House of Commons
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Madam Deputy Speaker (Ms Nusrat Ghani)
Before we begin today’s business, I remind Members that the deadline for submitting nominations and any supporting statements for the Select Committee Chair elections is 4 pm today.
Oral Answers to Questions
(2 months, 1 week ago)
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Bill Esterson (Sefton Central) (Lab)
Mrs Sureena Brackenridge (Wolverhampton North East) (Lab)
The Secretary of State for Education (Bridget Phillipson)
Qualifications must deliver on our missions, enhancing and spreading opportunity, and growing our economy. The last Conservative Government botched the roll-out of T-levels and defunded them. That is why this Labour Government have announced a pause and review of qualifications reforms, to support skills growth and students, and to bring certainty where there has been chaos. This short, focused review, along with other measures, such as the curriculum assessment review and the creation of Skills England, will allow the Government to improve skills training, unlock opportunity and harness talent.
Bill Esterson
There are a great many opportunities for technicians and engineers, which will only increase with the Government’s plans for clean energy and their industrial strategy. However, we are currently short of intermediate and advanced-level skilled workers in this country, so will the Secretary of State tell us how her plans will ensure that more young people make the most of those opportunities, and how our education system will deliver the qualifications they need?
Bridget Phillipson
I know how passionate my hon. Friend is about ensuring that young people in Sefton and across our country are able to seize the new opportunities of the future. We are determined to drive forward and make Britain a clean energy superpower. Our reformed growth and skills levy will give businesses greater flexibility and enable them to take on more young apprentices. Skills England will allow us to identify the skills gaps in every corner of our country and ensure that we drive forward on that mission.
Mrs Brackenridge
As a former deputy headteacher, I have seen at first hand the impact of the previous Government’s rushed plans to eliminate most BTec qualifications, in the midst of a botched roll-out of T-levels. How does my right hon. Friend intend to fix the mess that she has inherited and ensure that the diverse aspirations and varied talents of students in Wolverhampton North East are met?
Bridget Phillipson
Given her background in education, my hon. Friend knows all too well how important it is that all our young people have the opportunity to achieve and thrive. She is right that we inherited a big mess, but we have acted swiftly and we are conducting a focused, intense review to ensure that all our young people have options that are available to them and we make a success of T-levels.
Tim Farron (Westmorland and Lonsdale) (LD)
The Secretary of State is absolutely right that the previous Government botched the roll-out of T-levels. In particular, the failure to deliver the T-level in hospitality and tourism was a huge blow to our communities in the lakes and dales. Her predecessor said that was caused by a failure to gain placements in the tourism and hospitality industry. Surely that is surmountable, so what plans does she have to talk to the hospitality and tourism industry in order to deliver the T-level to communities like mine very soon?
Bridget Phillipson
The hon. Gentleman makes an important point about ensuring that placements are available. I am happy to ensure that he has a discussion with the Minister for Skills to make sure we address his concerns about hospitality.
Rebecca Smith (South West Devon) (Con)
Alderman Tooling in my constituency is one of thousands of employers now investing in the talent of tomorrow. In five years’ time, does the Secretary of State expect the number of apprentices to be higher or lower than today?
Bridget Phillipson
I pay tribute to all the businesses across our country that are providing high-quality skills training and apprenticeship starts. However, apprenticeship starts for the under-25s fell by 38% in the period 2015-16 to 2022-23. It will fall to this Labour Government to turn that around.
Mr Calvin Bailey (Leyton and Wanstead) (Lab)
Apologies, Madam Deputy Speaker; I was not expecting to be called so soon.
I thank the Secretary of State for her focus on T-levels and her recognition of the need for a pause. I back up what my hon. Friend the Member for Wolverhampton North East (Mrs Brackenridge) said about the botched nature of the T-level roll-out. Does the Secretary of State recognise that it is a challenge for many services, such as the NHS, to absorb T-level students effectively? Those qualifications need truly to give our young people the opportunities they deserve. Will she meet me and local further education experts to discuss this issue?
Madam Deputy Speaker
If Members are bobbing, they should be prepared to be called to speak.
Bridget Phillipson
Yes, I would be very happy to meet my hon. Friend. In this period of review, we are speaking to employers, training providers and colleges to ensure that we get this right.
Jim Shannon (Strangford) (DUP)
I thank the Minister for her response to those questions. I know that she does not have direct responsibility for Northern Ireland, but may I ask her about apprenticeships? In defence and cyber-security—in Thales and Spirit AeroSystems—and in agrifood, opportunities should be there for young ladies as well as for young men. What is being done to ensure that there is equality of opportunity for everyone, both male and female?
Bridget Phillipson
The hon. Gentleman makes an important point about ensuring that people from a range of different backgrounds, including young women, see the opportunities that exist. I have had the opportunity to meet my counterparts in Northern Ireland and I look forward to working with them to ensure that, across the UK, we can drive forward on skills, growth and opportunities for all our young people.
Josh MacAlister (Whitehaven and Workington) (Lab)
The Parliamentary Under-Secretary of State for Education (Janet Daby)
Reforming children’s social care is critical to delivering our opportunity mission, to ensure that a child or young person’s background does not limit their ambition. The children’s wellbeing Bill will remove barriers to opportunity and deliver the manifesto commitments on children’s social care, so that all children have a chance to thrive in safe, loving homes.
Josh MacAlister
I thank the Minister for her answer. It is just over two years since I published the independent review of children’s social care, which was commissioned by the previous Government. The review called for a radical reset of the whole children’s social care system, which was urgently needed, and the previous Government took some modest steps down that track but failed to realise the potential. Since the election, a number of the children, families and care-experienced adults who were involved in the review have been in touch with me to share their hopes that we will be able to deliver on the ambition of the review. Do the Government intend to prioritise the resources that will be needed to implement the review in the upcoming spending review?
Janet Daby
I thank my hon. Friend for the work he did on the independent review of children’s social care, which this Government are considering as part of our reform programme. Children’s social care is a key priority for this Government, evidenced by our commitment to the children’s wellbeing Bill announced in the King’s Speech in July. A full programme for delivery will be produced in order to support that commitment. We have inherited a challenging set of economic circumstances. However, we are committed to reforming children’s social care, and that will be brought forward, as I have already mentioned, in the children’s wellbeing Bill.
George Freeman (Mid Norfolk) (Con)
In Norfolk, as in many other areas, we saw during the pandemic some hugely complicated issues around early years, including lack of preparation and learning difficulties, which many of our schools are dealing with. Will the Minister reassure me that, in this forthcoming Budget, real attention will be paid both to supporting that network—supporting the previous Government’s introduction of early years—and to integrating better the mental health support, the learning difficulty support and the social care support? In the end, as these are children living one life, they surely need only one network of support.
Janet Daby
I thank the hon. Member for his explanation of all the various challenges experienced by young people and children. If I had a crystal ball, I would be able to explain what will happen in the spending review, but as we move forward and introduce the children’s wellbeing Bill, we will bring clarity to some of the Government’s reforms. The spending review will also reveal where the Budget lies in these things.
Matt Western (Warwick and Leamington) (Lab)
Dan Aldridge (Weston-super-Mare) (Lab)
The Secretary of State for Education (Bridget Phillipson)
For too long, universities have been treated as political battlegrounds. This Labour Government will treat them as engines of opportunity and growth. On 26 July, I published the report of the independent review of the Office for Students and appointed Sir David Behan, who led the review, as the interim chair. Under new leadership and with a sharpened remit, the Office for Students will concentrate on securing the future of universities and putting students first.
Matt Western
I welcome the Secretary of State to her position. Last year, the House of Lords Industry and Regulators Committee presented its report, which was very critical of the OfS—we did not need to read between the lines to understand just how poorly the Committee thought of it. It felt that it was serving neither the students nor the providers. What plans does she have to reset the relationship with the OfS so that it gives renewed focus to the students that it is supposed to represent?
Bridget Phillipson
I thank my hon. Friend for all his work in this important area to ensure that our universities are recognised as a crucial part of how we drive growth in our country. Sir David’s review, which we published in July, is a platform for improvement, and I welcome and accept its core findings. The Government will support the OfS in refocusing on fewer key priorities, to do what is most important for students and universities, and to do it well. We will take the necessary action to support that work.
Dan Aldridge
Young people in Weston-super-Mare and across our country deserve the very best opportunities. Since 2016, University Centre Weston has transformed access to higher education in our town, meaning that more can study closer to home, improving access. How will the Labour Government seek to strengthen the strategic objective of the Office for Students to widen participation in communities such as mine?
Bridget Phillipson
I strongly agree with my hon. Friend about the importance of widening participation, and he sets out clearly how universities are a key part of towns and cities right across our country. The last Government wanted to use our world-leading sector as a political football, talking down institutions and watching on as the situation became even more desperate. I have appointed the new interim chair to sharpen the focus of the Office for Students, focus far more on the financial sustainability of the sector, and return universities to being the engines of growth and opportunity that we want to see after 14 wasted years.
Jesse Norman (Hereford and South Herefordshire) (Con)
I am delighted to hear the right hon. Lady talk about engines of growth and opportunity, because that is exactly what universities are when they are well run. In my county we have a new university, the New Model Institute for Technology and Engineering, which is doing exactly that, and offering incredible opportunities for young people to do a masters programme in three years, and then, as we are seeing with the new cohort, to go into companies as good as BAE Systems, Kier, Balfour Beatty, the Atomic Weapons Establishment and others. That work has been assisted by the Office for Students, which granted new degree-awarding powers. Does the right hon. Lady share my view that this is a deeply worthwhile enterprise that could be replicated around the country, and will she come and visit herself?
Bridget Phillipson
I am grateful to the right hon. Gentleman for raising this matter. I would be happy to meet with him to discuss it further.
James Wild (North West Norfolk) (Con)
We have seen attempts by hostile states to influence our higher education sector, which the last Conservative Government took action to counter. Does the Secretary of State therefore share the concerns about reports that Peking University HSBC Business School in Oxford may be partly operating under Chinese Communist party rules, and does she expect the Office for Students to investigate that?
Bridget Phillipson
The shadow Minister will know that the Office for Students is independent, but I will ensure that it looks very carefully at the concerns that he has set out, and addresses them accordingly.
Mr Richard Holden (Basildon and Billericay) (Con)
The Secretary of State for Education (Bridget Phillipson)
The Government fully support academic freedom. Higher education must be a space for robust discussion and intellectual rigour, and it was a Labour Government that enshrined freedom of expression into law. Our recent decision to pause the implementation of further parts of the Higher Education (Freedom of Speech) Act 2023 was precisely because we believe in academic freedom. It is therefore crucial that the legal framework is workable. Baroness Smith in the other place and officials are speaking with a range of stakeholders. Their views will form part of our consideration of all options for protecting academic freedom into the future. No options are off the table.
Mr Holden
I thank the Secretary of State for that answer, and welcome her to her new position. Can she give the House a cast-iron guarantee that when she decided to reverse the Higher Education (Freedom of Speech) Act, she gave no consideration to the consequences of the new freedom of speech duties that the Act would impose on universities in terms of their financial relationship with authoritarian regimes such as the People’s Republic of China?
Bridget Phillipson
Yes, I can give the right hon. Gentleman that reassurance. We looked very carefully and very closely at the way in which the legislation was going to operate. I want to ensure that we have good, strong, workable legislation. I was concerned about what I had heard from Jewish groups and other minority communities about the unintended consequences that might follow from the legislation. That is why I paused commencement, with a view to getting this right, ensuring that we protect academic freedom while avoiding a situation where hate speech is allowed to flourish on campus.
Tonia Antoniazzi (Gower) (Lab)
I congratulate the Secretary of State on taking the hard decisions that are needed in Government, and I am very pleased to hear that no options are off the table. What reassurances can she give me and other women that she will protect female academics, such as Jo Phoenix, Kathleen Stock and Selina Todd, from being bullied and hounded out of successful university careers?
Bridget Phillipson
Like my hon. Friend, I take having strong freedom of expression in our universities, and students being exposed to a range of views—some of which they might find difficult or disagree with—extremely seriously. That is why it is so important to have a wide-ranging education. Officials will ensure that we engage with a wide range of views in this important area as we look at next steps, and I would be more than happy to discuss that in more detail with her.
Mr Gagan Mohindra (South West Hertfordshire) (Con)
I welcome the Secretary of State to her place. The Higher Education (Freedom of Speech) Act 2023 would have ensured that universities in England had the tools they needed to deal with interference and threats to freedom of speech and academic freedom, wherever they originated. Now that the Government will no longer implement that Act, will she clarify her alternative plans to protect academic freedom in the higher education sector?
Bridget Phillipson
The hon. Gentleman will know that freedom of expression and academic freedom are incredibly important. The Office for Students sets out duties, and many of those principles are already enshrined in law. However, I want to ensure that we get this right. I am confident that he would not have wanted to be in a position where the Act opened up the potential for hate speech, including Holocaust denial, to be spread on campus—something that the Minister in the previous Government was unable to rule out.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
The Parliamentary Under-Secretary of State for Education (Stephen Morgan)
Excluding private special schools, around 50 private schools close each year. There are a range of reasons for closure, including financial viability and departmental action where schools are not meeting required standards. Some 1,102 private schools closed between 11 May 2010 and 5 July 2024. It is also worth noting that the number of pupils in private schools increased in 2023-24, and that there has been a net increase of 13 private schools over that period.
Gareth Snell
St Joseph’s preparatory school, a small fee-paying independent school in Stoke-on-Trent, announced that it is closing its doors at the end of this year after a period of financial viability questions. What support will the Department offer the city council and parents in Stoke-on-Trent to ensure that those children can still access first-class education?
Stephen Morgan
I thank my hon. Friend for his question and welcome him back to this place. He is a tireless champion for children in his constituency and regularly speaks up on local schools. I am aware of the situation at St Joseph’s preparatory school. Private schools are of course businesses that are responsible for their own finances, but the Department stands ready to assist. The Government are committed to high and rising standards in schools, and I hope that we can work together to achieve that.
Dame Harriett Baldwin (West Worcestershire) (Con)
Malvern college, Malvern St James girls’ school, Bredon school and other schools in West Worcestershire that offer places to children with special educational needs not only play an important role in our education system, but support the local economy. Will the Minister state that he does not want to see the closure of any of those important independent schools in West Worcestershire?
Stephen Morgan
This Government’s ambition is that all children and young people with SEND receive the right support to succeed in their education as they move into adult life. We are committed to taking a community-wide approach, improving inclusivity and expertise in mainstream schools, and ensuring that special schools cater to those with the most complex needs. Children whose places in private school have been deemed necessary by the local authority will not be affected by the tax changes.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the shadow Secretary of State.
Damian Hinds (East Hampshire) (Con)
At the start of the new term, we all wish everybody well for the academic year ahead. What will Ministers say next September to parents who, because of Labour’s education tax, find that class sizes are bigger and more schools are full, and that fewer children are able to get a place in their first-choice school in Bristol, Bury, Salford or Surrey?
Stephen Morgan
I welcome the right hon. Member to his place, and I very much look forward to working with him to ensure that every child gets the best start in life. The number of children in private schools has remained steady despite a 20% real-terms increase in average private school fees since 2010, and an increase of 55% since 2003. We cannot predict closures, but we will use indicators such as occupancy to monitor that. My Department works with local authorities to help them to fulfil their duty to secure places.
Noah Law (St Austell and Newquay) (Lab)
The Parliamentary Under-Secretary of State for Education (Janet Daby)
This Government will unleash the green skills we need to make Britain a clean energy superpower and spread sustainable economic growth across the country. Businesses can already benefit from the level 6 mine management degree apprenticeship and we are establishing Skills England, which will work across the country and across the Government with employers, local partners, unions and other experts to ensure that we have the highly trained workforce that England needs.
Noah Law
In Cornwall, apprenticeships in the critical minerals industry are so important, creating great work for the next generation, fostering innovation and supercharging our mission for clean energy. Will the Secretary of State outline what steps are being taken to expand our investment in these apprenticeships and meet the growing skills demand in that industry?
Janet Daby
My hon. Friend makes an excellent point about the importance of apprenticeships and skills in creating local opportunities and national prosperity. Skills England will work with employers and other partners to identify the skills needs of the next decade, and ensure that the training needed for those skills, including apprenticeships, is accessible through the growth and skills levy.
Dr Allison Gardner (Stoke-on-Trent South) (Lab)
Kevin Bonavia (Stevenage) (Lab)
Sadik Al-Hassan (North Somerset) (Lab)
Luke Murphy (Basingstoke) (Lab)
Deirdre Costigan (Ealing Southall) (Lab)
Joe Morris (Hexham) (Lab)
The Secretary of State for Education (Bridget Phillipson)
The Conservatives left a trail of devastation across education, and nowhere is that clearer than in our current special educational needs and disabilities system. We know that, for too many children and families, the system is just not working, but I give my personal commitment to hon. Members across the House that the Government will listen to and work with families to deliver reform, improving inclusivity in mainstream schools and ensuring that special schools are able to help those with the most complex needs.
Dr Gardner
Last week, I visited Expert Citizens in Stoke-on-Trent, where people with lived experience of using public services help to inform system redesign. Many of my constituents across different councils have reported issues with SEND transport, which highlights the importance of listening to people with lived experience. In one example, a single working mother may need to give up her job because she does not have a car. She does not get SEND transport because she is 0.1 miles outside and therefore she cannot get her child to school. Does the Secretary of State agree that SEND transport needs a service rethink—one centred and built on the lived experience of the parents and children who use that service?
Bridget Phillipson
My hon. Friend is right to stress the need to listen to children, families and all those working in the system in order to deliver reform. If she can share some more detail with me, I will happily take a look.
Kevin Bonavia
I am grateful to the Secretary of State for her answer and to the Minister for School Standards for her response to last week’s Westminster Hall debate, led by my hon. Friend the Member for Hitchin (Alistair Strathern), on SEND provision in Hertfordshire. As the Minister will recall, there are many heartbreaking experiences faced by children and young people in Stevenage and across Hertfordshire, where waiting times are much higher than the national average. Will the Secretary of State therefore consider a fairer funding settlement for SEND provision in Hertfordshire when she is next able to do so?
Bridget Phillipson
My hon. Friend is right to draw attention to the significant interest in the Westminster Hall debate, and the level of interest today demonstrates the importance of getting this issue right. I know from speaking to him that he is concerned about the issue. I agree that it is important that there is a fair education funding system that directs funding where it is most needed. One aspect of that is the national funding formula and allocating high-needs funding. We will take our time to look carefully at whether any changes are required, including in Hertfordshire.
Sadik Al-Hassan
May I ask my right hon. Friend to detail the Department’s plans to help to solve the recruitment problem for SEND professionals, to enable schools to deal with education, health and care plans in constituencies such as mine, North Somerset?
Bridget Phillipson
It is certainly the case that there is a big workforce challenge, and making sure that we have specialists in critical areas is a central part of making sure children and young people can access the support they need. Our school support staff will play a crucial role in that, which is why Labour will reinstate the school support staff negotiating body. We will make sure that teachers have more training alongside support staff, in order to deliver better support and education for our young people, and this year we are investing over £21 million to train 400 more educational psychologists.
Luke Murphy
I welcome the Secretary of State’s answer. On doorsteps, in surgeries and over email, families across Basingstoke have told me countless stories of the obstacles they have to go through just to have the barest acknowledgement of their child’s needs, only to go through a similar obstacle course for their child to be assessed, and yet again for them to get the help they are legally entitled to. Can the Secretary of State offer families in Basingstoke with experience of this failing system some hope that they can expect better in future?
Bridget Phillipson
I joined my hon. Friend in Basingstoke during the general election campaign, so I know that many families in Basingstoke and right across our country were concerned about this issue, and I can give him that commitment. Members on the Conservative Benches may recall that the previous Education Secretary described the system that she left behind as one that was “lose-lose-lose”. I agree. We are determined to turn that around, which is why we have already restructured the Department for Education, with much more focus on support for children with SEND as part of our schools provision.
Deirdre Costigan
Speech and language support for children with special educational needs and disabilities was clearly not a priority for the previous Government. I have seen the damage that that has done to families in my constituency of Ealing Southall: at a recent surgery, one mum told me that she just wants her young son to be able to tell her when he is in pain. What steps will the Secretary of State take to ensure that children like those in my constituency receive the speech and language support that they need?
Bridget Phillipson
My hon. Friend is right to highlight how important it is that all of our children have strong speech and language skills. That is why this Government will roll out early language interventions to make sure that all of our children get support at the earliest possible point, including extending the Nuffield early language intervention for this academic year, because it is so important that we make a difference when our children are young.
Joe Morris
I thank the Secretary of State for her answers so far. People in my constituency of Hexham—one of the largest constituencies in the country—routinely tell me of the struggle they face in enabling their children to access the support they need and the education they are entitled to. Will the Secretary of State or one of her Ministers meet with me to discuss the challenges of accessing SEND education in such a rural constituency?
Bridget Phillipson
As the first ever Labour MP for Hexham, my hon. Friend will be a champion of rural communities across the country. I would be more than happy to meet with him—or my hon. Friend the Minister for School Standards will meet with him—to discuss this important concern, which I know many Members wish to discuss.
Graham Stuart (Beverley and Holderness) (Con)
I thank the Secretary of State for her answer, and for her personal commitment to creating a fairer funding system for children with special educational needs. In that light, she will forgive me if I mention that the East Riding has the lowest high-needs block allocation of any local authority in England. So many people have been genuinely committed to a fairer system in the past. Will the Secretary of State set out how she will achieve that? It is easy to support it in principle, but it is very hard to find a way of delivering it in practice.
Bridget Phillipson
I am grateful to the right hon. Gentleman for his question, and will make sure that officials engage with him on that point. If there is anything further he would like to share, I will happily look at it. He is right: this is a difficult area, and we need to make sure we get it right. I am determined to deliver a system where all children and young people have every chance and opportunity. Particularly when it comes to SEND support, we will have to work across the House to get to a much stronger and better position for our children and families.
Richard Tice (Boston and Skegness) (Reform)
What is the Secretary of State going to do about the capacity crisis that is rapidly emerging as tens of thousands of children are being forced out of independent schools by this Government’s deeply misguided VAT policy? I have a list of 20 schools in Buckinghamshire with no places whatsoever, and Bristol city council is considering buying places from an independent school to put back in that school, at taxpayers’ expense, a child who recently left that school at the parents’ expense.
Bridget Phillipson
We were elected on a manifesto of driving high and rising standards in our state schools. The public back our policy. We think it is right that we prioritise investment in our state schools where the vast majority of our children go to school, including the vast majority of children in the hon. Gentleman’s constituency. I suggest that he spends a bit more time thinking about their interests.
John Glen (Salisbury) (Con)
I welcome the Secretary of State’s commitment to improve the provision of SEND services in schools, but does she recognise that many ordinary, hard-working families make extraordinary efforts to find provision ahead of a formal assessment in independent schools as well? Will she commit to making an assessment of what levels of provision currently exist within the independent sector to satisfy special educational needs, because it will be material to the solution she will need to develop?
Bridget Phillipson
As the Under-Secretary of State for Education, my hon. Friend the Member for Portsmouth South (Stephen Morgan), has set out, we will make sure that, where children have an education, health and care plan, the VAT on fees policy change will not affect those children. I recognise the point the right hon. Member makes and I believe that parents have a right to choose where their children go to school, but the vast majority of parents in our country who send their children to state school are also ambitious and aspirational for their children.
Helen Morgan (North Shropshire) (LD)
Maria, in my constituency, has a son who was in a specialist placement, and in October last year that school said it could no longer meet his need. Since then, he has not been back in full-time education, while another headteacher keeps telling me that special needs provision in Shropshire is decades behind elsewhere in the country. If the Secretary of State aspires for all children in the country to have their special needs met, how is she going to ensure that happens in places that are struggling so much with funding, such as Shropshire?
Bridget Phillipson
I recognise the challenge the hon. Lady sets out, and part of it is making sure that our mainstream schools are better able to cater for children with a wide range of needs. I am very sorry to hear about the experience of her constituent, and I am sure my hon. Friend the Minister for School Standards will be happy to meet her or to look into that further to see if any action can be taken to support the family.
Dr Luke Evans (Hinckley and Bosworth) (Con)
In Leicestershire, special educational needs has been a real problem that I have seen in my constituency. The last Government made it one of the trailblazers to come together and trial some of the new things that could be done in special educational needs, and we started to see some progress in that. Will the Secretary of State meet me and the other Leicestershire MPs to discuss how we can take that forward, so we can get better provision for Hinckley and Bosworth and for Leicestershire?
Bridget Phillipson
The hon. Gentleman is right to draw attention to any emerging evidence that shows new ways of doing things. As a new Government, we are keen to do precisely what he describes to make sure, particularly when it comes to a better join-up between health and education, that we see faster improvement. I would be happy to meet him and Leicestershire colleagues, although my hon. Friend the Minister might be able to step in.
Josh Babarinde (Eastbourne) (LD)
Too many Eastbourne parents, my mum included, are forced to relentlessly fight to get their children into the school that can best meet their children’s special educational needs. That is so often down to a lack of funding, so will the Secretary of State commit to meeting Eastbourne families, Eastbourne school leaders and me to hear about the SEND landscape locally, and provide the funding that local children with special educational needs need and deserve?
Bridget Phillipson
The hon. Member is right in his characterisation of a system that is adversarial and where so many parents have to fight to get a good education and support for their children. I would be happy to do so, or perhaps my hon. Friend the Minister might take that meeting.
James Wild (North West Norfolk) (Con)
It was in response to growing demand that the last Conservative Government increased the high-needs budget to £10.5 billion and put in place a statutory override so that SEND-related deficits did not overwhelm council budgets. With that set to expire in 2026, what is the Secretary of State’s message to local authorities: is she pushing the Chancellor to extend that protection or for deficits to be written off?
Bridget Phillipson
I am genuinely surprised that the hon. Gentleman thinks that question is a source of strength. It represents significant failure over 14 years that we have ended up in such a desperate position facing our councils. We will of course look closely at all of this but, after 14 years when he will have heard that families have been terribly let down by the last Government, a period of reflection on his part might be in hand.
Alison Bennett (Mid Sussex) (LD)
The Parliamentary Under-Secretary of State for Education (Janet Daby)
This Government are breaking down barriers to opportunity by providing young people with the mental health support they need. The Office for Students is providing universities with £15 million this year to improve their mental health and wellbeing support. Our further education student support champion, Polly Harrow, is driving a strategic approach to supporting mental health for further education students.
Alison Bennett
I thank the Minister for her answer. The Children’s Society has found that British 15-year-olds are the unhappiest in Europe, and school absences are at record levels, often due to poor mental health or inadequate support for special educational needs. Early intervention is key to tackling mental health issues among our children. Does the Minister agree that, by putting a mental health professional into every primary and secondary school, we could help end the youth mental health crisis?
Janet Daby
I thank the hon. Member for her question and sincere concern about the mental health of children and young people. This Government are committed to improving mental health and wellbeing support for all children and young people. It is vital that the right support is available to every young person who needs it. That is why we will provide access to specialist mental health provision professionals in every school.
Chris Vince (Harlow) (Lab/Co-op)
As I have already mentioned in the House a number of times, I am a former teacher, I am married to a current teacher and most of my friends are teachers—[Hon. Members: “Hear, hear.”] She’ll be pleased with that. The mental health of teachers after the last 14 years is at rock bottom. What steps will the Department take to support not just the mental health and wellbeing of our students, which is really important, but the mental health and wellbeing of our teachers?
Janet Daby
I thank my hon. Friend for making it extremely clear that he is a teacher and has teachers within his network. He is right to mention the welfare and wellbeing of professionals and of teachers. I would like to offer him a meeting with an Education Minister to discuss that further.
Lee Anderson (Ashfield) (Reform)
Every year in the UK, hundreds of teenagers take their own lives—children as young as 12, like Riley Townsend in the constituency of Ashfield, who took his own life just a few weeks ago because of mental health problems. What more can we do to support our young people through the social care and education systems to stop this epidemic?
Janet Daby
I thank the hon. Member for highlighting that very serious concern. Student suicide is serious and a concerning matter. In the academic year ending 2020, the suicide rate for higher education students in England and Wales was lower than in the general population of the same age group. However, every suicide is tragic and suicide expert Sir Louis Appleby is overseeing the national review of higher education suicides to learn more to prevent suicides. It has seen excellent engagement from the sector and will report on that.
Laurence Turner (Birmingham Northfield) (Lab)
Last year, there was a 38% increase in the number of CAMHS referrals in Birmingham, while also a sharp fall in the number of young people seen within six months of a referral. Does the Minister agree that we need much more preventive support in schools, and closer working between education and health bodies?
Janet Daby
My hon. Friend is right. This Government have committed to recruiting 8,500 additional staff across children and adult NHS mental health services. That will help to reduce delays, provide faster treatment and ease pressure on busy mental health services. Family hubs are also crucial to providing that.
Mr Gagan Mohindra (South West Hertfordshire) (Con)
The previous Conservative Government introduced mental health support teams in schools, and the impact of the covid-19 pandemic is still being felt by students, particularly regarding mental health. Will the Secretary of State commit to continuing those mental health support teams to ensure that students can access the mental health care that they need?
Janet Daby
I thank the shadow Minister for his question. As I have already outlined, this Government are committed to improving the mental health and wellbeing of children and young people, and we will provide access to specialist mental health professionals in every school.
Douglas McAllister (West Dunbartonshire) (Lab)
Markus Campbell-Savours (Penrith and Solway) (Lab)
The Minister for School Standards (Catherine McKinnell)
As a first step in our mission to break down barriers to opportunity, we will recruit 6,500 additional teachers. We have kickstarted the recruitment campaigns, and made a 5.5% pay award, resetting the relationship with the education workforce. We will re-establish teaching as an attractive expert profession after years of damage under the previous Government.
Douglas McAllister
This Government have promised change in education, and made a commitment to raising school standards and increasing teacher numbers after 14 years of Tory neglect. The Scottish National party’s 17 years in power have led to falling standards, under-resourced schools and a growing attainment gap between the richest and the rest. Does the Minister agree that it is time for change, given the Scottish National party’s dismal record on education in Scotland?
Catherine McKinnell
Breaking down barriers to opportunity is a key mission for this Government and the Scottish Labour party. The SNP has seen attainment gaps widen and child poverty soar, but we will transform our education system so that all young people get the opportunities that they deserve, by driving high and rising standards across our education system. That is the change that this Labour Government will deliver.
Markus Campbell-Savours
Many teachers in my constituency welcome the drive to recruit more teachers, but they also want the Government to recognise the pressures on those already in the profession. What steps will the Department take to improve teacher retention in constituencies such as Penrith and Solway?
Catherine McKinnell
I want teachers to not only remain in the profession, but to thrive in it. That is why we are listening and acting on feedback. The Department, alongside school leaders, has developed a workload reduction toolkit and the education staff wellbeing charter. We will deliver a range of measures to make teaching a better valued and respected profession.
Ellie Chowns (North Herefordshire) (Green)
I recently visited Herefordshire, Ludlow and North Shropshire college, which provides excellent further education opportunities for students in my constituency. However, there is not parity of funding for teachers in the FE sector and those in the schools sector, meaning that post-16 education is now better funded for those pursuing academic courses than for those pursuing vocational courses. Will the Secretary of State roll out the 5.5% pay rise to teachers in the FE sector also, so that there is no increase in inequality between academic and vocational opportunities?
Catherine McKinnell
We accepted the School Teachers Review Body’s recommendation of a 5.5% award for teachers and leaders in maintained schools in England from September. It is a substantial award that recognises the hard work of those in our teaching profession. We recognise the challenges in the FE sector also and the issues that the hon. Lady outlines. We will continue to keep the matter under review, because we want to ensure that every child has the best opportunities, whether that is in our school system or in our FE sector.
Munira Wilson (Twickenham) (LD)
The new Government’s focus on the serious recruitment and retention crisis is welcome. However, as we have heard, the recent pay announcement overlooked teachers who work in colleges, who already face a pay gap of more than £9,000. We have twice the proportion of students from disadvantaged backgrounds in our colleges as in school sixth forms, so the recruitment issue is even more pressing in our colleges. Why is it that teachers of 16-year-olds in schools deserve a pay rise, but teachers of 16-year-olds in colleges do not?
Catherine McKinnell
We recognise the challenges that the hon. Lady sets out. We are facing an incredibly challenging fiscal position. From the previous Government, we inherited a £22 billion black hole to make up. This is about the opportunities of young people in this country, and we take the issues that she outlines incredibly seriously. We will continue to do what we can within the fiscal envelope that we have, and within the system that we have inherited. That is why we honoured the recommendations of the STRB review, and we will continue to do what we can in FE.
Helen Hayes (Dulwich and West Norwood) (Lab)
The Parliamentary Under-Secretary of State for Education (Janet Daby)
I thank my hon. Friend for all the work that she has done in standing up for children in social care in recent years. We will champion the ambitions of all children and ensure that background is no barrier to success. In our children’s wellbeing Bill, we will set out our plans to raise standards for all children in social care and will ensure that they are supported to thrive.
Helen Hayes
The drop-out rate from university for care-experienced students is 38%, compared with just 6% for non-care-experienced young people. As thousands of students are arriving at university for the first time this week, what steps is the Minister taking to ensure that there is a consistent package of support for care-experienced students at every university to help them overcome the barriers that they too often face, and to ensure that university is a place where they feel welcome and can thrive?
Janet Daby
I thank my hon. Friend for her question and the passion with which it was delivered. I recently spoke to members of a children and young people’s advisory group, who told me about some of the challenges they face at university. In some cases, they had not even been informed about the option of university, which is quite shocking. We are committed to providing the best university experience for care leavers. Access to higher education should be based on ability and attainment, not background, but too many children across our country do not get the chance to succeed. The previous Government could have done much more.
We will act to address the persistent gaps when it comes to access and positive outcomes for care-experienced young people. We have issued guidance to universities on supporting care-experienced young people and introduced statutory financial support, including a £2,000 bursary, but after the last 14 years, there is still so much more to do.
Dan Carden (Liverpool Walton) (Lab)
The Parliamentary Under-Secretary of State for Education (Stephen Morgan)
The children’s wellbeing Bill will be introduced as soon as parliamentary time allows. The Bill aims to put children and their wellbeing at the centre of the education and children’s social care systems, and to ensure that every child has a fulfilling childhood, enabling them to succeed and thrive.
Dan Carden
I know from visiting schools in my Walton constituency that some of the most difficult challenges that teachers face often come from the difficult socioeconomic challenges of the area spilling over into schools, so I welcome the Government’s focus on children’s wellbeing. Most important to my constituents will be the roll-out of free breakfast clubs. Could the Minister tell me a little bit about how and when they will be rolled out?
Stephen Morgan
I thank my hon. Friend for his question. Breakfast clubs are about more than just food: they provide opportunities for children to play, to learn and to socialise at the start of the school day. The Government are giving parents more choice in childcare, and are supporting families with the cost of living crisis. Our plans for breakfast clubs will remove barriers to opportunity by ensuring that every child of primary school age, no matter their circumstances, is well prepared for school.
Madam Deputy Speaker (Ms Nusrat Ghani)
We are moving on to topicals; the questions will be short, and the ministerial responses will be snappy.
Tim Roca (Macclesfield) (Lab)
The Secretary of State for Education (Bridget Phillipson)
As we start the new academic year, I want to say thank you to all staff working across education, and to wish all learners the best for the year ahead. It will be the mission of this new Government to break down barriers to opportunity, so that where a person is from does not determine what they can go on to achieve, and so that every child has the best start in life. We launch our mission against a backdrop of many inherited challenges: a childcare pledge without a plan for delivery; a crumbling schools estate; a school attendance crisis; large attainment gaps; and falling apprenticeship starts and training opportunities. I am determined to turn this around. We will drive high and rising standards across education, from early years right through to adult learning.
Tim Roca
Across the Macclesfield area, we have fantastic schools, but the legacy of 14 years of Conservative mismanagement means that they have some of the lowest funding in the country. Will Ministers meet me to discuss how we can turn the situation about and fund our schools properly?
Bridget Phillipson
I know that my hon. Friend cares deeply about the life chances of children in Macclesfield and across Cheshire East. I would be happy to meet him to discuss the matter further.
Damian Hinds (East Hampshire) (Con)
The Opposition share the Secretary of State’s good wishes to all for the new term and the new year, but does she recall that last time Labour was in office, not only did England tumble down the world education rankings, but we ended up as the only country in the developed world where the literacy and numeracy of recent school leavers was worse than that of the generation who were about to retire? If she continues to follow the same failed Labour approach, does she expect a different result this time?
Bridget Phillipson
The right hon. Gentleman, as a former Minister in the Department, knows all too well that he and others were cautioned about how they should be using data. When we look at the raw numbers, we see that under the last Conservative Government, reading standards were going down, as were standards in maths and science. One in four children did not reach the required standard at the end of primary school, and one in five young people was persistently absent from our schools. We will drive high and rising standards right across academic subjects, but we will also ensure that all our children and young people have a range of opportunities in music, sport, art and drama, not just those with parents who can afford it.
Ian Lavery (Blyth and Ashington) (Lab)
The Minister for School Standards (Catherine McKinnell)
We recognise the challenges that my hon. Friend raises, which is why the Government will introduce changes, so that state-funded schools can be asked to co-operate with local authorities on admissions and place planning. Local authorities have a responsibility to allocate all applicants a school place on national offer day. If children in his area are still without places, I would be happy to meet him, and to support him in resolving those issues.
Munira Wilson (Twickenham) (LD)
Disadvantaged pupils between 16 and 19 are likely to be up to four grades behind their more affluent peers. We know that funding drops by about a third at 16, yet 16-to-19 tuition was axed in July, and the pupil premium has never applied to that age group. If the Secretary of State is serious about smashing the glass ceiling, will she consider increasing funding targeted at this group?
Bridget Phillipson
I share the hon. Lady’s concern about making sure that we target funding in the most effective way. That is why I have said that my No. 1 priority is ensuring that we support children and young people at the earliest possible point, and give a real commitment around early education and childcare, because that is the single biggest way to ensure that our children arrive at school really well prepared and to stop those gaps opening up as children progress through education.
Helen Hayes (Dulwich and West Norwood) (Lab)
The Parliamentary Under-Secretary of State for Education (Stephen Morgan)
I thank my hon. Friend for all her hard work while in opposition on these important issues. This Government see early education as more than just childcare; it is central to our mission to give every child the best start in life. We recognise the inherited workforce challenges, in both recruitment and retention. In the coming weeks and months, this Government will set out plans for reform, beginning with a complete reset with the sector, so that the workforce feel supported and valued.
Charlie Dewhirst (Bridlington and The Wolds) (Con)
Catherine McKinnell
The Secretary of State has set out extensive responses to extensive questions on the inherited challenges in the SEND system. We recognise the issues that the hon. Gentleman raised, and will be happy to meet him and his colleagues around his local authority area to discuss this further.
Julia Buckley (Shrewsbury) (Lab)
The Parliamentary Under-Secretary of State for Education (Janet Daby)
Further education is front and centre of unlocking opportunity. I join my hon. Friend in congratulating the Shrewsbury Colleges Group on its excellent results.
Caroline Voaden (South Devon) (LD)
Catherine McKinnell
I recognise the concerns the hon. Lady raises. The Government intend to take time to consider the various funding formulas the Department and local authorities currently use to allocate funding for schools. It is really important that we have a fair education funding system that directs funding to where it is needed, and I would be happy to meet her to discuss the particular challenges in her area.
Rachael Maskell (York Central) (Lab/Co-op)
Stephen Morgan
We expect that private schools will want to continue to demonstrate wider public benefit through the provision of means-tested bursaries and partnerships with state-funded schools after the changes are made. As this is a taxation matter, His Majesty’s Treasury is leading the implementation of the policy. It published a technical note about the proposed changes on 29 July and will confirm its plans at Budget. I encourage all private schools to engage with that process, and I would happily meet my hon. Friend to discuss her report.
Claire Young (Thornbury and Yate) (LD)
Catherine McKinnell
The hon. Lady raises a concern that many have raised. She will have seen the level of concern at the special educational needs inheritance that this Government have taken on. Current safety valve agreements will continue to operate, as they are agreed, but we will look at their use going forward. I would be happy to meet her to discuss the particular challenges in her area.
Uma Kumaran (Stratford and Bow) (Lab)
Bridget Phillipson
I recognise the important point that my hon. Friend raises. Many parents are doing everything they can, often in very challenging circumstances, to support their children into school. For my part, I can assure her that this Government will do everything we can to make sure children find welcoming, safe environments at school, with better mental health support, breakfast clubs in our primary schools, a broader, richer curriculum, and more support around SEND in mainstream settings.
Patrick Spencer (Central Suffolk and North Ipswich) (Con)
There were reports in the press a couple of weeks ago that the Secretary of State took meetings with teaching unions who made the argument that multiplication times tables should be taken off the national curriculum. Given our stratospheric success in PISA—programme for international student assessment—numeracy ratings, thanks to changes introduced by the Conservative Government, can she give us a 100% cast-iron guarantee that she will not dumb down the curriculum in this country and will not take times tables off the national curriculum?
Bridget Phillipson
I would caution the hon. Gentleman about believing everything he reads in the press. Times tables are an important part of our system. We will drive high and rising standards from Government. Rather than picking pointless fights and avoidable industrial action, what he will see from this Government is a different relationship, as we work in partnership with teachers, school leaders and support staff to deliver better life chances for all of our children.
Mark Ferguson (Gateshead Central and Whickham) (Lab)
Bridget Phillipson
My hon. Friend is absolutely right. Conservative Members do not like it, but it is absolutely true. I would add that, when it comes to the concerns my hon. Friend raises, we see stark attainment gaps in the difference between what our poorest and more affluent children are able to achieve. That blights the life chances of children in his constituency of Gateshead. We are determined to make progress on that, unlike the previous Government.
Iqbal Mohamed (Dewsbury and Batley) (Ind)
I congratulate the Secretary of State and her team, and welcome them to their places.
In my constituency, children are being unenrolled after 20 days of absence, even when there is a valid and compassionate reason for their leave. Will the Secretary of State commit herself to reviewing this harmful and punitive rule, which is leaving children in my constituency without a school for many months, and will she take steps to make the necessary changes to protect those children and their right to an education?
Stephen Morgan
I am happy to meet the hon. Member to discuss the points that he has raised. Attendance and off-rolling are issues that the Government take very seriously, and we will set out more policies on them in due course.
Perran Moon (Camborne and Redruth) (Lab)
The last Government promised to publish a register of children who were not in school. I welcome the measures taken by this Government, but can the Minister update me on the next steps towards publication of the register?
Stephen Morgan
This Government have no time to waste if we are to fix the foundations of our country after 14 years of decline. We will legislate for the register through the children’s wellbeing Bill, which will be introduced as soon as parliamentary time allows, and which will support the Government’s work to ensure that every child has the best start in life.
Greg Smith (Mid Buckinghamshire) (Con)
Can the Minister confirm that the funding announced on 9 May by the Conservative Government for a brand-new SEND school in the county of Buckinghamshire is in no way, shape or form “under review”, and that we will get that new school?
Stephen Morgan
Ensuring that schools and colleges have the resources and buildings that they need is a key part of our mission to break down barriers to opportunity and give every young person the best start in life. We are committed to improving the condition of the estate through the Department’s annual funding, continuing the school rebuilding programme and fixing the problems caused by reinforced autoclaved aerated concrete.
David Baines (St Helens North) (Lab)
At the start of the new school year, may I wish all teachers, school staff and children in my constituency the very best for the year ahead?
Does my hon. Friend agree that, as part of the curriculum review, which I warmly welcome and look forward to, we need an education system and curriculum—particularly in primary schools—with much more focus on learning through play, on oracy, and on multisensory movement and the recording of learning? That would benefit not just children with SEND, but all pupils.
Catherine McKinnell
The curriculum assessment review, led by experts, will focus on the evidence—what we know from here and abroad about how we can best help children of all ages and abilities to learn, and that includes children with special educational needs. I am sure that those conducting the review will want to investigate different approaches to the primary curriculum, including those mentioned by my hon. Friend, but I would not want to pre-empt the review’s conclusions and recommendations.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. That concludes Education questions. I am sorry that I could not fit everyone in; better luck next time.
Government Policy on Health
(2 months, 1 week 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.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Victoria Atkins (Louth and Horncastle) (Con)
It is always nice to see the right hon. Gentleman, but I was expecting to see the actual Secretary of State respond to this question. Perhaps he is at a business meeting with health firms—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. May I ask the shadow Secretary of State just to pose the question? The Minister will respond, and then the shadow Secretary of State will get her two minutes after that.
Victoria Atkins
(Urgent Question): To ask the Secretary of State for Health and Social Care if he will make a statement on the involvement of people with no formal appointment in the development of Government policy on health.
I apologise to the House, Madam Deputy Speaker. I am more used to answering, but believe you me, I am looking forward to the questions.
The Secretary of State for Health and Social Care (Wes Streeting)
And I am committed to making sure that the right hon. Lady is there, asking the questions, for a very, very long time.
Unlike our predecessors, this Government cannot get enough of experts. We work with a wide range of stakeholders in developing policy, because that goes to the heart of our approach to mission-driven government. But I think the shadow Secretary of State was referring specifically to the right honourable Alan Milburn, so let me address him specifically. I walked into the Department of Health and Social Care on 5 July to be confronted with the worst crisis in the history of the national health service: waiting lists at 7.6 million, more than a million patients a month waiting four weeks for a GP appointment —if they could get one at all—the junior doctors still in dispute and on strike, and dental deserts across huge parts of our country, where people cannot get an NHS dentist for love nor money.
This Government are honest about the scale of the crisis and serious about fixing it, which means that we need the best available advice—it is all hands on deck to fix the mess that the previous Government left. If a single patient waited longer for treatment than they needed because I had failed to ask for the most expert advice around, I would consider that a betrayal of patients’ interests. I decide whom I hear from in meetings, I decide whose advice I seek, and I decide what to share with them. I also welcome challenge, alternative perspectives and experience.
The right honourable Alan Milburn is a former Member of this House, a member of the Privy Council and a former Health Secretary. He does not have a pass to the Department and, at every departmental meeting he has attended, he has been present at the request of Ministers. During Alan’s time in office, he gave patients the choice over where they are treated and who treats them, as well as making sure that the NHS was properly transparent, so that all patients were able to make an informed choice—a basic right that we expect in all other walks of life, but which only the wealthy and well connected were able to exercise in healthcare until Alan changed it. He gave patients access to the fastest, most effective treatment available on NHS terms, so that faster treatment was no longer just for those who could afford private healthcare. He made the tough reforms that drove better performance across the NHS and, along with every other Labour Health Secretary, delivered the shortest waiting times and the highest patient satisfaction in the history of the NHS. That is his record and Labour’s record, and it is the kind of experience that I want around the table as we write the reform agenda that will lift the NHS out of the worst crisis in its history, get it back on its feet, and make it fit for the future once again.
Victoria Atkins
I fear that the right hon. Gentleman is betraying his inexperience. It is a shame that he needs all that help and experience; the rest of us have just got on with the job.
The Department of Health and Social Care manages incredibly sensitive information, ranging from the development of healthcare policy to the handling of market-sensitive information concerning vaccines and medication, and the rules regarding patient confidentiality. It has emerged that Mr Milburn, a former Labour politician, has received more than £8 million from his personal consultancy firm since 2016. He advises one of the largest providers of residential care for older people, and is apparently a senior adviser on health for a major consultancy firm. [Interruption.] A Member sitting opposite says, “So what?” Given the risk of conflicts of interest—that, rather than the right hon. Gentleman’s inexperience, is the point of this UQ—has Mr Milburn declared his business interests to the Department? Can the right hon. Gentleman reassure the House on how such conflicts are being managed, so that we can get a sense of the scale of this open-door policy and Mr Milburn’s access?
Could the right hon. Gentleman tell us how many meetings Mr Milburn has attended? How many were with NHS England? How many were conducted without ministerial presence? What sensitive information has Mr Milburn been given access to? Does it include information concerning the sale of patient information to pharmaceutical companies? Has Mr Milburn seen internal DHSC or NHSE documents regarding the pricing of medicines and vaccinations, and other market-sensitive information? This is all information that comes across the right hon. Gentleman’s desk, and there is no formal record for understanding what Mr Milburn has seen.
If the right hon. Gentleman uses, as he has done just now, the excuse that this is all okay because Mr Milburn is a former Secretary of State and a Privy Counsellor, could the right hon. Gentleman set out where in the ministerial code or the civil service code such an exemption exists for unrecorded access to information by members of the public? I hope the Secretary of State will also confirm his lists of other advisers, their commercial interests and any other members of the public attending meetings that are of a deeply sensitive nature, so that we get a sense of just how far this goes.
This is just more evidence of cronyism at the heart of this new Labour Government. Following recent press reports that a Labour party worker had been parachuted into a civil service role in the Department through a closed recruitment process, will the Secretary of State finally come clean to the House and be transparent about who is running his Department and shaping policy for him?
Wes Streeting
The right hon. Lady wants to compare experience. It took me three weeks to agree a deal with junior doctors—she had not even met them since March—and in the two and a half years that I was the shadow Secretary of State for Health and Social Care, she was the fifth and among the worst. Does it not just tell us everything we need to know about the Conservatives’ priorities? She does not ask me what we are doing to cut waiting lists. She does not ask about the action we took to end strikes. She does not ask about the action that has been taken to hire a thousand GPs, who she left to graduate into unemployment. She has not asked me about the news on the front page of The Daily Telegraph that, on their watch, 50 years of health progress is in decline. And funnily enough, there was nothing on the news from The Observer this weekend that the NHS was hit harder than any other health service by the pandemic because it was uniquely exposed by a decade of Conservative neglect. Having broken the NHS, all they are interested in now is trying to tie this Government’s hands behand our back to stop us cleaning up their mess.
What the right hon. Lady is implying in this question is that, as Health Secretary, she never sought the advice of people who did not work in her Department, which would explain quite a lot actually. I feel sorry for her, because when I need advice, I can call on any number of Labour Health Secretaries who helped deliver the shortest waiting times and the highest patient satisfaction in history. But she never had that luxury, because every single one of her Conservative predecessors left NHS waiting lists higher than where they found them—except, of course, for Thérèse Coffey, who was outlasted by a lettuce.
In fact, it says a lot about the modern Conservative party’s anti-reform instincts that the right hon. Lady is so opposed to Alan Milburn. They used to hug him close when they were cosplaying as new Labour. Andrew Lansley even asked whether Alan Milburn would chair the new clinical commissioning board that his top-down reorganisation created, although Alan sensibly turned him down and labelled the reorganisation “the biggest car crash” in the history of the NHS, which just goes to prove that Alan Milburn has sound judgment and is worth listening to.
But if the right hon. Lady wants to lead with her chin and talk cronyism, let us talk cronyism. Why do we not talk about Owen Paterson lobbying Health Ministers on behalf of Randox? The Conservatives care so much about cronyism that they welcomed Lord Cameron back with open arms following his paid lobbying for Greensill. For reasons of ongoing court cases, let us not even get into Baroness Mone and the £200 million contract for personal protective equipment. Where was the right hon. Lady during those sorry episodes? Cheering on that Government and presiding over a record of abysmal failure that has put them on the other side of the Chamber.
This Government are having to rebuild not only the public services that the Conservatives broke and the public finances they raided, but the trust in politics that they destroyed. We will put politics back into the service of working people and rebuild all three. Clearly, we will have to do it without the support of the Conservative party’s one- nation tradition, who are not even running and have abandoned their flag. It is clear that the Conservatives have not learned a thing from the defeat they were subjected to on 4 July, and we will get on with the business of clearing up their mess.
Kit Malthouse (North West Hampshire) (Con)
On a point of order, Madam Deputy Speaker. The Secretary of State has obviously decided that attack is the best form of defence, but the operation of the House will collapse if he declines to answer any questions about a very serious matter of public concern. Can we seek your guidance, Madam Deputy Speaker, on whether he is conducting himself appropriately in the House? We are seeking transparency on a matter of probity, and he has a duty to answer the House, not least under the ministerial code.
Madam Deputy Speaker (Ms Nusrat Ghani)
The urgent question has just started, so there will be ample opportunity to continue to hold to account the Secretary of State, who no doubt believes that his answers are responding to the UQ. We have some time to go, so if Members bob, I will endeavour to ensure that they are called to do so.
Clive Efford (Eltham and Chislehurst) (Lab)
The sheer brass neck of the Conservatives to turn up on the very day that Transparency International UK published its report showing that £15 billion of contracts were red-flagged during the covid epidemic—[Interruption.] I am not reading. Those contracts have been red-flagged and are worthy of further investigation, and £500 million of them were given to companies that had not even lasted 100 days. Should the Conservatives not have taken that into consideration before coming here with this urgent question?
Wes Streeting
I wholeheartedly agree with my hon. Friend. Frankly, every single contribution from the Opposition Dispatch Box should begin with a grovelling apology for the way they conducted themselves in government, but they will not apologise: they have learnt nothing and they show no humility. To my hon. Friend’s point, when it comes to covid corruption and crony contracts, the message from the Chancellor is clear. We want our money back and the covid commissioner is coming to get it.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Liberal Democrat Front-Bench spokesperson, Sarah Olney.
Sarah Olney (Richmond Park) (LD)
The Liberal Democrats find it deeply ironic that the shadow Health Secretary has raised this question on the involvement of people with no formal appointment in the development of Government policy. Are they forgetting their record in government? Perhaps we should remind everyone that, under the Conservatives, it was their friends that benefited from large contracts to supply the Government during the covid pandemic. The result is that, just today, as the hon. Member for Eltham and Chislehurst (Clive Efford) has already highlighted, Transparency International UK has revealed multiple red flags in more than 130 covid contracts totalling over £15.3 billion. With the Conservatives out of power, we have the opportunity to clean up our politics, so will the Secretary of State update the House on whether the Prime Minister plans to appoint his own ethics adviser or whether Sir Laurie Magnus will remain in the post? Will the ethics adviser be empowered to initiate their own investigations and publish their own reports?
Wes Streeting
I am grateful to the hon. Member for her serious contribution. She is right to say that transparency matters. That is why meetings in my Department, and their attendees, will be published in the right and proper way on a quarterly basis.
It is also right to draw a distinction between those areas of business and meetings in the Department that are about generating ideas and policy discussion, and those that are about taking Government decisions. It is right that people from outside government come into the Department for Health and Social Care, or any Department, to lend their expertise and share their views, and it is right that Ministers make decisions absent of those outsiders. That is the distinction I would draw. The hon. Member raises a specific point about the Prime Minister’s ethics adviser. This is a Prime Minister who does take ethics seriously and will not behave in the way that his Conservative predecessors did. As for individuals, that is a decision for the Prime Minister, but I will ensure that the hon. Member gets a more fulsome reply.
Peter Prinsley (Bury St Edmunds and Stowmarket) (Lab)
I have been a surgeon for 28 years. In the first 14 years, we had a Labour Government and we saw the waiting lists more or less disappear, such that by 2010, a patient coming to see me in the clinic would be offered an operation. In the second 14 years, we have seen record waiting lists. I welcome the advice of Mr Alan Milburn, one of the most successful Secretaries of State and one of the architects of the fall in the waiting lists, and I support the Secretary of State in this.
Wes Streeting
I am grateful to my hon. Friend and I am delighted to see him here, bringing his experience to the House, sharing it with the nation, standing up for his constituents and being part of the team that will do what the last Labour Government did, which was to ensure that our NHS is back on its feet and fit for the future.
Kit Malthouse
Notwithstanding the Secretary of State’s bluster, he must appreciate that, given Mr Milburn’s involvement in the private healthcare sector, his direct access to the Secretary of State may have conferred a competitive advantage. What does the Secretary of State say to those companies who compete with Mr Milburn’s companies about the access that he has had to the Secretary of State? How can we in the House be reassured about the kind of information that Mr Milburn has been able to access and what, if any, advantage that might have conferred upon him?
Wes Streeting
With the way that Conservative Members are carrying on, and with the smears and innuendo they are applying, I am surprised that Alan Milburn is not paying them a marketing commission. The right hon. Gentleman makes out that Alan Milburn has come into the Department and is making all the decisions. If he were up to what they are suggesting, I could not think of better word-of-mouth publicity.
There is a clear distinction between inviting people with a wide range of experience and perspectives into the Department to have policy debates and to generate ideas, and having meetings that are about transacting Government business. I can assure the right hon. Gentleman and the House that nothing commercially sensitive has been shared with Alan Milburn, and I am genuinely astonished that Conservative Members think it is inappropriate for a Secretary of State for Health and Social Care to seek views, input and advice from their predecessors. In fact, I wonder how one of my Conservative predecessors, who is coming in to see me soon, will feel about their objections.
Mr Jonathan Brash (Hartlepool) (Lab)
In October 2023, when I phoned my NHS dentist to get an appointment for my children, the next available appointment was in June 2024. [Interruption.] When June 2024 rolled around, they cancelled the appointment. The next available appointment is April 2025. Given my right hon. Friend’s disgraceful inheritance, does he think the Conservative party should spend a little more time reflecting on its record and a little less time asking pointless questions?
Wes Streeting
I wholeheartedly agree with my hon. Friend. Let the record reflect that, when he was raising the crisis that is leaving people in Hartlepool without access to NHS dentistry, Conservative Members were shouting, “What about Alan Milburn?” That says everything about their priorities, everything about their lack of remorse and contrition, and everything about why they should stay in opposition for a very long time while we sort out the state of NHS dentistry in Hartlepool and across the country.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
How legitimate is it for the House of Commons to ask about external people coming into Departments and potential conflicts of interest? In cases like Alan Milburn’s, or that of a former Conservative Secretary of State, how does the Department identify and manage conflicts of interest?
Wes Streeting
It is entirely legitimate to ask questions, and it is also entirely legitimate for Government Departments to invite people with a wide range of experience and insight to advise on policy debates and discussions. That happens all the time. Where do we draw the line? Do we have to send compliance forms to Cancer Research UK before it comes in to talk about how we tackle cancer? Do we have to send declaration of interest forms to patients who want to discuss awful cases they have experienced?
Frankly, I find this pantomime astonishing. I am surprised that the shadow Secretary of State thinks this is such a priority that she should raise it on the Floor of the House rather than NHS waiting lists, ambulance response times, GP access or the state of social care. It is clear that the Conservatives have not learned why they are in opposition.
Anna Dixon (Shipley) (Lab)
I congratulate my right hon. Friend on taking advice from his predecessors. As someone who worked as a senior civil servant in the Department under Alan Milburn, I would like to echo my right hon. Friend’s comments about what a fantastic Secretary of State he was and speak to his record in that position. I also worked as a civil servant under the coalition Government.
Will the Secretary of State also be seeking advice from Andy Burnham who, as Secretary of State when Labour last left office, left record low waiting times and high public satisfaction?
Wes Streeting
My hon. Friend is absolutely right. How fortunate we are to be able to turn to every living former Labour Health Secretary, from Alan Milburn to Andy Burnham, and in every single one of those cases be able to draw on people whose record of delivery led to the shortest waiting times and the highest patient satisfaction in history. I can confirm to my hon. Friend that, both in opposition and in government, I have been talking to the Mayor of Greater Manchester. He is doing some brilliant work on prevention. I am really looking forward to working with all our metro mayors to tackle health inequalities across the country and to improve the integration of health and care services across the land.
Paul Holmes (Hamble Valley) (Con)
I know it will be a novelty for the Secretary of State actually to answer a question during this urgent question, but maybe he will do the House a favour by answering this very simple question with a yes or no. He said that no pass was given to Alan Milburn, so will he guarantee that no confidential documents that could have been used for commercial purposes were accessed or left his Department? Will he take responsibility if any documents or data discussed at ministerial meetings with Alan Milburn leave the Department—yes or no?
Shaun Davies (Telford) (Lab)
Fixing and getting our NHS back on its feet should be a national mission, and everybody should be able to play their part in that. Will the Secretary of State confirm whether any former Conservative Ministers have put themselves forward to try to fix the mess that the party now in opposition created over the last 14 years?
Wes Streeting
This is the extraordinary thing: notwithstanding the public job application of a former Conservative Secretary of State, which did not meet the bar, I have been approached by former Ministers in the Department of Health and Social Care who served in the Conservative Government who, in a spirit of public service, have wanted either to do work for the Labour Government on issues that they care about, or have sought to share their experiences—the highs or, indeed, the many lows—of being in government. That is a totally legitimate thing to do. I suspect that, if I rang round all my Labour predecessors, I would find that the Conservative Government tried desperately hard to get them to work for them, because, as I say, the challenge for Conservative Health Secretaries was that they did not have any successful Conservative predecessors to turn to.
Mr Paul Kohler (Wimbledon) (LD)
I share the Secretary of State’s frustration and understanding of the brass neck of the Tories on this point and I do not doubt the expertise of Alan Milburn, but legitimate questions have been asked about conflicts of interest. What safeguards are being imposed or considered to address the appearance of conflicts of interest?
Wes Streeting
It is absolutely right that people appointed to roles in public life declare their conflicts of interest so that they can be assessed when taking decisions or exercising powers to ensure that they are doing so in a way that manages those conflicts of interest and no conflict arises. Alan Milburn does not, at this stage, have a role in the Department of Health and Social Care. Many people have come into the Department for meetings in the past eight weeks. We do not ask them all to declare their interests. I know there is more red tape now in health and social care than when we left office, but this Government want to reduce that not increase it.
Chris Vince (Harlow) (Lab/Co-op)
The Conservative party appointed a party donor, Wol Kolade, who wants to change how the NHS is funded, to the board of NHS England. In January, the right hon. Member for Louth and Horncastle (Victoria Atkins) held a meeting with his private equity firm, Livingbridge, less than one month after he gave her party £50,000, so is it not the shadow Health Secretary who ought to be answering questions about cronyism?
Wes Streeting
It is not for me, thankfully, to answer for the shadow Secretary of State for Health and Social Care; it is just my responsibility to clean up her mess.
Mims Davies (East Grinstead and Uckfield) (Con)
Will the Secretary of State please illuminate the House about any conflict of interest concerning the gentleman in question? Did he head into the ministerial floor or access the Department? Many of us want our constituents to access health services and GP appointments. Did the right honourable gentleman, who is the Secretary of State’s friend from the old days and with whom he has worked with previously, have a day pass or a departmental pass? Beyond the bluster, can the Secretary of State assure hon. Members that there is no conflict of interest?
Wes Streeting
My right honourable friend, Alan Milburn, does not have a role in the Department. He does not have a pass to the Department. I am asked whether he has accessed the ministerial floor. I do not know where the Conservatives held their meetings, but I tend to hold them in my office on the ministerial floor.
Emma Foody (Cramlington and Killingworth) (Lab/Co-op)
Across Cramlington and Killingworth, I have heard countless stories—heartbreaking stories—of residents’ experiences of the NHS. They talk about the staggering length of waiting lists, access to GPs and access to dentists. Does the Secretary of State agree that, rather than focusing on who he might have once had a conversation with, the Conservatives would do better supporting the Labour Government in cleaning up the mess they left behind, which my residents live with every single day?
Wes Streeting
My hon. Friend is absolutely right. It is because of the way that she champions her constituency and her community that she was sent to this place to stand up for their interests. It will not be lost on her constituents or anyone else in the country that, with our national health service in the state that it is in and with the appalling headlines that we have been reading in recent days, the Opposition have absolutely nothing to say about the responsibility that they bear for the crisis or what they would do to fix it. They have the wrong priorities, but, fortunately, the country has the right Government.
Nick Timothy (West Suffolk) (Con)
How many meetings has Alan Milburn had in the Department? Will the Secretary of State place a list of all those meetings in the House of Commons Library? Knowing that the former Secretary of State has extensive financial interests in healthcare, did the Secretary of State ask him to declare those interests and publish them?
Wes Streeting
First, my right honourable friend, Alan Milburn, does not have a role in the Department. Secondly, of course we will publish, in the routine way that we do, details of meetings held in the Department and who attended them. I gently suggest that if the hon. Member has not made his way there already, there are plenty more interesting things to read in the House of Commons Library.
Sam Rushworth (Bishop Auckland) (Lab)
I think Opposition Members may be making the mistake of judging this Government by their own standards. I wish to ask the Secretary of State this: after my constituents and many others have suffered from the economic disaster that was caused in part by dodgy covid contracts and VIP fast lanes, what will this Government do differently?
Wes Streeting
I am delighted to see my hon. Friend here representing Bishop Auckland. The people of his constituency will be struck by the fact that this afternoon the Conservative party has chosen to create a mountain out of a molehill about a former Health Secretary coming in to lend his advice and experience to a Labour Government. On covid corruption, my hon. Friend is absolutely right to be angry, as indeed the country is, too. That is why my right hon. Friend the Chancellor of the Exchequer has been very clear that, when it comes to cronyism and corruption in covid contracts, we want our money back and the covid corruption commissioner is coming to get it.
Graham Stuart (Beverley and Holderness) (Con)
There is just one standard and it applies to whichever party is in power, and that should be respected. All this whataboutery relating to what may have gone on under a Conservative Government! Anyone who has done something wrong should be pursued. Anyone in authority should be accountable. It is the failure of accountability, a failure of recognition, by the right hon. Gentleman that lets down the House today. Can he confirm to the House that Alan Milburn did not have access to official sensitive papers? Anyone who visits a Minister—they come in all the time—sits on one side of the table and the official sensitive documents are on the other side. Can he confirm that Alan Milburn did not have access that no other visitor would have?
Wes Streeting
In the meetings that I asked my right honourable friend to attend—I need to make sure that I get this absolutely right—I tend to think that I saw him on the other side of the table in the corner. I cannot guarantee that he sat at that point in every single one of the meetings, but he certainly was not sitting next to me. With regard to the papers for the meetings that he attended, they were discussion papers about the challenges facing health and social care. They were not Government decision papers or recommendations for Ministers. There is a distinction between those two things. I decide who attends meetings in the Department, and, when it comes to wide-ranging policy discussions, I decide what reading material people receive.
Andrew Lewin (Welwyn Hatfield) (Lab)
The Conservative party famously said that they had “had enough of experts”, and look at where that got us—the longest NHS waiting list in history. I am pleased that my right hon. Friend rejects that approach emphatically. In the spirit of listening to professionals who are trying to make a difference, I ask him and his team to consider visiting Hertfordshire, where the community trust is working on a hospital at home scheme. The scheme is making a huge difference to patients at the end of their life, who need to be supported, cared for and monitored. This is an important part of easing the burden on our NHS with which we have been left.
Wes Streeting
I would be delighted for either myself or one of my ministerial colleagues to take my hon. Friend up on that offer. What a refreshing change from so many of the contributions that we have had this afternoon from the Opposition. Of course we want to learn from people with experience and expertise in getting it right on the NHS and social care. Many of those people are outside Government. Many of them have valuable experience in other parts of the public sector, in our public services, in the voluntary sector and in the private sector—or indeed experience as patients, users or carers in our health and social care service. Our message as a Government is clear: when it comes to fixing the crisis in health and social care created by the Conservatives, we cannot get enough of experts, and we are looking forward to mobilising the country in pursuit of our mission, so that we can deliver an NHS that our country can once again be proud of.
Gregory Stafford (Farnham and Bordon) (Con)
Given the potential for commercial advantage to Alan Milburn, will the Secretary of State publish all the papers that Alan Milburn was able to read? If the Secretary of State gave them on Privy Council terms, as he seems to be saying, will he at least give them to any Privy Counsellor who wants them?
Wes Streeting
Given the state of the Opposition, I bet they would love to see what policy discussion papers we are putting forward in the Department of Health and Social Care. The hon. Gentleman is right: papers have been shared with my right honourable friend on Privy Council terms. The Opposition will, in time, be able to judge the fruits of the labour, in terms of my decisions and the decisions of this Government when it comes to fixing the mess that they created.
Matt Turmaine (Watford) (Lab)
I welcome the decision of the Secretary of State to seek wisdom from experts across the health and care system in order to build a better NHS. Is he aware of the virtual hospital system that has been used at West Hertfordshire Teaching Hospitals NHS Trust Watford site, developed during covid in order to treat more people in a better setting?
Wes Streeting
I am grateful to my hon. Friend for his question. We know that the NHS is broken, and is going through the worst crisis in history. We will shortly hear from the noble Lord Darzi about the outcome of his investigation into the true state of our national health service, but against that bleak backdrop of political failure are stories across the country of triumph against the odds, and of some outstanding public servants doing extraordinary things, showing what the future of our health and care services could look like with a Government on their side. I am pleased that such a Government is here—this Labour Government—and I would be delighted to hear more about my hon. Friend’s constituency.
Jim Shannon (Strangford) (DUP)
I wish the Secretary of State all the best in his new role, and in the task that he has taken on. With great respect to my Conservative colleagues, the downfall of the Tory Government was due in part to the fact that people did not trust the background politics behind closed doors. I want the Government to succeed, as do most people in this House. Stability and direction are much needed, but that can happen only with openness, transparency and a desire to put nation before party. How can the Secretary of State assure us that this Government will do things differently, and that policy will be proposed by those with know-how, and passed with scrutiny in this place, not simply due to pressure from lobby groups?
Wes Streeting
I strongly agree with the hon. Member. In the short time that I have been in post, I have been delighted to have had virtual meetings with the current Northern Ireland Minister of Health, as well as with his predecessor, the hon. Member for South Antrim (Robin Swann), who now sits over there on the Opposition Benches—I am delighted to see him in his place.
Ministerial meetings attended by third parties are declared in our quarterly transparency publication. People will want to lobby and influence Government, and Members of Parliament, all the time. Members of Parliament regularly receive correspondence—let alone the deluge of advice that we receive in government. The important thing is that Ministers take decisions on the basis of the best possible advice available, that they weigh up carefully the evidence and arguments in a fair and proper way, and that advisers may advise but Ministers ultimately decide.
This Government are aware of the deep crisis in trust in our politics. That is why, on his very first day, the Prime Minister talked outside Downing Street about restoring Government to service. It is why it should be no surprise whatsoever that many people who have given outstanding public service to this country, such as my right honourable friend Alan Milburn—and the same is true of Patricia Hewitt, Alan Johnson, my noble Friend Lord Reed, the Mayor of Greater Manchester and many more—want to roll up their sleeves and help the Government. They can see the state that the Conservative party left our country in, and are willing once again to roll their sleeves up to get our country back on its feet, turn the situation around and ensure that everyone in our country can look forward to the future with optimism and hope after 14 years of abysmal failure.
Madam Deputy Speaker (Ms Nusrat Ghani)
That is the end of the urgent question. I thank all Members who participated. In reference to the Secretary of State earlier, the privilege of choosing UQs is down to the Chair and is based on merit and the urgency of the point being raised.
Post Office Horizon: Redress
(2 months, 1 week ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Secretary of State for Business and Trade (Jonathan Reynolds)
With your permission, Madam Deputy Speaker, I would like to update the House on the Government’s response to the Horizon scandal. How appropriate it is to see you, a former Business and Trade Minister, in the Chair.
My priority as the new Secretary of State is to ensure that victims of the scandal receive the redress that they deserve. Over the past few weeks, I have begun meeting with some of the postmasters whose lives have been so badly damaged by those events. Their stories are harrowing, but their resilience and steadfastness in seeking justice are inspiring. I am also grateful for their candour in sharing insights on how the various compensation schemes can be improved.
May I make a personal point, Madam Deputy Speaker? I know I speak for hon. Members across the House when I say that it fills me with sadness to have to stand here today and address such a significant failure of the state. The role of Government must be to do right, seek justice and defend the oppressed, yet Governments have too often had to be forced into action by brave, tireless and resilient campaigning. Once again, I pay tribute to the Justice for Subpostmasters Alliance, and to campaigners such as Jo Hamilton, Lee Castleton and Sir Alan Bates—incidentally, I add my personal congratulations to Sir Alan on his recent wedding. Without their tireless efforts, justice may well never have been done in this case. As we stand here today, in the shadow not just of this scandal but those of Grenfell, infected blood and several more, I know that it is the firm conviction of everyone in this House that we must do better. This is an issue not of politics but of justice.
In that spirit, I cannot speak of the new Government’s work to address this wrong without again acknowledging and appreciating the work of Lord Arbuthnot and the new Lord Beamish—formerly the Member for North Durham—as well as that of my friend the hon. Member for Thirsk and Malton (Kevin Hollinrake) as Minister. The announcements that we make today are built on their efforts to hasten redress payments and quash wrongful convictions.
Earlier in the summer, the new Government announced the launch of the Horizon conviction redress scheme. I am pleased to report that the first payments have been issued and good progress made on processing the claims received to date. As was the case for the group litigation order compensation scheme, the Department will be setting a target to make, within 40 working days, the first offer to 90% of those who have submitted a full claim. Additionally, the Post Office has now settled over 50% of cases on the overturned convictions scheme, with 57 out of 111 cases fully settled. The Department has also now received over 50% of GLO claims and settled over 200 of them.
Progress has also been made on implementing the £75,000 fixed-sum awards on the Horizon shortfall scheme. As of 30 August, over 1,350 claimants who had previously settled below the £75,000 threshold have been offered top-ups to bring them to that amount, and the Post Office will shortly begin making fixed-sum offers to new claimants. Those interventions will have a significant impact on ensuring that postmasters can access redress swiftly and simply. However, we recognise that this option will not suit everyone and does not address all the concerns raised by postmasters and their representatives. That is why we are taking further action today.
The Horizon compensation advisory board recommended last year that we introduce an independent appeals process for the Horizon shortfall scheme. Today I am pleased to announce that we have accepted that recommendation. That appeals process will enable claimants who have settled their claim under the HSS to have their case reassessed, with the benefit of any new information that they were not able to include in the original application. It will be delivered in-house by my Department, and we will apply the lessons learned from redress schemes to date to ensure that the process is easy for postmasters to engage with and that outcomes are delivered at pace. We will announce further details in the coming months.
There will be no obligation for postmasters to appeal their settlement, and no doubt many will be content that their claims have been resolved fairly. I know that financial redress will never fully compensate victims for their suffering, but we want to help bring some closure to postmasters as soon as we can, which is why we will establish the new appeals process as quickly as possible.
In summary, the new Government will do everything in our power to deliver justice for postmasters, to bring them closure and to ensure that such a national tragedy is never allowed to happen again. I commend this statement to the House.
Madam Deputy Speaker (Ms Nusrat Ghani)
No doubt that statement will mean a lot to many constituents, including those in my constituency of Sussex Weald. I call the shadow Secretary of State.
Kevin Hollinrake (Thirsk and Malton) (Con)
I thank the Secretary of State for advance sight of his statement and for his kind words. I assure him that we will continue to work collaboratively to put the interests of postmasters first. I also associate myself with the congratulations offered by the Secretary of State to Sir Alan Bates and Lady Suzanne Bates, and the recognition of their contribution and that of others.
As the Opposition promised during the very first urgent question of this Parliament, Ministers know that they will receive our full support to deliver compensation swiftly and quash the convictions of those wronged by this terrible tragedy. In his statement, the Secretary of State has set out a new appeals process for those who have already settled their claim under the Horizon shortfall scheme. I welcome that step. I know that the Department is implementing the work of the Horizon compensation advisory board, which was instrumental during my time in office, and will no doubt be supporting the new Government.
However, I have some questions about the Secretary of State’s statement. First, he confirmed that the appeals process will be open for claimants who have settled their claim under the HSS, but it is restricted to those who have new evidence to support their case. In the same breath, he recognised lessons learned from redress schemes to date, indicating that his Department is aware of the flaws in the scheme, which I also acknowledge. Crucially, will the appeals process also be available, as it should be, to all claimants, not just those with new information? Given the accepted flaws in the scheme, it would be wrong to leave individuals without the opportunity to appeal. If people choose the £75,000 top-up, will they be entitled to appeal? If so, there is a risk that for those wanting to go through the appeal process it will be a slower process because of the number of people seeking to appeal.
Secondly, the Secretary of State says that the appeals process will be up and running as soon as possible. Can he set out a specific timeline? Finally, on appeals, can he tell the House whether these individuals will be entitled to legal representation, as is the case in the GLO process?
Could I also ask the Secretary of State some questions about the broader compensation schemes? Some £289 million has been paid to over 2,800 claimants across four schemes. I was alarmed to find, however, that only six claims have been offered redress through the Horizon convictions redress scheme, and no full and final settlements have yet been made through that scheme. Can he explain those numbers?
I was also concerned to hear the Secretary of State say last week that only 130 letters have been written to postmasters who have had convictions quashed—I think there are 700 such postmasters—and that this was a matter for the Ministry of Justice, rather than his office. I am sure he realises that finger-pointing within Government will not wash with the people who have been through these difficulties and this horrendous scandal, so I must therefore push him on what steps he has taken to mitigate the delays in sending out letters to those affected.
Finally, delay in all the schemes is at least partially the result of an adversarial process of lawyers arguing with lawyers. As a remedy, we were working very hard for Sir Gary Hickinbottom, scheme reviewer in the overturned convictions scheme, to be appointed across all three schemes to expedite claims. Can the Secretary of State confirm that that vital appointment has now been made?
Jonathan Reynolds
I am grateful to the hon. Member for his response, and for the tone and collaboration that we tried to model when we were sitting in opposite places in this Chamber. I believe that helped advance what was a difficult piece of legislation to put on the statute book, particularly during a wash-up process, but was the only real vehicle for delivering what we all wanted to see. He has asked me a number of questions; all are absolutely reasonable, and I am happy to respond to them.
In a situation where someone has already received a top-up to £75,000, the hon. Member is right to say that the appeals scheme would not be available. It is a choice between the two best methods of redress and satisfaction for the postmaster. I recognise what the hon. Member has said—that, given the issues with the speed of delivering redress, having that system clogged up would not be satisfactory to anyone—but I think that both options represent reasonable ways forward for people who are in that position.
The hon. Member asked specifically about the remit of the appeals scheme, and I have listened to what he said. The reason we are announcing today that we will take this scheme forward, but will then consult with postmasters to make sure the eligibility criteria are correct—he asked about the timeline, which is just a matter of months—is to make sure that we do not have to revisit the scheme, and can all be satisfied that crucially, postmasters themselves have confidence in it. That is the intention, so I am grateful to the hon. Member for his comments about the remit of the scheme.
The hon. Member asked about legal representation. Yes, that is part of the scheme, again learning lessons from where we have been in the past. As he knows, most of the schemes have now been adjusted to reflect that, but I absolutely take his point about new announcements.
I want to be clear about the difficulty that has existed with the Horizon convictions redress scheme. To update the House, I will give the hon. Member the figures: so far, 180 letters have gone out from the Ministry of Justice. Including those letters and the people who have registered with the Government who perhaps have not all received a letter yet, there are now 276 claimants. I will make the appeal again: while we are doing everything we can with Ministry of Justice colleagues to make sure those letters go out, people can proactively register with the Government. To be frank, this has been a frustration. When the hon. Member and I were having our conversations when we sat in different places in the Chamber, neither of us perhaps knew the state of the database and the records, and—having passed the legislation—the frustrations we would face in getting to people. However, doing so is clearly integral to sorting this out.
Finally, the hon. Member asked about the scheme reviewer. If I may, I will come back to him on that; I will write to him to tell him the up-to-date situation.
In summary, I say again that we will work with all parties and all postmasters to get redress at pace, and to learn the lessons from where things have not gone well in the past, to make sure new announcements carry the confidence of the people who really need to have confidence in them.
Madam Deputy Speaker (Ms Nusrat Ghani)
Members should continue to bob if they want to be called. I am going to call everybody, as I know the Secretary of State also wants to respond to everybody. I call the previous Chair of the Business and Trade Committee.
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
I add my congratulations to Sir Alan Bates and Lady Suzanne on what looked like a very happy day.
I welcome what the Secretary of State has set out for the House this afternoon. When our Select Committee reported back in March, we said that trust in the Post Office was fundamentally broken and that the appeals scheme needed to be independent. This is an important step in that direction, but sub-postmasters have told me this morning that there is still a problem with the time it takes to get offers back when an offer is contested. The claimant’s lawyers have a fixed amount of time to put in a claim; when that claim is contested, it is taking far too long for Addleshaws, in particular, to come back and provide a second offer. What comfort can sub-postmasters take from the Secretary of State’s announcement today? This whole House agrees that justice delayed is justice denied.
Jonathan Reynolds
I am grateful to my right hon. Friend, who will, I hope, see his work as Chair of the Select Committee reflected in this announcement—specifically, that we are setting the target to issue initial offers to 90% of claims within 40 working days of receiving a full claim. On the point of how that is defined, a full claim is one where, following legal assessment, it is deemed that it does not require any further evidence to assess the claim further. Once that is in, the targets, which his Select Committee rightly called for to make sure redress is delivered at speed, are part of this process.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Liberal Democrats spokesperson.
Tim Farron (Westmorland and Lonsdale) (LD)
I thank the Secretary of State for sight of the statement and, indeed, for his decision to come to the House at this early stage to update us on progress.
I think it is worth saying that we are dealing with a catastrophic injustice that has affected hundreds upon hundreds of families—people who have paid with their livelihoods and, in some cases, tragically, with their lives. There is a complete lack of trust in Government, of whatever political colour, over the last 20 or so years because of this. That is why his answer to the questions raised already about the number of sub-postmasters who have been paid interim payments—only six, on the last data available, under the Horizon convictions redress scheme—is such a key issue. Likewise, as we have heard, the latest data show that fewer than one in six wrongly accused sub-postmasters have received letters confirming the quashing of their convictions.
Given this lack of trust—this mistrust—in Governments of whatever kind and in the Post Office management as a whole, would the Secretary of State also turn his thoughts to rebuilding trust in the Post Office management and in the network in the long term? In the eyes of the public, the brand of the post office is solid, but in the eyes of those who work in the industry and those who may come in as sub-postmasters, it is far less so. We were delighted in my constituency recently to see the reopening of post offices in Shap and Kirby Stephen. It was wonderful to see those two reopenings, but in Grasmere, Hawkshead and Stavely we are without post offices. In all three of those cases, it is in part because the former sub-postmaster, while not always directly affected by the Horizon scandal, but with disgust at the Post Office management, has left the industry and left those villages without a post office.
What can the Secretary of State say to this House and to the current cadre of sub-postmasters, and those who may want to join that cadre, to encourage them? Will he focus on pastoral care, financial support and other things that will bring about a package of inducements and enticements, so that those people who have felt let down so badly by Post Office Ltd management over the last 20 years will feel that the Post Office is something they can commit their lives to for the good of our communities and country as a whole?
Jonathan Reynolds
I am grateful to the hon. Member for that question. Specifically on the figures for the Horizon convictions redress scheme, he is right to say that there are only six claims where interim payments have been made so far, but I can assure him that I would expect that to rise rapidly following the announcement we have made, and I will keep the House informed as to all of that. I agree when he says that redress of this scandal has to link to the future of the Post Office itself. I think he is absolutely right. I mentioned in oral questions last week that I will appear before the inquiry. It is about not just an assurance on the lessons that will be learnt from the inquiry, but how that will affect decisions going forward.
Like the hon. Member, I have seen the post office network change a lot in my constituency. I was at the new banking hub in Stalybridge on Friday. I think the public support for the brand and for the people on the frontline is very strong, but the business model, as it stands, is not fit for purpose. Postmasters deliver essential services, but they do not make enough money from those essential services. I think too much of the money they make goes into the centre and does not return to the frontline in a way that is a viable business model for all of our constituencies. The issue of how the Post Office functions as an organisation has to be tied not just culturally to the reforms and redress we are all seeking to deliver, but to the business model.
Kate Osborne (Jarrow and Gateshead East) (Lab)
I welcome today’s statement on the appeals process, and thank Ministers for their engagement with me on this issue and in advance of the meetings we will have later this week. Horizon victims are understandably wary of Post Office involvement in the compensation schemes, so can the Secretary of State confirm that the appeals process he has announced today will be completely independent of the Post Office? As well as pushing for Horizon victims finally to get full compensation, what work is the Department undertaking to ensure that people are held to account for their roles in this scandal?
Jonathan Reynolds
I thank my hon. Friend for her question and recognise her contribution on this issue over many years. She is right to say that the appeals process I am announcing today will be run in-house by the Department for Business and Trade. Obviously, information will need to be provided by the Post Office, but an in-house scheme will be delivered. On redress, we are all following Sir Wyn William’s inquiry closely. We will need that to conclude and essential information will come out of it. After that, there will need to be a way to ensure that those findings, whatever they may be, are honoured in full and that we learn from them. In a number of cases, there is a need to hold people to account for their actions throughout the scandal.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Dewi Lewis of Penrhyndeudraeth is a former sub-postmaster who endured four months of imprisonment and had to wear a tag for another four months for a crime he never committed. He has not wanted me to raise his case in the Chamber before, because he said that to have his hopes raised and then dashed would destroy him: two weeks ago, he got a letter, I am glad to say, to say that his convictions were quashed. But the damage that has been done to the reputation of the Post Office in rural Wales is now so immense that people are no longer prepared to work in post offices. I welcome that the Secretary of State says that he believes the business model is no longer fit for purpose, but how can we be sure that we will have strategic planning to serve those communities that were once served so well by people like Dewi Lewis?
Jonathan Reynolds
I recognise very much what the right hon. Member is saying. I have had personal friends who were directly affected by this issue. Even though I was their MP as well as their friend, they did not feel able to tell me about it because they were so concerned about the impact on their reputation—they could not even tell a friend who was a Member of Parliament, even though the issue was clearly affecting their lives very significantly. I am sure that, like me, she has had situations where there is one provider of postal services in a relatively rural area—I represent Greater Manchester as it gets out towards rural Derbyshire—and people want the service to continue, but for various business reasons the provider is moving on. It is sometimes hard to find someone willing to take that business on, not just because of the scandal, but because of the business model. I assure her that the work we are already doing is about the future and recognising that, and making sure we have people in charge who recognise that that has to change. It is going to be a substantial piece of work for me and the Minister, but it is essential. We could not just provide redress for this scandal, without looking to the future and making sure we get this right.
Grahame Morris (Easington) (Lab)
I thank the Secretary of State for this statement. I also have constituents who are affected and I am grateful for the information about the appeals system. What steps are Ministers in the Department taking to secure the future of the Post Office network, and to reassure people who are considering becoming postmasters that they will not face the same unacceptable culture pervading Post Office senior management that was highlighted by the Business and Trade Select Committee, and that led to the Horizon scandal happening in the first place?
Jonathan Reynolds
As I have said in previous answers, we have to understand that that scepticism and concern is valid. The scale of this scandal is so large that people will challenge their Members of Parliament on how they feel about what they may be asked to do, and the risk that that poses to what is still an essential business and provider of services to all our constituents. That is key. I seek to reassure them by recognising the steps and commitment that we have to address, but also the future of a business model that delivers the kind of remuneration and operates in a way that recognises the scale of the failure in the past. If I was a postmaster, I would welcome those words, but I would want to see action. That is the only way we will be able to do that.
Mims Davies (East Grinstead and Uckfield) (Con)
I welcome the update to the House today. We saw through the ITV series that Lord Arbuthnot, like many, was an exemplary constituency MP and something for us to all aspire to. Many campaigned for so long in this place to recognise this scandal. I congratulate Sir Alan Bates and Lady Bates on their nuptials. Can the Secretary of State assure the House that full engagement is being undertaken with the MOJ, that the learnings are being understood and that those expecting their convictions to be quashed will hear imminently, as all our constituents will want to see justice?
Jonathan Reynolds
I very much echo the hon. Lady’s point that, if there is one bit where our political system operated well in this, it is the constituency link and the classic Member of Parliament’s surgery, although the story as a whole is clearly unsatisfactory. I recognise her words on Lord Arbuthnot and the cross-party campaign that came about. The Ministry of Justice issue is paramount and frustrating. The state of the records has delayed the process, and that is a real frustration, but she will understand that, following so much failure, if a case emerged where a letter was sent out incorrectly after all that people have been through, that would clearly be outrageous. Given I am now accountable for the scheme, I absolutely cannot have that. I could talk about some of the things we have inherited, but I do not think that is particularly helpful. I will simply give the hon. Lady the assurance that she rightly seeks: this issue is of maximum importance and we are working at pace with Ministry of Justice colleagues and the devolved authorities in relation to justice systems around the United Kingdom.
Clive Efford (Eltham and Chislehurst) (Lab)
I welcome the Secretary of State’s statement. I heard what he had to say about the involvement of the Post Office in the appeals process, but may I press him a little further? Given the mistrust in the Post Office that has built up over many years, even though the Post Office may only be providing information to the Department, is his Department satisfied with how the Post Office is providing that information? Have there been any occasions where the Secretary of State has had to challenge the Post Office? That is the degree to which people mistrust the Post Office in this process, and that has been the case for many years.
Jonathan Reynolds
I think my hon. Friend will have heard in my earlier answers that we have chosen to deliver this scheme in-house in the Department for Business and Trade, reflecting the concerns he is reasonably expressing. To command people’s confidence, they want to see the schemes not only set up, but delivering. That is why the updates to the House on how we are progressing under each scheme are so important, and I commit to doing them regularly.
Gregory Stafford (Farnham and Bordon) (Con)
I associate myself with the comments made on Lord Arbuthnot, who is a predecessor but one for part of my constituency. The Secretary of State has spoken about the letters quashing convictions, but does he not understand how important it is that those waiting for the letters get them swiftly? Will the Lord Chancellor come to the House to give us an update on the progress being made with those letters?
Jonathan Reynolds
The hon. Gentleman will have heard my answers. He would surely agree that to get things wrong with these cases would be a terrible problem. Some of the errors and the problems that have been caused have been a frustration, but I want to assure him. I think it is better, in matters relating to this scandal, that it is the Department for Business and Trade, given the interests of Members, that provides the updates on these matters. However, I can assure him that work is proceeding at pace, and people can proactively register their credentials to ensure that there is no delay if they are in a position where they know they are one of the wronged parties.
Natasha Irons (Croydon East) (Lab)
I thank the Secretary of State for the update today. My constituent Mahesh, who visited me at our surgery on Friday, told us that he had been assured that his conviction would be overturned—he was wrongfully convicted under the Horizon scandal—but he is frustrated by the length of time it has taken for it to be quashed. It is preventing him from moving on with his life. Can the Secretary of State update us on what work is going on to speed up the process to quash these convictions, so that people like Mahesh in my constituency can move on with their lives?
Jonathan Reynolds
I very much recognise the conversation that my hon. Friend has had with her constituent, and her need and desire to progress that claim. The issue is about ensuring that the records are accurate. Cross-referencing between Ministry of Justice databases and court documents is proceeding apace. If her constituent has not yet had a letter and needs to register their credentials, they can do so, but I assure my hon. Friend that this is of maximum priority.
Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)
I thank the Secretary of State for the statement. It is welcome that the appeals process has been set out. I pay tribute to my SNP colleague and former MP, Marion Fellows, who, as many Members will know, put considerable effort into the issue. She has provided me with wise counsel on it. How satisfied is the Secretary of State with take-up so far—there is obviously some helpful detail in the statement—and what awareness campaigns are planned? There may still be people out there who are not aware that they can claim compensation. It is important that as many methods as possible are used to get to them.
There have recently been complaints, even from legal experts, that the application form for redress is overly complex, and that even experts would struggle to fill it in. Can the Secretary of State look to simplify it, obviously without our getting away from the key points, and bearing in mind the data that need to be collected?
Finally, I associate myself with the comments made about the wider impact. It is only a week since the Grenfell report’s publication, and mention was made during the previous statement about the covid contracts. These issues go right to the heart of trust in the Government, which is a really important point to address.
Jonathan Reynolds
I echo the hon. Gentleman’s comments about Marion Fellows and her contribution to the scheme. He asks how satisfied I am. I will not be satisfied until everyone has had redress; it is as straightforward as that. There was a group of about 2,417 claimants under the Horizon shortfall scheme, but following the television drama, a whole range of people who were not aware that they were eligible came forward, which was incredibly positive. I think that over 1,500 people came forward. Indeed, Members may still be finding people who are coming forward because of the awareness that raised. We should be thankful for the power of the arts to get a message out to people. Given the situation, none of us can be satisfied until we can be sure that we have got redress to everyone. That is what this Parliament collectively has to commit to.
Markus Campbell-Savours (Penrith and Solway) (Lab)
Will the Secretary of State outline what the Government are doing to investigate the predecessor Capture system?
Jonathan Reynolds
Members may know that Capture was the precursor to the Horizon software. It is of concern to us, and we are investigating. The forensic accountants appointed to look into the issue are due to report fairly soon, and as soon as we have their findings, we will be able to update the House on steps that may be necessary.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State very much for the statement, and for the clear commitment to closure for all those affected. He said that the role of Government is to do right, to seek justice and to defend the oppressed. I say amen to that; that is exactly the Government’s role. It is past time that our handling of the scheme came to an end, but that can happen only when every affected postmaster and postmistress has been restored reputationally and financially, and when lessons have been learned to ensure that our reliance on computers is never again the vehicle of persecution. Will the Secretary of State assure me and the House that that has been done, and is in place right now?
Jonathan Reynolds
I thought that the hon. Member might recognise the words from Isiah that I used in the statement. The failure that goes to the heart of what we are talking about today is not just about the reliance on computer systems over the testimony of people on the frontline; it is also about the culture of organisations and how government operates. We will definitely turn a page on all of that, but there are Members in the Chamber who, like me, have been here not just for infected blood and the Grenfell statement last week, but for Hillsborough and Bloody Sunday.
We must reflect on what has been a very difficult set of findings. I think that we can commit to making sure that we learn the lessons from them, and take them forward. That is the challenge for all of us who believe that we are here to do good, and to do as I said in the statement. There is more to do on that, but we can move in the right direction, and that is certainly what I and my Government Ministers will do.
Ms Polly Billington (East Thanet) (Lab)
As my right hon. Friend will be aware, sub-postmasters such as my constituent have experienced an enormous amount of devastation without even having been convicted—30 years of reputation absolutely destroyed. Although he has had some compensation, he still does not know whether he has had the right amount of money, and whether he is paying the right amount of tax, and he still does not have an admission of responsibility and failings from the Post Office. How much of that will be dealt with by this redress scheme?
Jonathan Reynolds
I understand the situation, and the need to have different redress schemes to correct specific problems. I understand the constituent’s sentiments, as described by my hon. Friend. I would like to make sure that we are doing everything we can to provide the answers in every case. If she writes to me about that case, I will look into it personally and advise her, so that she can advise her constituent to make sure that, as far as possible, we give the right advice.
Rupert Lowe (Great Yarmouth) (Reform)
I am delighted to hear from the Secretary of State that progress is being made. Recompense, apology and all the things that should go with that cannot come too soon. This House needs to remember that but for the tenacity and the persistence of Sir Alan Bates, this issue may never have come to light. This is an issue of the state versus the individual. Given the loss of confidence in the state, it is essential that the House reassures individuals that the state will not bully them. That means a full investigation, and people who brought arguably malicious prosecutions must be brought to book. I would like his reassurance that that will happen.
Jonathan Reynolds
I very much agree. This is a major scandal, and we must ensure that the wider lessons and the wider lack of trust, which he correctly mentioned, are addressed in our response. That is fundamental. I have said many times that we might never have discovered the scale of this injustice were it not for the campaigners. That is shocking, and we must all reflect very deeply on that.
Blair McDougall (East Renfrewshire) (Lab)
I thank the Secretary of State for his comments, and for his recognition that the issue is about more than redress; it is about the restoration of trust. It has cast a long shadow in constituencies across the country. In my constituency, after years of sub-postmasters desperately trying to keep post offices open in the face of programmes of closures, we now face a challenge to get people to go into them. What is his message to those people, and those wondering whether the culture has changed? What lessons are the new Government drawing, across the public sector, to ensure candour, and to make sure that the culture that we saw in the Post Office is not replicated anywhere else?
Jonathan Reynolds
I recognise very much what my hon. Friend says. As I said in my earlier answers, there is an absolute need to not just provide redress but learn lessons for the future of the Post Office and all institutions of the state. Crucially, we must ensure that a business model is in place that rewards postmasters with a decent return for providing an essential service, in an organisation that supports their frontline activities and gives them the income and the prosperity that they deserve for that.
Robin Swann (South Antrim) (UUP)
The Secretary of State knows that 26 postmasters in Northern Ireland were wrongly convicted. I thank him for his work with the Northern Ireland Executive to bring forward the necessary legislative process. I seek his reassurance that the redress scheme will be equally open to Northern Ireland postmasters who were wrongly convicted because of a UK-wide issue. Will the redress scheme apply to them as well?
Jonathan Reynolds
People are aware that it is fairly challenging to have a situation in which justice is devolved across the United Kingdom. At times that has very much affected the debate in this House. I believe that what the hon. Gentleman says is the case, but I will write to him about the Northern Irish situation to give him the information that he needs.
Jim Allister (North Antrim) (TUV)
I welcome the Secretary of State’s announcement and look forward to things proceeding to the necessary conclusion. Redress is about righting wrongs, but there was more than one wrongdoer—there was also Fujitsu. Last week, the Prime Minister told us that firms that had fallen short in relation to Grenfell would be removed from Government contracts. Bearing in mind Fujitsu’s actions and that there was at least one suicide, will it be treated in the same way? Will there be redress against its unlawful actions as well?
Jonathan Reynolds
I agree with the hon. Member. That is a crucial and important question. I welcome Fujitsu acknowledging its moral responsibility in relation to these matters. I understand that it is participating fully with the Sir Wyn Williams inquiry. We will need that inquiry to conclude. We should not pre-empt that in any way and take any decisions before that process has been gone through properly, given that we all support it. Accountability will flow from the inquiry. It will be an important step and it will affect many, many organisations that have been part of this story. Fujitsu will clearly be one of them.
Speaker’s Statement
(2 months, 1 week ago)
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Mr Speaker
I wish to inform the House that the deadline for nominations for Select Committee Chairs passed at 4 pm today. The following Committees received a single nomination and the candidate will be elected unopposed: Backbench Business Committee, Bob Blackman; Culture, Media and Sport Committee, Dame Caroline Dinenage; Environment, Food and Rural Affairs Committee, Mr Alistair Carmichael; Health and Social Care Committee, Layla Moran; Northern Ireland Affairs Committee, Tonia Antoniazzi; Petitions Committee, Jamie Stone; Treasury Committee, Dame Meg Hillier; and Welsh Affairs Committee, Ruth Jones. I congratulate the Members concerned. The ballot for the remaining posts will take place on Wednesday 11 September, between 10 am and 4 pm in Committee Room 15. A final list of candidates and their supporters will be available in the Vote Office later this evening.
Bus Franchising
(2 months, 1 week ago)
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The Parliamentary Under-Secretary of State for Transport (Simon Lightwood)
With Permission, Mr Speaker, I wish to make a statement. Today marks the first stop on this Government’s journey to deliver better buses. Day in, day out, buses shoulder the needs of millions of working people across the country, whether they are getting to work or school, or seeing the doctor or friends. A reliable bus service is the difference between aspiration and isolation, between getting on and being forced to give up—a lifeline, plain and simple. But over the past four decades of deregulation, that lifeline has been on life support. Communities have suffered cuts to thousands of services, with 1.5 billion fewer journeys taking place in 2019 than in 1985, when deregulation began. Since 2010, a staggering 300 million fewer miles have been driven by buses per year. That is the legacy the previous Government left behind: a shocking decline in this country’s bus services, which has done untold harm to communities across the country.
Behind those stats lie human stories—of the poorest groups, who catch 10 times as many buses as trains, regularly let down; of people denied access to work or education, because they cannot depend on the journey there; or women and girls denied access to a safe journey home. They represent a steady cycle of decline that reverberates beyond buses to our economy as a whole, and of public services not working for working people.
Enough is enough. This mission-focused Government were elected to repair what is broken, and to reform what does not work. We are clear about the fact that better buses are essential to a better Britain, and that buses are a route not just to connection but to economic growth, cleaner air, and a fairer chance in life for everyone. That is why my right hon. Friend the Transport Secretary has made fixing this country’s broken bus network one of her top priorities in her Department, and it is why, just two months into office, we are kick-starting a bus revolution that will put services back into the hands of local leaders, achieving in just 10 weeks what the last Government failed to achieve in more than 14 years.
The statutory instrument that we laid this morning opens up bus franchising for all local transport authorities in England. It gives local leaders more flexibility to adopt a model that works for their areas, and because we are streamlining the current two-step process, authorities will now only need to obtain the Transport Secretary’s consent before preparing a franchise scheme. This is a transformative change, one that will give every community the same powers that mayoral combined authorities across the country are currently using to deliver better services, along with the power to match them to local needs. We know that the franchising model works: we need only look at the Bee Network in Greater Manchester, where buses were brought under public control just one year ago and where reliability has already improved, passenger numbers have already grown and a new 24/7 service has just been introduced; or at Greater London, where public control has meant that more bus journeys are now taken in our capital than in the rest of England combined.
We are taking aim at the current postcode lottery of bus services to ensure that our most popular form of public transport starts running in the public interest. Local authorities know best how to deliver for their communities, which is why today we are empowering them to follow in the footsteps of Greater Manchester and London, to ensure that they have buses in the right place at the right time, truly serving local needs. Our plan will help to turn the tide after decades of decline. The statutory instrument will be backed by a public consultation, which my right hon. Friend the Transport Secretary also launched today. It seeks views on breaking down the barriers to franchising, and on how we can support safer and more accessible services. By delivering simpler guidance, it will support and speed up the franchising process, meaning that councils will spend less time and money filling in forms, and more time planning routes and prioritising the interests of the communities that they serve.
However, this is just the start of our journey. Today’s steps pave the way for a new bus Bill later in the current parliamentary session—a Bill intended to reform funding, to allow franchises to be rolled out to more places more quickly and cheaply, and to support councils that choose not to franchise but still want the flexibility to deliver on local transport priorities. The Bill will also allow us to remove the ideological ban on municipal bus companies that was imposed by the last Government despite the huge success of those companies, which can be seen across the country where they are still in place—for instance, the award-winning publicly owned services in Nottingham and Reading. This, rightly, is not a one-size-fits-all approach, and, crucially, it places no additional burden on taxpayers. It simply acknowledges a truth with which many in the House will agree: that the best decisions are not always made by Whitehall, but are made in town and city halls throughout the country by those who are accountable to local communities, and by those who, day in day out, use the very services that we are talking about.
It has been said before, and I will say it again: under this new Government, the Department for Transport is moving fast and fixing things. Today’s steps place better buses at the heart of this Government’s plan for change. Four decades after buses were deregulated, and after 14 years of decline, we are now empowering communities to take back control of the services on which they depend—to get Britain moving, to get our economy growing and to get more passengers, wherever they live, back on board. I commend this statement to the House.
Dr Kieran Mullan (Bexhill and Battle) (Con)
I thank the Minister for his statement.
We on this side of the House are in full agreement that good local transport is something that everyone deserves access to, both for helping people to live their lives and for fulfilling the economic potential of all parts of the country. At the heart of our local transport services are buses. They are some of the most convenient, well-connected and accessible forms of public transport out there—crucially, not just in urban areas, but very often in under-connected rural areas. That is why, in government, we invested billions of pounds in the bus sector, including the vital support provided to maintain services during the pandemic. We rolled out thousands of new zero-emissions buses and introduced the “Get around for £2” scheme, saving millions of people money on their fares and helping to get passengers back on buses.
Those interventions worked. Bus passenger journeys in England increased by nearly a fifth in the year ending March 2023, and we welcome this Government’s desire to build on our progress in order to improve services further, to get more routes running at better frequency, and to make sure that as many people as possible have reliable services that get them where they need to go. I am genuinely interested in understanding how the Government feel that this set of measures will achieve that. We are worried about some of the significant risks, which the Government do not seem to have considered.
This legislation places greater responsibility in the hands of local authorities. We know that a number of local authorities face financial and organisational challenges, and although I do not doubt that there will be enthusiasm for making use of the new powers, running any form of public transport brings real challenges. Of course, as the Minister said in opposition, gaps in experience could be filled by support from the Department for Transport, but depending on the number of local authorities that choose to take up franchising, this could mean that significant central Government resources are required. Unless I have missed something, today’s announcement includes absolutely no funding to pay for increased capacity at the Department. What projections have the Government made of the costs, and how exactly do they expect them to be paid?
It is the same story with local government finances. Make no mistake about it: this is going to cost money. Many bus routes, especially rural services, are loss making, even before we account for the additional resources that local authorities will presumably need to operate them. In his statement, the Minister did not recognise the enormous challenges that have been created by changing travel patterns post covid. If this Government are committed to providing services at 1985 levels, as he seemed to imply, they will need to commit to enormous levels of subsidy.
I welcome the success stories in metropolitan areas that the Minister talked about, but such services operate in a fundamentally different space, because of the density of those areas’ populations. It means that if passenger numbers fall next year, the financial risk will be taken on not by a private company, but by the local council and, by definition, taxpayers. Again, given that there appears to be no funding attached to the policy, surely it can be funded only by increases to council tax or cuts to other local services.
It is the same story when it comes to responsibility for capital expenditure. Will this now be the responsibility of local authorities? How exactly are they expected to fund it? As we recently made clear when debating the Passenger Railway Services (Public Ownership) Bill, it might be the Labour party’s priority to undertake ideological reforms to bring the transport sector further into the control of the state, but passengers’ priorities are the price, performance and reliability of services, not who is running them. We want to hear how the reforms will make a difference to passengers’ journeys and their accessibility, frequency and cost, and how they will help to restore the number of rural services and make journeys cheaper for passengers—and not just through the generic pledges we have heard today, but through concrete commitments on which the public can hold the Government to account. The Minister made absolutely no commitment to increase levels of services or miles travelled as part of the Government’s “revolution”.
There are some simple things that the Government could do for passengers, such as extending our “Get around for £2” scheme, which has been hugely positive for passengers and for the viability of services up and down the country. I am aware that the Chancellor is not Labour Members’ favourite person at the moment, but I encourage them to make the case for the cost-of-living benefits of the £2 scheme, as well as for the benefits of the winter fuel payment, in any hurriedly organised meetings today and tomorrow.
The Government have got the wrong priorities yet again. At the end of the day, passengers care about the preservation of existing services, the extension of routes, improvements in frequency and reliability, and cost. We on this side of the House are all ears when it comes to what difference this policy will make for them and—not to be forgotten—who is going to pay for it.
Simon Lightwood
Modernising our transport infrastructure and delivering better buses are at the heart of our plan to kick-start economic growth in every part of the country to get our country moving. This statutory instrument is just the start of a package of measures; the buses Bill will deliver further measures on issues such as funding. Despite the challenging financial circumstances we find ourselves in—inherited from the previous Government—we are determined to deliver better bus services, growing passenger numbers and driving opportunity to underserved regions. All funding is rightly being considered as part of the spending review.
There is no one-size-fits-all approach for buses within local transport authorities. Franchising is just one way that this can be explored; there are also enhanced partnerships and municipal ownership. We firmly believe that our priorities to deliver better buses across the country are the right priorities, and we have the mandate from the British people following the general election to do just that.
Graham Stringer (Blackley and Middleton South) (Lab)
Last week and this week have been the best two weeks for public transport for many decades, righting the wrongs of the privatisation of the rail service and the deregulation of buses. I did not hear an apology from the Conservative spokesperson for laying waste to local government finance over the last 14 years and destroying public bus services by handing them over to be run by profiteers, pirates and other completely unsuitable people—not in all, but in many cases. Does my hon. Friend agree that there should be a massive apology from the Conservatives for the damage they have done to public transport?
Simon Lightwood
I believe there should be a massive apology from the Opposition for the mess they have left this country in and for the mess they have left our bus services in. Following the previous Government, almost 300 million fewer miles are now driven a year compared with 2010. That is an appalling statistic. This Government will turn the tide for communities across the country by giving them the opportunity to control local bus services and to have a real say in developing the local transit systems that serve them. The Secretary of State said—I will say it again—that we will move fast and fix things. Here is the proof.
Wera Hobhouse (Bath) (LD)
We Liberal Democrats welcome today’s statement to give local authorities, not just metro Mayors, more powers and the potential to run their bus services. We Liberal Democrats have campaigned for exactly that for a very long time.
The previous Conservative Government completely decimated local transport systems, but the rot set in a long time ago. Almost a quarter of bus routes have been cut in the past 10 years outside London. Whoever wants to apologise for that, we need to see some change. Bus services should be the most affordable and accessible of all forms of public transport. Good, well-used bus services would significantly contribute to getting to net zero and to improving our air quality. The previous Government, again, completely failed to make a positive case for that.
Not only are public buses crucial in urban areas such as Bath, which suffers from more and more congestion, because people can continue to increase their use of motorised individual travel, and is also still struggling with cutting air pollution; bus services are also important specifically for rural areas. What we currently have is completely inadequate, so will the Minister set out how today’s announcement will improve rural bus services, not just in the long term, but in the short term?
Simon Lightwood
The ability of local areas and local transport authorities to take back control of their bus services is crucial for rural areas, because they know their communities best. Those decisions should not be made from places in Westminster or Whitehall. Again, local transport authorities understand the specific needs of their local communities, be they rural or urban, and are best placed to make those decisions and design the network around those needs.
Grahame Morris (Easington) (Lab)
I welcome the statement and draw to the Minister’s attention the Transport Committee report, “Bus services in England outside London”, which was produced under the chairmanship of my hon. Friend the Member for Nottingham South (Lilian Greenwood), who is now Under-Secretary of State for Transport. There are some excellent recommendations in there. In regions such as Greater Manchester, the process of introducing bus franchising has been quite lengthy. Granting combined authorities the ability to directly award contracts would significantly shorten that timeline, allowing areas such as the north-east to bring about faster improvements. Will the Minister confirm that the better buses Bill will include provisions for direct award powers?
Simon Lightwood
I can confirm that my officials are investigating the means to do just that, and I will update the House accordingly as progress continues.
Simon Hoare (North Dorset) (Con)
I welcome the Minister’s statement. He and the House know that local government finance is under pressure, and that the delivery of services in rural areas is much more costly than it is in Manchester, Nottingham or London. That is just a geographical fact, which I think we all accept. May I urge the Minister, if he has not already done so, to engage the good offices of the County Councils Network, as the lead body for county councils and the unitaries, to find their views and suggestions? I also say to him politely that if this is to work in rural areas, for all the good reasons that he sets out about social mobility and access to work and education, rural councils will require some extra money to deliver what we all want to see achieved.
Simon Lightwood
I thank the right hon. Gentleman for his question and for his constructive engagement. I will certainly take up his recommendation to meet that grouping. Of course, all funding is being considered in the round as part of the spending review, but I take his points on board.
Mr Clive Betts (Sheffield South East) (Lab)
I very much welcome the Minister’s statement. Deregulation has been an absolute disaster in South Yorkshire. Since 2010, bus passenger miles have fallen by 50%. That means lots of people are not getting the services they previously had. The Minister has referred to Greater London, which gets more than 10 times as much Government finance per head for transport as South Yorkshire. He also mentioned Greater Manchester. Manchester got a very good bus service improvement plan—BSIP—settlement last time round. South Yorkshire got nothing in the BSIP settlement. Does he recognise the need to review some of these settlements? Otherwise, Mayor Oliver Coppard, who is committed to franchising, might see that the only responsibility they have is to make the cuts to bus services in a different way from what would have been the case without franchising.
Simon Lightwood
There was a host—a plethora—of different funding pots relating to buses, and we are keen to amalgamate and consolidate them, but also, importantly, to devolve them to local areas so that they have the funding flexibility they need to deliver better buses across their areas.
Mr Richard Holden (Basildon and Billericay) (Con)
It is great to hear of the success the previous Government’s £1.1 billion investment into Greater Manchester’s Bee Network is helping to deliver. I was delighted to launch it with the Mayor of Greater Manchester. As the Minister mentioned, one of the key things about the postcode lottery is the cost of using the bus. It can really put people off, particularly in rural areas where bus costs have traditionally been a lot higher. Is the Minister going to look at extending the Get Around for £2 scheme, which has been a real success, particularly for access to education opportunities and for those in lower paid work in rural areas? It has really helped to drive bus passenger numbers upwards since the end of the pandemic.
Simon Lightwood
Delivering reliable and affordable public transport services for passengers is one of the Government’s top priorities, and we know how important it is for passengers and for local growth. We are looking at the future of the £2 fare cap as a matter of urgency. We are considering the most appropriate and affordable approach, and we will update the House in due course.
Chi Onwurah (Newcastle upon Tyne Central and West) (Lab)
For as long as I have been a Member of this House, my constituents have looked upon London with envy for one reason, and one reason only—its cheaper and more reliable bus services with real-time bus information. Too often, my constituents do not even know if a bus is coming to the bus stop, never mind when. Kim McGuinness, our regional mayor, has committed to taking back control of buses. Can the Minister set out how he will work with her and support her to deliver the bus services that my constituents need and deserve after 14 years of Tory failure?
Simon Lightwood
I have already met the Mayor of the North-East on a number of occasions, and I am working closely with combined authorities and mayors across the country to make bus franchising simpler and easier. We will, of course, make sure that the Department for Transport provides support to local transport authorities, with a centralised resource to ensure that we spread best practice across the country.
Gregory Stafford (Farnham and Bordon) (Con)
I thank the Minister for his statement. The town of Bordon in my constituency is extraordinarily poorly served by bus routes, and it is crying out for a rail link bus service to the neighbouring town of Liphook. Will the Minister and his officials meet me to discuss how we can get a rail link bus service from Bordon to Liphook?
Simon Lightwood
I am more than happy to meet any hon. Member.
Alison Hume (Scarborough and Whitby) (Lab)
I welcome the statement, as will my constituents in Scarborough, Whitby and the villages who have seen the vital bus services on which they rely slashed over recent years. For example, cuts to the 95 Sleights to Whitby service have severely restricted my constituents’ ability to go about their daily lives. Does my hon. Friend agree that we need to move at pace to improve such routes in rural and coastal communities?
Simon Lightwood
I completely agree. This is fundamental to the work we have been pursuing to make franchising quicker and simpler, and to avoid the need for local transport authorities to spend their time filling in forms at great expense. Britain is one of the few places in the developed world that hands operators power to slash bus services and set fares with very little say for the communities that depend on those services. Decades of failed regulation have left communities with little say on the essential services on which they rely, and we are determined to change that.
Anna Sabine (Frome and East Somerset) (LD)
As my hon. Friend the Member for Bath (Wera Hobhouse) said, the Lib Dems broadly welcome the principle of this statement, as I think will the Somerset Bus Partnership. The volunteers of this fantastic organisation in my constituency work tirelessly to encourage people to use buses. Somerset council is facing an historic funding crisis and has narrowly avoided bankruptcy, so I am keen to understand how the Government will provide long-term funding so that such authorities can do the franchising that has been promised.
Simon Lightwood
As I said, we are looking to consolidate and simplify the funding pots for bus services, and we hope to deliver more multi-year funding settlements.
Mike Amesbury (Runcorn and Helsby) (Lab)
I welcome the statement. The Minister is genuinely taking control of our buses after years of the wheels on the bus not going round and round. I look forward to seeing the return of a direct service from Runcorn to Liverpool. Will the Minister meet me and leaders in Cheshire to discuss taking control of bus service arrangements through a new devolution deal?
Simon Lightwood
I would welcome the opportunity to meet my hon. Friend.
Jim Shannon (Strangford) (DUP)
I thank the Minister very much for a progressive, positive statement that will encourage many. I welcome the steps towards a more personalised approach to bus franchising. However, I believe it is essential, as I think the Minister does, that any changes should be rural-proofed to ensure that bus services allow our rural communities to commute to work, to access medical appointments and even to go shopping, by protecting services over profit through an iron-clad guarantee. Will he confirm that this is the Government’s position?
Simon Lightwood
I absolutely agree that rural bus routes and rural communities must be carefully considered. The best people to take that consideration are local leaders, which is why we are determined to allow local leaders to take back control of their bus services.
Tristan Osborne (Chatham and Aylesford) (Lab)
I welcome my hon. Friend’s statement. Villages in my constituency, such as Eccles, Burham and Wouldham, have suffered from 14 years of Conservative cuts and a reduction to the 155 bus service, which many elderly people rely on. Will the Minister assure councils such as Medway council and Kent county council that they can now join forces and collaborate on bus routes, so that we see an improvement to bus services for all our residents, including those in rural, isolated communities?
Simon Lightwood
The plan makes it possible for all local transport authorities to take back control of their buses. There is also the option of enhanced partnerships and municipal ownership. I look forward to working with my hon. Friend to achieve his objectives.
Lee Pitcher (Doncaster East and the Isle of Axholme) (Lab)
Buses are the most used form of public transport and a lifeline for those on lower incomes. The inadequacy of bus services across Doncaster East and the Isle of Axholme is an issue that comes up regularly on the doorstep. Hatfield Woodhouse only recently had its bus reinstated after many months of having nothing at all. Does my hon. Friend agree that delivering better buses will be essential to the Government’s missions, from growing our economy to breaking down barriers of opportunity and accelerating to net zero?
Simon Lightwood
My hon. Friend is absolutely right. Effective public transport, including bus services, is fundamental to delivering many of our missions in government.
Sean Woodcock (Banbury) (Lab)
At the weekend, I had the pleasure of attending the unveiling of two brand new community-owned green buses in the village of Middle Barton in my constituency. After 14 years of devastation to public bus services in Oxfordshire, such community-led schemes can go a long way to filling the gap. Does the Minister agree that a decade of renewal promised by this Labour Government must see an improvement and regeneration in rural bus services?
Simon Lightwood
Absolutely. We want to give local transport authorities and leaders the power to take back control of bus services, to shape the future of those services to accurately reflect the needs of individual communities.
Dr Scott Arthur (Edinburgh South West) (Lab)
I thank the Minister for his statement—we should speak about buses much more often in this place. Edinburgh has an award-winning bus service, which carries 2 million passengers per week. Its highly unionised workforce—I think over 90%—works in collaboration with the directors of the company. We already get around for £2 inside Edinburgh because that is the price people pay no matter how far they travel inside Edinburgh. That is a fantastic example of what public ownership in public transport can do. Does the Minister agree that more ownership and control of bus services are key to driving down costs for passengers, increasing patronage and hitting our net zero goals?
Simon Lightwood
I agree with my hon. Friend. I was pleased to visit a municipal bus company in Nottingham; the Under-Secretary of State for Transport, my hon. Friend the Member for Nottingham South (Lilian Greenwood), represents that area. I was blown away by the company’s knowledge of and commitment to the local area, and its having received numerous awards, with a satisfaction rating of something like 89%. Municipal bus companies are also a fantastic option for local authorities to consider.
Connor Naismith (Crewe and Nantwich) (Lab)
It was interesting to hear the Opposition Front-Bench spokesperson talk about the importance of preserving existing bus routes, when their party had presided over 14 years when thousands of bus services were lost to communities across the country, including in my constituency, where we still do not have a direct bus route from Nantwich to our local hospital. It has taken this Government just 10 weeks to present a plan to fix local bus services. Does that not epitomise how underserved our communities and local economies have been by 14 long years of Conservative government?
Mr Luke Charters (York Outer) (Lab)
It was great to visit the First Bus all-electric depot in York the other week, but I was saddened to hear just days later that First had withdrawn children’s monthly bus passes. After meeting representatives of the company, they are reviewing that decision, but does my hon. Friend agree that travel to and from school should be affordable? Will he meet me to discuss the future of buses in York?
Simon Lightwood
Of course I want to make sure that bus fares are affordable. I will meet my hon. Friend to discuss his particular circumstances.
Ms Polly Billington (East Thanet) (Lab)
As has been said, the past 14 years of Conservative Government have left local bus services, especially those in coastal communities, in a shocking state. In East Thanet, the 33, 34, 9 and 8A bus services have all been drastically cut, meaning that in certain areas of Broadstairs and Ramsgate there is no bus service at all within easy reach, and no one in either town has access to a bus to Canterbury outside commuter times. Conservative-run Kent county council must take up the powers that are being offered by this Government to serve disadvantaged communities such as that in East Thanet.
Simon Lightwood
Buses matter to millions of people, but 14 years of the Tories’ broken bus system have led to countless communities being failed and a spiral of decline in bus services. I hope all local transport authorities consider the range of options available to them to take back control of their buses and shape services for the communities that they serve.
John Slinger (Rugby) (Lab)
After the deregulation and decline of buses under the previous Administration, I imagine that local authorities are somewhat shocked and surprised at being given the opportunity to shape services genuinely in the public interest. What additional support is my hon. Friend considering to empower local authorities, especially smaller district authorities such as Rugby borough council, so that they can move fast and fix things locally?
Simon Lightwood
I thank my hon. Friend for his question. We are increasing the capacity of the Department for Transport to assist smaller authorities, so that all local transport authorities can consider franchising and other means of improving bus services in their communities.
Jacob Collier (Burton and Uttoxeter) (Lab)
I thank the Minister for his statement. I am pleased to see him driving forward this policy to improve our bus services, which are a vital lifeline for my constituents in Burton and Uttoxeter. Does he agree that this plan puts us on the right route by expanding franchising powers so that local voices can finally steer bus services in the right direction?
Simon Lightwood
I thank my hon. Friend for his question. He has already been a fierce advocate for public transport and bus services in his constituency. Local leaders, not private operators as is currently the case, will have the power to set routes, fares and services, putting passengers first after decades of regulation. That is the option available through franchising. Municipal ownership is also an option, as well as partnerships with operators and local authorities.
Jim Dickson (Dartford) (Lab)
As the Minister has already pointed out, and others in this Chamber have said, bus franchising has clearly delivered fantastic results where it is already in operation in Greater Manchester and London, but it will not be right for all communities. In my constituency, there are often only two buses a day connecting the outlying villages to Dartford and other population centres. Does he agree with me that the upcoming bus Bill will be a fantastic opportunity to end the postcode lottery of bus services across the country, providing maximum flexibility to local leaders, such as those in Kent if they are prepared to use it, to choose the right system for their populations?
Simon Lightwood
I agree with my hon. Friend. We must turn the page on years of Conservative failure in local transport, which is why the forthcoming bus Bill, in conjunction with our announcements today, will help end the country’s transport postcode lottery.
Point of Order
(2 months, 1 week ago)
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Gregory Stafford (Farnham and Bordon) (Con)
On a point of order, Mr Speaker. On 29 July, during a statement on public spending and inheritance, in response to my question about the effect that the scrapping of a new hospitals programme will have on Frimley Park hospital, which serves the northern part of my constituency, the Chancellor of the Exchequer responded:
“My right hon. Friend the Health Secretary will meet all those with affected hospitals—including those affected by RAAC—to ensure that we can as quickly as possible address the challenges”.—[Official Report, 29 July 2024; Vol. 752, c. 1065.]
Since then, I have had no contact from either the Health Secretary or the Chancellor. I seek your guidance, Mr Speaker, on how I can secure that meeting, and whether you have any advice for Ministers when making promises in this House on behalf of their colleagues?
Mr Speaker
I assure the hon. Member that I have absolutely no responsibility for Ministers, and neither would I want to have it. The message has gone out loudly. He has put it on the record, and I am sure that it has been noted by those on the Treasury Bench. If things do not happen, I say to the hon. Member—whose brother would, I am sure, also give him some good advice—that he can go to the Table Office. Many options are open to him to pursue the matter, but I am sure that the message has been heard.
Sanctions: Russia
(2 months, 1 week ago)
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The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Hamish Falconer)
I beg to move,
That the Russia (Sanctions) (EU Exit) (Amendment) (No. 3) Regulations 2024, (SI, 2024, No. 834), dated 29 July 2024, a copy of which was laid before this House on 30 July, be approved.
The instrument, which amends the Russia (Sanctions) (EU Exit) Regulations 2019, was laid before Parliament on 30 July using powers provided by the Sanctions and Anti-Money Laundering Act 2018, and entered into force on 31 July. For clarity, the instrument was first laid on 24 May under the previous Government. This Government support the aims of the instrument, so we revoked and re-laid it to provide additional time post election for the required parliamentary scrutiny. There are no amendments to the policy in relation to Russia sanctions, and the substance of the instrument remains the same.
The United Kingdom’s commitment to Ukraine is iron-clad. In July, the UK contributed £40 million to NATO’s comprehensive assistance package for Ukraine, which ensures that Ukraine will access vital assistance for counter-drone technology, de-mining of reclaimed land, and the medical rehabilitation of injured Ukrainian personnel. Ukraine has placed new orders for ammunition worth £300 million through the international fund for Ukraine, which is administered by the UK.
Sanctions, too, are a crucial tool to weaken Russia’s ability to attack Ukraine. In July, the UK hosted the European Political Community at Blenheim Palace, where more than 40 countries signed a call to action to tackle Russia’s so-called shadow fleet: a fleet of ageing oil tankers, which use deceptive shipping practices and substandard insurance to attempt to undermine sanctions on Russian oil. At the event, the UK spearheaded action against the shadow fleet when we sanctioned 11 oil tankers. Through this action, we continue to demonstrate the UK’s steadfast commitment to Ukraine and underline our leading role in eroding Russian oil revenues.
Targeted sanctions against oil tankers have had a material and immediate impact. UK sanctioned tankers have been left idling, knocked out of the Russian oil trade and for the most part unable to load new cargoes. The instrument provides the basis for those sanctions, and has enhanced the UK’s ability to respond to Russia’s increasingly desperate and reckless attempts to undermine our and our partners’ sanctions.
Jim Shannon (Strangford) (DUP)
I thank the Minister, welcome him to his place, and wish him well in his role.
I have been sanctioned by China and Russia, along with many others in this House—it is almost a badge of courage—but that is not the issue. My understanding of today’s sanctions is that businesses and those who have super yachts will be impacted directly, but that is all that the instrument means. If that is the case, will the Minister ensure that our sanctions have enough teeth to bite, and to be painful?
Hamish Falconer
I thank the hon. Member. If he allows me, I will go a little further into the introductory remarks, which I hope will specify why this afternoon’s measures will provide greater teeth. I hope that will answer his concerns, but if it does not, I will return to him.
The instrument, as well as increasing the effect on shipping, also broadens the designation criteria under the Russia regime. It expands our powers to target those who provide financial or material support to Russia’s war machine. That could include, for example, foreign financial institutions that facilitate significant transactions on behalf, or in support, of Russia’s military industrial base. That is in line with steps taken by partners and the G7’s commitment to curtailing Russia’s use of the international financial system to further its war in Ukraine.
Let me turn now to the measure about which the hon. Member for Strangford (Jim Shannon) asked. The instrument adds new relevant activities to the existing power in the Russia sanctions regime under regulation 57F—“specification of ships”—to provide the criteria to sanction individuals’ ships. The amendment provides that a ship may be specified by the Secretary of State where there are reasonable grounds to suspect that it is, has been or is likely to be used for any activity whose object or effect is to destabilise Ukraine, to undermine or threaten the territorial integrity, sovereignty or independence of Ukraine, or to obtain a benefit from, or support, the Government of Russia. That includes where a ship is involved in carrying dual-use or military goods, oil or oil products that originate in Russia, or any other goods or technology that could contribute to destabilising Ukraine or to undermining or threatening the territorial integrity, sovereignty or independence of Ukraine.
Where a ship is specified under regulation 57F, it will be subject to measures in regulations 57A to 57E—the shipping sanctions. Where those sanctions apply, a specified ship is prohibited from entering a port in the UK, may be given a movement or a port entry direction, and can be detained or refused permission to register on the UK ship register—or, indeed, have its existing registration terminated. Additionally, UK persons and persons in the UK cannot provide funds and financial services, including maritime insurance, or brokering services, in relation to specified ships that are transporting certain oil and oil products, and cannot use specified ships to supply or deliver Russian oil and oil products, regardless of the price of the oil on board.
Once again, the UK has already specified ships using that enhanced power. The previous Government specified six vessels on 13 June. In July, this Government specified 11 vessels that were operating as part of Russia’s shadow fleet. That fleet attempts to undercut our sanctions, undermines the maritime rules-based order, and presents an environmental and maritime security threat to coastal states.
This statutory instrument also amends regulation 6 of the Russia sanctions regime. That regulation provides the criteria for the designation of individuals or entities for the purpose of an asset freeze and other relevant measures. Specifically, the instrument adds additional activities for which a person may be designated, including where individuals or entities provide financial services or make available funds, economic resources, goods or technology to persons involved in obtaining a benefit from, or supporting, the Government of Russia. In practice, that widens the set of actors and enablers that can be targeted for providing financial and material support to Russia and its war machine as Putin continues to prosecute his illegal war in Ukraine.
The instrument also consolidates powers under the Russia regulations to designate individuals or entities involved in the destabilisation of Ukraine. Specifically, the additional activities that the instrument adds to the designation criteria make possible the designation of persons who have owned or controlled entities involved in destabilising Ukraine, as well as individuals who work as directors or managers of such entities.
In the plainest language—because that was the language that the hon. Member for Strangford used—the instrument enables us to target the ship, as well as the individuals or entities involved with the ship. We found, through the previous regime, that the ship itself is the sharpest area of vulnerability, so the International Maritime Organisation number of the ship itself is where sanctions have greatest effect, and that is the effect that we are using today.
Jim Shannon
I understand; the Minister has laid out the system very simply. It applies to the EU, but we all know that those who seem to break most of the rules are India and other countries across the world that are out to buy Russian oil. If that is the case, what discussions have been had to ensure that India does not contravene what we are trying to do through these sanctions?
Mr Speaker
I say gently to the Minister that we have only an hour and a half for this debate. I know Members want to speak and I do not want to take any of that precious time away.
Hamish Falconer
I defer to your good guidance, Mr Speaker.
In conclusion, European security is a key focus of this Government. Supporting Ukraine remains vital to that end, and the UK is committed to doing so. I am sure that, when I come to answer hon. Members’ questions, I will have an opportunity to say a little more about how we work with our partners, including India, on these matters. We will work with international partners to ensure that the values of democracy, human rights and international law are maintained. This legislation and subsequent sanctions made under it show our commitment to Ukraine as it defends its freedom in the face of Russian aggression. British support remains iron-clad. I commend the regulations to the House.
Alicia Kearns (Rutland and Stamford) (Con)
As this is the first time that I have appeared opposite the new Minister at the Dispatch Box, I wish not only to congratulate him but to welcome him to his place. In a previous life, we served together in the Foreign Office. He is free to disagree, although I discourage him from doing so, but I believe we worked well together in difficult conditions and I hope that we will have the same relationship going forward. I am confident that he will bring the same dedication to his new position that he showed in his work at the Foreign Office, although it is a difficult time to take responsibility for the middle east and north Africa. We all wish him genuine success in the role.
Although the Government may have changed, the commitment across the House to support Ukraine and starve the Russian war machine remains absolutely resolute. This motion demonstrates continuity of purpose, as it was originally laid by the Conservative Government, was interrupted by the election and has now been re-tabled by the new Minister. The Conservative Government introduced the Sanctions and Anti-Money Laundering Act in 2018, allowing us to build our own sanctions regime having left the European Union. Although our co-operative approach with the EU on sanctions is vital, particularly on Ukraine, that legislation laid the groundwork for the UK to create a world-leading and effective sanctions regime, as was demonstrated after Putin’s renewed illegal invasion of Ukraine and concerns about the territorial sovereignty of Bosnia and Herzegovina.
The UK has now sanctioned over 2,000 individuals and entities under the Russia sanctions regulations, with over 1,700 targeted since Putin launched his renewed and barbaric illegal invasion of Ukraine. Major progress has been made in cutting Russia off from global financial systems, restricting its military-industrial complex, reducing oil and gas revenues and banning items with dual military use from export to Russia.
Briefly, on behalf of my party, I want to thank the countless civil servants, intelligence personnel and officials —some of them will be in the Box today—who work day in, day out to refine and improve our Russian sanctions regime. I know it is often difficult and hard work, long into the night. We are extremely lucky in this country to be able to rely on some of the most intelligent and hard-working sanctions officials. I am sure the Minister has already seen just how effective they are, and of course he will have long-standing friendships with some of them.
The motion addresses a key pillar of our sanctions regime: the identification and designation of Russian shipping, including ships operating under Russia’s so-called shadow fleet. The success of our sanctions regime has forced Russia to resort to expensive and complex logistical measures to source sanctioned goods and materials and export oil and gas, often via third countries, as the hon. Member for Strangford (Jim Shannon) mentioned. It is therefore imperative that we target the maritime arteries feeding the Russian war machine, and we welcome the fact that the motion will sanction a further 17 Russian vessels, including 15 from Russia’s shadow fleet. It demonstrates that, no matter how deep Russia sinks into the shadows, the UK and our partners will identify and act against Russian assets and their war machines.
The broader changes to facilitate more effective targeting of Russian shipping and of individuals aiding and abetting Russian aggression are also welcome. The Minister has our full support for those changes. Our commitment to work collaboratively and in a spirit of co-operation with the Government on the development of our Russian sanctions regime will continue, because some things, rightly, are above politics.
As I am sure the Minister is aware, two areas requiring attention are the transfer of dual-use technology to Russia from China and the kidnapping of Ukrainian children, which some say is a form of genocide. Although I understand that he cannot comment on future sanctions, I ask him to keep all options open and commit to targeting any entity, individual state or organisation providing support for Russia’s illegal and brutal war and the kidnapping of Ukrainian children.
Maintaining an effective sanctions regime requires continuous attention and effort. This instrument is an important continuation of that work, and we support the Minister’s bringing it to the House.
Gordon McKee (Glasgow South) (Lab)
I welcome the Minister’s statement, and welcome him to his position in the House. He brings a huge amount of experience in this field, and I know he will do a fantastic job.
Tightening economic sanctions on Russia is one of the most fundamental ways that we can help to support the people of Ukraine in their fight for democracy, and that is what I want to speak about briefly. Throughout history, conflict has been a battle of individual courage and morale—something that the people of Ukraine have demonstrated time and again over the past two years since the Russian invasion—but it has always also been a battle of technology. From the Roman legions through to the Manhattan project, the side with the better, more advanced technology often prevails, which is why it is important that our sanctions restrict Russia’s ability not just to resource its war, but to fight it in the first place.
As the saying goes, chips are the new oil. Russian semiconductor technology remains around 15 years behind that of NATO allies, but by avoiding sanctions, it is able to overcome that problem. More than two years on from its illegal invasion, Russia remains able to acquire the microchips necessary for advanced missiles and drones that are used against innocent civilians in Ukraine. Many will remember—I certainly do—that, when our sanctions were first introduced, there was talk that Russia’s economy would come to a standstill, that within months, planes would not be able to take off and Russia’s military would be unable to function. Clearly, that has not happened. We must therefore ask ourselves why and what more we can do. Today’s move to ban shadow tankers and sanction those who operate them is the right decision. It will impair Russia’s ability to finance its war by selling and transporting oil, but there is still more to be done, much of which will require ingenuity and the kind of careful diplomacy that I know the Minister is more than capable of.
There are two broad strands to the ways in which Russia is obtaining this technology. The first, and perhaps the most difficult to resolve, is by repurposing common technologies, the kinds of dual-use microchips that the hon. Member for Rutland and Stamford (Alicia Kearns) referred to. They are in washing machines or microwaves, but they are also appearing in Russian attack weaponry. For example, the Orlan-10 drone—used by Russia to target Ukrainian troops—contains some western-made components that we would normally find in weather stations, or even in dishwashers. When the Minister sums up, will he reflect on what work the Government are doing to make sure those dual-use microchips are unable to be used in that way?
The other way that Putin’s military has continued to supply itself is by avoiding sanctions via third parties. The evidence is widespread: since the invasion of Ukraine, exports from the EU to some of the countries bordering Russia have increased by around 50%, roughly equivalent to three quarters of the drop in European exports to Russia since the war began. It does not take a genius to work out what is going on, especially given that the biggest growth in exports is in heavily restricted product groups such as chemicals, electronics and machinery. I know that the Minister will be keenly aware of this problem, so could he inform the House of the diplomatic work that the Foreign Office is undertaking to ensure we combat it?
I fully support the Government’s moves to tighten sanctions. Russia must never be allowed to prevail in Ukraine, and we must constrain its resources to fight this illegal war. The people of Ukraine have shown incredible bravery, courage and skill. The very least that we in this place can do is honour our commitment to them. I know the Minister will do everything in his power to help achieve that.
Richard Foord (Honiton and Sidmouth) (LD)
Given that this change to the law seeks to tighten economic and trade restrictions on Russia, the Liberal Democrats support this statutory instrument, which has been carried on from the work of the previous Government. However, if we step back from the detail of what this SI seeks to do, it is worth looking at some of the context in which it has been tabled. Proceeds from oil and gas sales within Russia’s federal budget rose by 41% in the first half of 2024. That is partly accounted for by the fact that oil prices have gone up and the rouble has become weaker, but we cannot get away from the fact that Russia is profiting from its oil and gas sales in a way that was not the case a year ago, and is getting far greater proceeds from the sale of its oil and gas.
That matters, of course, because Russia is using that money for its grossly illegal aggression in Ukraine. It is thought that those oil and gas sales account for between a third and a half of the total Russian federal budget, so we have to ask how that is happening. Yes, it is partly happening via Russian ships that are part of this so-called shadow fleet, and it is welcome that the SI will prohibit those ships from entering a port in the UK. It is welcome that those ships can be detained in the UK and will be refused permission to appear on the UK’s ship register, but the hon. Member for Strangford (Jim Shannon) is exactly right: we also have to think about what other countries than the UK are doing. According to the Financial Times, the oil trade between India and Russia almost doubled to $65 billion in 2023. India imported very little crude oil before the invasion of Ukraine; now it is the No. 2 importer of Russian oil, after China. It is alleged that India has been refining Russian crude and re-exporting it to European nations that are otherwise seen as subject to, and complying with, our sanctions regime.
It was also interesting to hear from the hon. Member for Glasgow South (Gordon McKee) about the use of dual-use technology. It is true that Russia is seeking to become increasingly self-sufficient, while it also looks to China and India to import technology in the fields of artificial intelligence, space technology and energy technology. Earlier this year, we saw the former Russian Deputy Prime Minister Andrey Belousov, previously Minister for the Economy, become the principal Minister for Defence. We now need to move to the next stage: when we think about dual-use goods, we need to think about how to make sure we can throttle the Russian economy so that it is not importing goods that can be used for aggression in Ukraine.
Madam Deputy Speaker (Caroline Nokes)
I call Josh Simons to make his maiden speech.
Josh Simons (Makerfield) (Lab)
Thank you, Madam Deputy Speaker. I know that tradition dictates that these speeches pay homage to our honourable predecessors, but the history of maiden speeches delivered by Members for Makerfield is somewhat chequered. My predecessor, Yvonne Fovargue, had to face down an unwelcome opponent—an unusually persistent wasp. Just as she stood up, after buzzing around her face, it struck, leaving her to struggle through the next few minutes while her face gradually swelled up.
Her predecessor, Ian McCartney, faced an even more formidable opponent: Michael Fabricant. I am told that, for decades, the parliamentary record of that encounter has stood uncorrected. As Mr McCartney began, Mr Fabricant put his feet up on the Bench. Betty Boothroyd was sat in your chair, Madam Deputy Speaker. Mr Fabricant interrupted with a point of order—not the done thing during maiden speeches, I am told. “Madam Speaker”, he said, “can you ask the man to speak in English?”, mocking Mr McCartney’s thick Scottish accent. Mr McCartney retorted, “If he doesn’t mention my accent, I won’t mention his wig.” The record does not then note Mr Fabricant’s response, “Touché, touché”, or Mr McCartney’s victorious retort, “Toupee, toupee.” Anyway, so far today there have been no wasps, and—a point that may perhaps unite this House in gratitude—no Michael Fabricant. While I do not wish to emulate those misfortunes, I hope to continue those Members’ good work in delivering for the people of Makerfield.
Many in this Chamber may not know that Makerfield is not really a place: it is a suffix attached to a collection of towns, given the name of an ancient Lancastrian forest called Macerfield that used to stretch unbroken from Wigan to Warrington. The towns I represent include Hindley Green and Hindley, Platt Bridge and Abram, Ashton and Bryn, Winstanley and Worsley Mesnes, and Orrell and Pickley Green. The history of those towns is the history of our nation. Many dug pit mines, producing the coal that powered our industrial revolution. While men dug the coal, women sorted it—pit brow lasses, as they are known. Mine workers organised into unions and, since 1906, elected Labour MPs to represent them. Industrial decline brought great destruction to many of these towns—places such as Abram, Bryn, Bickershaw and Hindley—and they will never forget the callousness with which they were treated in those years. That is one reason why I support delivering justice to mineworkers on the mineworkers’ pension scheme. Coal made this nation wealthy, and now we must ensure that those workers live with dignity in old age.
Backed by a Labour Government, Ian McCartney delivered the minimum wage, new health hubs in Platt Bridge and Worsley Mesnes, and investment in Abram and Winstanley. Then under the Tories, 14 years of austerity deepened the wounds of industrial decline, hollowing out public services and degrading public spaces, while wealth accumulated in London and the south-east. My predecessor, Yvonne Fovargue, worked hard to protect constituents, continuing a tradition of working closely with the fantastic Wigan council on its groundbreaking Wigan deal. She delivered a new health centre in Ashton and was a leading voice in combating debt, loan sharks and those who prey on the most financially vulnerable.
Through their ups and downs—their history is the history of this country—the towns I represent have developed one simple superpower: a community spirit that should be the envy of this land. They have pride in place, and care for friends, family and neighbours. Today, this spirit manifests in some of the wonderful community organisations I have had the privilege of getting to know. In Orrell, there is Tony, Julie, volunteers at Brighter Better Orrell, the Friends of Orrell Station, Greenslate community farm and Greenslate water meadows. In Worsley Mesnes and Winstanley, there is Joe at St Judes rugby club, Winstanley Warriors football club, and the Clifton Street community centre. In Ashton and Bryn, there is the Brian Boru club and Garswood Hall Bowling, Ashton Town FC and Ashton Athletic FC, which is currently rebuilding after a mindless arson attack. In Abram and Platt Bridge, there is David’s fantastic Wigan & Leigh Community Charity and Wigan Cosmos FC. In Hindley, there is Eric at the Hindley community allotment, the Friends of Hindley Station and the friends of Borsdane wood; and in Hindley Green, there is the Brunswick bowling club, the St John’s church and Bethel community centre, and the Hindley Green Residents Association.
What is the future for these towns and for our country? That is the question that we Labour Members must now answer. The task is immense. People I represent have lost trust in politics and in politicians. They believe that the work we do here makes little difference to them. They feel that we lecture, we speak, and we let economists, lawyers or bankers tell us the “right” answers, but that we do not listen, or respect or represent them. That is why the weight of responsibility on this Government, on me as my constituents’ representative and on all of us across this House could not be greater. Together, we must deliver for decent, fair-minded, hard-working people who love their community and their country, especially those in the former industrial heartlands of our great nation, which I am so proud to represent. We cannot and will not let these people down.
In this House, I hope to use my career to contribute on this question of the future. I spent years working on technology, data and machine learning. Too often, we talk about technology as an inexorable force, as if it bends society to its will, but it has no will. Technology is a tool. We build it, we design it and we use it in our world in ways that we choose. Now more than ever, we must have the interests of working people in mind as we harness the great potential of technology. I look forward to working with colleagues across this House who share those interests.
However, my family is what brings me more pride than anything. My parents divorced at a young age, so I grew up shifting between homes, towns and religions. I learned to see the best in people and in ways of living that could not be more different. Now I am lucky enough to see the world through the eyes of my children. I remember friends asking me before our first child was born, “How do you feel about bringing a child into this grim world?”, but to me that has it all wrong. Children are a bridge to the future. They inject hope for what our communities, our country, and we as individuals can be. That is why childcare will be a key focus of mine. We make having children too hard, too exhausting and too expensive in this country. Radically reforming childcare may be one of the most effective ways to deliver change that working people can feel, as well as boosting our workforce, and that is why I will campaign hard for that reform over the coming months and years.
Let me end by returning to something that my predecessor Mr McCartney said about the history and the future of the towns we represent. Democracy, he said, is not solely, or even primarily, about this place, or about us. It is about the efforts and endeavours of ordinary people. It endures because people have their country and their desire for freedom and fairness in their hearts. That is a profound lesson—a lesson that bears on this age even more than on his, and one that we must hold close through the challenges ahead, for we live in an age of insecurity.
As the organisation I was proud to lead, Labour Together, has argued, we must once again focus on strength, security and working with allies to navigate the choppy waters ahead. That is what we are here debating this afternoon, which is why I urge this House to support tightened sanctions on Russia. We must navigate the challenges of this age with a constant focus on working people, who are the backbone of this country, because unless working people like those I am so proud to represent feel change, and unless we in this Chamber demonstrate humility and honesty, and act with integrity and with respect, they have no reason to believe in democracy. That is the kind of representative for the people of Makerfield that I hope to be.
Stephen Gethins (Arbroath and Broughty Ferry) (SNP)
First, I congratulate the new hon. Member for Makerfield (Josh Simons) on his extremely well delivered maiden speech. I am sure that he is somebody whom we will not be able to ignore over the next few years. Inevitably, given his remarks, he has somebody with a Scottish accent following his maiden speech. I hope that everybody in the Chamber will be able to follow mine, unlike Michael Fabricant in the past.
I also think it is important to speak today, and I join colleagues in backing the Government’s move on sanctions. The cross-party support that the Government have on this issue is exceptionally important. We could be slightly more robust on this issue, and I have a number of very specific questions for the Minister. I know that he will not be able to answer them all, but I would like to put them on record for him to answer in due course.
First, I was very pleased to hear the Minister talk about European security. We are of course stronger in dealing with Russian aggression in Ukraine when we do so in commonality with our partners in Europe. I was pleased to hear the Foreign Secretary talk about the importance of common European foreign and security policy. However, that security also applies to issues such as energy, and when it comes to energy security, being outside the single market makes us less secure. I would like to hear from the Minister about the areas in which he feels he can deepen our security by working with our European partners—on sanctions, but also more broadly.
Secondly, on tightening up financial regulations, the Minister will be aware of the issue of shell companies. The former Member for Kirkcaldy and Cowdenbeath, Roger Mullin, frequently raised the really important issue of Scottish limited partnerships. I know that this is not something that the Minister can answer immediately, but can he look at financial regulations and the challenges around dirty money? All too often, as we know—this has been picked up on by Members from across this Chamber—that money has found its way into the UK economy. I would be grateful if he could look at that issue, although I acknowledge that putting him on the spot right now may be a little unfair.
I want to pick up on the recommendations in the report by the Intelligence and Security Committee. Yes, I know we are talking about sanctions, but there is the broader issue of polarisation and disinformation in our society. I pay tribute to the work of my predecessor, Stewart Hosie MP. He worked tirelessly on the Intelligence and Security Committee, as did colleagues from across the House, on that issue. I have not yet had the opportunity to pay tribute to him in the House for his role in raising these issues in Parliament, but also for being an exceptionally diligent, hard-working and popular local MP.
I want to pick up on points made by the hon. Member for Rutland and Stamford (Alicia Kearns). First, I pay tribute to colleagues in the Foreign, Commonwealth and Development Office, who have been working on this issue exceptionally hard. I also pay tribute to the intelligence services for the work they have done, often in very difficult circumstances. It would be remiss of us not to touch on the exceptional work done by the international community of non-governmental organisations, many of them based in the United Kingdom, which have done incredibly brave work in the field on this issue. Some of the work NGOs have done has found its way into policy—for others, that is not so much the case—but the international NGO community has been exceptionally good over the years, and often ahead of the Government of the day on some of these issues.
The hon. Member for Rutland and Stamford mentioned the kidnapping of children, and I wholly endorse her remarks. The hon. Member for Glasgow South (Gordon McKee) was right to pick up on technology and its secondary role, and I endorse his remarks. Finally on sanctions, I ask the Minister to look across the piece at the system of controls on arms exports to secondary countries. I hope—I will write to the Foreign Secretary about this—that we will ensure that we do not catch countries such as Ukraine in the measures, and impede their ability to defend their territorial integrity after Russia’s aggression. I thank the Minister for his comments. He will have our support.
Madam Deputy Speaker (Caroline Nokes)
I call Tim Roca to make his maiden speech.
Tim Roca (Macclesfield) (Lab)
I congratulate my hon. Friend the Member for Makerfield (Josh Simons) on his fantastic maiden speech. There is already a little bit of confusion between Macclesfield and Makerfield, and it is good that we can continue that by giving our maiden speeches on the same day.
It is the privilege of my life to be elected to represent the communities of Macclesfield, and I start by placing on record my thanks to the House staff for the warm welcome and support that they have given new Members over the last few weeks. The Table Office, the Speaker’s Office, the Doorkeepers and our catering and security colleagues have all been phenomenal; thank you so much.
I understand that just by speaking I have already outdone one of my predecessors, as those in the Library tell me that they are yet to find any evidence that a century ago William Brocklehurst said anything at all in the 12 years in which he represented Macclesfield. On the subject of predecessors, I wish sincerely to pay tribute to my immediate predecessor David Rutley, particularly for his public service on behalf of Macclesfield and our country. People of all political persuasions will tell you that he is a man of courtesy and kindness, and that certainly tallies with my experience.
After the momentous general election that we had earlier in the summer, lots of bright new Members are frenetically trying to make a name for themselves, so I need something to help me stand out from the crowd of new MPs. The House Library thinks it has found it: I may well be the first Labour Member of Parliament to be called Tim. As I grew up in the 1990s, when Harry Enfield was on television, being called Tim was a bit of a cross to bear, so it is good to see that it has finally paid off. If being the first Tim is not enough, I will make do with being the first ever Labour Member of Parliament for Macclesfield.
Seventy-five years ago, my grandad crashed his car in Macclesfield, and while hospitalised, he fell in love with a young Irish nurse, my grandma Josephine, and my family’s story in Macclesfield began. I grew up in the constituency, and I am proud to call it home. From the Cheshire plain to the rolling hills of the Peak district, it is a beautiful part of our country. Indeed, nearly a third of the constituency lies within the Peak district national park. The town itself was famously home to a thriving silk industry, with 71 silk mills operating at one time, and I am proud to be wearing a Macclesfield silk tie today.
Macclesfield and its towns and villages—Disley, Poynton, Bollington, Prestbury and more—have made their contribution to our country with athletes, artists, scientists and writers of renown. Although my hon. Friend the Member for Salford (Rebecca Long Bailey) can try to claim the band Joy Division, the mural of Macclesfield born and bred Ian Curtis dominates our town, a reminder not only of his talent, but of the very real struggle that many people face with mental health. Macclesfield also hosts a sprawling AstraZeneca campus that employs more than 5,000 people and is crucial not just to my constituency, but to the economy of our country.
At the election, it was a privilege to campaign and, importantly, listen to people’s concerns, aspirations and fears, Many spoke of the climate emergency and the need for greater action. Others insisted on the need for electoral reform—a view that I share. Universally, they worried about public services and the cost of living crisis, with the backdrop being widening inequality on a scale that is Edwardian, unprecedented, and in my view, immoral.
There is no doubt that we live in interesting times. During the last Parliament, colleagues had to contend with a global pandemic that still casts its shadow across our country, but there is a feeling that the world is drifting towards the rapids. Every day, the brave men and women of Ukraine fight for the life of their country, and these coming weeks may prove critical in that war. In the middle east, innocent civilians bear the brunt of a tragic conflict, with a ceasefire proving frustratingly elusive, and across the world economic shocks, climate extremes, and soaring prices are combining to create a food crisis of unprecedented proportions. At home, confidence in our political system is at a record low, and according to the latest British social attitudes survey, as many as 58% of people say that they “almost never” trust politicians to tell the truth.
In medieval times, Parliaments had monikers, such as the Mad Parliament, the Lawless Parliament, and the Merciless Parliament. How will we in this place be known as we face up to our responsibilities in this Parliament? I look forward to working with Members from across the House to meet those responsibilities, to act for the public good and to contribute thoughtfully without fear or favour. We must make this a place of public service, not self-service, and about the national interest, not self-interest, so that together, to borrow a phrase, we are a standing contradiction to people who wish to believe that only those with cold hearts and twisted tongues can succeed in the world of politics.
Madam Deputy Speaker (Caroline Nokes)
I call Rupert Lowe to make his maiden speech.
Rupert Lowe (Great Yarmouth) (Reform)
Great Yarmouth is a constituency like no other. In many ways, it feels two or three decades behind the rest of the country, but what may seem to be a criticism is in fact the complete opposite. Countless other areas that once, not too long ago, shared Great Yarmouth’s unique sense of community, have lost that. In Great Yarmouth, everybody knows everybody, and if they do not know somebody, they know somebody who does. It holds a remarkable charm that is unlike anywhere else I have experienced. My constituents care about their town, they care about their community, and they care about their country. It is, as Harry Redknapp would say, “a proper place”. During the European Championships, I can honestly say that I have never seen so many England flags in my life than in Great Yarmouth—certain hon. Members from across the Chamber may have found that experience to be a reminder of past indiscretions.
As is customary, I would like to thank my predecessor, Brandon Lewis, for his contribution to the Great Yarmouth constituency over 14 years. It is a genuine honour to represent the UK’s premier seaside tourist destination, narrowly beating Clacton and Skegness to the top spot, on a billing definitively decided by a straw poll of constituents on Great Yarmouth’s famous Golden Mile. A particular fan of the attractions in the constituency was one Ann Widdecombe. Taking her on the world-famous “snails” rollercoaster during the election campaign was an experience she is unlikely to forget—and her back held up rather better on the rickety ups and downs than my own!
We are blessed with some of the UK’s most glorious coastline, with Great Yarmouth, Caister, Gorleston, California, Hopton and more. As those who are familiar with the geology of the area will know, my constituency’s borders change on an almost monthly basis as swathes of land are reclaimed by the sea, particularly in the charming village of Hemsby. While other coastal communities have been rightly gifted the defences they desperately need, the good people of Hemsby have been left to fight the power of the sea. It has been a losing battle, and numerous constituents have lost their homes with zero compensation. In fact, one resident told me that his property was worth minus £15,000 due to demolition costs.
I pledged to fight for Hemsby, and that is exactly what I am doing. The funding criteria, as promised by a now Minister in the Department for Environment, Food and Rural Affairs on an election visit to the area, must be urgently changed. We do not have time for the usual pontification; we must act before any more of my constituency disappears into the sea. I am pleased to say that among other things, I have already secured the reopening of the Hemsby beach public loos.
Decades ago, the ocean brought huge wealth to Great Yarmouth from both fish and oil. Primarily known for its wildly successful herring fishing industry, at its peak, it was one of the most important fishing ports in Europe, often referred to as the herring capital of the world. That wealth was stolen from the people of Great Yarmouth and transferred overseas through our membership of the European Union. It is no surprise that my constituents overwhelmingly voted to leave the European Union. Evidently, it is a constituency with fine judgment. It is sad that today, having been our largest fishing port, only one fishing boat operates from Great Yarmouth, and there is no longer a local fish processing industry.
Great Yarmouth’s local football club is affectionately known as the Bloaters. The Wellesley ground contains the oldest wooden football stand in the world. I am now the proud holder of a season ticket, which was an incredibly kind gift from the club’s chairman following the donation of my first month’s parliamentary salary to the club—don’t worry, Madam Deputy Speaker; it has been appropriately declared. It is a ticket of perhaps less financial value than those that some other Members will have declared, but it holds infinitely more real value for me.
Being elected as Great Yarmouth’s MP was the proudest moment of my professional life, narrowly beating taking Southampton to the FA cup final in 2003 as chairman. Sadly, we lost 1-0 to Arsenal that day, to a tidy Robert Pires finish. The town and its people have quite simply been let down and forgotten for too long, being at the end of the line, literally and metaphorically. My constituents look around their town, and they have seen their once-booming home change beyond recognition. Uncontrolled mass immigration has failed Great Yarmouth, as it has failed the entire country. Just like the majority of the rest of the country, in 2010 they voted for lower immigration. In 2015, they voted for lower immigration. In 2016, they voted for lower immigration. In 2019, they voted for lower immigration. What did the Conservatives do? They allowed immigration to soar, with no thought to the brutal consequences.
In 2024, Great Yarmouth also voted for lower immigration. The difference this time is that I will voice those concerns and fight as best I can to drastically reduce the unsustainable number of people settling in our country. The roads are packed, the hospitals are full, GP surgeries are bursting at the seams, and dentists are inaccessible—frankly, the system is broken and mass immigration is largely responsible.
Great Yarmouth has a long history of proudly welcoming immigrants who come to the UK to work hard, integrate properly and contribute to the economy. The current chaos could not be further from that. We have local people, particularly women, feeling unsafe in their own town. We are told that crime is down, but I do not believe it and the town certainly does not. We must be clear: the reporting of crime is down because many have lost faith that the police will act. I am determined to change that, and I am running a public awareness campaign on the importance of reporting crime. It is one that I think should be replicated nationally. Yes, of course we need more police on the streets, but without reporting crime, nothing will change.
There is so much to resolve in Great Yarmouth, but treating the symptoms can only be a temporary measure until the root cause of the issue—uncontrolled immigration —is tackled in Westminster. Our whole system of governance is broken. I have huge respect for Members of this House who have entered with genuine experience from a career in business, medicine, the military or however else. Sadly, we are a dwindling number, and the relentless rise of the career politician continues. From politics, philosophy and economics at Oxford, to special adviser, to parliamentary candidate, to MP—this well-trodden journey serves nobody but the traveller, and deprives the British people of the representatives they deserve.
Many Members of Parliament lack experience of the challenges faced by people in the real economy. A day on my farm or some work experience in one of my contracting businesses would open their eyes to the punishing reality of what hard-working Brits go through every day, much of which emanates from do-gooding legislation. I fear that people in Britain will not understand the damaging reality of socialism until they have experienced it. The only difference between this Government and the last is that they may be more honest about what they intend to inflict on the British people.
The political system serves nobody but itself. It is arrogant, out of touch and incompetent. That potent mix has delivered woeful Government after woeful Government. Who suffers? Decent men and women working hard to provide for their families. We need to back the risk-takers, back the wealth-creators and back the doers. As the greatest Prime Minister in many decades correctly said, “Let us back the workers, not the shirkers.” If we are to successfully change Britain, we need to change politics. The election of five Reform party MPs, including me, is a politically seismic event in our two-party state. We are just getting started and the winds of change are blowing much harder.
On Russia and the Ukrainian situation, I think it is a tragedy for both those countries, for Europe and for the world. In particular, it is a tragedy for those people who are needlessly dying on both sides.
I echo what one of my colleagues said about the support and help that the staff of Parliament have given to all of us new MPs. I would not call myself a young MP—I am a pensioner—but I thank them all very much indeed.
Hamish Falconer
I thank Members for their contributions to this debate. In particular, I thank the shadow Minister, the hon. Member for Rutland and Stamford (Alicia Kearns), for her kind words about my service in the Foreign Office. Indeed, I pay tribute to hers: she did fine work on Iraq and Syria, and I was glad to work with her. I look forward to working with all of this House on matters of national security.
I welcome the maiden speeches that were made. My hon. Friends the Members for Makerfield (Josh Simons) and for Macclesfield (Tim Roca) were both funny, which is useful when I am being so dour at the Dispatch Box. I noticed that the hon. Member for Great Yarmouth (Rupert Lowe) paid tribute to particular kinds of experience —military, business, and so on—but he did elide the diplomats. Given that there are many of them in the Box, I would like to say that he should take a look at the good work of the Foreign Office, because there are many hard-working officers who do their very best, and I am grateful to everybody in the House for recognising that.
If I may, I will come back to some of the points raised by the other parties. I regret that I may have to write to the hon. Member for Arbroath and Broughty Ferry (Stephen Gethins) about the specific Scottish issue.
Stephen Gethins
I am grateful to the Minister for saying he will respond to me in writing, which I accept, but I should also be clear—this was the mistake that previous Prime Ministers made—that Scottish limited partnerships are not a Scottish Parliament issue, but a Westminster reserved issue.
Hamish Falconer
I understand that, and I agree. I welcome the importance that the hon. Gentleman placed in his comments on working together. I also believe that, on many of these issues, we are better together.
Some important points were raised about our partners in India and China in relation to Russia. I say to the shadow Minister that any evidence of Chinese companies providing military support to Russia would be damaging to China’s international reputation, given its strong position on not being involved in the conflict. We will not hesitate to take action against anyone supplying and funding Putin’s war machine.
On India, which was raised by the hon. Member for Honiton and Sidmouth (Richard Foord), we regularly raise Russia’s actions in Ukraine with India. We did so most recently in a conversation between the Foreign Secretary and the Indian Foreign Minister. We highlight the importance of tackling the shadow fleet. India is a key partner, and we are committed to working together across a whole range of issues. We underline to them how unreliable an energy partner Russia would be.
The hon. Member for Rutland and Stamford raised the tragic forceful deportations of, we believe, almost 20,000 Ukrainian children, which is a matter of real concern to me and the rest of the ministerial team. As a member of the jointly led Canadian Ukrainian initiative, along with 28 other states, the UK is providing funding to support the rehabilitation of children.
My hon. Friend the Member for Glasgow South (Gordon McKee) made some kind comments. I am unsure whether they were for Minister Doughty or for me, but, as I am here, I will certainly accept them. He made important points about microchips and various other dual-use technologies on which we are taking action with others to try to address. In the interests of the House’s time, I will write to him to give further detail.
On the wider point about circumvention, I am grateful to the House for its support and recognise the widespread concern about other countries doing otherwise. We are sending senior officials to the United Arab Emirates, Kazakhstan, Uzbekistan, Kyrgyzstan, Georgia, Armenia, Turkey and Serbia to highlight circumvention risks and to offer technical support. We recognise that these issues are global in nature, so we have designated individuals in Belarus, China, Iran, Serbia, Slovakia, Switzerland, Turkey, the Emirates and Uzbekistan. I will no doubt have another opportunity to update the House on our work in this area in due course. I thank the House for its support and urge it to support the motion.
Question put and agreed to.
Resolved,
That the Russia (Sanctions) (EU Exit) (Amendment) (No. 3) Regulations 2024, (SI, 2024, No. 834), dated 29 July 2024, a copy of which was laid before this House on 30 July, be approved.
Sanctions: Syria
(2 months, 1 week ago)
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The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Hamish Falconer)
I beg to move,
That the Syria (Sanctions) (EU Exit) (Amendment) (No. 2) Regulations 2024, (SI, 2024, No. 833), dated 29 July 2024, a copy of which was laid before this House on 30 July, be approved.
This instrument amends the Syria (Sanctions) (EU Exit) Regulations 2019. The instrument was laid on 30 July using powers provided by the Sanctions and Anti-Money Laundering Act 2018 and entered into force on 31 July. For clarity, the instrument was laid on 24 May under the previous Government. We support its aims, so we revoked it and re-laid it to provide additional time post election for the required parliamentary scrutiny. There are no amendments to the policy and the substance of the instrument is the same.
With the conflict in Syria now in its 14th year, the humanitarian situation remains dire. A record 16.7 million people are estimated to be in humanitarian need, nine in 10 people in Syria are living in poverty, and nearly 13 million lack sufficient food. Many more have been forced to flee their homes and are living in settlements and camps.
Our support for the Syrian people is unwavering. The UK has spent over £4 billion to date—our largest ever response to a single humanitarian crisis—and we continue to provide lifesaving support to those in need. It is imperative that aid reaches the most vulnerable and that UN agencies, international organisations and non-governmental organisations have the support necessary for their work.
The UK has engaged with financial institutions and humanitarian actors to fully understand and mitigate the impact of the humanitarian provisions in our sanctions legislation, including by issuing general licences following the earthquakes in February last year. The UK has acted to ensure that aid continues to reach those most in need. These amendments to the regulations will allow trusted organisations to focus on delivering aid, support efficient and effective humanitarian delivery and provide reassurance for those organisations and their service providers. They will ensure that we continue to meet our humanitarian objectives while ensuring that our sanctions regime is robust.
UK sanctions are designed to encourage the Assad regime to refrain from actions, policies or activities that repress the civilian population in Syria. They also serve to encourage the regime to participate in good faith in negotiations for a political settlement in line with UN Security Council resolution 2254 and to bring about a peaceful solution to the conflict in Syria.
This instrument amends the humanitarian exception to the petroleum measures contained in the 2019 regulations with the aim of improving the delivery of humanitarian aid in Syria. The amendments expand the eligibility for the humanitarian exception from solely UK-funded persons to all organisations covered by UN Security Council resolution 2664 to the extent that they are captured by UK sanctions. The extension will enable more organisations to benefit from the humanitarian exception.
The instrument extends the regulations to ensure that they apply to those involved in the humanitarian delivery chain. The change ensures that the delivery chain of relevant persons as outlined in the regulations will benefit from being able to use that exception. That provides assurances to relevant delivery partners on the ground and to financial service providers when improving payments.
The instrument also amends the 2019 regulations to authorise financial service providers of “relevant persons” to use the humanitarian exception, removing the requirement for financial service providers to apply for individual licences to facilitate activities authorised by the exception. The change will also provide greater assurance to both humanitarian organisations and their financial providers, reducing delays in payments.
In addition, the instrument replaces the existing notification requirement for “relevant persons” using the humanitarian exception for petroleum prohibitions in the 2019 regulations with a new requirement to notify the Treasury on an annual basis that they are involved in the provision of humanitarian assistance in Syria. The notification requirement will apply to relevant persons conducting humanitarian assistance activities in Syria, but not to financial service providers, the UN, the International Committee of the Red Cross, the International Federation of Red Cross and Red Crescent Societies, the British Red Cross or downstream delivery partners.
Finally, the instrument makes two further, more minor amendments. First, there is a small amendment to the humanitarian fuel exception and a related exception for petroleum products for diplomatic and consular premises in the 2019 regulations. Those exceptions are amended to refer to “acquiring” fuel rather than “purchasing” it. Secondly, the instrument amends the record-keeping requirements in the regulations with respect to trade licences to clarify that specified information is required where appropriate. That will ensure that correct records are kept for relevant licences.
UK sanctions on Syria continue to send a clear message to the regime and its supporters: we will not stand by while they commit serious human rights abuses. The regulations ensure that the sanctions will not hinder humanitarian aid efforts. We will continue to work closely with the UN, like-minded states, humanitarian organisations and the financial sector to ensure that the sanctions work in tandem with humanitarian efforts and that the Assad regime and its allies and supporters bear responsibility for the devastation endured by the Syrian people. I commend the regulations to the House.
Alicia Kearns (Rutland and Stamford) (Con)
The people of Syria have suffered unimaginable horrors since 2011, first under Bashar al-Assad’s brutal dictatorship and then at the hands of Daesh, al-Qaeda, Iranian-backed militias and the Wagner Group. The Syrian people have endured unforgivable cruelty and suffering, with over 6 million forced abroad as refugees, 7 million displaced in their own country and 90% living within poverty. Over half lack access to clean and safe water. It is a humanitarian catastrophe that stems from Bashar al-Assad’s oppressive authoritarian rule and industrialised brutalisation of his own people. Sadly, the earthquakes in February 2023 caused further suffering and directly impacted a further 9 million people. It is absolutely right that we continue to sanction Assad and his regime, but we must also ensure that much-needed humanitarian aid is delivered.
This instrument was initially proposed before the election as a means of improving the humanitarian exemption from sanctions for those providing vital aid to Syria. It will give humanitarian organisations access to fuel, ensuring that they can carry out important work. I am therefore grateful to the Minister for re-tabling the instrument, which the Opposition will of course support.
The sanctions regime, delivered under the Conservative Government, rightly targets those who have caused this appalling humanitarian disaster, not the rule-abiding NGOs, international organisations and accredited individuals helping to alleviate the suffering. Introducing an automatic humanitarian exemption, rather than by licence, and extending the 2023 earthquake exemptions were requested by humanitarian groups through the tri-sector group. These changes will now extend to fuel. Of course, we will expect the Minister and his officials to maintain clear protections to prevent the misuse of this exemption, and we will monitor its implementation. Sadly, new crises are emerging at an alarming rate, but we must never forget the people of Syria. Assad and his Russian backers may be content to let the people of Syria suffer, but the UK has a proud humanitarian legacy, regardless of which party is in government. These changes will help to ensure its continuation.
On our Syria sanctions regime, I ask the Minister to use his position to look into the proliferation of Captagon, a highly addictive amphetamine. The success of global sanctions in cutting off Assad’s regime from funding has led him to turn Syria into a narco-state, producing 80% of the world’s Captagon. In my view, Syria has become the Amazon warehouse for terrorists and states who behave like terrorists. There was some hope that the normalisation of relations between several Arab countries and the Syrian regime might see that addressed. When in government, we opposed that normalisation, and I would be grateful if the Minister confirmed that his Government will adopt that position.
Although Captagon causes the most damage in countries neighbouring Syria, it is starting to affect those across the world. I am concerned that, having been discovered in the Netherlands—my own Committee did an inquiry into this—we are starting to see it in the UK. Addiction and misery are now bankrolling Assad’s continued tyranny and indulgence of Putin’s Russia. We must ensure that we take action on Captagon so that we are protected here in the UK.
We cannot forget Syria and the Syrian people. Anyone who has worked on Syria knows that we are haunted by our failures, the survivors we met and the photos of those who were murdered. Rarely is Syria discussed in this place, since the shameful vote of 2015, so I take this opportunity to request a few clarifications from the Government on their policy. First, I ask the Minister to take forward and give his Government’s support for a new chemical weapons tribunal—a treaty-based court that will put on trial those guilty of such heinous inhumanity and deliver accountability and justice for those in Syria.
Likewise, I urge the Minister to keep his eye on Daesh, because we are seeing a re-emergence of that evil in the caves and the mountains along the border between Iraq and Syria. There were 153 attacks in the first six months of the year, and we know that they are seeking every opportunity. Finally, I ask the Minister to use his voice and urge his office to speak up for those whom Assad seeks to silence. Hope lives on in Syria, as we have seen from the women-led protests across the country as recently as August.
We give our full support to this instrument—originally laid by the Conservative Government—which welcomes and provides exemptions for humanitarian groups to access fuel under strict management systems and which, we hope, will go some way towards addressing the misery that the Syrian people have endured for too long, and support those who are working to alleviate that suffering.
Richard Foord (Honiton and Sidmouth) (LD)
I echo what we have heard about the effect that this dreadful war has had on the people of Syria. We understand that 300,000 civilians have been killed since the war broke out in 2011, and more than 13 million people have been displaced internally or have had to leave Syria as refugees. We have been talking this afternoon about sanctions and about how we might tighten the noose on trade and on financial transactions. If we see the situation on the ground improving we might need to loosen that noose, but what is happening on the ground in Syria is still appalling. More on that later.
First, bilateral aid between the UK and Syria has been falling in recent years, from a high of £300 million in 2020 to £205 million the following year, £158 million in 2022 and £150 million last year. We have seen the halving of our bilateral humanitarian aid to Syria. I question whether one reason for that may have been co-option of humanitarian aid—a concern that was flagged in a 2019 report by Human Rights Watch called “Rigging the System”, which pointed out that the Syrian Government of al-Assad had co-opted reconstruction funding in Syria and had
“developed a policy and legal framework that allows it to co-opt humanitarian assistance and reconstruction funding to fund its atrocities, advance its own interests”
and to
“punish those perceived as opponents”.
This SI is specifically about carve-outs for petrol for humanitarian workers. I am sure that the Government will have assured themselves that those humanitarian workers will not be siphoning fuel for the Syrian Government, but I ask the Minister to reinforce that reassurance when he responds.
Finally, we heard earlier that there have been strikes in Syria. The Syrian Observatory for Human Rights has suggested that the strikes, allegedly carried out by Israel, were on a programme to develop short and medium-range precision missiles and drones. If that is so, it is the same site that was struck in 2017 when an Israeli strike was suspected on a rebel-held town in northern Syria.
Will the Minister confirm that, by supporting humanitarian groups and organisations, we are not in any sense affording the Assad regime access to fuel to carry out his dreadful crimes in Syria?
Madam Deputy Speaker (Caroline Nokes)
I call Charlie Maynard to make his maiden speech.
Charlie Maynard (Witney) (LD)
Thank you, Madam Deputy Speaker. I thank the hon. Members for Makerfield (Josh Simons) and for Great Yarmouth (Rupert Lowe), who gave us very different views of their constituencies, but were linked by their love for them.
I stand here today to represent the people of Witney. I am incredibly grateful to them for electing me to represent them, and I will do my best for them. I am also incredibly grateful to the people who helped me get here. We had a fantastic team who worked extremely hard, and I thank them all. I am also extremely grateful for my very large family up there in the Gallery—I love you all, too.
Until July, Witney had voted Conservative for 102 years. Famous parliamentarians from Witney include Douglas Hurd and David Cameron. I owe David Cameron a backhanded vote of thanks, because some of his decisions put me on the path to politics. I also thank Robert Courts, who worked very hard for the constituency for the past eight years.
Our constituency is beautiful. It sits at the bottom of the Cotswolds, and it is full of market towns such as Faringdon, Burford and Witney, which did well off the wool trade. They did more than trade it—they spun it, they wove it and they made it into beautiful blankets, which were famous throughout Europe from the middle ages. Then, the dastardly duvet came along and that was the end of it.
At its best, Witney innovated. We have a lot of Methodist roots in town; the people shared technology, and they cared about welfare and social justice. If there is one theme that is kept going today throughout the constituency, it is that care. So many community groups work so hard. One of the wonderful things about being an MP and a candidate is getting to see so much of them at first hand, whether it is the food banks, the larders and the fridges, the sports teams, the day centres, the councils or the churches—you name it, it goes on and on and on. That network of volunteers makes the constituency tick. They are particularly stretched now because our public services are so underfunded and stretched.
Witney is just 10 miles west of Oxford, which for many makes it one of the reasons it is so wonderful to live, work and play there. That cuts both ways. We have enormous pressure on housing. So many people have grown up there but cannot afford to live there anymore. That is brutal. Added to that is transport—in our wisdom, we tore up the railway 50 years ago and we are now stuck on the A40, taking more than an hour most days to get just those 10 miles between Witney and Oxford. That doubles down into health. We have great GP practices around the constituency, but our secondary healthcare is in Oxford, which is virtually impossible to get to. That causes an enormous amount of stress. We are trying to get secondary healthcare out of that hub in Oxford and to Witney, where we can redevelop council-owned land into better healthcare services, more social rented housing and better further education provision.
For the past four years, I have worked on a project to rebuild the railway linking Carterton, Witney and Eynsham with Oxford. It is a huge project, but we now have an opportunity. One thing that will make it harder—and easier—is that our new Government have just said that West Oxfordshire must take 62% more housing. That, by itself, would be a disaster and is too high a number. However, if we are clever we can do what our Victorian forebears did: put housing around railway stations and use that to fund the railway. That is what we are intent on doing. That would connect Witney to Oxford in just 16 minutes, a cut in travel time of 70%.
Our rivers were our original transport links. They did very well for our blanket and quarrying industries, but we have not returned the favour and they are full of sewage. We are very lucky to have one of the best advocacy groups in the country, Windrush Against Sewage Pollution, which has done a fabulous job of turning the light on Thames Water and really recognising how dire the situation is. Thames Water now has £18 billion of debt and £1 billion in cashflow. It is in breach of its operating licences, but is allowed by this Government to operate with impunity. The sooner the company is put into special administration, the better.
Our constituency plays a key part in the defence of our country. We have the biggest airbase in the UK, at RAF Brize Norton just south of Carterton, and the nation’s Defence Academy at Shrivenham in the south of the constituency. Since world war one, the women and men in my family have served our country: they have fought for the Army, the Navy, the RAF, the Fleet Air Arm and the SAS. They have been awarded one MBE, two Distinguished Service Crosses, three Distinguished Service Orders and a Victoria Cross for their courage. One of the DSOs and the VC were awarded for saving lives rather than taking them. That gives me a lot of respect for how the people in our forces serve us. At their best, the academy and our air force stand up for the British values of democracy, human rights and the rule of law. Here in this Chamber, we need to ensure that we also stand up for those values and do not sell weapons to dodgy regimes.
Today’s motion is about Syria. I fully support it, because we need to get more humanitarian aid in there. Thirty years ago, I visited Syria and it was wonderful. After a chance meeting one morning, I was invited to a wedding feast in the evening and the hospitality was fabulous. Nine years ago, a two-year-old Syrian boy was washed up dead on a British beach. This country’s grief was enormous: there was a nationwide outpouring. Almost by accident, my family ended up taking quite a few Syrian refugees. They stayed with us for over a year and we still stay in very close touch with them. That taught us that one key thing the Government could do is make it easy for their citizens to help refugees to integrate in our country and society. We really have not done that very well at all. The other thing it brought home to me is that when a Government fail their citizens, it can go very, very badly wrong. In our country, I think we are complacent about how unlikely some things are; that they will not happen and that things will not go wrong.
Another trigger that brought me into politics was Brexit. I started a business when I was 25. I built it, with colleagues, over 24 years. It ended up being a global business. We had nine offices around the world, with seven in Asia, and 100 people. That was through thick and thin, and by hanging on in there and trusting people to get things done. But when Brexit hit and, beyond that, we were taken out of the single market and the customs union, my experience of business led me to think, “Holy cow, this is really bad news. This is disastrous for our economy. It will not sink us overnight, because we have a lot of things going for us, but it is a slow puncture.” We see that today in our flat GDP figures, our flat investment figures and our chronically underfunded public services. I blame our previous Government for that, but I also look across the Chamber and I am shocked. What I see now is a new Government defending those disastrous Tory policies of being outside the single market and outside the customs union. I hear that we are pro-growth, but how does that add up? It does not make any sense. I really hope—I say this in a constructive spirit—that we find a way to get out of that hole pretty quickly. We owe it to our country to do so. So please, I would love the new Government’s help on that.
The people of the Witney constituency put me here to listen, to learn—as anybody who is new in this Chamber knows, there is an enormous amount to learn—and to speak up for them, but they also put me here to do things. I still have to figure out how to get things done here, but I look forward to working with Members from all around the House to do that. To the people of Witney, I say “Thank you again for voting me in to represent you. I will do my very best.”
Jim Shannon (Strangford) (DUP)
It is a real pleasure to follow the hon. Member for Witney (Charlie Maynard). I thank him for his excellent maiden speech. I did not agree with everything—such as the Brexit stuff, but that is by the way—but I was very pleased to hear his contribution. I am also very pleased to see his very large family in the Gallery. You’ve been a busy boy, by the looks of it.
I would like to touch on a comment the hon. Gentleman made about the Syrian relocation scheme, which was introduced by the previous Government. In my constituency, there is a big town called Newtonards. We took in six families and they are still there today. The scheme really worked, because the people of Newtonards recognised that the people were desperate and needed help. That brought together all the organisations: churches of all denominations, together as one; the housing executive, with responsibility for housing; and voluntary and community groups. The refugees were displaced Christian families from Syria and, if I may, Madam Deputy Speaker, I would like to speak about them briefly.
Before the election, I had occasion to meet some of those Syrian refugees. They now have jobs, have had children and have moved into houses. That has happened because the people of Strangford and Ards, like the people Witney and elsewhere, saw the need and came together and responded. That, for me, is one of the wonderful things about my constituency. So, I just wanted to make that comment to reinforce what the hon. Gentleman said about Witney in his maiden speech.
I welcome the Minister to his place and I welcome his commitment. I suspect we will be in many debates together, as this is a subject matter in which I have an interest, and I look forward to that. His colleagues on the Front Bench have had responsibility for similar subject matter and we have worked together on many things. I hope we will do the same.
Sanctions are important, because throughout Syria there are pockets of conflict where Christians continue to be caught in the crossfire. I am the chair of the all-party parliamentary group for international freedom of religion or belief, so this is a really important issue for me, as it is for many other Members. We speak up for those with Christian faith, those with other faiths and those with no faith, because that is what we believe in, so it is really important to put these issues on the record. In many cases, Christians are deliberately targeted. For example in Afrin, Turkish-backed troops are reported to be targeting Kurdish Christians. Christians are particularly endangered in the Idlib province, which is still controlled by Islamic militants. In the Al-Hasakah district in the north-east, Turkish military and Turkish-supported opposition forces are active. They always seem to pick the small ethnic and religious groups. They abuse human rights and the humanitarian aid, which is so important. I understand the difficulties that exist, but I ask the Minister whether it is possible to ensure that humanitarian aid does reach those small ethnic groups in Syria, especially those in the north and the Kurdish areas—to ensure, given the human rights abuses, religious persecution, murders, rapes and physical abuse, that the aid gets to the right people. Converts to Christianity are also at risk throughout the country, but their situation is especially dangerous in the north-west and the north-east.
The hon. Member for Rutland and Stamford (Alicia Kearns) referred to drug abuse in Syria. I attend the prayer breakfast here when it is possible for me to do so; it takes place on Wednesdays, and I suspect that there will be one this Wednesday. A speaker from Syria came to address us at one of those events, and told us that drugs were rife in Syria, among all sections of people. That, he said, had been encouraged by the Russians, who seem to be involved in all sorts of illegal activities in that country as well.
It is important that we recognise the difficulties in Syria in general, but also recognise the ethnic and religious groups who particularly need humanitarian help. In the past, the UK has had a strong relationship with Syria, but I ask the Minister: what can we do to help those groups, apart from imposing sanctions? I fully support the sanctions and understand the reasons for them. I know that, if we are to address human rights abuses and maintain the support that we give to ethnic and religious groups in Syria, we need to combat the brutal violence that the Syrian Government are perpetrating against those people. My question to the Minister is a simple one: what more can we do to help Syrians who are suffering human rights abuses and subjected to persecution for their religious beliefs, and to help the women and children and give them hope? We in the House always wish to give hope and, if it is possible, Minister, I think we would all appreciate hearing your thoughts on how we are to do that.
Madam Deputy Speaker (Caroline Nokes)
Order. Before I call the Minister, may I please remind Members not to use the word “you”—that means me!—and, specifically, not to refer to colleagues by name.
I call the Minister to wind up the debate.
Hamish Falconer
I thank Members for their contributions. Let me address some of the important questions that they have raised, particularly in relation to Captagon, chemical weapons, and whether we have achieved the right balance between sanctions and humanitarian aid. I will also deal briefly with some of the points raised about freedom of religious belief.
I pay tribute to the hon. Member for Witney (Charlie Maynard) for his maiden speech, and associate myself in particular with his comment about the Chamber being a confusing place for a newbie—and if it was me who made those mistakes, Madam Deputy Speaker, I apologise. We are closely monitoring the regime’s links with Captagon, as you will know—I am sorry; as the hon. Member will know. My apologies, Madam Deputy Speaker. In March 2024, we co-hosted a conference with Jordan and we are keeping the matter under close review. I should be happy to write to the hon. Member with further details, because it is of real concern. Also of concern, obviously, is the chemical weapons situation in Syria. Last week, I was pleased to meet the director general of the Organisation for the Prohibition of Chemical Weapons, and to make a further voluntary contribution on Syria specifically in relation to the significant problems that it poses in respect of chemical weapons. As for the concern about getting the balance right—
Alicia Kearns
Would the Minister be kind enough to write to me with the details of that voluntary contribution, so that I understand fully what contribution was made?
Hamish Falconer
I should be happy to do so.
I can assure the hon. Member for Honiton and Sidmouth (Richard Foord) that no assistance will be provided directly to the Government of Syria, and that we go to great lengths to ensure proper compliance with our sanctions regime. The hon. Member also referred to the strikes in Syria. The protracted conflict clearly poses risks of other regional tensions being played out, but we have made it clear to all parties that further escalation in the middle east must be avoided at all costs, and is in no one’s interests.
I understand and welcome the fact that the hon. Member for Strangford (Jim Shannon) and I will no doubt face each other across the aisle in debates on many issues, and I recognise his personal commitment to freedom of religious belief. We have provided, I believe, £14 million of assistance in respect of human rights monitoring in the conflict in Syria, I know how desperate some of the human rights issues are in the country, and we will continue to keep them under close review.
I hope and trust that the House will support the regulations, and I thank Members for that.
Question put and agreed to.
Resolved,
That the Syria (Sanctions) (EU Exit) (Amendment) (No. 2) Regulations 2024, (SI, 2024, No. 833), dated 29 July 2024, a copy of which was laid before this House on 30 July, be approved.
Transport
(2 months, 1 week ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Transport (Mike Kane)
I beg to move,
That the draft Renewable Transport Fuel Obligations (Sustainable Aviation Fuel) Order 2024, which was laid before this House on 24 July, be approved.
I want to take a moment to pay tribute to my former constituent Ken Eastham, who died recently at the age of 96. He served the people of Blackley and Broughton in this House from 1979 to 1997. He knew me as a child, and was delighted that I became a Member of Parliament. He worked diligently on behalf of his constituents. I will remember him, his late wife Doris, with whom I kept in contact, and his family in my prayers tonight.
As a fuel that can be used in existing aircraft, sustainable aviation fuel, or SAF, is one of the most effective ways of starting to decarbonise flights. The greenhouse gas emissions associated with the use of SAF are 70% less than those from fossil jet fuel on a life-cycle basis. This Government recognise the urgency of the global climate challenge, and the opportunities that are available from leading on the development of these technologies. It is a core part of our mission to make the UK a clean energy superpower, and it is one of the many steps that we are taking to decarbonise aviation, which include our plans for airspace modernisation. The SAF mandate will support the decarbonisation of the aviation industry by creating demand for SAF in the UK. The scheme has been developed over several years, during which there have been two formal consultations and significant stakeholder consultation. In July this year, we confirmed the detail of the proposed SAF mandate set out in the statutory instrument, and that was received positively by stakeholders.
The SAF mandate is one of several Government initiatives to support the development, production and use of SAF in the UK. The advanced fuel fund, for example, is currently supporting 13 UK plants with £135 million of grant funding. Additionally, the Government are introducing a revenue support certainty mechanism Bill, which was included in the King’s Speech and will support SAF producers who are seeking to invest in new plants in the UK. It will incentivise investment in UK SAF production, helping to drive growth across the UK, secure the supply of British-made SAF, and maintain the UK’s position as a global leader.
Alongside the potential for SAF to reduce carbon emissions on a life-cycle basis—compared to that of traditional jet fuel—there are significant economic benefits associated with the development of a domestic SAF industry. Industry research estimates that such development could generate up to 60,000 new jobs by 2050, adding up to £10 billion gross value added per annum. That supports our growth mission to kick-start economic growth across the UK.
The introduction of a SAF mandate marks an important step forward for the decarbonisation of the aviation sector. It will provide a long-term incentive for SAF use in the UK by setting a guaranteed level of demand, demonstrating the UK’s world-leading commitment to SAF uptake. It will also provide clarity for investors: a clear signal to develop SAF production facilities and more advanced SAF technologies in the UK and globally. Crucially, the mandate could reduce aviation emissions by up to 2.7 megatonnes of carbon dioxide equivalents in 2030, and by up to 6.3 megatonnes of CO2 equivalents in 2040.
Decarbonising transport is a key focus for this Government. It is central to the delivery of the UK’s cross-economy climate targets, and directly supports the Prime Minister’s mission to accelerate our journey to net zero. Delivering greener transport is also one of the five priorities that my right hon. Friend the Secretary of State for Transport has set out for the Department. This statutory instrument will deliver on our manifesto pledge to secure the UK aviation industry’s long-term future by promoting sustainable aviation fuels. It will impose an annual sustainable aviation fuel obligation on every company that supplies jet fuel over a certain threshold in a specified period. The SI will operate a tradeable certificate scheme, whereby the supplier of SAF is rewarded in proportion to its greenhouse gas emissions reduction.
To be eligible for certificates, the supplied SAF must meet strict sustainability criteria, including that it must be a residual waste or residue-derived biofuel, a recycled carbon fuel, a low-carbon hydrogen fuel or a power-to-liquid fuel. The certificates can be used to discharge a supplier’s obligation or sold to other suppliers. If this statutory instrument is approved, the SAF mandate will take effect on 1 January 2025. The SAF mandate will require 2% of jet fuel to be made from sustainable sources in 2025, 10% in 2030 and 22% in 2040. It is one of the world’s most ambitious frameworks to drive demand for SAF.
A successful and resilient SAF industry will need a range of technologies and feedstocks to meet increasing demand. The SAF mandate drives the diversity of technologies and feedstocks in two main ways. First, we will create space for more advanced fuels by setting a future cap on fuels that will be limited by feedstock supply. Fuels derived from segregated oils and fats are known as hydroprocessed esters and fatty acids. We recognise that HEFA will make an important contribution to meeting the SAF mandate, particularly in the early stages of the mandate. HEFA can contribute 100% of the SAF demand required under the mandate in 2025 and 2026. The cap will then gradually tighten, decreasing to 71% in 2030 and 35% in 2040. The mandate will still allow around 1 million tonnes of HEFA-derived SAF to be supplied each year in the UK from 2035.
Secondly, to accelerate the development of advanced fuels, a specific obligation on suppliers to supply power-to-liquid fuels will be introduced. Power-to-liquid fuels have a lower risk of feedstock competition and other negative environmental impacts. From 2028, the power-to-liquid obligation will be set at 0.2% of total jet fuel demand, increasing to 3.5% in 2040. Fuel suppliers will be able to meet their SAF mandate obligation in three ways: they can supply SAF and earn certificates, buy certificates from others who have supplied fuel, or pay a buy-out price. The buy-out mechanism will apply to both the main obligation and the power-to-liquid obligation, which will operate as a method of compliance if there is insufficient SAF supply in the market. This SI sets out the buy-out prices, which represent a significant incentive to supply SAF to the UK market. They are set at a level that encourages the supply of SAF over the use of the buy-out and set a maximum cost for the scheme, thereby delivering a greenhouse gas emissions reduction at an acceptable cost.
As I have mentioned, for fuel to be eligible for certificates, it must align with strict sustainability criteria and be made from sustainable wastes or residues. SAF produced from food, feed or energy crops will not be allowed. Suppliers must therefore report information to the mandate administrator to demonstrate compliance with the sustainability criteria for each application. The mandate administrator will have the power to not issue certificates if sufficient evidence is not provided. It will also have the power to revoke certificates if inaccurate or fraudulent information is provided, and to issue civil penalties to suppliers for lack of compliance.
The information that fuel suppliers provide must be independently verified before suppliers can apply for SAF certificates. To ensure that the design of the SAF mandate reflects the latest technological and commercial developments on SAF, there will be continuous monitoring of trends, and formal reviews will be conducted and published every five years, with the first review carried out by 2030. To support fuel suppliers, the administration of the SAF mandate is closely aligned with the administration of the renewable transport fuels obligation, which currently obligates suppliers of road fuels in a very similar way.
The Government recognise that sectors such as aviation are vital for achieving economic growth, shaping the future of clean energy and delivering for our communities. The development of the SAF mandate, alongside other priorities such as modernising our airspace, is a key part of this Government’s ambitious and pragmatic approach to decarbonising transport and promoting economic growth, ensuring that the UK continues to lead the way on SAF globally. I commend this order to the House.
Greg Smith (Mid Buckinghamshire) (Con)
In responding to this debate on the Renewable Transport Fuel Obligations (Sustainable Aviation Fuel) Order 2024, may I say at the outset that the transition to sustainable fuel is a topic that has had my interest for many years? Some may even say that I am very capable of becoming a complete bore on the subject, but I will not push the limits too far this evening. [Interruption.] The hon. Member for Easington (Grahame Morris) knows that all too well; we both served on the Transport Committee in the last Parliament. Our “Fuelling the Future” report championed sustainable and synthetic fuel, and I have put it into practice—in my case, on the road, rather than in the air, in a classic Land Rover powered by synthetic fuel—during my past two summer surgery tours. I draw the House’s attention to my entry in the Register of Members’ Financial Interests.
There is a clear and undeniable role for such fuels across all transport modes in our path to 2050. Aviation is possibly the most difficult to de-fossilise and decarbonise, but it is also ahead of the curve, because sustainable and wholly synthetic fuels are an innovation that enables everyone to continue doing what they want to do—flying off on holiday or to see family, going on a business trip or general motoring—in a cleaner and eventually de-fossilised, carbon-neutral way. We are not reinventing the wheel, but reinventing the fuel.
I assure the House that the Opposition are not looking to oppose this statutory instrument or divide the House on it—quite the opposite, as it is a continuation of plans set out by the previous Government. The development of sustainable aviation fuel was one of six key measures in the last Government’s jet zero strategy, which supported the growth of sustainable aviation fuel in our United Kingdom. The cost-benefit analysis produced by the Department for Transport before the general election suggested that the SAF industry could add more than £1.8 billion to the economy and create over 10,000 jobs in the country. A gradual transition to SAF is the correct way to go; we should require 2% of UK jet fuel to be made from sustainable sources in 2025, 10% in 2030 and 22% in 2040, and that should be incentivised through the award of tradeable certificates with a cash value. That said—it is rare that I make this comparison—the UK target for 2040 falls short of that set by the European Union, which is 34%.
The Conservative Government recognised that SAF may be more expensive than traditional jet fuel in the intermediate term. Our plan included a review mechanism to help manage prices and minimise the impact on ticket fares for passengers. My first question to the Minister is: can the Government reassure the House that the impact on passengers will be kept to a minimum, and can we ensure that they are not footing the bill? Provided that sufficient SAF is available, any increases in air fares as a result of SAF will fall well within the range of the usual fluctuations in prices that we see every year, and the previous Government had plans in place to prevent any major hikes. Can the Government confirm that they too will guarantee that there will be no major hikes in prices, so that we can transition to net zero in an affordable way, taking people along with us?
The Conservatives kick-started the UK SAF industry by allocating £135 million through our advanced fuels fund, which was funding 13 projects to reach completion and supporting our ambition to ensure that five plants were under construction by 2025. Will the Government provide an update on those projects, as they will be vital in helping us to move towards using sustainable fuel?
I urge the Minister to focus thoughts on how to ensure that the UK is a power hub for eSAF—to clarify, that is 100% synthetic aviation fuel—and to gently kick the tyres on whether we are progressing the technology as quickly as is humanly, financially and scientifically possible. We have significant players in this space in the UK, such as Zero Petroleum, which sits on the jet zero council and, indeed, holds a 2021 Guinness world record for “first aircraft powered by synthetic fuel”. Over the summer, I visited Zero Petroleum’s plant, where it produces engineering-level synthetic fuel, including aviation fuel, to hear about its progress and to better understand the obstacles in its way. It is essential that such innovators be empowered to grow, develop their fuels and provide green solutions and value to our economy.
Power-to-liquid SAF has a sub-mandate starting in 2028. We will reach 0.5% SAF by 2030 and 3.5% by 2040; that is slower and less ambitious than the European Union’s figure of 10% by 2040. Some experts have said that this suggests that the UK has a more cautious approach to power-to-liquid, and that the United Kingdom’s strategy focuses on monitoring progress under the mandate, and on us having the potential to revise targets depending on technological advances.
Where the SAF mandate, and the statutory instrument, could go further in future iterations is clear. According to the explanatory memorandum, if subsidised hydrogen is used to make eSAF, under the hydrogen production business model support scheme, SAF certificates cannot be claimed against the mandate. Without HPBM support, there is the risk that the cost of green hydrogen will be far too high for eSAF to be produced at a competitive price in the UK. Indeed, there is even the risk that the eSAF production cost will be above the eSAF mandate buy-out price. If the cost is above the buy-out price, that will mean that no UK eSAF plants will get built, so all the UK’s eSAF demand will be fulfilled by foreign producers.
The HPBM is needed to bring down the cost below the buy-out price under the SAF mandate. Both support under the HPBM and the revenue certainty mechanism are needed for UK eSAF projects to be bankable—for example, credit or potentially subsidy stacking needs to be explicitly allowed. This SI is clearly supportive of the power-to-liquid pathway. However, it would be prudent for the Government to express an intent to financially support domestic eSAF technology developers, such as Zero Petroleum or OXCCU—as opposed to project integrators—in order to give a boost to this much needed industry in the UK, as well as helping the country to benefit from the vast export potential of the technology. That could be through dedicated power-to-liquid technology grants, such as fuel synthesis, direct air capture specifically for fuel, and/or equity funding—for example, through the UK Infrastructure Bank. A further anomaly is that the Aerospace Technology Institute, which is UK Government-funded, is not permitted to deploy funds to power-to-liquid technologies. I put it to the Minister that that should be corrected.
We can be a powerhouse in the United Kingdom for SAF. The new Government are right to continue with the path set by the previous Conservative Government, so we support the motion, but the potential for the future is huge, and in the spirit of getting this right, I urge the Minister to consider the points that I have outlined, and to supercharge our great country’s role in this technology.
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
Before I call the next speaker, I remind Members that it is helpful for the Chair—not least me personally, but there will be other Deputy Speakers later—if you bob up and down. Even if I have your name on a list, it is helpful if you indicate that you wish to speak.
Grahame Morris (Easington) (Lab)
I will not detain the House too long—[Interruption.] Hooray! I just want to make a couple of points. As the shadow Minister, the hon. Member for Mid Buckinghamshire (Greg Smith), indicated, we both served on the Transport Committee in the last Parliament, and the Committee did quite a detailed inquiry on the sustainability of fuels in all sectors. We made several recommendations, and I do not believe that there is a cigarette paper—perhaps that is a non-PC term—between the two sides of the House on the issue, but I want to ask a couple of questions.
This subject is really complicated and is plagued with acronyms—HEFA, SAF, ATF, eSAF, HPBM, Jet Zero. I will not be tempted into aviation puns, but there are some important stats. As the Minister stated, estimates suggest that the sustainable aviation fuel industry could create up to 60,000 jobs by 2050—the shadow Minister said that there would perhaps be 10,000 new jobs, but that is in a longer timeframe. The shadow Minister also said that the SAF industry could contribute as much as £1 billion to the UK economy, but by 2050, it could contribute as much as £10 billion, so it is clearly a very important sector.
I am concerned about ensuring that sustainable aviation fuels under this mandate be required to meet the strictest sustainability standards. We must ensure that they are green fuels, and that there is a staged progression towards jet zero—we have heard what that is: 2% from 2025, 10% by 2030 and 22% by 2040—and we really must ensure that the greener fuels are responsibly sourced from the most sustainable locations, preferably in the United Kingdom. We had a debate last week about the launch of GB Energy and the importance of not exporting the jobs created through our efforts on decarbonisation. Will GB Energy play a role in some of these new technologies? We may well develop a hydrogen fuel cell that can produce green hydrogen much more cheaply, but in the meantime, to plug the gap, we must ensure that efforts are made to onshore as many of the jobs and benefits of this exciting opportunity as possible.
Madam Deputy Speaker (Caroline Nokes)
I call the Liberal Democrat spokesperson.
Wera Hobhouse (Bath) (LD)
I sense that there is a great deal of consensus across the House on this statutory instrument. There is consensus that the aviation sector is one of the hardest to decarbonise, and probably also that the new technology that is being proposed—SAF, in its different iterations—needs a great deal of technological knowledge. However, the principle of taking the first steps towards creating the SAF mandate—of the requirement for SAF to meet 2% of total jet fuel demand from 1 January, and of increasing that on a linear basis, to 10% by 2030 and to 22% by 2040—has no opposition, and we will absolutely support the Government in that effort.
Virgin Atlantic has already demonstrated that a plane can fly across the Atlantic on 100% SAF, but that was just one flight, and there are hundreds of flights every day. That is the challenge. I congratulate Virgin Atlantic on this groundbreaking achievement but we really need to see how industry, the Government and indeed everybody who is developing new technologies can produce sustainable aircraft fuels at the scale that is needed. This needs a great deal of investment.
We know that biofuels are not a long-term solution, as they compete with food production. SAF from waste, the next generation of SAF, is not a long-term solution either. It is obviously part of the solution, but as the shadow Minister has pointed out, the real challenge is to get to the third generation SAFs—that is, synthetic fuels. We need to develop them as soon as possible, and they need a great deal of electricity. Whatever we say about this, direct air capture needs a great deal of electricity. Producing hydrogen in a sustainable way—that is, getting to green hydrogen—will also need a great deal of electricity. The crunch in all this is: where is all that renewable energy coming from, unless we are ultimately overproducing renewable energy? I believe that GB Energy will have a big say in this and will be crucial in developing all the renewable energy that will ultimately help us to decarbonise the aviation sector. This is really the challenge.
While I welcome the kick-start of a journey to net zero in aviation, the 10% to 22% mandate between 2030 and 2040 is a concern for the Liberal Democrats. We want to get to net zero by 2045, but having planes still running on 78% fossil fuels is just not good enough. The UK has the third largest aviation network in the world and the second largest aerospace manufacturing sector. Almost 1 million UK jobs are directly or indirectly supported by the aviation sector. The future of the aviation industry with SAF is obviously a wonderful opportunity and challenge. Making the right choices on SAF will ensure that the UK can continue to be a global leader, and I think that we are as one across the House in wanting this to happen in order to make the UK the global leader in this area.
It is only right that we take these steps, which support decarbonisation and also create the jobs that we need in the future. What is important is that the Government collaborate with the aviation fuel suppliers to ensure that this initiative really succeeds. I would like to hear a little more detail from the Minister about how the Government will work alongside suppliers to make this a long-term success.
As I have said, we welcome this, but there are other examples of what we can do in the meantime to decarbonise the sector. For example, we could ban short-haul domestic flights on journeys that can be done by rail in less than 2.5 hours. Such a ban already exists in France, so it would be good if the Government at least looked at this. The cost of flying must be linked to the environmental cost. It is ridiculous that I can, at least on some journeys, fly 100 miles to a European city for less than it costs me to go by train from Bath to London. The Liberal Democrats would focus on those who fly the most to reduce the unfair burden on households who fly only once or twice a year. Plus, we would impose a new super-tax on private jet flights and remove VAT exemptions for private, first-class and business-class flights.
To conclude, while we welcome today’s introduction of the SAF mandate on 1 January, I urge the Government to review the targets set from 2030 to 2040 and to be more ambitious than what they are proposing today, so that by 2040 a much higher percentage of aviation fuel comes from sustainable aircraft fuel than the 22% that is currently proposed.
Madam Deputy Speaker (Caroline Nokes)
I call Steve Race to make his maiden speech.
Steve Race (Exeter) (Lab)
Thank you, Madam Deputy Speaker. May I take this opportunity to put on record my congratulations to you on your election and to pay tribute to the staff of the entire House, who have worked so hard to make us all comfortable and able to get on with our jobs in this very complicated and complex place?
I pay tribute to those who made their maiden speeches in previous debates today, including my hon. Friends the Members for Makerfield (Josh Simons) and for Macclesfield (Tim Roca) on this side of the House, and the hon. Member for Witney (Charlie Maynard) on the Liberal Democrats Benches. Given the hon. Member for Witney’s reference to the wool trade, and given that Exeter’s wealth in the middle ages was built on the wool trade, with the wool being brought down from Dartmoor, it is entirely possible that our two places had significant trading links in the past.
I am delighted to give this maiden speech as the new Member for Exeter—only the third in over half a century. In his own maiden speech, my hon. Friend the Member for Lincoln (Hamish Falconer), who was here earlier today, stated that Lincoln was the oldest parliamentary seat in the country, established in 1265. Exeter, another great cathedral and university city, is by comparison a mere whippersnapper, with our seat being established in 1295.
Of the many Members who have represented Exeter in the subsequent seven centuries, my immediate predecessor, Sir Ben Bradshaw, needs little introduction. He served the country diligently throughout his 27 years as a Member, including a decade as a Minister. Elected in the 1997 Labour landslide, he gained early notice as one of the first out gay men ever to be elected to the Commons. After a notorious campaign, Exonians in their wisdom rightly and roundly rejected the outrageous homophobia of his opponent, and I and many others here today are among the many proud successors of his trailblazing role.
Ben loved our city, and the city took him to its heart. He was re-elected six further times, and even this July, despite no longer being the candidate, he was as active knocking on doors as he has ever been and as popular as ever. I might have been having a particularly difficult conversation on a doorstep, but the face of even the most hardened and sceptical voter would light up as Ben marched past in his canvassing uniform of cargo shorts and a check shirt, usually whistling the theme tune from “The Great Escape”. Hugs were exchanged, selfies taken and heartfelt thanks expressed. He is almost universally accepted as having done Exeter proud. He has certainly been a friend and mentor to me over nearly two decades, and I thank him for that.
Ben took particular pride in the turnaround in Exeter’s education under his watch, something to which, as MP, he made a huge contribution. By 2010, not only had every single state secondary school in Exeter been rebuilt, but a new leadership culture had been established where low attainment became unacceptable for our young people in every single part of the city. From having some of the worst state secondary schools in the country, Exeter secondary schools became some of the most improved, to which the most recent exceptional GCSE results bear testimony.
Exeter can now also boast one of the best further education colleges in the country—again, as our recent A-level and T-level results show—a vital but, in much of Britain, badly neglected element in providing wider opportunity for young people, including those who choose alternative routes into work. As a school governor at Willowbrook primary school in Exeter, which serves one of our most economically deprived neighbourhoods, I also pay tribute from first-hand experience to the primary school teachers everywhere, who go above and beyond to give their young children the very best start in life.
This turnaround in Exeter’s education system did not happen by accident. It took hard work, strong leadership and a collaborative culture. I would like to thank some of our leaders for everything they have done to give our young people better life chances in Exeter. They include Moira Marder at the Ted Wragg Trust, John Laramy at Exeter College and Molly Marlow at Willowbrook primary school. And of course, I want to pay tribute to the politicians, including former Devon county councillor Saxon Spence and the then Schools Minister Lord Adonis, who had the vision and the ability to deliver for Exeter.
Exeter’s standing in learning goes beyond our schools system. Next year, the University of Exeter celebrates the 70th anniversary of its royal charter. In that time it has grown to be an outstanding institution, now with well over 30,000 students, but it builds on a tradition of an unbroken history of learning and academia stretching back at least to the 10th century. In Exeter cathedral rests the Exeter Book, an exquisite anthology of Anglo-Saxon poetry and riddles that is still the largest known collection of Old English literature. It is recognised by UNESCO as one of the world’s principal cultural artefacts, making Exeter a UNESCO city of literature.
Today, five of the world’s top 21 climate scientists are UK based and all of them work for our globally renowned University of Exeter and the Met Office. Along with these two institutions and a growing ecosystem of businesses, Exeter is home to a large and ever-growing research and innovation base that is at the forefront of combating and mitigating the effects of climate change. It has become fashionable in some circles to denigrate our universities. I reject this entirely: they stand as beacons of intellectual excellence, the future success of our knowledge economy and the hope of wider educational opportunity for many people.
A good education is what helped me to become a Member of Parliament. I grew up in a council house with my mum, who spent her entire childhood in care, and I was the first in my family to go to university, so I pledge to work with all our education leaders to make sure that every young person in Exeter has the best education to help them to reach their potential. I want this Labour Government to deliver an equivalent leap forward in educational opportunity that their predecessors achieved for their time in 1945, 1964 and 1997.
In relation to this debate, Exeter University is home to the centre for future clean mobility, a partnership with business to develop low emission power systems for the aerospace and automotive sectors.
Our university is also world leading in genomics research. One of the main reasons I am in politics, as a Labour MP, is my sister. She was born when I was 10, and when she was a year old, she was diagnosed with Hurler syndrome, a rare genetic condition with no cure. Given a life expectancy of around five years, she finally died two days short of her 10th birthday. Much of her life was spent being cared for by the NHS and our local children’s hospice, and I will be eternally grateful for everything they did to give us so much more time with her than we expected.
At the time of my sister’s birth, we understood genetic conditions but did not yet have the tools to help. The human genome was finally mapped just a year before she died, and that same year the first enzyme replacement therapy trials for her condition commenced in the UK. People born today with my sister’s condition have a range of treatment options to help to make their life more comfortable and more fulfilling. I am particularly proud that Exeter University, in partnership with our local NHS trust, is at the forefront of this new wave of innovation.
We know that scientific research and innovation, whether on tackling climate change or in medical advances, will make the lives of people in this country and around the world better, but the Government have to recognise the vital role of our universities in economic growth and take advantage of the many opportunities for partnership with the NHS and across the public sector.
I know that this Government will understand the need to ensure that the UK continues to be at the forefront of scientific endeavour; and, as a pro-European, I believe that this is where Britain can make a huge contribution, working with our European friends and partners despite the tragedy of Brexit. I also ask that Ministers recognise that Exeter and the wider south-west have the talent and the institutions in which to invest to ensure that the UK remains at the cutting edge of UK and European innovation.
To succeed in these endeavours we also have to recognise that diversity is a strength, so building communities together on the principle of equality for everyone is vital to our success. In Exeter, the university and the local council play an important role in bringing people together. We have a thriving mosque and Muslim community. We have welcomed hundreds of Ukrainian and Hongkonger families over recent years, and we have large and growing Kurdish, Afghan and Nigerian communities, among others. Everyone brings something new and positive to our city, and I love nothing more than our annual Respect festival—a celebration of all our many communities—and our Pride parade. Inclusive Exeter, a community interest company, also plays an important role in bringing communities together. Exeter has become a true beacon of living well together.
It is a privilege and an honour to represent all the people of Exeter in this place, and I thank them for their vote of confidence in sending me here. I also thank my local activists and, of course, my family and friends, some of whom are in the Gallery, for all their support over the years. Without them I would not be here.
Exeter is a happy and optimistic place, and I hope to do it proud by serving it as conscientiously and as successfully as my distinguished predecessor.
Madam Deputy Speaker (Caroline Nokes)
I call Lee Dillon to make his maiden speech.
Mr Lee Dillon (Newbury) (LD)
I congratulate the hon. Member for Exeter (Steve Race) on his maiden speech. My hometown of Thatcham was recorded in “The Guinness Book of Records” in 1990 as the country’s oldest continuously inhabited settlement, dating back some 3,000 years, although it is not quite a parliamentary seat. I pay my respects and tribute to his sister. I will also reference my sister and her reliance on the NHS.
I have been in the Chamber for many maiden speeches, and I have been impressed by them all. I congratulate them on sharing their passions and their local knowledge.
Newbury has returned a Member of Parliament since 1835 but, following the recent boundary changes, the constituency has lost the south bank of the Thames at Streatley and villages including Compton, West Ilsley and, pertinent to me, Hampstead Norris, the village of my grandparents, but I know they are safe in the stewardship of the hon. Member for Reading West and Mid Berkshire (Olivia Bailey). However, we have retained our market towns of Newbury, Thatcham and Hungerford, alongside our beautiful villages of Lambourn, Peasemore, Inkpen, Hermitage, Chieveley and Cold Ash, where I went to primary school, to name but a few.
My constituency has a proud racing heritage, with Lambourn training some of the world’s best racehorses and Newbury hosting one of the most prestigious horse races in the calendar. In Hungerford you can spend the afternoon antique shopping, and in Thatcham you can visit one the largest inland reed beds in southern England, home to internationally important species.
We are also home to Vodafone, one of the global leaders in telecommunications. Xtrac in Thatcham supplies Formula 1 components, and Stryker is one of the world’s leading medical technology companies. Away from cutting-edge technology, we also have: traditional craftsmanship at companies like Benchmark in Kintbury, which has been building and designing furniture for over 40 years; delightful country homes like Welford Park, which is home to “The Great British Bake Off”; and one of the most unique and beautiful theatres in the country, the Watermill at Bagnor.
And, of course, we are supported by many great charities: Greenham Common Trust, the Community Furniture Project, Eight Bells for Mental Health, local alms houses and, sadly, West Berkshire food bank and Newbury soup kitchen, which are needed to help a growing number of local residents. We also enjoy being surrounded by the area of outstanding natural beauty and 200 of the most precious chalk streams in the country.
In giving our maiden speeches, we all like to claim the beauty of our own area, but the author Bill Bryson has it spot on and may be able to stop future disagreements in the Chamber. In “The Road to Little Dribbling” he writes:
“There isn’t a landscape in the world that is more artfully worked, more lovely to behold, more comfortable to be in than the countryside of Great Britain. It is the world’s largest park, its most perfect accidental garden… All we have to do is look after it.”
As a member of a political party with a proud heritage of standing up for the environment, I can assure hon. Members and my constituents that I will do my bit in this place to make sure that we do look after it. The decision that I believe will conclude this debate, given the cross-party support, will contribute to that ideal. I welcome the proposed changes.
As the Member for Newbury, I will uphold our traditions and protect our environment, because without them the Newbury constituency would not be what it is—a balance between our environment, our traditions and our ability to innovate. These were also supported by my predecessors.
My immediate predecessor Laura Farris—strangely, I saw her in Central Lobby just before coming to the Chamber—delivered meaningful change in this House on sexual abuse and violence against women. She secured new laws on sexual violence in the Domestic Abuse Act 2021 and campaigned for tougher sentences for fatal domestic abuse. It is a further credit to her that the handover to me was as smooth as one could have hoped for. I wish Laura and her family all the best for the future, and I am sure she will continue to make a difference.
Richard Benyon, now Lord Benyon, served Newbury from 2005 to 2019 and has always been open and approachable, offering me some early advice when I was first elected. The Liberal Democrat David Rendel held the seat following a then record-breaking by-election—my party is rather good at those—from 1993 to 2005, and I ran with him in my home ward back in 2007, starting my electoral journey in West Berkshire.
All three predecessor cared deeply about Newbury and West Berkshire, as I do, too, but in new times there are new challenges. The Royal Berkshire hospital in Reading is in great need of replacement, and I look forward to a swift review of the new hospitals programme. The West Berkshire community hospital in Newbury is willing to do more so that diagnostic services can be provided locally. Without the NHS, my sister, Michelle, would not be here today. We need to cherish it, fund it and modernise it.
Despite our apparent wealth, we have pockets of poverty in Newbury. As I alluded to earlier, we are seeing an increase in the use of food banks and soup kitchens, the cost of living is still hurting and the proposed removal of the winter fuel allowance will compound that problem even more, despite our best efforts to get those who are entitled on to pension credits. House prices have soared and are now over 10 times the average salary, increasing demand for rented homes and adding pressure to housing waiting lists. The ability to have a warm and secure home is the foundation of a settled life. Children learn better, crime is lower and community cohesion is stronger when people have a settled community. I have worked in the social housing sector for the last 14 years. We must do more to deliver much needed homes for social rent.
I wish to conclude my speech by giving a small round of thanks. First, I thank my constituents for entrusting me with the honour of representing us here, and my local team for engaging in so many positive conversations on the door steps. I will endeavour to pay back their support with my deeds in the House. To my wife, Gemma, and my children, Oliver, James and Eleanor, I say thank you for your constant support and love that has allowed me to fulfil my dream of being the Member of Parliament for my home.
As a 16-year-old, I arranged a visit to Parliament. As we were being shown around the Chamber, we came past the Opposition Front Bench and a school friend cheekily sat down. I will not use parliamentary privilege to name him but he encouraged me to do the same. You will be pleased to hear that I declined, Madam Deputy Speaker. However, I said that I would sit there if I ever got elected. Well, 25 years later, I can now rightly take my place on the famous green Benches, so some dreams do come true.
As the son of a trade union official, I suspect I was always going to end up in a role where I could speak truth to power. I thank my father, Raymond, for instilling in me a sense of fairness and a belief that we can make change happen. My mother, Geraldine, and step-father, Colin, have supported me in every election I have stood in—I thank them for being there for me, keeping me honest and reminding me that it is nice to be important, but it is more important to be nice.
Madam Deputy Speaker (Judith Cummins)
I call James McMurdock to make his maiden speech.
James McMurdock (South Basildon and East Thurrock) (Reform)
Thank you for the opportunity to address the House, Madam Deputy Speaker. I thank the hon. Members who have already spoken today, whether about falling foul of a wasp, what levers to pull—I can certainly empathise with that—or genuine courage, which we can all agree is absolutely necessary in this House. I thank them all for their words.
I start by thanking my predecessor, Stephen Metcalfe. I extend to him my gratitude, not least for his gentlemanly conduct throughout the campaign. He was gracious and dignified throughout, so it is easy to understand why he was, as far as a politician might expect, well liked by both MPs and constituents.
As we navigate life’s milestones, it is natural to become philosophical. First and foremost, I am a husband and a father. While no professional achievement rivals the significance of personal events such as childbirth, being given the tremendous opportunity to serve our country and constituents, those in need and, if we do our jobs right, those whom we can help to avoid need altogether, comes close.
Speaking of fatherhood and childbirth, I draw hon. Members’ attention to the tremendous work done by the Basildon university hospital, a place where miracles are commonplace. It is the place where my children were born and where, at one time or another, virtually everyone I love has been nursed back to health. I extend my heartfelt appreciation, admiration and respect to everyone who works there.
Since its inception as a constituency, people in South Basildon and East Thurrock had always voted blue, until they chose turquoise for the first time this July. To stand here today, I had to overcome a previous winning margin of 19,922. My own winning margin was less dominant: it was one of the tightest in the country, at just 98 votes. A swing that large is strong testament to the importance of listening to the people who put us here—all of them. That is a lesson I will not forget.
It goes without saying that I did not achieve that swing alone. Although I would like to think that my efforts, and those of my mother, who marched tirelessly next to me, handing out fliers in the baking June sun, earned me the 100 or so votes that got me over the line, the vast majority of that shift was carried by my colleagues and fellow Reform UK MPs. Their tireless championing of the British people is something we should stive to emulate. I am extremely grateful to them. Although, as my hon. Friend the Member for Clacton (Nigel Farage) has said, this has ruined my life, I would not have it any other way.
I am eternally grateful to the good people of South Basildon and East Thurrock for sending me here. I intend to repay their trust by being open and honest, accessible and available. Never has it been more important to reconfirm that they have the right to a voice. It is my duty to hear it and protect their right to it. Having volunteered to stand as a parliamentary candidate on 4 May and having been invited to stand on 4 June, it is poetic that my seat was one of the last to be called in England, having to endure three counts. I might add that I won all three.
South Basildon and East Thurrock is a beautiful cross-section of this country. Situated just 30 miles east along the Thames from this beautiful Palace, it is an area of great natural diversity, joyfully combining the new with a rich and varied history, rural and industrial. South Basildon and East Thurrock boasts Europe’s largest Amazon centre as well as glorious countryside and a prime location on the Thames. Many of our quaint villages have historical significance. Horndon-on-the-Hill is mentioned in the Domesday Book of 1086 and one of the earliest uprisings that led to the peasants’ revolt took place in Fobbing in 1381. Those uprisings marked the beginning of the end of serfdom. I am hopeful that the lessons taught to the ruling class then never need to be relearned.
How appropriate it is then that I have the privilege to stand and champion the core values that so many from my home hold dear: independence, equality of opportunity, upward social mobility, courage, long suffering, honesty and forgiveness. I am grateful to champion these qualities not just because I believe in them but because I have benefited from them. I was the first in my family to go to university. I have been shown forgiveness, given opportunity and climbed upwards. As the door was opened for me, I will help hold it open for others.
Most importantly, I must thank the wonderful women in my life: my late grandmother, a survivor of the blitz, who dedicated her life to her family, and my mother and sisters, whose strength, courage and determination inspires me. I have not written this down, but I had better mention my mother-in-law.
James McMurdock
To my wife, the mother of my children, who in a crowd of powerful women stands as the most glorious of all, you are my strength, my light and I love you with all my heart. To my father, brother and late grandfather, who fought for this land and spent his last years in peace in the constituency I now represent, and to the rest of my big, wonderful, eclectic family, thank you for mocking me so ruthlessly that my feet will never leave the ground.
If hon. Members will forgive me, I will now fulfil a dream nearly a quarter of a century in the making and end by misquoting the immortal words of Ali G —“R-E-S-P-E-C-T.”
The Parliamentary Under-Secretary of State for Transport (Mike Kane)
My goodness, it is a pleasure to see you in the Chair, Madam Deputy Speaker. Congratulations on your election.
It has been a collegiate debate and I am grateful to all the hon. Members who have attended. I am grateful to the Opposition for their support. I say to the hon. Member for Mid Buckinghamshire (Greg Smith) that I am looking forward to a picture on his social media of his SAF-powered Land Rover as he goes canvassing in his constituency—that is a must-see for us all.
Mike Kane
That is good news. The issue has had good cross-party support: when I was in opposition, I supported the Government on it.
In his maiden speech, the hon. Member for Witney (Charlie Maynard), who is no longer in his place, thanked his predecessor, and I put on record my own tribute to the former Member for Witney; he undertook my current role with diligence, care and good humour and I wish him the best for the future.
Really, this legislation was set out by the Labour Government in 2003 in the aviation White Paper, “The Future of Air Transport”, in which we talked about the future of decarbonising aviation for the first time and about bringing in new sustainable fuels.
The shadow Minister had some specific questions. He asked about ticket prices. The Government recognise that SAF will be more expensive than traditional jet fuel, and it is right that the costs, as we have agreed in the past, are borne by the polluters—they will not be borne by the Government. I think the figures are that, by 2030, we expect tickets to be £4 more, which will be a 2% increase, and by 2040, we expect them to be £10 more, which will be a 5.5% increase. Before Mayor Burnham re-regulated the buses in Greater Manchester, a person could fly from Manchester airport to Dublin for £12.99 but they could not cross my conurbation on a bus and change transport providers for that amount of money. The shadow Minister was right to raise that point, but the increase is negligible.
The shadow Minister asked about the future fuel funds. We have seen some great things going on in private industry. In the north-west of England, we see Fulcrum BioEnergy producing sustainable aviation fuel at Ellesmere Port; we see Velocys in the north-east doing it at Immingham—I will come to my hon. Friend the Member for Easington (Grahame Morris) in a minute—and Alpha Air doing it in Teesside. That is really good for the regeneration of post-industrial areas in parts of the north of England.
The shadow Minister talked about power to liquid. Yes, that is the future. In my speech, I set out some ambitious targets that we will have to meet to reduce the HEFA and improve power to liquid. He asked about our ambition. The UK does not want to be at a competitive disadvantage, which is why we have carefully balanced the HEFA cap in a way that recognises that HEFA is, currently, the only commercially available type of SAF, but that does not mean that we cannot go further and faster. I mentioned in my speech that there will be reviews every five years, starting in 2030, so I hope that that satisfies the Opposition. I am grateful for their support in this area.
Let me turn now to my hon. Friend the Member for Easington. I always like to thank him for his contribution to transport debates; he is always in these debates. He is a stalwart when it comes to transport issues and he is really considered. He is right that there are too many anagrams in the field of sustainable aviation fuel. When the Conservatives were in power, they always talked about the bonfire of regulations. Perhaps we should start the bonfire of anagrams. My hon. Friend is not wrong, but we will have to see. He did say that these are good, sustainable industrial jobs in parts of the country where we need them. That is what SAF brings us and that is what the Government are trying to achieve.
I also thank the Liberal Democrats for their support on this issue. We are working with suppliers. I have had roundtable discussions with suppliers, particularly in opposition, and there is more to come in government. I have mentioned some of the companies that we were working with. This is an ambition, but I think that we can go further and faster. The figures that I gave are not set in stone. We should be promoting new technologies, because there are new technologies beyond this area. There is hydrogen battery power. When it comes to UK emissions, would it not be a great day when a Minister can say that there will be no carbon burned in any planes flying internally within the UK? That would be a great place to be.
As a north of England Member, however, I have to disagree with the idea that we should stop people flying because there is a train. That might be fine in an area where there are great, reliable train services, but I invite the hon. Member for Bath (Wera Hobhouse) to come on my Avanti train occasionally to see how unreliable and how poor that service is. We have to keep it in mind that, one day in the future, we will improve the rail services through our great British rail Bill, but at the moment we have absolutely no plans as a Government to stop people flying.
Mike Kane
I thank the hon. Member for his intervention, but I am grateful for small mercies; the Liberal Democrats are supporting this move. I thank the former Minister, the right hon. Member for Basildon and Billericay (Mr Holden) for his time in the Department and in this role.
To my hon. Friend the Member for Exeter (Steve Race), I say very well done. What an excellent and considered maiden speech he made. The personal testimony about his mother and his sister was really poignant. That speech will stand him in good stead. I was, however, a bit perturbed to hear about the former Member for Exeter, who was a passionate advocate of sustainable aviation in this place, whistling the tune to “The Great Escape” while out canvassing. A day probably does not go by in this place without one of us whistling “The Great Escape”. I was once taught by a sage old Whip that most MPs spend their whole life trying to get here and then the rest of the week trying to get away. I say to my hon. Friend the Member for Exeter again that that was a really great, well-considered maiden speech, and I wish him all the very best for his years ahead on these Benches.
That speech was followed by another very well-considered maiden speech from the hon. Member for Newbury (Mr Dillon). I do not think that anyone can beat the fact that he has the home of “The Great British Bake Off” in his constituency. That is amazing and no Member can beat that. When it comes to our beautiful chalk streams such as the ones in Newbury, or to our skies, it is our sacred mission to protect our environment for future generations. That is why we must keep talking about decarbonisation, which is what we are doing here tonight. I say very well done to the hon. Member and I wish him well for the future.
Finally, let me come to the hon. Member for South Basildon and East Thurrock (James McMurdock). I, too, pay tribute to his predecessor, Stephen Metcalfe. My first speech in a Bill Committee up in a dusty corridor was terrible and he wrote me a note saying, “Really well done, Mike”, and I still have that note on my wall today. What a lovely, lovely man he is. I congratulate the hon. Member, who raised the subject of childbirth and early maternal care, which we should come back to a lot more in this House in the future; there is still a lot more to do in that area. He may be a latter-day Wat Tyler, with the peasants’ revolt quote, but on a personal level I hope that there is not a great rising of Reform. However, I wish the hon. Member the best for his career in this place.
I thank Members again for their consideration. For those questions where it has not been possible for me to provide a response today, I ask Members please to let me know and I will write to them. SAF presents a key opportunity to decarbonise UK aviation and secure a long-term future for the sector. These draft regulations demonstrate how we can capitalise on this opportunity. Mandating the use of SAF has the potential to generate significant greenhouse gas savings, and ultimately play a pivotal role in achieving net zero. I commend this order to the house.
Question put and agreed to.
Resolved,
That the draft Renewable Transport Fuel Obligations (Sustainable Aviation Fuel) Order 2024, which was laid before this House on 24 July, be approved.
Madam Deputy Speaker (Judith Cummins)
We now come to the next item of business. I call the Minister to move the motion.
Medicines
(2 months, 1 week ago)
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The Minister for Secondary Care (Karin Smyth)
I beg to move,
That the draft Human Medicines (Amendments Relating to Naloxone and Transfers of Functions) Regulations 2024, which were laid before this House on 29 July, be approved.
I, too, congratulate you on your election, Madam Deputy Speaker; it really is a pleasure to see you in the Chair.
The draft statutory instrument will amend the Human Medicines Regulations 2012 to expand access to naloxone: a lifesaving medication that reverses the effects of an overdose from opioid drugs. In addition, the SI will keep the regulations current by updating references to Public Health England and the Health and Social Care Board, following the dissolution of those bodies.
Hon. Members will no doubt know of the devastating impact of illicit drugs. Drugs destroy lives, tear families apart and make our streets less safe. Almost 3,000 people died of drug misuse in England in 2022—the highest number since records began in 1993. Drug misuse deaths have doubled over the past 10 years, and people die from drug misuse at a tragically young age, often in their 40s. Almost half of drug misuse deaths in 2022 involved opiates such as heroin.
These deaths are avoidable. Dedicated drug treatment services provide the path to recovery, and my Department is continuing to invest in improvements to local treatment services, which have faced significant cutbacks. We also know that over half the people struggling with opiate addiction are not engaged in treatment at all. That means that significant numbers of an incredibly vulnerable population are at increased risk of accidentally overdosing and dying.
People who experience addiction often have multiple complex needs, and we know that there is a strong link between addiction and deprivation. The rate of drug misuse deaths in the most deprived areas of England is almost three times higher than in the least deprived. Nearly a third of people in treatment for drug or alcohol problems reportedly have a disability, around one in six have a housing problem, and around 70% have a mental health treatment need. Tackling this issue supports the Government’s health mission, ensuring that people can live longer, happier lives, as well as our collective efforts to break down barriers to opportunity and create a fairer society.
Naloxone is a highly effective antidote against opiate overdose. It can be administered quickly and safely by anyone in an emergency, but currently exemptions in the human medicines regulations targeted at specific providers enable supply only by drug and alcohol treatment services, which limits the reach of this lifesaving medicine. Widening the statutory framework will mean that more services and professionals are able to supply this medication. That means easier access to it for people at risk and their loved ones. In short, the legislation will save lives. We are already seeing the benefits of professionals outside the health service, such as police officers, being able to administer naloxone. North Yorkshire police have already saved seven lives since April, when naloxone was rolled out across the force.
The draft instrument proposes two key UK-wide changes to existing regulations. First, it will expand the list of services and professionals named in the regulations who are able to give out naloxone without a prescription. In short, that means that professionals such as registered nurses and probation officers will be able to provide take-home supplies of naloxone where appropriate, should they wish to do so. Secondly, we propose to establish national registration services across the whole of the United Kingdom. That will enable all other services and professionals who are unable to be named in the legislation, including housing and homelessness services, to register and procure naloxone, subject to the passage of this statutory instrument. I look forward to working with colleagues across the devolved Governments on this important issue; I thank them for their work to date, and their continued support.
I reassure hon. Members that we are not compromising on safety with these changes. This is an extremely safe and effective measure, even when administered by a layperson with no prior experience. It has an effect only if the person has taken opioids, and is already widely used across the UK and internationally. We are taking steps to mitigate any, very limited, risks associated with wider access. We will provide updated guidance for services in scope, and set out robust requirements for training and safeguarding. The new powers are enabling but not mandatory. The intention is not to create new burdens for services, but to provide an opportunity for provision based on local need. I am confident in the support for the changes across sectors, which was evident in the responses to my Department’s consultation earlier this year, over 90% of which were in support.
I recognise the long-standing calls for these changes among experts in this area. For instance, the Advisory Council on the Misuse of Drugs is an independent expert body that advises the Government on drug-related issues in the UK. In 2022, it published a review of naloxone implementation that called for more work to widen access to the medication. Similarly, Dame Carol Black’s independent review of drugs also highlighted expansion as a vital harm-reduction measure. I pay tribute to Dame Carol for the work that she has done to drive improvements in drug treatment and recovery, and express my gratitude for her continued advice and expertise.
The importance of this work only continues to increase as time goes on. Hon. Members may be aware of the growing threat posed by synthetic opioids. These synthetic drugs, such as nitazenes and fentanyl, are often more potent and more deadly. The Government are taking a range of steps to prevent the rise of these dangerous drugs in the UK, but the availability of naloxone will be vital to our ability to respond and save lives.
Addiction is not a choice. It is often fuelled by wider issues, such as trauma and housing instability. This is a complex public health issue and must be tackled as such. We must change the narrative on addiction to one that is about preventing drug use, reducing harm and enabling recovery. The changes in the legislation are simple and low risk, but have the potential to save countless lives. On that basis, I commend the draft regulations to the House.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
It is not often that one speaks in this place on changes to the law that will have the direct result of saving lives, but once the draft regulations pass, as I hope they will this evening, we expect them to save many peoples’ lives. Today is a very special occasion. I do not say this to disparage people who work in the public health industry, but at its core, public health is not about flash or pizazz; it is about incremental changes that make a real difference to people’s lives, and have an ongoing, cumulative effect. Naloxone reverses the effects of opiate intoxication or overdose. It stops people from dying of accidental or deliberate overdoses of heroin and other opiate drugs, and opiate medications. It is quite literally a life-saving medication. Accordingly, it is one of the World Health Organisation’s essential medications.
Tomorrow is World Suicide Prevention Day, so I am pleased that we are supporting and debating a motion to expand access to and administration of a vital antidote to opiate poisoning. Suicide is the biggest cause of death in men under the age of 50. The stats vary, but while I was looking for the best and most recent data, I read that around three quarters of suicides each year are by men, and that suicide is the biggest killer of under-35s, impacting people from all walks of life. Many people are affected by such deaths. On World Suicide Prevention Day, we remember all those affected by suicide, and the work that we need to do to reduce suicides through public health measures and mental health service provision and treatment.
The use of highly addictive, lethal opiates, perhaps in combination with other substances, is often responsible for death as a consequence of drug misuse. In 2022, opioids were involved in 73% of drug misuse deaths in England, and 82% in Scotland. The last Government worked very hard to make progress on reversing the upward trend in drug poisoning deaths. Our 10-year, cross-departmental drugs strategy, published in 2022, aimed to prevent nearly 1,000 deaths in England by 2025. The naloxone roll-out has been highly effective in reducing drug misuse deaths by treating the effects of opiate overdoses.
There have been several regulatory changes that have expanded access in the last decade. Under the last Government, the Human Medicines Regulations were approved in 2012 to regulate the supply and use of drugs in the UK. That was followed by further amendments in 2015 and 2019, which focused on expanding access to naloxone for emergency use. The last Government then called on Dame Carol Black to lead an independent review of drugs policy. I thank Dame Carol for her work in this space, and indeed everyone working in this area, and those who contributed to our consultation earlier this year.
One of Dame Carol’s key recommendations was that more individuals supporting drug users be able to access and give out naloxone. I am pleased that she welcomed the proposals to expand access to naloxone earlier this year. When we launched a consultation seeking views on improving naloxone access through named services and professionals, as required by the Medicines and Medical Devices Act 2021, there was strong support. There were over 300 responses, of which a third were from organisations and over 200 from individuals and professionals. More than 80% were supportive of improving access through named services and professionals, and of introducing registration with a naloxone supply co-ordinator.
I am pleased that Ministers have followed the direction of the previous Government in legislating to expand access to naloxone to more healthcare professionals and services, as they want and need it. That will build on work across the UK to reduce the scourge of drug-related deaths caused by opioids. On this legislation, the Government will have the support of His Majesty’s loyal Opposition, and I encourage all colleagues from across the House to give it their backing.
Of course, I have a question for the Minister about training, which is critical. During my psychiatric training at medical school, a key thing instilled into my head about the use of naloxone is that it is a wonderful drug for the first 30 minutes, but then it starts to wear off. It has a short half-life—the time that it takes to leave the body—and then the effects of opiate overdose can start to reoccur, especially when we are talking about long-acting opiates, so although it fixes one problem, another problem is coming down the track. The patient must have adequate treatment quickly so that they do not suffer after effects when naloxone wears off. Can the Minister reassure me that for those involved in the administration of naloxone kits and aftercare—she mentioned families, and broader access for homelessness charities—the training component is as secure as possible, so that everything is done to avoid further drug-related deaths?
Madam Deputy Speaker (Judith Cummins)
I call the Liberal Democrat spokesperson.
Bobby Dean (Carshalton and Wallington) (LD)
It is good to a hear consensus building across the House on naloxone because, as we have heard from other Members, it is a lifesaver. Since its roll-out in the UK, that highly effective antidote to opioid intoxication has doubtlessly saved hundreds of lives and prevented many more harmful overdoses, as organisations working in my community have known for some time.
On the day that my local branch of Cranstoun—the harm reduction charity—received its first supply of naloxone, staff members noticed that someone was overdosing in the reception area. They were still unpacking the pallet, but they were able to get access to the medicine, administer it, bring the person back around, and then help them further. Within an hour after that vital medication was received, it potentially saved a life in my borough. The local staff describe naloxone as a game changer. That is why I and the Liberal Democrats welcome this motion to expand access to that vital treatment.
Naloxone is not a difficult drug to administer: just 30 minutes of training can be enough to equip somebody to treat a person in need. Naloxone is also low-risk. The person administering it does not need to know for sure what drug someone is on: if they have taken an opioid, Naloxone will help; if they have taken something else, it will likely do no harm. The combination of it being easy and safe to use, along with its life-saving potential, means that, as long as the correct training is given, it is common sense to get naloxone into as many hands as possible. That is particularly true given the frightening rise of the use of synthetic opioids, such as nitazenes, in our country. Most people are aware of the dangers of one particular opioid—heroin—but the crackdown on supply in Afghanistan means that a new synthetic alternative is rapidly taking its place in the market. Nitazenes are estimated to be anywhere between 30 and 500 times as potent as heroin. That is scary. If we do not act fast, we could be dealing with a national emergency comparable to the fentanyl crisis sweeping across the United States. Although I welcome the measures, this urgency means that I must encourage the Government to think quickly about going further.
The expanded roll-out of naloxone to police, prison, probation and youth justice services is welcome, but I ask the Minister to monitor the success of that expansion closely, to listen to the organisations on the ground, and to keep under review whether it is practical and desirable to expand access even further. For instance, some charities have called for taxi drivers and nightclub door staff to be able to access if they want it. That would have to go alongside the appropriate training, so that they can recognise the effects wearing off in 30 minutes. If that training is in place, we should expand access further still. If we build the evidence base, we can be led by it and ensure that harm reduction measures reach as many people as possible.
Going further also means taking a whole-system approach to drugs policy—from appropriate sentencing to investment in addiction services and other specialist support for users. We have tried the tough talk and the war-on-drugs route in this country, but they have left us with one of Europe’s worst drug-related death rates. If we transferred the departmental lead on drugs policy from the Home Office to the Department of Health and Social Care, it would go a long way towards our recognising that our drugs policy should ultimately be driven by the desire to reduce harm and save lives. The Liberal Democrats support this measure to improve access to naloxone, and I thank the Minister for bringing it forward.
Jim Shannon (Strangford) (DUP)
I thank all those who have made maiden speeches and valuable contributions today. As the Democratic Unionist party’s health spokesperson, it is important that I speak on this issue to provide, as I always do, a Northern Ireland perspective for the Minister, the shadow Minister and all others who have spoken. The experience in Northern Ireland mirrors that in the rest of the United Kingdom. I add my support for what the Minister has brought forward—nobody in the Chamber is unable to see the benefits.
As Members will be aware, naloxone is a life-changer. The DUP has consistently supported the administration of naloxone by the Police Service of Northern Ireland and the ambulance service. The legislation before us will extend that remit to further professions and staff, as well as confirm necessary rules around storage and training. I have talked to colleagues and friends back home about this issue. They were clear that we need to address it, and the provisions are a method of doing just that.
The figures around opioid-related death in Northern Ireland are absolutely heartbreaking: 154 drug-related deaths were registered in 2022. Although that represents a reduction of 59 from the 213 drug-related deaths registered in 2021, I think we can all agree that that is simply too many deaths. We must do whatever we can do reduce that number and the impact on all those families who wish something was available to save lives. Since 2012, deaths from drug-related causes have risen by 98% in Northern Ireland, They have gone from 110 to a peak of 218 in 2020, and to 213 in 2021. The 2022 total of 154 represents a 40% increase on the number of drug deaths registered a decade ago. All those figures show a worrying trend.
My constituency gained new territory from South Down in the boundary changes prior to the last election. Drug-related activity there is incredibly worrying, and I am taking up those issues with community representatives and the PSNI. Of the 154 drug-related deaths registered in Northern Ireland in 2022, over two thirds were of men. If we look at the number of deaths by age, the 25-to-34 and 35-to-44 age groups accounted together for 56% of all drug-related deaths in 2022. Each year, over half of drug-related deaths involve an opioid. In the years from 2020 to 2022, the death certificates for an average of 118 drug-related deaths mentioned an opioid.
The Minister mentioned homelessness. The provincial press back home—I think it was a newsletter that I read before I left this morning—mentions an increase in the number of homeless people in Northern Ireland. We have never before experienced such figures in all these years. The Minister is right to underline that issue, because it is not just happening in London, Birmingham, Manchester, Newcastle, Glasgow or Cardiff; it is happening everywhere. It is happening in Northern Ireland. The numbers of people looking for properties and accommodation in my constituency are at some of the highest levels I have ever seen, in all my years as an elected representative—as a councillor, as a Member of the Northern Ireland Assembly and latterly as a Member of Parliament.
The need for the appropriate use and storage of this medication, which can bring people back from the brink and hopefully give them a chance of a normal life, is all too clear. I also ask the Minister to outline whether, within the legislative process, there is any protection for public health staff. That is very important; I say that respectfully, because I know how important it is for the staff I speak to back home that they receive protection from legal liability for the administration of naloxone. We need to ensure that staff do not fear stepping in and that they fully understand that their intentions to do good in the circumstances will come with a cloak of protection. I ask that for the sake of the people I represent; I know that the hon. Member for South Antrim (Robin Swann) will speak shortly, with his vast knowledge of health issues, and will probably reiterate the same point.
It is a terrible thing to understand, but whenever I speak to medical personnel, they say that there must be no hesitancy about stepping forward for fear of repercussions. Many people wait to see whether someone else will step forward—not because they lack confidence in their ability or because of a mentality that they are off the clock and about to go home, but because of a deep fear that if their help is not successful, they will face repercussions. The situation needs to be clarified for the workers allowed to administer the drug, who must always be protected while administering it.
I very much welcome the Minister’s proposals, and I look forward to the House’s endorsement of the draft regulations. There has been magnanimous support for them from the shadow Minister and the hon. Member for Carshalton and Wallington (Bobby Dean), as I am sure there will be from the hon. Member for South Antrim and from other Members who contribute. This is the right thing to do. Let’s do it. I look forward to the Minister’s response.
Siân Berry (Brighton Pavilion) (Green)
Alongside hon. Members who have spoken on behalf of other parties, I welcome the changes. Naloxone saves lives: it brings people back from one of the most final and, in many cases, fatal mistakes they can make.
This is a really important change to make, but I hope that the regulations will be kept more closely and continuously under review, rather than us just coming back to the topic in two years’ time, as is mandated. Drugs policy must be evidence-led. As we see the benefits, hopefully quickly, of wider access and of more people having naloxone available in their work, it might be a good idea to see whether we can widen access any further.
I have been reading the careful, evidence-based and considered responses from a range of different charities, including Release. It seems that there are quite a few groups of workers who ought to be able to use the first route—the expanded definition of workers who can easily access and use the drug—rather than the second route, under which they access it not directly but via a separately accredited provider of naloxone. As Release says, one of the simpler ways to achieve that might be to make it a pharmacy-available drug rather than a prescription drug, with some exceptions, as we have now.
I do not want to say, “Don’t do this”; I am saying, “Do it, then review it and go further if you can.” Many groups of workers will have the experience of unexpectedly meeting people who are going through overdose more often than others will in their daily work. There are now also more people working with those who will unexpectedly be going through overdose because of the wider prevalence of synthetic opioids and the other routes to becoming a victim of opioid overdose. They include student welfare workers, youth workers who are not necessarily involved in youth justice, local councillors potentially, night-time venue staff, transport workers, who are not currently on the list, street cleaners and park workers. Once we see the benefits of wider groups being able to access naloxone easily, it may become obvious that some of these other groups ought to be trained and given simple access—potentially through pharmacies to anyone who asks.
This is not to quibble. I am obviously restating quite a lot of what was said in the consultation. I hope that we continue to look at the evidence and expand this as quickly as possible. Every life that we could save, we should save. The harm that could be done is minimal in comparison.
Robin Swann (South Antrim) (UUP)
I thank the Minister for bringing this statutory instrument to the House. As I think all hon. Members have said, naloxone has proven itself time and again to be the lifesaving drug that reverses the effect of a devastating opioid overdose. That is especially important because opioid-related deaths now make up the largest proportion of deaths from drug misuse across the UK; in Northern Ireland, as the hon. Member for Strangford (Jim Shannon) said, they represent over 50%.
The purpose of these amendments, which I fully supported when I was Minister of Health in Northern Ireland, is to increase the number of services, professionals and organisations that can supply naloxone without prescription or even a written instruction. In June 2021, when I was in post in my Department, the then Government agreed to a UK-wide public consultation on the proposed changes to the Human Medicines Regulations 2012, which sought views on the viability of proposals to widen access to naloxone by expanding the list of services and individuals who can give it out without a prescription or a written instruction.
I support the contribution from the hon. Member for Brighton Pavilion (Siân Berry). We need to keep the matter continually under review, with additional training to ensure that we can get naloxone into as many people’s hands as possible, so that it can be administered at the right point at the right time.
I thought at the time, and I still think today, that these changes are not just perfectly sensible; they are a small legislative step that will have big, real and life-changing consequences. I am glad to see that they have received support across the House. Thankfully, the consultation indicated strong support for each of the proposals, including from those who responded solely from the Northern Ireland perspective. The evidence is clear: countless lives have been saved as a result of naloxone. I am confident that today’s changes will help to prevent more people who use drugs from sadly losing their lives to that use.
Karin Smyth
This evening, I am standing in for my hon. Friend the public health Minister, who could not be here. I might offer to stand in again, such has been the rare outbreak of unanimity across this House. I know from my own experience in the sector that that is often the case with public health measures, as so much work is done in the background, and there is broad agreement on the need for prevention and the great work that has been done before. I thank Members, particularly the Opposition spokespeople, for their support this evening and their comments, which are testament to the work done by officials and by the previous Administration to get us to this point. The consultation was very well received.
I support the comments of the Opposition spokesperson, the hon. Member for Runnymede and Weybridge (Dr Spencer), about recognising World Suicide Prevention Day. Suicide, particularly among men, is something that has affected most families—most of us, I think—and it has certainly affected many people in this House, so the hon. Member is right to raise those issues. He asked about training, and I can confirm that training and data reporting requirements will be attached to this measure. That training will be required to meet some broad objectives, including the safe administration of naloxone, safe storage, and how to train someone else to handle and administer it safely. Training on its use is already well established in most parts of the country alongside naloxone provision, and each product has its own established training set out by the manufacturer. I have heard the professional points that the hon. Member has raised, and if he has any further requirements, my hon. Friend the public health Minister would be happy to write to him.
Other excellent points were made about keeping this issue under review, which we absolutely will be doing. The hon. Member for Brighton Pavilion (Siân Berry) made her points well, and they are now on the record. The Government will be looking to work on our prevention strategy across all Departments—including the Ministry of Justice, the Home Office, the Ministry of Housing, Communities and Local Government, the Department for Work and Pensions, and the Department for Education—to ensure that we take a preventive, public health-led approach to this issue. I also thank the hon. Member for South Antrim (Robin Swann), who has brought his expertise in Northern Ireland into this House for this debate. I am sure this issue will come back before the House in the future.
Jim Shannon
In my contribution I asked a question—which the hon. Member for South Antrim (Robin Swann) has reminded me of—about ensuring that medical staff who have the expertise to administer naloxone, but do so outside of their job, are covered and that there is no comeback against them. Could the Minister answer that question?
Karin Smyth
I understand that there are some concerns about that issue, and we will make sure that the hon. Member receives a full answer from my hon. Friend the public health Minister.
In short, these changes will widen access to life-saving medicine. I am sure hon. Members will agree that any death from an illicit drug is tragic and preventable, so I am pleased that we are taking this step and that we have the support of the House this evening for reducing drug-related deaths. On that basis, I hope hon. Members will join me in supporting these important regulatory changes, which I commend to the House.
Question put and agreed to.
Resolved,
That the draft Human Medicines (Amendments Relating to Naloxone and Transfers of Functions) Regulations 2024, which were laid before this House on 29 July, be approved.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
On a point of order, Madam Deputy Speaker. Last Thursday, during questions to the Leader of the House on the statement of business, I asked a question about BTecs in relation to colleges. Although it is registered in the Register of Members’ Financial Interests that I am a governor of two colleges, I failed to draw the House’s attention to that fact before asking my question. The two colleges that I am a governor of are affected by the answer, so I take this opportunity to place that on the record, and offer my unreserved apology to the House accordingly.
Madam Deputy Speaker (Judith Cummins)
I thank the hon. Member for his point of order and his clarification. I am sure the record will stand amended and corrected.
Business of the House (Today)
Ordered,
That at today’s sitting the Speaker shall put the Questions necessary to dispose of proceedings on the Motion in the name of Lucy Powell relating to the Modernisation Committee not later than one hour after the commencement of proceedings on the Motion for this Order; such Questions shall include the Questions on any Amendments selected by the Speaker which may then be moved; proceedings on that Motion may continue, though opposed, after the moment of interruption; and Standing Order No. 41A (Deferred divisions) shall not apply.—(Lucy Powell.)
Modernisation Committee
(2 months, 1 week ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Jeremy Corbyn (Islington North) (Ind)
I am surprised that the Leader of the House did not speak to this motion. Obviously the House needs a Modernisation Committee, and obviously there is a great deal of work to be done by that Committee—there are many things we could modernise, including the voting and the hours, which the Committee will have to draw attention to.
My question to the Leader of the House is this. There is a group of five colleagues who were elected independently to Parliament for the first time. I am not seeking a job, by the way—I am not seeking to be on the Committee. However, I do think that the knowledge and experience that is brought to bear in this House by people who have come here through an abnormal route—that is, not through party machinery—could bring a great deal of value to the work of the Committee and help to inform its work. Is the Leader of the House prepared to consider changing the format of the Committee to include representatives of all groupings in the House, so that they can all help to make it work in a more modern and efficient way, and so that our time is better used than—in my experience—by spending hours and hours going through the Division Lobby when we could quite easily vote electronically, for example?
The Leader of the House of Commons (Lucy Powell)
I thank the right hon. Member for Islington North (Jeremy Corbyn) for those points. I am sure he and I share many of the same frustrations, which is one reason we are establishing the Modernisation Committee. He may not be aware that the substantive motion establishing the Modernisation Committee was considered at length during several hours of debate before the recess. The motion before us is about the membership of that Committee, the names having been nominated by the party they represent.
In the debate before the recess, I said very clearly that I want the Committee to fully engage with all the parties and all the groupings in the House. It has not been possible to do more, because of the maths of the situation. For example, how would we pick which smaller party was represented on that Committee through a formal membership? However, both in the Chamber at this Dispatch Box and subsequently in writing, I have made it absolutely clear that the Modernisation Committee will meaningfully and continually, on an ongoing basis, engage with the smaller parties across this House. As the right hon. Gentleman says, their input will be vital to its work. I think that is the best way to represent all the different smaller parties and their very differing views about some of these issues.
Jeremy Corbyn
I am grateful to the Leader of the House for what she has said about inclusion. That is welcome of course, but it seems to me that an even better form of inclusion of the views of all parties in the House would be through membership of the Committee so that they are at every meeting, rather than dependent on the generosity or largesse of the Committee as a whole to invite them to give evidence.
Lucy Powell
I thank the right hon. Gentleman again for that, but this is a balance. The membership make-up of the Committee reflects that of all Select Committees of this House, and to achieve a proportion where one place would be available for a smaller party would mean a very big Committee indeed—even then, only one smaller party would be represented and not all. My approach will be to make sure that the smaller parties are regularly invited into the Committee, are regularly engaged and are regularly asked for their thoughts ahead of and during inquiries. That is a more meaningful way to collate all the views of the different parties and groupings in this place, given how the membership of the Committee has to come about.
Jim Shannon (Strangford) (DUP)
I want to follow on from what the right hon. Member for Islington North (Jeremy Corbyn) said, and to raise a specific query about my own party, the DUP. We have five Members, while there are other single Members from Northern Ireland as well, and there is a big interest in, for example, the Northern Ireland Affairs Committee. I do not expect an answer from the Leader of the House straightaway—I am not putting her on the spot—but I am very keen to hear her thoughts on the best way to do this. With our deep interest in Northern Ireland affairs, is it the intention of the Government, ever mindful of the statistical and numerical change there has been in this Chamber, to ensure that our party has representation to reflect that?
Lucy Powell
It has been the long-established practice, particularly on the Committees that relate to the devolved nations of the UK, that there is representation from all the parties that have been elected from that area. I think that has been a long-standing tradition, and I do not think there is any intention to change that at this stage.
Question put and agreed to.
Helme Chase Maternity Unit
(2 months, 1 week ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate
Tim Farron (Westmorland and Lonsdale) (LD)
I rise to present a petition on behalf of 2,200 of my constituents on, and indeed against, the temporary closure of Helme Chase maternity unit at Westmorland general hospital. This is the third such temporary closure in five years of our maternity unit, and over the past 20 years we have seen a 90% reduction in the number of births at Helme Chase, due to the steady erosion of that vital and much loved unit. We are determined to reverse that and see a renewed, properly resourced and safe maternity unit for Westmorland’s mums and their babies. The petition states:
The petition of residents of the United Kingdom,
Declares that Helme Chase Maternity Unit has been underfunded by the Morecambe Bay NHS Hospitals Trust; further declares that responsibility for this falls upon previous Conservative Government’s cuts to rural health services; further notes that sufficient money and resources from the Government to fully staff Helme Chase would stop the threat of permanent closure to this local maternity unit from closure.
The petitioners therefore request that the House of Commons urge the Government to consider Helme Chase Maternity Unit’s resource needs when providing funding to Morecambe Bay NHS Hospitals Trust.
And the petitioners remain, etc.
[P003006]
Housing: Cornwall and the Isles of Scilly
(2 months, 1 week ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Andrew George (St Ives) (LD)
It is a pleasure to have the opportunity to raise the rather grave issue of providing affordable housing in the housing emergency-ridden communities of Cornwall and the Isles of Scilly. I am grateful to those engaged in business earlier this evening who have permitted us a little extra time to explore the issue. Perhaps that was done for good reason, so that the grave and important issues of Cornwall and the Isles of Scilly could be properly and fully debated. I welcome the Minister to his place. Indeed, Liberal Democrat Members warmly welcome him and fully take on board the sincerity, intensity and determination of the Government to address the serious housing problems that exist across the country, and the housing emergencies that exist in many communities as well as Cornwall and the Isles of Scilly.
I should also declare an interest. During my nine-year sabbatical from this House I went back to my profession as the chief executive of a registered provider—a housing charity—working at the front line on predevelopment work and delivering affordable homes for local people. It is a challenging environment, and because of the man-made—or man and woman-made—nature of the regulatory environment in which professionals operate, and the topographical challenges that we face in places such as Cornwall, it is a little like trying to push boulders up a steep slope. I hope the Minister will take into account that if measures can be taken to improve the availability of opportunities for those who are ticking all the right boxes to deliver genuinely in-perpetuity affordable homes, which are desperately needed in our communities, the Government will do that.
This is not my maiden speech, and after having taken a sabbatical—perhaps it was an enforced sabbatical, but it was one I enjoyed—away from the Chamber for so long, I would in normal circumstances praise my predecessor. We did not share much in the way of political agreement, but he worked hard for the constituency and achieved a great deal. Indeed, Mr Derek Thomas strived on a large number of projects, and I hope that I will reflect the efforts he made to ensure that those projects are delivered during my time in this House.
Because it is not my maiden speech, I therefore do not need to remind the House, as I did on 22 May 1997, that my constituency is the most beautiful and most remarkable place in the country, occupied by the most beautiful, remarkable people.
Jim Shannon (Strangford) (DUP)
On that point, will the hon. Member give way?
Jim Shannon
First, I commend the hon. Member on securing the debate. It is good to see him back in his place. He brought much to the Chamber when he was here before, and I was fortunate to share some time with him in the Chamber. We have many things in common. The first is that we have beautiful constituencies, and the second is our concern about affordable housing and its accessibility. Does he welcome the Government’s manifesto pledge to increase housing? In my area, the housing lists are massive. Does he agree that when it comes to the Government’s policy, it must first be better streamlined planning? Secondly, they should allocate funding to getting families into homes. Thirdly, does he agree that we need a strategy and a programme motivated and driven by Westminster for all the regions of this great United Kingdom of Great Britain and Northern Ireland, because, as I always say, we can do it better together?
Andrew George
The hon. Member anticipates many of the subjects that I will be coming on to, which are about the delivery and streamlining of planning and so on.
Part of my background is not only in the delivery of housing through a community land trust and the charitable housing sector, but also in my volunteering. For many years, I was involved in Penzance street food project and was working at the frontline addressing and speaking to people who were suffering from the most severe housing problems in the country. Indeed, in Cornwall we often have to repeat that although people come and have enjoyable holidays, as I know the Minister did, beneath that veneer are extremely severe housing problems and severe and exceptional levels of homelessness, which perhaps are beyond the vision of those who come and enjoy our beautiful beaches, our beautiful environment and our wall-to-wall sunshine.
I have given the Minister advance notice of some of the subjects I intend to cover, but one is to probe a little harder on the Government’s intention to raise house building targets and to challenge how we can properly ensure that if we are to build more homes, that will address need, rather than developers’ greed. I will come back to that in a moment. Under the surface—I think a lot of people are not fully aware of this—the public purse is making a major contribution to the injustices going on in the housing sector, in that multi millions of pounds in public money are going into the pockets of holiday home owners, especially through various tax loopholes and covid aid grants and so on. That clearly is driving the sector in the opposite direction to the one in which it should be going.
By way of background, Cornwall has high levels of housing need. The latest Homechoice register is 20,332, but that is after the annual administrative process of removing people who have not been active on the register for the previous year. The month before that, the register was 27,000, so the numbers oscillate. From my experience of undertaking housing need surveys across many communities in Cornwall, the numbers often underplay the significant level of unexpressed housing need. We often find that the level of need in most communities is at least double what is recorded on the Homechoice register, because many people think it is a waste of time putting their names on it, because they have little chance of ever getting a home.
Of course, every location has housing problems of one type or another—other places experience similar problems—but in Cornwall we face a rather unique combination. For example, just 12.8% of our housing stock is social housing against a national average of 17.1%, and although 20% or thereabouts of the housing stock is privately rented—that is about the national average—it is an extremely vulnerable sector for people to find themselves in. Particularly in recent years, a large proportion of families in that sector have found themselves on the verge of being evicted to make way for yet more holiday lets.
Housing completions have been good. We have an effective register and a housing association sector that is delivering well, and indeed Cornwall is one of the best local authority areas in delivering numbers, but it achieves that as one of the larger local authorities, so it is bound to be up at that end of the league.
My first substantive point for the Minister is about the Government’s stated intentions on house building targets. I fully endorse and support the Government’s intention to deliver in order to meet housing need, but, as I said to the Deputy Prime Minister when the announcement was made in July, Cornwall shows how simply having house building targets does not work.
Cornwall is one of the fastest growing places in the United Kingdom, having almost trebled its housing stock in the last 60 years—I have been living there through most of those years—and yet at the end of all that the housing problems have got worse. I am not saying that it would be better if we had not built any houses, but simply setting very high housing targets in itself does not address housing needs. The two-dimensional view of housing being somehow a simple relationship between supply and demand in which equilibrium will be found and prices will therefore reflect what local wages can afford has never been the case in Cornwall. That reflects, in effect, a sub-London housing market, with house prices having been significantly inflated by people and property investors buying second and holiday homes.
In the present local plan for Cornwall, covering 2010 to 2030, the house building target is 52,500. The Government propose to increase those projections under their new formula from 2,707 properties per annum to 4,454. I urge the Minister to allow places such as Cornwall to be granted devolved powers to vary the way in which we achieve what needs to be done in our local environment: not simply to give us house building figures but to set targets to reduce housing need. After all, house building targets are a means to an end—the end is to meet the housing need—and if we have built the homes but that has not achieved the purpose, we must ask ourselves: are we going about it in the right way?
The Government’s new standard method has a different starting point from the old method. It is based on a two-step process of a 0.8% annual uplift on existing housing stock, plus a further uplift for the affordability gap. The problem with that approach is that, in places such as Cornwall, it bakes in demand for second and holiday homes, because that has to be included in those overall figures. That was a problem in the previous plan, when we had our local plan projections rejected and the inspector wrote in much higher figures, saying that we had to increase the numbers to 52,500—more than another 5,000 homes—in order to address, as they put it, “the growing demand for second homes in Cornwall.” We have high and growing demand for affordable homes—that should be baked into the figures.
We should have a mechanism by which we can deliver those homes, because the way in which the system works is that we get all the second and investment properties—the developers are very pleased to do those, but they are not so keen to deliver the genuinely affordable homes, which are the ones that we need. There is a simplistic view that there is equilibrium between supply and demand, and there is a presupposition that developers will release properties in the market when the Government’s policy achieves its stated intention of reducing house prices in that locality. We found that they only release them at times of housing inflation, so that is simply not the case.
In my experience at the development end, trying to deliver the affordable homes that local people need, the policy is counterproductive because if the number of homes announced in the local plan increases, the hope value of land adjoining every single community in Cornwall goes through the roof. If a local housing charity goes there and says, “I would like to look at your land and build some affordable homes on it,” the developer will not talk to them. They will wait for the lottery win when they get the full open market development value on that land, which is significantly greater than what a local charity can offer. I urge the Minister to have a conversation with those who are trying to deliver the products on the ground, to set targets to reduce need rather than feed developers’ greed, because that is what housing targets do in places such as Cornwall—elsewhere they might have a different impact. Again, I ask the Minister to come to Cornwall and the Isles of Scilly and see what it is like. I am sure that all the local MPs, who are all champions for their own localities, will be fighting hard to address these issues.
A further point I wish to make is on the rural exceptions policy, as I used that tool when working in the sector on a regular basis, and I have raised it with the Minister already. It works well; since the 1990s when it was introduced, it has been very effective in delivering affordable homes on land that otherwise would not get planning permission. All I would say to the Minister is that we should look at ways in which we can expand and grow development on rural exception sites. In Cornwall we are doing very well; we deliver 50% of what is delivered on rural exception sites across the whole of England. About 20% or 30% of delivery in Cornwall is through rural exception sites. What the local authority has done, and what we as a charity sector campaigned for it to do, is extend the entitlement to deliver rural exception developments from the smaller villages to the edge of towns. It may sound counterintuitive, but one of the best ways of delivering affordable homes is to draw the development boundary very tight around a local community and to use rural exception as a way of ensuring that we keep the development land values low and deliver genuinely affordable homes.
The other thing I urge the Minister to do, perhaps to correct the mistake made by Cornwall some 15 years ago, is not to allow cross-subsidy on rural exception sites. That has created a slippery slope where more and more landowners and private developers find ways around normal planning procedure and use rural exception sites as a Trojan horse to crowbar in far many more unaffordable homes on those sites than would otherwise be the case if we stuck to the principle of the policy itself.
Against that, there is a very significant challenge of construction industry inflation, which is affecting Cornwall as it is many other places. That has caused a lot of developments in places all around Cornwall to be stalled, as the cost-to-value ratios have resulted in the unviability of many projects. I urge the Minister to look—I am sure he is—at Homes England’s affordable housing programme. While it is looking to the next five to 10 years, the current programme up to 2026 needs a further injection to address the current difficulties that many developments face.
I said that I would address housing injustice. I am conscious of time and I know other hon. Members wish to speak, so I will be brief. When I was first elected, in 1997, the Conservatives had just introduced the 50% council tax discount for second homes. I campaigned against that at the time, and was grateful to Chris Mullin and the late Michael Meacher for being receptive to the arguments to remove the 50% council tax discount. However, in 2012, the Conservatives then introduced another loophole, which allowed second home owners to flip their properties from being registered as second homes for council tax to being registered for business rates as a holiday let, if they could demonstrate that the property was available for 140 nights a year. They did not need to let it, but it had to be available for 140 nights a year as a holiday let. Then they could apply for small business rate relief and pay nothing at all.
We have ended up with a situation where all that has to be covered by the Treasury. Initially, in 2012, when I first blew the whistle on it as an MP, that resulted in £6.5 million going each year to holiday homeowners in places such as Cornwall. Within a couple of years, that had doubled. There has been an industrial-level movement of properties from council tax to business rates. When covid happened, they were all entitled to a covid grant as well, on top of that. As a result of that, the furnished holiday lettings and other loopholes, in Cornwall alone over 10 years we ended up with over £500 million of taxpayers’ money—that is our money—going into the pockets of holiday homeowners, at a time when only half that amount was going into housing associations to deliver affordable homes. I urge the Minister to work with his Treasury colleagues to close those loopholes and to find far better ways of using that money. If, as the Prime Minister rightly says, those with the broadest shoulders should bear the greatest burden, this is an area where that burden should be borne by the people who can afford extra properties and property investment in holiday and second homes. That is not, in my view, an appropriate way for us ever to spend public money.
I said to the Minister earlier that I wanted briefly to mention the Isles of Scilly, and I hope that he will come and visit the area. Many people find it surprising that it is currently experiencing depopulation, which is largely driven by the lack of affordable housing. Here I declare an interest, as one who has been working in the sector. Our charity had been working with the council on a project for which we had planning permission, and everything else, to deliver 12 self-build affordable homes for local families. Those homes were desperately needed—I believe that only eight homes have been built on the Isles in the last 10 years—but the construction costs were extremely high. It costs three times as much to build a home there as it does to build one on the mainland. Moreover, the project did not meet the requirements of Homes England in relation to subsidies.
I urge the Minister to have a look at the very special environment that exists on the Isles of Scilly, and to address its housing needs. It is 28 miles from the mainland coast, and it should not be said that members of its community can commute, because they simply cannot do so. I also urge the Minister to consider the community-led homes sector. If we want to change the whole narrative and the way in which communities operate, we should give people the power to start representing themselves and local housing needs through, for instance, community land trusts and co-housing communities. The last Government had a flirtation with that sector and gave it some support, but then withdrew it. However, this work has started, and I think that more can happen to deliver more. If communities have local land trusts or local housing working parties, that is far better than allowing the nimbys to take over and start driving the development process.
Let me also encourage the Minister to consider the issue of discounted sale homes. Before I worked in a community land trust I was a sceptic, but I have to say that I am a convert to that method as one of the additional mechanisms to provide intermediate housing. I believe that it would be a cost-effective way for Homes England to engage with communities that want to deliver in-perpetuity homes for locals, which is clearly very important.
Of course we do not want Rachmans and of course we want to drive bad practice out of the sector, but I hope that, perhaps taking a cue from what is happening in the holiday lettings, the Minister will consider this suggestion. As well as regulating the private rented sector, why should we not reward good landlords? If they are delivering security—affordable rents, a high-level energy performance certificate and the decent homes standard—surely there must be a way, within the tax system, of rewarding those good landlords, as well as regulating and penalising the bad ones.
I hope that the Minister will consider each of the points that I have made to him. I am grateful for the additional time that I have been given to elaborate on those important points, and, of course, he has plenty of time in which to respond. I do not know whether other Members wish to speak as well.
Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)
Thank you, Madam Deputy Speaker, for granting extra time for a debate that is so important for Cornwall and for giving others a chance for speak about its very particular housing issues. I also thank the hon. Member for St Ives (Andrew George) for initiating the debate. As he said, about 27,000 people are on Cornwall’s housing waiting list, and about 800 are in temporary and emergency accommodation. Many of them are families with young children, who are placed in caravan parks and holiday homes that are up to an hour and a half or two hours away from their support networks, their schools, their jobs and where they live. This is really affecting community cohesion, upsetting families and causing real hardship.
The council is struggling with the need, and the cost is vast. It is providing bunk cabins in council car parks for people to live in as emergency and temporary accommodation, which is very difficult. So many people in Cornwall are now living in their vans, because they simply have nowhere else to go. I am finding that families are moving into emergency accommodation, and that the single people who were becoming homeless when I was first a councillor in Cornwall are now living in their cars. The situation has become really dire.
Businesses are now finding that key workers have nowhere to live, so we have people coming down to work in the hospitality sector or in agriculture. The same is true for professionals, such as teachers, nurses and doctors—a headteacher in Cornwall struggled to find somewhere to live, and she had to give up her job and move away again. There is now a movement called Homes for Cornwall, whereby businesses are coming together to try to find alternatives solutions to deal with the housing crisis, which has become so bad that they cannot find staff. As the hon. Member for St Ives said, we have a very low number of social houses in Cornwall—only 10,300 council homes.
I want to talk about the affordable housing programme grant, which a previous Secretary of State, Michael Gove, suspended for Cornwall because of the poor performance of the housing provider Cornwall Housing, which is an arm’s length company owned by the council. That performance has now improved, and the grant is desperately needed for a new social housing scheme in Redruth, but it has not been returned. I ask the Minister to look into that, and to see whether other local authorities in this situation have been treated in the same way and lost their grants. Has that grant moved to other registered providers in Cornwall, or has it left Cornwall completely? Is there any way we could get that back and backdate it?
The other issue, which the hon. Member for St Ives spoke about, is second homes and holiday lets, which have absolutely exploded in Cornwall, particularly since covid. The private rented sector has been decimated and is now virtually non-existent. We have struggled so much with section 21 notices, which explains to a great extent why so many of our families are now in emergency and temporary accommodation.
Ben Maguire (North Cornwall) (LD)
I thank the hon. Member for giving way, and I commend my hon. Friend the Member for St Ives (Andrew George) for securing this excellent debate. It is great to welcome him back to his place; he brings a wealth of expertise in this area. I also welcome the hon. Member for Plymouth Sutton and Devonport (Luke Pollard) to his place. I hope that he understands some of the issues that have been raised in this debate, given that he is a close neighbour of ours.
I welcome the cross-party co-operation that we are seeing from hon. Members across the House this evening—although not so much from the Conservative Benches, unfortunately. Cornwall faces a real housing emergency, and it is critical that we work together to fix it. As my hon. Friend mentioned, we must finally move away from building more and more executive housing that has little to no infrastructure, and focus on local need.
Madam Deputy Speaker
Order. I remind the hon. Member that interventions should be short.
Ben Maguire
Does the hon. Member agree that the long-standing Liberal Democrat policy of introducing use classes for non-permanent occupancy is a good idea?
Jayne Kirkham
I thank the hon. Member for his intervention. I will shortly move on to some of the ways in which we can deal with the proliferation of second homes and holiday lets, and address the imbalance.
I want to reinforce the point that the hon. Member for St Ives made about the tax loophole. I think £18 million is now lost in council tax because so many housing providers have taken advantage of the loophole whereby they can claim business grants and the zero rate of exemption, rather than pay council tax, if their houses are let out for 10 weeks of the year. As the hon. Member said, so much money was lost in business grants during covid. I think £170 million in business grants went to properties that were registered as holiday lets.
I want to mention my hon. Friend the Member for Plymouth Sutton and Devonport (Luke Pollard), who cannot speak in this debate. He has worked hard with us in Cornwall on the issue of protecting first homes, rather than second homes, and he has supported us, as I know that the same issue applies up in Devon. We have spoken with the Minister about potentially having a toolkit of measures that could be used to deal with issues relating to second homes and holiday lets. I know that our Government will introduce one of those measures: the licensing of holiday lets, hopefully with fees and safety checks on those lets, which is not done at the moment—some properties are not checked for fire safety, or for safety in any way. That is a massive loophole that needs to be dealt with.
The hon. Member for St Ives talked about planning requirements. The previous Government had a review on introducing a use class for holiday lets—but then did not do very much about it—so that is one possible measure. The default could be second home owners having to apply for a change of use if they flip their homes to holiday lets.
Andrew George
On the C5 category, and further to the excellent point that my hon. Friend the Member for North Cornwall (Ben Maguire) made, the last Government tinkered with this, announcing and reannouncing on many occasions a proposal to introduce a use class for holiday lets, but does the hon. Lady not agree that that would be far better if it applied to all non-permanent occupancy, whether second homes or holiday lets? Otherwise, there will continually be flipping from one to the other to avoid regulation.
Jayne Kirkham
I thank the hon. Member for that point. I wanted to talk about council tax in particular, because, strangely, one of the few things that the entire council agreed on—we have a Conservative council in Cornwall at the moment—was doubling the council tax on empty second homes. In fact, we wrote to the Secretary of State at the time to ask whether we could triple the council tax on second homes, as they do in Labour Wales—that was a very unusual thing to do. Of course, as has been discussed, this is about looking at closing the loophole so that the owners of the property cannot flip between business rates and council tax. That would mean an £18 million a year gain in council taxes.
I agree with the hon. Member that we should encourage co-operative and community housing in Cornwall. That is very popular, and if it was supported more, there would be a great deal more of it. In fact, our cabinet housing member in Cornwall has said that if every village built 10 homes, that would deal with the housing crisis completely. Discouraging hope value, particularly in certain parts of Cornwall, would be very helpful. I know that forcing developers to deliver their affordables rather than relying on the viability defence is part of the Government’s plans, because so often developers get to a point and say that they cannot afford to build the affordable houses that they promised. Another real problem is that the cost of building has shot up because the contractors in Cornwall have dropped in number and have become a great deal more expensive.
The Minister for Housing and Planning (Matthew Pennycook)
I congratulate the hon. Member for St Ives (Andrew George) on securing this important debate, and I commend him for the forceful but thoughtful case he made on behalf of his constituents. He has considerable experience and expertise when it comes to housing policy and practice, and I listened with great interest to his views and many of his proposals.
I thank my hon. Friend the Member for Truro and Falmouth (Jayne Kirkham) for her incisive contributions and all those who have added to the debate this evening. There is clearly a fierce clarity of purpose on both sides of the House in respect of meeting housing need across the county, and I assure all hon. Members present that the Government are resolved to do what is necessary to ensure that that can happen.
It would also be remiss of me not to acknowledge my hon. Friend the Member for Plymouth Sutton and Devonport (Luke Pollard). He is not a Cornish MP, but his constituency suffers from many of the challenges that hon. Members have touched on; indeed, he is impacted by the challenges coming from Cornwall. He has been a champion over many years for bold action to tackle the housing crisis across the south-west.
As we have heard, the housing crisis in Cornwall and the Isles of Scilly is acute. Eye-watering house price-to-earnings ratios are putting home ownership out of the reach of most local people; an overheated and shrinking private rented sector is placing a severe strain on local economies as well as families and communities; and social housing waiting lists are growing steadily. I recognise that second homes and short-term lets are not the sole causes of those pressures, but none of them can be properly understood without taking into account the sharp increase in the numbers of second homes and short-term lets in the county over recent years—an issue to which I will return in due course.
In the time available to me—there is more of it than I expected when I drafted this speech—I wanted to provide the hon. Gentleman and other hon. Members representing Cornish seats with an overview of the Government’s thinking in this area, and a sense of how we intend to address the challenges around housing availability in the county, with the caveat that there is a limit to the detail I can provide at this point, given that we are a new Government still considering the best options to achieve our aims.
The causes of England’s housing crisis are multiple, but among the most important is our singular failure as a nation to build enough homes of all tenures. That is why this Government are determined to do what is necessary to get the country building again, including by ensuring that we put in place a planning system geared towards meeting housing need in full. On our proposed reforms to the national planning policy framework, I acknowledge the hon. Gentleman’s concerns about the introduction of mandatory housing targets, and I appreciate that he made a nuanced argument, but I am afraid that I am unconvinced by it. The fact that the distribution of homes in his constituency is creating significant challenges for the communities he represents is not, in my view, an argument against ensuring that sufficiently ambitious targets are in place to boost housing supply. Rather, it is an argument for making sure that local planning authorities have the full set of tools they need to manage those distributional challenges, and to plan for development in line with their targets in a way that meets local need.
Noah Law (St Austell and Newquay) (Lab)
Will the Minister give consideration to the hypothesis to which the hon. Member for St Ives (Andrew George) alluded, which was that building the wrong kind of housing in Cornwall can beget demand for the kind of housing that we have so struggled to build—namely, truly affordable and social homes?
Matthew Pennycook
I thank my hon. Friend for that point. I acknowledge the pressures and the challenges. We need to give local authorities the tools to shape the type of development undertaken—not only through their local plans—and to get a grip on excessive concentrations of second homes and short-term lets. That is the Government’s intention. On the NPPF and housing targets, it is the Government’s considered view that we need to act to increase supply in all parts of the country, and need to take steps to ensure that the housing market responds to the needs of communities. These are complementary, not conflicting, policy intentions.
Andrew George
I entirely endorse the sentiment of what the Minister is trying to do, but this is about practicalities. There are enormous opportunities for unscrupulous developers to use the NPPF as a Trojan horse, so that they can crowbar in significant lottery-like wins on land. If someone can convert an agricultural acre into an open market acre of development land, they do not need to work for a living; they just need to keep shoving in planning applications, and they will make a lot of money. Having some intermediate measure by which we can deliver affordable homes on that land is surely the way forward.
Matthew Pennycook
I will touch on rural exception sites, and the land market in particular, but I come back to the point that none of that negates the need for ambitious housing targets, via consents and oversupplying consents, to ensure that we build the number of homes that we need, but I take the hon. Gentleman’s point and will address it directly in short order.
I shall start with land values, because the hon. Gentleman has raised a concern, not only in this place but in other forums, about our proposed changes to national planning policy potentially placing upward pressure on land values, thereby frustrating our objectives. We fully appreciate the risk, which is why we are committed to further strengthening the system of developer contributions and to the reform of compulsory purchase compensation rules. Indeed, just today I brought into force regulations that allow action to be taken on hope value, where required in the public interest, but we will go further in the forthcoming planning and infrastructure Bill.
The hon. Gentleman touched on rural exception sites. The Government very much recognise that people living in rural areas often face challenges finding adequate affordable housing. Ensuring robust support for the necessary housing in rural areas is essential to supporting the broader sustainability of rural communities. The national planning policy framework is already clear that planning policy and decisions should support opportunities to bring forward small sites for affordable housing in rural areas. These rural exception sites should help to meet the housing needs of rural communities, enabling local people, and those with family or employment connections, to live locally and help sustain thriving places.
However, I want to go further in supporting rural affordable housing. In the consultation on the proposed reforms to the NPPF, launched on 13 July, we are actively seeking views on what measures we should consider to better support an increase in affordable housing developments in rural areas, and I very much welcome the hon. Gentleman’s engagement with that. I will take away his point on cross-subsidy and give it further consideration.
I very much recognise the unique situation on the Isles of Scilly, particularly the challenges to the viability of construction. My officials are working closely alongside Homes England to support the council in achieving its housing ambitions, and it is important that this close collaboration continues. I also note the wider challenges on the isles and how housing challenges interact with other pressures faced by residents. In recognition of this, my officials are looking to convene a working group with other Departments to highlight the plurality of issues, and to ensure that the Government can best support island residents.
I appreciate the hon. Gentleman’s interest in community-led housing, including the role of community land trusts, and his professional experience in this area. I recognise the role that community ownership of land and affordable homes can play in delivering the Government’s agenda, although I hope that he will recognise that the support we are able to offer must be considered in the round, alongside the full range of departmental programmes. Again, the Government have set out changes to how we plan for the homes we need as part of the NPPF consultation, which includes proposals designed to strengthen support for community-led housing.
Anna Gelderd (South East Cornwall) (Lab)
I thank the hon. Member for St Ives (Andrew George) for securing this important debate. Local residents are being priced out of the constituency I represent, the beautiful South East Cornwall, and we do not have the homes we need. Earlier this summer, an elderly couple from Torpoint, both in their 90s, were forced to live apart for more than four months after an accident at their home left one in hospital. A lack of suitable housing meant they could not live together. Does the Minister agree that we need action on second homes so that local people, such as this couple from Torpoint, can benefit from more of the housing that is being built?
Matthew Pennycook
My hon. Friend pre-empts what I was about to say; I was just about to address second homes and short-term lets. I take her point, and I am sorry to hear about the situation in which her constituents from Torpoint find themselves. The Government recognise that this is an area in which more needs to be done.
Both in the constituency of the hon. Member for St Ives and in the county more widely, it is beyond doubt that the prevalence of second homes and short-term lets has constrained the availability of homes for local residents to buy and rent, and that it is having a detrimental impact on local services in many areas. A balance obviously needs to be struck between the benefits that second homes and short-term lets can and do have for local economies and their impact on local people, but many coastal, rural and indeed urban communities are grappling with excessive concentrations of such properties. When I was shadow Minister for Housing and Planning in the last Parliament, I spoke to many colleagues who faced acute pressures in their constituency, and the feedback we are getting from coastal, rural and some urban communities makes it clear that we have not yet got the balance right.
Caroline Voaden (South Devon) (LD)
I thank my hon. Friend the Member for St Ives (Andrew George) for raising these difficult issues around housing and second homes in Cornwall and the Isles of Scilly. We have parallel issues in my constituency of South Devon, a little further up the coast. It is apt that we are having this discussion today, after the presentation of Devon Housing Commission’s report at lunchtime, which highlighted many of the issues and just how difficult the situation is in Devon, as in Cornwall. Second homes are hollowing out communities in my constituency. Like the hon. Member for Truro and Falmouth (Jayne Kirkham), I have had a headteacher and the local hospital—
Matthew Pennycook
I thank the hon. Lady and appreciate that she was cut off. As Mr Speaker, Madam Deputy Speaker and the other Deputy Speakers remind us, interventions have to be short, but I am sure we can pick up the conversation outside the Chamber. I recognise the impact on communities of the unique challenges that she mentions, particularly the excessive concentrations of second homes and short-term lets.
The hon. Member for St Ives said that the previous Government introduced a limited number of measures in response to concerns expressed in the previous Parliament. In Opposition, I welcomed those measures, while making it clear that they did not go far enough. That remains my firm view, so although we will progress with measures such as the introduction of a registration scheme for short-term lets in England, and the abolishment of the furnished holiday let tax regime, we are also considering what additional powers we might give local authorities to enable them to better respond to the pressures that they face. I will update the House as soon as I am in a position to.
In conclusion, I thank the hon. Member for St Ives once again for giving the House an opportunity to consider these important matters. I look forward to engaging closely with him and all other Cornish Members, so that together we can ensure first homes for all local people in Cornwall and the Isles of Scilly.
Question put and agreed to.
Written Corrections
(2 months, 1 week ago)
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Ministerial Corrections
(2 months, 1 week ago)
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Foreign, Commonwealth and Development Office
(2 months, 1 week ago)
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Anneliese Dodds
I am grateful to the hon. Member for raising those important points. On the UK’s support, we have doubled the official development assistance contribution, recognising the severity of this crisis. I announced another £15 million of vital assistance on 22 August, bringing that up to £97 million, which will be focused on where it is possible to operate in Sudan.
—[Official Report, 3 September 2024; Vol. 753, c. 164.]
Written correction submitted by the Minister for Development, the right hon. Member for Oxford East (Anneliese Dodds):
Anneliese Dodds
I am grateful to the hon. Member for raising those important points. On the UK’s support, we have nearly doubled the official development assistance contribution, recognising the severity of this crisis. I announced another £15 million of vital assistance on 22 August, bringing that up to £97 million, which will be focused on where it is possible to operate in Sudan.
Anneliese Dodds
I am grateful to the hon. Member for raising that point. I mentioned that the UK is supporting the Centre for Information Resilience, a research body that is gathering evidence of what is taking place on the ground. For example, funding is being provided for the Sudan witness project, which is investigating attacks against civilians and infrastructure. On the specific finding of genocide, I am clear that that is an internationally focused definition, but we are concerned that we are seeing patterns of violence that bear the hallmarks of that kind of development, so we are keeping that very closely under review.
—[Official Report, 3 September 2024; Vol. 753, c. 168.]
Written correction submitted by the Minister for Development:
Anneliese Dodds
I am grateful to the hon. Member for raising that point. I mentioned that the UK is supporting the Centre for Information Resilience, a research body that is gathering evidence of what is taking place on the ground. For example, funding is being provided for the Sudan witness project, which is investigating attacks against civilians and infrastructure. On the specific finding of genocide, I am clear that that is an internationally focused definition, but we are concerned that we are seeing patterns of violence that might bear the hallmarks of that kind of development, so we are keeping that very closely under review.
Written Statements
(2 months, 1 week ago)
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Digital Markets, Competition and Consumers Act 2024
(2 months, 1 week ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)
The Digital Markets, Competition and Consumers Act received Royal Assent on 24 May 2024. The Act will make significant changes to the UK’s competition and consumer landscape that will protect small businesses, save consumers money, boost innovation and drive growth.
Part 1 of the Act will establish a pro-competition regime for digital markets that will promote more dynamic markets and ensure the most powerful tech firms treat consumers and business fairly.
Part 2 makes several enhancements to our wider competition regime, to give the Competition and Markets Authority greater powers in tackling illegal, anti-competitive, behaviours and to focus competition regulation on the areas of greatest potential harm.
Parts 3 and 4 strengthen the enforcement of consumer law and introduce new consumer protections, including tackling fake reviews and drip pricing, new rules for consumer saving schemes and introducing new rights relating to subscription contracts.
Part 5 contains miscellaneous measures including provisions which deal with investigative assistance to overseas regulators, disclosing information overseas, providing for a duty of expedition on the CMA and sectoral regulators, and giving the CMA new information gathering powers to support a function of monitoring competition in the retail motor fuel sector in the UK.
A key focus of the Act is providing greater powers and responsibilities for the CMA, the UK’s primary independent competition and consumer protection authority. This will help the CMA meet the challenges of the modern economy.
The Government recognise the importance of implementing the Act as soon as possible so that businesses and consumers can reap its benefits. We also understand those affected by the Act need to know when its changes will come into effect. That is why the Government are publicly setting out our plans for implementation.
Key steps must be taken to implement the Act. Secondary legislation must be laid in Parliament, under powers set out in the Act, before the Act’s measures can be commenced and enter into force. The CMA must publish guidance setting out how it will carry out its functions and use its powers. The Secretary of State for Business and Trade must approve CMA digital markets guidance. The Government are working closely with the CMA to ensure these are in place as soon as possible. Of equal importance is the need for secondary legislation and guidance to be detailed, robust and clear to ensure the Act’s changes are understood and can be complied with.
The Government aim to commence parts 1, 2 and 5 of the Act in December 2024 or January 2025. In the autumn, secondary legislation will be laid before Parliament for scrutiny before it enters into force. Commencing part 1 will bring the digital markets regime into effect, and we expect the CMA to launch the first strategic market status investigations shortly afterwards. The reforms to the existing competition regime, the new motor fuels function and other part 5 measures will take effect on the commencement date.
The commencement order will be made at least 28 days before the commencement date.
In April 2025, the Government expect to commence part 3 of the Act, which provides for the consumer enforcement regimes, and part 4, chapter 1 of the Act, which replaces the unfair trading regulations. Secondary legislation will set out rules for the CMA’s new direct enforcement powers, alongside guidance on these new powers. New savings schemes rules will not commence before April 2025, and this timeline is subject to continuing engagement with consumers and industry. Reforms to subscriptions contracts and alternative dispute resolution will follow later, with subscriptions reforms not commencing before spring 2026, at the earliest. These timelines follow commitments made in the previous Parliament, and reflect the quickest possible delivery of the reforms, while ensuring that the necessary consultation and other steps can take place.
The Government’s implementation plans will deliver the Act’s benefits as quickly as possible, while ensuring its changes enter into force smoothly, allowing those that will be affected by them adequate time to prepare.
[HCWS74]
Strikes (Minimum Service Levels) Act 2023: Repeal
(2 months, 1 week ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)
Minimum service levels unduly restrict the right to strike and undermine good industrial relations. The introduction of the Strikes (Minimum Service Levels) Act 2023 was met with widespread condemnation from employers and trade unions. Many employers across different sectors pointed to its unworkability and impact on the ability of employers and trade unions to negotiate and to resolve disputes.
As such, the Government announced on 6 August 2024 that we will repeal the Strikes (Minimum Service Levels) Act 2023 to get public services back on track and strengthen the rights of working people. The Deputy Prime Minister and the Secretary of State for Business and Trade have also written to other Secretaries of State, the First Minister of Scotland and the First Minister of Wales asking them to encourage employers to avoid imposing minimum service levels on their workforce, until the Act is repealed.
We have begun preparations to repeal the 2023 Act as part of the forthcoming employment rights Bill. Amendments made by the 2023 Act to the Trade Union and Labour Relations (Consolidation) Act 1992 will accordingly be reversed and any minimum service regulations will lapse automatically once the employment rights Bill has Royal Assent.
Although the ability of employers to give work notices will legally continue until the Strikes (Minimum Service Levels) Act 2023 has been formally repealed and amendments to the 1992 Act are accordingly reversed, in this interim period we have strongly encouraged employers to seek alternative mechanisms for dispute resolution, including voluntary agreements, rather than imposing minimum service levels.
I also wish to make clear that, following the High Court ruling in August 2023 which upheld the judicial review challenge on the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022, employment businesses are prohibited from providing agency workers to cover the duties normally performed by a worker of an organisation who is taking part in a strike or other industrial action. In the light of the High Court ruling, it is not necessary to repeal these regulations.
The upcoming employment rights Bill will remove barriers to effective dispute resolution and we will continue to work with businesses as we develop and implement our plan to make work pay.
[HCWS75]
Death Certification Reform
(2 months, 1 week ago)
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The Parliamentary Under-Secretary of State for Health and Social Care (Andrew Gwynne)
My noble Friend the Parliamentary Under-Secretary of State for Patient Safety, Women’s Health and Mental Health (Baroness Merron) has made the following statement:
I wish to inform the House that reforms to the death certification process in England and Wales begin today.
These reforms focus on the experience for bereaved people and seek to support improvements to patient safety. Importantly for bereaved people, the introduction of a statutory medical examiner system provides an opportunity for them to raise questions or concerns with a senior doctor not involved in the care of the deceased. The statutory system will also help deter criminal activity, improve practice and ensure appropriate referrals to coroners for further investigation.
These reforms respond to multiple inquiry recommendations over many years and mark a significant change to processes for medical practitioners, registrars and coroners. Under these reforms all deaths will legally become subject to either a medical examiner’s scrutiny or a coroner’s investigation irrespective of whether the deceased is to be buried or cremated, delivering a more equal and comprehensive system of assurance. From today, all of the medical examiner system’s obligations, duties and responsibilities are enshrined in law.
These reforms are the result of work across a number of Government Departments including the Department of Health and Social Care, Ministry of Justice, Home Office and General Register Office, Welsh Government and the Office for National Statistics. The National Medical Examiner in NHS England oversees the medical examiner system. The Royal College of Pathologists, the lead college for medical examiners, provides training for medical examiners and shares relevant communications to all those involved in the death management process.
I wish to share my gratitude to all those involved in delivering this important reform to death certification to provide greater transparency to bereaved people on the circumstances surrounding a death.
[HCWS76]
World Health Organisation Pandemic Accord Negotiations
(2 months, 1 week ago)
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The Parliamentary Under-Secretary of State for Health and Social Care (Andrew Gwynne)
I would like to update the House regarding the ongoing negotiations on a new, legally binding international agreement on pandemic prevention, preparedness and response—a pandemic accord—at the World Health Organisation.
Infectious diseases do not respect borders. As the covid-19 pandemic showed, and the current mpox health emergency has reminded us, we can only protect citizens and economies from health threats if we collaborate closely with other countries.
Whether it is to monitor the spread of disease or to develop new vaccines, in future health emergencies we will likely rely on others, and they may rely on us, to share the information and resources we all need to save lives. It was only because of the information shared with us from countries which covid reached first that we were able to develop the vaccines that protected the UK and many around the world. More global collaboration on health threats will make Britain stronger and safer.
That is why the Government are committed to working with our international partners, including those in the global south, to negotiate a pandemic accord that enhances global health security across the world and is firmly in the UK’s national interest.
The pandemic accord presents a unique opportunity to:
protect lives, livelihoods and the NHS by strengthening pandemic prevention and response;
contribute to economic growth by promoting innovation in pandemic-related R&D;
signal to the world that the UK is taking a new approach to multilateralism and is sincere about improving equitable access to vaccines, treatments and tests.
The Government are also determined to use this opportunity to support delivery of our health, growth and security missions. We will engage closely with our developed and developing country partners to reach a consensus agreement that reflects their priorities as well as our own, to keep us all safer. We will also continue to engage with civil society, industry, and the devolved Governments, Crown dependencies and overseas territories.
Member states of the WHO have until the World Health Assembly in May 2025 to reach an agreement on the pandemic accord, following an extension agreed at the World Health Assembly in May 2024.
Targeted amendments to the international health regulations to improve information sharing and collaboration for public health emergency response were agreed at the World Health Assembly in May 2024. The international health regulations are an important technical framework that helps to prevent and protect against the international spread of disease. This set of proposed amendments updates the regulations to reflect lessons learned, including from covid-19.
Every WHO member state, including the UK, now has the right under the international health regulations to evaluate each and every amendment before exercising its sovereignty to decide whether to accept or opt out of each or all of the amendments. This Government will of course agree to amendments only if they are in the UK national interest. Officials across Government are currently analysing the amendments and will provide advice to Ministers. The Government will provide an update to Parliament on the UK’s approach in due course.
The pandemic accord and international health regulations negotiations have been the subject of significant misinformation. Both the WHO and the UK Government are clear that respect for member state sovereignty is a guiding principle of the negotiations. Co-operation with countries around the world does not compromise our sovereignty; it strengthens our security.
The Government are firm in our belief that a new pandemic accord and strengthened international health regulations that set out how countries will work together to address health threats is in all of our best interests. The world is safer when we stand together.
We will continue to update the House through the course of this Session at relevant and important junctures in the negotiating process.
[HCWS77]
House of Lords
Introduction: Lord Cryer
Introduction: Lord Sharma
Oaths and affirmations
Pension Credit
(2 months, 1 week ago)
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Lord Davies of Brixton
To ask His Majesty’s Government how many people (1) claimed, and (2) were eligible to claim, Pension Credit in each of the past three financial years.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Sherlock) (Lab)
My Lords, in answer to the first part of the Question, the numbers of people claiming pension credit were: in 2019-20, 1.49 million, in 2021, 1.41 million, and in 2021-22, 1.35 million. In answer to the second part, we cannot know precisely how many people are eligible to claim pension credit because we do not hold data on their circumstances, but we make estimates based on surveying pensioners and extrapolating from there. On that basis, we estimate that in 2019-20, 2.26 million were eligible. No figures are available for 2020-21 because the pandemic restricted the number of face-to-face interviews that could be done, and that were necessary to collect the data. In 2021-22, there were 2.15 million.
Lord Davies of Brixton (Lab)
I thank my noble friend for her Answer and express my great pleasure at seeing her in her place. But, her Answer makes it clear that many of the poorest pensioners—not just those who fail to claim credit, but those with an income slightly higher than that—will suffer from the cut to the winter fuel payment. Does she agree that seeking a replacement for the anomalous tax-free cash payment should only follow a thorough and detailed review, rather than this rushed, information-lite and damaging decision?
Baroness Sherlock (Lab)
I thank my noble friend—for everything up to the “But”. The Government are having to take what is a difficult decision at this time for the very simple reason that we inherited a £22 billion pressure on public finances.
Baroness Sherlock (Lab)
If only the Opposition had been as attentive when they were building up the deficit as they are now it is there. To be really straightforward, the Chancellor came in and looked at the public finances, which were the result of significant pressures having built up in departmental spending. Significant commitments had been made, but no spending review had been done since 2021 to make sure that the money was there to pay for things. As a result, this Government have had to make the hard decisions that were not made previously, and this is one of them. We have taken action to make sure that we are protecting the poorest pensioners. Everybody on pension credit will be entitled to the winter fuel payment. We are targeting it at those who need it most, not at the many pensioners who do not need it as much.
Lord Sherbourne of Didsbury (Con)
My Lords, when the Government looked at the various candidates for cutting public expenditure, why did they choose winter fuel payments?
Baroness Sherlock (Lab)
My Lords, the pressures were such that some of the money had to be found in this financial year, because a series of expenditure gaps came to light in this financial year. We have already cut other capital programmes, and departments are absorbing pressures. This was a cut that could be made in-year, so it was added to it.
I am sorry to say that this is not the last difficult decision this Government are going to be forced to make, but we will try to target things appropriately. I think most Members of the House would agree that something like a winter fuel payment should not be going to the roughly quarter of pensioners who have a million pounds in assets; it should not be going to those who can manage. What we should be doing is trying to target the money at those who need it most, and that is what we set out to do.
Lord Palmer of Childs Hill (LD)
My Lords, the Minister has talked about encouraging people who are entitled to pension credit to claim it. Does she agree that they do not claim it for reasons of pride, or perhaps because they are unable to cope with the system? How are the Government going to encourage this large number of people to claim pension credit, because if they do not, they will not have the winter fuel allowance? I have doubts that people will actually claim it to any great degree.
Baroness Sherlock (Lab)
The noble Lord makes an important point and I am grateful to him for doing so. Certainly, a significant number of pensioners do claim pension credit—1.4 million have managed to claim and do get it as a result. So, our job is to get the next surge of people to do that. DWP has a big campaign on: we had a week of action last week, and we work with partners such as charities and local authorities to go out and promote the campaign. From next week, we are running a national marketing campaign on a range of channels, including national print and radio. We will be targeting people of pension age but also friends and family, who can encourage them to apply. It can be tough, but sometimes we need to make people understand that there is lots of help out there. They can call the department free of charge and get charities to help them. If people are really stuck, we have a DWP home visiting team, which will visit the vulnerable and help them make a claim. So I urge all noble Lords: by all means let us have the fight in here, but please put the word out and let us get people to claim what they are entitled to.
Viscount Younger of Leckie (Con)
My Lords, allied to pension credit, the Government find themselves firmly between a rock and a hard place on this ill-judged decision to cut the winter fuel payment. On the one hand, if there is a substantial increase in the uptake of pension credit—and of course, we are all for that—the figures show that the increased costs will all but wipe out the net gain of £1.4 billion that the Treasury expects through the cut. On the other hand, with a poor or low uptake, it is apparent that many more of the most vulnerable pensioners will be hit. What mitigating measures are the Government looking at to reduce the impact of this decision, and when will they be announced and introduced? Mitigating measures there will need to be—and even better would be to see a reversal of the whole policy.
Baroness Sherlock (Lab)
My Lords, the noble Lord is talking about take-up. As I said, the best estimate of pension credit take-up as a whole is 63%: that is 63% of the number of people who could be claiming pension credit who we think are getting it. The amount of pension credit that is taken up is quite a bit higher than that, nearer to almost three-quarters of the total amount claimed. The challenge for us is to make sure that those who do not claim it do get it. However, the big difference this will make is this: if you are on the basic state pension and not claiming pension credit, you will get not just an extra £200 or £300 in winter fuel payments; you could get thousands of pounds in pension credit itself. Our job is therefore to make it as easy as possible for people not just to get this smaller amount, but to get the bigger amount as well, so let us all try to do that.
Lord Watts (Lab)
My Lords, many of us accept that the Government have inherited a black hole in the budget and need to take action on it, and we are also not against the principle of some form of means-testing. However, many of us also think that the threshold is too low. Will the Government look at the threshold again to ensure that poor pensioners are not excluded from the winter fuel allowance in the future?
Baroness Sherlock (Lab)
My Lords, I have had lots of very interesting suggestions from, and conversations with, Members from around the House, who have variously suggested trying different thresholds and creating a new, higher threshold. One of the challenges is that this is a single, once-a-year, one-off payment. There is already a means-testing process for pension credit. Creating a brand new means-testing system for a one-off payment would involve simply too much bureaucracy, complication and red tape for what is a once-a-year payment. So, we have ended up going for pension credit, which is already there. The great advantage is that, if somebody is on pension credit, we can pretty much automatically give them the winter fuel payment, so they will not have to apply for it, whereas, if we create a new special scheme, people will have to apply for it. We will continue to look at a range of alternatives, but this is clearly the only sensible way to do this in the short term. I stress again: everybody on pension credit is entitled to this money. Let us get them out and getting it.
Lord Cameron of Chipping Norton (Con)
My Lords, as someone who made a promise to Britain’s pensioners to keep the winter fuel payment, and kept that for six years as Prime Minister, may I make a gentle suggestion to the Government? Instead of this misguided attack on the winter fuel payment, why not simply say that pensioners who are higher-rate or additional-rate taxpayers do not receive it? You may only raise 10% of the money but you would save 90% of the shame and embarrassment of the current position.
Baroness Sherlock (Lab)
I am grateful to the noble Lord. He will remember that the previous Government decided to do something similar with child benefit. They wanted to means-test it, but because they could not find a way to do so, they decided to get just higher-rate taxpayers. He may also remember the massive complications that flowed from that—because the tax system is individual-based and the benefit system household-based—and that it caused huge complications and the Government effectively had to relitigate to do it all over again. We need to find something that works and is straightforward. The pension credit system is established; people know it is there. Our job is to make sure they can apply for it. If we can do that, we can ensure that they get not just this £200 or £300 but the thousands of pounds they might be entitled to under pension credit. We have absolutely committed to looking after pensioners. The triple lock gave people £970 the year before and £900 this year; who knows what the earnings data will be, but it could be several hundred pounds more this year as well. We will keep investing in pensioners, but we will direct more to those who need it most.
Baroness Jones of Moulsecoomb (GP)
Why do these tough decisions always hit the poor and not the fossil fuel companies and the water companies?
Baroness Sherlock (Lab)
My Lords, of course, the point is that most of the pensioners hit by this decision will not be the poor, among those who actually get money at the moment. But the noble Baroness absolutely has a point about making sure that polluters pay, and this Government are addressing those questions as well.
Anti-Muslim Prejudice and Hate Crime
(2 months, 1 week ago)
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Baroness Gohir
To ask His Majesty’s Government what assessment they have made of the drivers of hate crime against Muslims in Britain, and what steps they are taking to challenge anti-Muslim prejudice and anti-Muslim hate crime.
Baroness Gohir (CB)
In begging leave to ask the Question standing in my name on the Order Paper, I draw attention to my interests set out in the register.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Lord Khan of Burnley) (Lab)
My Lords, we are absolutely committed to tackling Islamophobia. Our Government are only 10 weeks old, but in this time, I have crossed the country from Southport to Sunderland to Camden to hear directly from communities, with more meetings planned. I am deeply saddened by recent horrific scenes and hateful attacks against Muslims, causing unacceptable fear. We are refreshing our strategic approach to tackling all forms of hatred, including Islamophobia, and we will update the House shortly.
Baroness Gohir (CB)
My Lords, I am publishing a report today called Anti-Muslim Hate: Concerns and Experiences. I have sent a draft of it to the Minister and will send a final copy today. Will the Government formally respond to my report? Key findings included 80% of Muslims who experienced hate crimes not reporting them and 73% being very worried about their safety after the riots. What action will the Government take to increase reporting and improve the safety of Muslim communities—not just of mosques but of Muslims walking down the road and Muslims online using social media?
Lord Khan of Burnley (Lab)
My Lords, the noble Baroness has raised some important questions regarding hate crimes against Muslims in our country. I am particularly thankful to her for all the important work she has done, including leading the Muslim Women’s Network UK and advocating for Muslim communities, and women especially, at the highest levels. I look forward to meeting her tomorrow. Anti-Muslim hatred is abhorrent and has no place in our society. We will continue to take swift action to address anti-Muslim hatred, and this includes safeguarding Muslim women. MHCLG is reviewing Dame Sara Khan’s advice, and we will provide updates on social cohesion work in due course.
Baroness Warsi (Con)
My Lords, you cannot genuinely tackle what you dare not define and detail. In opposition, Labour adopted the All-Party Parliamentary Group on British Muslims’ definition of Islamophobia, as did most other political parties, including the Conservative Party in Scotland. Can the Minister update the House on whether the Labour Party intends to follow through on that work now that it is in government, and what work, if any, has started?
Lord Khan of Burnley (Lab)
I first acknowledge the work that the noble Baroness has done in this area; in particular, a comprehensive piece of work done by the APPG on the definition of Islamophobia. A new definition must be given careful consideration so that it comprehensively reflects multiple perspectives and considers the potential implications for different communities. We understand the strength of feeling on this issue and want to make sure that any definition comprehensively reflects multiple perspectives. We are actively engaging and considering our approach to Islamophobia, including definitions, and we will provide further updates in due course. I look forward to working and engaging with the noble Baroness and the APPG.
Baroness Hussein-Ece (LD)
My Lords, the previous Government established the cross-departmental Anti-Muslim Hatred Working Group, of which little was known about its membership and work. I found out about it quite by accident a few months ago. Do this Government plan to re-establish this working group, and will the Minister meet Muslim Members of this House and another place, and others if necessary, to consult on its membership and work?
Lord Khan of Burnley (Lab)
I reassure the noble Baroness that I am happy to meet any noble Lord, in particular about any concerns about religious hatred of all kinds. In relation to our approach on the definition of Islamophobia, as I just answered, we will come forward and update the House and discuss the actions we will take to tackle the problem of Islamophobia in our country.
The Lord Bishop of Lichfield
My Lords, some of the most valuable and effective work that is being done to improve community relations, and so to counter religious hate crime and prejudice, is at a local and grass-roots level; for example, in Walsall we have community iftars, church-mosque twinnings, multifaith drama groups, and so on. Can the Minister tell us what the Government are providing in funding and support for local initiatives and groups of that kind?
Lord Khan of Burnley (Lab)
First, I express my gratitude to the right reverend Prelate for his question. He makes the point that faith groups play a huge role in working to promote community cohesion and attacking the problems that we face in society. Moving forward, we are looking at having an approach that best supports communities. A lot of work is now being led by the Deputy Prime Minister; in the next few days we will see some measures that will take not just a national but a cross-governmental approach to social cohesion. I reassure the right reverend Prelate that we are looking at these challenges at the moment.
Lord Singh of Wimbledon (CB)
My Lords, there are no comparative statistics to show that Muslims suffer more from irrational prejudice than, say, any member of the Hindu, Sikh or Buddhist faiths. To borrow from Shakespeare, if a member of those other faiths is cut, do they not bleed? Will the Minister confirm that the Government will be even-handed in looking at the needs and concerns of all religions and those of no faith?
Lord Khan of Burnley (Lab)
I say in response to the noble Lord’s important points that all forms of racial and religious discrimination are completely unacceptable and have no place in our communities. This Government will explore a more integrated and cohesive approach to tackling it. We are committed to protecting the right of individuals to freely practise their religion and we will not tolerate religious hatred in any form towards any religion.
Baroness Scott of Bybrook (Con)
My Lords, the previous Government committed to spending over £117 million to protect mosques and Muslim schools and community centres in the UK from anti-Muslim hate attacks over the next four years. In the light of the unrest we saw this summer, what discussions has the Minister had with his ministerial colleagues to ensure that this money is being spent effectively to protect Muslim communities? In the light of the summer disruption, what further steps will the Government take to tackle anti-Muslim hate in the United Kingdom?
Lord Khan of Burnley (Lab)
My Lords, the noble Baroness makes an important point. On the latter question, the Home Office has announced a rapid response force—work which involves more security to help support mosques that are facing direct public and violent disorder against them. I have visited quite a few mosques and had discussions with communities. In relation to our £29.4 million pledge to support mosques, a lot of mosques are taking up these schemes. Their continuation is important, as it is to tackle any form of religious hatred we see, including anti-Semitism. Where there are high levels of religious hate crime, there is existing government funding to support institutions to protect themselves.
Baroness Blower (Lab)
My Lords, does my noble friend agree that the review of the national curriculum that the Government are planning provides the opportunity to ensure that schools are places where all ignorance and prejudice-based behaviour are challenged, and where anti-racism—in this case, islamophobia—is actively taught, to try to stop these attitudes developing in our young people?
Lord Khan of Burnley (Lab)
My noble friend makes an important point in recognising that school has a huge role to play in raising awareness and tackling discrimination. At a very early age, young people can understand our British values. I visited Middlesbrough, and that was what the community was telling me. We should be looking at this more closely, looking at the national curriculum. That is a discussion to be had with the community and the Department for Education. We will take that forward and pass it to the relevant department.
Lord Ahmad of Wimbledon (Con)
My Lords, in thanking the Minister for sharing his answers, perhaps I might make a suggestion. My noble friend on the Front Bench has already articulated the issue of funding. There is existing architecture from the previous Government—the Anti-Muslim Hatred Working Group. Also, it was the Conservative Government led by my noble friend Lord Cameron that made anti-Muslim hatred a specific hate crime. There is also an issue of underreporting.
I hope that the Minister agrees that we must focus on reporting these crimes and make that issue of education prevalent in the communities. Linked with that, we must accentuate the positive. Muslims make an incredible contribution across the piece in the United Kingdom, even in areas such as cricket, which may be the litmus test. I recall a particular ministry official saying to me that when he gets up in the morning, he hears Mishal Husain on the radio, travels on an Underground run and overseen by Sadiq Khan, then reports to a Minister called Tariq Ahmad. Let us accentuate the positive of Islam and Muslims in Britain alongside what we do in tackling anti-Muslim hatred.
Lord Khan of Burnley (Lab)
I do not have anything to respond to that with. It was a fantastic point. I pay tribute to the work that the noble Lord did as Special Envoy on Freedom of Religion or Belief. His points were very clearly made, and I will take them forward. I appreciate his comments.
Independent Review of Children’s Social Care
(2 months, 1 week ago)
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Lord Wood of Anfield
To ask His Majesty’s Government what plans they have to implement the recommendations of the 2022 Independent Review of Children’s Social Care.
The Minister of State, Department for Education (Baroness Smith of Malvern) (Lab)
My Lords, reforming children’s social care is critical to giving hundreds of thousands of children and young people the best start in life. It is also necessary to achieve financial stability for local authorities. The previous Government oversaw the Independent Review of Children’s Social Care in 2022. This Government have already moved quickly to set out our legislative programme. The children’s well-being Bill will deliver on our manifesto commitment to ensure that all children can thrive in safe, loving homes.
Lord Wood of Anfield (Lab)
My Lords, I thank the Minister for that Answer and say “Hello” to her with her new hat on. All of us know that the state of our children’s care system is totally unacceptable. It is a system with growing financial shortfalls, where rising numbers of placements squeeze spending on prevention and, most importantly, where the most vulnerable children in our country are, for cost reasons, being sent sometimes hundreds of miles from their home and their kinship circles. Can I ask the Minister about regulation in response to this? Last week, Ofsted said that it should be given the powers and resources to stop unregulated children’s homes, where hundreds of children currently reside, and to equip Ofsted to regulate private equity-run companies that increasingly dominate children’s care services, often based overseas and facing little regulatory oversight. Can the Government commit to meeting these important Ofsted demands?
Baroness Smith of Malvern (Lab)
My noble friend is right, I am afraid, in his description of the enormous challenge in children’s social care at the moment, particularly by identifying the role of Ofsted. As I outlined in this House last week, Ofsted will be working closely with the children’s social care sector to determine how it can protect children in the way that he described. Also, on the particular challenges in the children’s social care placement market that my noble friend outlined, local authorities are facing enormous rising costs for these places and, as my noble friend says, for places which increasingly are not serving the needs of children. This Government are clear that excessive profiteering from vulnerable children in care is unacceptable. Through the legislation that we will bring forward, and through the regulation that he described, we will tackle this.
Lord Young of Cookham (Con)
My Lords, the MacAlister review described foster carers as the bedrock of a social care system. However, in the last five years we have lost 1,000 foster carers, with 5,000 more children in care. For many children, a children’s home with dedicated staff is the right answer, but living with a family in foster care may provide a more stable environment at a quarter of the cost. What is the Minister doing to encourage more foster carers to come forward and provide that care for children?
Baroness Smith of Malvern (Lab)
The noble Lord is right: for many children the stability that comes from being in a loving family with foster care is absolutely appropriate for them. Therefore, it is disappointing that, since 2019, the number of mainstream local authority foster carers has dropped by 11%. We will continue the policy of foster care hubs to provide support and resource for local authorities and foster carers in 10 different places—covering 64% of the country—and, where those hubs do not have impact, we will also develop the foster link resource to support children’s social care services in other parts of the country. There is a role to play for all of us and all local authorities in celebrating foster carers and encouraging more people to think about doing it.
Lord Laming (CB)
My Lords, does the Minister agree that there are two main thrusts of this report? First, there needs to be a huge increase in family support services to prevent, as far as possible, children being removed from their parents. Secondly, for the children that are in care, the state has a responsibility to be a good parent and that means helping these children fulfil their full potential. Does the Minister think that the Government have the ambition to achieve these two things?
Baroness Smith of Malvern (Lab)
Given the noble Lord’s enormously distinguished career in this area and his contribution to ensuring that children are kept safe, I think the whole House will listen to what he has to say. He is right that the objective of the MacAlister review and this Government is to bring timely support to children and families that need help; evidence shows that preventing problems from escalating leads to better outcomes. We will build on the work of the Families First for Children pathfinders, which, unfortunately, are only in 10 places at the moment, to think about how we can develop that early help. The noble Lord also makes the very important point about all our responsibility, as corporate parents, to ensure that children who have to come into the care system get the same very best care from us that we would expect for our own children. That is certainly something that this Government will pursue and think about how we can embed that even more broadly in the public sector and in our communities.
Baroness Tyler of Enfield (LD)
My Lords, I will pursue the point made so eloquently by the noble Lord, Lord Laming. Last week, the children’s care coalition of charities highlighted that, for the first time, more is being spent on residential care placements than on early intervention. Can the Minister say how the Government plan to rebalance that spending, given the current tight fiscal climate, including in the upcoming Budget and spending review, to ensure that families, children and young people get the support they need before reaching crisis point?
Baroness Smith of Malvern (Lab)
The noble Baroness makes a very important point. The Local Government Association also found that, whereas in 2022-23 91% of councils that responded spent at least £10,000 per week or more for one placement, in 2018-19 that had only been 23%. Not only does the position in the placement market disadvantage children in not being able to find those loving and stable placements that they need, but it is also an enormous burden to local government. That is why, as she said, we have to build on, for example, the £45 million invested in the Families First for Children pathfinders this year to help families get support earlier. Where there is clear profiteering from some providers in the placement market—evidence of this has been discovered—we need to take action and we will do so.
Baroness Barran (Con)
My Lords, I recognise the Minister’s sincerity and that of her colleagues in addressing this issue, but we know that when we talk to children with personal experience of the care system, what they tell us is how many different social workers they interact with. I am not sure what the opposite of stability is, other than instability, but it is a series of fractured and fragmented relationships. Can she update the House on how the Government plan to address this?
Baroness Smith of Malvern (Lab)
The noble Baroness is right. I have recently been in a position to talk to children in social care in Sandwell and she is absolutely right, as one of their top concerns is not having continuity of social worker. That is why it is so worrying that local authorities are becoming even more reliant on agency social workers, as 17.8% of all local authority child and family social workers are agency workers currently. There are many good and high-quality social workers who come through the agency route, but their position is more likely to be unstable than it would be with a permanent worker. That is why the department is already building a new relationship with the children’s social care workforce and is looking at how to improve support for workers in children’s social care. Thinking particularly about working conditions as a key factor in keeping social workers in the profession, this autumn we will release resources to support local authorities with best practice to retain social workers. We will continue the work of the national workload action group, which will make independent recommendations on acting on workloads by January 2025.
Lord Sikka (Lab)
My Lords, between 2011 and 2023, 816 care homes were involuntarily closed by the regulator. Of these, 804 were operated by for-profit organisations. They profiteered from regulation and safety breaches, low staffing and harms to residents. Local authorities and not-for-profit care homes provided the best care. In the light of this evidence, can the Minister say when the Government will end the running and operation of care homes by for-profit organisations?
Baroness Smith of Malvern (Lab)
My noble friend has certainly identified a challenge, where providers of placements and homes for children focus more on profit than on the quality that is being provided to those children. Local authorities are currently providing 45% of looked-after children’s placements and the private sector is providing 40%, some of which offer stability, high-quality and loving care for our children. However, where it is clear that placement providers are profiteering from the most vulnerable children in the country, this Government are absolutely committed to taking action.
Local Bus Sector
(2 months, 1 week ago)
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Lord Berkeley
To ask His Majesty’s Government what plans they have to provide longer-term support to the local bus sector.
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
The Government are determined to deliver better bus services. We are setting out an action plan allowing every community the opportunity to take back control of local bus services to deliver improvements for passengers and giving local leaders more control and flexibility over bus funding to deliver their local transport priorities for growth, jobs and housing. We will consider how best to support buses in the longer term as part of the forthcoming spending review.
Lord Berkeley (Lab)
I am grateful to my noble friend for that Answer. He has long experience in the bus industry. Would he look, in particular, at the problem of rural bus services, which on the whole do not get much visibility? He may know of a very good one in Cornwall; buses go every half hour, with cheap fares. How will he ensure that the whole country benefits? Will the funding be there and will it be ring-fenced? Will the Government encourage or force local authorities to pick up their offer?
Lord Hendy of Richmond Hill (Lab)
The proposition for local authorities and communities throughout the country is to take advantage of the proposals that the Government will table, which will ensure the right solutions for each area. My noble friend knows that the bus service in Cornwall is particularly well organised; it is not franchised but is subject to a large degree of local authority control. Consistency of information, ticketing, fares and service standards is an important feature, wherever in the country buses operate.
Baroness McIntosh of Pickering (Con)
My Lords, will the Minister, whom I congratulate on his new position, pay tribute to rural bus services such as those in North Yorkshire? If the bus arrangements transfer back to the local authorities, will he ensure that the funds will follow the responsibility for, in particular, concessionary bus fares, which are so important for older people in rural areas?
Lord Hendy of Richmond Hill (Lab)
I thank the noble Baroness for her compliment. I hope the House will see it repaid in what I do. Concessionary bus fare funding will, without any doubt, follow the control of bus services, and that will be as important in North Yorkshire as it will be everywhere else in the country.
Baroness Randerson (LD)
My Lords, the Minister will be fully aware from his extensive experience how much young people in London benefit from free bus travel. Unfortunately, in the rest of the country the picture is different—it is very patchy and uneven. Does the Minister agree that there is a strong argument for a standard system of highly reduced or free bus fares for young people across the country, to help them into jobs, apprenticeships and education, to create a fairer society and to create a new generation of bus travellers?
Lord Hendy of Richmond Hill (Lab)
The noble Baroness will recognise the important ability of the Mayor of London to fund cheap and free fares for young people. The opportunity that the Government’s franchising proposals will give is that other local authority leaders and combined authority mayors will also have the ability to fund fare concessions for the purposes that she mentions.
Lord Moylan (Con)
My Lords, the Minister is right to emphasise the importance of bus services, particularly for the elderly. I speak as somebody who has reached pension age. In that light, and given the Government’s, shall we say, cavalier attitude to pensioners that we have seen on display, can he give an unshakeable commitment that the Government will maintain the national bus pass and the statutory freedom pass scheme in London? Or is there the possibility that they too could find themselves subject to means testing?
Lord Hendy of Richmond Hill (Lab)
At my age, I share the noble Lord’s enthusiasm for the freedom pass scheme. He is attempting to put me in the invidious position of making a concrete commitment for all time. The freedom pass, and the local authority and national scheme for free travel for pensioners, has lasted a long time and we would all hope that it continues into the future. The Government are not in a good position with the state of public finances they have been left with, but we will bear in mind his enthusiasm, and that of many others, for free travel for elderly people on buses as we move forward with our commitments for the bus service.
Lord Berkeley (Lab)
My Lords, in addition to the work that my noble friend is doing with buses, we will soon hear about the Great British Railways changes, with Ministers taking much greater control of the railways. Does this not provide an opportunity for some proper timetabling, so that when a bus arrives at a station there is a train soon ready to go, rather than one that has just left, which happens in so many parts of the country at the moment?
Lord Hendy of Richmond Hill (Lab)
I thank my noble friend for that question. It is a subject that has engaged the bus and railway industries for generations. In fact, it is more likely that the bus will have to alter its timetable to suit the railway, because the railways are a national, integrated system, but he is right to suggest that the opportunity arises as a consequence of the Government’s proposals for Great British Railways and for buses as part of a more integrated public transport service across the entire country. The Government will do their best to make sure those opportunities are built on.
Lord Kirkhope of Harrogate (Con)
My Lords, my colleagues and I are concerned about the amount of pollution which diesel buses in particular present. We used to have trams and vehicles that were run on electricity. Can the Minister confirm what the Government are doing to encourage better environmental standards in buses and other means of public transport?
Lord Hendy of Richmond Hill (Lab)
The programme to reduce emissions from the bus fleet has been carried out by successive Governments over many years. There is no doubt at all that government intervention has created both cleaner diesel buses, which now meet that Euro 6 standard, and an increasing fleet of electric buses, which are the modern equivalent of tram-cars. This Government hope to continue that, subject to funding, because it is clearly a very important contribution to air quality in urban and other areas.
Lord Hampton (CB)
My Lords, while we talk about support for buses, I think we ought also to talk about support for bus safety. I quote the BBC website from this morning:
“At present there is no independent investigator and no independent recommendations when it comes to bus collisions. The families want to know why there is one policy for trains and another for buses”.
Perhaps the Minister could comment on that.
Lord Hendy of Richmond Hill (Lab)
It is clearly critical that bus services and buses should be safe. The DVSA, which is an agency of the Department for Transport, does look at serious bus accidents. It can deal with the drivers and the operators of those vehicles, and take into account whether standards should be changed for bus design.
Baroness Blackwood of North Oxford (Con)
My Lords, for many of those dependent on buses, whether they are travelling to work or to hospital appointments, lateness can have a real impact. Can the Minister say what actions he will take to improve real-time tracking of buses?
Lord Hendy of Richmond Hill (Lab)
The technology for real-time tracking has changed enormously in 20 years. One of the opportunities for franchising, which is part of the Government’s programme for bus services, is to provide consistent real-time information. It is important. It is quite clear that, where that information is provided—which is not limited to signs on bus stops; it can also be accessed on mobile phones and at home—patronage increases, so we have every enthusiasm for increasing it. The proposals on bus franchising will enable it to be more easily supplied where bus franchising takes place.
Public Authority Algorithmic and Automated Decision-Making Systems Bill [HL]
Monday 9th September 2024
(2 months, 1 week ago)
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Lord Clement-Jones (LD)
My Lords, I draw the attention of the House to my AI advisory interests on the register.
Permitted Development Rights (Extension) Bill [HL]
Monday 9th September 2024
(2 months, 1 week ago)
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Grenfell Tower Inquiry Phase 2 Report
(2 months, 1 week ago)
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The Lord Privy Seal (Baroness Smith of Basildon) (Lab)
My Lords, with the leave of the House, I shall now repeat a Statement on the Grenfell Tower inquiry made in another place last Wednesday by my right honourable friend the Prime Minister. The Statement is as follows:
“Sir Martin Moore-Bick has now published the final report of the Grenfell Tower inquiry. I am sure the whole House will join me in thanking him, the members of the inquiry and his whole team for their dedicated work.
I want to speak directly to the bereaved families, the survivors and those in the immediate Grenfell community, some of whom are with us in the Gallery today. Sir Martin concluded—I am afraid there is no way of repeating this that will not be painful—that
‘the simple truth is that the deaths that occurred were all avoidable and that those who lived in the tower were badly failed over a number of years and in a number of different ways’
by, as the report lays out in full, just about every institution responsible for ensuring their safety. In the face of an injustice so painful and so deserving of anger, words begin to lose their meaning, after seven years still waiting for the justice that you deserve. I want to say very clearly, on behalf of the country, that you have been let down so badly before, during and in the aftermath of this tragedy.
While Sir Martin sets out a catalogue of appalling industry failures, for which there must be full accountability, he also finds
‘decades of failure by central government’.
He concludes:
‘In the years between the fire at Knowsley Heights in 1991 and the fire at Grenfell Tower in 2017 there were many opportunities for the government to identify the risks posed by the use of combustible cladding panels and insulation’.
He concludes that,
‘by 2016, the department was well aware of those risks, but failed to act on what it knew’.
Further, he finds:
‘The department itself was poorly run’
and
‘the government’s deregulatory agenda … dominated the department’s thinking to such an extent that even matters affecting the safety of life were ignored, delayed or disregarded’.
So I want to start with an apology on behalf of the British state to each and every one of you and, indeed, to all the families affected by this tragedy. It should never have happened. The country failed to discharge its most fundamental duty to protect you and your loved ones—the people we are here to serve—and I am deeply sorry. I also want to express my admiration for the strength it must have taken to relive these events when giving your evidence to the inquiry, and indeed to see written down today the circumstances that led to the deaths of your loved ones.
After all that you have been through, you may feel that you are always one step away from another betrayal. I get that, and I know that I cannot change that with just words today. But what I can say is that I listened carefully to one of the members of the inquiry, Ali Akbor, who said this this morning:
‘What is needed is for those with responsibility for building safety to reflect and to treat Grenfell as a touchstone in all that they do in the future’.
I consider myself someone with responsibility for building safety, and that is exactly what I will do and what I will demand of this Government.
Today is a long-awaited day of truth. It must now lead to a day of justice—justice for the victims and the families of Grenfell—but also a moment to reflect on the state of social justice in our country and a chance for this Government of service to turn the page. That is because this tragedy poses fundamental questions about the kind of country we are: a country where the voices of working-class people and those of colour have been repeatedly ignored and dismissed; and a country where tenants of a social housing block in one of the richest parts of the land are treated like second-class citizens, shamefully dismissed as, in the words of one survivor,
‘people with needs and problems’,
and not respected as citizens—as people who contribute to Britain, who are part of Britain and who belong in Britain. Unbelievably, that continued even after the tragedy. Sir Martin highlights:
‘Certain aspects of the response demonstrated a marked lack of respect for human decency and dignity and left many of those immediately affected feeling abandoned by authority and utterly helpless’.
That alone should make anyone who feels any affinity towards justice bristle with anger.
Sir Martin continues that he finds
‘systematic dishonesty on the part of those who made and sold the rainscreen cladding panels and insulation products’.
He goes on to say:
‘They engaged in deliberate and sustained strategies to manipulate the testing processes, misrepresent test data and mislead the market’.
Sir Martin also cites
‘a complete failure on the part of the Local Authority Building Control … over a number of years to take basic steps to ensure that the certificates it issued … were technically accurate’.
He finds that the work of the Building Research Establishment
‘was marred by unprofessional conduct, inadequate practices, a lack of effective oversight, poor reporting and a lack of scientific rigour’,
and that the tenant management organisation
‘must also bear a share of the blame’.
Its only fire safety assessor
‘had misrepresented his experience and qualifications (some of which he had invented) and was ill-qualified to carry out fire risk assessments on buildings of the size and complexity of Grenfell Tower’.
He also finds
‘a chronic lack of effective management and leadership’
on behalf of the London Fire Brigade, with tragic consequences on the night of the fire.
In the light of such findings, it is imperative that there is full accountability, including through the criminal justice process, and that this happens as swiftly as possible. I can tell the House today that this Government will write to all companies found by the inquiry to have been part of these horrific failings, as the first step to stopping them being awarded government contracts. We will, of course, support the Met Police and the CPS as they complete their investigations. But it is vital that, as we respond to this report today, we do not do or say anything that could compromise any future prosecution, because the greatest injustice of all would be for the victims and all those affected not to get the justice that they deserve.
There must also be more radical action to stop something like this from ever happening again. One of the most extraordinary qualities of the Grenfell community is their determination to look forward. They are fighting not only for justice for themselves but to ensure that no other community suffers as they have done.
Some important reforms have taken place in the last seven years—which we supported in opposition—including banning combustible cladding, new oversight of building control, a new safety regime for all residential blocks over 18 metres, new legal requirements on social landlords, and making sure that fire and rescue services are trained and equipped to handle large-scale incidents, including moving from ‘stay put’ to ‘get out’ when needed. We are now addressing the recommendation from Sir Martin’s first report to introduce a new residential personal emergency evacuation plan policy for anyone whose ability to evacuate could be compromised, with funding for those renting in social housing.
We will look at all 58 of Sir Martin’s recommendations in detail. There will be a debate on the Floor of this House. We will respond in full to the inquiry’s recommendations within six months, and we will update Parliament annually on our progress against every commitment we make.
But there are some things I can say right now. There are still buildings today with unsafe cladding. The speed at which this is being addressed is far, far too slow. We only have to look at the fire in Dagenham last week—a building that was still in the process of having its cladding removed. This must be a moment of change. We will take the necessary steps to speed this up. We will be willing to force freeholders to assess their buildings and enter remediation schemes within set timescales, with a legal requirement to force action if that is what it takes. We will set out further steps on remediation this autumn.
We will also reform the construction products industry that made this fatal cladding so that homes are made of safe materials and those who compromise that safety will face the consequences. We will ensure that tenants and their leaseholders can never again be ignored, and that social landlords are held to account for the decency and safety of their homes.
As the Government tackle the most acute housing crisis in living memory, building 1.5 million new homes across the country, we will ensure that those homes are safe, secure and built to the highest standards—places of security, health and well-being that serve the needs of residents and their wider communities. A safe and decent home is a human right and a basic expectation, and the provision of that right should never be undermined by the reckless pursuit of greed. One of the tragedies of Grenfell is that this is a community who nurtured so much of what we want from housing: people who had made the tower their home and were entitled to a place of safety and security, not a deathtrap. Yet time and again they were ignored.
Two weeks ago I made a private visit to Grenfell Tower. I laid a wreath at the memorial wall and affirmed the Government’s commitment to the work of the memorial commission to deliver a permanent memorial on the site through a process led by the Grenfell community. As I walked down the narrow staircase from the 23rd floor and looked at walls burned by 1,000-degree heat, I got just a sense of how utterly terrifying it must have been. As I saw examples of the cladding on the outside of the building and listened to descriptions of the catastrophic and completely avoidable failures of that fatal refurbishment, I felt a sense of the anger that now rises through that building. It left me with a profound and personal determination to make the legacy of Grenfell Tower one of the defining changes to our country that I want to make as Prime Minister.
To the families, the survivors and the immediate community, I say that we will support you now and always, especially those who were children. In the memory of your loved ones, we will deliver a generational shift in the safety and quality of housing for everyone in this country. In the memory of Grenfell, we will change our country—not just a change in policy and regulation, although that must take place, but a profound shift in culture and behaviour, a rebalancing of power that gives voice and respect to every citizen, whoever they are and wherever they live. We will bring the full power of government to bear on this task because that is the responsibility of service and the duty that we owe to the memory of every one of the 72. In that spirit, I commend this Statement to the House”.
Lord True (Con)
My Lords, I thank the noble Baroness the Leader of the House for repeating this important Statement. Like her, our thoughts and prayers are with the victims and survivors, their friends and families and all the lives that have been irreversibly affected by this terrible tragedy. We will never forget the 72 people who lost their lives that night and, as the report makes clear, need never have lost them.
The publication of the Grenfell Tower Inquiry: Phase 2 Report is a damning indictment of over 30 years of successive state failures—the failure to appreciate, to understand and to act—and we must all take our share of responsibility for that. In this comprehensive report Sir Martin, whose appointment was not universally acclaimed, and his team should be commended. It raises many points that I am confident that all parties and both Houses will agree on. This will be a difficult time for the Grenfell community and a difficult report to process and come to terms with. Will the Government ensure that those affected will get all the support that they need at this time?
When this party was in government, we put an extensive remediation regime in place, financed by central government funding and developer contributions. That work to remediate and identify at-risk buildings must continue in order to prevent another tragedy, and I welcome that assurance. A £600 million fund was put in place to replace unsafe aluminium composite material—the cladding type used on Grenfell Tower. A further £5.1 billion followed through the building safety fund and the cladding safety scheme to pay for remediation beyond ACM cladding.
I am delighted to hear that the new Government will continue supporting leaseholders and tenants to get their buildings fixed as quickly and as safely as possible, and indeed intensify those efforts. Can the noble Baroness the Leader tell the House what the Government’s targets are for remediation work being completed?
Legislation in the last Parliament, as the noble Baroness acknowledged, reformed our fire safety and building regulation regimes through the Fire Safety Act and the Building Safety Act, and created a new building safety regulator and a new building safety regime. There was also change to statutory guidance in Approved Document B to ban combustible construction materials and reduce the threshold for sprinklers in new blocks of flats. It also introduced requirements for evacuation alert systems and secure information boxes.
I agree with the noble Baroness the Leader of the House that further measures will be needed on top of these to ensure that the regimes remain fit for purpose. The inquiry has recommended regular updating of Approved Document B, the appointment of a chief construction adviser, a single regulator and a single responsible Secretary of State. I can assure the noble Baroness that we will work with the Government to support the delivery of any proportionate and necessary measures that follow the report.
Will the Government actually commit, as the report asks, to embedding regular reviews of Approved Document B so that it keeps up with developments in building technology? If the Government agree with the recommendation to appoint a chief construction adviser, can the Leader tell the House when they hope to commence seeking to appoint someone to this position? Will the Government consider, as was proposed to be necessary, machinery of government changes to ensure that there is one lead department responsible for such issues, going forward?
We must confront the failure of oversight by those responsible for ensuring the independence and rigour of testing and compliance. Sir Martin described, as the noble Baroness said, the Building Research Establishment’s work with suppliers as “systematically dishonest behaviour”. No one would wish to jeopardise criminal inquiries—I agree with the noble Baroness—but it would be a euphemism to describe some of the behaviour described in this report as shocking and shameful.
I welcome the Prime Minister’s forthright commitment to continue to support the Metropolitan Police and the CPS in continuing to pursue criminal charges against a small number of developers and contractors who, knowingly and dishonestly, cut corners on building safety for financial gain. We stand foursquare with the Government on that, and I hope that the noble Baroness will understand that we on this side strongly agree that disgraced firms should not benefit from future public procurement.
We all have lessons to learn from this inquiry: that includes the local council and, as the noble Baroness said, the tenant management organisation. The Social Housing (Regulation) Act 2023 was introduced to improve the quality of social housing accommodation, ensure better training and the professionalisation of senior social housing staff, and redress the balance between social landlord and tenant. I am pleased that the report acknowledged the difference that this Act will make for social housing tenants. As a Government, we listened to the Grenfell community throughout the passage of that Bill; noble Lords on all sides of this House played a valuable part in improving and delivering it, and I would like to thank them. When will the Government bring forward secondary legislation to implement the measures included in the Act?
At the time of the fire, my noble friend Lady May of Maidenhead apologised for local and national failures in response to it. I reiterate her apology and repeat my own profound sympathy and apologies to all those affected by the Grenfell fire tragedy. The word “community” is much used—perhaps overused—in some aspects of modern politics. The brave people of Grenfell, in all their diversity, by their courage and support for each other, by their determination to fight for what was right for their fellows and for others in the future, and never to accept a wrong, taught us what a true community is. We honour them. We will never forget all those who died and those whose lives were so brutally changed. We, and the whole House, will stand behind the Government in ensuring that justice is done and that such a horror must never happen again.
Lord Newby (LD)
My Lords, the central conclusion of this long-awaited report is blunt and devastating. Sir Martin finds that building safety has failed for decades in central government, local government and the construction industry. He says that every single death was avoidable. From these Benches, we say a heartfelt sorry to the victims, their families and their friends.
One of the most shocking threads running through the report is that there has been no sense of responsibility and a lack of questioning inside various government departments, including by Ministers. The report says that the machinery of government and its agencies failed the victims, especially as a result of a lack of interdepartmental working. Fragmentation and a lack of curiosity resulted in inaction, delay and obfuscation, and this cost lives. This criticism also came up in the Infected Blood Inquiry, the Hillsborough report, and the Post Office Horizon report. That is why, from these Benches, we have long advocated for a duty of candour, and we are pleased that the Government have committed to introducing it. Can the Minister say when this legislation will appear?
In the meantime, what changes have been made to ensure that civil servants and public agencies ensure that Ministers are always told the truth, however uncomfortable it may be? Specifically on building safety, can the Minister say what steps the Government are taking to ensure that everyone across government knows who is in charge, and how the current culture can be changed to ensure that no more tragedies like Grenfell can happen again?
The failures of the construction sector—whether regulators, manufacturing companies, builders, maintenance or management agents—are also shocking. The 2018 Hackitt report, with 50 reforms for the sector, was accepted by both Sir Martin and the last Government, in 2019. The key was to strengthen the golden thread of safety running throughout the sector, from manufacturing to regulation and training. When will there be an update to Parliament on the implementations of the Hackitt recommendations? In particular, can the Minister say when she expects the Government to appoint a cladding safety tsar, as proposed by Dame Judith?
At the heart of this report is the evidence of the poor treatment of individuals, especially those already marginalised in our society. Sir Martin speaks of
“a marked lack of respect for human decency and dignity”,
with
“those immediately affected feeling abandoned by authority and utterly helpless”.
These words could also be written about the other inquiry reports, such as those on Windrush and infected blood. This widespread lack of respect challenges all involved in public policy management, whether Ministers, politicians or officials, to change our attitudes. Central government must take a lead in bringing about this change, which requires a fundamental change in mindset. This will take time and commitment, but it is crucially important.
In this case, the tenant management organisation failed badly. Never again should social housing tenants be regarded as not worthy of safe housing. Never again should the vulnerable, especially the elderly and disabled, be regarded as not worthy of safety systems to get them out of burning buildings. In the light of the Dagenham fire two weeks ago, where there were locked exits and problems with the fire alarms, what are the Government doing to ensure that all blocks of flats, regardless of height, have working fire systems without delay?
Seven years on from the Grenfell fire, the delays in the removal of combustible cladding are now a national disgrace. As the noble Lord pointed out, the previous Government committed funds and said that they wanted to knock together the heads of the building firms and freeholders. But clearly more still needs to happen, and urgently. So what will this Government do to speed up the process of making safe the hundreds of blocks that still have inadequate cladding?
It is vital that the police and the CPS move at pace to review the report and investigate the individuals and organisations that Sir Martin says deliberately breached the law. Given the pressures on the police and the CPS, will the Government ensure that there are no further delays because they lack the resources to do the work? Justice further delayed is justice denied, and there have been enough delays already.
The Government have pledged to act on more than 50 recommendations in the report. Despite their initial commitments to move on them all, there is a danger that momentum may not be maintained, as we have seen with the recommendations of the Hackitt report. So can the Leader of the House commit to a full debate in your Lordships’ House in the near future, and then a regular report back to Parliament, so that everybody can feel safe in their homes and those who behaved so appallingly in this case can be held to account?
Baroness Smith of Basildon (Lab)
My Lords, I thank both noble Lords for their comments. I think the House is united, first, in an apology and, secondly, in determination and a sense of anger. As I read the inquiry report and felt that disappointment and sadness about it, the further I read, the angrier I got. It is quite hard to sustain anger, but by the end I was more than just bristling with anger, and I think anybody who read it felt exactly the same. So I am grateful for all the comments.
I will take the last point first. Yes, we commit to a debate in the House. This addresses points made by both noble Lords. The Prime Minister has committed to an update, within six months, on where we have got to, but there are things that can be done sooner and, where they can, they will be implemented sooner, with an annual update to the House. So there will be a regular update, and there will be an early debate, although I will not attempt to identify when; I leave that to the Chief Whip, who will come back.
The noble Lord will know that the height of buildings referred to in the report is currently 18 metres, but we have to see whether that is the appropriate level.
On when secondary legislation will come forward, it is being drafted now and there will be measures in the renters reform Bill to bring that forward. The police and the CPS will have the resources they need to do this job. Justice has been denied for far too long, and this should move on apace. Anyone who read the interviews with police officers involved in the investigations would have sensed their determination and commitment. Anybody who has spoken to the families or anyone affected will be nothing but moved and determined to support and help them. I went to one of the hearings in Church House. There is always a sense of guilt: when you hear something and are deeply moved by it, you realise what it must have been like to be there at the time, even though all you are doing is hearing it and being deeply moved at that point. So there is an absolute determination that resources will not prevent proper investigations and prosecutions.
The duty of candour will come forward. The noble Lord, Lord Newby, is right to raise this: there does seem to be a theme of people being ignored or not taken seriously. Many years ago, when I was a Minister in Northern Ireland, there was a report into the deaths of children in hospitals there. The first recommendation for the Northern Ireland Government was that there should be a duty of candour—in other words, for public servants to tell the truth. That also protects junior members of staff, who may feel under pressure from more senior members not to say exactly what they know. Bringing that forward, I was pleased to see that in our manifesto.
On the management of buildings and how we manage public policy, it is worrying to read the report and see how many opportunities there were to prevent this happening. Information was withheld, including information on the testing of combustible materials. The culture change on this starts from the top. Ministers have to be told uncomfortable facts and create a climate in their departments whereby, if they are brought information that is not what they want to hear, that is difficult and uncomfortable, when action has to be taken by government and may be expensive, that information will be brought to them and members of their departments will be encouraged to do so.
On the removal of cladding, we are accelerating that process. It is a tragedy that in Dagenham that work was ongoing and had not been completed, which also caused a problem. There is the scale of the challenge—4,630 residential buildings over 11 metres have been identified as having unsafe cladding—yet, so far, all these years on, only 50% have either started or completed that remediation work. That has to continue apace, and we must do so as quickly as possible. There is now a route to do so, and access to government funding, as well as a way of identifying whether any buildings have been missed there.
Lord Young of Cookham (Con)
The Leader of the House will recognise that the Building Safety Act does not cover all buildings at risk or all leaseholders, and it does not cover all safety defects. She recognised that they may need to look again at the buildings under 18 metres, which get no help at all. I shall press her on something that the Prime Minister said last Wednesday:
“We cannot suggest for a minute that the existing legislation, guidance and policy is sufficient. We need more powers”.—[Official Report, Commons, 4/9/24; col. 326.]
He was right. Will we get that new legislation in this Session?
Baroness Smith of Basildon (Lab)
The first stage is to look at what can be done with existing legislation or under the legislation that has been brought forward already, and then examine whether new legislation is required. If it is, the Government will do their best to bring it forward as quickly as possible. This is not something that we want to leave and see a further tragedy. We have seen too many tragedies; this is not the first case. I am not going to give a commitment as to when it will be brought forward, but I shall say that it will be as quickly as it can be.
Baroness Chakrabarti (Lab)
My Lords, I declare an interest as a Member of your Lordships’ committee looking into the operation of statutory inquiries at the moment. I thank my noble friend the Leader for the clarity, compassion and, indeed, righteous anger of the Statement, and I thank the noble Lords, Lord True and Lord Newby, for the tone of their responses.
How can we ensure that deregulatory zeal and the desire to cut so-called red tape never again becomes the basis for compromising human decency, dignity and protection?
On the time that it takes to investigate and prosecute, I agree with my noble friend that independent investigations and prosecutions, and indeed trials, should not be compromised. But given the fabulous way in which the Government responded over the summer to the racist riots by ensuring that the authorities had the resources they needed to accelerate the process, are the Government confident that they can ensure that the police, prosecutors and so on have the resources, including specialist resources, that they need to bring matters quickly to a conclusion?
Baroness Smith of Basildon (Lab)
On the first point that my noble friend raises, there is an issue about deregulation, which should always be seen in the context of what is appropriate; it is not about the numbers of regulations that we have. Most importantly, what struck me when reading this report was that, although deregulation was certainly part of the issue, honesty and dishonesty were an even greater part. Parts of the report refer to deliberately concealing from the market the true extent of the danger, systematic dishonesty, how a company embarked on a dishonest scheme to mislead its customers in the wider markets, as well as a deliberate strategy to continue selling those products in the face of a statement about the fire performance which they knew to be false. The scale and depth of the dishonesty there is extraordinary. So regulation is important, but the point about honesty, misleading information and systematic failures runs so through deeply throughout this that there are multiple threads to the failure.
On resources, the Prime Minister has made it clear that they should be made available to ensure that prosecutions can be brought, if that is the view of the police and the CPS, and that they will have the resources to do so.
Baroness Brinton (LD)
My Lords, six people died in the Lakanal House fire. The coroner said in that inquest, published in 2013, that, if Lakanal House had had sprinklers, not one of those six deaths would have happened. While it is good that the Government have accepted the need to review the height of 18 metres, there has been no mention about sprinklers, not just in new buildings but in tall, older buildings. Will the Government reconsider ensuring that sprinklers are retrofitted, particularly in the most high-rise flats? Also, while the Statement recognises the need for residential personal emergency evacuation plans, can the Minister please confirm that work will be done with disabled communities before decisions are made, which did not happen with the previous Government when they created their interim versions earlier this year?
Baroness Smith of Basildon (Lab)
Yes; the noble Baroness is right that we have to engage with those who will be directly affected. Work is ongoing on that now. On the point about sprinklers, it is one of many solutions in terms of reducing the risk of damage from fire. Sometimes it can actually be quite difficult to do. All options are open in looking at how to ensure that buildings are safe.
Baroness Sanderson of Welton (Con)
My Lords, the Leader makes a very good point about anger. If that is how it made us feel, can you imagine how difficult that report must have been for the victims last week? “Systemic dishonesty”, “persistent indifference”, “basic neglect”, “a cavalier attitude”—all terms used by Sir Martin to describe the behaviour of everyone involved, from the manufacturers and contractors to national and local government and the oversight and regulatory bodies.
Sir Martin has made a series of carefully considered recommendations. I mention just one, recommendation 113.4, and declare a similar interest regarding the committee I am on:
“We recommend that it be made a legal requirement for the government to maintain a publicly accessible record of recommendations made by select committees, coroners and public inquiries together with a description of the steps taken in response”.
Progress on recommendations obviously needs to be made, but victims and survivors also need to be able to see that progress is being made. So will this be one of those areas for early work that the Prime Minister outlined last week?
Finally, will the department look at the excellent monitoring system devised by the Home Office in response to the phase 1 recommendations? It is very easy to navigate and far more accessible than the usual GOV.UK updates but, inexplicably, it still has not been put into use.
Baroness Smith of Basildon (Lab)
I pay tribute to the noble Baroness for her work, commitment and support for the victims of those in Grenfell; I know that she has visited the site and met them. I know how deep her commitment is—led, I think, by the anger that we all feel—and pay tribute to her for that also.
She is absolutely right: as we move forward on this, those who have been involved in supporting Grenfell survivors and those who themselves survived are going to need confidence; the Prime Minister referred to this in his Statement. It takes more than just words to reassure them that action has been taken. We need to look at an appropriate format so that it is easily understood what has been done, what is about to be done and the timescales. He has committed to come back with a full response “within six months”. I know that he and the team are looking now at what can be done within that time so I will take back the noble Baroness’s comments and, if there are examples of how it has been done in the past with open access, that would be a good thing to look at as a model.
Baroness Warwick of Undercliffe (Lab)
My Lords, I want to raise the issue of remediation as it affects social housing. Nothing is more important to housing associations than the safety of their residents. They have been moving quickly to identify buildings with combustible materials and remediate them as quickly as they possibly can so that residents can feel safe in their homes, as they should be able to. They need to do more; they want to do more.
The previous Government took a decision that meant social landlords cannot access the building safety fund and cladding safety scheme in the same way that private building owners can. Private building owners have received 90% of the government funding available for remedial works to buildings 11 metres-plus high. There is almost no public funding available for works to flats where social tenants live. Will the Leader of the House urge the Government to reconsider the previous Government’s decision so that housing associations can ensure their residents’ safety more quickly?
Baroness Smith of Basildon (Lab)
My Lords, I understood that different schemes were in place, but I will take that back, look into it and come back to my noble friend with a response.
Baroness Pinnock (LD)
My Lords, thousands of leaseholders and tenants are still living in blocks that are unsafe. I thank the noble Baroness the Leader of the House for the commitment she has given to speeding up remediation works. However, some leaseholders are not included in the current scheme, as non-qualifying leaseholders of various sorts. Will the Minister commit to reviewing the qualification of leaseholders for the scheme to get the cladding on their homes removed? They are, as are others, living in places where they fear fire every day.
Baroness Smith of Basildon (Lab)
My Lords, nothing is more important than feeling safe and secure in your own home. My noble friend Lady Taylor, who is sitting with me, is well aware of this as a former council leader. The department is aware of the issue and is looking into it.
Lord Cromwell (CB)
I add my thanks to the Leader of the House for the very moving and, in a true sense, infuriating sharing of that Statement. I think we would all agree that dealing with the issues has been far too slow. As the noble Lord, Lord Newby, and others have pointed out, it is now seven years since Grenfell. Is it to be reasonably expected, given the size of the challenge, that, when we reach the grim 10th anniversary—or even the 15th—there are still going to be buildings with flammable cladding on them?
Baroness Smith of Basildon (Lab)
I very sincerely hope not. It is our intention to accelerate this as quickly as possible. It would be a failure if, in 15 years, we still had cladding on those buildings. We would not be fulfilling our obligations as a Parliament, a Government and a country.
Baroness Manzoor (Con)
My Lords, I thank the noble Baroness for repeating the Statement and for the empathy and sympathy that she has shown. It is very sad that there are many people throughout who are marginalised and do not feel that they have access to the appropriate services, whether in the NHS or in the housing sector.
I come back to the point made by the noble Lord, Lord Newby, around the duty of candour and whether the Government will look at this particular issue across different departments; whether it will need primary legislation; and whether something can be put in place around this duty in terms of procurement services for external bodies, which will help immensely. I concur with the noble Baroness, Lady Chakrabarti: seven years is far too long, and we need to see justice being done. To my mind, there is ample evidence of where things have gone wrong. We should support the CPS to move to prosecutions very quickly; otherwise, this will be another injustice done on top of what should already have been avoided.
Baroness Smith of Basildon (Lab)
The noble Baroness is right but I think we would all want to ensure that the CPS has the time and the resources to ensure that, if it brings prosecutions, it is confident that it has the evidence to prosecute so that it can be fully considered. That is partly why this is taking so long but we are assuring it that this will not be a matter of resources; we want it to do its duty as quickly as it can.
We have made a commitment to the duty of candour; it is a really important factor. When the legislation comes before your Lordships’ House, it will be primary legislation and considered in the usual way. I sense that the time has come. I remember that, when this was first mooted a number of years ago, there was quite a resistance towards it in terms of why it was required—that is, why did we need a duty of candour? I think we all know why we need a duty of candour now.
Lord Harris of Haringey (Lab)
My Lords, I refer to my interests in the register on preparedness and resilience. There are a lot of parallels between this report and the report that we debated last week on the Covid inquiry, particularly the importance of clarity about who holds responsibility for particular things. In the case of the Covid inquiry the noble and learned Baroness, Lady Hallett, was talking about system-wide risks and contingencies. This report is very clear about who holds the responsibility when several departments and several agencies might be involved. Can my noble friend tell us how that will be taken forward and whether these common themes will be picked up?
The other issue I wanted to raise, which was raised by a number of noble Lords, is about responding to inquiries and inquests. This occurs throughout the public sector. It happens in the health service, and I know from the work I have done in the past on prisons that the same sorts of recommendations are made time and again there. Too often, a response is sent to the individual coroner which says, “We’ve established a committee to look at this”—and that is the end of the response. Never is it explained what lessons have been learned and what lessons have been acted on, and how that is working. How will this be turned into something which operates effectively and systematically across the public sector?
Baroness Smith of Basildon (Lab)
That is the great challenge for government and public sector organisations. The Chancellor of the Duchy of Lancaster is leading on a resilience review, and that is the kind of issue that should be brought forward. Unless you are joining the dots on this, we will hear this same theme. As has been mentioned already today, whether you are looking at Hillsborough, Covid—as the noble Lord mentioned—or this incident, in every single case, people gave warnings and were not believed. That is often compounded afterwards because trying to get to the truth is made harder than it ever should be.
In this case, the last Government did the same, setting up the inquiries. Getting to the truth is the first part of being able to take the action needed. It then needs that determination to see it through. When the Prime Minister made the Statement in the House of Commons, he acknowledged that just words are not enough; we have to see this through with actions. The resilience review is part of it but we also need to learn the lessons. Sometimes when we are looking across government at what needs to be done—Covid is an example again—we may think, “Everything’s okay at the moment; there is no problem”. You have to prepare for the worst-case scenario to ensure that if there is a difficulty or a problem, we have the resilience and the resources in place to deal with it.
Lord Shipley (LD)
My Lords, the Minister just mentioned resilience. The Statement itself does not say very much about emergency planning and resilience, yet Sir Martin Moore-Bick says at chapter 113.73 that the Royal Borough of Kensington and Chelsea
“was not able to provide an effective response to the emergency”,
and he therefore recommends that
“local authorities train all their employees, including chief executives, to regard resilience as an integral part of their responsibilities”.
This is pretty basic. Can the Minister ensure that the Government take steps to enable resilience and emergency planning to be seen as a central duty of local government?
Baroness Smith of Basildon (Lab)
The noble Lord is absolutely right. I can remember from a time when I was a county councillor that the emergency planning committee was quite a central committee of the council; we do not see so many of those around these days. Unless we address the issue of resilience and preparedness at every level of government, we will not be in the right position to deal with problems, as I said in my previous answer. Yes, work is ongoing across government on that issue now.
Lord Kerr of Kinlochard (CB)
One of the striking and shocking aspects of this brilliant report is the proof that requiring regulators to operate commercially, competing for business, risks their capture by business. Grenfell shows the piper playing the tune that business wanted and that cost lives. I hope the Government will take up the recommendation to have a single regulator for the construction industry, and I really hope that they will site that regulator and all its regulatory functions in the public sector.
Baroness Smith of Basildon (Lab)
One of the starkest issues in here is about dishonesty, incompetence and responsibility, including not even checking the qualifications of those responsible for undertaking inspections. I do not know if the noble Lord’s response to the report was similar to mine but, as he can see if I hold it up, there are lots of pink and red marks where I have highlighted it. I went through it thinking at every stage, “How did this happen? How could this happen?” I am grateful to him for his comments, and we will report back to the House on those points.
Lord Naseby (Con)
My Lords, I am sure I speak for the whole House in thanking the Leader of the House for coming to us today, and for the clarity with which she made the Statement. I raise two quick questions. First, it has been my privilege to be involved in social housing ever since I was elected to the London Borough of Islington and became the housing chairman there and, subsequently, as Member of Parliament for Northampton, a new town. In relation to who should drive this forward, it seems to me that she has sitting on her right-hand side somebody who has been involved with the new towns commission. That might not be the right vehicle, but it works in relation to housing and quick decisions on issues. We may need some variation of that, but I put that forward as a suggestion.
Secondly, missing all the time—and I questioned my Government about this—has been any real contribution from developers on the continent of Europe, some of whom were involved in various developments. So far, to the best of my knowledge, we have had no financial contributions from the construction companies involved from outside the UK. We ought to look very closely at that, particularly as our construction companies—to the best of my knowledge, the vast majority—have contributed so far.
Baroness Smith of Basildon (Lab)
Yes, I think where companies have been international there has been greater difficulty in that regard. I thank the noble Lord for his comments about my colleagues. My noble friend Lady Taylor—now a Minister in the department—has experience in local government that is a huge asset to us, but also my noble friend Lady Twycross was the deputy mayor for fire and resilience in London. I assure him that there is great determination, which we feel quite personally, to ensure that we move forward as quickly as we can with respect to those who suffered because of this fire.
Budget Responsibility Bill
Monday 9th September 2024
(2 months, 1 week ago)
Lords ChamberRead Full debate Budget Responsibility Act 2024 View all Budget Responsibility Act 2024 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 4 September 2024 - (4 Sep 2024)
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
My Lords, at the general election, our manifesto made it clear that sustained economic growth is the only route to improving the prosperity of our country, raising living standards, and sustainably funding public services. That is why it is our central economic mission.
On her first day in the Treasury, the Chancellor received new economic analysis from Treasury officials on the lost growth of the past 14 years. This analysis showed that, had the UK economy grown at the average rate of other OECD economies, it would now be over £140 billion larger. This could have brought an additional £58 billion in tax revenues in the last year alone—money that could have revitalised our schools, hospitals and other public services. We have therefore urgently begun the work to deliver on the mandate for change delivered by the British people at the election to fix the foundations of our economy, rebuild Britain and make every part of our country better off.
Our approach to growth rests on three pillars: stability, investment and reform. We have set out ambitious reforms, most importantly to the planning system, the single biggest obstacle to our country’s economic success. We have ended the ban on onshore wind and set out reforms to the skills system. With regard to investment, we have established the national wealth fund, committed to an industrial strategy council, and begun the creation of GB Energy. But the first, and most critical pillar, is economic stability—it is the rock on which all else must be built and the essential precondition for growth.
Over the last 14 years, with five Prime Ministers and seven Chancellors, instability has deterred investment, undermined family finances and, most importantly, held back growth. Many of the crises we faced during that time were of course global in origin—pandemic, war and an energy shock—but other countries faced those same shocks. The reason why we in the UK were hit harder than other comparable countries can be explained only by the choices made by the previous Government here at home: austerity, which choked off investment; a rushed and ill-conceived Brexit deal; and the disastrous Liz Truss mini-Budget, which crashed the economy and sent mortgage rates spiralling.
We believe that stability must begin with respect for our economic institutions. For much of the UK’s history, the strength of our economic institutions has bestowed credibility in international markets and underpinned our economic success. Politicians who seek to undermine those strengths, as we saw in the last Parliament, play a dangerous game. Under this Government, the Bank of England’s Monetary Policy Committee will continue to have operational independence in the pursuit of its primary objective of price stability, and, in line with our manifesto, we will support and strengthen the Office for Budget Responsibility, hence the Bill we are debating today.
The OBR was, of course, introduced by a Conservative Chancellor to deal with a lack of independence in forecasting and the problems that had caused. It was a commendable move, bringing greater transparency and independent scrutiny to fiscal policy. But while the previous Government then went on to undermine it—Liz Truss notoriously saying that she wanted to
“see the back of the OBR”—
the Labour Party continued to support it. Now, in government, we will strengthen it.
This Bill therefore fulfils a simple but important step to help restore economic stability: it brings transparency and independent scrutiny into law by ensuring that every fiscal event that makes significant changes to taxation or spending will be subject to an independent report from the OBR. In doing so, it delivers on a manifesto commitment.
Let us be clear about why this Bill is needed. While the existing fiscal framework requires at least two OBR forecasts a year, there is currently no requirement on the Treasury to subject announcements on all fiscally significant measures to independent OBR scrutiny. In effect, that means there are times when the Government can make fiscally significant announcements while opting out of both transparency and scrutiny. This was a key factor in the disastrous Liz Truss mini-Budget, which did so much damage to our economy and to households, who are still paying the price for it today.
The previous Government knew the measures they were taking were unfunded and unaffordable, but as they were not bound to a forecast, they wilfully prevented one from taking place. This absence of scrutiny was a key factor in the adverse market reaction that followed. As the now shadow Chancellor said at the time, the mini-Budget damage was in part
“caused by the lack of a forecast””.—[Official Report, Commons, 17/10/22; col. 395.]
This cannot be allowed to happen again, so this Budget Responsibility Bill takes five important steps.
First, the Bill requires that, before the Government make any fiscally significant announcement in Parliament, the Treasury must ask the OBR to prepare a report which takes that announcement into account. This builds on the existing process whereby the Chancellor commissions the OBR for an economic and fiscal forecast to accompany a fiscal event. It guarantees in law that, from now on, every fiscally significant change to tax and spending will be subject to independent scrutiny from the OBR.
Secondly, the Bill gives the OBR new powers independently to decide to produce a report if it judges the measures in a fiscal event to be fiscally significant. If a fiscally significant announcement is made without the Treasury having previously requested a forecast from the OBR, the OBR is required to inform the Treasury Committee in the House of Commons of its opinion, and then prepare a report as soon as is practicable.
Thirdly, the Bill defines a measure, or combination of measures, as “fiscally significant” if they exceed a specified percentage of GDP. The Charter for Budget Responsibility will then set the precise threshold. Setting the threshold in this way provides clarity for the OBR and external stakeholders about what constitutes a fiscally significant announcement and ensures that the Government can set it at the right level going forward, recognising economic conditions. The Treasury has published a draft of the updated charter. This notes that the threshold level will be set at announcements of at least 1% of nominal GDP in the latest OBR forecast.
Fourthly, the Bill ensures that these arrangements do not apply to Governments responding to emergencies. The Bill does this by not applying in respect of measures that are intended to have a temporary effect and which are in response to an emergency. The charter will define “temporary” as any measure that is intended to end within two years. This recognises that it is sometimes reasonable, as it was during the pandemic, for the Government to act quickly and decisively without an OBR report, if that is needed in response to a shock. Of course, in emergencies it may be appropriate for the Chancellor to commission a forecast from the OBR to follow measures that need to be announced or implemented rapidly, and that would happen in the usual way. Alongside any such announcement, the Treasury will be required to make clear why it considers the situation to be an emergency. As set out in the updated charter, the OBR will have the discretion to prepare a report if it reasonably disagrees.
Fifthly and finally, the Bill requires the Government to publish any updates to the detail of these arrangements, such as the threshold level at which they are triggered, in draft form at least 28 days before the updated charter is laid before the House of Commons. This is an essential safeguard in the Bill, preventing any future Government from choosing to ignore these arrangements by updating the charter without clear parliamentary consent. In line with this Bill, and as the Chancellor announced in July, she has commissioned a full forecast to accompany the Budget on 30 October, following the important principle that significant fiscal policy decisions should be made at a fiscal event and accompanied by an independent OBR report.
In the Chancellor’s July Statement to Parliament, and in light of the scale of the overspend left by the previous Government, of which the OBR has confirmed it had not been informed, she also announced additional measures to strengthen the fiscal framework. These require the Treasury to share with the OBR its own assessment of immediate public spending pressures, enshrining that rule in the Charter for Budget Responsibility and establishing that spending reviews will take place every two years, with a minimum planning horizon of three years, to avoid uncertainty for departments and to bring stability to our public finances.
The changes introduced in this Bill are an important step in bringing much-needed stability to our economy. By empowering the OBR and ensuring that an independent report will accompany all fiscally significant announcements, it will improve transparency and accountability. Economic stability is central to economic growth—objectives that I hope will be shared across your Lordships’ House. I beg to move.
Lord Altrincham (Con)
My Lords, we thank the Minister for bringing forward this important Bill. Perhaps we should also thank the OBR for its very good work over these past 14 years. We in Parliament have been concerned about the supervision of financial regulators, and we did a lot of work last year on strengthening the supervision of other financial regulators in the Financial Services and Markets Act. Separately this afternoon, the Industry and Regulators Committee has been looking at a whole range of independent agency regulators with a very mixed performance.
It is worth pausing for a moment on the Office for Budget Responsibility itself, which is widely admired across government, in Parliament and, as the Minister says, by the current Government. It is to its credit that it managed to find a way to work closely with government, but independently and transparently. We should mark this with respect, given how stressed the government finances are.
A core objective of the OBR is, of course, the sustainability of the public finances. Perhaps we should look at how that has been since it was set up, following the 2011 Act. In 2012, public sector debt to GDP was 74%. One way or another—by spending the fiscal headroom across various Governments, and following the different issues that arose—we are now at 98%, which is a rise of around 2% per year in debt to GDP. This kind of budget responsibility is becoming almost unaffordable to the public exchequer, and things will have to change.
They will have to change because the scale of public spending—to the tune of £1 trillion a year—requires very good forecasting, and some of the forecasting that underpins this tight nexus between the Treasury, the OBR and their own reviews has been challenged. The OBR substantially missed the inflation change; lots of other agencies missed it—less in the private sector than in the public sector—and that is a problem because it hints at a closeness between the OBR and the Treasury because it was agencies of government that all missed the inflationary change. The OBR reviews its own forecasting very carefully, so when it reviews that error, it will tend to look at supply shocks in Ukraine and downplay quantitative easing and rates. That is one area of weakness, but there are others that will affect this concept of the fiscal announcement.
The OBR has struggled with basic numbers around population. It tended to underestimate population and is now scrambling to increase population in its model, which currently has a population of 57 million adults in the UK in 2029. This number is extraordinarily sensitive, obviously, for estimates of average wages and welfare spending. The OBR says that modelling those kinds of assumptions is very difficult because they are modelled off much lower levels of immigration than we are currently seeing, and these are the kind of numbers that would trigger enormously different fiscal outcomes in the Treasury/OBR model. There are other numbers in the forecast which are very sensitive, and the OBR itself mentioned this, but it is important that we reflect on this as we think about how this kind of fiscal brake might work. The OBR is modelling the expected tax take out of the economy to reach 37% of GDP in 2029. It is essential, of course, that it does reach that kind of level, but it is unknowable whether the economy can really sustain that level of taxation. It is a modelled outcome—we must all collectively hope it can work, but it might not, and therefore inherent in the actual forecasts are very significant fiscal risks.
One other area to mention in the OBR numbers that will underpin the Budget in October is the huge variable of accounting for the economics between the Treasury and the Bank of England. This is an extraordinarily enigmatic subject, not particularly well explained by the OBR itself, whereby the Bank can, at its discretion, impose costs on the Treasury which themselves could become very significant in these fiscal numbers. My question to the Minister is: what should we expect the costs of the asset purchase scheme to be between the Treasury and the Bank of England for this year? Will that be an area in which the Treasury can balance the numbers that it believes are a black hole? The kind of scale of adjustment is easily that big—for example, the Bank of England could easily stop issuing gilts for the coming months, seemingly at its discretion—so maybe the Minister could clarify that.
I end with the Chekhov question. Chekhov used to say that when you see a revolver on the mantelpiece in the first act, it will always be fired before the final curtain. I ask the Minister whether we can expect the fiscal announcement, beautifully described in Clause 1 as the “section 4(3) report”, to take place in this Parliament.
Lord Macpherson of Earl’s Court (CB)
My Lords, this is a sensible Bill to strengthen a sensible institution. The creation of the Office for Budget Responsibility, together with the granting of operational independence to the Bank of England, has transformed macroeconomic policy-making in the UK, and it is no coincidence that the premium the UK has had to pay on its debt, relative to its G7 partners, has declined over the last 25 years.
Economic forecasting is a thankless task. Forecasts are invariably wrong. The late Denis Healey’s commented that he would like to do for economic forecasters what the Boston Strangler did for the reputation of door-to-door salesmen. In an ideal world, forecasts would not be necessary. However, Governments have to plan public spending and the taxes necessary to pay for it. They need to do so over the medium term to better understand the implications for borrowing and the debt market. Somebody has to make the projections on which the decisions that determine the well-being of the nation are based.
Over my career at the Treasury, I worked on well over 60 fiscal events. For over 50, the Chancellor determined the forecast. It is fair to say that, on the vast majority of those occasions, the Chancellor did not seek to interfere with the forecast that Treasury officials presented to him. Even then, he often had to resist pressure from the First Lord of the Treasury to raise the growth rate just a little to make tax cuts or public spending increases more “affordable”—I emphasise the inverted commas surrounding the word affordable.
Whether or not Prime Ministers or Chancellors interfered, the perception of the markets was that they did. The result was that the forecast’s credibility was always called into question and that the taxpayer had to fund an interest rate on government debt that was slightly higher than it needed to be. Two years ago, that term came to be known as the “moron premium”. I emphasise that the OBR is no better at forecasting than other institutions; the importance is that its forecasts are perceived to be unbiased, and this is borne out by the evidence.
On the detail of the Bill, I welcome the Government putting a number on what constitutes fiscally significant. It may be a little on the high side—most fiscal events over the last 30 years have made a fiscal adjustment of less than 1% of GDP—but I see the problem in setting it too low and triggering an endless round of forecasts.
I also welcome the Government’s determination to improve the credibility of public spending projections. We should be in no doubt that an incredible spending forecast is the source of the problem with which the Government are now wrestling. Had the previous Government been required to populate their spending plans with policy decisions, I rather doubt that they would have announced successive cuts in national insurance contributions.
The measures set out in the Chancellor’s letter to Richard Hughes of 29 July are a big step forward: in particular, a clear timetable for spending reviews and a requirement for the Treasury regularly to update the OBR on emerging spending pressures. Allowing the OBR to publish, in effect, corrected spending plans will improve decision-making, even if it makes life more difficult for the Chancellor in the run-up to an election.
As the Government consider further reforms to the OBR framework, I encourage the Treasury to focus on another issue that also muddies the waters in the run-up to an election: the costing of opposition policies. Every four or five years, we have to go through the absurd theatre of the Chancellor of the day publishing, to great fanfare, official costings of their opponents’ policies. Of course, they are not official costings, since the assumptions are determined by Ministers and their special advisers. The Opposition are always rightly indignant at the time, claiming that the process is terribly unfair. I had to field unhappy telephone calls from shadow Chancellors from both main parties. But, once in government, parties have an uncanny knack of forgetting about the unfairness.
While the present Government are still in their early days of missionary zeal, I encourage them to resuscitate the 2015 proposal of the then shadow Chancellor, Ed Balls, to put opposition costings in the hands of the OBR, as happens in countries such as Holland. I ask the Financial Secretary to raise this issue with the Chancellor when he returns to the Treasury.
Lord Eatwell (Lab)
My Lords, the OBR was created by George Osborne to
“remove the temptation to fiddle the figures”.
An entirely non-political evaluation of major fiscal measures was certainly a good idea; unfortunately, it has not yet been achieved. The failure to attain political independence may be attributed to two elements that are not dealt with in the Bill yet are essential to its purpose.
First, key inputs to the OBR’s work are the estimates of future spending provided by the Government. We now know that these can be politically manipulated to ensure that fiscal targets seem to be met. As the Institute for Government commented at the time of the Conservative Budget this Spring,
“the figures that Hunt announced … are based on entirely fictitious future spending plans”.
Since the election, we have learned that not only were the Conservatives fiddling the figures that they provided to the OBR, but they were concealing spending plans too. In the light of post-election findings, Mr Hughes confirmed that the OBR was made aware of the extent of pressures on departmental budgets only in late July. Happily, the Financial Secretary has just outlined the measures that are to be taken to verify the data supplied by the Government. These measures are most welcome.
The second key political element undermining the value of the OBR’s current assessments is the current formulation of the charter. The current charter embodies three targets that the OBR is required to assess; unfortunately, none of them is based on sound economics.
First, there is the objective to have public sector net debt—excluding the Bank of England—as a percentage of GDP falling by the fifth year of the rolling forecast period. As the noble Lord on the Opposition Front Bench just pointed out, this means that whenever the Bank of England sells part of its stock of government debt to the private sector, it automatically tightens the noose around government spending. An important part of monetary policy has damaging consequences for fiscal policy—how foolish is that?
More importantly, the objective treats all government expenditure as having the same economic relevance. A crazy unfunded tax cut is assigned the same economic impact as investment in industrial infrastructure. As the Chancellor of the Exchequer argued in her Mais Lecture while still the shadow Chancellor,
“our fiscal rules differ from the government’s. Their borrowing rule, which targets the overall deficit rather than the current deficit, creates a clear incentive to cut investment that will have long-run benefits … I reject that approach”.
Unfortunately, the next objective, to ensure that public sector net borrowing does not exceed 3% of GDP by the fifth year of the rolling forecast period, is simply a dynamic version of the first objective and is, therefore, subject to the same rejection that the Chancellor has made.
The third and final objective is to ensure that expenditure on welfare is contained within a predetermined cap. One of the important operational aspects of economic policy is the value of the automatic stabilisers in the economy: when the economy booms, welfare spending automatically goes down; in a slump, welfare spending automatically goes up. The notion of a cap would emasculate the automatic stabilisers—again, a silly thing to do.
In short, none of the current objectives in the charter makes sound economic sense. It forces the OBR to make forecasts that are simply not relevant for the Government’s stability and growth objectives. It is imperative that the charter is revised prior to the Budget on 30 October. Given the requirement that revisions of the charter must be presented to Parliament 28 days before coming into effect, will the Minister tell us whether we can expect a revised charter to be presented before 1 October?
To conclude, the OBR is a very good idea, as is this Bill, but major operational aspects need urgent correction. I look forward to hearing from the Financial Secretary how these deficiencies are to be dealt with.
Baroness Noakes (Con)
My Lords, I have a number of regrets about the Bill. My first regret is that it is a money Bill. It is customary that this House does not challenge the decision of the Speaker in the other place, and I will not do so. It is not, however, a Bill that has any direct fiscal impact, but it makes changes to a body that has become an integral part of the country’s economic management. I believe the Bill would have benefited from a normal Committee, where we could have scrutinised it in detail. For example, noble Lords might recall that when income tax was first introduced in 1799, it was labelled a temporary tax, which raises interesting questions about this Bill’s exclusion of temporary measures from the OBR’s new powers.
Secondly, I regret that the Government have not taken the opportunity to ensure that the OBR’s forecasting is fit for purpose. My noble friend Lord Altrincham raised several of the issues here. On its own internal assessment, the OBR is not particularly good at forecasting. It claims, with no sense of irony, that its performance is in line with that of the Bank of England. The noble Lord, Lord Eatwell, from whom we have just heard, pointed out in his speech on the gracious Speech in July that the OBR was set up to reinforce austerity and is ill-suited to underpin the Government’s growth ambitions. In the same debate, I argued a similar point: the OBR does not use dynamic modelling, so growth measures will struggle for a full evaluation in the OBR’s calculations. These areas would have been a better target for the Government’s reforming zeal.
Thirdly, I regret that the Bill does not ensure that the OBR operates to high standards of governance. I cannot think of another public sector body which has an executive chairman and does not have a majority of non-executive directors. Like most independent quangos, its external accountability arrangements are weak. It is quite simply dangerous to allow a public body, which can exert great influence on the Government’s fiscal policies, to exist with weak internal governance alongside weak external accountability.
Lastly, I regret that the Government have used this Bill to peddle untruths for political purposes. At Second Reading in the other place, the Chief Secretary said:
“The country cannot afford a repeat of the calamitous mini-Budget of September 2022, when Liz Truss and Kwasi Kwarteng’s reckless plans unleashed economic turmoil that has loaded hundreds of pounds on to people’s mortgages and rents”.—[Official Report, Commons, 30/7/24; col. 1211.]
The Minister repeated the substance of that in his opening remarks. The fact is that interest rates were already on the way up in the fight against inflation, and they remain high for the same reason. They did spike immediately after the mini-Budget, but the Bank of England’s own internal analysis shows that two-thirds of the 103 basis points spike in the 16 days after the mini-Budget was due to the Bank’s own mismanagement of the risks inherent in LDI strategies. Furthermore, the Bank had already unsettled financial markets by failing to raise interest rates in line with the US and with market expectations. It does not reflect well on either of the Chancellors who succeeded Kwasi Kwarteng that they have turned a blind eye to these truths.
It was political opportunism that led to the creation of the OBR, and it is the same motivation driving this Bill. This is a poor foundation for legislation.
Lord Hain (Lab)
My Lords, two years ago the Tory faithful showed that they had no firmer grip on reality than Liz Truss by choosing a Prime Minister who engineered her own downfall and now blames absolutely everybody else. The infamous Truss mini-Budget provoked a crisis of confidence in Britain’s public finances by sidestepping the Office for Budget Responsibility, and this Bill will ensure that cannot happen again. The financial turmoil around the Truss mini-Budget, with its reckless £46 billion package of unfunded tax cuts and cavalier attitude to government borrowing, added to the economic chaos that seven successive Tory Chancellors caused over 14 years in office since 2010, dumping an appalling legacy in Labour’s lap.
First, they left office with real household incomes lower than when they came into government and working people with the highest tax burden for 70 years. The main reason was appallingly slow economic growth, due in large part to investment being significantly lower than in other G7 economies. Had the UK economy grown as fast as the OECD average over the past 13 years, UK GDP would have been more than £140 billion bigger, providing some £50 billion of extra tax revenue for public services and lower borrowing.
Secondly, the Tories gave up their seals of office on the 76th anniversary of the NHS’s launch with more than 7.6 million patients waiting for hospital treatment in England.
Thirdly, national debt, which stood at 65% of GDP in 2010 even after the financial crisis, is now touching 100%. The Tories have also bequeathed to Labour a huge £22 billion budgetary black hole about which Tory Ministers deliberately kept quiet and with which the Chancellor is now having to wrestle. She is right to stress that 14 years of damage cannot be reversed in one Budget. The OBR estimates that the decade of fiscal austerity imposed by George Osborne and Philip Hammond added up to nearly 9% of GDP—82% by cuts to public spending and 18% cent by tax increases—equivalent in today’s terms to some £200 billion of public spending cuts.
Do not forget that things could have been even worse. The noble Lord, Lord Cameron, admitted in his memoirs that, had he stayed in office after 2016, he would have pursued even more public spending cuts. George Osborne’s last Budget in March 2016 revealed plans for another £60 billion of public spending cuts, which would have brought total Tory cuts to £260 billion. Fortunately, Liz Truss lost office before she could attempt similar economic and social vandalism—but then, in this summer’s election, Rishi Sunak’s dishonest promise of national insurance cuts of £13 billion and defence spending rises of £7 billion per year would have doubled the black hole that the Chancellor discovered.
When critics claim that the Chancellor has embarked on George Osborne-type austerity, she is absolutely right to insist that giving public sector workers their first real-terms pay increase in 10 years is certainly not that. Osborne’s first Budget announced a two-year public sector pay freeze. Jeremy Hunt now claims:
“Labour have inherited a growing and resilient economy”.
He says that because UK GDP grew in the first half of this year, yet GDP shrank in the second half of last year as the economy sank into recession. We may have stopped going backwards but we are not yet any further forward than we were an economically destructive and financially irresponsible Conservative year ago. The Bank of England now expects growth to slow, not speed up, in the third and fourth quarters of this year—another sign of Tory failure and nothing like the rapid turnaround that we experienced under the last Labour Chancellor in 2009 as the economy recovered from the terrible global financial crisis.
This Bill is designed to block any repeat of such Tory antics and to establish a future under Labour of economic growth and stability. It will not be easy, but thank goodness we have grown-ups running the country again.
Lord Frost (Con)
My Lords, I find this a peculiar Bill. There are a number of odd things about it.
First, as my noble friend Lady Noakes mentioned, it seems odd that this is a money Bill. I do not challenge the decision, obviously, but it does not seem to affect the Government’s powers to raise taxes or spend in any way. I cannot help but notice that, as far as I can tell, the original Budget Responsibility and National Audit Act, which created the OBR, was not a money Bill, so it is odd that this one is. I do not question the decisions on this point but it does seem odd; I agree that it would have benefited from more scrutiny.
This feels more a constitutional Bill in some ways, but it is weak there too. The Minister billed it as a lock on government actions, and others have described it as such, but it does not actually stop the Government doing anything; it only requires the OBR to write a report if they do so, so it seems misconceived in those terms too. One has to ask what the point of the Bill is. It is, of course, a process Bill, but it is also a political Bill. It is written entirely to give an opportunity for the Government and the Labour Party to contrast their activity with the Liz Truss mini-Budget and the decisions taken in 2022. We have heard plenty of that already in this House today.
I think Labour will find two problems with that. First, as my noble friend Lady Noakes has already mentioned, the Bank itself says that two-thirds of the problem was its own mishandling of the LDI crisis. It is hard to see how, if this Bill had been in force and a report had been required, it would have had any effect on that aspect of the autumn 2022 problems. The other problem that the Government will find is that the world does move on. Their own so-called fiscal black hole, which they have already spent a large time creating, is where attention will move. They may regret this Bill before long, to judge by the Niagara Falls of public money that seems likely to pour out of the Treasury in the months and years to come.
I do not think that we are meant to take this Bill seriously. Outsiders recognise that; the IFS itself says that the proposal is “largely performative”. Even the Resolution Foundation describes its impact as “relatively small”. The real impact of the Bill will be to reinforce the position of the OBR in the constitution, but I am doubtful about that for two reasons.
First, for some of the reasons that have been said, the OBR is not a particularly effective institution. It clearly reinforces the Treasury view of the world. It has a poor record, as others have said and as it itself acknowledges. It is negative about Brexit and it repeats the zombie 4%-cut-to-GDP figure that was produced six years ago on the basis of reports put together before we even left the EU. It is doubtful about incentives and what makes a free economy tick. Forecasting is difficult—people bring their priors to it—but the answer is not to do it better or do more forecasts; the answer is to remove the privileged status of the OBR and the forecasts it gives in our economic decision-making. That is the first reason.
The second is that this Bill forms part of the tendency over the past 20 to 25 years to tie down elected Governments with Platonic guardians who think they know better than Governments. This is an intellectual error that began, reasonably enough, with Bank independence in 1997, but it cannot be extended to every single situation. Just because it is good for running monetary policy does not necessarily make it desirable to have independent controls on fiscal policy, to give independence to one regulator after another or to give independence to institutions with wider economic policy effects, such as the Climate Change Committee and many others. These are very different things. You cannot solve the problems that the country faces by constantly giving further independence to unelected institutions and bureaucratic processes.
I am afraid that this error has time to run yet. It is sapping democracy and will make it more difficult to deal with new economic challenges. I hope that, one day, we will reverse this trend and look at this panoply of constraints on government action with a much more sceptical eye.
Baroness Wheatcroft (CB)
My Lords, I welcome this Bill, short though it may be. We have already heard different views of the Liz Truss mini-Budget. I would merely say that it does seem advisable to try to thwart cavalier, determined efforts to avoid scrutiny by the OBR; it makes one slightly suspicious. However, the OBR can only be as effective as the information with which it is provided. It should be a cause of concern that the OBR chairman, Richard Hughes, has intimated that he was not kept fully in the picture towards the end of the previous Administration. We need to be very wary about a repeat of that.
I believe the whole basis of government accounting is flawed. It focuses solely on the short term, to the detriment of the country’s longer-term interests. Take the current controversy over the winter fuel payment. I will not enter into the rights and wrongs of that decision—we have already heard about those today, and will hear a lot more—although it seems to be a very costly exercise in terms of political capital, for very little financial gain.
However, the £22 billion black hole that we keep hearing about that the Government intend to fill, in part with the proceeds of cutting the winter fuel allowance, is actually more of a bottomless pit, for a major contributor to that £22 billion is the pay rise for public sector workers. That pay rise brings with it huge ongoing costs that do not feature because public sector pensions are not provided for. That is a massive obligation which is simply swept under government carpets. According to the whole of government accounts, public service pensions are the largest single liability on the Government’s balance sheet. In 2021-22 they were calculated at £2.6 trillion—greater than the national debt.
The idiocy of this system of accounting was highlighted in a recent article by John Crompton, a former investment banker who has also done three stints at the Treasury. He suggests that the latest public sector pay awards, cited as contributing £9.4 billion to that black hole, could also bring unfunded liabilities of between £3.5 billion and £4 billion every year. Crompton calls this treatment of government liabilities “downright misleading”, and I am afraid it is. The short-term saving from cuts such as the winter fuel allowance will be wiped out year after year by numbers that do not appear in the accounting at superficial levels.
So, while I welcome the Bill as a minor improvement, I ask the Minister whether he agrees that the time has come for a much more radical rethink of government accounting. Yes, cash flow is important, but, as every household knows, concentrating solely on income and expenditure is not the way to build a healthy economy. Major infrastructure projects, such as those cited by the noble Lord, Lord Eatwell, are essential. Cancelling them because of a short-term need to cut expenditure, as this Government have done, may be foolhardy. A proper net worth finances method of accounting, dealing with government expenditure over the longer term, would enable a much more effective long-term view to be taken of the costs and benefits of investment. A change to a more sensible fiscal framework would make for much healthier, better management of public finances, and it would contribute to the growth that we absolutely need.
The Minister explained that the Government have three aims as far as the Bill and the economy are concerned: stability, investment and reform. I ask him to really be serious about reform.
Viscount Chandos (Lab)
My Lords, this is a short Bill, which, as it is—in my view, rightly—designated as a money Bill, your Lordships’ House cannot amend. I propose to speak briefly. I add my voice in support of the Bill and of the persuasive reasoning set out by my noble friend the Minister in his opening remarks.
More unusually, I find myself in a position of agreeing with the noble Lord, Lord Frost. Yes, there is a political aspect to the Bill’s introduction. Ben Zaranko from the Institute for Fiscal Studies wrote that it
“is broadly sensible but largely performative … rather theatrical … some future Chancellor determined to misbehave”—
this sounds familiar—
“could almost certainly find a way to get around it”.
He concludes, however,
“but it nonetheless serves as a welcome commitment to fiscal transparency”.
That commitment should not have needed to be codified but the reasons that it is in fact necessary and welcome lie not just in the debacle of the Truss-Kwarteng fiscal event—that mini-budget, self-immolation or whatever—but in the persistent indifference, arguably contempt, shown by the last four Conservative Governments towards the principles of good governance and towards the institutions of the state, old and new.
Restoration of confidence in the professionalism of government and the stability of the UK economy is needed; this Bill is a useful contribution to that. Forecasting, to paraphrase Professor Niels Bohr—or Yogi Berra—is difficult, particularly about the future. Criticisms from some quarters of the OBR’s track record are not, however, well founded, so not a reason for dismissing the validity and importance of its assessment of any proposed large fiscal event.
The Bill increases fiscal transparency, rather than delegating decision-making to an unelected body. Extraordinarily, the shadow Exchequer Secretary, traumatised perhaps by his membership of the previous Government, lamented in the House of Commons in July that
“nowhere in the Bill … is the OBR empowered to prevent a Government from taking fiscally significant action of any kind”.—[Official Report, Commons, 30/7/24; col. 1215.]
The newly elected Labour Government face many challenges in the direction of the UK economy, arising from both the legacy of the Conservative Governments and geopolitical, demographic and technological trends. They are not abdicating responsibility for those decisions but seeking to ensure that those decisions are taken—and can be judged—in the context of the best possible independent analysis. This Bill is an important symbol and insurer of this, and I look forward to its passing all stages in this House and receiving Royal Assent—the first Bill to be enacted by this Government.
Baroness Bennett of Manor Castle (GP)
My Lords, in introducing this Bill the Minister said that
“economic stability is … the rock on which all else must be built”.
I respectfully suggest that that is a reflection of what has been described as “Treasury brain”, a subject that the noble Lord, Lord Macpherson, and I have previously had some discussions on. I would posit that the rocks on which our society depends are the health, energy, talents and skills of its people; the state of its environment; and the capacity of its infrastructure and services, from the quality of the housing to the facilities of our NHS. I pick up here the points made by the noble Lord, Lord Eatwell, and the noble Baroness, Lady Wheatcroft.
There is also the question: what is the economy for? The economy is there to meet the needs of the people and to care for our environment. We are not all here to work for the economy; I fear that is all too often forgotten. Also too often forgotten is the fact that the economy is a complete subset of our physical and natural world, and the understanding that we cannot have infinite growth on a finite planet. The UK is now using its share of the resources of more than three planets. We have to go back to one-planet living fast and that is the frame in which we always have to think about the economy.
Mainstream economic thinking has a phrase that it is very attached to: “ceteris paribus”. That is the Latin for “all other things being unchanged or constant”. I welcome the fact that the Office for Budget Responsibility has been showing increasing awareness of the fact that things are not staying the same in terms of the environment, physical and human, that the economy is operating in. I note that, since 2017 it has been producing the Fiscal Risks and Sustainability report, the last of which was presented to Parliament in July 2023. That report now lists 57 risks, some of which may be described as purely economic, but many of which relate to the state of the physical and human world. The OBR is picking up on some of the risks we are facing.
I particularly draw to the attention of noble Lords in this House who like to question spending towards the country reaching net zero, that the OBR says that there is the risk of a
“delayed transition to net zero raising … fiscal cost”.
I also note that four risks have been added to this latest report:
“persistent and high inflation, rising global trade tensions, global security threats, and cyber-attacks”.
At least the first three of those are very much related to the climate emergency. We are seeing the impact that the climate emergency is having, for example, on food prices—which, I am afraid, is only going to keep getting worse. “Ceteris paribus” certainly does not apply to the state of our world; the old economic verities will not hold, if, indeed, they ever did.
It is also worth noting that the OBR report talks about one of the unchanged continuing risks being
“the risks of financial crises and … non-payment of taxes”.
I note that, in your Lordships’ House, with backing from the now-Government and now-Opposition, we recently passed the Financial Services and Markets Act. That contains a push to grow the financial sector, which the OBR has identified as a significant risk to all of our futures.
Picking up the point on climate spending, the OBR said that if we do not act and invest now, the
“public investments needed to support the decarbonisation of power, buildings, and industry could reach £17 billion a year”
by 2030. As our own independent Climate Change Committee has been making clear, if we invest now, we save ourselves—or if you want to phrase it that way we save “the economy” —very significant costs and risks in future.
Finally, I particularly note the OBR’s reference to the number of people of working age not being in paid employment. The figure in the 2023 report is 2.6 million people of working age not in the labour force for health reasons. That figure reached 2.83 million in April. If we are going to look at our economic future, we have to think about investing in a healthier society. The OBR says that, although there is much talk about people being on NHS waiting lists, it is only a small part of the problem. We have a deeply unhealthy society, and that is something the Treasury and Government need to be thinking about when looking at their spending plans.
Baroness Lawlor (Con)
My Lords, I am grateful to the Minister for his exposition of the Bill. I declare a special interest, having worked on and published a number of independent analyses of the fiscal, monetary and regulatory problems of the UK economy as director of Politeia, the think tank at which I am now research director.
No one with the public finances at heart can fail to support a measure that strengthens transparency and a rules-based approach to the UK’s public finances. I am a devotee of fiscal stability and the need for rules, written or, as in previous times, understood. As the German economist Ludger Schuknecht has explained, many serious problems arise not because of bad rules, but because of the failure to implement the rules by using tools such as medium-term budgetary frameworks, spending reviews, financial risk analysis and independent fiscal councils to help achieve these aims.
But are the Bill and the structures—including the OBR, which it relies on—the way to ensure sustainable public finances and tighter fiscal discipline? I am unsure, and I have the following questions. First, is the Bill requiring an OBR assessment for financially significant measures or empowering the OBR to offer such an analysis, should it deem a measure such, enough to control unsustainable public spending and public debt? Is there any obligation on the Government to change their spending or debt policy if an OBR analysis predicts potentially dire consequences for the economy? If not, there is no fiscal lock, contrary to the Government’s suggestion, but simply fiscal advice. If so, that raises constitutional questions about unelected bodies and the power they exercise.
Secondly, the Government want to allow a higher ceiling for debt as a proportion of GDP by the fifth year of the cycle, from 1% to 1.2% of GDP, made public in advance of the Budget. Should we expect a further relaxation of the three previous rules for fiscal discipline and, if so, which will be relaxed, which will be changed and which will become less transparent? Will further changes be assessed by those who, like me, are sceptical of lax fiscal discipline?
Thirdly, no single forecasting institution can, or should be expected to, take the burden of advising a Government on tax and spending alone. We have heard today of some of the problems with the OBR which it has the modesty to recognise. Will the Government be open and invite other forecasters and assessments, equally independent of the Treasury and the OBR, to be sure to have other views?
Fourthly, what public spending will count as fiscally significant? I know the 1% of GDP measure has been provided, but here are two sorts of public spending that may be open-ended and not fall within the threshold, although they will eventually. The first is public sector pay rises. Rises of 5% or 6% for the 3.5 million public sector workers have been announced, adding to the potential for pay inflation, with other rises reported to be in the offing, including 22% mooted for doctors. Will the Minister agree that such pay rises should prompt an OBR report, particularly if they will likely continue to increase and reach the high threshold?
The second is the costs of immigration. According to Home Office figures, quite apart from legal migration—which is nearer to 1 million this year, net migration being lower—illegal migration via channel crossings amounted to 9,000 illegal immigrants crossing to the UK in July, August and the first week of September. Since no scheme in place is likely to deter these crossings, will the Minister confirm whether the additional management, administrative and legal costs—these have been itemised by previous Governments—for processing individual cases and providing public services, including housing and subsistence, will be averaged in an annual figure and considered as significant in order for an assessment by the OBR?
Lord Davies of Brixton (Lab)
I support the Bill—after all, it is in the manifesto—but it has faced some criticism. The comments of Ben Zaranko have already been mentioned. It ill becomes a Member of the Opposition to criticise legislation as performative, since that is practically all they did over the last five years.
The legislation is not performative but declaratory—it is setting out a declaration of intent, and it is to be welcomed for that. But—and there is always a but—I see in the Bill potential weaknesses, which arise from the exceptions in new subsection (4), and this issue of what counts as “temporary”. After all, the freeze in fuel duty each year is temporary, but it is now apparently part of our constitution. But I am more concerned about the term “emergency”. Is it a term of art? Who is going to determine what counts as an emergency? It is not defined in the Bill, and it has not been used in the charter. Ultimately, there is no track record of how it is interpreted in this context or who is going to decide.
We have an interesting case study here. Of course, we had a fiscal event on 29 July. I shall steer away from talking about winter fuel payments again. My assumption is that it was not large enough to trigger the size test, but did it trigger the emergency or the temporary test? I shall be interested in hearing my noble friend’s comments on how that undoubtedly fiscal event fitted in with the requirements of this legislation.
I was going to speak at more length on that but, inevitably, I was diverted by the comments made by the noble Baroness, Lady Wheatcroft, who came up with the perennial saw that there was some sense in including liabilities for future unfunded public service pensions in the national accounts. The whole point about unfunded pensions is that they are unfunded, and it makes no sense at all to treat them as though they were funded. However, if you are going to do the sums—or I could do them for you—and say what the current value of the future liabilities of these schemes will be, logically you should also have a figure for the future revenues that are going to meet those liabilities. It is not funded, so the future payments are exactly matched by the future taxation revenue that will pay those liabilities. You have to include both figures if you are going to account for them, and they are equal and opposite by definition. Including them in the national accounts makes no sense.
Lord Moylan (Con)
My Lords, I always think that legislation, of which this is not the only example, which arises in reaction to a single event is almost certain to be foolish, pointless and dangerous and to lead us astray. That is particularly so when reflection has shown that the initial understanding of that event—in this case, I am talking about the mini-Budget—was flawed, and that in fact it was not the mini-Budget and its fiscal measures that caused the market volatility.
It is now accepted—even by the Bank of England, I believe, in a recent paper—that about two-thirds of the volatility was caused by the Bank of England’s own misregulation of some dodgy LDI schemes in pension funds, which I do not claim to understand. Possibly the noble Lord, Lord Davies of Brixton, would understand them, given his background. They were happening in something like the equivalent of the darknet of the pensions industry, and they were what caused most of the problem. Perhaps we would be better off having a Bill that penalised the Bank of England for misregulating pension funds and other financial institutions within its purview, which might actually keep it on its toes.
My second point has already been made to some extent by my noble friends Lord Frost and Lady Lawlor. This Bill is a further step in the de-democratisation of our governmental decision-making. It is the transfer, in effect, of power from elected Ministers, who are accountable to the electorate, to unaccountable institutions on the basis of the claim that they are somehow independent. They simply have a view as to how certain changes in taxation and expenditure are going to affect the economy. It is perfectly possible for somebody else to have a different view—in fact, it is perfectly possible for a Chancellor of the Exchequer to have a different view. The noble Viscount, Lord Chandos, tried to persuade us that that was not in fact so, but of course the whole point of the Bill is to trammel and put handcuffs on the Chancellor of the Exchequer—and, of course, the first people who will be penalised by this and come to regret this legislation will no doubt be the current Chancellor of the Exchequer and her successors, if she has any, over the next few years. But that is the whole purpose of the Bill beyond its performative measure.
My third and final point was simply to say that I wanted to follow up on the remarks of the noble Baroness, Lady Wheatcroft. She said something to the effect that we were looking at our public accounts the wrong way. I agree with her to some extent but I want to make a different point. We have this enormous focus on the fiscal rules, which are essentially about the level of debt that the Government can carry—but that is a secondary matter.
The really crucial matter is what level of national income the Government should dispose of. To some extent, that is a political question, because inevitably the Labour Party will take the view that the Government should dispose of a larger sum and the Conservatives would probably take the view—I hope—that they should dispose of a smaller sum. It is not quite clear where the Liberal Democrats would stand on that crucial question. But that is the essential point that should drive all our politics. However, it is not simply a political matter; it can also be considered with regard to the effectiveness of that spending and whether that spending, as it increases, achieves a proportional improvement in the outcome of public services or whether it runs into what might be described as diminishing returns. I would say that the evidence is clear that at a certain point increased public expenditure starts to run into the problem of diminished returns when you measure the outputs that the Government actually achieve. Spending more money on the health service might produce more hospitals but does it produce better health outcomes? Are death rates from certain illnesses improving, and so forth? When you measure those things, it is clear from the evidence that simply spending more money does not produce proportionate outcomes.
The Government really need to focus on questions of that character, because the question of how you fund that expenditure, whether through debt or taxation, is an important one but essentially secondary.
Lord Murphy of Torfaen (Lab)
My Lords, I very much support the Bill. The debate has been extremely interesting, although noble Lords seem to want to rewrite recent history. The purpose of the Bill is to reflect on what happened when Liz Truss was Prime Minister. There is a revisionist view going around that she was not so bad after all. The idea that you can have £46 billion of unfunded tax cuts everybody knew was bonkers, which of course was why she did not involve the Office for Budget Responsibility and why she sacked an eminent civil servant, the Permanent Secretary to the Treasury, because he disagreed with her.
It is ironic that the Office for Budget Responsibility was brought in by the Government of the noble Lord, Lord Cameron. It was not a Labour proposal. We have had all this business about how it is not democratic and how we have to go to the people and all the rest of it—but it was brought in by a Conservative Government, apparently in response to what they regarded as the profligacy of the Labour Government of which I happened to be a member. At the very end of that Government, in 2008, 2009 and 2010, when we were facing the international financial crisis, and I was a member of the National Economic Council, the problems that we faced were global. Over the past number of months, the Conservatives have argued, rightly, that many of the problems that they faced in government were global, with Covid and the war in Ukraine, as well as the problem with energy supply.
Of course, the truth lies somewhere in the middle, but there is no doubt in my mind that if Gordon Brown had not tackled the financial crisis as he did, it would have been much worse not just for our country but for the whole of the western world. I recall having to meet the Prime Ministers of Canada and Japan because he had called together the leaders of all the major economies in the world to resolve this matter.
Having formed the OBR, the Conservatives, having used what they regarded as the profligacy argument, embarked on a terrible period of austerity which effectively eroded our public services to the extent that they are at rock bottom. It has been 14 years of austerity and now we are told that, in the last year of that, there was no comprehensive spending review, no effective management of revenue spending in the departments and no funding for policies announced during the last six or seven months, and the result of all that is that it is all the more important for there to be an Office for Budget Responsibility to give an independent and transparent account, analysis and assessment of where we are in our economy.
The noble Lord, Lord Frost, said we should not have these bodies; they should be elected and we should rely on the good sense of the British people to assess and make a judgment on the economic mess in which we now find ourselves. Well, they did. They gave the Labour Party a majority of nearly 170 and virtually destroyed the Conservative Party in the House of Commons. They did give a verdict on the Liz Truss mini-Budget and that is why we have a Labour Government and why the Conservative Party will be out of office for a very long time.
Lord Bilimoria (CB)
My Lords, Rachel Reeves said:
“This Government’s defining mission is to deliver economic growth. However, growth can only come through economic stability and a commitment to sound public money so never again can a government play fast and loose with the public finances. This new law is part of our plan to fix the foundation of our economy so we can rebuild Britain”.
The decision by Labour gives the OBR the most power it has ever had since the Chancellor at the time, George Osborne, set it up in 2010. Of course, we know that forecasts can be wrong. The noble Lord, Lord Macpherson, said that they are invariably wrong, but he made an interesting point: what about opposition forecasts? Will the Minister respond to that?
The noble Lord, Lord Macpherson, also said very clearly that forecasts are based on assumptions. I know that. We in business continually make assumptions on all our forecasts and they are not always correct. Laith Khalaf, head of investment analysis at AJ Bell, said:
“Ironically Liz Truss and Kwasi Kwarteng did more to burnish the credentials of the OBR than any politicians since its inception. As things stand, the OBR is now more commanding than ever”.
The Bill will mean that the OBR, which monitors and checks the UK Government’s financial plans, has the power to make an assessment on announcements over the course of a financial year that make permanent tax or spending commitments worth more than 1% of the UK economy. That 1% is just over £2 trillion—just over £20 billion. My noble friend Lady Wheatcroft spoke about the black hole of £22 billion. This number keeps getting bandied around: it is not even 1% of GDP, yet it is made out to be the only reason why taxes need to be put up. If taxes are put up in the Budget coming forward—taxes such as CGT equated to income tax—it will be so damaging to the country and its economy and to investment.
The OBR provides independent analysis. It is meant to be absolutely independent. The Chancellor must request the OBR to produce forecasts at least twice a year. The initial Cabinet Office briefing note stated that the Bill’s purpose was
“to capture and prevent those announcements that could resemble the disastrous Liz Truss ‘mini-budget’”.
The briefing was republished with the reference to Ms Truss removed. Will the Minister confirm that? The absence of public OBR analysis is considered to be a factor in the negative reaction of the financial markets that followed. After Kwasi Kwarteng’s Statement, as we know, market volatility led to increased government borrowing costs and the devaluation of the pound against other international currencies. My friend Sir Anthony Seldon has just released his new book, Truss at 10: How not to be Prime Minister.
The fiscal mandate is a Government’s guiding fiscal objective, so tax and spending policy decisions should be made with this in mind. It is to ensure that public sector net borrowing does not exceed 3% of GDP by the fifth year of the rolling forecast period. The noble Lord, Lord Eatwell, made a very good point that I ask the Minister to respond to: what is the effect of this on automatic stabilisers? According to the Treasury, the effect of Kwasi Kwarteng’s and Liz Truss’s mini-Budget, which would have reduced income tax by around £45 billion, would have been to reach a trend rate of growth of 2.5%—that was a noble objective. It was reported that the OBR had provided the Chancellor with a draft forecast, but this was not made public. Opposition parties and the Conservative chair of the House of Commons Treasury Committee urged the Chancellor to publish the forecast, and the lack of that OBR analysis has been cited as the major factor that contributed to the negative reaction to the mini-Budget in the financial markets.
We can go into the analysis—by the BBC, for example—of key aspects and consequences of the mini-Budget: unfunded tax cuts, a funding shortfall, market reaction, an impact on interest rates and pension funds, Bank of England intervention, loss of market confidence, political and economic repercussions, reform and an emphasis on credibility. The noble Baroness, Lady Noakes, made a very important point: why is this a money Bill? This means we have a limited influence on the Bill; I do not think that this should have been a money Bill.
To conclude, the Bill has received support from many quarters, including from the CBI, of which I was president for two years, from June 2020 to June 2022. Louise Hellem, chief economist at the CBI, said:
“Market stability is a key foundation to enabling economic growth and business investment. Ensuring large changes in tax and spending policy are always subject to an independent assessment by the Office for Budget Responsibility will give businesses and investors additional confidence in the stability of the public finances”.
Lord Sikka (Lab)
My Lords, this Bill produces comfort for Chancellors, even though the OBR acknowledges that there are shortcomings in its work. Right at the outset, can the Minister explain why the Bill does not permit the OBR to publish forecasts at its own volition or at the request of parliamentary committees? Why that particular restraint? The OBR’s reports are promoted as apolitical, but that does not mean that it is free from institutional biases. Neither the Treasury nor the OBR makes a distinction between capital and revenue expenditure. Both are lumped together to produce a forecast of government spending and debt, which is of little use in charting the long-term course of the economy. Does the Minister agree that these items should be separated?
The OBR forecasts government debt, but asks no questions about the composition of the debt. For example, government debt includes Treasury bills and gilts held by the Bank of England’s asset purchase facility, which amount to £643 billion. It is really a hangover from the quantitative easing period and should not be part of the government debt. The left hand of the government creates the money, then the right hand buys the Treasury bills with it, and, somehow, £643 billion turns up as a government debt. I cannot see any economic logic to this, and it really constrains the Government’s policy options. I hope the Minister can explain why the Government are content for this overstatement of their debt: it ought to be looked at.
The OBR asks few searching questions and rarely steps beyond the conventional. With apologies to the philosopher Bertrand Russell, I am reminded of the story of the inductivist turkey that became famous for its forecasting abilities. It collected daily data, noting the times when the flock was fed and watered. Soon, it began to predict when the daily feeding and watering events would occur. Everybody was in awe and it became a celebrity.
The OBR of the turkey world checked the calculations and confirmed that the predictions were accurate, but some had different questions. They wanted to know why they were fed and watered every day; why they were weighed every day; why they were caged; and why it was that some were taken out and never seen again. Such questions were not the flavour of the day, and the critics were whipped into silence. The rulers decided that the inductivist turkey should receive a specially minted gold medal. The next day, it was Christmas.
So it is here: key assumptions and wisdom are not questioned by either the OBR or the Treasury because they are all intoxicated with getting the forecasts right. The entire life of the OBR has been accompanied by policy failures: the flatlining of the economy; cuts in real wages; falling living standards; investment strike by the state; crumbling infrastructure; and people dying while awaiting a hospital appointment. The OBR never looks at the multiplier effect of the Treasury assumptions or the composition of the government debt but Chancellors are still comforted because, somehow, the OBR has said that everything is okay.
If the authentication of financial forecasts by so-called independent parties is so desirable, why do the Government not apply the same logic to other arenas, such as pensioner poverty, child poverty, income and wealth inequalities, mental health and social care targets? Perhaps, when he is replying, the Minister can explain the political indifference to the social squalor created by relying on forecasts.
Viscount Trenchard (Con)
My Lords, I congratulate the Minister on his appointment, if it is not too late to do so. I was delighted to learn from his interview with the Financial Times that he is working on breaking down
“very big obstacles to inward investment”.
This Bill is intended to contribute to financial stability; I imagine that the Government think that periods of relative financial instability have constrained foreign direct investment. That may or may not be true, but is it not also the case that foreign investors are more likely to invest in countries with relatively low rates of tax and relatively light and proportionate regulatory regimes?
The Government also make much of their democratic credentials but the effect of this Bill is to transfer power away from the democratically elected Government and the Chancellor of the Exchequer—accountable to the House of Commons—to an independent body that is, however well regarded it may be as a fount of prudential wisdom and the most formidable number cruncher bar none, still a quango. There are too many quangos and they have too much power, which has been relentlessly but steadily drawn away from Ministers. Most new substantive Acts of Parliament create a separate independent quango with its own offices, board of directors and substantial costs that are met by either taxpayers or consumers.
I was rather sceptical about the OBR when it was created by George Osborne. I did not believe that there was any chance that it would be a more accurate predictor of the consequences of any fiscal changes on the economy than the Treasury. Graham Stringer, speaking in another place last Wednesday, suggested that George Osborne created the OBR in order to trap an incoming Labour Government, restrict them and slow them down; he described it as
“an odd thing that we see this quango being gilded ”.—[Official Report, Commons, 4/9/24; col. 340.]
Is it not obvious that, as is reported in the media, the existence of the fiscal rules as adjudicated by the OBR severely limits the Government’s choices? Does the Minister agree that these limitations were behind the Chancellor’s decision to cancel infrastructure spending to meet public sector pay demands?
I am not sure that having the OBR really protects us at all from financial instability. I am pretty sure that the average voter does not have a clue what it is or what it does—but we have it, and we should make sure that it is as cost-effective as possible. I am sympathetic to the attempt made by my honourable friend in another place, Nigel Huddleston, who sought to amend the Bill to ensure that any changes in the fiscal rules would trigger a requirement for the OBR to issue a report. As the Government have committed to reduce the national debt, it is also critical that we understand the definition of debt in connection with the application of the fiscal rules. Without certainty in respect of these two points, it is hard to accept that the fiscal lock will be effective.
As was discussed in another place last week, it is also unclear what happens when a fiscal measure intended to be temporary—I understand that this means up to two years—runs on beyond that time limit. The example of income tax was given; it was introduced as a temporary measure in 1799 by Pitt the Younger. I ask the Minister whether there should be constraints on Ministers taking significant decisions on other measures that are not fiscal ones if it is considered that, severally or cumulatively, they may have an effect on GDP of over 1%.
Does the Minister not agree that it would be much better if the revisions to the Charter for Budget Responsibility had been published already? I agree with the noble Lord, Lord Eatwell, on this. Can the Minister tell your Lordships whether there will be an opportunity to debate the changes to be made to the charter in due course? The separation of the charter revisions from the Bill itself gives the impression of undue haste. I am tempted to agree with those who think that the Bill is not necessary and is as much concerned with political theatre as with making changes that will have any real positive effect on the operations of the OBR.
Lord Liddle (Lab)
My Lords, I strongly support this Bill and congratulate the Financial Secretary on the very able speech with which he introduced it. I do not see how an attempt to prevent a repeat of Liz Truss can be regarded as performative. Surely everybody would want to see that consequence.
My worry is that this Bill does not go far enough. In the past two years, we have seen a real failure of fiscal responsibility in the way in which Rishi Sunak and Jeremy Hunt justified big cuts in national insurance on the basis of public spending forecasts that were, as the noble Lord, Lord Macpherson hinted, completely unrealistic. This has now landed us in a very difficult position. When they made their public spending forecasts, they did not take account of public sector pay, which is part of Chancellor Reeves’ black hole of £22 billion. They did not take account of the need for social care reform, without which, as Wes Streeting has said, there cannot be any wider reform of the NHS.
In an excellent report published just today by Unison, we learn that local councils are at risk of going bust. There is also a crisis in our courts and prison system. The Conservatives committed themselves to a defence target of 2.5%, which they seriously said could be achieved by “efficiency savings”. These were completely unrealistic public spending forecasts on which tax decisions were taken. Worst of all, in order to finance them, the Government pencilled in a cut in public investment from about 2.6% of GDP to 1.9%, which is actually the reverse of what the country needs: a big increase in investment.
So, we have a big structural deficit on our current account that we have to correct. We can try efficiency savings, benefit freezes or putting off change and reform in the hope that growth will naturally increase, but I argue that tax will have to be part of the solution to this, because the public were misled by the last Government. However, when I say “tax”, I do not believe some people from our own side, who seem to think that we can deal with this problem by simply taxing the top 1%. Yes, the broadest back should bear the heaviest burden, but it should be broader than that to work without economic damage.
We need tons of investment to launch a new nuclear energy programme, invest in our railway infrastructure, reconfigure the national grid, apply AI to public services, build new towns which have adequate social housing and fund the modern industrial strategy based on promoting a new wave of entrepreneurialism from our excellent science base. I believe that we need tough fiscal rules; we have to plan for current spending and revenue to be brought quickly into balance. But at the same time, I agree with my noble friend Lord Eatwell that the rules have to be sufficiently flexible to accommodate worthwhile, spend-to-save measures in public services and invest-to-grow measures for the wider economy. I believe that, although fiscal rules matter, a convincing growth strategy matters even more to the financial markets, and the bond markets will back our ambitions as long as our investment plans are well conceived.
Labour has a unique or huge opportunity ahead of it. We certainly need prudence and certainly need to be disciplined, but we also need radicalism—a radicalism from what I would describe as the politics of the centre ground.
Baroness Kramer (LD)
My Lords, I am pleased to welcome the Bill. My colleagues in 2010 were very closely involved in the creation of the OBR in order to provide an independent analysis of the UK economy free from party politics. The noble Lord, Lord Macpherson, talked about the importance of the absence of political bias, and I think the noble Lord, Lord Murphy of Torfaen, echoed that same set of thoughts. We on these Benches believe that the OBR serves Parliament and the nation well.
A report from the OBR is not an examination judgment such as a “Good”, “Outstanding” or “Failing” from Ofsted. It is an analysis with which one can agree or disagree, but it enables policy and decisions to be made with deeper insight and challenged with greater insight. Obviously, forecasts must be part of that or the analysis is near meaningless.
Many noble Lords speaking today have suggested that there need to be further reforms, whether it is of fiscal rules, accounting rules or methodologies, and all that is worth looking at. We heard from the noble Lords, Lord Eatwell, Lord Altrincham, Lord Sikka and Lord Liddle, and the noble Baronesses, Lady Noakes, Lady Wheatcroft and Lady Lawlor. I have to say that I have a particular sympathy with the noble Lord, Lord Liddle, but it was also suggested by someone else—the name has escaped me—who challenged the current arrangement whereby the Treasury lays down the future spending plans that will be part of the OBR’s forecast. I would see much more scope for challenge there.
None of this is perfect, but to me it seems important that the OBR’s view does not dictate what policy or decisions will be. I say to the noble Viscount, Lord Trenchard, and the noble Lords, Lord Moylan and Lord Sikka, and the noble Baroness, Lady Bennett, who came at this issue from many different angles, that any politician or Chancellor with some backbone can accept or reject the conclusions that will come from the OBR, but presumably they will then have to explain in some detail why, and that process of challenge is crucially important.
A modern economy and a modern Government are so complex that, frankly, except for a small handful of institutions that have very extensive resources, it is extremely difficult to try to understand the primary elements of economic performance. It is really like trying to unravel a bowl of spaghetti if you come at it with the kind of tools, for example, that I would or many of my colleagues would have. But it is not just those outside of government that can use the OBR analysis; it is also data either to agree with or to challenge. I know from my very brief period inside government that the OBR view at least does something to check some of the groupthink that almost inevitably grows up inside government and which is a constant risk. Here is one of the opportunities to challenge that groupthink.
Frankly, I was stunned in 2022 when the then Prime Minister Liz Truss and her Chancellor Kwasi Kwarteng suddenly announced a mini-Budget with the biggest tax cuts in 50 years and soaring borrowing with no OBR analysis or economic forecast attached. The Bank of England, which also had no advance warning, had to step in to prevent financial meltdown as the markets went into shock, both from the content of the mini-Budget but also from the manner of its doing. I will not dwell on the consequences, because, as I think the noble Lord, Lord Liddle, said, the country gave its verdict at the last election, except to say that to this day ordinary people are still hurting, and hurting badly, from the consequences of that Budget and the manner of its introduction.
Why did the Truss Government turn their back on the OBR? They could easily have requested a draft forecast, and indeed one was offered by the OBR. I think it was because we had a series of Tory Governments which found economic truth at best “inconvenient”, and especially the consequences of Brexit—I heard that in some of the speeches today—and the permanent scarring of the economy that followed. Ministers would talk about the 2008 financial crash, Covid and the energy crisis arising from the Russian invasion of Ukraine. However, from on high or through self-denying ordinance, the B-word was banned, despite being far more damaging and a far more permanent blow. We heard speech after speech, month after month and year after year, in which there was omertà on that particular set of issues. As far as I can see, the OBR has never hesitated to name both the problem and the causes of a problem and to lay out its rationale. It can be challenged, but it has not flinched.
I very much hope that this new Government would never behave in the same way as Liz Truss—or any other Government, quite frankly; I hope that lessons have been learned. But the problem is that the horse has bolted. Financial markets will always suspect that a British Government are capable of the arrogance, self-interest and ideology to produce sweeping fiscal policy without any kind of unbiased or objective analysis—I think the noble Viscount, Lord Chandos, made that point. That indeed is the value of this piece of legislation.
This is a money Bill, so I cannot propose amendments. Were it not so, it would indeed be nice to be able to go through a process of probing amendments at the very least to try to understand more about some of the terminology, to understand what a “fiscally significant” event is and more about the issues of “temporary” and “emergency”. The noble Lord, Lord Davies of Brixton, raised similar points on trying to get greater clarity on this issue. I join others—I think the noble Lord, Lord Liddle, was the last to mention this—on wanting to understand how change can happen through the Charter for Budget Responsibility. We are going to be notified 28 days in advance, but I would love to have seen, at least from a Minister, some commitment to bring such issues to the Floor of the House for debate, which is where they belong—and remember that the Charter for Budget Responsibility was set up under the umbrella of primary legislation that started in this House. However, we are where we are, and when it comes indeed to the heart of the issue, do we support the Bill or do we not? We do.
Baroness Vere of Norbiton (Con)
My Lords, this has been an interesting debate with thoughtful contributions from all sides of your Lordships’ House.
From these Benches, we believe that information about the public finances should be open and transparent so that the public can hold the Government to account over decisions they make when it comes to spending taxpayers’ money. That is why the Conservative Government created the Office for Budget Responsibility in 2010, to ensure value for taxpayers’ money and that the Government of the day were making responsible decisions with the public finances. We therefore welcome the opportunity to ensure that this remains the case, but sadly that opportunity is not before your Lordships’ House this evening.
The Bill is so narrow in scope and effect that it can be assessed only for what it is; a naked opportunity to play political games and engage in a bit of political theatre, using a rushed and ill-thought-through Bill to fill a bit of parliamentary time. Its publication back in July was accompanied by an astonishingly overtly political statement from the Cabinet Office, as was noted by the noble Lord, Lord Bilimoria; this statement had to be swiftly withdrawn. This is clear evidence that the Bill is the Government playing political games, as was also noted by my noble friend Lord Frost. To my mind, the Government are not taking the issues of transparency and accountability seriously when it comes to public finances, and this hastily assembled Bill reflects that.
The furore around the statements made on the publication of the Bill was one of the first missteps from this Government, missteps that have continued and intensified. Later this week, the disastrous decision to cut the winter fuel payment will be debated in your Lordships’ House. The Government have decided to buy off the train drivers—with no strings attached—from the pockets of pensioners. The impact of this cut is clearly significant, not only on pensioners themselves but on the public services that support them. But there is no impact assessment accompanying the cut, and certainly no report from the OBR. The timing of the cut could only be described charitably as ill conceived—out of the blue, with no notice, as we head into the winter period. It is all beginning to look a little ragged, and the Government have been in place for only just over two months.
I return to the Bill: what does it actually do? Not much. To summarise, I say that it sets a rather high and woolly trigger threshold for a tax and spending change above which a third-party body, the OBR, would have to write a report. There is no brake, no lock, no stop. It does not stop anybody from doing anything—much as, I hear from many noble Lords, they would like it to do so.
The Minister in his opening remarks rehashed quite a large quantity of doom-and-gloom, “Oh my goodness, we didn’t know what we were getting into” lines about the nation’s finances, echoed by the noble Lords, Lord Hain and Lord Liddle. I struggle to follow the relevance when it comes to this legislation. Many noble Lords, including my noble friend Lord Moylan, pointed to the 2022 fiscal event as the single and only driver for this legislation.
The measures in the Bill are described by the Minister and the Treasury as a “fiscal lock”, which sounds very decisive. I have been trying to figure out who or what is being locked, fiscally or otherwise. It is not a lock. It is another example of the Government taking a very well-understood English word and simply redefining it to mean something else for political expedience. As my noble friend Lady Lawlor noted, it is merely fiscal advice—a report. The Bill does not create a lock. It does not empower the OBR to stop, to brake, or to prevent the Government taking fiscally significant action of any kind. I do not think that it was a lamentation by the Exchequer Secretary in the House of Commons, as noted by the noble Viscount, Lord Chandos, when he mentioned that it did it not do that; it was simply a statement of fact. This Bill is so riddled with holes and high thresholds that I cannot see it having much effect at all, other than to use up a bit of parliamentary time while other more contentious Bills are being argued about with the unions and other stakeholders behind the scenes.
Yet there was an opportunity to improve this frankly underwhelming Bill. As noted by my noble friend Lord Trenchard, my opposition colleagues in the Commons tabled a helpful amendment which would have improved transparency and accountability. The amendment laid in the Commons would have required the OBR to publish a report not only when there are significant and permanent tax and spending changes but when fiscal rules, including the metrics used, are changed. Fiscal rules are important. They set the boundaries within which the Government have committed to operate tax and spending decisions. Fiscal rules are an important pillar, contributing to economic stability. It must be right that the Government should not be able to change their fiscal rules and the underlying metrics without some analysis and assessment of the impacts to enable scrutiny. As noted by my noble friend Lord Trenchard, changing the metric for the debt rule would allow for billions of pounds of higher borrowing, which would be funded by working people and other taxpayers. If large ad hoc tax and spending changes are to be subject to OBR analysis, surely ad hoc changes to the fiscal rules should also apply. These are, after all, very significant fiscal decisions and, as I said, contribute to economic stability. Sadly, the Government declined to accept the amendment.
This Government are beginning to show signs of fiscal incontinence, and I fear that they will seek to conjure up headroom by tinkering with the fiscal rules. Right on cue, only today the Trades Union Congress voted in favour of reforming the
“unnecessarily restrictive and arbitrary fiscal rules”,
citing a £500 billion public investment deficit. That is a pretty big increase. Is that the sort of quantum that the noble Lord, Lord Liddle, has in mind? It is going to need quite a shift in the fiscal rules and quite some jiggery-pokery with tax rates. Rather than playing the hand that the Government have been dealt from the current pack, they may seek to simply swerve the difficult decisions and magic up a bigger pack of cards. Will the Minister confirm that, despite extreme pressure from the TUC, individual unions and the noble Lord, Lord Liddle, the Chancellor will stick to the current fiscal rules and metrics which guided the difficult decisions made by the last Government? Or will she make her difficult decisions substantially easier by changing the debt rule and piling the burden on to working people?
It is worth commenting on how the Bill works in practice, and I will turn to triggering the lock—or, in other words, exceeding the rather high and woolly threshold at which a third-party body must write a report. There are at least two elements to be considered by the OBR when deciding whether to write this report. The first is the size and nature of the tax and spending change. In the text of the draft Charter for Budgetary Responsibility, the Government state that “fiscally significant” is equivalent to 1% of nominal GDP in any single financial year in the forecast period. This is quite a substantial amount: just under £30 billion.
I accept that public sector spending is around £1.2 trillion and, as a percentage of that total, this is actually quite small. But realistically, discretionary spending is far less than that. Therefore, the Bill is setting a threshold which would be a massive change over and above what might be considered basal. It is so high as to be substantially meaningless—which possibly reverts to the rationale for the Bill in the first place being that single event. Furthermore, the impact must be in a single year, not the discounted value of the impact in the years in the forecasted period. Again, a carefully crafted but significant change could fall equally over many years and therefore escape scrutiny.
As importantly, how is the costing of the change decided? Who defines what is and is not a fiscal measure—a measure with a potential impact on the GDP of this country? I agree with the comments made by my noble friend Lady Lawlor, who also questioned the scope of what might be considered significant. Is the Minister able to give your Lordships’ House additional context about how that figure was arrived at and what will be in and out of scope? Might there be a temptation for a Chancellor to make one, two or more announcements totalling just under £30 billion, or 1% of GDP, over several years, and in doing so still substantially change the fiscal picture of our nation?
The second factor is that the change is excluded if it is temporary—if it will unwind within two years and is in response to an emergency. The world of the Treasury is littered with tax and spend decisions which were “temporary” and “emergency” at the time yet still became a permanent part of the fiscal picture. Many noble Lords mentioned income tax, which of course is one of the most famous, but I am sure there are many others—I think fuel duty was also mentioned.
This stipulation that temporary emergency measures be excluded puts the OBR in a difficult position. The OBR must decide what counts as a spending emergency and what does not—the point made by the noble Lord, Lord Davies of Brixton. The OBR is not part of decision-making within government, and it is reasonable to assume that the OBR will not have all the information available with which to reach a rather rapid judgment about whether something is an emergency.
If the OBR disagrees with Ministers, the process by which it would do so, and the consequences, are unclear. Would the OBR notify the Treasury of its decision, and would the Treasury then delay the announcement, or not? Would the OBR continue its work and produce a report, and over what timeframe? Would the OBR have full access to all the information relating to a temporary emergency measure? What impact would all this have on the markets?
I hope the Minister agrees that, in the haste to get this Bill into the current legislative gap, there are still significant questions to be answered. Has he considered whether the OBR should be under the same obligations when temporary emergency measures are announced but given the latitude to produce the report after the announcement has been made?
I have some questions around OBR decision-making, assuming that the measure is in scope of the arrangements currently in the Bill. How much notice will the OBR get that a fiscally significant announcement is planned? How much time will the OBR have to prepare and present its assessment, and how detailed will that assessment be? Is it the Minister’s expectation that a fiscally significant announcement will be accompanied by an assessment or a statement from the OBR setting out the reasons why one is not appropriate? There is a big grey area there in which I am sure the markets will show great interest. Will the OBR publish a summary of the information that it used to reach its determination one way or the other?
I note that the information in the draft Charter for Budget Responsibility text published on 18 July was quite limited. I would be grateful if the Minister could let your Lordships’ House know whether there will be any further guidance for the OBR around this, because I see pitfalls everywhere—where it may be charged with being too political when politics should not be part of what it does.
I listened with great interest to the wise words of many noble Lords when it came to the OBR’s governance and operations, particularly those of my noble friend Lady Noakes and, of course, my colleague and noble friend Lord Altrincham. The OBR cannot itself be beyond scrutiny, and I hope that the Minister will consider their words, alongside wider input into how we measure and present our public finances from the noble Lords, Lord Eatwell, Lord Davies of Brixton and Lord Sikka and the noble Baronesses, Lady Wheatcroft and Lady Bennett. There is an opportunity to continue to debate how public finances appear in front of the public, and it is incredibly important.
To conclude, the Bill before your Lordships’ House can be described only as a disappointment. It is with sorrow that I reflect on the political theatre accompanying it in political statements from the Cabinet Office and in contributions in the Commons and, to a lesser extent, your Lordships’ House. When he took office, the new Prime Minister seemed to imply that this Government would occupy the highest pedestal and would be above petty and theatrical politics. It is clear now that this is not the case. This Bill will be the first to receive Royal Assent under the new Labour Government; part of me thinks that is oddly appropriate. This Bill cannot be amended in your Lordships’ House, so to the statute book it will go.
Lord Livermore (Lab)
My Lords, it is a pleasure to close this debate on the Bill. I am grateful to all noble Lords for their contributions and questions.
As promised in our manifesto, we will support and strengthen the Office for Budget Responsibility. This Bill delivers on that simple but important step to help restore economic stability by bringing transparency and independent scrutiny into law, ensuring that every fiscal event which makes significant changes to taxation or spending will be subject to an independent report by the OBR.
Let us remind ourselves why this Bill is needed. Although the existing fiscal framework requires at least two OBR forecasts a year, there is currently no requirement on the Treasury to subject announcements on all fiscally significant measures to independent OBR scrutiny. In effect, that means that there are times when the Government can make fiscally significant announcements while opting out of both transparency and scrutiny. As the noble Baroness, Lady Kramer, said, this was a key factor in the disastrous Liz Truss mini-Budget, which did so much damage to our economy and to households, which are still paying the price for it today.
The previous Government knew that the measures they were taking were both unfunded and unaffordable but, as they were not bound by a forecast, they wilfully prevented one from taking place. That cannot be allowed to happen again. This Bill takes five important steps, which, in combination, will deliver on that commitment.
First, it requires that, before the Government make any fiscally significant announcement to Parliament, the Treasury must ask the OBR to prepare a report which takes the announcement into account. This guarantees in law that, from now on, every fiscally significant change to tax and spending will be subject to independent scrutiny from the OBR. The noble Baroness, Lady Lawlor, suggested that certain announcements should have been accompanied by such a forecast under these arrangements, a question also raised by my noble friend Lord Davies of Brixton and the noble Baroness, Lady Vere of Norbiton.
I will look first at the Chancellor’s July Statement. It did not represent a change to the funding allocated to departments or to borrowing plans. This Bill is aimed at ensuring independent scrutiny of significant fiscal announcements that would represent risks to macroeconomic stability. The threshold is set at 1% of GDP or more in any year. None of the policy announcements mentioned by the noble Baroness would qualify as fiscally significant within the definition of the Bill. However, that 1% is of course cumulative, and, unlike the previous Government at the time of the disastrous mini-Budget, when they wilfully prevented a forecast from taking place, the Chancellor has commissioned the OBR to deliver a full economic and fiscal forecast, which will be presented alongside the Budget on 30 October. This is when the Government will set out their fiscal plans, including how they meet our fiscal rules, in the usual way.
My noble friend Lord Eatwell spoke about those fiscal rules, as did the noble Baronesses, Lady Wheatcroft, Lady Lawlor and Lady Vere, my noble friends Lord Sikka and Lord Liddle and the noble Viscount, Lord Trenchard. The Government’s manifesto set out robust fiscal rules which will ensure that the current budget moves into balance, so that day-to-day costs are met by revenues, and debt must be falling as a share of the economy by the fifth year of the forecast. The Chancellor will set out the Government’s full fiscal plan, including the precise details of those fiscal rules, in the usual way: at the Budget in October, alongside an economic and fiscal forecast produced by the OBR. A revised OBR charter will be published at that point.
To further address the point made by the noble Baroness, Lady Wheatcroft, I point out that the Chancellor said, in her Mais Lecture earlier this year, that she
“will report on wider measures of public sector assets and liabilities at fiscal events, showing how the health of the public balance sheet is bolstered by good investment decisions”.
The noble Lord, Lord Altrincham, asked about the costs of the asset purchase scheme. The OBR provides detailed projections of the underlying cost arising from QT and the impact on different fiscal metrics. The latest OBR forecast for the financial year 2024-25 put HMT transfers to the APF at £34.5 billion. The separation of fiscal and monetary policy is essential, so the Government do not comment on the conduct or effectiveness of monetary policy.
Secondly, the Bill gives the OBR the power to decide independently to produce a report, if it judges the measures in a fiscal event to be fiscally significant. The noble Lord, Lord Frost, raised the question of how much impact this Bill will have, a point also made by the noble Viscount, Lord Trenchard, and the noble Baroness, Lady Vere. As my noble friend Lord Liddle said, we need look back only at the disastrous Liz Truss mini-Budget and at the current cost of the average mortgage—£300 a month higher than before that mini-Budget—to see how serious the impact of sidelining the OBR can be.
Of course, the noble Lord, Lord Moylan, is correct to say that the problems with that mini-Budget went much wider than just the absence of a forecast. As the noble Baroness, Lady Kramer, said, the announcement of £46 billion of unfunded tax cuts led to an unprecedented increase in borrowing costs. As a result, the value of sterling fell to a record low against the dollar, with a near collapse in the pension market. As my noble friend Lord Murphy rightly said, explicitly sidelining the OBR meant that no one knew how any of this would be paid for or how it would impact on the then Government’s fiscal rules. There is no doubt that this contributed to uncertainty in the markets. As the now Shadow Chancellor said at the time, the mini-Budget damage was, in part,
“caused by the lack of a forecast”.—[Official Report, Commons, 17/10/22; col. 395.]
The noble Baroness, Lady Vere, described this Bill as political theatre. However, what is particularly notable is the lack of an apology to the British people from the noble Baroness in her speech this evening for the damage that the Liz Truss mini-Budget did to family finances. I know that they are determined not to apologise, but I am not sure that is a wise strategy. As long as they refuse to do so, they may well continue to pay the electoral price for it.
To address the question from the noble Baroness, Lady Lawlor, and my noble friend Lord Sikka, this Bill will prevent the sidelining of the OBR by giving it the power to start an assessment if the Government announce fiscally significant policies without one. This means that the mini-Budget, and any other fiscally significant announcements like it, would have been subjected to the scrutiny of an independent OBR report. This Bill ultimately is about transparency and scrutiny.
The noble Lords, Lord Frost and Lord Moylan, and the noble Viscount, Lord Trenchard, whom I thank for his kind words, criticised some independent regulators. I respectfully disagree. This Bill ensures transparency and accountability. It does not give the OBR policy-making powers. As my noble friend Lord Sikka and the noble Baroness, Lady Kramer, rightly said, policy is very much for the elected Government. By adding a further level of scrutiny to fiscally significant announcements, this Bill takes nothing away from the power of this Parliament—in fact, greater transparency surely increases accountability. This Bill requires that policy-making is subject to proper scrutiny. Independent scrutiny of the public finances promotes greater accountability to the public, provides certainty for the markets and investors, and supports economic stability. We have seen what happens when the OBR is sidelined—higher interest rates and mortgage misery for millions.
The noble Baronesses, Lady Noakes and Lady Vere, raised the question of the OBR’s accountability. The OBR is accountable to Parliament. The Treasury Committee in the Commons can call in the chair and other OBR members, and both oral and written evidence submitted by the OBR are available on the Parliament website. It must also consent to the appointment of the OBR chair. In addition, a full update to the charter will be published on 30 October alongside the Budget, on which Members in the other place will vote in the usual way.
The noble Lord, Lord Macpherson, and my noble friends Lord Eatwell and Lord Liddle, noted that the Chancellor’s Statement in July set out robust reforms to further increase transparency in the public finances. In the light of the scale of the overspend left by the previous Government, mentioned by my noble friends Lord Hain and Lord Murphy, and the noble Baroness, Lady Wheatcroft, about which the OBR had not been informed, the Chancellor also announced additional measures to strengthen the fiscal framework. These require the Treasury to share with the OBR its own assessment of immediate public spending pressures, enshrining that rule in the Charter for Budget Responsibility and establishing that spending reviews will take place every two years, with a minimum planning horizon of three years to avoid uncertainty for departments and to bring stability to our public finances. The noble Lord, Lord Macpherson, asked about further reforms to the OBR, and I will of course look at his suggestions.
The noble Lords, Lord Altrincham and Lord Frost, and the noble Baroness, Lady Noakes, questioned the OBR’s forecasting record and some of the assumptions that the OBR makes. As my noble friend Lord Chandos said, this Bill concerns the scrutiny and transparency around fiscally significant announcements. However, I note that the IMF has said that the OBR’s analysis
“can be considered as best-practice, and could be used as a benchmark by other advanced countries”.
Meanwhile, the OECD has described the OBR as a
“model independent fiscal institution”.
The OBR’s forecasts for GDP and the public finances have typically been more accurate than the previous forecasts made by the Treasury. As the noble Lord, Lord Altrincham, said, the OBR is required by primary legislation to publish an annual assessment of the accuracy of its forecasts. All previous forecast evaluation reports are available on the OBR’s website.
The third element of this Bill is to define a measure or combination of measures as “fiscally significant” if they exceed a specified percentage of GDP, with the OBR charter then setting the precise threshold at 1% of GDP. The noble Lords, Lord Macpherson and Lord Bilimoria, and the noble Baroness, Lady Vere, discussed the setting of the 1% threshold. The purpose of the legislation is to ensure that large-scale fiscal announcements that could undermine macroeconomic stability cannot take place without independent scrutiny. This requires a threshold that is targeted at fiscally significant announcements. The current threshold will ensure that the provisions are triggered only when appropriate to support macroeconomic stability.
To answer the noble Viscount, Lord Trenchard, and the noble Baroness, Lady Vere, the 1% of GDP threshold is cumulative and treats savings and costs separately. This means that announcements made by government to Parliament in any financial year in the forecast period can be added together and trigger these arrangements. It will not be possible to simply announce savings to offset costs to avoid it. The Treasury will keep track of announcements as they are made over time and share these with the OBR as requested. This is an important part of how these arrangements will hold the Government to account on spending commitments.
Fourthly, this Bill ensures that measures do not apply to responses to emergencies. The Bill does this by not applying in respect of measures that are intended to have a temporary effect and which are in respect of an emergency. The OBR charter will define “temporary” as any measure that is intended to end within two years. In an emergency—for example, during a pandemic such as Covid-19—it may be necessary for the Government to take rapid action. In these cases, it would not be appropriate to hold back the response to the emergency until such time as a forecast could be produced.
My noble friend Lord Davies of Brixton and the noble Baronesses, Lady Kramer and Lady Vere, sought clarity on the definition of “emergency”. Given the unexpected and unpredictable nature of events, it is not possible to set out a precise definition of an emergency in legislation. However, the Bill contains clear limitations to ensure that no Government can inappropriately avoid independent scrutiny on its significant fiscal announcements.
The first of these limitations is that the updated Charter for Budget Responsibility notes that, when the Treasury believes something is an emergency, it would need to make it clear why it considers the situation to be an emergency. Secondly, this can be relevant only for temporary measures which are intended to end within two years. Thirdly, as set out in the updated charter, this will not simply be for the Treasury to decide. The OBR will have the discretion to prepare a report if it reasonably disagrees on whether the situation in question is an emergency. If it were to reasonably disagree, the OBR would be required to notify the Treasury Committee in the House of Commons of its opinion. I repeat that, in emergencies, it may be appropriate for the Chancellor to commission a forecast from the OBR to follow measures that need to be announced or implemented rapidly. That would happen in the usual way.
Finally, the Bill requires the Government to publish any updates to the detail of these arrangements, such as the threshold level at which they are triggered, in draft form, at least 28 days before the charter is laid before the House of Commons. This is a key safeguard in the Bill, preventing any future Government from choosing to ignore these arrangements by updating the charter without clear parliamentary consent.
The noble Baroness, Lady Noakes, and the noble Lords, Lord Moylan and Lord Bilimoria, raised the question of scrutiny of this Bill in your Lordships’ House. As the noble Baroness, Lady Noakes, and the noble Lord, Lord Frost, noted, this is for the Speaker in the House of Commons to determine under the Parliament Act 1911. This Bill focuses on the scrutiny of fiscally significant announcements—tax and spend—which is the remit of the other place. To reassure the noble Viscount, Lord Trenchard, the House of Commons will debate and approve the updated charter.
The changes introduced in this Bill are an important step in bringing much-needed stability to our economy, so that we never again see a repeat of the disastrous Liz Truss mini-Budget and the damage that it did to family finances. By empowering the OBR and ensuring that an independent assessment will accompany all fiscally significant announcements, it will improve transparency and accountability. Economic stability is the rock upon which all else must be built; it is the essential prerequisite for growth. This Bill is an important step as we fix the foundations of our economy, rebuild Britain and make every part of our country better off.
Watchdogs (Industry and Regulators Committee Report)
(2 months, 1 week ago)
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Lord Hollick
That this House takes note of the Report from the Industry and Regulators Committee Who watches the watchdogs? Improving the performance, independence and accountability of UK Regulators (2nd Report, Session 2023–24, HL Paper 56).
Lord Hollick (Lab)
My Lords, I am pleased to introduce this debate on the Industry and Regulators Committee report. I thank our committee members and staff for their valuable contribution to the committee’s work, particularly my noble friend Lady Taylor, who has taken over from me as chair of the committee. Over the last three years, the committee examined the regulators of energy, water, higher education, and financial services. This report drew on our findings in those inquiries and built on them by hearing from a wide range of other witnesses, whom we thank.
Our report focused on how power is delegated to regulators and how they are held accountable for the use of that power. The 90 or so regulators in the UK usually have oversight of particular sectors, such as Ofgem, for the energy sector, or particular issues across the economy, such as the Competition and Markets Authority. Regulators are set up to act independently from government, with the aim of providing long-term stability and instilling confidence that enforcement decisions against citizens and organisations are not affected by political considerations or lobbying. They wield significant power and influence over our economy and our everyday life; that unelected bodies wield such power is unusual, and for this reason it is important that Parliament holds regulators to account for how this power is used.
Primarily, this is done through Select Committees. However, we found that the scrutiny of regulators by committees tends to be piecemeal and reactive. There is little routine scrutiny that focuses specifically on whether each regulator is carrying out its duty effectively in line with its remit. We recommend that a regular review is needed to provide an assurance that regulators are carrying out their duties as required and to identify problems before they occur—I hope—rather than examine the debris after the fact. The Industry and Regulators Committee has been filling some of this gap, and so will the new Financial Services Regulation Committee, which I now sit on, but they are not able regularly to scrutinise all the UK’s regulators. In the absence of a regular review of regulatory performance, each inquiry has to start from scratch. This contrasts starkly with the practice of the European Parliament, which can call on European regulators and examine their performance and hold them to account, well informed by the knowledge and evidence prepared by a substantial permanent group of officials.
We have important bodies to aid scrutiny. The National Audit Office does sterling work in supporting the Public Accounts Committee, including, on occasion, by assessing the value for money that regulators provide. However, it does not have the resources to cover all regulators on a routine basis, and neither does the PAC have the time to do so. The National Infrastructure Commission has an important role to report on the delivery of UK infrastructure where regulators such as Ofgem, Ofcom, Ofwat and the environment agencies hold some responsibility. Given the importance of investing in infrastructure and securing growth—the key aspiration of the new Government—we recommend that the National Infrastructure Commission be put on a statutory footing, giving it the freedom of independence to speak truth to power and to inform the public about what is going on, or often not going on, with large-scale investments into our public realm. For instance, we were disappointed to find that the NIC did not have the power to investigate proactively catastrophic underinvestment in the water infrastructure over many years, which led to widespread sewage discharges. Why is that? Because it is not allowed to investigate areas of settled government policy.
We recommend a more effective approach to improve parliamentary oversight of regulators, and a new independent statutory body, the office for regulatory performance, should be created to advise Parliament and its committees to hold regulators to account on a more thorough and systematic basis and provide an annual report card on each regulator’s performance. The resources to fund its work would be well spent to ensure that regulators are delivering what they are asked to by Parliament. We recommend that the Government consider provisions for the office for regulatory performance as part of their forthcoming creation of the regulatory innovation office.
Imposing multiple statutory responsibilities on regulators can muddle them and their accountability. Some regulators have been given too many objectives and matters to have regard to without any clear guidance on priority. This makes it difficult for a regulator to achieve its objectives and for Parliament to assess its performance. Take the case of Ofwat, which prioritised keeping consumer costs down instead of increasing essential investment in the water infrastructure to meet population growth and replace its failing century-old system. Where there is a lack of clarity in the job role given to regulators, they often reach for the most cautious solution and avoid raising bills, even where this might be necessary. This lack of clarity undermines the independence of regulators; Parliament and the Government need to be clearer when setting and prioritising objectives and not remain mute on the issue.
The recent introduction of the competitiveness and growth objectives for regulators brings a welcome focus on growth and improving the performance of regulators, but it also brings a challenge for regulators to balance the new growth objective with their overriding responsibility to sustain the integrity and enforcement of effective regulation in their sector and, particularly, the protection of customers.
Noble Lords will recall the enthusiastic embrace of the coalition Government for a bonfire of red tape. Earlier this afternoon, we were reminded of the dangers of thoughtless implementation of that approach when the Grenfell fire report cited lax regulation as a key contributory factor to the devastating fire. The objectives of growth and competitiveness must sit side by side with a strengthening of public protection and an improvement in the clarity and speed of response and remediation provided by regulators to the public and business alike.
Regulators can have a significant impact on growth. In the Industry and Regulators Committee’s 2023 letter to the London insurance market, we noted how the introduction of rules to allow the advent of securitisation and captive insurance was widely applauded and adopted in many jurisdictions, and opened attractive growth opportunities for London. In Singapore, where the regulator promoted the virtues of these same UK rules, they rapidly authorised several companies to open for business. UK regulators were far too slow off the mark and introduced a very long process of authorisation, which prevented London taking advantage of being the primary rule setter.
When the CEO of the London Market Group appeared before the Lords Financial Services Regulation Committee last week, she reported that there had been no improvement in London’s regulatory process since our earlier report. In the same meeting, the head of Marsh McLennan told us that the cost of compliance in the UK was estimated to be six times greater than in the nearest major competitor jurisdiction. These examples appear to be a result of our regulators’ passion for process rather than effective outcomes. This results in great frustration for customers and businesses; it adds costs and undermines growth.
That regulator passion for process is in part born of an understandable need to minimise the danger of getting something wrong and missing key information. Perhaps the advent of AI software, which itself presents some interesting regulatory challenges, can transform that process by collecting all the data, verifying it for an available, possibly centralised database, and identifying those cases and authorisations that require further inquiry and judgment to resolve. The regulators can then focus their resources and well-honed skills on resolution rather than procrastination. Innovation like that can improve regulatory performance and protection, and promote growth.
The Government’s announcement to legislate to set up a regulatory innovation office provides an important opportunity to consider how AI and other innovations can be harnessed and regulated to improve protection, competitiveness and growth. Will the Minister please confirm that there will be a pre-legislative consultation, when the recommendations of our committee and others can be considered? When do the Government expect to set up this new body and are they supporting the previous Government’s May 2024 White Paper, Smarter Regulation, ensuring that regulators play their part in supporting growth?
Regulators protect citizens and the environment against those who, by design or otherwise, wish them ill. By providing a clear and efficiently managed set of rules, regulators provide the predictability, stability and competitiveness that help businesses to attract domestic and overseas investments, which can help them flourish and boost growth. Regulators need a clear remit, independence from political interference, and the necessary funding and resources to do their job.
Regulators have the responsibility to operate in a transparent manner, to explain the reasons for making their decisions, and to speak candidly to Parliament and the public if there are significant issues that need to be addressed and resolved, however discomfiting the Government of the day might find them. Parliament, for its part, must adopt the reforms proposed to strengthen its oversight of the regulators and to fulfil its role watching the watchdogs. I beg to move.
Lord Hunt of Wirral (Con)
My Lords, I first draw attention to my entry in the register of interests; in particular, as chair of the financial services division of DAC Beachcroft. I welcome the opportunity to follow the noble Lord, Lord Hollick, not only to congratulate him on an important speech but to thank him and his colleagues for making such an important contribution to this debate.
This report excels particularly in its shrewd and practical analysis of the eternal tension between independence and accountability. As it states in paragraph 171:
“Regulators should be held to account for aspects of their performance by their sponsoring departments within government. Given the importance of regulatory independence, accountability cannot be left to the Government alone, and Parliament must play a critical role”.
Experience tells us that regulators have their ups and downs. In the unlikely but possible event of one going rogue—acting outwith its statutory remit, demonstrably underperforming or even failing completely—there must be some mechanism for dealing with that. Sometimes we joke that the sign of a successful regulator is to be equally unpopular with producers and consumers, and with Governments and Oppositions.
Financial regulation—the very foundation of our economic system—failed disastrously, resulting in the crash of 2008. Thereafter, the debate seemed to be between rules-based versus principles-based regulation. I say that we need proportionate, flexible and targeted regulation. There is always a risk of regulating to prevent the last catastrophe, rather than creating a system that can prevent the next one.
In May, the previous Government produced a very good White Paper, Smarter Regulation, which included the observation that
“regulation should only be used where strictly necessary, with a high bar for introducing it and laser-like focus on how it will be implemented and felt”.
Labour’s manifesto said:
“Labour will ensure economic regulation supports growth and investment, promotes competition, works for consumers, and enables innovation”.
I hope that the new Government’s policy on regulation will continue to have its roots in their oft-stated intention to promote growth. For any consensus about the future of regulation to be truly sustainable, it should be across parties and not just within them. I hope to hear from the Minister a repeated echo of the spirit of practical common sense that so characterises this report.
Adam Smith, who I suppose is the father of free market economics, famously wrote:
“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices”.
There, in a proverbial nutshell, is the case for regulation: a totally free market might well unleash countless instances of honest entrepreneurship and public benefit, but it would also facilitate all kinds of mischiefs.
As Secretary of State for Wales in the early 1990s, much of my effort was directed towards securing inward investment. When considering where to invest, major international companies, especially those in financial services, will naturally take account of taxation rates and regimes, but they will also subject regulatory systems to formidable scrutiny—and, believe me, they really do their homework.
What attracts much-needed inward investment is a regulatory system that is stable, predictable and proportionate, not one that wastes everyone’s time and resource with pointless box-ticking and form-filling. I very much hope that we can all agree on that.
Lord Clement-Jones (LD)
My Lords, it is a pleasure to follow the noble Lord, Lord Hunt, and a particular pleasure to follow so closely the comprehensive introduction by our excellent former chair, the noble Lord, Lord Hollick.
As the noble Lord alluded to, the Grenfell report and today’s Statement have been an extremely sobering reminder of the importance of effective regulation and the effective oversight of regulators. The principal job of regulation is to ensure societal safety and benefit—in essence, mitigating risk. In that context, the performance of the UK regulators, as well as the nature of regulation, is crucial.
In the early part of this year, the spotlight was on regulation and the effectiveness of our regulators. Our report was followed by a major contribution to the debate from the Institute for Government. We then had the Government’s own White Paper, Smarter Regulation, which seemed designed principally to take the growth duty established in 2015 even further with a more permissive approach to risk and a “service mindset”, and risked creating less clarity with yet another set of regulatory principles going beyond those in the Better Regulation Framework and the Regulators’ Code.
Our report was, however, described as excellent by the Minister for Investment and Regulatory Reform in the Department for Business and Trade under the previous Government, the noble Lord, Lord Johnson of Lainston, whom I am pleased to see taking part in the debate today. I hope that the new Government will agree with that assessment and take our recommendations further forward.
Both we and the Institute for Government identified a worrying lack of scrutiny of our regulators—indeed, a worrying lack of even identifying who our regulators are. The NAO puts the number of regulators at around 90 and the Institute for Government at 116, but some believe that there are as many as 200 that we need to take account of. So it is welcome that the previous Government’s response said that a register of regulators, detailing all UK regulators, their roles, duties and sponsor departments, was in the offing. Is this ready to be launched?
The crux of our report was to address performance, strategic independence and oversight of UK regulators. In exploring existing oversight, accountability measures and the effectiveness of parliamentary oversight, it was clear that we needed to improve self-reporting by regulators. However, a growth duty performance framework, as proposed in the White Paper, does not fit the bill.
Regulators should also be subject to regular performance evaluations, as we recommended; these reviews should be made public to ensure transparency and accountability. To ensure that these are effective, we recommended, as the noble Lord, Lord Hollick mentioned, establishing a new office for regulatory performance—an independent statutory body analogous to the National Audit Office—to undertake regular performance reviews of regulators and to report to Parliament. It was good to see that, similar to our proposal, the Institute for Government called for a regulatory oversight support unit in its subsequent report, Parliament and Regulators.
As regards independence, we had concerns about the potential politicisation of regulatory appointments. Appointment processes for regulators should be transparent and merit-based, with greater parliamentary scrutiny to avoid politicisation. Although strategic guidance from the Government is necessary, it should not compromise the operational independence of regulators.
What is the new Government’s approach to this? Labour’s general election manifesto emphasised fostering innovation and improving regulation to support economic growth, with a key proposal to establish a regulatory innovation office in order to streamline regulatory processes for new technologies and set targets for tech regulators. I hope that that does not take us down the same trajectory as the previous Government. Regulation is not the enemy of innovation, or indeed growth, but can in fact, by providing certainty of standards, be the platform for it.
At the time of our report, the IfG rightly said:
“It would be a mistake for the committee to consider its work complete … new members can build on its agenda in their future work, including by fleshing out its proposals for how ‘Ofreg’ would work in practice”.
We should take that to heart. There is still a great deal of work to do to make sure that our regulators are clearly independent of government, are able to work effectively, and are properly resourced and scrutinised. I hope that the new Government will engage closely with the committee in their work.
Lord Cromwell (CB)
My Lords, I have the honour of serving on the committee that produced this report, which was chaired superbly by the noble Lord, Lord Hollick, and is now chaired by the noble Baroness, Lady Taylor—both of whom we will hear from today. We were very fortunate in our staff, who achieved the almost impossible against excruciating timelines.
To illustrate the points that I will make with one example, I will reprise the committee’s experience with the water industry. The initial objective given by the Government to the regulator and thence to the water companies was the production of clean, cheap water—and that happened. Privatisation raised some finance but the investors’ objective was to deliver profits to their own stakeholders; that happened too, through financial engineering that its regulators did not understand or question. So long as the initial objective—cheap, clean and plentiful water—was being met, the water companies were largely left to go their own way. The result? Investment for the long term was ducked, sewage discharge facilities were abused and monitoring was inadequate until environmental objectives gained prominence and a combination of civil society, the media and the committee’s inquiry revealed that Ofwat, the Environment Agency and Defra had been both diffident and outplayed in their dealings with the water companies. Thereupon, water companies’ directors were lambasted for taking bonuses while polluting rivers and their investors were criticised for sharp practice. The regulators, exposed as complacent, imposed swingeing fines on water companies—costs that will ultimately fall on the consumer, as will the many billions for overdue investment in a catch-up that will probably take a quarter of a century or more.
Meanwhile, investors have taken fright, some water companies face bankruptcy and there is uncertainty as to whether the water companies and their regulators are even up to the job of delivering the projects needed. All this reflects a combination of poor and shifting objectives from government while complacent departments and underskilled, under-resourced regulators were outsmarted by the very businesses they were supposed to be regulating.
This brings me to my two points. First, the inherent tensions between independent regulators, the Government, consumers and delivery organisations—often with sophisticated investors—are characterised by divergent stakeholder objectives that alter over time and are not clearly prioritised. Regulators must work robustly with stakeholders while remaining independent, vigilant and inquisitive, but they also need skills ranging across both technical and financial areas. Despite the concerns that have been raised over the executive pay at regulators, the report highlights that skills gaps and resourcing at competitive financial levels are serious issues in some of them. It would therefore be helpful to hear from the Minister what plans the Government have to ensure that regulators can access a full range of skills, possibly shared between regulators—for example, in private equity financial engineering.
Before I touch on my second point, which covers regulatory accountability to Parliament, let me say that I support the report’s finding that such examination should systematically include relevant government departments whose guidance and interaction with regulators are vital determinants of their effectiveness. They should be automatically and fully in scope, rather than seeking to brush aside the inquiries from our committee.
Returning to the regulators, the question is, “Who watches the watchdogs?” The answer is, “We do”. However, with 90 regulatory bodies—perhaps considerably more—there is a simple capacity issue. In theory, every regulator should come before Parliament at least to present its annual report, be examined on it and have agreed actions followed up, but that just does not happen. Consequently, as the noble Lord, Lord Hollick, pointed out, interaction between Parliament and the regulators is typically reactive—that is, not preventing problems but seeking who is culpable afterwards. It is not systematic: the examination of those who do get called in is useful, but inquiries then hasten on to the next pressing matter and follow-up is far too limited.
A key recommendation of the report is to create an independent office for regulatory performance, as has been touched on, in order to spread the load and move towards a systematic approach rather than a reactive one. Before the election, the Labour Party said, as others have mentioned, that it would create a new regulatory innovation office with an emphasis on removing delays in regulators’ approvals of business proposals, along with strengthening the Regulatory Horizons Council.
Getting to grips with performance means constant vigilance, not complacency, and—I underline this—access to the necessary skills to get right down in the weeds on a whole range of technical and commercial areas. If such a body can both speak hard truths to government about its continuous responsibilities for clear prioritisation of objectives and bring practical help to parliamentary committees in systematically holding regulators to account, I would welcome it. It would therefore be very helpful to have a detailed update on the Government’s plans when the Minister comes to wind up.
Viscount Chandos (Lab)
My Lords, I congratulate my noble friend Lord Hollick on securing this debate and his outstanding introduction. This report, Who Watches the Watchdogs?, is the crowning glory of his term as the inaugural chair of the Industry and Regulators Committee, to whose establishment he did much to contribute. The standing of the committee, which is recognised by the Institute for Government, as I shall refer to later, owes much to his term as chair. Like the noble Lords, Lord Clement-Jones and Lord Cromwell, I was proud to be a member of the committee at the time of this inquiry, and continue to be a member under the excellent chairmanship of my noble friend Lady Taylor of Bolton.
Who among us has not felt frustration at the burden or impact of regulation, whether as consumers or in our business or professional lives? That, I suggest, is the result of bad regulation, not the principle of regulation, and the purpose of the committee’s inquiry was to identify ways in which regulation could be made consistently better. Further, like the noble Lord, Lord Clement-Jones, I believe that good regulation is a key determinant of the success of a dynamic social market economy. One of the most striking pieces of evidence that the committee heard was from Virginia Acha of the pharmaceutical group MSD. She argued that, if you look around the world, there is no country in which there is a thriving life sciences industry that does not have a strong pharmaceutical regulator.
What is true for life sciences is true for other industries and sectors, even or particularly those that are complex and/or fast changing. For that reason, I disagreed with the previous Conservative Government’s policy of delaying overarching regulation of AI and look forward to the Labour Government introducing legislation as soon as possible, drawing where appropriate, I hope, on the Private Member’s Bill introduced in the previous Parliament by the noble Lord, Lord Holmes of Richmond.
The most significant of the many good recommendations in the committee’s report is the establishment of an office for regulatory performance to improve Parliament’s ability to oversee regulators and hold them to account. As my noble friend Lord Hollick also noted, two months after the report was published, the Institute for Government published its own valuable report on the specific issue of the parliamentary scrutiny of regulators. It proposed a regulatory oversight support unit as its solution to the same challenges that the committee set out to address through the office for regulatory performance, as well as suggesting that the committee should seek to involve members of the House of Commons in its proceedings on a regular basis. This last suggestion feels to me to be way beyond my pay grade, although I would welcome it.
On the difference between the committee’s advocacy of the office for regulatory performance and the Institute for Government’s recommendation of a regulatory oversight support unit, I am torn between a loyalty towards the committee of which I am a member and feeling that the pride of co-authorship should not be allowed to get in the way of achieving, as soon as possible, a practicable and cost-effective solution. Can my noble friend the Minister say whether the Government will, alongside the proposed establishment of the office for regulatory performance, also explore, with both Houses of Parliament, the best way to strengthen Parliament’s scrutiny and holding to account of regulators, drawing on the work of both the Industry and Regulators Committee and the Institute for Government?
Baroness Finn (Con)
My Lords, I congratulate the noble Lord, Lord Hollick, on the work of his committee in producing such a comprehensive and insightful report. It has brought into focus an important issue that has a huge impact on the wider public. Many years ago, I worked at the Financial Services Authority at its foundation.
A common refrain from commentators, frustrated with democratic politics, is, “Things would be so much better if only experts were in charge”. However, I suggest that the proliferation of regulators throughout the United Kingdom has tested that theory, and the committee’s report provides ample evidence of the trade-offs inherent in delegating matters to regulators.
As many in this House will know, decision-making in government consists of an endless flow of problems. These problems, almost without exception, involve distributional trade-offs between competing voices in society, each of whom has a legitimate claim on public resources. Every decision creates winners and losers: those who stand to gain or suffer from the effects of public policy. That is why I welcome the committee’s recommendation that, where decisions necessarily involve distributional trade-offs, there should be some facility for regulators to seek guidance from the Government as to how to proceed. There is a good case for making that facility more formal.
The only plausible qualification for taking distributional decisions is democratic consent. Accountability to the electorate is the only effective deterrent for decision-makers to resist the temptation to serve factional interests over wider public interests. Since 2008, the Bank of England has engaged in almost £1 trillion-worth of quantitative easing. In evidence to the Economic Affairs Committee of this House, Bank officials stated that they “hope”—their word—that the effect of this stimulus would be to inflate existing asset prices, making asset-holders richer and thus prompting them to spend more money. That is a distributional decision, the consequences of which impact on us all, and one which Parliament played no role in authorising. I therefore also welcome the committee’s recommendation that the accountability of regulators to Parliament must be strengthened, although I doubt whether the committee’s recommendation for yet another statutory body will enhance that accountability.
The power of regulators is supposedly curtailed by their having clearly defined statutory duties that limit their freedom of manoeuvre. I fully agree with the committee’s finding that many regulators today suffer from a proliferation of conflicting statutory duties that read more like shopping lists than legal direction. However, when a regulator catastrophically fails to exercise its statutory duties, there are seldom any consequences. The 2008 financial crisis was unambiguous evidence of the failure of the institutions responsible for supervising the financial services sector, yet the central culprit of that failure—the Financial Services Authority—was simply rebranded, with some of its responsibilities moved down the street to the central bank. The bulk of its personnel did not change, nor did their working practices. The very culture that gave rise to such failure was left to fester, and the FCA can often seem to take a greater interest in the diversity of the board members of those it regulates than it does in the macroeconomic risks arising in the financial services sector.
The report also makes a number of recommendations about the appointments to regulators’ boards, including the timeliness of such appointments. This is an entirely fair criticism, but, having had some experience of such appointments inside government, I highlight that the data about these important appointments is often woeful. In the then BIS department, it took officials almost six months to pull together the data on upcoming appointments. This is important in the appointments to regulators’ boards, since those who are most qualified to undertake these roles will almost certainly have conflicts of interest and will need to be approached in good time and, often, persuaded to apply. They are not the sort of people who will check the public appointments website, so it is vital that the departments give such appointments the attention that they deserve, with officials of appropriate seniority in charge.
I close by emphasising that regulators, with few exceptions, seem to have fallen prey to the temptation of governing not in the wider public interest but in the factional interest of those they apparently exist to regulate. A different incantation of statutory words cannot resolve this. The only answer, as the noble Lord, Lord Hollick emphasised, is for our democratic decision-makers to play a more meaningful role in the regulation of the British economy.
Lord Berkeley (Lab)
My Lords, it gives me great pleasure to take part in this debate and to congratulate my noble friend Lord Hollick and his committee on a most excellent report. I was not a member of the committee, but sometimes I felt I was a lone wolf in challenging HS2 and other things over their costs over the past 10 years because there was no regulator. What struck me was that, on page 5 of the report, near the bottom, there is an interesting paragraph which says:
“Ministers and Departments responsible for specific regulators should be subject to scrutiny … the Committee was disappointed by the Department for Business and Trade’s limited engagement”.
I think that is probably putting it mildly. It probably did not turn up at all. The same applies to the Department for Transport in my fights with it. I have come to the conclusion that there may be a difference between the way that regulators can regulate commercial companies and the way that they try, sometimes successfully, to regulate government departments.
In the time available, I shall concentrate on the Department for Transport. It has sat back and seen the capital cost of HS2 go up from £37 billion to £180 billion. That is quite a jump over 10 years. When you try to challenge it, it all gets very difficult. I tried the PAC and the National Audit Office, and they were busy, as one might expect. So, I wrote to the Cabinet Secretary to ask him to investigate whether Ministers had complied with paragraph 1.3 of the Ministerial Code by failing to give an accurate and truthful account to Parliament, knowingly misleading Parliament and failing to be as open as possible with Parliament and the public. The answer to all of those was no. Simon Case, the then Cabinet Secretary, instead of doing what I asked him to do, asked the Permanent Secretary of the Department for Transport to respond. Unsurprisingly, she said everything was fine—but she would because was it her department I was challenging.
Then I was told by the Cabinet Secretary that he could do nothing unless the Prime Minister agreed. The Prime Minister at that stage was Boris Johnson, who liked HS2, so there was a circle of nobody doing anything at all and just letting this thing flounder until, finally, the Treasury was persuaded that my costs were likely to be closer to what was going to happen than those the Department for Transport was producing, and the Prime Minister then cancelled most of HS2.
Whether we think that is a good thing or bad thing does not really matter, but it demonstrates that there does not seem to be any way of challenging the Department for Transport unless it is through Parliament. As the noble Lord, Lord Cromwell, said, that might be a good idea, but you have got to get Parliament to do it, and that is quite hard work. My preference would be for the House of Lords to be able to do it as well as the House of Commons because we have a bit more time.
This is a good report. I think there are many other bits of regulation that one could talk about—for example, nuclear power stations, the Office of Rail and Road, which does not look at road safety, and many things like that. I think an office of regulatory performance would be a very good start, and I hope that when my noble friend responds she will give it an amber, if not a green, light.
Lord Holmes of Richmond (Con)
My Lords, it is a pleasure to take part in this debate. I congratulate the noble Lord, Lord Hollick, on his excellent introduction to the debate and thank him and the committee for an excellent report that covers so much ground in such clarity and detail. “Who watches the watchdogs?” has been the cry over centuries of human societies, and it is never more applicable than today with the proliferation of regulators covering all aspects of our economy and society. Performance, independence and accountability are exactly the three points on any tripod to get into the issues surrounding how in the UK we regulate in the 21st century. The recommendations are clear, achievable and relevant, and I agree with all of them.
The themes running through the report are equally clear. There is a sense that it is as good as pointless—worse, harmful—simply to add more statutory objectives to regulators in the belief that this would impact performance and produce a better result for the market or consumers. Similarly, some regulators are able to fund themselves through levies and fees, and others have to go with their hand out to government. That financial structure must impact on the way that they operate, through no fault of their own.
The cry I hear running through the whole report is for clarity, consistency and coherence across the regulatory landscape. I agree entirely. This is never clearer than when we come to artificial intelligence where, currently, there is no regulator. The previous Government had the inadequate approach of writing a letter to all regulators to ask them what they intended to do when it comes to artificial intelligence. Will the Minister say what this Government’s approach will be to get the right regulatory framework for AI? I would certainly like to see an AI authority to review many of the provisions in my AI Private Member’s Bill, and I thank the noble Viscount, Lord Chandos, for his kind words about it.
When I say an AI authority, I do not mean a behemothic regulator covering all aspects of AI; I mean a right-sized, agile, nimble and, crucially, horizontally-focused regulator to look across all the existing regulators to assess their competence, address the issues, challenges and opportunities of AI and identify the gaps where currently there is no recourse. For example, in recruitment, if you find yourself on the wrong end of a recruitment decision, often without even knowing that AI was in the mix, there is currently nowhere in the regulatory landscape to seek redress. Similarly, we need an AI authority to be the custodian of the principles we want to see, not just for the right-size regulation of AI, but going further than that with an ability to transform the way we regulate across the whole of our economy and society and to look at all legislation to address its competence to address the challenges and opportunities of AI.
Will the Minister say where the Government currently are with the regulatory innovation office? What will be the scope? How will it be funded? What will be its first tasks? Does she agree that it is high time that we had an AI authority if we are to gain all the economic, social and psychological advantages and benefits of AI while being wholly conscious and competent to address all the risks and challenges? I suggest that if we had such an AI authority, it would have not just a positive impact on how we go about regulating AI but could improve how we go about regulation and regulators across the piece, not just positively impacting AI, not just asking the question “Who watches the watchdog?”, but enabling those watchdogs to be more, enabling them to be guard dogs and to be guide dogs, and, crucially, if the guard dog and the guide dog fail, empowering them to show their teeth.
Baroness Kidron (CB)
My Lords, it is an absolute pleasure to follow the noble Lord, Lord Holmes, not just because I am going to speak thematically, alongside him, but because he speaks so wonderfully.
I thank the committee for its excellent report, and the excellent introduction by its chair, the noble Lord, Lord Hollick. I will restrict my remarks to two issues: the AI skills shortage across government and regulators, and the recommendation for a Joint Committee of both Houses to oversee digital regulation. I refer the House to my interests, in particular as adviser to the Institute for Ethics in AI at Oxford and as chair of the LSE’s Digital Futures research centre.
AI technology is not new, and nor is competition for digital expertise to support public policy. However, in recent years, we have seen a raft of digital regulation across data, competition, safety, consumer products and so on, as well as a step change in the scale at which AI is being deployed across business, public services and direct to citizens. Together, these have created an eye-watering competition for AI skills. The US and China dominate the charts of AI talent, together currently employing 75% of highly skilled workers; that is up from 58% in 2019. One sector analysis found that there are only 10,000 people in the world with the kinds of skills that new applications of AI need. I ask the House to do the maths: if the US and China have 7,500 of those people, that leaves very few for the rest of us.
What was once an issue concentrated in the tech sector, or in businesses with complex delivery or service functions, is now an issue for everyone, including the regulators. Increasingly, we hear government Ministers suggest that AI is the tool by which they will reform the NHS, justice and welfare, and that it is central to their growth agenda. This requires regulators and government itself to enter an intensely competitive market for skills in which they either pay eye-watering sums to attract talent or outsource to companies, most often headquartered outside the UK, with which they frequently make data sharing and processing arrangements that accrue long-term value disproportionately away from the UK.
There are a number of actions that government might consider, from funding graduate programmes to retraining professionals in associated fields or adding digital skills to those with domain expertise, compulsory training for civil servants and government lawyers, attractive packages for foreign nationals, and so on. But without a concerted and urgent effort, our hopes to be a centre of innovation, and for the transformation of public services and functions of government, such as drafting legislation or fulfilling oversight functions, will be blighted by a lack of access to adequate skills.
This leads neatly to my second point. The pre-legislative committee on the online harms Bill, on which I was privileged to serve, recommended a Joint Committee of both Houses to oversee digital regulation, setting out five primary functions for that committee: scrutinising digital regulators; scrutinising government drafting of legislation about digital technologies; reviewing relevant codes of practice; monitoring new developments such as the creation of emerging technologies; and publishing independent research or whistleblower testimonies. During the passage of the Online Safety Bill, the data Bill and the competition Bill, the creation of a Joint Committee was supported by Members of both Houses and from all parties, most notably championed by the noble Baroness, Lady Stowell, but including the Minister herself.
There is not time in this debate to go into detail about emerging gaps between the intentions of Parliament and digital regulators, the speed of regulatory codes versus the speed of technological development, the twin evils of hacking and scraping of intellectual property, commercial access to publicly held data, or the ferocious lobbying of government and regulator by the most powerful companies in the world. However, along with the issues raised by the report of conflicting objectives, inadequate expertise in government and regulator, and the habit of information overload instead of transparency, each of these things would be well served by Parliament having oversight and expertise from dedicated committee members and staff.
This is a time in which digital solutions, particularly those driven by AI, come before the House in ever greater numbers, with unprecedented impact on every area of public and private life. If we do not ourselves grasp the problem of skills, we will squander our sovereign resources and find ourselves renters of services and products that should be built in the UK. If we do not improve our oversight of digital regulation, we will squander our chance to be a rule-maker and not a rule-taker of the new world.
Baroness Jones of Moulsecoomb (GP)
My Lords, I congratulate the noble Lord, Lord Hollick, on his opening speech, which was very good, and also congratulate his committee on this report, which was extremely interesting. If Who Watches the Watchdogs? is to have an impact, we in your Lordships’ House have a responsibility to hold those watchdogs to account.
The report highlights a lot of challenges, but the key challenge for the new Government is to ensure that real change actually happens. It is very easy—well, perhaps not easy—to produce a report, and we produce reports and they are then often ignored. As the Institute for Government says about the infected blood scandal:
“Past inquiries, including the high-profile Mid Staffs inquiry, have put forward similar recommendations on culture, candour and patient safety. These have not, however, resulted in change.”
We have 90 watchdogs, a library full of regulations, and all supported by some very high-level civil servants, probably drawn from our best public schools. It is a puzzle as to why we have had Grenfell, infected blood, sub-postmaster prosecutions, Hillsborough and the PPE contract scandals. It seems that here in this country, ordinary people can die but those responsible never get jail time. Ordinary people can lose everything but will have to wait decades for compensation, while the CEOs enjoy bonus payments and retirement cheques, and never have to worry about paying any money back. It seems that ordinary people take pay cuts for years but the profits for energy companies stay excessively high. Why do the shareholders of water companies get billions in dividends while those of us paying the bills pay the interest on their debts?
If noble Lords want to know why Britain has more billionaires than ever before but collapsing public services, it is because many modern fortunes have been built on regulatory capture, privatised services, and a system of corruption designed to separate taxpayers and bill payers from their money.
I was shocked to discover today that water companies have a duty to not pay shareholder dividends if that stops them delivering improvements and doing their jobs. What has Ofwat being doing for the last few decades? Why do this Government think that this is going to suddenly change if they leave Ofwat in charge?
This report examines the many and varied reasons why watchdogs are failing, but I want to focus on two that the proposed watchdog of the watchdogs is seeking to address. First, there is regulatory capture. The water industry is riven with revolving doors, as Ofwat is joined by water company bosses and water companies co-opt ex-Ofwat chiefs. The deals are arranged between an overstretched Environment Agency and water companies to keep the industry solvent. Is the Environment Agency captured by business interests rather than doing its job to protect the environment?
This weekend, I visited Lake Windermere to see the well-publicised problem of pollution there, and I heard some distressing reports. On the August bank holiday in 2022—when, as you can imagine, a lot of holidaymakers were making their way to Lake Windermere—around the lake, six miles of blue-green algae were clearly visible in the north basin. World Health Organization limits were breached, yet the Environment Agency issued no warning because of “reputational risk”. On 15 May 2024, United Utilities spilled 10 million litres of untreated sewage into the lake in an eight-hour period. Again, the Environment Agency response was inadequate.
I argue that within the definition of “national park” there should be a high standard for the water in that park, which does not happen at the moment, and that should prevent sewage dumps and other pollution. Lake Windermere could be a pilot for that idea.
The Grenfell Tower Inquiry report points out the problem that successive Governments have failed. It seems that the cutting of red tape was done with a carelessness that is absolutely incredible. Regulations can be influenced by the power of money. Private developers accounted for around a third of donations to the Conservative Party for about a decade, and lobbying by developers and the construction industry undoubtedly played a part in the shameful Grenfell cladding scandal and the deaths of residents.
I say to the Minister opposite and to the new Government: please listen to other voices. If you hold a meeting with the water companies, meet Feargal Sharkey to get a counterview. If you meet Post Office bosses to discuss compensation for sub-postmasters, please also meet Mr Bates. If you get a Civil Service briefing on a scandal such as infected blood, personally check what the victims have to say. You have to listen to other voices. It will not make for an easier life but it will make for wiser decisions.
Lord Kerr of Kinlochard (CB)
I was lucky enough to serve on the economic committee when the noble Lord, Lord Hollick, was chairing it, so the quality of the report and the skill with which he introduced it tonight came as no surprise to me. I shall pick up what it says about transparency and accountability and draw on two examples to illustrate the point made very powerfully in the report at paragraphs 83 and 85.
I shall begin with Ofwat, about which the noble Baroness, Lady Jones, has spoken so eloquently. The Government have said they are reviewing regulation of the water sector. Because of the financial crisis at Thames Water, there is now a Water (Special Measures) Bill before the House. However, I wonder whether the Government will also review Ofwat’s announcement only a week after the election, clearly made with pride, that it had knocked £16 billion off the water companies’ investment plans for the next five years. The noble Lord, Lord Hollick, referred—correctly, in my view—to catastrophic underinvestment in the sector. It does not sound as if the water regulator agrees. Perhaps the Minister could tell us whether the decision announced a week after the election stands. It seems a little odd, given the national revulsion against polluted rivers and beaches. One wonders whether the regulator was not perhaps operating under an injunction from the previous Government to give paramount priority to keeping prices down. We do not know whether that is the case because all such injunctions are not necessarily public. Like the committee, I think that is wrong.
I have the same concern about Ofgem, the energy regulator, about which I know rather more because throughout the Cameron, May and Johnson years I was on the board of a company running extensive electricity networks. Ofgem cut back its investment plans in every one of the years that I was on the board, by over £1 billion in some years—it was not just us; our competitors fared no better—although everyone agreed that on present plans the national electricity grid would be quite inadequate to meet future demand. Think data centres, road transport, rail transport, domestic heating and net zero. The biggest problem is not generation but distribution.
I do not know whether the Government, anxious to keep today’s prices down, were urging Ofgem not to take a long view, or whether—although this is a little implausible—they were simply looking the other way, passively allowing Ofgem to forget about tomorrow. However, we should have known and the country should have known. The report by the noble Lord, Lord Hollick, is spot on when it says at paragraph 83:
“The Government’s strategic steers and policy statements to regulators often do not provide adequate clarity on how to make trade-offs between their objectives, especially in relation to political and distributional issues, such as balancing the affordability of utility bills with the need for future investment … The Government must not duck responsibility by delegating political or distributional decisions to regulators without clear objectives or any sense of priority”.
I agree with that; it has to be right.
Ofgem says on its website:
“We are a non-ministerial government department and an independent National Regulatory Authority”.
Is there not a contradiction there? How independent can a government department be? It continues:
“Our role is to protect consumers now and in the future by working to deliver a greener, fairer energy system”—
not a clearer, fairer and adequate energy system. Must protecting consumers now mean curtailing tomorrow’s consumption? I do not think so. Clearly there is a balance to be struck but, equally clearly, striking it is a political decision that should be public—announced to Parliament and accountable to Parliament. He who pays the piper calls the tune, but he must not pretend that it was the piper alone who picked it.
Also, Mrs Badenoch really should not have refused to give evidence to the committee.
Lord Addington (LD)
My Lords, when I put my name down for this debate, I suspected I would learn more than I imparted to the House. What dragged me towards this debate—that moment when you take that rare parliamentary step of getting out of your own little corner—was that, when I looked at the title, I remembered my experience many decades ago when I was the baby on the then water Bill. Indeed, when I explained this to my noble friend Lord Teverson, he asked whether I was on some sort of day release or child workforce project for Parliament.
I remember being told at the time that the regulator would work and would cover everything, but we have discovered that it did not. The noble Lord, Lord Cromwell, has pulled that apart for us and shown that the regulator did not have the structure, the incentive or the vision to do anything about it, but we did not know that. The regulator just jogged on, doing its inadequate job and delivering on its original remit, and no one paid any attention until it was too late—until we had people making reports to the press, which then made their way to Parliament, and by that point you are often basically playing catch up and mend. The conclusion that I have come to is that the difference between a regulator and red tape is that the work is the same and you decide whether it is red tape or useful regulation.
There are many other regulatory bodies. As my noble friend Lord Clement-Jones pointed out, there is some debate about how many we have. Surely that is something that Parliament could sort out. Is it 90 or 200? Is there some subset below 90? Surely that is something to find out.
The central idea of an office for regulatory performance is a crucial one. It would be a much better way of allowing Parliament to see what was not working. If you have to come and report to Parliament, you will find out.
When it comes to regulation or red tape, I do not think that many people in either House are basically evil and out to get everybody else. They may have different views and objectives but if you can say, “Something isn’t working, so please do it differently”, you stand a good chance of somebody engaging. It is just one of those things that happens. The noble Lord, Lord Holmes, pointed out something that we have not really looked at, because we did not really understand it until comparatively recently, and when it comes to new areas we have to do something. Also raised in this report is: do not just stick something into an existing body, if it has not got the structure to handle it, because everybody is panicked.
Having looked at this report, I think it seems awfully like common sense to anybody who has been around Parliament for a while. If you do not know that something has gone wrong and it is not in the press, Parliament will not discuss it, so the regulatory framework carries on until something catastrophic happens and there is real public failure, or until it becomes politically desirable or fashionable for the party in power to address it. Those things are both probably undesirable, because somebody comes through and makes sweeping changes that may not make it any good, or they are responding to a disaster.
Surely some form of reporting on how things are managed is very sensible. I hope that when the noble Baroness, Lady Jones of Whitchurch, replies she will say that she is looking at this favourably. It does not have to be this scheme, but there should be something that reports back and lets us know how efficient things are. We are not asking for some revolution here, just for better monitoring of our current system.
Lord Ashcombe (Con)
My Lords, I am delighted to be able to take part in this debate, but before I start I should declare my interest as an employee of Marsh McLennan, the insurance broker. I thank the noble Lord, Lord Hollick, and his committee for this report and believe that nothing but good can come from this debate around the performance, independence and accountability of the UK regulators. I know that it was welcomed by many within London’s commercial insurance and reinsurance markets.
The committee’s report was particularly welcome in the context of the Financial Services and Markets Act 2023, which established a number of new accountability metrics and mechanisms, including a secondary objective for international competitiveness and growth for the FCA and PRA. These two regulators are now required to publish annual competitiveness and growth reports, the first of which were published in late July. These reports represent an important step forward and illustrate how the new accountability measures introduced are starting to engender a culture change in these regulators. Time will tell of progress. They also provide an opportunity for noble Lords, via the Financial Services Regulation Committee, to scrutinise the performance of these two regulators.
To take advantage of dynamic changes, businesses need to be able to respond swiftly to new opportunities and risks. They will have many choices about how and where to do that, so the speed, responsiveness and willingness of the regulators to support these innovations are vital factors. If London is to remain the global centre of risk transfer and retain its reputation for innovation, it needs to be able to offer customers all the tools available—tools used in competitor jurisdictions.
The noble Lord, Lord Hollick, touched on two topics, captive insurance and insurance-linked securities, which I would like to go a little further on. I am particularly interested in the potential of captive insurance, a rapidly growing global market estimated by Marsh McLennan to reach $161 billion by 2030, and of which the UK has no share. Core to its success will be the approach by the regulators; the regime needs to be designed and structured in a balanced and proportionate way. I urge the regulators to learn from their experience of the ILS market, an area where the UK market has broadly stalled—unlike Singapore, which copied the UK’s framework in 2019, since when 28 transactions have been launched thanks to the proactive work of its regulator, the MAS.
I welcomed the inclusion of a consultation on the creation of a UK captives regime in last year’s Autumn Statement. I understand that significant progress had been made prior to the general election about that consultation nearing publication. Pressing ahead and establishing the UK as a relevant captive domicile would mean that the UK could take advantage of a market that is growing rapidly, contribute to growth and bring back taxpayer capital currently held in the captives of UK public bodies based offshore. I hope that this House will continue to review these essential topics in the years to come. We have an important part to play in making the FCA and PRA fulfil their primary and secondary objectives.
I finish with two questions to the Minister. First, does she agree that, given that a number of UK public sector bodies currently base their captives offshore, the creation of a UK regime would be a positive step in bringing back taxpayer capital to the UK? Secondly, can she provide the House with an update on the Government’s work in preparing a consultation on the creation of a UK captives regime and, furthermore, will she prepared to meet me and other noble Lords interested in the potential of this market, to seek our views? We all want growth, with the UK economy thriving and driving our nation’s prosperity.
Lord Skidelsky (CB)
My Lords, I was not on the committee and therefore would like to allow myself a few mild criticisms of a very thought-provoking report. I will touch on three aspects of its central problem: “Who watches the watchdogs?”
First, a bit of history might be helpful. In its present form, this challenge was created by the Thatcher reforms of the 1980s, which produced a new dividing line between the state and the private sector. Previously, the Government owned the public utilities and were accountable to Parliament, while the private sector was in the hands of private companies that were in theory accountable to the market. That was the model, anyway, but it was swept away by the reforms of the 1980s. Injected into the private sector by Margaret Thatcher and her successors were some big natural monopolies, which had to be regulated to protect the consumer and the general public, so we got Ofcom, Ofgem, Ofwat and so on. Now there are altogether 90—or is it 200?—regulators. No one seems to know, but a massive quangocracy has arisen and with it the problem to which the report speaks: people can replace their elected representatives but they cannot vote out bad regulators
It would have been helpful had the report given a bit of this history, because that would have helped us to think more clearly about which bits of the economy are best in the private sector and which should be in the public sector. For all its talk of efficiency gains and protecting the consumer, privatisation was a euphemism for the sale of public assets, the main purpose of which was to raise revenue, reduce public debt and thus enable tax cuts. In short, it was a Conservative programme for shrinking the state, dressed up in the clothes of scientific economics. Any historian probably has to take some view of that kind.
One way of tackling the problem of accountability is to rethink the present boundary between private and public, particularly to ask whether it makes sense to keep some of these hybrids, with their layers of regulators, in the private sector at all. The present division is based on no principled red lines. It is directly implicated in the decline in total investment as a share of GDP and the growth of inequality, but that is a matter for another debate. I do not blame the report for taking the world as it is and trying to improve it. I do not think I need to limit myself to that.
My second point is mandate creep, which is something the report pays a lot of attention to. It is the loading of more and more functions on to the regulators, obscuring the character of their remits. As the report rightly says, regulators are increasingly told to “have regard to” or “take account of” or “consider” matters not in their original mandates. The general problem is illustrated by the Bank of England. The Bank of England Act 1998 mandated it to maintain price stability. The Banking Act 2009, and then the Financial Services Act 2012, added a macroprudential remit. On top of that, in 2021, there was a mandate to facilitate the transition to net zero. Here we have a clear example of mandate creep.
In 2021, when I was on the Economic Affairs Committee, I strongly agreed with the noble Lord, Lord King of Lothbury, that the new net-zero mandate would set up a conflict with the Bank’s primary objective of maintaining price and financial stability. Not surprisingly, Bank officials welcomed this increased degree of ambiguity, which allows them to interpret their mandate as they see fit. What exactly is it that they are to be held accountable for?
My final point is on transparency. Telling the truth to power? Not if your prose is so obscure that the truth disappears in a forest of impenetrable jargon. I am rather disappointed that the report is heavily sprinkled with acronyms, which are probably unknown to any but specialists. So-called transparency mechanisms, such as publishing board agendas, minutes, annual reports and strategic business plans, are not transparent to what used to be called “the man on the Clapham omnibus”—and not even to some parliamentarians. It is a fault that is very hard to cure. Clear reporting in very plain English should be a remit given to all regulators.
Baroness Taylor of Bolton (Lab)
My Lords, I thank the noble Lord, Lord Hollick, for the way in which he chaired our committee and made sure that the work the committee has done has been purposeful.
I will start by coming back—as the noble Lord, Lord Skidelsky, has just done—to why we have a body of regulators in the first place. Like the noble Lord, Lord Addington, I remember the passage of the Water Bill while I was in another place. We were told at that time that independent regulators were going to be needed to protect industry and business from too much political interference by Ministers. The idea was, as the committee was told in evidence, that independent regulators can support stability and business confidence by separating important decision-making from political considerations and the electoral cycle. The committee was, and still is, interested in just how independent our regulators really are. That raises some significant questions, as we have heard this evening. Are the regulators really given a clear remit? Are their statutory duties and objectives properly defined?
The committee found that over time regulators have been given too many objectives, too many secondary objectives, and too many issues to which they “must have regard”. For example, the Office for Students was given seven general duties it has to consider. However, during our inquiry into the OfS, the regulator suggested that these duties do not necessarily have to be achieved, and the OfS merely has to show it has thought about these when making decisions. That is not a strong or clear basis on which to delegate power to an unelected body. This was clearly a cause for concern within higher education, the sector being regulated, especially when the OfS appeared not to be pursuing some of its duties, in particular in relation to institutional autonomy.
In other sectors, we noted that both the energy and water regulators face trade-offs, as we have heard this evening, between their different responsibilities—the affordability of consumer bills, the necessity of providing secure supplies and the need to protect the environment. It is challenging, and who should actually decide on the right balance—regulators, Ministers or Parliament? Quite simply, the duties and objectives given to these regulators in legislation do not provide guidelines on how to prioritise between the objectives they are given and the balances that should be struck. Government and Parliament need to give greater thought as to how they assign objectives to regulators. I welcome that the Government are conducting a review into the objectives of utilities regulators. Could the Minister give us more information on the timescale of that and whether it might be extended?
The power and influence that regulators have are very significant. It affects the lives of all of us and the viability and success of individual companies, and, indeed, our economy. It is therefore critical that regulatory bodies are accountable. They should be accountable to Ministers, where transparency is vital to ensure that there is clarity between the independent decisions of regulators and any political direction from Ministers. We cannot say that Ministers should not give directions, but when they do, there should be transparency.
As we have heard already, we need better accountability to Parliament. We acknowledge that many Select Committees in both Houses do a great deal of important work across a range of issues, but there is no drumbeat of accountability so far as the regulators are concerned, and we need to do more. The committee called this an accountability gap, and in a democracy that is very serious. We advocated for the body that has been spoken of, which would be similar in purpose to the Public Accounts Committee, but on a much smaller scale.
Independent regulators are here to stay. They have an important role, but we need changes so that their remits and responsibilities are clear; so that relationships with Ministers are clear and transparent; and so that they have a proper and appropriate degree of scrutiny, with Parliament playing a full role in this.
Lord Teverson (LD)
My Lords, I have not had the opportunity to welcome the Minister to her new position. Her work on the environmental side of things when she was on the Opposition Benches was exemplary, including how she worked with our Benches at that time. I wish her well in her role.
I once accused my noble friend Lord Addington of having entered the House in short trousers, because of his experience here—the noble Baroness, Lady Taylor, was in the other place at that time—in terms of the water industry. With the way things are going, I suspect they may witness the full circle, not through legislation but through a lack of financial engineering and investment, of those organisations—some quite close to this building—suffering and coming back into public ownership of some kind.
I found the report extremely interesting. The history the noble Lord, Lord Skidelsky, gave I found excellent as it put it in an interesting framework. The one thing that came to me from this report is that in this House we very much concentrate on primary legislation. We look extensively at secondary legislation. However, here we have another area, rule-making, which is below those tiers. It is one that is evidently quite untransparent and we need to shed light on it. That, in a way, was the most important message to someone who does not get involved in this area all the time. Having said that, for six years I was a board member of the Marine Management Organisation, one of the less known regulators of the seas around England. I congratulate the noble Lord, Lord Hollick, on his report.
Like the noble Lord, Lord Kerr, I was absolutely astounded that the Secretary of State, Kemi Badenoch, refused—and was distinctly unco-operative with—the committee and, in effective, this House. It is important that Secretaries of State understand that this is a House of Parliament to which they are accountable, even though they are not Members of this place. We need to remember that.
The noble Lord, Lord Kerr, is absolutely right about Ofgem. Over the last year to 18 months, it has generally been understood—even by the previous Government—that the national grid is unable to deliver net zero or what we are doing in terms of the offshore rounds and the various other areas of renewable energy, hence why this House pushed strongly for that regulator to be given an additional responsibility for net zero. It did not have that before; it therefore did not provide that basis operationally to deliver what the country required.
I say distinctly that we on these Benches believe that regulation can be good. Sure, not all regulation, but this has to be said because regulation is so often seen as a burden on industry, economic growth and other areas. Generally, it is not, although bad regulation is clearly bad. It was always an irony that, during the Brexit discussions, we talked about “Singapore on Thames” as if Singapore is a rip-roaring, free-enterprise, absolutely-do-anything economy. It is not; it is one of the most regulated parts of the globe, as well as one of the most successful. A number of Members mentioned the examples of Grenfell, the financial crisis, and the fall of Northern Rock and the other financial institutions of this country, which have shown how dangerous getting rid of regulation—as rather did happen in the City prior to 2008—can be.
The report mentions that we have abolished one other big regulator: the European Commission, which kept a close eye on certain areas. Secretaries of State and heads of department were very concerned about infraction procedures, but that has gone. As part of the trade and co-operation agreement, we now have the Office for Environmental Protection; I will come back to that organisation later on because it was rather ignored recently by the previous Government. We cannot have Governments without transparency; that is one of the key messages that comes out here.
Let me go through one or two important areas that I learned about during my time at a regulator. One concerns independence and funding. The report mentions a divide between regulators that are independent of grant in aid by government and those that are not. I was in one that was completely dependent on grant in aid and was therefore careful about some of its decisions that it made on, in that case, Defra. It relied completely on that funding and its independence was very much impaired by that relationship. There should be a real emphasis on trying to get regulators to be, where they can, sustained through levies or other means; that is most important.
One area where funding is important is enforcement; the report mentions enforcement on a number of occasions. At the end of the day, there is no point in having a regulator if it does not enforce. Clearly, you do not enforce straightaway—you warn, try to educate and do all those other things—but, at the end of the day, if someone transgresses and continues wilfully to transgress, you should be able to enforce. However, the cost of enforcement to regulators, particularly smaller ones, is often huge. In our case, we ended up subcontracting it to the Treasury under the proceeds of crime legislation. Fair enough—maybe that enforcement was done—but I strongly believe that we have an enforcement gap in this country. That is particularly true at the local authority level, which is not considered in this report but is one area that is of great importance because those who keep to regulations are discriminated against by those who do not. This is fundamentally wrong in terms of the way our economy should work.
We have mentioned Ofwat on a number of occasions. It is the view of our Benches that, if a regulator publicly fails so catastrophically, I am afraid you have to get rid of it and change it. During the coalition Government, the FSA, which was mentioned by the noble Baroness, Lady Finn, was in effect abolished and replaced by the FCA and the PRA. I take the lesson that, if you abolish and change, you really have to change; you cannot just keep the same people in different positions. To us, Ofwat’s public reputation is dead, and it needs to be changed.
On timing, I was particularly struck by how slow some regulators work, mainly because departments will not appoint. I applied to be a board member of the Environment Agency some time ago. I was on a shortlist of one and I thought, “I could be here”. Then they told me that I had to go and see the Secretary of State, who was Liz Truss at the time. The civil servants warned me that she could be difficult on occasion and that I had to be careful about how I handled that. Within literally 10 seconds of walking through the Secretary of State’s door, I knew that I was not going to get the appointment—it was quite obvious. I have no problem with that as I was probably not the right person; maybe that was the right judgment. What annoyed me was that it took two to three months to tell me that that was the case. I know from other boards that, exactly as the report says, departments look in their diaries and think, “Oh my goodness, so and so has come up for renewal for a three-year term and we’ve forgotten to do anything about it”. That has to change.
It is key that funding is not just as independent as possible but sufficient for regulatory activity to take place fully. The Environment Agency has been an example of that in the past. Another example, with nutrient neutrality—that will be a topical subject again—is that the OEP was ignored by the previous Government. In future, will the Government take notice of the OEP’s recommendations, as they do of those of the Climate Change Committee, which is in some ways equivalent on the carbon side?
I come back to my noble friend Lord Clement-Jones’s challenge: will we have an office of regulatory performance? What is the alternative to make sure that this area of important regulatory work functions?
Lord Johnson of Lainston (Con)
My Lords, I direct Members to my register of interests, although I do not believe that I have any specific conflicts relating to this debate. I should admit that I am going through a planning process at the moment, so I can work from home; I will not raise the word “bats”, which will no doubt send shivers down the spine of anyone who has looked at regulation.
I thank the Industry and Regulators Committee for its work in producing this important report. I thank the noble Lord, Lord Hollick, for his introduction to this debate and his chairing of the committee, which has been succeeded exceptionally ably by the noble Baroness, Lady Taylor. I very much enjoyed our interactions in the last few months when I was the Minister for Smarter Regulation.
I welcome the Minister to her place and look forward to her replies. I look forward to hearing her clearly stating this Government’s commitment to better regulation. This is my first appearance on behalf of His Majesty’s Opposition and naturally I am extremely keen to play a strong part in holding this Government to account. I seized a copy of the Government’s response to Who Watches the Watchdogs?, sure in the knowledge that it would be full of holes and give me plenty of opportunities to challenge the Minister, and possibly even cause significant embarrassment to her so early on in her tenure. But as I read it, I was overwhelmed by a steady and growing sense of déjà vu, realising somewhat late in the document it was written by me, when I was Minister for Regulatory Reform.
First, I praise the essence of the response in its balance and breadth, and I confirm that, as the noble Lord, Lord Clement-Jones, said, we supported the majority of all the extremely good points raised. I also take this opportunity to say how much I appreciated the work of the regulatory directive in the DBT, headed by Chris Carr. I am sure that the Minister and her colleagues will have a chance to work with it, because it really did excellent work in trying to introduce reforms to our regulatory environment and better understand it.
It is important to state that I am personally very aware—as is my party, the Conservatives—that regulation is at the core of our high-functioning advanced economy, as the noble Lord, Lord Teverson, said. Consumers need to be protected, and we see how the failure of regulation and regulatory implementation can lead to devastating loss of life, as the noble Lord, Lord Clement-Jones, mentioned earlier. Markets need to operate effectively, and we must have frameworks that generate trust, without which we cannot function. But as the noble Lord, Lord Hollick, said, excessive regulation and the wrong standards—for example, ill-co-ordinated regulations, coming often out of departments, and a lack of effective collaboration between regulators, business, the consumer and the Government—have resulted in regulatory burdens costing the wealth of the nation tens of billions of pounds annually. We cannot ignore that—and I was particularly fascinated by the history lesson given to us by the noble Lord, Lord Skidelsky.
As I discovered when I was Minister for Regulatory Reform, the long and short of it is that we love regulation. This House and the other place are designed to create regulations; that is what we are—we are legislators, and we are here to make regulations. I found it very difficult—as I am sure my predecessors did and my successor will, which is why I wish him so much success—to get my hands around the regulatory structures and reduce regulatory burdens, to make them more meaningful and effective. However, in light of this, I ask the Government for their view of the growth objective, which the noble Lord, Lord Hunt, mentioned at the beginning of the debate. We have not heard much about it during this debate, but it was introduced and recently confirmed to cover a whole raft of regulators. Frankly, it is central to how we believe that we need to proceed with regulatory actions. My first main question is whether the Minister will continue to commit the Government to the principle that regulation must always be proportionate and effective and that regulators must adhere to the growth objective passed into law earlier this year as a requirement for them to bear in mind when managing their affairs.
It is clear from both the report and several consultations undertaken by the Department for Business and Trade—as well as from many good comments, some of them made by the noble Baroness, Lady Finn, in her excellent speech—that the entire regulatory landscape is confusing, with overlapping duties and a lack of clarity about those duties, layered over generations. Regulators are also often unsure of their relationship with government, so will the Minister confirm that her Government will take action to simplify and measure regulators’ duties? That has come up time and again, particularly in this report. Will the Government work to provide better assessment of the regulators themselves, as called for in this report, and work hard to ensure that strategic steers and better accountability to Ministers—and ultimately to Parliament, as the noble Baroness, Lady Taylor, raised—are now built better into the system. That was covered by a number of Peers, including the noble Lord, Lord Cromwell, and the noble Baroness, Lady Kidron.
In my work, and clearly identified by this report, are issues surrounding the work of regulators. If we are to innovate and grow our economy—the noble Baroness, Lady Kidron, and the noble Lord, Lord Holmes, made a strong series of points about the importance of AI—and if we are effectively to police the market to ensure proper consumer safety, the people who lead and staff these regulators must have proper qualifications in monitoring. With this in mind, will the Government properly assess the competency of the regulators and ensure that they have the resources necessary to carry out their functions? That includes timely appointments of boards, where we would agree that Parliament should also have more effective opportunities for scrutiny and oversight.
Too often, the cry is for more regulation or, on the other hand, deregulation. People used to come up to me and whisper furtively, “I’m so glad you’re Regulation Minister, let’s get rid of all regulation”. Other people would confront me in the passages here and come right up to me and say, “What are you doing? We need more regulation”. It is completely ridiculous—a bonfire of red tape, or whatever it may be, in reality has nothing to do with the quantum of regulation, more or less, and everything to do with the culture of regulation and how regulators themselves undertake their work.
We heard a great deal about the failure of regulation in the water sector from many noble Lords today, but clearly that has nothing to do with a lack of regulation. The process of water companies to establish pricing now runs to more than 20,000 pages. It clearly has to do with the lack of clarity regarding the objectives, often a lack of expertise in the regulator and a belief in checking boxes rather than looking at proper outcomes, with a view that the regulator has only a limited role to play in making the sector function effectively and does not look closely enough at how to make it a success for consumers and the economy more broadly.
To respond to these issues, and indeed many of the points raised in the report, the last Government issued a White Paper entitled Smarter Regulation, which was mentioned by the noble Lord, Lord Hunt. I have a copy here, signed by the team. It followed on from the now well-established smarter regulation framework, which, by the way, I assume that the Government have no plans to deviate from, and the context of which was the introduction of the growth mandate mentioned. In this document, there were 10 key principles designed to make the regulatory environment more effective. To point to a few, they were: clear guidance; transparency and accountability; the need to avoid unnecessary risk aversion; proportionality; and a focus on being highly pro-innovation, as the noble Lord, Lord Holmes, raised. All were absolutely central. They also included: far better collaboration between regulators; much better engagement with business and citizens, which is important regarding regulation as a service; a real focus on skills and capabilities; and more understanding of how regulations are applied at local levels, which will be particularly relevant in planning reform.
I have a simple question for the Minister, if I may. Is this White Paper still a feature of the Government’s ambitions? How will the Government build on this important work? To some extent, some of the problems highlighted in this debate stem from the original work of departments in issuing directions and drafting new regulations. If we had more or better analysis of the cost of regulations, and assessment as to the impact on regulatory activity in business, we would be in a far better place than we are today.
This brings me to the work of the Regulatory Policy Committee, headed by the very able Stephen Gibson. The work of this body has been too narrowly defined and its resources too thin to enable it really to aid Parliament to monitor the cost of regulations as well as the actions of regulators. There is talk of a super-regulator; this may actually be a very good compromise answer to that conundrum. We thoroughly support a review of this body, to increase its effectiveness, and I hope the Government will continue to ensure that its impact assessment processes continue to be a central feature of their own legislative process.
In summary, will the Minister tell the House how she will comply with the response to the committee’s extra paper? Additionally, will the Government commit to continuing the work started by the White Paper on smarter regulation, especially when it comes to more funding and investigatory powers for the Regulatory Policy Committee, higher expectations on regulators to foster innovation, provide better service to business and collaborate more effectively with each other.
Finally, will this Government, with all their commitment to economic growth, give proper credence to the process of the better regulatory framework and the now established principle of smarter regulation? I very much look forward to hearing from the Minister on these points and those raised in the excellent report under discussion today.
The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Baroness Jones of Whitchurch) (Lab)
My Lords, I am very pleased to respond on behalf of the Government. I thank my noble friend Lord Hollick for tabling today’s Motion and congratulate him on the report of the Industry and Regulators Committee. As others have said, the report is a fine swansong for his very able period as chair of the committee. I am also grateful to other members of the committee and other speakers for their insights and remarks on this important topic. I am grateful to the noble Lord, Lord Skidelsky, for giving us a very short but important history lesson. It is important that we remember the context which started this whole process, through the natural monopolies that were created and the forced need for external oversight. What a journey we have been on from those days to where we have got to today, with all the complications of regulation that we are now confronting.
This Government welcome views on how we best improve the performance and accountability of UK regulators and the frameworks to which they operate. This will support our ambition to build a pro-innovation, pro-worker, pro-wealth creation economy. I am therefore grateful to the committee for conducting its inquiry and producing this report, which focused on concerns about the functioning of the relationship between regulators, government and Parliament and made recommendations spanning issues across the regulatory landscape. I have heard messages from noble Lords today which echo many of the issues in the report: for example, the need for a review of regulator duties, with a view to streamlining duties and objectives and providing clear priorities; the need for strategic steers in how regulators handle any political and distributional trade-offs in implementing their duties; more attention to the skills and resource needs of regulators in the context of what they are being asked to achieve; the need for measures to support accountability, including a definitive list of UK regulators; and a greater emphasis on performance reporting from regulators, with metrics linked to outcomes.
As the noble Lord, Lord Johnson, quite rightly identified, a formal government response was published in May 2024 as a supplementary document to the White Paper, Smarter Regulation: Delivering a Regulatory Environment for Innovation, Investment and Growth. This response proposed a number of non-statutory reforms to the regulatory landscape and worked towards addressing some of the recommendations in the committee’s report. However, I have to say that the response was written some time ago, and since then a new Government have been formed, so I think it is important to say that we will need to consider afresh our approach to all these issues.
I should also say that I know that noble Lords will want to press me on the specifics of our reform agenda, but I hope they will understand that, at this stage, I am able only to outline a direction of travel; we are still working on a lot of the detail. However, what I can say is that the Government are determined to kick-start economic growth, working with industry and businesses to deliver economic opportunity. This of course needs to be supported by the right regulatory frameworks that foster competition, innovation and investment. Central to this will be a focus on ensuring high-quality regulation, both in terms of improving existing regulations and, where the bar is met, delivery of any new regulations necessary to support the Government’s missions.
In addition to the interest from the committee and the comments we have heard today, noble Lords will know that there have also been numerous well-researched publications on regulatory reform led by a number of think tanks, including Progressive Britain. They too have set out concerns and recommendations on the performance and accountability of independent regulators. All of this is invaluable work in shaping the Government’s next steps. It goes without saying that regulators play a crucial role across almost all sectors of the economy, including the oversight of essential services and infrastructure; medicines and healthcare products; workplace safety; and the environment and financial services. Their work is seen and felt by consumers, businesses and the environment—by everyone. It is only right that we continue to evaluate how our regulators are functioning and drive improvement where needed to support our economic growth mission.
In response to the noble Baroness, Lady Finn, and the noble Lord, Lord Clement-Jones, the Government of course have a critical role to play in setting that strategic direction and the outcomes that they want to see regulators deliver, so issuing strategic guidance in a consistent way is key to that delivery.
The noble Lord, Lord Clement-Jones, and others asked about publishing a list of the UK regulators, with their responsibilities and their oversight. The White Paper proposed that a register be published, and we are considering how to take that proposal forward.
The noble Lord, Lord Clement-Jones, the noble Baroness, Lady Finn, and others asked about getting the best possible people on boards. Many of these are regulated by the Commissioner for Public Appointments, but we are determined to reduce delays and improve those processes. I think we could all identify with the experience of the noble Lord, Lord Teverson, when he illustrated the problems that he encountered.
The noble Lords, Lord Hunt of Wirral and Lord Johnson of Lainston, asked about and emphasised the growth agenda. The Government recognise the importance of well-performing and accountable regulators in our mission to kick-start economic growth. This is reflected in our plans to launch a new industrial strategy to build a more resilient economy, while ensuring that we have the right regulatory environment to go for growth at every opportunity. Regulators reporting on their performance will continue to play an important part, and the Government will set out their overall plans on performance to help deliver that growth agenda in due course.
A number of noble Lords, including my noble friend Lord Hollick, stressed the importance of independence. The Government recognise the important role of regulatory independence, particularly in technical areas where outcomes depend on long-term decisions that sit outside of traditional political cycles. We know this is valued by businesses, investors and wider stakeholders. At the same time, we know that regulators differ in their degree of operational and policy independence, and that there is a role for government in providing that strategic direction and ensuring that regulators operate to the right duties. As noble Lords have argued, we must be alive to mission creep, and ensure that regulators’ duties are focused on what matters to business and to citizens.
We are alive to the importance of these issues for all stakeholders. Indeed, the Department for Business and Trade’s call for evidence, which has been referred to, and which ran from October 2023 to January 2024, has informed our understanding of these regulatory issues and the specific concerns of industry. The call for evidence received over 200 responses from a diverse range of voices, including businesses, consumers and industry groups, academia and regulators themselves. Respondents recognised the many positives in the UK regulatory system, that it is broadly well-structured and that it is well-regarded internationally.
However, they also set out some specific concerns that are helpful to the committee’s understanding of these issues. These points have been reiterated today—for example, the difficulty that businesses and others face in understanding the different roles and remits of the different regulatory bodies and how they interact with government; the accumulation of regulatory duties over time, which can dilute regulatory purpose and give rise to trade-offs which are implied rather than explicitly addressed; and the need for effective strategic steers from government to regulators on how to handle those trade-offs in their duties, particularly for decisions that verge on the political, such as normative and distributional issues.
This Government are determined to further understand and tackle these issues head-on. This includes pro-actively engaging with regulators to understand the issues they face and identify where the greater scope for improvement lies. This will also include identifying areas where the costs of regulation, particularly when viewed in the round, may be too high and burdensome for businesses. This includes both how regulations are designed, as well as how they are implemented.
In response to my noble friend Lady Taylor, we absolutely understand the need for regulators to have those clear duties and objectives, particularly in the light of the piecemeal accumulation of duties which has occurred to date.
We will take a mission-driven approach to improving the UK regulatory regime. This means improving existing regulations and working actively with regulators to support their performance and accountability, the frameworks that they operate to, and, crucially, the candour with which they explain their decisions. It means ensuring there is a shared understanding of objectives, and working with regulators to ensure that they have a skilled and capable workforce, alongside an efficient appointments process for independent boards.
The noble Baroness, Lady Kidron, quite rightly raised the issue of raising skills, particularly in technology and AI. I absolutely understand and concur with her concerns. As part of this work, we want world-leading regulatory structures in driving technology and innovation, with, for example, a clear understanding of the potential role that artificial intelligence can play.
In that regard, I agree with my noble friend Lord Chandos and the noble Lord, Lord Holmes, that AI has a huge role to play, but we have to get the regulation right. So, as per our manifesto, we will introduce binding regulation on the handful of companies developing the most powerful AI models.
More broadly, we are acutely aware of the need to support innovative businesses working in a fast-growing, fast-changing field such as AI and quantum computing, so that they can navigate the regulatory landscape effectively. This will be the principal focus of the regulatory innovation office, led by the Department for Science, Innovation and Technology. This was a key manifesto commitment, and we are pressing ahead to deliver on it over the coming weeks and months.
A number of noble Lords, including my noble friends Lord Hollick and Lord Berkeley and the noble Lord, Lord Holmes, questioned the role of the regulatory innovation office. It is important to clarify its future role. It is part of the overall solution but will not be the independent statutory oversight body recommended by the committee. As part of the Government’s mission-driven vision for regulatory reform, the activities of the regulatory innovation office will sit alongside wider cross-cutting work on improving regulatory performance and accountability led by the Department for Business and Trade, and it will work closely to deliver on the Government’s priorities with the Department for Science, Innovation and Technology.
A number of noble Lords, including the noble Lord, Lord Cromwell, raised the interests of stakeholders. We are acutely aware of the importance that stakeholders place on understanding roles and responsibilities across government, with clear points of contact to address their regulatory concerns. I reassure the House that the Government will take a joined-up approach to regulatory reform across departments and will clearly communicate this to stakeholders.
More broadly, we are in the process of developing a clear regulatory reform agenda that addresses all the issues I have outlined in my speech and which noble Lords have highlighted today. This agenda will be set out in more detail in due course. However, we are clear that these reforms must have a real, lasting and positive impact on business and everyone who interacts with the regulatory system and UK regulators. It is important that we get this right and deliver the high-quality reforms that are needed. This will be the best way to support the growth mission and deliver the right outcomes for individuals, households, businesses and the environment.
A number of noble Lords illustrated the failures of regulation in a number of different sectors, and Ofwat, as has been well discussed, is a good case in point. My noble friend Lord Hollick described it as arising from a catastrophic underinvestment, and the noble Baroness, Lady Jones, well illustrated how the regulator lost its way in maintaining water quality standards. She also rightly mentioned the need to listen to wider voices when we are putting forward the direction for regulators. The Water (Special Measures) Bill will deliver our manifesto commitment by putting water companies under tough special measures by strengthening regulation. Similarly, as my noble friend Lady Taylor illustrated, the Office for Students was given too many conflicting spheres which prevented it fulfilling its effectiveness. We would not want to repeat that issue in the future.
Before I turn to other points made in this debate, I acknowledge the Grenfell report that was published this week and take this moment to honour those who lost their lives and the many who were injured and extend my deepest sympathy to the bereaved and to the broader Grenfell community affected by this tragic event. I echo the sentiments expressed by the Prime Minister, who apologised on behalf of the state in a Statement to the House of Commons on 4 September. There is no doubt that it represents, in part, a failure of regulations at that time. This Government are committed to carefully considering the inquiry’s findings and recommendations to ensure that a tragedy like this can never happen again. There will of course be opportunities for more in-depth debate on the inquiry’s report in due course.
Turning back to the context of this debate, I hope that I have picked up most of the points that have been made. I would be happy to meet with the noble Lord, Lord Ashcombe, to discuss the UK captive regime and perhaps could recommend HMT Ministers joining that discussion as well. If I have missed other noble Lords’ questions, I will write to them.
I noted the report’s remarks on the previous Government’s engagement, or perhaps lack of engagement, with the committee, and I reassure your Lordships that this Government look forward to engaging in a bipartisan fashion with the committee and in a very positive way with noble Lords as we take this vital work forward. I personally have a huge respect for the work of the committee and look forward to working with it in future.
In conclusion, I believe we are broadly on the same page, not only in the report but in this debate, and I hope that in due course noble Lords will see the full evidence of the seriousness with which we are taking these issues and our determination to modernise the regulatory landscape to achieve better outcomes. I therefore commend this report to noble Lords.
Lord Hollick (Lab)
I thank noble Lords for their contribution today. I think it has been a very good debate. There is clearly a strong appetite to be a good and effective watchdog, or guide dog, and I believe that some of the points that have been made and some of the recommendations from the committee will considerably assist this House to fulfil the duties that it clearly wants. It is hopeful that my noble friend the Minister said that she is looking at everything afresh. When she does that, I hope she will be able to return to the House and explain how it is that we will be helped to hold the regulators to account and how clarity and transparency will be ensured. Without those fundamental reforms, we shall be back having the same debate in two or three years’ time.
The fact that the previous Minister was otherwise occupied and could not come to see us should be taken as a very clear point that we need serious engagement from the Government about how we can improve the regulatory regime and the performance of regulators in this House, to the benefit of the protection of our citizens and for better regulation for those businesses and sectors that, frankly, need to have a lighter but more effective burden on them to stimulate growth.
These are big issues, they are important issues and, when the Minister looks afresh, hopefully she will be in a position to come forward to explain how they are to be addressed in a practical way over the next period.