devices Safety Review, as well as to her team of Sir Cyril Chantler, Simon Whale and Dr Valerie Brasse, and the patient groups.
Simply put, victims have suffered as a result of two medications and one medical device. The medications are: hormone pregnancy tests such as Primodos, which were later withdrawn due to concerns over birth defects and miscarriages; and sodium valproate, the anti-epileptic drug which was later found to cause physical malformations, autism and developmental delay in children after being taken by pregnant mothers. The medical device is the pelvic mesh implants which were used to repair pelvic organ prolapse and address urinary incontinence. Their use has been linked to crippling, life-changing complications.
My noble friend Lord Kamall tells me that when he was a Minister in the department he was horrified that progress for helping the poor women who had suffered from these two medications and one medical device was far too slow. Fortunately, the then Minister, Maria Caulfield, asked the Patient Safety Commissioner to explain what the Government should do to meet the needs of individual patients who had suffered these avoidable harms.
In government, we completed four of the initial recommendations in the report of my noble friend Lady Cumberlege, and another three were in progress in March 2024. The most important of these is the setting up of nine specialist centres which can provide the support needed in terms not just of redress surgically or treatment-wise but of the support that people need to help them cope with the issues. We expect the Government to deliver financial compensation for those affected by these treatments as soon as possible.
My noble friend Lady Cumberlege has said that after “first do no harm” should come
“and now do some good”.
As other noble Lords have referenced, the Patient Safety Commissioner’s report, published earlier this year, states that
“there is a clear case for redress based on the systemic healthcare and regulatory failures”
for women and children affected by the issues in England.
There is agreement across this House that Governments of all political colours have been too slow in delivering justice and financial compensation to victims of scandals in the past. We need mention only the Post Office Horizon scandal to remind ourselves of the importance of delivering justice to those who have been wronged. When these problems come to light, it is essential that we help the victims of these scandals as quickly as possible. Too many people suffered over the Horizon scandal and too many people and families suffered due to delays in helping victims of the infected blood scandal. Likewise, too many women, children and families have suffered as a result of women being prescribed Primodos, sodium valproate and pelvic mesh implants. The Government must act urgently to help those women who have suffered, so will the Minister give an undertaking today to make this a priority?
On 23 July, my noble friend Lord Kamall submitted a Written Question to the Minister asking when the Government intend to respond to the Hughes report and when they anticipate making the first payments under the recommended redress scheme. I thank the Minister for replying within three days, saying:
“The Government is considering the recommendations of The Hughes Report, and to prevent future harm, the Medicines and Healthcare products Regulatory Agency, NHS England, and others have taken action to strengthen oversight of valproate prescribing and mesh procedures”.
My noble friend Lord Kamall followed up on 29 July to ask the Government
“by which date they expect to issue a response to the Hughes Report, and whether they plan to offer compensation as the report recommends”.
Again, the Minister responded promptly with the Answer:
“The government is carefully considering the valuable work done by the Hughes Report and will respond in due course”.
We recognise that the Government are relatively new and need time to get up to speed, but can the Minister be more specific at this stage in answering the timescale question?
My noble friend Lord Kamall tells me that when he was a Minister there were two phrases in briefings that he was not fond of. One was “at pace” and the other was “in due course”. Can the Minister give noble Lords an approximate timescale for a decision—for example, by the end of 2024, mid-2025 or indeed the end of 2025? If not, can she enlighten noble Lords on when she will be able to give an estimate of the date by which she will know the date of the Government’s response? It is vital that they give some certainty to noble Lords—and, more importantly, to the many women and children who have suffered for far too long physically, mentally and economically. I know that the noble Baroness is a formidable operator as a Minister and, to speak personally, she has our full support on this side of the House.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Baroness Merron)
My Lords, I congratulate the noble Baroness, Lady Cumberlege, on securing this important debate. I compliment her on getting it early in the time of a new Government, which will help me to do the job that I will need to do. I also thank noble Lords for their powerful words on this important topic. To borrow some of the words used, anybody sitting here will understand that we are talking about something so harrowing, so shocking and so distressing that it would be hard not to be moved by what has been heard both today in the Chamber and, as the noble Baroness, Lady Wyld, said, when one reflects back on the report.
I give the assurance that after the debate I will reflect closely on all the points raised, and I will seek to cover a number of them as best I can now. The noble Lord, Lord Evans, obviously and rightly invites me to set out a timetable—as have many other noble Lords. I know that your Lordships’ House understands the newness of the Government and the need to get it right. While saying that, I also hope that noble Lords will appreciate that I understand that this has been going on for a very long time under the previous Government and that many individuals, and their families and friends, are looking for resolution.
As we have heard, lives have been irrevocably changed by vaginal mesh implants, and we have to ensure that lessons are learned. This Government will endeavour to build a system that listens—particularly, I might add, to women, whose voices have not been heard, which is why we find ourselves in many of the situations we are considering—and a system that hears properly and will act with speed, compassion and proportionality.
The noble Lord, Lord Mancroft, brought into the Chamber a very specific case, about which I was sorry to hear. I am sure that we are all sorry to know that the woman to whom the noble Lord referred is far from alone. I repeat to all those who have been affected that, as the report said,
“it was not your fault”.
We deliberately will put patient safety at the heart of improving our health and social care system. I convey my sympathy to everyone who has suffered complications following vaginal mesh implants. I am committed to ensuring that we learn from these tragic incidents. The Independent Medicines and Medical Devices Safety Review’s report, which was published in 2020 and chaired by the noble Baroness, Lady Cumberlege, was pioneering in its impact. The stories and realities are as deeply affecting today as they were when the noble Baroness commenced her work. I thank her, as many other noble Lords have done, for her work. She has been and is a key advocate for women’s health, but particularly for those who are experiencing complications and after-effects that they should not be enduring.
The Patient Safety Commissioner has continued this work. I thank her for the work she did on the Hughes report, published in February. Having met with Dr Hughes soon after my appointment, I very much look forward to working closely with her on a number of issues, including this one, to improve patient safety.
I hope that noble Lords will appreciate that in my comments I am reflecting on the situation as it stands. As we have heard, when used for pelvic organ prolapse and for stress urinary incontinence, vaginal mesh can be incredibly damaging for those suffering from complications, which is why it has been paused in these instances. NHS England has now established nine specialist mesh centres across England. The aim is to ensure that women in every region who have complications can get the right support and care. Each mesh centre is led by a multidisciplinary team to ensure that patients get access to the specialist care and treatment that they need, including pain management and psychological support as well as mesh removal surgery where that is appropriate.
The noble Baroness, Lady Sugg, and other noble Lords rightly raised the powerful Sling The Mesh campaign for an improved database. I associate myself with the comments of appreciation for that campaign group and many others who have campaigned in an area where others have feared to tread. I certainly share the desire of the noble Baroness, Lady Sugg, to ensure that there is proper data collection on device safety, which is why mesh centres will improve recording and monitoring of patient outcomes and experience by submitting procedural data to the pelvic floor registry. In this vein, through the National Institute for Health and Care Research a £1.56 million study has been commissioned to develop the patient-reported outcome measure for prolapse, incontinence and mesh complication surgery. In the longer term, this measure will be integrated into the pelvic floor registry.
The review by the noble Baroness, Lady Cumberlege, also looked into the matter of sodium valproate, and rightly so. I am glad to report that since then a number of actions have been taken or are under way to ensure that valproate is prescribed only when absolutely clinically appropriate. Alongside that, I am encouraged that the number of women who are still being prescribed it has reduced significantly following the MHRA’s introduction of the pregnancy prevention programme.
While significant progress may have been made in the areas I have outlined, the core question posed by this debate is about progress in ensuring that those suffering complications receive financial compensation for their suffering. This is an absolutely key question. This and the sodium valproate issue, which was reviewed in the Hughes report, are extremely complex and sensitive, as I know noble Lords appreciate. I want to reassure your Lordships’ House that I am considering this and the recommendations of the Hughes report.
As I mentioned at the outset, as a new Government, we need to carefully consider the report before coming to a decision. The recommendations will be discussed with colleagues across government, and lessons will be learned from other instances where patient safety has been impacted, as noble Lords have asked of me. As part of this, and in answer to some of the questions by the noble Baroness, Lady Bennett, and others, I will ensure that the number of those affected is reflected correctly. While I hope that noble Lords will understand, if not be happy, that I cannot provide a decision today, I commit to providing an update to the Patient Safety Commissioner’s report at the earliest opportunity and look forward to being able to update noble Lords further.
I have taken on board a point made by the noble Baroness, Lady Sugg, and throughout the debate, about the importance of transparency, trust and confidence. The department has worked with NHS England and healthcare providers to understand systems already in place for the collection and publication of information on doctors’ conflicts of interest and the work needed to implement updated guidance. That guidance will be published by NHS England. Again, I look forward to providing an update to your Lordships’ House on this. Furthermore, the department has held a public consultation on the disclosure of industry payments to the healthcare sector, and we will respond to that one shortly.
The noble Baroness, Lady Cumberlege, and other noble Lords raised the topic of imposing rules on manufacturers to pay compensation. This is a complex area and would potentially affect how products were developed, so it will need careful thought. Again, I will do that in conjunction with colleagues across government. Where a product causes injury, while it may be possible for an individual to pursue a claim for compensation directly against the manufacturer under existing legislation, I absolutely take the points made in the Chamber today that legal costs, practicalities, stress and the further distress that obviously goes alongside it often make this totally unrealistic.
I turn to some of the additional specific questions from noble Lords. The noble Baroness, Lady Bennett, was one of the noble Baronesses who raised the question on stopping manufacturers putting a 10-year time limit on redress. I will certainly raise this in discussions with colleagues at the Ministry of Justice, and I am happy to write to noble Lords further to update them on any progress. The noble Baroness, Lady Berridge, made a powerful and illustrative point that errors are not cost-free in any sense. I definitely echo her concerns about the extensive cost of this failure: some is seen and some unseen, but the costs are there. I will consider it such an exercise when I reflect on how we take this forward. The noble Baroness, Lady Wyld, also raised the point on maternity services, which, as she will be well aware, the Government recognise has serious issues. We are determined to improve this, and I assure noble Lords that my work is under way. Those areas failing in maternity care will be supported to make rapid improvements. The noble Baroness, Lady Brinton, clearly shares my appreciation, as do others, for the work of the Patient Safety Commissioner. I will ensure that she has the resources and support that she needs.
This subject rightly evokes great sympathy, but it also needs action. I must and will return to this again.
Independent Schools: VAT Exemption
(3 months, 2 weeks ago)
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Lord Lexden
That this House takes note of the contribution of independent schools, and any potential effects that changes to the VAT exemption for independent school fees could have.
Lord Lexden (Con)
My Lords, I sought this debate because our country’s independent schools—of which there are some 2,500 in total—face an imminent and dramatic change in their circumstances, which will have serious and far-reaching consequences. The Government are to put VAT on their fees in fulfilment of a pledge given in Labour’s recent election manifesto. This education tax, the first to be introduced in Britain—and, apart from a disastrous recent experiment in Greece, the first in Europe—is being imposed on schools with extraordinary haste.
At the very end of July, the Government announced, wholly unexpectedly, that their education tax would come into effect at the very beginning of next year. Now, 1 January 2025 is just under four months away. Schools and parents have made their plans for the academic year that is now beginning. How on earth do the Government imagine that these plans can be swiftly and easily rearranged? It is of course impossible, and it is quite wrong that schools and parents should have been plunged into such difficulties. Acute concern has naturally arisen. Many parents are deeply worried. Many schools, particularly those of small size which account for the overwhelming majority in the independent sector, face an uncertain future.
I stress one point above all: the effect that the rapid introduction of the tax will have on thousands of children, their well-being and their life chances. They should surely be at the forefront of our minds and, indeed, our hearts during this debate. The number of Peers taking part in it testifies to the strength of concern that exists across the House.
I declare my interests as a former general secretary of the Independent Schools Council and the current president of the Independent Schools Association, one of the council’s constituent bodies. I naturally judge the issues which arise in this debate from their perspective, to which I will return.
Words matter. Labour’s leaders have become fond of saying that they will recruit 6,500 more teachers for state schools
“by ending tax breaks for private schools”.
This clearly implies that independent schools now enjoy some kind of special exemption from tax that they do not deserve. The truth is that all those who provide educational services have always been exempted from VAT, as they should be. That exemption is now to be removed from independent schools, and from independent schools alone, at least for the time being. The current tax regime has helped independent schools to thrive, a state of affairs that the Prime Minister has said enjoys his full approval. Last September he told Jewish News:
“We have got fantastic independent schools, I want them to thrive”.
With this VAT proposal, he is perhaps going a strange way about helping schools to fulfil his ambition for them.
No one, I think, doubts the excellence that abides in our independent education sector. It contains some of the best schools in the world. The majority of their pupils find places at leading universities. They go out into the world well prepared for their careers in a meritocratic, multiracial society. They look to the future, not to a vanished class-ridden past, as is so often asserted by those blinded by prejudice against them. Four out of 10 places in the schools represented by the Independent Schools Council are filled by the children of ethnic-minority families. The Jewish and Muslim faiths are among those who run schools within the council’s ambit. More than 2,000 youngsters from Ukraine have been given places at member schools, and for the most part their families remain in their war-torn homeland. These are among the many valuable and socially beneficial features of life in our country’s independent schools today.
Nor should it be forgotten that independent schools make a significant economic contribution to our country. Research by Oxford Economics in 2022 showed that they add £16.5 billion to the UK economy, sustain 328,000 jobs, provide in one way or another £5.1 billion in tax, and save the education budget £4.4 billion by educating pupils who would otherwise be a cost to the state, a saving that must now be expected to shrink as pupils are forced out of independent schools by the imposition of VAT.
I referred at the outset to the two linked organisations with which I am connected: the Independent Schools Council and the Independent Schools Association. The council represents some 1,400 schools, where around 80% of the half a million pupils in the independent sector are educated—the children at the heart of this debate. The Independent Schools Association has some 670 of those schools, a big slice of the total, in its membership. It is among them that many of the small schools, so prevalent in the independent sector today, are to be found. Some flourish with no more than 200 pupils, others with far fewer. They include performing arts schools, bilingual schools and many special needs schools. They cater for the children of hard-working, local parents who have struggled to have their needs met in the state sector. Many are virtually unknown outside of their local communities, where they are highly respected. The important point is this: the 670 members of the association are far more representative of the true state of the independent sector than the comparatively small number of large, well-known schools—Eton, Harrow and the rest—which exert so much fascination over the media. Those schools are the exception, not the rule; they constitute no more than 10% of the total.
What all the diverse members of the Independent Schools Council have in common is a commitment to high standards for the sake of their children’s future and to working in partnership with colleagues the state sector in a whole host of different ways—from academic teaching, orchestral concerts, drama and sport. There are now well over 9,000 flourishing partnership projects. These typically involve several different strands of activity in and out the of classroom, in which state and independent schools work together for their mutual benefit—I stress mutual benefit. Full details can be found on the Schools Together website.
Meanwhile, independent schools have been widening their intake through fee reductions. In the last year, schools provided a total of £1.1 billion, much of it in the form of means-tested bursaries. How I wish it had been possible to induce our Governments over the years to back an ambitious wider access scheme, with places being made available at all levels of ability, co-funded by the Government, local councils, schools and benefactors. Winston Churchill sometimes spoke privately during the Second World War of constructing a great scheme of educational co-operation. How Churchill would have jeered at Labour’s attempts to depict our independent schools today as the exclusive preserve of the super-rich, in defiance of the facts that I have set out.
Most independent school parents are not rich, let alone super-rich. Labour blithely says that schools will not need to pass VAT on to parents but can absorb it all themselves. They cannot; only a handful have the endowments or reserves that would enable them to pay it themselves. Today, many parents up and down our country are looking at their family budgets and concluding that they will not be able to pay the higher fees that the Government will create for them. They will, with the heaviest of hearts, have to seek places in state schools.
Here is one example of what then will be the inevitable consequence. The head of a small school in Derbyshire with 80 pupils has written to tell me:
“it is clear from conversations I have had with parents that a significant proportion of our families will simply be unable to afford the increase. We could easily lose 17 pupils. This will have a devastating impact upon school income and will close us”.
Labour seems to think that school closures need cause no great concern. It says that over 1,000 independent schools closed during the 14 years from 2010. But some were mergers rather than closures and others were very small schools. Less than half were mainstream schools; schools delivering specialist provision are always prone to fluctuations, and Covid took its toll. There is also a world of difference between sudden state-driven closures and the closing down of schools for reasons of their own, with new ones opening probably in the vicinity. Who will want to open new independent schools today?
The prospect of losing smaller independent schools is simply appalling. So much invaluable support is provided in them for a huge variety of special needs. Many parents have since the election been making clear their heartbreak at the thought of being unable to afford any longer the place where their child with a special need has been wonderfully cared for. The Government-created fee rise will affect more than 90,000 families with special needs. Only children with hard-to-come-by education, health and care plans will be exempt from it.
A special needs co-ordinator who has worked in a state school for nearly 40 years writes:
“many private schools have been formed to cater specifically for special needs. They provide centres of excellence, often where there is a deficit regionally. Why risk losing them?”
Why indeed?
The government-created fee rise will make small community faith schools unaffordable for many Jewish and Muslim families. At present, some 370,000 children attend independent faith schools in England.
The prospect of this fee rise is a source of the greatest worry to our service families, who place our society so greatly in their debt. Some long-serving men and women in our Armed Forces fear that they will have to leave jobs they love. The 4,700 children for whom the continuity of education allowance is being provided must not be made subject to VAT.
It is very far from certain that, by slapping VAT on school fees, the Government will get anywhere near the £1.5 billion they seek to create new teachers for state schools. The additional resources that state schools will need to teach more pupils could absorb much of the revenue gained from the VAT charge, and perhaps even exceed it. Estimates of the number of children who will have to leave independent schools vary. The Government have not undertaken any assessment whatever. They are rushing ahead, without even waiting for the conclusions of the Office for Budget Responsibility, which they have pledged to respect.
I invite support for the following propositions. All children with SEND should be exempt from the VAT charge. It should not be applied to service families receiving the continuity of education allowance. Steps should be taken to protect small faith schools. Above all, VAT should not begin to apply before the start of the 2025-26 academic year. The date now proposed—1 January 2025—has been widely and rightly described as cruel. A full independent assessment of the implications of our first-ever education tax should be carried out before it is introduced.
Is it not our duty to do all we can to protect the interests of all children everywhere? One mother writes to me that
“my child sat and watched an interview with Rachel Reeves, in which she stated that she is concerned with the 93 per cent of children in state schools and not the 7 per cent in independent schools. My child turned and asked why the lady doesn’t care about me”.
Is that not a truly heart-rending comment? I beg to move.
Baroness Ramsey of Wall Heath (Lab)
My Lords, I refer to my interests in the register. I have been lucky enough to play a role in the governance of both state and independent schools. From 2016 until recently, I was chair of Young Epilepsy, which, among many other things, runs a wonderful special independent school in Surrey, called St Piers, for both day and boarding pupils. I am currently a board member of the Lift Schools multi-academy trust—formerly AET—which runs 57 state schools across the country. So noble Lords might think I would find myself somewhat torn when considering the arguments for and against charging independent schools VAT and spending the money generated by so doing on state schools—but I am not.
At Lift Schools, I can see at first hand just how vital that extra injection of money is. In the words of our inspirational chief executive:
“We simply don’t have enough teachers in our schools. This is down to absolute numbers, but it is also down to the fact that the role of a teacher has been stretched beyond anything imaginable 10 years ago. No longer simply an educator, they are social worker, mental health first aider, a parent for some. One of the casualties of this raid on discretionary effort is the wider enrichment that is the norm in independent schools and should be for state schools too—the music, sports, art, drama, debating, foreign trips and field trips”.
As for St Piers and all those other independent schools meeting the needs of children with education, health and care plans, the Government have made crystal clear that fees for these children will be exempt from VAT.
The independent schools that will have to pay VAT are not special schools like St Piers but the ones whose parents choose to pay for their children to have a more well-funded education than the state can afford to provide. I do not criticise parents who wish that the fees they pay to private schools were not going to rise further as a result of the ending of the VAT exemption—of course I do not. But, if we look at the issue in the round from the perspective of the nation’s children as a whole, rather than from only the one in 15 who attend private schools, what do we learn?
We learn from the unimpeachable source of the impartial Institute for Fiscal Studies that the 14 in 15 who go to state school are falling further and further behind, compared with one in 15 at private schools, with their enviable resources. Private schools, the IFS tells us, spent 40% more on their pupils’ education than state schools were funded to do back in 2010—a pretty big gap, I am sure we can all agree. But now the gap is an incredible 90%; it has more than doubled since my party was last in power. In that situation can we really justify a continued 20% tax break for private schools? I think not. Why has the gap got so much bigger? Partly, of course, it is because the previous Government cut state school funding per pupil in the age of austerity, and their more recent increases only brought schools back to where they started in 2010. But it is mainly because private schools have increased their fees, which are 24% higher in real terms than in 2010. By the way, those arguing that charging VAT will mean pupils switching from private to state seem to forget that the 24% increase in fees has led to no reduction whatever in the proportion of pupils going to private schools, which is still steady at one in 15, just as it was in 2010.
But it is not really about the numbers, of course—it is about the children. Let me end by telling noble Lords about my daughter’s first day at her local comprehensive secondary school, and in particular about the instruction she and all new pupils were given that day: no running in the playground at lunchtimes. Why not? Because it was so crowded that they might hurt themselves bumping into each other. Why was it so crowded? Because this hard-pressed state school, desperate for extra cash, had sold part of its land to the adjoining private school. My daughter pressed her face up to the wire fence, gazing at the endless fields stretched out in front of her for the benefit of the one in 15, and thought that that was not fair. She was right: it was not, and it still is not, so let us do something about it.
Lord Addington (LD)
My Lords, this is a debate that I never thought I would be taking part in, the tone of which we should note. We on these Benches do not like what is going on here in education. Different bits of the education sector are being taxed differently. With special educational needs, you can claim some of the money back. Well, that is always going to run smoothly; there will never be a cashflow problem and nobody will ever get it wrong. Also, it is dependent on that wonderful thing, an education and healthcare plan.
If there is a more unloved bit of the education sector than the education and healthcare plan, I have not seen it. It takes about two years to get—if you have the right lawyer and the right type of parents, who fight for it. Schools are blocking it because they do not want it to go through. The weirdest thing about it is that we have broken the £100 million barrier of public money going into resisting it and going to tribunals. Some 90% plus of the tribunals are granted—it is almost a rite of passage.
If the Government had said that they would help the private sector in dealing with special educational needs, having dealt with this first, they would be getting a much more favourable hearing from me. It is an absurdity to base an exemption on something that favours—guess who?—the educated, wealthy parents who can afford the legal fees to get through. There is something fundamentally wrong here.
I am in favour of making sure that we get better provision in state schools to address special educational needs. However, the whole system has gone wrong. If it is based around this, I cannot see how it is going to happen. Let us remember that private education has been looking after X amount of those with SEN for more than half a century; it is a very established pattern.
Also, the schools doing this have a percentage of pupils who do not have the plan, often because their parents are not prepared to put themselves or their children through the delays and the process of getting that plan. They are creating a critical mass for the economic reality of that school. If we lose these, or a percentage of these, what happens to those schools?
I hope that the Government have, at some point, done an analysis of how many pupils they can lose from this sector. The Government have recognised that it is important, so I hope they have. For pupils who do not have a plan for leaving the sector or going back into a state school, it would help to know the economic benefit. I do not know what it is—is it positive or negative? It would help if we could find out.
This contribution from the independent sector is clearly necessary at the moment. I hope the Government will tell us what they are going to do that will mean it is not necessary. Can they please tell us how they will do this, and when it will arrive? I do not like the idea of people having to go to independent schools to get the education they need but, at the moment, it is clear that they do. Will the Government address this problem in the round, and will they tell us when they are going to get rid of the plan?
Lord Alton of Liverpool (CB)
My Lords, in welcoming the noble Baroness, Lady Smith of Malvern, to her new responsibilities, I also say at the outset that I am grateful to her for promising to respond, when she replies, to some detailed questions I have sent to her. I also thank the admirable noble Lord, Lord Lexden, for the customarily powerful and eloquent way in which he introduced today’s important debate. I agree with everything that he has said today.
For family reasons my Cross-Bench colleague and noble friend Lord Pannick is unable to be here today. He has looked at this education tax and its potential conflict with the European Convention on Human Rights. He tells me that it
“is strongly arguable that the imposition of VAT would breach Article 2 of the First Protocol read on its own (access to educational facilities) or with Article 14 of the Convention (arbitrary discrimination in the enjoyment of educational facilities)”.
I serve on the Joint Committee on Human Rights, whose mandate is to monitor potential conflict between government policies and the ECHR. My noble friend Lord Pannick says that
“it would be a very valuable service if the Joint Committee could look at this”.
I agree, and I hope that the Minister will assure us that the Government will not proceed if this is found to be in breach of the ECHR.
We need also to scrutinise some of the other claims that have been made, such as the impact on public finance. The Adam Smith Institute calculates that, far from generating revenue, the policy could lead to a staggering loss of up to £2 billion. The Minister has seen that assessment and the work of the Institute for Fiscal Studies, along with a Times editorial, which all question the Government’s assumptions about raising revenue. Let us also look at what happened in 2015 in Greece when a similar tax was introduced. Some schools were forced to close, while others inevitably passed on the tax to parents. The same thing is already happening here.
Driven by dogma, it is easy to say that this is all justified as a long-overdue attack on the ultra-rich. However, as the noble Lord, Lord Lexden, reminded us at the outset of the debate, this regressive double tax on people who have already paid for universal education through their income tax will not impact wealthy families who pay for education, often, through property purchases in sought-after school districts, merely increasing educational inequalities. This education tax will disproportionately impact middle-income families, such as those of the 168,000 children who receive financial support from independent schools or the 10,000 who pay no fees. These are the families who will suffer, many of whom have made great sacrifices for their children’s education, not those with ultra-deep pockets.
Those affected will include men and women in our Armed Forces—families who make use of the Continuity of Education Allowance. Some say that they are having to consider exiting military service as a consequence. How does the Minister respond to their appeals, and to professionals, including those working in education, policing and healthcare, who rely on the wraparound care provided by many independent schools; or to the single mother whose letter I sent to the Minister, and for whom independent schooling is the only way she can maintain her employment?
As the noble Lord, Lord Addington, reminded us, what about the impact on children with special needs or mental illness? The noble Lord gave a figure which I had not heard before that as many as 90,000 people will be affected by this. They will have chosen an independent school because of its particular expertise or focus on those children.
Finally, introducing this tax midway through the school year, on accelerated timeframes, will adversely affect children, who may struggle to integrate into new schools, with some forced to change curriculum, exam boards or subjects. Top of our concern, and at the heart of this policy, must be the impact on children. It clearly is not. This taxation is punitive, unjust and unfair, may be in breach of the ECHR, and will worsen educational inequalities. For all those reasons, I hope the Government will think again.
The Lord Bishop of Southwark
My Lords, the Government’s intention to levy value added tax in this area was a manifesto commitment at the general election. The Government entertain a well-evidenced belief that parents purchase an economic and social benefit for their children’s future through private schooling. Whatever the experience any of your Lordships have had of such schooling, the undoubted premium placed on forming character or the excellence in pastoral care that some of these schools exhibit, the Government nevertheless have a mandate for change. The noble Baroness, Lady Ramsey, underlined the pressing need for more teachers in our state schools.
However, who will and who will not be affected by this change is a worthy subject of debate. I am happy to say that both the boys’ and girls’ choirs at Southwark Cathedral are almost entirely drawn from state schools, and are consequently unaffected by the VAT change. Furthermore, a number of schools in my diocese offering provision for special educational needs and disabilities have their places funded by the local authorities. But there are cathedral and choir schools, and private schools, with provision for special educational needs that will be severely affected by the change that the Government intend. Many of these are small schools, and therefore the impact will be disproportionately severe.
The briefing provided by the House of Lords Library refers to some 20% of pupils in this sector receiving provision for SEND, which is of undoubted public benefit, but of these, only 6.9% have an education, health and care plan. This suggests that there is a significant element of special needs provision that is currently covered by private funding, and which cannot be absorbed by local education authority budgets if private places become unaffordable. Furthermore, if some small and medium-sized schools that provide SEND then become unviable, the general SEND capacity in the country, already overstretched, becomes yet smaller. A question, therefore, needs to be asked—and I ask it of the Minister—as to the appropriateness of removing the exemption at such short notice in January 2025, as other noble Peers have already said, with little time to adjust budgets.
Finally, there is the distinctive yet gloriously diverse world of cathedral and choir schools, which continue to safeguard and feed the English choral tradition. They are intimately bound up with their localities, drawing choristers from a wide social background, and have a very significant impact on the choral and musical life of this nation. I will cite some detail from one of them: a 100% bursary fee remission for local children who are very talented musically but whose parents cannot afford any fees, with numerous other pupils who are in receipt of 75% or more remission—the focus now being on remitting fees, rather than on awarding scholarships, to increase social inclusion.
I am a grammar school boy and I could not sing the “Eton Boating Song” if you paid me, yet I am deeply concerned about the adverse and unintended consequences which this manifesto commitment will have unless it is applied with much greater sensitivity—and possibly also phased in—affecting, as this does, the enormous variety of private school provision, about which we have heard and which is committed to public benefit.
Lord Davies of Brixton (Lab)
My Lords, I thank the noble Lord, Lord Lexden, for introducing this debate. No one doubts the strength of his feeling on the issue. I suspect that much of his speech overrated the problems that the private sector will face, and my view is that it will survive, but he quite rightly raised a number of practical issues towards the end of his speech which I am sure my noble friend Lady Smith of Malvern will address in her reply. I take the opportunity to welcome her to her place.
I speak as a parent but also as someone who had experience running a public education service, and that drives my view of the necessity for this measure. Of course, the actual discussion will take place when we get the finance Bill, when we will doubtless have this debate again, but it is entirely appropriate that we should discuss it now.
I want to stress that VAT is a tax—no surprise there, but there is a big debate within the public expenditure discussions about the appropriate balance between income taxes and expenditure taxes. There are those who believe that there should be a greater reliance on expenditure taxes. That is an issue, but it means that they are both providing the same function; they are both providing public revenue to provide public services. It is worth stressing that taxes are paid not as a fee for a service but as an individual commitment to society as a whole. It is no more reasonable for those who choose to spend their money on sending their children to private school to have a VAT rebate than for people to expect to get an income tax rebate.
The basic fact about this proposal is that it was in the manifesto. It was not hidden or avoided during the election campaign, and this party was elected with a commitment to implement it. Practical issues were raised, and I hope my noble friend will address them.
I have taken the opportunity to read all the submissions that were sent to me. There was a large number and I cannot claim to have read every last one or through each one entirely—there was a certain amount of copying and pasting—but I got a sense of the expressions of concern that were being made, almost entirely by parents. The issues on which I hope my noble friend will be able to provide some comfort are, first of all, children with special needs and, possibly to a lesser extent, military families.
I want to conclude with a point that makes me angry—so far none of the speakers against this proposal has made the fatal mistake of making this point—and that is the idea that parents who choose to send their children to private school care more about their children than those of us who choose to send our children to state schools. The last Prime Minister made that classic mistake, in answer to Questions in the House of Commons, so noble Lords should not dismiss it. I hope no speaker in this debate will give that idea a scintilla of justification.
Baroness Fraser of Craigmaddie (Con)
My Lords, I add my thanks to my noble friend Lord Lexden for his determination to enable us to debate this issue.
The draft Bill which has been published is, to me, a blunt instrument. It treats the sector as a homogenous whole, so causing unintended consequences that implementing the policy in the middle of the school year will not enable us to unravel, let alone resolve. Time is of the essence, not least the limited time that we have to speak today, so I would like to request that the Minister convenes a round table to explore with interested parties the unintended consequences of the current draft legislation in greater depth.
I declare my interest as a former pupil of a specialist vocational performing arts school. I also have a child at a fee-paying independent day school in Scotland and a sister who is a teacher at another.
In the King’s Speech debate, I highlighted my worries about the impact on SEND children. Others have expanded on this, and I support them wholeheartedly. The Local Government Association has called for SEND provision to be reformed; I trust that we can explore this on another day with a little more time.
The first sentence of the Treasury’s technical note published in July states:
“The government is committed to breaking down barriers to opportunity”.
For our performing arts sector, and the schools which provide highly specialist training in music and dance, even the prospect of a VAT levy has created a barrier to opportunities. The schools that deliver training for the Music and Dance Scheme are currently able to offer places on assessment of talent, not ability to pay. This will not be the case if MDS schools have to levy VAT on any part of their fees. I urge the Government to work with the heads of MDS schools to explore the case for their exemption.
Question 5 of the current Treasury consultation asks:
“Does this approach achieve the intended policy aims across all four UK nations?”
I argue that it does not. The education landscape in Scotland is different. We have no academy schools. We have a different curriculum, which in some schools can force children to limit their choices to six subjects at age 14. Thanks to devolution, unlike in England, the Government cannot control how any money raised would be spent in Scotland. That would be a decision for the Scottish Government. There is no guarantee that it would be spent on education. Given the current state of the Scottish Government’s finances, it is likely to be repurposed, like many other programmes, such as the provision of digital devices to pupils. In Scotland, independent schools have been subject to more scrutiny by the Scottish Charity Regulator than any other part of the sector, with regular reviews to ensure that they meet the “charity test”, a process which does not happen south of the border.
The Government’s policy on VAT was announced in the middle of the Scottish school holidays. The allocation of places happens in April each year, but with one in three secondary schools operating at over 90% capacity, there is no space in the Scottish state sector to accommodate even a small proportion of the pupils who may need to move. Schools and families have not had time to prepare. With the changes being introduced midway through the academic year, the disruption for all will be significant. Already, two independent schools in Scotland have closed. I urge the Government to pause the implementation of this policy until the beginning of the 2025 school year and to use that time to explore with us the many complex issues raised today.
Baroness Finlay of Llandaff (CB)
My Lords, I declare that I am an associate of the Girls’ Day School Trust. I am grateful for the many sacrifices my parents made to allow me to go to Wimbledon High School after I failed my 11-plus pretty badly. I have been the governor of Howell’s School in Llandaff, a Girls’ Day School Trust school.
We should not be pitching one sector against another, but we must realistically acknowledge the unintended consequences of the VAT proposals and the speed with which they are being introduced. Howell’s School, whose pupils come from all walks of life, estimates that 11% of families will no longer be able to afford the fees, causing disruption and distress to those forced to leave a school community where they are happy and established. Howell’s will no longer be able to provide bursaries that have tided children over when disaster struck, such as three siblings I knew well, who were suddenly left orphaned and completely destitute. Continuity of education at the school and care allowed them to achieve, against all odds.
When Ukrainian refugees arrived in Cardiff, the school welcomed eight students aged three to 17 into its community. Some spoke no English; many had experienced significant emotional trauma from leaving behind homes, friends, fathers, brothers and grandparents. All had individualised timetables with extra classroom support and access to a school counsellor.
English lessons were extended to the students’ accompanying mothers and grandmothers, who connected on cultural visits locally as they gradually integrated into the community. The school has, to date, waived £377,000 in fees and incurred an additional £57,000 in expenses to support these girls—and that support is ongoing. Only this week I had a letter from a disabled school leaver, who, with that school’s support, has achieved university entrance to study law. I really doubt that she would have done it without being at the school.
Around 10 % of the school’s applications for places come from children who have struggled in a maintained school because of bullying, anxiety and other mental health problems, a lack of support with additional learning needs, or other reasons. This is similar to figures from across the UK. Parents and grandparents desperate to keep their child going to school do without for the child to have a tailored approach to academic and well-being support, a reduced timetable, and a calm, quiet space of safety.
The fee-paying schools in Wales are integral to their local communities. They are smaller on average than those in England, and they estimate that between 10 % and 36% of pupils will have to move to state schools, suddenly putting pressure on the state sector, with between 3,700 and over 6,500 extra children, and requiring £35 million in pupil funding. Education is fully devolved, but VAT receipts are paid directly to the Treasury. Can the Minister clarify whether the whole of the predicted £1.7 billion revenue has already been allocated for England’s use, or whether it covers England and Wales, and other devolved nations? Can she confirm that funds needed to meet Welsh schools’ needs will come from the additional revenue raised and will include the Barnett uplifts?
I wonder whether the Minister will accept the suggestion made by the noble Lord, Lord Pannick, as outlined by my noble friend Lord Alton, to refer this to the Joint Committee on Human Rights, particularly in relation to devolved nations.
Lord Forsyth of Drumlean (Con)
My Lords, I have only four minutes so I will sum up my view of this policy in three words: wicked, stupid and cruel. I have spent the summer receiving emails from vast numbers of parents. The noble Lord, Lord Davies, told us he had not had time to read all of them. If he had done so, he would be heartbroken.
Lord Forsyth of Drumlean (Con)
I am not going to give way—he would not give way to me.
These are lone parents, single parents perhaps struggling with two jobs in order to pay. They are people who put themselves in danger to defend our country in the armed services. They are parents struggling with children with severe learning difficulties. Who in this Chamber can defend the idea of sending a child who suffers with autism to a completely different environment halfway through term? Anyone who knows anything about autism will know that that would be a cruel and disgraceful thing to do. That is the consequence of this policy.
The messages are coming from health workers, teachers and small businesses, people who are struggling to pay those bills. The noble Lord, Lord Foulkes, is not in his place but he told me he was not going to listen to what I had to say because he has seen people turning up in their Range Rovers to schools. The people I am talking about do not have summer holidays and run old cars to scrimp and save to do their best for their child in their circumstances.
By the way, every single one of these parents is saving taxpayers money. For the noble Baroness to suggest that this was a tax break—it is not one unless you take the view that education should be taxed. What has happened to the Labour Party that set up the Workers’ Education Association and founded the Open University? The Labour Party was elected in 1997 on “Education, education, education” and has now become the party of “Taxation, taxation, taxation”.
I agree that state schools need more resources, but look at the impact that this is going to have on those schools half way through the school year. I guess Emily Thornberry did not get to be Foreign Secretary because she let the cat out of the bag. She said, “It’s fine: if we have larger classes, we have larger classes”. “Let them eat cake”—she did not add. One in four children in Edinburgh go to independent schools. How on earth will state schools be able to cope with people who are no longer able to pay the cost?
I confess that I have not always been a huge fan of the ECHR, but I hope that those people with the resources will put their hands in their pockets and help my noble friend Lord Lexden and others to take this Government to court over this issue, and that the Government will realise that their time is nigh. As for the idea that this will save money—the Government have come up with at least three figures, all reducing in number—they need to read the wonderful analysis by the noble Lord, Lord Hacking, on their own Benches, as to how it will end up costing more than it will save.
I have a suggestion to make to the Government. I know they have made a silly manifesto commitment, and I know they feel that they have to do something, but they should at least take some time and not do this half way through the school year. If that is what they are determined to do, they could perhaps meet their requirement to put VAT at 5% rather than 20%, as we do on heating charges, and phase it in over a reasonable period of time. I fear that this is an ideologically driven policy of the kind that the Prime Minister showed during the election, when he was asked, “If one of your family were desperately ill, would you ever use private healthcare?” and he said no. We do not want that kind of politics in this country.
Baroness Bull (CB)
My Lords, the disparity of outcomes between private and state school pupils is well evidenced, and I welcome the commitment to equalise opportunities by rebalancing investment, but I hope Ministers will heed calls for more nuance in how proposed changes are applied.
As we have heard, “private schools” is a catch-all term, encompassing both schools paid for by choice and schools providing specialist education for pupils whose needs cannot be met in the state sector. I share concerns already expressed in relation to special educational needs, but I will use my time to expand on the concerns that the draft legislation inadvertently captures a small number of schools providing education for another group of children whose needs cannot be met by the state sector—by which I mean schools providing world-class music and dance vocational training to exceptionally talented children, regardless of background or ability to pay.
Successive Governments since the 1970s have recognised that if gifted dancers and musicians are to achieve their potential, they need a level and intensity of training that is impossible to achieve within the structure of a standard curriculum. In 1973, the Yehudi Menuhin and Royal Ballet Schools became direct grant aided, with means-tested DfE support for talented children from low-income families.
I declare an interest here, as I was one of those children. I joined the Royal Ballet School in 1974. The fees were well beyond my parents’ means, but they had no choice, because professional ballet training must start young if a dancer is going to compete in a global marketplace. It takes 10 years of daily practice under expert tuition to achieve the flexibility, speed and strength that characterise world-class performance, and those 10 years must take place before puberty sets in.
DfE’s music and dance scheme was established in 1981 as the successor to direct grant aid. The nine designated schools in England and Scotland have little in common with typical private schools. They recruit on talent first, and the majority of parents would not, in other circumstances, choose private education. At non-specialist private schools, around 7% of students receive a bursary or means-tested support. At music and dance scheme schools, it is 90%. The schools are costly to run, requiring specialist, world-class teachers, equipment, studios and theatre spaces, but there is no wealthy parent body, no large endowments and no eligibility for government building maintenance grants.
Earlier this year, the now Prime Minister spoke of the country’s
“huge talent … waiting to be unlocked”,
promising that people from every background and every region would have the opportunities they deserve. The Music and Dance Scheme is pivotal to this ambition, removing barriers to entry and allowing children from diverse backgrounds to dream of a career at the highest level. But 12 years of funding freeze mean the schools are already operating at full stretch. Further financial pressure will impact on quality of training, reduce diversity in the student body and severely impact the UK’s ability to produce the home-grown, world-class talent for which it is renowned.
This legislation aims to break down barriers to opportunity, but including these specialist schools in its scope will have the opposite effect. Prodigiously gifted children with the potential to become world-class artists need specialist education from a very early age, education that will never be possible in the standard curriculum. Raising barriers to entry will mean that only the most advantaged children will be able to access the training fundamental to career success. I would not have become a ballet dancer.
I join the noble Baroness, Lady Fraser, in asking the Minister: will she convene a round table with interested parties and experts to explore how this legislation can avoid irreparably damaging the schools that underpin the UK’s success on the world stage?
Lord Maude of Horsham (Con)
My Lords, the register carries my declarations that I am chair of governors at Brighton College, a large and successful independent school—which is obviously in Brighton. I was previously chair of governors at my old school, Abingdon, which when I and my brother were there was a direct grant school, a status that was abolished by the Labour Government in the 1970s. It occurs to me to wonder why successive Labour Governments have been more associated with destroying categories of schools—first the grammar schools and direct grant schools and now, in all likelihood, some proportion of the independent sector—rather than creating schools, which would be more natural for a party which, as my noble friend Lord Forsyth suggested, claimed to be for “Education, education, education”.
Of course, this was a manifesto commitment, and the Government will rely on that. I remember being told when I was in government that relying on the manifesto commitment is the last refuge of the scoundrel; it is there but it did not have to be done this way. The precipitate haste with which this has been pursued and the lack of any kind of impact assessment when the effects are manifestly clear just from the speeches being made in this Chamber today—I particularly pick out the powerful speech from the noble Lord, Lord Addington, based on deep knowledge and deep passion on the effects of it—mean that it is important that the effects should be understood. It is assumed that there will be a cash dividend from this but that is by no means clear. You would think that a Government who claim to be committed to the writ of the Office of Budget Responsibility might want to hear what it has to say about this before progressing at this kind of speed.
I want to say a word about some of the other things that the independent sector contributes to the benefit of society. Brighton College was responsible for establishing the London Academy of Excellence in Stratford in Newham, providing an excellent sixth-form education for some of the most disadvantaged children in that very disadvantaged borough. It now ranks among the top 10 schools of all kinds for A-level outcomes this year. The percentage of LAE students eligible for free school meals is more than five times higher than any other school in that top 10.
The LAE was founded by the Brighton College headmaster, Richard Cairns, who has led it from being a middle-ranking school to absolutely top of the tree in just 18 years, and a Brighton College governor. It receives a cash donation from the Brighton College community, and five Brighton College governors serve on various committees there. It would not have happened without Brighton College, and large numbers of bright, gifted children from disadvantaged backgrounds have benefited from it.
Brighton College has offered 24 refugees from Ukraine places with 120% scholarships. It also offers Opening Doors scholarships to disadvantaged children from local families—I am delighted to see my noble friend Lord Soames here as we both had children going through Brighton College and he now serves as president of the college—and many of those children have secured places at top universities.
Finally, I want to say a quick word about the value of education as an export. The Government do not quite understand the prestige and the cachet that attach to British education around the world, both in attracting students from overseas to schools here and in the growing number of UK schools that operate around the world, particularly in Asia. There is a hard-currency benefit to that in terms of cash coming into the country, and there are softer benefits of great value from the lifelong networks that these young people develop and the bonds of affection that flow from them.
I can see that this must have felt like a free hit at the time, but it is not turning out that way. I advise the Government to think again.
Lord Griffiths of Burry Port (Lab)
My heart has been warmed by the illustration just offered by the noble Lord, Lord Maude, and others like it could be multiplied and accumulated. However, on the other side we can find stories that say exactly the opposite and make the opposite case. Not always do private schools favour places in disadvantaged localities in the way that he has described—would that they did.
I passed the 11-plus at the age of 10, but a year later my brother failed, so we lived in two different universes: we had friends who were not the same friends; we dressed differently; he left school at 15, and I had a Rolls-Royce education. However, at the end of the grammar school—which for me was a godsend; it made me—my headmaster took me into his study and said he was forming an Oxbridge class but was not putting me in it, even though he thought I was clever enough, on the grounds that I would not be able to cope with Cambridge socially. It was the right decision and I have never held it against him, but it made me determined to spend the rest of my life, as much as I could in the sphere of education, trying to ensure that educational advantage was offered equally to all, not simply on the basis of money.
I am not even talking about hugely super-rich people. My three children were educated in private Methodist schools: The Leys in Cambridge and Kingswood School. I spent 38 years in school governance, if you add it all up, and the last 20 years as chair of the trustees of the Central Foundation Schools of London, with a school in Islington and another in Tower Hamlets—I know these places to my fingertips. But they are part of the Dulwich foundation. They are beneficiaries. They get a huge amount of money that helps to pay for a teacher and helps with language-learning skills, sport and pastoral work. We appreciate the 5% that we get in each of our two schools from the total disbursement. However, the total disbursement is £7.5 million, and 85% of that £7.5 million goes towards the three public schools at Dulwich. When you look at this year’s A-level results this year and see what our little schools in London got, and compare that to what the rest of the foundation got, you are left with one conclusion: we must build an educational sector that is far more open.
We talk about choice. The people I am thinking about, the 2,500 pupils in our two schools, have no choice. We talk about people doing two or three jobs, but hundreds and hundreds of people in the inner city do two or three jobs with no access whatever to these privileged places. We must be careful about how we lampoon each other.
When I was a governor at Kingswood School, I said, “I can only think of the privileges of this school if you have a social policy that seeks to spread its benefits as widely as you can”. Then, at the Central Foundation Boys’ School in London, we had a boy with three A* grades who had work experience at three stock exchanges—Tokyo, London and New York—and was captain of the football team. He was fantastic, but he was refused at Cambridge because he had not studied the right kind of mathematics at A-level.
We are grossly saddled with disadvantage, and we need to do something about it. If the VAT project does not do it—and I am prepared to admit that doing that so suddenly presents real problems—at the same time, let us not think we have solved any problems by dealing critically with what is on the table now. The battle will remain, and I am committed to fighting it to my dying breath.
Lord Taylor of Holbeach (Con)
My Lords, I am delighted to follow the noble Lord, Lord Griffiths. I have always liked his contributions to debate and today is no exception. I particularly wish to thank my noble friend Lord Lexden for proposing this debate, because it is opportune. It is really important that we talk about this issue. The debate shows that education is seen by all of us here as a public good—something that needs investment.
I think the present Government are mistaken in believing that they have a solution in trying to transfer resources from the independent sector to the public sector. That is the wrong way to go about raising money to reinforce education. There are other ways of raising tax not on the subject itself. If it is education today, it could be medical and social care tomorrow—the NHS equally needs investment; its staff equally need pay. I say to noble Peers opposite and the Government that I really think this is the wrong way of going about the problem.
I will talk a little about my personal history. I am a local person: I was born in Holbeach, lived in Holbeach and went to Holbeach infant school, aged four. I loved my school; I always liked being educated and learning things and it was a very satisfying experience. But, unfortunately, when I got to the end of the school and was due to move on to secondary school, aged nine, I was too young to sit the 11+ and there was no secondary modern in Holbeach. Because my parents were state-educated individuals, I was directed to the Holbeach boys’ school, which contained adolescents aged 15. My parents were horrified that I would not be able to cope with this and they sent me away to school.
Some people may say that that is a terrible thing to do to a child, but fortunately I had a grandmother who sent a brother with me; I am the eldest of five siblings, and my next brother came away to school with me. It was an experience which set me up for life. I am lucky enough to have gone to an excellent public school, with an old boy here, well known to the House—my noble friend Lord Naseby—and Lord Paddy Ashdown, whom many people here will remember. It was a good school. It opened my eyes and gave me opportunities that I would not otherwise have had.
I do not want to penalise people who are not necessarily rich. It has been pointed out time and again, and it is true, that people who look for independent education for their children just want what is best for them. Not everybody is able to do it, but we should not deny it to those people who can afford to do it. This is a misguided policy, and it is clear that the arguments presented about its immediate introduction present a lot of problems for the Government.
Lord Roberts of Belgravia (Con)
My Lords, unlike my noble friend Lord Taylor, I had a terrible time at my public school and was expelled—or, more accurately, I was asked to leave and not come back—so I cannot be accused of being parti pris in this in saying that I support public schools.
There is one iron law in politics and history—namely, the law of unintended consequences. As Winston Churchill said in his eulogy for Neville Chamberlain,
“we are so often mocked by the failure of our hopes and the upsetting of our calculations”.
As the noble Lord, Lord Lexden, and several other speakers in the debate have pointed out, the present proposal is suffused with the dangers of unintended consequences. The Government want public schools to become less elitist and exclusive, but as it will be the less financially secure schools that will have to shrink, and maybe in some cases close, that will leave the rest of the independent sector more elitist and exclusive.
The Government say that they are prioritising economic growth, but they will effectively let parents keep about £400,000 of post-tax income per child, if they take their children away. Studies show that many parents will reduce their work hours, retire earlier than planned or leave the workforce entirely, with serious effects on the economy and the public finances. The Government say that they welcome the huge amount of philanthropic work that public schools do in their local communities, but that will understandably be among the first things to go when schools have to draw in their horns financially to keep school fees down.
The Government want more working-class children to go to Oxbridge, but if middle-class parents have to withdraw their children from public schools and send them into the state system while tutoring them privately, the likelihood is that Oxbridge will become more middle class rather than less. The Government are committed to fighting bullying in state schools, but this measure is likely to unleash more bullying, based on class prejudice against middle-class children who join state schools half way through the school year.
The Government say they want lower class sizes, but this measure will probably raise class sizes in state schools, especially if the new teachers cannot be hired on the expected VAT, which will not be forthcoming if parents withdraw their children from public schools in significant numbers. The Government say that they want to encourage educational charities, yet they are setting a hugely dangerous precedent in taxing them, and it is hard to escape the conclusion that they are doing this for a tribal shibboleth, more for ideological than for practical reasons.
This measure unfairly penalises those incredibly useful people in our society—parents who pay for education twice, once through their taxes for other people’s children, and once in school fees for their own. Instead of spending their money on luxuries, they invest it in their children’s education. This is therefore essentially a tax on those parental sacrifices, and one that comes fraught with myriad unintended consequences.
Lord Hampton (CB)
My Lords, I must join the chorus of thanks to the noble Lord, Lord Lexden, and pay tribute to the noble Baroness, Lady Barran; we may have disagreed at times when she was a Minister, but nobody could doubt her dedication to making life better for young children. I also welcome the new Minister and, as ever, declare my interest as a teacher in a state school in Hackney, where my children have been educated as well. My own education was quite mixed. I went private, and to a local state school—Dyson Perrins CofE high school, Malvern Link. Yes, I thought that might make the Minister look round.
Everyone wants the best for their own children; that is obvious. But history is littered with people who have talked up the state system, then sent their own children private. The best education should be available to everyone, and it should be free, and I am lucky enough to believe that my children have had the best education.
I also believe that those who want to should be able to pay for their children’s education. But there is a climate of fear and division in this country, and an idea that private schools equal success and everybody else is going to school with knife-wielding maniacs, in hideous schools with massive classes. I can tell you from personal experience that you can quite happily teach a class of 32, where everyone learns and makes progress, in safety. This is a battle for the middle ground.
We have all had emails from parents with really difficult stories but I have a suspicion that, for some of them, at the first bump in the road the child was whisked out of school and home educated or sent private. I genuinely believe that an education is more than passing exams; it is about learning to face other people—people who do not look like you, people who do not think like you. That is how we get through life; we have to make the best of the situation.
There is an assumption that private schools are at the heart of the community, that they all provide charity to all around and that it would be a disaster if some of them failed. I cannot help feeling that if some private schools failed, that would release a lot of engaged children and motivated parents who could work with state schools, propelling the attainment upwards. It might even bring some badly needed teachers back into the state system.
If parents are unable to afford the fees, it might be a relief to give somebody else the payment of their children’s education. Who knows, their children might even thrive in a mixed environment. But, for this, there must be space in state schools, SEN support and, critically, the teachers to teach. I join everybody in asking that the VAT exemption come in gradually. Also, the briefings that we have had have been radically different in terms of how much money this will cost and how much we will have to recoup. I look forward to the Minister’s thoughts on that.
With the impact of VAT, the best private schools will survive. Those who want to pay will have the choice. Some of the less good schools will wither on the vine and perish, mourned by very few, but whatever we do, we must be sure that any changes benefit the vast majority of our young people.
Lord Balfe (Con)
My Lords, I thank the noble Lord, Lord Lexden, for initiating this debate which, of course, was tabled before the election. We are now catching up. I agree with noble Lords who said that this was in the manifesto, but it is still a very vindictive policy and the way in which it is being introduced worsens things. Top schools will still be okay. Eton, Harrow, Winchester and the like will not go under. They will stay there. The only schools that will go under are those that are on the margin anyway.
There are good schools in places such as Woking, Guildford and Kent, in areas where there are grammar schools. We already have a lot of schools in the state sector which are as good as public schools.
Two of my children went to public school. I observed the huge struggle that parents had in paying fees. It was quite common for there not to be a summer holiday. They went to a very average public school in Ely. We used to know it in slang terms as “Farmers’ Comprehensive” because it catered for the rural community of the north part of East Anglia. However, many of the parents there struggled very much. Not only that, when two parents sent their children to the school, for one of those parents nearly all their income was spent on those school fees.
I was lucky because my wife earned more than me for a good period of our early marriage. Most of that money went on childcare, first on nannies, then on schooling. It was very beneficial because I was working in Brussels, and we felt that my son would benefit from having male teachers around and not being in a totally female environment. However, we also felt that my daughter, who had mild dyslexia, would benefit from the dyslexia programme of the King’s School in Ely, which she did. She went on to university, got a 2.1 and now holds down a very good job.
There are a thousand stories behind all this. Look at the family reasons. I am the president of BALPA, the pilots’ union. Pilots are often away for a week at a time. Sending their children to weekly boarding helps to round them and to give them a start in life.
The same was true for my wife, who is the daughter of a Foreign Office diplomat. She went to public school at 10 and did not see her parents, apart from during the holidays, until she was at university. This is the sacrifice that many people make for their country and the schooling system helps with that.
Finally, I have one question for the Minister. King’s Ely has a burgeoning group of Asian children. It is likely that, if their numbers go down, the school will pull it up by bringing in more migrants. Have the Government made any assessment of this? How many migrants are we to expect? Will there be visas for parents, noting that health service workers can no longer have family visas? Will the children be able to bring their parents in to help look after them, or is this yet another bit of the puzzle that has not been thought out?
Lord Lucas (Con)
My Lords, I declare interests as proprietor of the Good Schools Guide and having sent my children to both state and independent schools. I do not think taxing education is right, but we do. If I spend £20,000 on holidays, I will pay £3,333 in VAT. If I spend that same amount on schooling, I will forgo twice the value of that, and the state will benefit by twice the amount for the cost of schooling that it would have incurred otherwise. In putting VAT on these parents, we are not making tax fair: we are taking people who are already taxed at twice the rate of other people and taxing them at three times the rate. It will not hurt the rich; it will hurt the people who are struggling to afford the fees as they are. As I know from my work at the Good Schools Guide and through correspondence in this House, most of them are people who, one way or another, have found that the state will not educate their children in a way that they need. As the noble Lord, Lord Addington, said, a lot of this is due to special needs: a lot of the education is not provided through education, health and care plans but just as part of ordinary education.
This is a tax that is focused on people whom we ought to value and not punish. I do not believe that it will raise the money that it said it will either. There are too many leaks. There are families where the local state system cannot provide local schooling, where they will have to ship them 10 miles or so. You might think that 10 miles is fine, but it has to be by taxi—and 200 days a year of taxis, morning and afternoon, costs 10,000 or 20,000 quid, depending on the state of traffic. There will be parents who opt out of working so hard if their children go state. There will be all sorts of leaks. I really hope that the Government will commit to making a clear evaluation of the effectiveness of this policy and whether it actually raises money.
What I am most concerned about is the merciless decision to put VAT on in January, to force children to move schools mid-year, in the middle of exam years, when there is no chance to negotiate proper provision for SEN; healthcare workers who need to find a way to be able to work the hours they are asked to and cannot turn up at 3.30 pm to pick up their kids from school; and the number of letters I have received from members of our Armed Forces. They are not well paid. It is astonishing that we should treat people who dedicate their lives to our safety in this way, and I find it astonishing, given the years I have been here and the respect I have for the party opposite, that it should contemplate treating children with such cruelty. It really is not in the blood of the Labour Party that I know. I really hope that the Government will think again and make the start date next September.
When approaching the question of the educational divide, I hope this will one day be for the Labour Party a matter of hope not hate. There is so much that the independent sector could do—is doing—for children who need particular help. For instance, there are schools that take on children in care, and there are many other things that could be done by the independent sector, if the Labour Party would only harness its power rather than trying to stamp on it. I think we would all gain.
Lord Bilimoria (CB)
My Lords, the Labour Party’s manifesto stated that if it was elected it would remove the exemption from VAT—and business rates, which noble Lords have not mentioned—for independent schools. It said that there would be a benefit of £1.5 billion and therefore it would employ 6,500 more teachers in the state sector.
I thank the noble Lord, Lord Lexden, for his excellent opening speech, and I agree with 100% of his recommendations. I am a governor of Wellington College, where our older daughter was at school for five years under the leadership of Sir Anthony Seldon, the legendary headmaster. I am an international student from India. I came here at the age of 19. I co-chaired the All-Party Parliamentary Group for International Students, and I am president of the UK Council for International Student Affairs. There are many international students at our boarding schools. I attended Hebron School, a British international boarding school in India, and I was back at the school in April for the 120th anniversary celebrations. Recently, I have been appointed honorary president of the British Association of Independent Schools with International Students.
I was a member of the Times Education Commission in 2022, when I was president of the CBI, and we emphasised very clearly that 7% of children go to our private schools. I quote:
“The commission recognises that many independent schools offer an excellent education. When only 7 per cent of children go to private schools the priority must be to improve the state schools that educate most young people in this country rather than bashing the independent sector for the sake of class war”.
Imposing VAT will make it unaffordable for many children to attend private schools, and that will put a burden on the state school sector. We are talking about 600,000 students at independent schools, and 28.5% of them get some sort of support. The total number of international students is 27,000; that is, 5% of these students are international. If we look at the fee gap, it is roughly £16,000 for independent schools and £8,000 is spent on a state school child, so the different is double, and I will come to that at the end.
Independent schools save taxpayers money, as has been said by many noble Lords. Oxford Economics found that this saving amounts to about £3.8 billion just from ISC schools. Now here is a fact: 39% of the current Cabinet, 48% of FTSE 350 CEOs, 59% of Permanent Secretaries and 52% of diplomats were privately educated.
There are 65,000 boarders at ISC schools. The contribution of boarding schools is £3 billion and 64,000 jobs. It is phenomenal. The 26,000 overseas boarders contribute £2.1 billion. Unlike UK students, international pupils who come here have a choice to go to any country. If the fees are increased, there could be a 15% reduction in their number, which would reduce the contribution by £315 million. Here is another fact: international students who come to our boarding schools go on to British universities, so our universities benefit from them as well.
Whatever happens, we must make sure that there is an exemption for children with special needs, whom the noble Lord, Lord Addington, mentioned. Two of my children have special needs. If one of them had not gone to one of the top independent schools, he would not have got three A*s at A-level and a first-class degree from the London School of Economics. We owe that independent school for what he achieved.
We must exempt service families on continuity of education allowance. Independent schools add £16.5 billion to the UK economy, save the taxpayer £4.4 billion, provide 328,000 jobs and produce £5.1 billion in annual tax revenue. I conclude with this, and it is a fact: the state school budget is £60 billion and here we are talking about getting £1.5 billion more. Who is doing the thinking over here? We underspend on our state school children: £16,000 in private schools, £8,000 in state schools. We need to increase investment in state schools and not rob Peter to pay Paul. This is penny-wise, pound-foolish nonsense.
Lord Hacking (Lab)
My Lords, I stand here as a supporter of the Government, but no support can be blind. I cannot support the proposed VAT on independent school fees, whether or not it was in the manifesto. It is immoral and destined to bring about significant social and political damage to my party and the country.
There are many serious worries. For example, the introduction of an education tax will put us at odds with every country in the European Union and all federal and state law in the United States of America. There is also a serious worry about a blatant breach of the education provision in article 2 of the first protocol of the European Convention on Human Rights. Unfortunately, the noble Lord, Lord Pannick, is not among us, but we have heard his views through the noble Lord, Lord Alton, and he supports entirely what I just said.
The most worrying feature is the failure properly to assess the likely level of forced pupil migration from the independent to the state sector—a vital assessment. The VAT proponents have not revealed their calculations, but the arithmetic is such that any pupil migration above 10% will wipe out any profit for the state and become a progressive burden on the state. Since the VAT proponents are still claiming a profit of between £1.3 billion and £1.5 billion for the state sector, the assumption has to be that they are the working on a very low pupil migration figure, possibly as low as 5%.
There are other calculations. The October 2022 parent survey by the Independent Schools Council, conducted among 16,000 parents, found that 18.8% of parents were likely take their children out of independent education. In April 2024, a parent survey by the Times newspaper set a pupil migration figure of 26%. A preparatory school in Surrey forecasted the same 26% migration of pupils. The Hulme Grammar School in Oldham believes that 50% of parents will find it difficult to meet the VAT school fees. Scaling down the figures as far as possible, this means we are risking no less than 80,000 to 108,000 pupils being forced from the independent sector, with all the education disruption and distress this will involve, and with a big burden of new pupils being placed into the state sector.
The task, therefore, upon which I have embarked is to persuade my party not to carry this measure further forward. It must be noted that the well-endowed schools constitute only 10% of the independent sector, as the noble Lord, Lord Lexden, pointed out. The axe will fall not on them, although they will be affected, but on the hundreds of independent schools, some very small, throughout the country which are providing most valuable education to supplement the state sector. Take, for example, the independent schools in Greater Manchester that I recently visited—the Hulme Grammar School, which I have just mentioned, and the Bolton School in Bolton. As I learned, the parents are just working people employed in health, education, catering and hospitality. They are taxi drivers, joiners, carpenters, and all are making great sacrifices to provide a better education for their children. These are the very people my party has pledged to support.
Finally, I can only repeat that this VAT proposal is wrong. Any reasonable assessment of likely pupil migration will show that it will provide no benefit to the state but would be a heavy burden on it. I ask the Minister and the Government to respond positively to all these concerns and, as promised by the Leader of the House, to listen to constructive criticism.
Baroness Garden of Frognal (LD)
My Lords, I find this a sad debate, but I am delighted to follow the noble Lord, Lord Hacking. I thank the noble Lord, Lord Lexden, for his championship of the sector and his spirited introduction.
We had high hopes that the incoming Labour Government would champion education, move away from the stultifying knowledge-based curriculum and look for opportunity for all. The Liberal Democrats would never tax education, and worry that singling out independent schools in this way betrays a vindictive lack of understanding of the breadth and social impact of the sector. I thank all those who have written such moving letters to us about their own stories.
Anyone who knows anything about education knows that changes should only ever be made at the beginning of the school year. As many have said, introducing such a significant measure in January will bring great unnecessary stress, as pupils struggle mid-year to adjust to significant change. I join the appeal to the Minister at the very least to postpone this until September, which will also give the chance for proper scrutiny and impact assessment. I fear that the huge sums the Government expect to raise for teachers will prove far from the reality.
In four short minutes, I will raise the issue of military children. With my RAF husband, we moved 24 times in 30 years. At the age of nine, both our daughters were starting their seventh school, and we took the decision that they should board to get continuity. We could do that only because of the substantial forces education grant. My husband was a high-flyer, but we never had much money. When the school decided to change school blouses and summer dresses, I bought material and sewed six blouses and six summer dresses, because the material cost only about a quarter of the ready-made clothes. I assure noble Lords that this was not for fun: we simply could not afford the uniforms from the shops.
Military children already suffer upheavals and uncertainties, so will the military education allowance be raised to pay the VAT? If not, I fear that, as was mentioned, many military families will be placed in an impossible position and military children will once again be disadvantaged.
The Bill, alas, smacks of prejudice rather than clear thinking. It is of course a matter of concern that the 7% or so of those independently educated end up in much greater numbers in top jobs, but we should look at the reasons why. What is it in private schools that works better than state schools? Surely, we should aim for state education to emulate what works in the private sector, rather than destroy schools that are giving great education, often to difficult and challenged children.
Many independent schools are small, with 200 or 300 pupils. As we have heard, many cater for special educational needs or specialist skills—music, drama, dance and art, subjects that the Conservative Government did much to abolish in state schools. They cater for parents of limited means, who struggle to do the best for their children. This increase in fees could be the straw that breaks the camel’s back. But where in the state sector are the places for additional SEND pupils, or, as the noble Baroness, Lady Bull, pointed out, for the creative stars of the future?
Parents work flat out to keep their sons and daughters in school environments where they can flourish and succeed. If the sums simply do not add up, they will be dismayed if their children have to return to schools where they have struggled and failed. It is a matter of great regret that this unkind and uncosted measure was put in the manifesto. It needs much greater scrutiny if we are not to find many vulnerable children, who were happy and achieving, cast into an uncaring world, with their life chances ruined and parents distraught. I beg the Minister at the very least to delay this until September and to look carefully at the damage the Government are doing. The speakers in this debate have surely given reasons aplenty for a pause and a rethink.
Baroness Monckton of Dallington Forest (Con)
My Lords, I declare my interest as set out in the register: I am the founder and chairman of a charity that, among other things, is a special post-16 institution. Our aim is to prepare young people for employment. The charity is Team Domenica, named after my daughter, who has Down’s syndrome. Also, we have staying with us a Ukrainian refugee child, who attends the nearest public school, free, along with four others.
Non-maintained special schools have been excluded from the new 20% tax. However, these schools are only a very small part of the special educational needs landscape. Department for Education data shows that there are only 52 such schools, educating 3,965 pupils. Yet there are 753 independent special schools, educating nearly 25,000 pupils, all of whom are potentially liable for VAT. Where their place is funded by the local authority, this can be claimed back, but the school still faces the cost of registering for VAT and the burden of managing the system.
Where does that leave specialist colleges such as ours, of which there are 130 in England? At the moment, all Team Domenica’s candidates are over the age of 18, but, if we decide to take on students between the ages of 16 and 18, the VAT would fall upon not only those individuals but on every single pupil at our college. We would also lose our business rates relief, as pointed out by the noble Lord, Lord Bilimoria. In a field where there is already such a grotesque volume of form-filling, we will have the pointless bureaucratic nightmare of recycling money that comes from the state only to return it. The Government would effectively be taxing themselves. This would perversely discourage extending this potentially life-transforming service to some of our most disadvantaged young people. These 130 institutions, of which we are one, are the only alternative to mainstream further education for people with more complex learning disabilities.
On the wider point, which other Members in your Lordships’ House have raised, concerning the 94,000 SEN pupils placed in private mainstream schools, only 7% of them have an education, health and care plan, which means that the overwhelming majority are paid for by the parents, many of whom will already be at the limits of what they can afford. A large number of these pupils will have been taken out of maintained schools and transferred by their parents to the private sector out of desperation, as these children, particularly those on the autistic spectrum, have not been able to cope with the large class sizes.
The general effect of this tax will be to drive more SEN young people into the maintained sector, which is already inadequate at meeting these needs. This will make more parents go to tribunals if the local authority refuses to give their child an EHCP—which happens all too frequently. I have sat in on some of those tribunals. I would like to invite the noble Lord, Lord Addington, who articulated with such passion and anger what happens in those tribunals, to come with me to the next one that I have to attend. This is an exhausting option for parents already struggling to cope. Some 96% of such hearings end in favour of the family, but at a huge emotional cost.
No previous Government have taxed education—it is seen quite rightly as a public good. But to tax parents of children with special educational needs, parents whose lives are already so challenged and difficult, and who often struggle more than people could imagine, is cruel. I hope that this is merely an oversight on the part of the Government, but, if such is the case, that is itself a problem, because people with learning disabilities are too often forgotten. They deserve so much better
Lord Black of Brentwood (Con)
My Lords, I declare an interest as president of the Boarding Schools’ Association and the Institute of Boarding. This is an intensely personal issue for me. My beloved parents sent my brother and me to Brentwood School, an independent school. They were not at all wealthy—my father owned a shoe shop and my mother looked after the family. It was a real struggle for them, but they never regretted it. To their sacrifice, and an exceptional education at Brentwood, I owe everything. My parents were just the sort of people, battling to make ends meet to pay the fees, who would have been hit hardest by this spiteful policy. They would not have been able to cope with a sudden 20% increase, especially halfway through the school year, and we would have been placed in a state school, adding to their overcrowded classrooms. That is what will happen now—one of many reasons why this policy will end up costing taxpayers money. This truly is voodoo economics. Those affected will be young people at their most vulnerable. They are not statistics, but children with whose lives this Government are heartlessly toying.
Fifty years on, I am chairman of governors at the school, and I declare my interest accordingly. Abundantly fulfilling our charitable purposes, we play our full part in helping many from less well-off backgrounds. We spend nearly £2.5 million each year on over 120 bursaries, half of which are fully funded. We have an active programme of partnerships and volunteer programmes with the local community, and we work with many local state schools to provide sporting, musical and science facilities, as well as donating laptops. That is replicated across the sector. However, all that is at risk if VAT, alongside the removal of business rates relief, hits the financial sustainability of independent schools.
A prime duty of government in education policy should be to encourage excellence access—hallmarks of schools such as Brentwood. This policy does the opposite: it is a tax on opportunity and achievement. If I dare use this phrase, it is the first time in five decades that a Government have had levelling down as an aim of education policy, rather than levelling up.
Brentwood is also a boarding school. Boarding schools, both state and independent, are a vital part of the education sector, contributing £3 billion a year to the economy and providing 64,000 jobs, as the noble Lord, Lord Bilimoria, said. They educate 70,000 children a year, with 25,000 coming from overseas, making them part of the incredible international success story of independent education. They play a particularly important role in training young people in music, singing and ballet. As such, they are a crucial part of the UK’s creative economy, especially at a time when music education is collapsing in state schools. They also provide indispensable continuity of education for military families, on whom we depend for our freedoms. The Government say that will not charge VAT on state boarding fees but will on independent boarding fees. Why on earth should they be treated differently, if not simply for ideological reasons? Should not fees for military families, and for students enrolled in music and dance schemes, be exempt, in the interests of wider public policy and at a cost of just a few million pounds?
This cruel policy—in sharp contradiction, I might say, of our obligations under the Universal Declaration of Human Rights—shamefully puts the interests of crude ideology before those of children, many with special needs. The Government must delay its implementation until September 2025, undertake a proper consultation, talk to the sector and come back with plans that are properly thought through, costed and practical. It is time to put children before party.
Baroness Butler-Sloss (CB)
My Lords, I declare my interest that I went to an independent school, as did my children. I must say, like many others have said so far today, that doing that spent all our money. We did not take foreign holidays and things like that, but it was worth it.
I strongly support what the noble Lord, Lord Hacking, said, as well as many other speakers. The Government have not looked across the independent sector; they have concentrated on the great schools. As has been said, the great schools will survive, probably largely because of foreign pupils.
I have had a lot of experience of small independent schools, right across the country, and I have had—like everyone else here, I am sure—endless emails from parents from small independent schools, many of which are likely to close. They are often local, and parents have put their children in them for very good reasons. One example I read was of a nine year-old autistic boy who is extremely clever. In the state sector, he was absolutely hopeless. He was removed and sent to a small independent school, where he was cherished. That sort of child may well cope in ordinary school if he has sufficient help, which this child did not have.
I also have a personal experience. One of my grandsons is profoundly deaf. He is American, and he went to an independent school in Los Angeles because he could not cope with a lot of noise and had to sit at the front of the class to be sure to hear what was going on. I am sure that similarly profoundly deaf children in this country going through ordinary education would not necessarily have a very good time.
I have to say that I am very concerned for the people on modest incomes—many of your Lordships have already been talking about modest incomes—who are still taking the trouble to spend money on education rather than on holidays and other things. That is what is being attacked here with this proposal.
As I said, many small schools are almost certain to close. What on earth will the effect be if, in the middle of the academic year, a considerable number of children have to go into the state sector? We know that many schools in the state sector are overfull already, and the teachers will not be there because the money has not yet been raised. I am particularly concerned with pupils in their GCSE and A-level years; nobody has yet spoken particularly about those two groups. How on earth will they go into the state system with probably a completely different programme, working in a state where they absolutely will not be able to cope with what is going to happen? If they do not look at anything else, the Government must look at January. Finally, I ask them to please look at SEND, at special schools for other needs and at military schools.
Lord Kirkhope of Harrogate (Con)
My Lords, I declare my interests in this subject, first as a former pupil, then a parent and then a governor of the independent Royal Grammar School in Newcastle upon Tyne. I will concentrate some of my remarks on giving a few facts about my old school. Established in 1525, it is coming up to its 500 years. The school has always promoted a rich social diversity. When I attended, a little later than that, we had the benefit of the assisted places scheme, with many students attending based on their potential, not their financial circumstances. The school has had one of the most distinguished academic records of any school in the United Kingdom, particularly in its region, the north of England.
When the assisted places scheme was withdrawn, the school found ways of keeping its diversity by offering support and finding some or all of the fees for many deserving students and later, to this day, seeking bursary advances from institutions, former pupils and others to maintain that broad offer. Nearly 100 students at the school are currently supported by bursaries. Since going co-ed the pupil roll has gone to more than 1,300, and the mix has added to the comprehensive nature of the education provided. But the school has never considered itself as a privileged island, remote from the community. I am sorry that the noble Lord, Lord Griffiths, is no longer in this place because his reference to this is important. The Minister can get confirmation of that from north-east representatives at all levels.
There is a genuine pride of that establishment in the region. The Labour-controlled Newcastle City Council is constantly in touch with the school and using its assistance in various ways. The governing body has local authority representatives from the neighbouring areas, and its contribution to the community includes the sharing of its assets. More than 100 state schools in the north-east of England benefit from Royal Grammar School specialist staff, who assist with subjects including maths, physics, robotics and computer science. In its charitable status declaration, it includes reference particularly to providing facilities of social welfare to the public at large, with a view to improving the conditions of life in Newcastle upon Tyne and the north-east of England. This is really important.
Alumni have included many who have gone on to be leaders in their fields, in academia, medicine, the arts, the law, sport, religion and public service. I was interested to hear the reference by the noble Lord, Lord Alton, to the ECHR; I think I will have to advise my honourable friends standing for the leadership of my party of that point, in case they develop that theme too much, but it is very important. Can the Government please examine carefully whether legality exists in this case? If they persist in their plan, may they please at the very least look at ways in which they can give concessions to reflect the community output of a school based on its belief in encouraging good education everywhere?
Although bursaries are a means of benefiting those from poorer situations—from an RGS education, for instance—they do not benefit those parents who narrowly fail to meet the criteria for such awards or where the limit of grants has been reached. Many struggle to give their children the opportunity to receive this form of education best suited to their needs. Levying VAT on fees will have a big impact on those families and force compromises, including on services offered by the school both internally and externally. Regardless of the commitment of the Government to this policy, I therefore hope that they will find ways to recognise schools such as the Royal Grammar School in Newcastle, with its strong involvement for good education and community concern.
Lord Winston (Lab)
My Lords, I work at Imperial College where I am a champion of the outreach group, which has grown considerably over the years. It started 50 years ago; we called it the Pimlico project. That school has benefited massively from the sort of work that we do with it, and across London we have done this continuously since.
The big problem is outside London, where what I am seeing, as the person who represents the college mostly outside London, is truly frightening: the lack of aspiration and ambition, and the number of kids who do not consider that it is worth being at school after the age of 15, let alone 16, or who are not able to do A-levels because there is not enough money to do that. There is a crisis in our schools, and it is a crisis in the state sector. It is not diminishing. I go into schools in the north-east and north-west of England. I spend much time in East Anglia, 10 or 15 miles from Cambridge, one or the great seats of learning, and it is extraordinary how great that deprivation is. I also work in the West Country and more recently in Wales, particularly in the parts that are difficult to reach in the middle of Wales on the coast. It is a five-hour journey for me, meaning I have to stay overnight. I wondered what the hell I was doing there, but when I saw the sort of things that I could stimulate, I was completely converted to realising that we are doing a useful job.
We are not going to do anything to deal with the massive problem that we have in some of our state sector—not all of it, but where it is poor and diminished there is some urgency. As for the idea that somehow levelling down by taking money from the private schools is going to make a difference, it cannot possibly. The sort of money that is involved is trivial compared with what is needed. Unfortunately, my Government, which I absolutely support, have to recognise that we need to think of much more sensitive ways of dealing with what is in fact needed.
What we are doing with the outreach at Imperial is using the private schools. To take one example, Peterborough is a pretty poor area. Lots of state schools there are not doing very well. We focused on Oundle, which is in the centre up there. Oundle has been amazing. I have visited Oundle maybe seven times in the last 10 years, maybe more. Other members of the college have gone there too. They have connected with the state sector and made a huge difference to the state schools in that collaboration. Those sorts of collaborations are what we should have done in the health service under Tony Blair’s Government, bringing the private sector into the health service, but he felt that the party would never stand for it. We now have another opportunity with education; we have to consider how we can manage that. The attitude of damning the private sector, with all the objections that we have heard—and I agree with them completely; they are really serious—needs to change.
It is all very well to talk about a manifesto commitment. Everybody can believe in their party, but nobody on either side of this Chamber can believe in everything that the party believes; that is madness. Here, we have to think again and recognise that we have to do something about it.
Lord Naseby (Con)
My Lords, I think it is plain to all noble Lords that it is wrong to put a burden on certain families who, faced with increased fees caused by a policy of introducing VAT, find themselves totally adrift. Those children will undoubtedly suffer.
Frankly, independent education has been with us for centuries. I declare an interest as having been at Bedford School, which was founded in 1552. It is a boys’ school of just over 1,000 boys, the best part of 25% of whom board. They do so because their families work somewhere abroad and there is no alternative. There is no state boarding. We must reflect on that dimension.
We also need to recognise that children today, whether in independent or state education, have been through a shattering experience with Covid. I do not know whether noble Lords saw what happened in individual homes; I certainly saw what happened in my daughter’s home and my son’s home. Sections were set aside for remote education for my two granddaughters. That sort of thing was done throughout my former constituency in Northampton South. Whether we like it or not, those children suffered. That must be recognised.
I was a boarder. My parents worked in Lahore and Ottawa. Where else could I go other than to a boarding school? We are an exporting, trading country. For heaven’s sake, there are thousands of parents abroad supporting this country. We must remember that. On top of that there is also the military and everybody else. Boarding is vital.
The Harpur Trust, which looks after the three major independent schools and one small one in Bedfordshire, says that £2.7 million is spent on bursaries, as well as for 52 disadvantaged young people from Bedford to go to university. There are school uniform grants to every young person in Bedford on free school meals moving from primary to secondary school. That is a terrific achievement. My own school has a partnership with Mark Rutherford School and a new project in the last few years, Ready2Lead, covering eight secondary schools. The school’s Quarry Theatre opened to the public in 2015 and will celebrate 1,200 shows in July. So it goes on. Here is a small quote from a Mrs Barker, the head teacher at Scott Primary School:
“We are so grateful for the opportunity that Bedford School are offering”.
This is not the right policy. We need to be practical, exempt boarding fees from whatever comes out, and be sensible and move this to the end of the school year —it is pretty difficult to change course in the middle. If we are really short of money, why is gambling—bingo and betting—exempt from VAT? Is that more important than the education of the young people of this nation?
The Earl of Clancarty (CB)
My Lords, I am grateful to the noble Lord, Lord Lexden, for the opportunity to speak in this debate. This is about schools, but I will start by talking briefly about higher education, as it has a bearing on the debate. Ideally, all education should be free, and that ought to include higher education. I strongly believe that it was a grave error of the Blair Government to introduce tuition fees and effectively commercialise universities. Despite the problems we now face, if Germany can successfully operate a free higher education system, for example, why can we not do so if we believe in the principle of free education? I raise higher education in this debate because of the respective choices that face parents and students in every area of education, which may have little to do with principle but everything to do with necessity.
We have already heard from my noble friend Baroness Bull about the particular performing arts schools where, unless the state decides it is going to start operating its own tuition-free ballet school, for example, there is no option for the parents and students concerned—just as there has been no option since 1998 in higher education except to get a loan.
I agree entirely with the noble Baronesses, Lady Fraser and Lady Bull, about the need for certain exemptions. The Labour Government’s own dance and drama awards have potentially been caught up in this too. I hope the Minister can say that the 15 providers for performing arts training through these awards will not attract VAT.
To make the wider point, not every parent has sent their child to an independent school because it is what their parents did, but because what was required for the particular child has not been readily available in the state sector. They will scrimp and save to do so and make use of bursaries which will likely now be less available. This is true for the arts, which have been significantly diminished in the state sector, as the noble Baroness, Lady Garden, said, but have flourished in many independent schools. Nevertheless, let me remind the House what Keir Starmer said in his speech at the Guildhall on 14 March:
“Every young person must have access to music, art, design and drama. That is our mission”.
He went on:
“we are launching a sector plan to support the entire ecosystem of the creative industries”.
Schools are of course a major part of the ecosystem. The goal should be that the state sector arts education be at least as good as independent schools are now, and make that offer unnecessary. However, when you realise that, for example, independent schools spend on average five times as much on music as state schools currently do, this is a hefty challenge. Will the Government rise to this challenge and keep their promises on art education in view of their intentions for the private sector?
I make one further point, in the interests of co-operation—there is considerable adversity in this debate. I believe in good education for everyone whatever their background. However, I also believe in advances in education—Education, if you like. What independent schools have been able to do, unencumbered by the accountability measures and the narrow tunnel into which state education has been pushed, is experiment, and that should be valued. As my noble friend Lord Aberdare pointed out in the 11 to 16 year-old school education debate on 26 July, some independent schools have developed their own curriculum offers and assessment methodologies. The Government, the state sector and, indeed, Becky Francis could be learning from these developments in the independent sector so that education as a whole may benefit.
Baroness Lawlor (Con)
My Lords, I am very grateful to the noble Lord, Lord Lexden, and I congratulate him on tabling this Motion for us to debate. I am very concerned about the impact it will have on independent schools. I oppose the plan and I hope that we and the Government will think again, given all the reasons we have heard today about the impact on parents, schools who face closure and the wider benefits to the community, which will be lost.
This matters more than ever before. Independent schools show not only what can be achieved. They offer competition and an alternative to the state sector. I believe this is, more than ever, important. We are confronted today, not just in this country but in others too, by the total state and its domination over life and liberty, over every area of our lives and our children’s lives, through ever-higher tax, the arrogation to itself of ever greater powers, and ever more spending on what the state, rather than the people, decrees.
That will now be extended to independent schools which, unless the Government change their intended policy, will be obliged to pay VAT. Many are charities that originated in municipal, private and church charity under, and helped by, the historic charity laws of Elizabeth I when education was specifically mentioned as one of the purposes of charity, along with three others.
Indeed, in 1870, when the state itself moved in to provide for public elementary schooling where previously there had been a grant system, the Prime Minister of the day, William Gladstone, insisted that parental freedom and freedom of conscience must continue to be catered for, and that the state should supplement not supersede existing voluntary schools, which were independent of the state. He was a Liberal Prime Minister who led a debate against the left—the ideologues—in his own party, who wanted a uniform, Prussian-type military system of education as a state system. He would not sacrifice parental choice to a uniform system. He won the day and the law provided that the state with its board schools would supplement not replace voluntary schools of all persuasions—Anglican, Catholic and Dissenter.
In today’s secular world, your Lordships may no longer think such freedom of conscience matters, but we face an ever bigger state. We also face threats not only to freedom of conscience but to the academic and intellectual freedom of those who teach. The Government now appear intent on suspending indefinitely the operation of freedom of speech in universities, the Higher Education (Freedom of Speech) Act. They are intent on reviewing a national curriculum which the coalition worked so hard to ensure would provide a minimum of knowledge in each subject on which teachers themselves would be free to build and develop. They also intend to get rid of the Ofsted snapshot.
These matters are more important than ever; we are confronted by the total state. I urge the Government to treat this measure in the spirit of all Governments of the past: to encourage diversity and to leave it alone. The Labour Party under Mr Blair, the Liberals under Gladstone and the Conservative Party have all championed diversity, not uniformity.
Lord Kempsell (Con)
My Lords, in the debate on the gracious Speech before the Summer Recess, I suggested that the Government’s proposal to impose VAT on school fees would ultimately narrow opportunities across the country rather than widen them. What I did not predict is that the Government would make such a quick success of wreaking havoc on the lives of children who are now living with uncertainty about the implementation of this measure.
I want to focus on one such group in particular: Armed Forces families. More than 4,000 military children receive support with school fees via the continuity of education allowance. From Cyprus to Sierra Leone, from South Sudan to the Falklands, the operational demands on these families have a huge impact on their education. Army families, for example, are highly mobile; they are asked to move every two years on average. They receive support so that their children can have continuity by attending boarding schools, minimising the need to constantly switch schools. That funding is capped and there is also a parental contribution, so these are not fully funded places. Of course, these families are far from wealthy, but they are highly concerned that they will be priced out by the Government’s plan.
Just last night, I received an email from a service family who described their tears of worry at the Government’s policy. It says: “My child should have stability in being able to stay in the English education system at the same school, but the Labour Government apparently wish to break their heart and soul”. I must warn Ministers that their plan is already doing damage to morale among service personnel, and that is not acceptable.
Worryingly, nearly 70% of Army families surveyed say that if there is no exemption or mitigation to cover the costs of the VAT, they would have to consider leaving the Armed Forces. With the global security situation as it is and the current operational tempo, this surely cannot be what the Government intend by this policy.
I also highlight the many self-funding Armed Forces families who do not claim the continuity of education allowance, who rely on these schools to make their role feasible—on overseas deployments there is obviously no access to alternative state provision. I asked a Written Question on this matter over the summer break and no detail has been forthcoming from Ministers. I wrote to the Treasury but have not received a reply. The school year has already started and the Government are leaving Armed Forces families in the dark. I join calls from across your Lordships’ House today for Ministers to clarify the situation for Armed Forces families. They should commit to exempt all Armed Forces families, whether in receipt of support or not, from their plan to place VAT on school fees. If the Government are not willing to do so, they should design a rebate or mitigation that means that Armed Forces families are not forced to consider whether they can continue in service. It is not sufficient, as the Treasury says in its technical notes, to wait for the spending review to evaluate the impact on military families as this is having an impact now.
As my noble friend Lord Roberts so aptly said, private school VAT will become a case study in the unintended consequences of ill-thought-out policy. Indeed, it has already been scrapped in other countries, the unintended consequences having been noted in Greece, where the policy was withdrawn. It will flood the state sector, cause successful schools to close and have a negative impact on communities. I fear that most of all it will clobber Armed Forces families, who are doing nothing other than serving their country and from whom I have had a huge number of representations.
I fear that behind this policy lies the worst kind of political grandstanding. It does not reach the standard even of sixth-form politics but feels like 1970s-style divisive class politics reheated for today, and leaves a bitter taste.
The Earl of Devon (CB)
My Lords, it seems that this is a debate somewhat about privilege and so I should declare some privileges as I start. The first is the privilege to listen to such an interesting, balanced and informative debate. The second is the privilege I enjoy, having gone to Eton College, which got a rather stupid student into Cambridge University. The third is the privilege I had of sending my children to state primary and secondary schools in Devon, where the education was excellent and they did very well. Fourthly, I should note the privilege I currently have of hosting Kenton Primary School at Powderham Castle—it moved in this week and therefore I am the landlord of a state primary school.
I am not an education expert and was not going to speak in this debate but I was encouraged to by the experience of the people I know locally, particularly families with SEN children and military service families. On SEN children, I really cannot add much more than what the noble Lord, Lord Addington, said, except to note that Covid has obviously been brutal on children’s mental health. It has also been brutal on the mental health services that support our children. The thought that those wholly stretched services are going to have to deal with a whole raft of additional applications for education, health and care plans at short notice when they are considerably understaffed beggars belief, and I cannot believe that the Labour Government really intend to do that in January and cause so much additional burden and stress for these families who are in great need.
On military families, I spoke to my sister this morning. Her husband commands in the south Atlantic and she is flying off to the Falklands tomorrow. She has just packed her children off to boarding school, where they are safe and will have a consistent education. They have no idea how they are going to afford that education on their military salary. I think it is particularly cruel to those people who give so much for the defence of our realm for us to be putting them in this state at this time.
Lastly, it is difficult to say anything new after such an erudite debate, but Mrs Helen Mason, who has informed me a lot about the condition of SEND children, points out that Articles 28 and 29 of the UN Convention on the Rights of the Child may well be implicated in this policy. I ask the Minister to comment on that.
Lord Fairfax of Cameron (Con)
My Lords, I too thank my noble friend Lord Lexden for bringing forward this debate. Like many others, I agree with every word that he said.
I had intended to speak in this debate in any event, but the pitiful letters that I and many others have received have stiffened my resolve. While this misconceived and ill-thought-through measure was in the Labour Government’s manifesto with the aim of reducing educational inequality, every indication is that its rushed implementation without proper consultation or financial assessment may achieve precisely the opposite, as well as bringing extreme pain to many families and children.
The Government’s vindictive proposal is to impose this measure with effect from 1 January next year. That is an exceptionally short time and is likely to lead to many seriously negative effects. Some independent schools will be unable to plan properly in the short time available and may be forced to close. Children, particularly those with special needs, may have their education catastrophically disrupted mid-year and their exam attainment prejudiced. Local authorities and state schools may not have time adequately to plan for the likely mass transfer or attempted transfer of pupils to them from the independent sector. I say “attempted” transfer because of course, many schools have already told inquiring parents that “there are no places available”.
As some speakers have said, there is great uncertainty about the likely financial impact of this policy. The Labour Party is praying in aid a net benefit of £1.5 billion but others, including the Adam Smith Institute, suggest that the measure could raise no money at all or even cost the Government £1.5 billion per year.
Because my noble friend Lord Lexden has already quoted them, I will not repeat the Oxford Economics figures—on the contribution of independent schools to the UK economy and so on—but have the Government and the Minister ever heard of the Laffer curve effect? Contrary to stereotypical perception, this measure will not hit the Etons of the independent school world but the small, far from rich independent schools, about 50% of which have fewer than 100 pupils. Those are the schools that are financially vulnerable and may be forced to close because of this measure.
Internationally, neither the US nor the EU imposes VAT on independent schools; and as noble Lords have heard, Greece tried it in 2015 with catastrophic results and had to reverse it. So, if the Government bring in this measure, they will be an international outlier. As others have advocated, there is a strong case that three categories in particular should be exempted, which I would support: children with special educational needs, small faith schools, and service and diplomatic families.
I have to hand it to the new Labour Government: in their short time in office, they have already succeeded in alienating pensioners, Jewish people, entrepreneurs and now children and parents using independent schools. That is quite an achievement in three short months. Our children’s education is far too important a subject to be upended by this mean-spirited, ideological and ill-conceived measure.
Lord Etherton (CB)
My Lords, I too am grateful to the noble Lord, Lord Lexden, for securing this important debate. I agree with many of the concerns expressed by previous speakers, including the need for more comprehensive consultation; the need to delay the imposition of VAT until next September; and an exemption for schools providing for children with special educational needs and disabilities, as well as for small faith schools and boarding schools for the children of soldiers and diplomats, who rely on boarding education for their children in order to carry out their duties.
I shall concentrate on the contributions made by some independent schools for the benefit of state schools and deprived children. The helpful briefing of the ISC states that there were 9,248 partnerships between ISC schools and state schools or community groups in the 2023-24 academic year. Last year, ISC schools gave £1.1 billion in assistance, more than half of which was means-tested. My point, in short, is that this contribution must in some meaningful way be recognised if the proposed new VAT regime is imposed.
I wish to give as a live example one metropolitan independent school—not Eton or Harrow. It supplies teachers directly to state schools: last year the equivalent of three full-time teachers. Substantial amounts were applied in partnership projects, equivalent to approximately 2.7% of total turnover. In addition, the school spends approximately £3.5 million a year on bursaries—8% of turnover. The majority of this comes from donations. Critically, more than 50% of parents give donations for bursaries and partnerships. Taking an overview, more than 10% of the school’s turnover was applied last year to bursaries and partnerships, a significant proportion of which came from donations from parents.
The obvious concern is that parents who pay VAT at 20% will be less inclined to give donations that would have been applied for bursaries and partnerships. I suggest that the Government should consider carefully ways in which, if VAT is imposed on the fees paid to independent schools, allowance is made to recognise the significant amount paid by some independent schools for the benefit of less-advantaged state schools and pupils and, indeed, to incentivise the giving of such assistance.
I put forward for consideration by the Government two possible approaches. One is to have a reduced rate of VAT where a certain percentage of the independent school’s turnover is applied in bursaries, partnership projects and other assistance. The second is to treat money, or money’s worth, applied for bursaries, partnership projects and other assistance as deductible from the fees paid by parents in order to arrive at a net figure for the purposes of VAT.
Assuming as I do that the Government’s intention is not a spiteful attack on independent schools but a genuine attempt to improve state schools, it seems obvious that the Government should not disincentivise the financial assistance for state schools and disadvantaged pupils currently derived from parental donations in the independent education sector, but encourage such donations alongside the intention to impose VAT on independent schools’ fee income. If, as I hope, these ideas are of some interest to the Minister, I suggest that a meeting with her, attended by those with appropriate expertise, be arranged.
Lord Fuller (Con)
My Lords, I attended an independent school and was a governor of another one for about 10 years in the 2010s. I thank the many people who have written to me explaining their personal circumstances and detailing the effect the proposals will have on them as families and on their children. For the most part, these correspondents are not wealthy people. They include police officers, soldiers, airmen, nurses and firefighters—working people with aspiration and ambition for their children, many of whom have their own challenges. I empathise with them all but wish to make a different point.
First, I wish to talk about the schools themselves and their staff. Nearly all these organisations are charities; they are run for charitable purpose, not to generate healthy bank balances. Even schools with 500 pupils may run a surplus of just £250,000 a year to fund reinvestment. They do not have fat on their backs. In these cases, the fees from perhaps only half a dozen boarders make the difference between profit and loss, surviving or failing. Their finances are finely balanced and under pressure.
In the shires, these schools are often located in market towns: places such as Loddon, Holt, Ely, Uppingham, Oundle—I notice that the noble Lord, Lord Winston, is not in his place—Oakham, Felsted and Framlingham. They are lovely places with wonderful high streets and a much wider range of pubs, cafés and restaurants than their populations would normally sustain. But they are not market towns; they are factory towns. The schools are their factory: factories of education and learning. Two boarding schools in Norfolk, Langley and Gresham’s, employ 450 people each and the latter spends £25 million a year in Holt and is just about to refurbish and repurpose a grade 2 listed building which otherwise would be lost to the nation. They underpin local economies.
I was in my local pub in August, and I bumped into a man wearing a Langley School polo shirt. It turned out that he was responsible for running the minibus network, with 27 minibuses, the drivers, himself, a secretary and some maintenance staff—a 35-person sustainable transport business. His colleagues were cooks, cleaners, matrons and groundkeepers, not just the teachers. They are working people, and I want to speak for them, because this proposal risks putting them all out of work, and will not raise a penny for the Exchequer.
It is simple: if you force an organisation to levy VAT on sales, it can reclaim VAT on its purchases, and net off. Charities cannot do that. If you start to treat charities as businesses, do not be surprised if they start acting like businesses. If schools are forced to close, we are looking at the loss of PAYE and the payment of benefits, in areas where there are few other employment opportunities. Cancelling a bursary for the child prodigy, or a scholarship for an exceptional sportswoman from a disadvantaged family, helps nobody. It will drive inequality harmful to our national sporting life. We will all be poorer for it.
There is so much more I could say, but this proposal will drive more elitism and social inequality, and lead to less opportunity, less charitable purpose, less choice, fewer exports and stunted economic growth. It will have a catastrophic effect on the economic base of our market towns, and on working people and struggling parents. It will put additional burdens on local authorities, with listed buildings left to moulder and the disruption of house prices.
I was just a boy in the 1980s, but I remember wholesale factory closures. For four decades the Labour Party made a rallying call around that. But make no mistake, the Government are mandating factory closures in market towns across our nation. The perverse consequence will be that the lowest paid and the most challenged will pay the price, damaging our place in the world and the promotion of our values to other nations.
Lord Shinkwin (Con)
My Lords, I am grateful for the opportunity to speak in the gap. I too thank my noble friend Lord Lexden for securing the debate. I can hardly remember a time when the House has been so united in rejecting policy based on class envy at the expense of the life chances of vulnerable children.
I declare an interest: I am the beneficiary of a public school education. That was not the intention; it happened by accident—literally by accident, because as a child, as a result of brittle bones, I had too many accidents and too many fractures. My orthopaedic surgeon at the time told my parents that I had to carry on walking if my bone density was not to deteriorate further and my brittle bones worsen. The state system said I had to stay in my wheelchair if I was to remain at a state school. The only alternative was a segregated school for what were labelled “handicapped children”, where the headmaster boasted to my mother that one of the pupils had recently achieved one CSE.
My parents, being teachers in the state system at the time, knew that a solid education would determine the difference between my being able to realise my potential or sink in a pool of chronically low aspiration. Thanks to my parents’ huge sacrifices, their decision to join the staff of an independent school, and my gaining a scholarship, I was able to benefit from smaller class sizes, a safer environment that enabled me to walk at school, and educational opportunities I would not otherwise have enjoyed.
None of this is in any way intended to detract from the wonderful work our state sector teachers, SEND specialists and support staff do today. It is fantastic to know that laws passed by your Lordships’ House prohibit the disability discrimination I faced. Yet like other noble Lords I fear that an unintended consequence of this dramatic change will be to deny the more than 110,000 pupils with SEND currently at independent schools the educational opportunities that I had—opportunities that mitigated the potential life chance limitations imposed by my disability. I cannot believe that that is the Government’s intention.
I close by supporting the call of my noble friend Lady Fraser of Craigmaddie in asking the Minister to meet with those noble Lords who have expressed concerns relating to children with SEND, specifically to explore how, together, we can address the unintended consequences of this policy for disabled children and their families.
Lord Wallace of Saltaire (LD)
My Lords, this has been a passionate debate about a policy which we do not know the details of yet, and which, as many noble Lords have said, has a lot of consequences about which one cannot be entirely sure at present.
I am a disciple of slow government. Many of the things that I objected to most about the last Conservative Government involved Ministers dashing in and pushing ideas which they had not thought through and which ended up being disastrous. I fear that this is one of those. Certainly, it ought not to be implemented within a few months of being decided.
I am also in favour of a simplification of the British tax system. As your Lordships know, the British tax system is far more complicated than that of any other European country, with a much longer tax code. This, I fear, is a further complication, with a great many administrative costs around tax moving backwards and forwards, being remitted and so on and so forth.
There is a major problem of inequality and unfairness in the provision of education in this country. It is the result both of the steady increase in private school fees above inflation over a very long period and of the cumulative cuts in funding for state education over the last 20 years—which has doubled the gap between what we spend on children in state schools and children in the private sector, with the quality of the facilities in private schools increased even further by donations supported by their charitable status. There is a desperate need for better funding of state schools as a result.
My party has been in favour of education for all, funded out of general taxation, for a very long time. Titus Salt, a Liberal MP who built Saltaire, built a village with a school at its centre. His successor as Liberal MP for Bradford, WE Forster, introduced the first Elementary Education Act. I do not recognise the description of that Act given by the noble Baroness, Lady Lawlor. Of the debate within the Liberal Party, including on the Prussian elements, I recall that it was between nonconformists and Anglicans over the quality of religious education. The noble Lord, Lord Roberts of Belgravia, a historian, will remember that a number of Tories in both Houses opposed the Acts on the principle that education for the working classes might encourage them to become discontented with their station in life. I fear that there were those in the Conservative Party of the last 20 years who had something of that in their attitude to the funding of state education.
Clearly, we need better-funded schools for all our children, not only for the principle but because they are citizens and because competitiveness requires us to get the skills that we need for all our population. Since we have just seen riots committed by people who were no doubt excluded from school in their teens and have not really had any purpose in life since, there are all sorts of reasons why funding for state education should increase. I was very glad to hear the noble Lord, Lord Forsyth, say that. Every time he hears one of the candidates for the Conservative leadership say, “What we want are further tax cuts and a smaller state”, I hope that he thinks that that would mean further cuts to state education. We cannot say we want a smaller state if we want to have decent education and welfare for our citizens.
We are talking here about a very diverse private sector. I see it in both Yorkshire and London, and I am struck by how different it is. Day fees for private schools in London are twice those in Yorkshire. In West Yorkshire, 4% or 5% of people go to private schools—these are Catholic, Methodist, Anglican, Jewish, Muslim, Quaker; small, large, prestigious. In south-west London, a quarter of students go to private schools. There is a real social divide, and it worries me that the gap in income and wealth in London is also becoming a gap in society, which we need to tackle.
Of course, there are also specialist schools. I declare an interest here: I dropped out of the state sector at the age of nine by getting a full scholarship to a choir school just across the road. It is not entirely clear what will happen to these specialist schools, as the noble Baroness, Lady Bull, said. I was given a full scholarship, and thus free education, as a choirboy. Does that get taxed with VAT or are those schools exempt? When I went on to secondary school, my father’s employer gave me a two-thirds fee scholarship, very generously—good-enough scholarships were then provided by Barclays Bank. I presume bursaries and partial scholarships are subject to tax, but what about Eton’s King’s scholarships, for example, which are full scholarships for very bright young men? I have met one or two of them—one or two when they were Cabinet Ministers. Do those come under the same system or not?
I will not touch on SEN; I am sure the Minister will, because it is clear from all the messages that we have got that SEN raises very considerable difficulties, and the problem again is that state schools are unable to provide sufficient support for SEN in their schools. I have talked to teaching assistants, and I have seen some of my local schools. Titus Salt School has an extremely good stream for dealing with children with Down’s in the school, but there are not very many schools that can manage to do that sort of thing. I look forward to what the Minister will say on SEN.
As a party, Liberal Democrats oppose VAT on schools, but we do favour a much tougher approach to charitable status and the requirement to contribute to public benefit. The charitable status of schools requires a major contribution to public benefit. Some do this extremely well—I have visited the York partnership and have seen other schools—while others are beginning to lose any sense of providing the sort of public benefit that is required and have gone a long way from their original charitable purposes, with international franchising, failure to invest in bursaries for local students or failure to share their facilities with the local community. I am aware of one school in Yorkshire that had such a large proportion of foreign students that it was beginning to lose any possibility of optimising British values or even making sure that English remained the dominant language within the school corridors.
I read this in the Times the other week, written by a Policy Exchange staffer:
“It is through education that children come to understand themselves as citizens of a nation, with a common culture and shared values”.
I hope we all agree with that, and I hope we think that that should be the purpose of all schools, public or private, state or independent. That requires active partnership between the state sector and the independent sector. It requires independent schools to recognise that one of their main purposes and responsibilities is to act as members of their local community and their national community. That said, I think this is the wrong way to encourage that, and that the priority for the Government should be a qualitative improvement in our state schools, their funding, staffing and resources. I regret that we have not yet seen enough evidence of that.
Baroness Barran (Con)
My Lords, I too thank and congratulate my noble friend Lord Lexden on securing this debate and on his exceptionally clear and lucid introduction. I also congratulate noble Lords on the high quality of all their contributions today. Like others, my inbox has been full of correspondence from numerous parents who wrote to me. I thank them too and share with the Minister—her private office inbox may also be full, but they might not have got to her —just some of the questions they asked, because I would be interested to know her response and what she would say to those parents.
Many of them point to the sense of rushed policy and poor planning that we have heard from so many of your Lordships this afternoon. I do not know what the Minister would say to the mother of a child who has just finished their first year of A-levels in subjects that their local state schools do not offer, or to children in year 11 who have been doing the IGCSE syllabus, which again would not be available to them, to the parents of children in state schools who will have bulge classes to accommodate new entrants from private schools, or to the parents of children with special educational needs who now feel that they will need to go through the process, which we heard about so vividly from the noble Lord, Lord Addington, of getting an EHCP for their child in order for their needs to be met.
We have heard from many of your Lordships, including, of course, my noble friend Lord Lexden, about the very important contributions that independent schools make to our education system and economy. That is through bursaries, through partnerships with state-funded schools, such as those that the noble Lord, Lord Winston, articulated, through the provision of places for children in the care system and, crucially, as we have heard from around the House, through support for 90,000 children with special educational needs and disabilities.
We have heard about the range and variety of schools, including from the right reverend Prelate the Bishop of Southwark, and we even had the noble Lord, Lord Alton, channelling his inner Lord Pannick to raise questions about the legality of the policy, which I am sure the Minister will take away and consider. I shall pick up on some of these themes and ask the Minister a number of questions.
In terms of timing, which my noble friends Lord Maude and Lord Lucas and many others raised, could the Minister explain to the House and the parents who will be impacted by this change why the Government judge it to be the right balance to introduce VAT in January 2025 rather than in September next year? We all understand that it raises more money, but the disruption of moving a child part-way through the school year is something that every parent seeks to avoid. The technical note provided by the Treasury states that:
“The Government understands that moving schools can be challenging”.
I have to say that is quite an understatement, even from the Treasury.
Why the rush? It leaves so many unanswered questions and puts so much avoidable pressure on parents, teachers and, most importantly, children. I hope the noble Baroness will consider some of the suggestions about a phased introduction, such as those raised by my noble friend Lord Forsyth of Drumlean.
I turn to the amount of money this may raise, which was touched on by the noble Lord, Lord Hacking. The Government tell us that this change is not ideological; it is about raising an estimated £1.3 billion to £1.5 billion to fund additional teachers and a long list of other things. Will she confirm that, if the tax fails to raise additional revenue, her Government will reverse this proposal, and if not, why not? Will she confirm that the Office for Budget Responsibility will give an annual update on the net financial impact of the proposed change once it is clear how many children have left independent schools and joined the state sector, and not simply—again, I quote from the technical note—
“certify the government’s costings and impact analysis for these measures”?
I turn to capacity in the state sector. The Government have said that they are
“confident that the state sector will be able to accommodate any additional pupils and that there will not be a significant impact on the state education system as a whole”.
I know that the noble Baroness understands that this is not really about the system as a whole. We know that there are parts of the country with plenty of capacity in the state system, but it is about what happens in each local area. It would help reassure the House if she could explain what assessment the Government have made of the impact on children in state schools in areas with very high percentages of children in independent schools—for example, Surrey or, as we heard, Edinburgh? There are also areas such as Bristol, where there is already pressure on state school places, and Salford and Birmingham, where there are many small Muslim and Jewish schools.
Turning special educational needs and disabilities, can the Minister reassure the House that VAT will not be charged on places for children with special educational needs? We heard very powerfully from the noble Lord, Lord Addington, about some of the issues. My noble friend Lady Monckton of Dallington Forest spoke about specialist further education colleges. It would be helpful if the Minister could clarify if they will be impacted by this. Will non-maintained special schools be able to recover VAT? What assessment have the Government made of the demand for additional EHCPs as a result of this policy?
A number of noble Lords, including the noble Earl, Lord Devon, and my noble friends Lord Black of Brentwood and Lord Kempsell, raised the important issue of military families who serve their nation abroad and, as we heard, need boarding places for their children. Can she confirm that their personal contribution will be exempt from VAT?
I look forward to the Minister’s response to the questions from my noble friend Lady Fraser and the noble Baroness, Lady Bull, about the impact on specialist music and dance schools, the future of which is now in peril. I hope the Minister can respond to these questions from the Dispatch Box but, if not, perhaps she could confirm that she will write to me with the answers.
Time does not permit me to cover other points today, so I will close with the feeling these proposed changes give me, and many others, as we have heard in your Lordships’ House today. This feels like a Government who are focusing on division, rather than aspiration; a Government who are seeking to run down private schools, rather than challenging them to contribute more to the overall education sector. The suggestions from the noble and learned Lord, Lord Etherton, were extremely helpful. These proposals will take away parental choice not from the super-rich—from the people the Prime Minister described as having the broadest shoulders —but from those with shoulders already burdened by choosing to prioritise education for their children in the way that they want. That erosion of choice bodes ill for our country.
I will leave the Minister with one last question. I think the House is just asking the Government to listen. I hope very much that she can answer that they will.
The Minister of State, Department for Education (Baroness Smith of Malvern) (Lab)
My Lords, I thank the noble Lord, Lord Lexden, for opening this debate, and I am grateful for the many contributions. I will do my best to respond to as many as I can in the time available, and I undertake to write to noble Lords on those that I am not able to get to.
I put on record that I share the view of the noble Lord, Lord Lexden, that there are many excellent schools in the private sector, as there are in the public sector. My mother taught at one of them in Malvern. I spent time during my teenage years washing up in the kitchen of another. I know that excellent education is provided in those schools, which is why the department will continue to have, I hope, an important and constructive relationship with the ISC and the ISA in thinking through the whole range of issues that relate to independent schools. But some people listening to this debate might have thought that the intention was to completely do away with the private sector. The noble Lord, Lord Naseby, described how independent education has been with us for centuries. It will be with us for centuries more. People will continue to have a choice of whether they want to educate their child in a state or a private school. I will return to that in a moment.
I was a teacher in one of the excellent state schools which educate more than nine in 10 of our children, and I now discover that I attended the same state school as the noble Lord, Lord Hampton. So I will be crystal clear about the focus and priority for this Government. We are determined in government—on these Benches and in the other place—to drive up standards in those schools for the overwhelming majority of the children in this country, so that they may receive the opportunities that, too often, have been the preserve of the rich and the lucky, as many noble Lords have demonstrated.
There has been an assumption from some contributors that only some parents have aspirations for their children. As the mother of two children, of course I understand the absolute passion of parents to do the best for their children—to find the place that suits their children the best. That is not confined to people who choose to educate their children in private schools and are able to. As my noble friends Lord Davies and Lord Griffiths made clear, it is an aspiration shared by many parents around the country and one that this Government are determined to meet. Private education is not an option—
Baroness Smith of Malvern (Lab)
No—the noble Lord has had the opportunity to have his say, and I want to respond to as many of the points that have been made as possible.
Private education is not an option for most of those people and, unlike the last Government, we will not build public policy around the expectation that public services will fail our children. Most parents need local state-funded schools to support them in meeting these aspirations. It is therefore right for the Government to focus on improving those schools—a public good that will benefit all of us.
Several noble Lords, including the noble Lord, Lord Forsyth, have identified the significance of education and the contribution that investment in that education makes. My noble friend Lady Ramsey identified the gap between that investment provided to our state schools and that provided to private schools: there was a 40% gap in 2010 and there is a 90% gap now. The noble Lord, Lord Bilimoria, said that we should spend more on state schools. The noble Lord, Lord Winston, talked about the deprivation and impact on aspiration of those who do not get the education that they deserve, and argued for more investment. That is precisely what this Government want to do—but we arrived into government to discover a £22 billion black hole and, unlike the previous Government, we are determined to make that investment in our schools but make it on a sustainable basis whereby we can outline where that money is coming from. That is why ending the tax breaks on VAT and business rates for private schools is a tough but necessary decision. It will generate additional funding to help to improve public services, including the Government’s commitments relating to education and young people.
VAT will apply to tuition and boarding fees charged by private schools for terms starting on or after 1 January 2025. I assure noble Lords that the impact of those changes has been assessed and that the Office for Budget Responsibility will certify the Government’s costings for those measures at the Budget.
Several noble Lords have asked what the impact will be of introducing the change on 1 January. We are impatient in this Government to ensure that we can start funding the improvements that so many noble Lords have argued for—that is one reason. It is also worth while, when thinking about the impact of the changes, to recognise that, for many pupils, the change should not mean that parents will automatically face 20% higher fees—nor do we expect pupils to move immediately. Most of the analysis suggests that that will not happen to the extent that pupils move at all—and I shall return to that point.
The Government expect private schools to take steps to minimise fee increases, including through reclaiming the VAT that they incur in supplying education and boarding—so the estimate is that the real VAT impact will be 15%. We think that that will happen, because we have seen what has happened in recent times. There have been above-inflation increases in private school fees for very many years. There has been a 55% increase since 2003 and a 20% increase since 2010, and there has not been a large exodus of pupils from those schools, which of course suggests an inelastic demand for private school places. It is reasonable for the Government to model and think about future impact based on previous experience.
We have provided considerable information around the proposal—both in the technical note and the draft VAT legislation. The technical consultation remains open until 15 September, and I encourage those who are interested to contribute to that as well.
The noble Baroness, Lady Monckton, raised a specific issue about the support to implement the VAT regime. The Government recognise that this will be the first time for many schools that they will need to register for VAT, and HMRC will publish bespoke guidance. It will also contact private schools directly with information about support sessions that will help them to go through this process.
The noble Lord, Lord Lucas, and the noble Baroness, Lady Barran, raised issues about what potential there is to raise revenue here. This will of course be part of the OBR assessment that will be published alongside the Finance Bill at the time of the Budget, which will enable us to consider the broad impact of this—not just the taxation impact but the broader cost impact as well. The IFS estimates that it will raise an extra £1.3 billion to £1.5 billion per year in the medium to long term. As I say, these points will be certified by the Office for Budget Responsibility. The Treasury is doing an economic analysis of the impact of this policy change and the interaction with other behaviours that might come about because of the introduction of VAT.
While there will be more detailed information about the revenue raised by this measure, this seems like a reasonable estimate of the revenue that will be raised. Unlike some other noble Lords, I do not see that amount of money as being inconsiderable. Of course there is more that I would certainly hope that we as a Government will be able to find to invest in education, as previous Labour Governments have, but this is an important contribution to some very important changes that we wish to make.
The noble Baroness, Lady Finlay, asked about the devolution consequences of VAT receipts. I assure her that additional funding provided for schools in England will be matched in the devolved Administrations in line with the Barnett formula.
I move to the issue of special educational needs. Understandably, this has been raised by many noble Lords this afternoon, in particular the noble Lord, Lord Shinkwin, in his contribution about the enormous significance of the independent special school that he identified, and the noble Baroness, Lady Monckton. Once again, I say that there is excellence in the private sector in independent special schools. Such excellence is the reason why, when there is a particular need for a pupil educated in the state sector to benefit from that excellence and its provisions for their education, health and care plan, that place is paid for by the local authority. The local authority will have the ability to reclaim the VAT placed on that fee, so there will be no impact on the parents of those children with the most acute special educational needs. I can also confirm, in answer to questions from the noble Baroness, Lady Barran, that further education institutions will not be affected by these provisions, and non-maintained special schools are exempt as well.
I can understand the concern of parents—given what I said previously about everybody’s aspiration—particularly where their children have special educational needs that have not been met or assessed through an education, health and care plan, in wanting to think about the best place for their children to go, but we cannot organise policy on the basis of the broken state of public provision for children with specific learning needs. This is a government failure long in the making. I share the passion of the noble Lord, Lord Addington, about the way in which the current system is working. In fact, the former Secretary of State for Education, after 13 years of her party’s approach to special educational needs, rightly described this issue as “lose, lose, lose”. One reason for needing the additional investment that this provision will provide is to help begin turning round the special educational needs system, which I wholly agree currently fails too many of our students.
In response to those who have asked for further discussions about the position of independent special schools, we are happy to continue having those conversations. However, I reiterate that, for those children with acute needs who are being educated in independent special schools with an EHCP, there will be no impact on them from this VAT change. We will actively listen to the questions and concerns being raised and will meet with our colleagues.
Several noble Lords, including my noble friend Lord Hacking and the noble Baroness, Lady Barran, raised the impact of these changes on state schools. The Government believe that the number of pupils who may switch schools as a result of these changes represent a very small proportion of overall pupil numbers in the state sector. As I have already outlined, those parents paying to send their children to private schools have already experienced considerably above-inflation increases and have not chosen to move their children, but we will of course monitor local demand to ensure that appropriate measures are taken to increase capacity where required.
I take the noble Baroness’s point about the differential impact, potentially, on different parts of the country, and DfE officials will monitor that very carefully, but children move between the private and state sectors every year and local authorities and schools have processes in place to support their transition. In terms of places, of course we are going through a period of demographic change. Even if the pupil displacement is above the estimate of the independent Institute for Fiscal Studies, which suggested that up to 40,000 might move over a period of time, that is still likely to represent less than 1% of the more than 9 million total UK state school pupils. The latest figures published showed that 83% of primary schools and 77% of secondary schools have one or more unfilled places.
I turn to the issues raised by the noble Baronesses, Lady Fraser and Lady Bull, about the enormously important contribution of Music and Dance Scheme schools. We can all see, in the talent of the noble Baroness, Lady Bull, the significance of those schools. We are continuing to engage with the schools currently within the Music and Dance Scheme project. As has already been outlined by noble Lords—and I wholly agree that, for the good of all of us, we need low-income families to be able to send their children to those schools when they have that talent—the children of parents who cannot afford the fees are funded by the Music and Dance Scheme. We will consider, in the light of the VAT charges, how and whether we can change that scheme to compensate for the VAT issue. We are willing to carry on talking, as we have done, to representatives from the Music and Dance Scheme schools about the impact of this change of policy. The same goes, as the noble Earl, Lord Clancarty, raised, for the dance and drama awards, where we will also continue having discussions that we have already started with the schools in that category.
Noble Lords, including the noble Lord, Lord Kempsell, the noble Baroness, Lady Garden, and the noble Earl, Lord Devon, raised the issue of military families. I reiterate that the Government recognise the enormous sacrifices our military families make; of course, that is why the Ministry of Defence and the Foreign and Commonwealth Office provide the continuity of education allowance to eligible officials and service personnel. It is also worth pointing out that very many military personnel send their children to state schools and want to benefit from the improvements that will happen in those state schools. However, the Government will monitor closely the impact of these policy changes on affected military and diplomatic families. The upcoming spending review is the right time to consider any changes to this scheme, but we will continue to look very carefully at that.
Several noble Lords talked about the contribution of private schools, and the defence was that because they contribute through partnerships with state schools or by providing bursaries, we should not interfere with that. I welcome the contributions private schools make to cross-sector partnerships, as outlined by the noble Lord, Lord Maude, my noble friend Lord Winston and the noble and learned Lord, Lord Etherton; I hope that will continue. Certainly, for schools with charitable status, as charities, and in line with legislation passed by the last Labour Government, they must continue to demonstrate public benefit. I hope they will continue to do that through the provision of a small number of means-tested bursaries and through partnership with local state schools. I think they will continue to demonstrate their broad public benefit through those wider contributions.
On the legal position, raised by the noble Lord, Lord Alton—channelling the noble Lord, Lord Pannick —and my noble friend Lord Hacking, I am not going to speculate on the outcome of the ongoing technical consultation. However, legal considerations have been incorporated into the process, as is standard for all legislative changes, and we are confident that the measures are compatible with the Human Rights Act 1998.
I know I have not managed to cover all of the wide range of issues that have been raised, and I undertake to write to noble Lords, but I assure the House that private schools will remain part of our education system. The choice to send your child there will remain. However, most children are educated in the state sector and that is where we must target our support and resources most. We will work closely with schools and local authorities to make the implementation of the new tax rules as smooth as possible. I thank noble Lords for their contributions this afternoon.
Lord Hacking (Lab)
These are therefore imaginary words being used in the House of Lords. My noble friend was kind enough to mention the first protocol of the European Convention on Human Rights, but I would be very grateful if she could send a letter, particularly to myself and the noble Lord, Lord Alton, on the advice the Government are receiving relating to that very important issue. I remind her that it was a Labour Government, in 1998, who brought that provision into our law under the Human Rights Act 1998.
Baroness Smith of Malvern (Lab)
My noble friend is right, and I am very proud of that. Our position, as I said, has been tested in the legal advice in the consideration of these changes. Our view is that being charged at the standard rate of VAT paid by millions of businesses across the UK is not discriminatory and is clearly proportionate to the objective of better funding for state schools. To the extent that I am able, I will certainly ensure that I write further about that issue to my noble friend and to others.
Baroness Butler-Sloss (CB)
May I ask the Minster, before she sits down, about the children taking GCSEs and A-levels? What are the Government going to do to help them where there will be changes in the programmes they are doing?
Baroness Smith of Malvern (Lab)
I apologise to the noble and learned Baroness: with respect, I was showing my inexperience in this House and asking my Whip about the situation. If the House will allow, could the noble and learned Baroness repeat her question?
Baroness Butler-Sloss (CB)
I was asking about children taking GCSEs and A-levels when this starts in January.
Baroness Smith of Malvern (Lab)
I think I covered that point in talking about the arguments for introducing this in January, while also making it clear that it is the Government’s view that introducing the VAT liability does not necessarily imply that a sudden increase in bills will arise; nor does it imply that the whole of that increase in VAT will be passed on in fees. In fact, if we look at the behaviour in the private school sector, we see that, despite very large increases in fees—well above inflation—parents have tended, where they have made that choice, to keep their children in the private sector anyway, and I am sure that the vast majority of parents will continue to do that. The analysis, including that carried out by the Institute for Fiscal Studies, suggests that, even if there is going to be a movement of pupils away from the private sector, that will tend to be not immediately in January but over a much longer period, and I imagine that will be the approach that most parents take.
Lord Forsyth of Drumlean (Con)
Before the noble Baroness sits down—since she is now giving way—she made a very passionate point about how all parents have aspirations for their children, wherever they are educated. She has not explained why she wants to tax that aspiration.
Baroness Smith of Malvern (Lab)
I explained that, to improve state education—where 93% of our pupils are educated—and meet the aspirations of the parents who send their children to those schools, we need to find the funding. Unlike the previous Government, we are not willing to make uncosted commitments or run this country’s fiscal position into the ground. We are not willing to risk our pensions and our reputation as a fiscally prudent country in the way that the last Government were. Therefore, to make and deliver the range of commitments we have set out, we will be clear about where that money is coming from. This is part of the honesty and transparency around fiscal prudence that the last Government so patently failed to deliver.
Lord Lexden (Con)
My Lords, my purpose in seeking this debate was to bring home to the Government the extent of the damage that would be done as a result of the imposition of VAT on school fees on 1 January 2025. That purpose has been very satisfactorily achieved, on behalf of all the parents and schools up and down our land who have been brought to despair by the Government’s decision to impose VAT so suddenly on them.
Many who have been watching this debate and follow these controversial matters will be disappointed by what the Minister has said. I do not think that the great concern that exists has been in any way significantly alleviated by her comments. We who have sought to represent the difficulties feel, above all, that VAT should not be introduced without, as I said at the start, a full and independent assessment of the implications of our first-ever education tax. This is the essential point on which nearly all speakers agreed. We must ask the Government to think again.