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Dan Carden (Liverpool Walton) (Lab)
Andrew Ranger (Wrexham) (Lab)
The Lord Chancellor and Secretary of State for Justice (Shabana Mahmood)
Today is the day that those on the Opposition Benches always knew was coming. The legacy of the previous Government was a prison system on the brink of collapse, which left us with no choice. Today, around 1,700 offenders have had to be released a few weeks or months early by changing their automatic release point from 50% to 40% of their sentence. Had we not done so, we faced courts unable to hold trials, police unable to make arrests and a total breakdown of law and order. This is not the long-term solution—there is more that we must do—but it was the necessary first step that we had to take following the disgraceful dereliction of duty of the previous Government.
Dan Carden
I refer hon. Members to my entry in the Register of Members’ Financial Interests. One way to reduce pressure on numbers is to treat more offenders with drug and alcohol addictions outside the prison estate. That reduces prisoner numbers and reduces reoffending, which means fewer victims and fewer people returning to prison. Such a system is operating successfully in many parts of the country, but it requires the highest quality treatment. It also requires probation to work well, otherwise magistrates are limited in their choices. May I encourage the Secretary of State to get hold of Dame Carol Black’s internal review of treatment and recovery of drug-dependent people in the secure estate if she has not already done so? I have not seen it, obviously, but I am certain that it will contain many excellent recommendations.
Shabana Mahmood
I thank my hon. Friend for his question. He is right: good quality work on rehabilitation to reduce reoffending and deal with drug and alcohol issues is critical to dealing with not just the rehabilitation of offenders, but the prison system. He will know that nearly 80% of offending is reoffending, which is far too high. The situation at the moment is that it is impossible to do good-quality, rehabilitative work in prisons that are more than 99% full, with prisoners locked up for 23 hours a day, so the first step is to address capacity. Once we have done so, we will be able to build on recommendations made by experts in this area to make sure that we do everything we can to reduce reoffending.
Andrew Ranger
I thank the Secretary of State for her answer. My constituency of Wrexham is home to one of the UK’s largest prisons. It is well known that if an offender has fixed and secure accommodation to go to, they are less likely to reoffend. What steps is she taking to ensure that those released today under SDS40 will have accommodation on release, including in Wrexham?
Shabana Mahmood
We are working closely with colleagues from the Ministry of Housing, Communities and Local Government to understand the impact on the housing sector, but, as is the case any time a prisoner is released, probation staff are working hard to prepare release plans, including permanent and temporary accommodation. If an offender is at risk of homelessness on release, they will be housed in community accommodation. We expect to provide housing for the majority of offenders using existing provision, but, should there not be enough, I have authorised probation directors to make use of alternative arrangements, including budget hotels, as a temporary measure for the cases that we will see in the next few weeks.
Priti Patel (Witham) (Con)
During the debate on early prisoner release in July, the impact assessment produced suggested that there would be 5,500 fewer prison places than planned for because of the need to meet the capital savings that were discussed at the time. When I raised that with the Secretary of State, she said that this matter would be under review. Can she now confirm that it is the Government’s intention to cut back prison places by 5,500 over the medium and long term?
Shabana Mahmood
The right hon. Lady will know that I have committed to publishing a 10-year capacity strategy. There are also live discussions as part of the Budget and spending review process. We have committed to delivering the shortfall of 14,000 places in our prison system, which the previous Government failed to do. That is a commitment that we have given. Those conversations are live conversations and I will report to the House in due course, but we will publish that 10-year capacity strategy before the end of the year.
Richard Tice (Boston and Skegness) (Reform)
Can the Secretary of State explain why, when some 10,000 foreign criminals are blocking up space in our jails, they are not being removed and deported, which would simultaneously save the British taxpayer billions of pounds every year and have the support of millions of British voters?
Shabana Mahmood
They are being deported, and they will continue to be deported. Nothing will change as far as the deportation of foreign national offenders is concerned, but the inheritance we received from the previous Government meant we had to take additional measures. The answer will not come from the deportation of foreign national offenders alone, but it is very much part of the picture.
Edward Argar (Melton and Syston) (Con)
Under the early release scheme starting today, the detail of which was designed by the Secretary of State, how many people will be eligible to be released at the 40% point who have been sentenced, for example, for offences under section 20, grievous bodily harm, and section 47, actual bodily harm, of the Offences against the Person Act 1861, both of which carry a maximum sentence of five years, but for which more often a sentence will be awarded that is less than five years?
Shabana Mahmood
The shadow Lord Chancellor will know that we have made important exclusions in the design of the policy and that all those who have committed serious offences and have been sentenced to four years or more will be excluded from it. I will not be able to give details on the specific mix of offences per offender, but those offences that would otherwise be included, but that relate to serious violence or sexual offences, have been excluded from the policy.
Edward Argar
I am grateful to the Secretary of State, but I have the statutory instrument and the list of exclusions in the schedule here, and those offences are not specifically included in that list of exclusions. My fear is—and this would be deeply disappointing—that many domestic abusers who were convicted for those offences but received fewer than five years may be eligible for early release and be considered for it, because her scheme does not explicitly exclude those offences. Given that, the reality is that the Government’s claim that domestic abusers will not be eligible to benefit from the scheme will ring very hollow to victims of domestic abuse and the wider public, won’t it?
Shabana Mahmood
With respect to the shadow Lord Chancellor, what will ring hollow to members of the public is the Tory party’s new-found commitment to exclusions for domestic abuse, and the sheer hypocrisy of talking about exclusions to this policy when he was a Minister in the previous Government who brought in the end of custody supervised licence scheme, which had no exclusions relating to domestic abuse whatsoever—[Interruption.] He talks about the governor lock from a sedentary position, but he knows full well that that was an attempt to shift the blame away from ministerial decision making and to place it on governors—something I am not sure was much appreciated by those who run our prisons. We have taken every step and every mechanism available to us to exclude offences connected to domestic abuse and, crucially, to give the probation service time to prepare—something the previous Government never did.
Mr Lee Dillon (Newbury) (LD)
It is clear that our prisons are at breaking point. The Conservatives’ failure to tackle the courts backlog has directly contributed to prison overcrowding. Thanks to their neglect and mismanagement, the Government have been left with no choice but to take these measures. However, the Lord Chancellor said in her statement in July that these measures would be reviewed
“within 18 months of implementation—at the very latest, in March 2026.”—[Official Report, 25 July 2024; Vol. 752, c. 833.]
That is a long time away, particularly given the various stories we are hearing about certain individuals being released. Will the Secretary of State once again confirm that no dangerous criminals will be released early?
Shabana Mahmood
We have taken every measure available to us to exclude offences from this measure. Serious violence, sexual violence and offences connected to domestic abuse have all been excluded, as have terror offences and so on—the hon. Gentleman will know the list of exclusions. We will work with our probation service, which has done a heroic amount of work over the summer to deliver this policy, in the coming months. We will also work very closely with criminal justice system partners to make sure that the roll-out of the scheme is as safe as possible. We have taken every measure, we will continue to keep matters under review and I will keep the House updated in due course.
Mr Speaker
We need to speed up a little. We are only now getting to Question 2.
Bobby Dean (Carshalton and Wallington) (LD)
Monica Harding (Esher and Walton) (LD)
Paul Davies (Colne Valley) (Lab)
The Parliamentary Under-Secretary of State for Justice (Sir Nicholas Dakin)
Hon. Members are right to focus on reducing reoffending. Nearly 80% of offending is reoffending, and it has an immense cost to the taxpayer and to communities. As the Lord Chancellor said, we have inherited a difficult situation in relation to prison capacity, which makes it harder to address the rehabilitation needs of prisoners. The House should have no doubt that this Government will roll up our sleeves and get on with the job of reducing reoffending.
Bobby Dean
My point speaks to what the Minister just said. The lack of prison capacity means that some people are locked up in their cells for 22 or 23 hours a day, and many prisons are ranked insufficient or poor for delivering purposeful activities such as education and training. How does the Minister plan to address that while we still have a bulging prison population? How will he increase the provision of those purposeful activities?
Sir Nicholas Dakin
We are taking the hard decisions that are necessary to create space and capacity in the Prison Service to address that issue. The hon. Member is right that the report from His Majesty’s Inspectorate of Prisons identified the provision of sufficient purposeful activity as its No. 1 issue to address. We know that education and employment help to reduce significantly the chance of reoffending, and we will work to do that with the Prison and Probation Service.
Mr Speaker
Order. You are supposed to sit down, Minister! I know that you are enjoying the Dispatch Box on your return, but please do not over-enjoy it. I call Monica Harding.
Monica Harding
As my hon. Friend the Member for Carshalton and Wallington (Bobby Dean) mentioned, the chief inspector of prisons said this morning that prisoners can sometimes be banged up in their cells for up to 22 hours a day, that classrooms and workshops are empty, and that education and training are simply not given the priority they need. Does the Secretary of State agree that, in order to cut reoffending, it is time to introduce a proper workable plan to improve the rehabilitation of people leaving prison?
Sir Nicholas Dakin
My own example demonstrates that training and education are very important in whatever role one takes on, so I agree wholeheartedly with what the hon. Member says.
Paul Davies
Addressing literacy in UK prisons is crucial for successful rehabilitation. Improved literacy skills empower inmates with better job prospects, aiding their reintegration into society. Education fosters personal growth, self-esteem and decision-making abilities, which are essential for a crime-free life. Investing in prison literacy programmes is a vital step towards creating safer communities and offering inmates a genuine second chance. What comprehensive strategies are being implemented to address that?
Sir Nicholas Dakin
My hon. Friend is exactly right: literacy and numeracy are crucial. I was pleased to visit HMP Humber recently, where I saw excellent best practice. It is important that those programmes are in place, that we learn from best practice and that we continue to do our best in that area.
Andy Slaughter (Hammersmith and Chiswick) (Lab)
A key driver of rehabilitation and the prevention of reoffending is sentencing policy. In our manifesto, we promised a review of sentencing policy—quite properly. When is that likely to take place, and will it take account of the very interesting recent paper by former Lord Chief Justices on sentencing inflation?
Sir Nicholas Dakin
The paper to which my hon. Friend refers is a significant one, and I urge all Members to look at it. The Government are committed to a review of sentencing policy, and it will commence as soon as it can. We will report in due time.
Alison Hume (Scarborough and Whitby) (Lab)
Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)
Dan Aldridge (Weston-super-Mare) (Lab)
Dr Marie Tidball (Penistone and Stocksbridge) (Lab)
Anna Dixon (Shipley) (Lab)
Liz Twist (Blaydon and Consett) (Lab)
The Parliamentary Under-Secretary of State for Justice (Alex Davies-Jones)
The Government are deeply committed to supporting victims of rape and sexual violence. To do that, we will increase the powers of the Victims’ Commissioner and get victims the information that they need, provide free legal advocates to uphold the rights of victims of rape, and fast-track rape cases to drive down waiting times for victims of those abhorrent offences.
Alison Hume
Last week, “Emmerdale” aired an upsetting episode dealing with the domestic abuse suffered by Belle Dingle. The storyline has shown just how difficult it can be for someone to leave an abusive relationship, not least because of the psychological control exercised by abusers. Some victims also need somewhere to go for safety. According to the latest available figures, Scarborough has the highest rate of reported domestic abuse in North Yorkshire, but there is still no refuge for victims in the town. Will my hon. Friend work with me, colleagues across Government and stakeholders to find the funding to ensure that a refuge finally opens in Scarborough?
Alex Davies-Jones
As an avid “Emmerdale” fan, I saw that harrowing episode. It goes to show the importance of TV drama in raising awareness of these vital issues. The Government are committed to halving violence against women and girls within a decade. The Ministry of Justice is working with Departments across Whitehall, including the Ministry of Housing, Communities and Local Government, to support local authorities to meet their statutory duties, including refuges for all victims of domestic abuse who need them. We know, though, that it is not just refuge support that is important; wider community-based support is important too, and the MOJ provides funding to police and crime commissioners to commission those vital services for victims.
Jayne Kirkham
Victims of alleged rape in Truro and Falmouth and across the country are having their trials pushed back for months, if not years, often very shortly before those trials are set to begin. That leads to severe distress for victims and families, and can have unintended consequences, such as bail conditions becoming outdated as victims wait so long for their cases to come to trial that addresses change in the meantime. Will the Minister please outline what she is doing to prevent or minimise the potential harm caused by such unintended consequences and to bring those long-delayed cases to a speedy conclusion?
Alex Davies-Jones
I thank my hon. Friend for highlighting the awful state our criminal justice system was left in by the previous Government. We are committed to ensuring swift delivery of justice for victims at all stages of the criminal justice system, and we are working closely with various partners to achieve that aim. We know that due to the complexity of their cases, rape victims often wait disproportionately long periods for their trial compared with victims of other offence types. Reducing waiting times for victims is a priority for me and this Government, which is why we have committed to fast-tracking rape cases through the justice system. I recently saw at first hand at Bristol Crown court how that can be done, and how our judges are working tirelessly to make it happen.
Dan Aldridge
Many will be watching with horror the extraordinarily disturbing case unfolding in France, in which drugs were allegedly used to facilitate the abuse of a woman by her husband and over 70 men. Like many across the House, I have received communication from victims of spiking in my town of Weston-super-Mare. They and I are keen to know what steps the Minister is taking to crack down on the devastating crime of spiking here in the UK.
Alex Davies-Jones
The case in France is truly shocking, and we have all looked on in horror as the details have unfolded. I commend the victim for her bravery in coming forward and making it public so that we can see the full aspects of the trial. Spiking is a despicable crime. We have committed to introduce a new criminal offence of spiking and we are considering how best to implement it. To be clear, in England and Wales, having sex with a person who cannot consent is rape, and spiking with intent to engage in sexual activity is a specific offence, with a maximum penalty of 10 years in prison.
Dr Tidball
Ten years ago, Jack and Paul Sykes, aged 12 and nine respectively, tragically lost their lives at the hands of their abusive father, who set their house on fire. Their mother, my constituent Claire Throssell, is a powerful campaigner against presumptive contact—a legal principle that allowed a known domestic abuser to access Jack and Paul. Will the Minister meet Claire and me to discuss how we can properly protect children from domestic abuse in our family court system?
Alex Davies-Jones
I thank my hon. Friend for that really important question. Claire’s tireless campaigning for families and children experiencing domestic abuse is inspirational, and my thoughts are with her and the whole community as the anniversary comes closer next month.
Both the criminal and family justice systems will play an essential role in delivering our commitment to halve violence against women and girls. The family court system must protect child victims of domestic abuse, and the new pathfinder courts provide more support for domestic abuse agencies and ensure that the child’s welfare and voice is at the centre of proceedings from the outset. The Government and I take the need to respond robustly to perpetrators within the family courts very seriously. The previous Government were reviewing the presumption of parental involvement. We are considering the findings and will respond in due course.
Anna Dixon
I draw the Minister’s attention to the work of Bradford council and West Yorkshire Mayor Tracy Brabin, who have launched the safety of women and girls initiative, together with a dedicated women’s safety unit within West Yorkshire police. What support can the Government offer to bolster the efforts of local authorities such as Bradford to stamp out violence against women and girls in our communities?
Alex Davies-Jones
My hon. Friend’s question gives me the opportunity to also place on record my thanks to Mayor Tracy Brabin for all the incredible work she is doing in this field. She is an outstanding champion for tackling violence against women and girls, and we should be doing more work like hers across Government.
As I have said, we are committed to halving violence against women and girls within a decade. We are supporting colleagues across Whitehall, including at the Ministry of Housing, Communities and Local Government, to ensure close collaboration with local authorities. In addition, the duty to collaborate under the Victims and Prisoners Act 2024 will facilitate improved multi-agency working and encourage all local commissioners to provide joined-up working for victims of all crimes, including violence against women and girls.
Liz Twist
This time last year, the Lord Chancellor announced her intention to introduce free legal advocates so that victims of rape can enforce their rights—for example, in relation to the use of their personal information in court. What progress is the Minister making in bringing forward that vital new protection for victims?
Alex Davies-Jones
In our manifesto, this Government were clear that we are committed to introducing free, independent legal advice for victims and survivors of rape, from report to trial. I am working with officials to develop this new policy and to ensure victims get the support they need to understand and uphold their rights as soon as possible. I plan to draw on lessons learned from the successful pilots in Northumbria, as well as from the Mayor of London’s current ILA pilot.
Sir Geoffrey Clifton-Brown (North Cotswolds) (Con)
In the last Session, when the Public Accounts Committee looked at the effect of delays in the criminal justice system on serious sexual and rape cases, it found that some cases were taking five years or more from prosecution to trial, and that some of the poor traumatised victims were simply disappearing because they could not stand it any longer. Without entering into the blame game, what can the Minister do to improve that situation?
Alex Davies-Jones
The hon. Member is right that, although we do not want to get into the blame game, the current status of the criminal justice system is truly appalling. Rape trials are not getting as fast-tracked as they should be, and we are working at pace to try to remedy that situation. Currently, 60% of rape victims are pulling out of the criminal justice system. The attrition rate is far too high, and I am working with officials to improve that rate and to improve victims’ experience at court.
Mike Martin (Tunbridge Wells) (LD)
How many prisoners are going to be released today in Kent, and can the Secretary of State guarantee that none of them will be homeless within a month?
Alex Davies-Jones
As the Lord Chancellor has previously said, we cannot give exact figures for specific areas. However, we are working with other Departments, including the MHCLG, and with local authorities to ensure that those who are being released from prison today under SDS40 have the accommodation that they need. The Probation Service has been working around the clock to ensure that.
Mr Speaker
Order. That question pushed the boundaries a little bit. I think it should have been mainly about those who are rapists who are being released.
Jim Shannon (Strangford) (DUP)
I thank the Minister for her answers, but what discussions has she had with Education Ministers about supporting victims of rape and sexual assault who are under 18 years of age within our educational institutions?
Alex Davies-Jones
I thank the hon. Member for his question. He will know that this Government have a mission to tackle violence against women and girls. As I have said, that vision pulls together Departments across Whitehall, including the Department for Education—I recently had a meeting with an Education Minister to discuss exactly that issue. I have been clear that sex with anyone who cannot consent is a crime, and we are working across Government to tackle it.
Josh Babarinde (Eastbourne) (LD)
From my own experience, I know that independent sexual violence advisers provided by amazing charities such as SurvivorsUK are critical guides to help survivors navigate their path to justice and peace. Could the Minister commit to redoubling her support for ISVAs and the organisations that make them available to the survivors who need them?
Alex Davies-Jones
I know that the hon. Gentleman is passionate about this field of justice. His question gives me the opportunity also put on record my thanks to ISVAs, who do immense work across this field day in and day out, supporting victims of these abhorrent crimes—the work they do is invaluable. This Government are committed to introducing independent legal advocates to help victims and survivors get the support they need, and we are working with our stakeholders across the sector to ensure that support is available.
Linsey Farnsworth (Amber Valley) (Lab)
Alex Baker (Aldershot) (Lab)
The Lord Chancellor and Secretary of State for Justice (Shabana Mahmood)
The criminal justice system rose to the challenge brought about by the violent disorder we saw over the summer. As of 22 August, 576 individuals have been brought before the courts. Of those, 123 have been given a custodial sentence by the Crown court.
Linsey Farnsworth
As a Crown prosecutor for 21 years, I know only too well that the court backlog has been worsened by repair issues forcing courts to close. What is the Secretary of State doing to address the repairs needed to the court estate, so that victims in my constituency of Amber Valley and across the country can get access to justice?
Shabana Mahmood
I thank my hon. Friend for that question. It is of course crucial that courts are in a position where the building—the infrastructure itself—does not prevent them from being able to sit. It will be a priority for this Government to resolve those issues, so that cases can be heard and victims can be given the justice that they deserve.
Alex Baker
It is clear that we have come dangerously close to running out of prison places in the last few months, which as the Prime Minister has rightly said, is
“about as fundamental a failure as you can get”.
Who does the Lord Chancellor blame for this failure, and does she think we will ever get a word of apology from the Conservative party for leaving our prison estate on the brink of disaster?
Shabana Mahmood
I would happily give way to anybody on the Opposition Benches if they would like to take up the invitation to offer an apology, but I do not think one will be forthcoming. I certainly do think that one is required given the state of the prison system that we have inherited, but it is our job to make sure that that never happens again. That is why we will be launching a review into how the current position was allowed to come to pass. The Conservative party ignored all the warnings, putting political gain ahead of the country’s best interests, and it will fall to this Government to fix it.
Neil O’Brien (Harborough, Oadby and Wigston) (Con)
The Government have rightly found prison places for those involved in the recent disorder, but they have done that by continuing their early release policy. Will the Secretary of State confirm that those guilty of manslaughter are among those able to get early release, and will she explain to the House why people guilty of manslaughter should be released early?
Shabana Mahmood
I think the hon. Member is guilty of wilful ignorance. He will know full well that the prison system that we inherited was on the point of collapse. The fact that some prison build that was already in course was able to be brought on line a little earlier to help us get over the crisis of the summer is testament to the people working at the frontline to make sure that those prison spaces were available, but we are still short of prison capacity. Prisons are still at over 99% capacity, and that is the legacy left by his Government. He will know that we have important exclusions to the SDS40 policy, and he will know that the offence and the sentence are both taken into account. I will not give a running commentary on exactly which sentences and which offenders are affected, but he knows what exclusions are in place.
Sarah Coombes (West Bromwich) (Lab)
The Parliamentary Under-Secretary of State for Justice (Alex Davies-Jones)
This Government are committed to improving the victim experience at court. We will work with the judiciary to fast-track rape cases to ensure timely justice for some of the most vulnerable within the criminal justice system. Additionally, this Government committed in our manifesto to introducing free, independent legal support for victims of rape from report to trial. We have also committed to strengthening the victims code and to increasing the Victims’ Commissioner’s powers to make sure that victims’ needs are met.
Sarah Coombes
For victims, giving evidence in a court can sometimes be a very difficult and distressing experience, which is why they sometimes prefer to give evidence via video link. Can the Minister set out what steps the Government are taking to ensure that more victims can give evidence via video link across our country?
Alex Davies-Jones
I thank my hon. Friend for that important question. Video links are available in all courts to help vulnerable and intimidated witnesses give evidence. We have recently invested £50,000 to transform witness facilities and upgrade video link rooms in 10 Crown courts. Pre-recorded evidence is also available in all Crown courts for eligible victims to spare them the trauma of giving evidence at a live trial.
Jess Brown-Fuller (Chichester) (LD)
To ensure that victims see justice, criminal cases need to be heard in a timely manner, which relies on a number of courts being in place to be able to hear them. The future of Chichester Crown court, which is the only Crown court in west Sussex, has been under threat for nearly a decade. Local campaigners fought to save that provision, leading to its reopening to clear the backlog, but its future remains uncertain. Will the Minister meet me to ensure the future of Chichester Crown court?
Alex Davies-Jones
We know that courtroom availability is essential to dealing with the backlog, and I will pass on that message to the courts Minister—the Minister of State, Ministry of Justice, my hon. Friend the Member for Swindon South (Heidi Alexander).
Josh MacAlister (Whitehaven and Workington) (Lab)
The Parliamentary Under-Secretary of State for Justice (Sir Nicholas Dakin)
My hon. Friend is completely right: prison officer recruitment targets are essential. Prison officers do a fantastic job. We have seen how they have gone above and beyond over recent weeks and months, so I pay tribute to them. Nationally, we are currently above staffing targets, but challenges remain in certain sites with a high number of vacancies, and bespoke interventions are being developed for those sites.
Josh MacAlister
I thank the Minister for that answer, and I praise the Government team for the way they have responded to the complete chaos left in the wake of 14 years of a Conservative Government.
In my previous work I visited young offenders institutions, which have been left in total chaos by the last Government. Part of their recklessness was to start a botched recruitment process for the graduate recruitment training programme for prison officers. It is currently delivered by Unlocked Graduates, which is doing fantastic work. The Government’s chief inspector of prisons has said there is a real risk that that programme ending will add to the recruitment problems that the Government face. Will they restart that procurement process and meet me to discuss its future?
Sir Nicholas Dakin
I am happy to meet my hon. Friend to discuss that matter. His Majesty’s Prison and Probation Service worked to reprocure the next iteration of the graduate scheme, with contracts for an open procurement exercise. Although Unlocked Graduates was identified as the winning bidder and was offered the contract, it did not confirm its intent to sign the contract. The Department is now working hard to come up with plans to put a graduate scheme in place for future years.
Mr Jonathan Brash (Hartlepool) (Lab)
Steve Darling (Torbay) (LD)
The Minister of State, Ministry of Justice (Heidi Alexander)
It is good to be back. Mr Speaker.
The Government are committed to reducing caseloads and bringing waiting times down for court users across all jurisdictions. We continue to keep 18 Nightingale courtrooms open across eight venues, so that we have more physical capacity to hear cases in all jurisdictions. We plan to sit more than 105,000 days in the Crown court and more than 102,000 days in the family court this financial year, enabling us to work through as many cases as possible.
Mr Brash
Hartlepool’s court building has stood empty since 2017, after it was mothballed by the then Conservative Government. Will my hon. Friend investigate the potential for reopening Hartlepool’s court as part of our efforts to expand capacity and clear the backlog, and will she meet me to discuss the issue further?
Heidi Alexander
I hear you, Mr Speaker.
I welcome the question from my hon. Friend. He will know that His Majesty’s Courts and Tribunals Service keeps the court estate under regular review to ensure that it meets operational requirements. I am afraid there are currently no plans to reopen Hartlepool magistrates court, but I would be happy to meet my hon. Friend alongside officials from HMCTS to discuss his concerns. The reasons behind the increased caseload in our criminal courts are complex and multifaceted, but the number of courtrooms available is not the main constraint we currently face.
Steve Darling
Torquay magistrates court closed in the last decade, and therefore justice is served somewhat distantly from our communities in Torbay. Can the Minister assure the House that there will be some reviews to ensure that justice is served more locally to our communities in south Devon?
Heidi Alexander
I may be having another meeting, with the hon. Gentleman, as well as looking at the court in Chorley, and I am happy to discuss that matter with him.
Rebecca Smith (South West Devon) (Con)
The Parliamentary Under-Secretary of State for Justice (Alex Davies-Jones)
This Government are deeply committed to supporting domestic abuse victims, and we provide funding to police and crime commissioners, who commission community-based support services for domestic abuse victims and survivors, and independent domestic violence advisors. Domestic abuse victims are automatically eligible for certain special measures in court such as screens or video links, and the pathfinder pilot in family courts aims to improve experiences and outcomes for children and families affected by domestic abuse.
Rebecca Smith
Devon and Cornwall-based domestic abuse charity First Light south-west, and national domestic abuse charity Hourglass, which works specifically with older victims, have highlighted to me the challenges that they face with short-term funding streams for their work. The current year-on-year funding model results in issues with the recruitment and retention of staff, which in turn impacts on service provision to victims. Specialist services are especially vulnerable given the nature of the support they provide. Will the Minister commit to providing sustainable long-term funding for frontline domestic abuse services, including for specialist services for older victim survivors, so as better to support victims in my constituency and across the country?
Alex Davies-Jones
The work that Hourglass and many others do is outstanding, and I place on record my thanks to it for championing the rights of older victims across the piece. The Ministry of Justice provides police and crime commissioners with annual grant funding to commission local practical, emotional and therapeutic support services for victims of all crime types. I am hearing loud and clear the calls from the sector, but it would be wrong of me to pre-empt the announcement of funding after March 2025. We cannot agree that before the spending review, but the Ministry of Justice has allocated £1.2 million of funding over two years to support the training and infrastructure of ISVAs and IDVAs and to support fantastic organisations such as Hourglass that do such brilliant work.
Jake Richards (Rother Valley) (Lab)
Another forum in which domestic violence is litigated is private children’s cases in our family courts. The Secretary of State and Ministers will no doubt be aware of the huge delays that families are suffering in having their cases heard and then those cases being decided. At the heart of that are children waiting for a conclusion. What steps are the Government taking to try to expedite those cases, in particular working with other agencies across government including the Children and Family Court Advisory and Support Service and local authorities?
Alex Davies-Jones
The Government recognise the importance of supporting separating families and, where appropriate, helping them to resolve their issues quickly and without the need to come to court. This is a complex area. My officials and I are working closely on it, and I would be happy to update my hon. Friend with a more thorough review soon.
Gareth Bacon (Orpington) (Con)
Domestic violence at its most severe becomes murder. Domestic murder is often the most shocking and brutal. With that in mind, what assessment has the Minister made of the Killed Women campaign?
Alex Davies-Jones
I am aware of the Killed Women campaign. I have liaised closely with it in opposition and now in government. Its aims are admirable. Any woman murdered by domestic homicide in this country is one woman too many. We know that sadly three women a week are being murdered. That is a shocking statistic that this Government are hoping to tackle.
Gareth Bacon
I thank the Minister for that answer. In light of that, will she commit to responding to the calls of Carole Gould, Julie Devey and Elaine Newborough and many others to address the injustice of the discrepancy between the starting point for sentences in domestic murder cases versus that for other murder cases? Will she do so in quick time, so that she can include appropriate measures in the forthcoming victims, courts and public protection Bill?
Alex Davies-Jones
I am meeting the women imminently to discuss this further, and the Government have committed to a thorough sentencing review.
Mr Paul Kohler (Wimbledon) (LD)
Sir Desmond Swayne (New Forest West) (Con)
The Minister of State, Ministry of Justice (Heidi Alexander)
We are committed to ensuring the swift delivery of justice for victims at all stages of the criminal justice system, and we are working closely with various partners involved to achieve that aim. In relation to the courts, we plan to sit more than 105,000 working days in the Crown court this financial year, and we continue to hear criminal cases at Nightingale courts. We are also considering other measures to speed up justice for victims, and we will make further announcements in due course.
Mr Kohler
I thank the Minister for her answer. After waiting seven years for the Grenfell inquiry to report, the bereaved families and survivors have now been told that they must wait two or possibly three years for a decision on whether and whom to prosecute. As Martin Luther King said,
“justice too long delayed is justice denied.”
I understand from the Crown Prosecution Service, which I met recently, that much of the delay is for the discovery process, where the welter of digital information must be assessed. Can the Minister tell me what is being done to address these delays and whether things such as artificial intelligence are being contemplated?
Heidi Alexander
As the Prime Minister made clear, those affected by the Grenfell tragedy have already waited too long for justice. I can assure the hon. Gentleman that anything in my or my Department’s power that needs to be done will be done. The Government fully support the Metropolitan police and the Crown Prosecution Service as they complete their investigations and bring prosecutions to trial, while respecting their operational independence. I am sure the use of all forms of technology will be considered in that process.
Sir Desmond Swayne
Perhaps too many barristers have become politicians, but however caused, how will the Minister address the shortage at the criminal Bar?
Heidi Alexander
I hesitate to answer the right hon. Gentleman’s question, given that my boss is a former barrister—I say that we cannot have too many.
Only last week I discussed the adequacy of numbers of legal professionals in the Crown court with the chair of the Criminal Bar Association, Mary Prior, and I will be working with the profession to ensure not only that we are recruiting sufficient barristers to work in the courts, but that we are retaining barristers at the criminal Bar.
Jessica Morden (Newport East) (Lab)
Our team in Newport East are trying hard to raise the issue of how long cases are taking for constituents—we inherited those delays from the Conservatives—but even the CPS is taking months to answer basic queries about where the delays are in cases. Will the Minister urge the CPS to respond faster?
Douglas McAllister (West Dunbartonshire) (Lab)
Does the Minister agree that a properly funded legal aid scheme both here and in Scotland is essential for access to justice, and that the decline in this vital public service that both the Tories and the SNP have presided over is nothing short of disgraceful?
Heidi Alexander
What we are experiencing is the very long tail of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, which has meant that both the civil and criminal legal aid sectors have faced huge challenges. That is vital to people’s access to justice.
Olivia Bailey (Reading West and Mid Berkshire) (Lab)
The Lord Chancellor and Secretary of State for Justice (Shabana Mahmood)
On taking office two months ago, it was immediately clear that we had inherited a prison system at the point of collapse. That is why our emergency action, which will see certain offenders leave prison a few weeks or months early, has proved necessary. The measure takes effect today. I pay tribute to the work of the Prison and Probation Service, which has gone above and beyond the call of duty both in responding to the violent disorder in recent weeks and in preparing for the introduction of those measures. This marks the beginning of a rescue effort—one that will, in time, allow us to rebuild and reform our justice system in the years ahead.
Olivia Bailey
After the last Government left our prisons on the brink of collapse, I welcome the Secretary of State’s commitment to building new prisons and driving down reoffending. I also welcome her commitment to additional transparency. Does she agree that such transparency is a significant departure from the approach of the previous Government, who released thousands of prisoners early in secret?
Shabana Mahmood
My hon. Friend is absolutely right that it is a significant departure from the approach of the previous Government, who introduced an early release scheme—the end of custody supervised licence scheme—that operated under a veil of secrecy, with no data ever published on the numbers released. It took our Government to publish the data showing that more than 10,000 offenders were released under that scheme. I am pleased to say today that we have ended that scheme.
Edward Argar (Melton and Syston) (Con)
I am grateful to the Secretary of State for her previous answers on substantive questions about accommodation for prisoners released early. Further to that, have the Government contracted any specific hotels for potential use by early release prisoners?
Shabana Mahmood
I have authorised probation directors in areas to make appropriate provision, if that proves to be needed—at this point, it is not definite that it will be required—to ensure that there is no gap in provision for offenders being released under the SDS40 scheme.
Edward Argar
I think the Secretary of State said that none has been contracted at this time. If they are at any point, further to the point made by the hon. Member for Reading West and Mid Berkshire (Olivia Bailey), will she be open and transparent with the House, local authorities and the public about how many, at what point and, in broad terms, where they will be located?
Mr Lee Dillon (Newbury) (LD)
Every 30 seconds, a domestic abuse-related call is made to the police. It is positive to see that the number of domestic abuse cases referred from the police to the CPS has increased, but those numbers are still well below the level seen over the past five years. Will the Secretary of State address the delays in domestic abuse referrals from the police to the CPS and acknowledge the unique risks that they pose?
The Parliamentary Under-Secretary of State for Justice (Alex Davies-Jones)
As I have stated, this Government were elected with a landmark mission to halve violence against women and girls within a decade. To do so, we must improve the justice system’s response to these crimes, including domestic abuse. We must relentlessly target the most prolific and harmful perpetrators, better support victims and survivors, and ensure timely and effective justice. We will put domestic abuse experts in 999 control rooms and strengthen the use of protection orders, and we will strengthen the tools available to manage domestic abuse offenders.
Joe Powell (Kensington and Bayswater) (Lab)
The Minister of State, Ministry of Justice (Heidi Alexander)
As I said to the hon. Member for Wimbledon (Mr Kohler), we will do everything we can to ensure swift justice for the victims of Grenfell. We plan for the Crown court to sit for at least 105,000 days this financial year, and we will do more to increase the speed with which cases are heard in the Crown court.
Bradley Thomas (Bromsgrove) (Con)
Shabana Mahmood
I have committed to the review, because that is the appropriate way, and I will not make early promises that might not be kept. I have committed to both transparency and a review. We will publish all the data on a quarterly basis and I will return to the House with the results of the review and the approach that we will take at that point.
Jessica Morden (Newport East) (Lab)
Alex Davies-Jones
The victims code sets out the services and support that victims of crime are entitled to receive from the criminal justice system in England and Wales. That includes the right to access support, which applies regardless of whether they decide to report the crime to the police. I would be delighted to meet my hon. Friend to discuss this further.
Christine Jardine (Edinburgh West) (LD)
The Parliamentary Under-Secretary of State for Justice (Sir Nicholas Dakin)
The hon. Member is right that drugs in prison is a big issue that the Government are working hard to tackle. I would be very happy to write to her with further details of what we are doing.
Jess Asato (Lowestoft) (Lab)
Alex Davies-Jones
First, let me congratulate my hon. Friend on succeeding me as chair of the all-party parliamentary group on perpetrators of domestic abuse. It is a vital APPG and I know that she will do sterling working as its chair.
To confirm, we have excluded from SDS40 certain offences that are frequently connected to domestic abuse, such as stalking and controlling or coercive behaviour. The victim contact scheme is available to all victims of a sexual, violent or terrorist offence where the offender is sentenced to 12 months or more in custody. We are working with the sector and others to consider how to improve communication with victims about an offender following a conviction.
Steff Aquarone (North Norfolk) (LD)
Heidi Alexander
As I have said, the Crown court will sit for more than 105,000 days this financial year—an increase of 28% on the year before the pandemic. That means that there is more capacity in the Crown court this year than in six of the past seven years. We have inherited a criminal justice system on life support as a result of the previous Government, and we have a broken economy. Everyone can see the state of the public finances, and justice is not immune from that.
Henry Tufnell (Mid and South Pembrokeshire) (Lab)
In Pembrokeshire we have no local solicitors’ firms offering pro bono work, and the nearest free legal advice centre is in Swansea. Many of my constituents are therefore unable to access to justice, which is particularly distressing in the area of family law and care proceedings. What steps is the Minister taking to tackle the issue of legal deserts in places such as Pembrokeshire and west Wales?
Heidi Alexander
Access to justice is integral to a fair society, including for our rural communities. In our courts and tribunals, modernised services and a more effective use of technology can improve people’s access to the justice system, but I recognise that there is more to do and I am happy to meet my hon. Friend to discuss that.
Monica Harding (Esher and Walton) (LD)
Shabana Mahmood
We have taken every measure available to us and pulled every lever we could to ensure that offences connected to domestic abuse are excluded and that the probation service has had time to prepare. We will work with it in the coming weeks and months to ensure that release plans are in place and victims are notified in the usual way.
Ben Goldsborough (South Norfolk) (Lab)
A widow was prosecuted under the single justice procedure after her husband had passed away and the car tax expired. She was convicted over just £3.34, and the Driver and Vehicle Licensing Agency sent the letter to the wrong address. Will the Minister meet me to discuss how we can reform the single justice procedure to make it more accountable and ensure that there is better oversight of the process?
Heidi Alexander
I am very happy to meet my hon. Friend. I am also very keen that we keep under review what more can be done to support vulnerable defendants going through the single justice procedure, and to improve oversight and regulation of the organisations using that procedure.
Siân Berry (Brighton Pavilion) (Green)
Sir Nicholas Dakin
The hon. Member is right that this is a big issue. The Prison and Probation Service is working hard to ensure that appropriate accommodation is available, and working hard with partners across the country in different regions. I am very happy to meet the hon. Member to talk about the issue further.
Rachael Maskell (York Central) (Lab/Co-op)
Amazing charities such as Survive in York depend for their survival on the rape and sexual abuse support fund. However, without certainty over the amount, and if and when the funding will come, it is hard to leverage funding from other sources, such as the national lottery. When will the funding be announced, and will the Minister meet me to discuss this vital funding as demand rises?
Alex Davies-Jones
I thank my hon. Friend for that question. I recognise the vital work that Survive in York does to support victims and survivors in her area. I fully appreciate the importance of notifying police and crime commissioners and providers about future funding as early as possible to effectively commission, plan and deliver those services. As I have indicated, it would be wrong of me to pre-empt the current spending review. We know that current providers are concerned about the cliff edge in March 2025. I fully appreciate that and I would be delighted to meet her to discuss that further.
Manuela Perteghella (Stratford-on-Avon) (LD)
Will the Secretary of State ensure that measures are put in place in the criminal justice system to support survivors of violence against women and girls, including mandatory training for prosecutors on understanding the impact of trauma on survivors and the release of court transcripts for free for victims of rape?
Heidi Alexander
The hon. Lady may know that we currently offer free transcripts of judges’ sentencing remarks to families of victims of fatal road offences, murder and manslaughter. In May, we extended free transcripts of sentencing remarks to victims of rape and serious sexual offences, in a year-long pilot. We will continue to look at how we can lower the costs of obtaining a court transcript.
Harpreet Uppal (Huddersfield) (Lab)
Former clients of the law firm SSB Law were unexpectedly pursued for adverse legal costs following the installation of defective cavity wall insulation. I understand that the Solicitors Regulatory Authority has opened an investigation. Will the Secretary of State review the situation urgently, including establishing a cross-Government working group on the matter?
Heidi Alexander
I am aware from correspondence that I have received, as the Member of Parliament for Swindon South, that there are significant concerns about the collapse of law firms such as SSB Solicitors, Axiom Law and McClure. As my hon. Friend said, the Solicitors Regulation Authority is looking at this, as is the Legal Services Board, and I shall be happy to speak to her further to provide an update.
Sir David Davis (Goole and Pocklington) (Con)
The Justice Secretary will be aware that the Criminal Cases Review Commission took 17 years to overturn the conviction of Andrew Malkinson, an innocent man, even though DNA evidence exonerating him was available from the fourth year; and his is not the only such case. Has the Minister any intention of addressing the resources, regulation and management of the CCRC to ensure that innocent people are not left incarcerated for many years?
Heidi Alexander
What happened to Mr Malkinson is appalling, both for him and for the victim of the crime. It is vital that lessons are learned. As the right hon. Gentleman will know, following the publication of the Henley review of the CCRC’s handling of Mr Malkinson’s case, the Lord Chancellor’s view is that the current chair is unfit to fulfil her duties. As for resources, the amount that the CCRC has received in recent years has risen, and we will continue to keep that under review.
Will Stone (Swindon North) (Lab)
As the Minister will know, one of the factors that can contribute to backlogs in courts is the existence of basic maintenance problems with the buildings, which prevents cases from being heard. In Swindon this year, we had a serious fire which resulted in one of the courtrooms being closed and cases being transferred elsewhere. What investment is being made in courts in places such as Swindon to ensure that justice can be delivered swiftly?
Heidi Alexander
I am very pleased to be responding to a fellow Swindon Member, and I am grateful to my hon. Friend for giving me the chance to mention our home town during my first ministerial outing. I should add that I am also grateful to local judiciary court staff and justice stakeholders for their work in maintaining justice during that incident in Swindon. As the Lord Chancellor said earlier, ensuring that buildings are maintained effectively is critical to the delivery of justice.
Alicia Kearns (Rutland and Stamford) (Con)
My constituent was brave enough to report her husband for the abuse that he put her through. He has just been released from prison on two conditions: he would be tagged and he was not allowed to go into her village. He has not been tagged because the Probation Service says that it does not have enough tags and there is a technical fault, and he entered her village on his first day out of prison, staying overnight. He was on her street, and his family knocked on her door. Will the Secretary of State please respond to my letter about my constituent, who feels extremely vulnerable? Will she also confirm that there are enough tags, and that in cases such as this there will be not just a verbal warning—which is all that her husband received for his actions—but remedial repercussions?
Shabana Mahmood
I am not aware of the correspondence to which the hon. Lady has referred, but I will chase it up and ensure that she receives a comprehensive response.
Andy Slaughter (Hammersmith and Chiswick) (Lab)
The coronial system is a mess, with substantial backlogs, a lack of representation for bereaved families, and erratic use of prevention of future deaths reports. Will the Secretary of State consider reforms to deal with these problems? If she needs ideas, there is a very good report from the Justice Committee.
Alex Davies-Jones
I concur: there is an excellent report from the Committee, to which the Government will respond in due course. I am well aware of some of the issues with the coroners and reporting deaths for bereaved families and I should be delighted to discuss them further with my hon. Friend.
Helen Whately (Faversham and Mid Kent) (Con)
Catapults are not classed as offensive weapons, but they are being used increasingly in my constituency to injure and kill livestock and pets. Will the Minister responsible for such matters agree to meet me to discuss how we can deter these people and stop their use of catapults to kill?
Shabana Mahmood
I suspect that that may be a matter for my colleagues in the Home Office, but I will happily liaise with the relevant Minister and ensure that the hon. Lady receives a response.
Ukraine
(3 months, 1 week ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Secretary of State for Defence (John Healey)
With permission, Mr Speaker, I will make a statement on Ukraine, but may I first reflect on last week’s dreadful news of the death of Royal Naval pilot Lieutenant Rhodri Leyshon? On behalf of this House, I pay tribute to him. He was a consummate professional to his colleagues and was dearly loved by his family. He will be sorely missed by so many, and the thoughts of this House are with them today.
It has now been 930 days since Putin launched his full-scale illegal invasion of Ukraine—930 days in which Ukrainian forces have fought heroically while communities have endured relentless attacks. Children have been stolen to Russia, and families have seen their homes destroyed. Yet, throughout everything, Ukraine has stood tall in the face of Russian aggression. Since day one, when I was the shadow Defence Secretary and sat in the place now occupied by the hon. Member for South Suffolk (James Cartlidge), this House, and our country, has been united for Ukraine. In opposition, Labour backed every package of military aid, every sanction on Russia and every scheme to support civilians, such as Homes for Ukraine. I know the Opposition will continue to work with the Government in the same way, because this House stands united for Ukraine.
I have been proud of UK leadership on Ukraine, and I am determined that it will continue. I am also determined to work across this House, so I will offer Opposition leaders regular intelligence assessments on the conflict. I will offer MPs of all parties regular Ministry of Defence and Foreign, Commonwealth and Development Office briefings, the second of which took place in the MOD this morning. More than 100 colleagues from both sides of the House have attended the briefings, and the House will receive regular updates on the conflict from me.
Ukraine is a first-order priority for me as Defence Secretary, and for this Government. That is why, on the second day in the job, I flew to Odesa and joined President Zelensky and his team for the afternoon. I told him that the Ukrainians’ courage inspires the world. I also told him that this new Government will step up support for Ukraine at this critical moment. In our first week, we announced a new package of UK military support, including ammunition, missiles and artillery guns; a new commitment to speed up the deliveries pledged by the previous Government; and a promise to spend £3 billion on military support for Ukraine this year, next year and every year for as long as it takes.
In the weeks since, we have stepped up support even further. We have signed a new £3.5 billion defence industrial support treaty, hit the £1 billion milestone for the International Fund for Ukraine, advanced the UK-led maritime and drone capability coalitions, and agreed a new £300 million contract for artillery shells. At the Ukraine Defence Contact Group meeting in Ramstein on Friday last week, I announced a new £160 million production contract for air defence missiles. I also announced that the UK’s Operation Interflex, which has trained 45,000 Ukrainian troops since 2022, will extend beyond this year and throughout 2025. Our support is both short term and long term, entailing immediate provision and long-term production. We are training troops today and developing Ukrainian forces for the future. This approach gives the Ukrainians the confidence to plan, and it sends a signal to Putin that the UK and our allies will stand with Ukraine for as long as it takes.
There have been important battlefield developments during the past month. In the first week of August, Ukrainian forces launched a remarkable offensive across Russia’s border and into the Kursk region. This exposed the vulnerabilities of Putin’s frontline forces, and it demonstrates Ukraine’s ability to achieve surprise strategic attacks. It also helps to better defend Ukraine and its northern centres by pushing back against sites from which Russia can launch deadly attacks. Around 900 sq km of territory is now held by Ukrainian forces in the Kursk region, and this has put Putin under pressure. After initial disarray, Russian forces are now deploying to the area in greater numbers.
But eastern Ukraine continues to be Russia’s main focus, with tactical advances bringing Pokrovsk within approximately 8 km of the frontline. With Russia continuing to rely on infantry-led assaults, its casualties remain high and rising. Daily casualties have doubled from this time last year, with Russia averaging more than 1,100 a day killed or wounded in July and August alone. Meanwhile, recent Russian air bombardments have been some of the most intense since the start of the war. President Zelensky stated on Friday in Ramstein that 4,000 missiles and drones were fired at Ukraine in the last month, targeting critical national infrastructure and attacking civilian centres, including Poltava and Lviv in the last week. Since 2022, the impact of this has been that Russia has destroyed or captured more than 50% of Ukraine’s power generation capacity, forcing Ukraine to implement power outages with winter approaching.
Meanwhile at sea, Ukraine has scored some significant successes, including driving Russia’s fleet out of the western Black sea to reopen export trading routes and destroying or damaging 26 Russian naval vessels operating in the Black sea, including a Russian Kilo class submarine just last month. Despite these notable achievements, Russian pressure across the whole of the frontline will continue in the months ahead. Russian industry remains on a war footing, Russian artillery is outfiring Ukraine by at least three to one, and Russia is also conscripting or recruiting 400,000 additional soldiers this year. For the coming weeks, two things are clear: Ukrainians need to strengthen their frontline in the east and look to hold the territory in Kursk. The longer they hold Kursk, the weaker Putin becomes. The longer they hold Kursk, the better defended Ukraine will be.
This was discussed at the US-led Ukraine Defence Contact Group that I attended last Friday with other Defence Ministers and President Zelensky. This was where military support and unity for Ukraine were strengthened among 50 allied nations, and where the US Defence Secretary Lloyd Austin served an important reminder to everyone:
“If Ukraine is not free, the world is not safe.”
This is why the defence of the UK starts in Ukraine. If President Putin prevails in Ukraine, he will not stop at Ukraine. If big nations redraw international boundaries by force, the sovereignty and security of all nations is undermined. That is why UK support, alongside allies, is so important: military, economic, industrial and diplomatic support.
I also want this House to know that we are seeing clear growing signs of Russian aggression beyond Ukraine. NATO allies are reporting Russian drones violating their airspace. The heads of the UK and US security services have confirmed that Russian intelligence is conducting a “reckless campaign of sabotage” across Europe, and last week the National Cyber Security Centre revealed that Russia’s specialist GRU unit is conducting offensive cyber operations directed at Governments and civilian infrastructure. Putin is targeting our security. He is targeting our way of life.
We face a decade of growing Russian aggression, but this is a Government who will protect our people and our country. We will actively deter and defend against Russian threats, working in partnership with allies. That is why, as a new Government, our defence policy will now be NATO first. As we approach 1,000 days of war, this conflict is at a critical moment. That is why the UK is stepping up support. Because this is not just Ukraine’s struggle; it is our struggle too. Ukraine is fighting to regain its sovereign territory, but it is also fighting to reinforce peace, democracy and security in the rest of Europe.
James Cartlidge (South Suffolk) (Con)
I am grateful to the Secretary of State for early sight of his statement, and for the briefings he has provided to me and all parliamentary colleagues. I associate myself and my party with the condolences he expressed regarding the tragic death of Lieutenant Leyshon.
As we have confirmed previously, I reiterate without reservation that, as Labour did when in opposition, we will continue to do everything possible to support the Government over Ukraine. We remain steadfast in our total condemnation of both Putin’s illegal invasion of Ukraine and his conduct of the war, during which he has shown no regard for human life, even, it would appear, that of his own service personnel, with losses now at terrible levels on all sides. Indeed—this was one of the Secretary of State’s most striking points on the operational situation—it is an extraordinary testament to the brutal disposition of the Putin regime that their strategy continues to rely on the mass sacrifice of infantry personnel.
That said, the Secretary of State is surely right to remind us that, despite the extraordinary naval success Ukraine has enjoyed in the Black sea and the surprise incursion into Kursk that has thrown Putin’s regime into confusion, Russia remains a formidable foe and nothing at all can be taken for granted. On the contrary, it is clear that the UK must continue to do all it can to support Ukraine’s Government, people and armed forces.
On the Conservative Benches, we are proud of the role our Government played in showing real leadership in respect of Ukraine. If Ukraine had fallen early, the world would have been in a precipice situation akin to the late 1930s, but we made a huge difference to avoiding that outcome by being the first nation to train Ukrainian troops, the first to provide main battle tanks and, in particular, the first to provide long-range weapons. In August, President Zelensky commented that Britain’s support for Ukraine has slowed down recently. What assessment has the Secretary of State made of those comments?
On these Benches, we recognise that a key part of our leadership has been bringing other allies on board, which must continue in key operational and logistical decision making. Nevertheless, we have also shown leadership as a sovereign nation that believes wholeheartedly in Ukraine’s fight for freedom. As such, I confirm that we would have no hesitation in supporting the Government in continuing that leadership were they to confirm that the Ukrainian Government have maximum freedom of operation with regard to all the munitions we have supplied, including long-range missiles.
On the provision of additional munitions and the latest news shared by the Secretary of State, I welcome the announcement of £160 million for air defence missiles to be produced, of course, in Belfast. That underlines the intention we had in government, when the latest round of support commenced, to ensure a maximum degree of benefit for the UK defence sector in our support for Ukraine. Will the Secretary of State confirm that that remains a top priority and that, as we supply Ukraine with more and more drones across defence, he will ensure that we rapidly learn the lessons of their deployment so that we can build the ecosystem for our own sovereign uncrewed sector?
We agree that supplying Ukraine with arms has been the right thing to do but—and the public feel this very strongly—that must be accompanied by the replenishment of our own stockpiles and platform inventory. A top priority of our funded, timetabled commitment to 2.5% was an additional £10 billion to replenish our munitions. Is the Secretary of State still committed to that extra £10 billion for munitions? Can he confirm that the delay in setting out a clear timetable to 2.5% will not lead to the deferment of any major munitions orders, either this financial year or next?
The Secretary of State spoke of Russian artillery outfiring Ukraine by 3:1, and he knows the crucial importance of industrial output. That being so, does he recognise that we must urgently fire up production across our own defence sector by committing to 2.5% as soon as possible?
Finally, one lesson from Ukraine is the vital importance of maintaining air superiority in battle. In relation to our future combat air capability, I asked the Secretary of State a set of written questions on 29 July on the sixth-generation global combat air programme spending, and he has to date answered only the questions on historical spend, not those on the current financial year. Will he therefore confirm whether his Department will be deferring any spending on GCAP planned for the current financial year?
John Healey
I thank the hon. Gentleman for his support, his tone and his commitment to continuing to back further military aid to Ukraine, including the £160 million contract for lightweight multi-role missiles that I announced last week. He talked about the “mass sacrifice” of Russian personnel, and he is right. President Putin is a leader who shows contempt for the lives of his own soldiers.
On UK leadership, I have set out to the House my determination to maintain that leadership in the support for Ukraine, and demonstrated how we stepped that up in the first week, in the weeks that followed and last week at Ramstein. In terms of the lessons for drones, their deployment and our work with Ukraine, we are learning those lessons. We need to speed that up. Given the hon. Gentleman’s previous job, he will be well aware of the implications for the way in which we procure and contract for capabilities, both for export and for our stockpiles. On stockpiles, we have—as he will also know—so far spent £1 billion in the UK on replenishment. We have plans to build that, because we need to boost not just production, but the productive capacity of UK industry, so that we are capable of demonstrating that it can be scaled up in the face of future threats in a way that is not apparent at present.
The hon. Gentleman asks about long-range missiles. I have to say that only Putin benefits from an open debate about those sensitive issues, and I will not comment on operational discussions. There has been no change in the UK’s position. We continue to provide military aid to Ukraine, as I have set out, to support its clear right to self-defence and in line with the operation of international humanitarian law.
On the question of 2.5%, we will increase defence spending to 2.5% of GDP. The last time the UK spent 2.5% of GDP on defence was in 2010, when I last stood at this Dispatch Box as part of the previous Labour Government. In 2010, the Conservatives cut defence spending: they never matched 2.5% in any of their 14 years in office. My priority will always be to ensure that this country is well defended. In the face of growing threats, we will do more to make Britain secure at home and strong abroad.
Derek Twigg (Widnes and Halewood) (Lab)
I thank my right hon. Friend for his statement and the 100% commitment to supporting Ukraine, as we have seen previously. I welcome his statement about the investment in LMM defence. Can he say a bit more about the scope of that?
John Healey
I have said that Ukraine is my first-order priority, and I was in Odessa on my second day in the job. I have now had the privilege of meeting President Zelensky four times while in post, and I have met his Defence Minister six times. Like the previous Government, we consistently try to respond to the needs that Ukraine says it has for systems and ammunition. At the moment, above all, it needs new supplies of ammunition and stronger air defence systems capable of taking down Russian missiles and drones at different distances. While the US made a commitment at Ramstein last week to an extra $250 million in air defence systems, we made a commitment of an extra £160 million through a short-range modern air defence system—650 LMMs, with production under way—the first of which will be delivered to Ukraine before the end of the year. We are stepping up the support that we pledged for Ukraine and speeding up the support that we deliver to Ukraine.
Richard Foord (Honiton and Sidmouth) (LD)
On behalf of the Liberal Democrats, I wish to add to the tributes that others have paid to Lieutenant Rhodri Leyshon. He served with the Commando Helicopter Force in 846 Naval Air Squadron at Yeovilton. The Royal Navy said that Rhodri was one of their
“most trusted and highly capable aircraft captains and instructors”.
Our thoughts are with his family.
I am reminded of the saying “train hard, fight easy”. It is attributed to the 18th-century Russian commander Field Marshal Suvorov, but the Russians are not practising that today, sending to the front Russians who have had as little as two weeks’ training. By contrast, the training that has been provided under Operation Interflex has enabled Ukrainian troops to hold ground and exploit Russian weaknesses. The Liberal Democrats welcome the announcement last week at the Ukraine Defence Contact Group that Operation Interflex will continue until the end of 2025. Indeed, we have welcomed announcements on Ukraine from the current Government and the previous Government, and we would not want to see any party political capital sought from the solid British support for Ukraine.
We have seen some failures by the British state in recent years to plan for contingencies, whether post-invasion planning for Iraq or for a non-flu pandemic. We have discovered that sometimes in the British state there is a little bit of “hope for the best”.
On support for Ukraine by the United States, what contingency planning is being undertaken for an uplift in our support for Ukraine—and by other states in the Ukraine Defence Contact Group—in the event that a gap opens up with a US Administration under Trump and Vance?
John Healey
I am sure that Lieutenant Leyshon’s family will appreciate the hon. Gentleman’s comments.
The outcome of the US presidential election will be determined by the American people. This country has a deep relationship with the US: it is our most important security ally, and we are its most important intelligence ally. The relationship goes back decades and has survived the ups and downs of the political cycles on both sides of the Atlantic. We are determined that it will do so again, whatever the result of the election.
On the question of training, I cannot match the hon. Gentleman in citing 18th-century military figures, but I can say that the mismatch between the level of training that we and allies are trying to provide to Ukrainian troops is part of the attempt to counter the outmatch in numbers on the Russian side. I can confirm to the House that that includes not just the 45,000 Ukrainian troops trained so far under Operation Interflex since Putin’s invasion, but the 93 F-16 pilots trained in English and technical matters as well as flying, and almost 1,000 Ukrainian marines trained by the UK, working with allies. That is why I was able to make the announcement last week at Ramstein that this important UK training effort, linked into the new NATO arrangements, will be part of the way that we equip Ukraine forces for the future to be better prepared and trained than their Russian adversaries.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
Let us be under no illusion: in the face of Russian aggression and invasion, the defence of the UK starts in Ukraine. My right hon. Friend the Defence Secretary was right to focus not only on the immediate challenges facing Ukraine but on the longer-term imperatives. Does he agree that the UK-Ukraine friendship is not just for the short term or for as long as it takes, but must endure in the years and decades to come?
John Healey
I do indeed. A lot of attention is given to military aid to support Ukraine’s short-term needs—its immediate battlefield requirements—but in the longer term we need to reinforce Ukraine’s capacity to produce for itself. That is why an important element of the steps we have taken to step up support for Ukraine, since the election just two months ago, has been to sign a defence export treaty, which I was privileged to sign with Defence Minister Umerov in No. 10 Downing Street. It provides some £3.5 billion-worth of export credit guarantees that will help us do more to get the equipment Ukraine needs manufactured and exported, and into Ukrainian hands for its fight against Putin’s invasion.
Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)
I thank the right hon. Gentleman for his statement. People in Ukraine are facing great challenges, and we can see how much resource Russia is throwing at the situation. Most colleagues on the Government Benches feel it is time for Storm Shadow to be allowed to be used with freedom by the Ukrainian people. Will the right hon. Gentleman set out the legal restrictions that are stopping that from happening? Conflicting briefings have been coming out of Government.
John Healey
That is not a matter I am prepared to discuss openly, as such a debate would benefit Putin. The principle upon which this country has given, and will continue to give, weapons to Ukraine is that those weapons support Ukraine’s defence and its right to self-defence as a sovereign nation. To do so, across the board, does not preclude Ukraine from striking targets in Russia, if that is part of that determination and strategy for self-defence and provided it is within the bounds of international humanitarian law.
Blair McDougall (East Renfrewshire) (Lab)
Without wishing for one second to diminish the threat of Putin’s Russia or the sacrifices that Ukrainians continue to make, I note that Moscow’s airport was closed by Ukrainian drone attacks this morning, that the Russian central bank will raise interest rates to 18% on Friday, and that half a million Russian troops have been killed. All of that has been inflicted by a country that is a third of the size of Russia. Does the Secretary of State share my frustration that so many people in the west seem to accept the misinformation war—Putin’s version of events that this war is going swimmingly for him—when any rational assessment of the events of the last two and a half years shows that they have been an absolute catastrophe for Russia?
John Healey
My hon. Friend is right. Part of the battle that Putin is waging is with his own people—to control their freedoms, including taking steps to assassinate political opponents, and their right to freedom of information. One thing that has put President Putin under pressure is that Ukraine has taken 900 sq km of territory in the Kursk region to defend its own cities and centres in the north. That has brought home to President Putin and the Russian people the consequences of his aggression, and shown that this is not a special operation, simply confined to Ukraine. Ukraine has the right to self-defence. In doing so, Ukraine is trying to defend itself better by striking targets in Russia from where the Russians are launching the deadly attacks from which Ukrainian civilians, cities and power systems have suffered for too long.
Dr Andrew Murrison (South West Wiltshire) (Con)
What assessment has the Defence Secretary made of Operation Renovator and how does he plan to change it?
John Healey
The right hon. Gentleman asks a question with a good deal more information than the rest of the House. I will write to him with the detail he seeks rather than trying to give a superficial answer from the Dispatch Box.
Dan Carden (Liverpool Walton) (Lab)
I welcome the Defence Secretary’s statement, especially what he said about the deepening military and industrial strategy between the United Kingdom and Ukraine. There is clearly a growing alliance building between Russia and Iran, united in undermining democracy and risking further proxy wars. Will the Defence Secretary give his assessment on how the UK Government seek to influence Iran?
John Healey
My hon. Friend follows these matters closely and speaks with authority in the House on these things. We have been warning—in fact, the previous Government were warning too—about the deepening security alliance between Iran and Russia. Part of the declaration, made alongside international partners, at the NATO summit in Washington warned Iran that any transfer not just of drone technology, but of ballistic missile technology to Russia would be regarded as a significant escalation. The House can take a broader lesson from my hon. Friend’s point: Iran’s destabilisation is not a malign influence that is simply felt throughout parts of the middle east, but has wider repercussions, which is why Iran is one of the most serious threats to this country in the future.
Dave Doogan (Angus and Perthshire Glens) (SNP)
The Secretary of State can look forward to the same support for Ukraine’s defences from the SNP that the previous Government enjoyed. He mentioned increased air defences coming from the UK and the United States that will be in Ukraine before the end of the year. Russia will not wait until the end of the year before attacking civilian infrastructure, particularly energy infrastructure, so will the Secretary of State advise of any steps that have been taken to accelerate that increased air defence to the benefit of the people of Ukraine?
John Healey
I am grateful for the hon. Gentleman’s continuing commitment and support, given on behalf of his party, to stand with Ukraine in this House. For some months, the Ukrainians have been saying they want delivery of the pledges of military aid to help with their fight against the illegal full-scale invasion; they want what has been promised to be in their hands. That is why when I first met President Zelensky, on my second day as Secretary of State for Defence, I made a point to not just say to him, “Right, this Government are willing to step up the support we are offering,” but to tell him that we recognise that imperative and will speed up the support we offer. We will speed up the delivery of the big package of aid announced by the previous Government in April, and we will try to say to President Zelensky, “Where we pledge our support, we will give you a guarantee about the delivery times by which it will be in your hands, to strengthen your fight for your sovereignty and against this illegal invasion.”
Johanna Baxter (Paisley and Renfrewshire South) (Lab)
I strongly welcome the confirmation of the extension of Operation Interflex over this year and next. Will the Secretary of State join me in paying tribute to the hard work and professionalism of the UK troops involved in the operation, and the bravery of all the Ukrainian troops who are serving to protect their home?
John Healey
My hon. Friend reminds the House of a very important point. Numbers are one thing—we can say that the UK has led the Operation Interflex nations to train 45,000 Ukrainian troops—but more importantly the expertise of British and other allied soldiers has helped to provide the Ukrainian soldiers who are stepping forward to help defend their country with combat medical skills, battlefield training and survival techniques. I had the privilege to join the then Leader of the Opposition on Salisbury plain to witness some of the training and, later, to talk to Ukrainian troops who had finished their training at Brize Norton as they were poised to fly back to Ukraine. They were men very much like any in this House—lorry drivers, accountants and public relations executives—who are now, alongside their civilian colleagues, fighting for the future of their country and the right to decide, as a sovereign nation, its future in the world. I pay tribute to their bravery and to the skill of our armed forces in helping to train them for that task.
Mr Mark Francois (Rayleigh and Wickford) (Con)
We have had a quote from Suvorov, and Napoleon famously said that
“the moral is to the physical as three is to one.”
After two and a half years of a barbaric Russian invasion, we cannot expect the Ukrainians to keep resisting with one hand tied behind their back. That means that, while the Russians attack power stations with long-range missiles at will with winter coming, and while they use glide bombs, which are brutally effective as tactical weapons on the frontline, we have to allow the Ukrainians full freedom of action to retaliate, not just as a military necessity, but to maintain their own morale. They must be bolstered to keep going. We could help them, and it is about time that we did that one thing.
John Healey
The right hon. Gentleman makes his very strong points in his customary way. This is about not retaliation, but self-defence, and he is quite right to say that the impact of the “moral” often outweighs the impact of the physical. When I updated the House on the physical—the 900 sq km of the Kursk region that is now in Ukrainian hands—the “moral”, or morale, impact on Ukrainian troops and Ukrainian citizens has been huge, so just as it is putting pressure on Putin, it is also lifting the spirits of Ukraine after nearly 1,000 days of a bloody battle against Putin’s invasion.
Alan Gemmell (Central Ayrshire) (Lab)
The Secretary of State spent the last Sunday of the election campaign in Prestwick, near our town’s world war two Polish war memorial. Within days, he was in Odesa and has stepped up and sped up the support that the UK is delivering. Does he agree that we have started as we mean to go on and that this Government will stand with Ukraine for as long as it takes?
John Healey
Yes, I do. It is a real pleasure to see my hon. Friend in his place. He brings expertise from a very wide field of foreign-policy affairs. I know that he will make a big contribution to this House, and if I made a small contribution to his election campaign, then I am doubly pleased to see him.
Sir Julian Lewis (New Forest East) (Con)
The Secretary of State was a consistent supporter of Ukraine in opposition, so it is no surprise to hear that positive statement from him today. When he goes into battle with the Chancellor of the Exchequer for a good defence budget, will he remind her that, in the 1980s and the cold war, we regularly spent 4.5% to 5.1% of GDP on defence? Will he also assure the House that if America elects a President who does not wish to support Ukraine, the support for Ukraine by the remaining European members of NATO will intensify, not diminish?
John Healey
When, as a Government, we declare that we are ready, we show that by stepping up support for Ukraine. When we say that we will stand with Ukraine for as long as it takes for it to prevail, we mean it. Whatever the decisions of other countries may or may not be, I do not expect—whatever the result of the US elections—for the US to walk away from Ukraine. I said in my statement that if big countries with authoritarian rulers can redraw international boundaries by force, the sovereignty and security of all nations are left weakened.
On the question of defence spending, we are a Government who will not be having battles, as the right hon. Member put it. But I will go into the discussions that I will inevitably have with the Chancellor with a copy of our Labour manifesto, which, at the election, said that we are a Government who will spend 2.5% of GDP on defence. We will increase spending on defence, which is entirely the opposite of what happened when we had the change of Government in 2010. That was a Government who cut defence spending over those first five years by nearly 20%.
Tim Roca (Macclesfield) (Lab)
May I thank the Secretary of State for his statement, but also the Ministers who have provided cross-party briefings to colleagues? It really is appreciated. President Zelensky has called on partners to ensure that aid packages that are announced are delivered to Ukrainians as quickly as possible. Will the Secretary of State set out the actions that the Government are taking to ensure that aid to Ukraine is sped up?
John Healey
My hon. Friend is quite right: stepping up the pledges of aid is one thing, but speeding up the deliveries is another. That is why, on that second day in Odesa, I made an undertaking to the Defence Minister and President Zelensky that this was a Government who would do both. I am able to update the Defence Minister in Ukraine of progress on each of the elements of the package that we have pledged.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I thank the right hon. Gentleman for his statement. Even though he has announced nothing new today, I very much welcome that he is keeping this matter at the top of his and the nation’s agenda. Although he may be able to say little about this, will he forgive those of us who can speak for continuing to press for the west to untie the hands of our Ukrainian allies, so that they can strike back at those who are striking at them illegally and without justification? We know that that probably does not apply to this Government, but will he confirm that there are discussions with our allies about this matter? May I wish him every success in helping us to deliver the freedom and security of the world by breaking the stalemate in Ukraine that will overwhelm the west if we allow it to continue?
John Healey
I thank the hon. Gentleman for his comments and for his welcome to me. I note the points that he makes. On the point about my not announcing anything new, I just say to him that I did so on Friday last week. This is my first opportunity to update the House on the announcements of extra aid not just last week, but in the weeks over the summer recess—and, indeed, the package in our first week in office. This is the fourth sitting week since the election, and I hope that he will be reassured by my personal undertaking to ensure that I update the House on developments in Ukraine on a regular basis.
Kevin Bonavia (Stevenage) (Lab)
I, too, welcome the Secretary of State’s statement and his wholehearted commitment of this country to the defence of our ally in its hour of need in the face of Putin’s aggression. I am very pleased that my constituency of Stevenage is where many of the Storm Shadow missiles being shipped to Ukraine are manufactured, but, of course, manufacturing missiles and other armaments takes time. Will the Secretary of State explain what steps he and his Department can take to speed up that process?
John Healey
I will indeed. I am delighted to see my hon. Friend take his place on the Labour Benches as part of a Labour Government speaking up for Stevenage. His constituency is home not just to the production of some of the most important defence equipment, but to their development and the technology that goes into it.
We will build on some of the steps that the hon. Member for South Suffolk (James Cartlidge) first took as Minister for Defence Procurement in the last months of the previous Government. I recognise that, with the nature of warfare changing so rapidly—exemplified by what we see in Ukraine—large platforms, which may take many years to produce, risk rapidly becoming outdated in the technology and systems that they cover. We have to be able to procure, we have to be able to develop as we procure and, once in the field, we have to be able to update on a regular basis. My hon. Friend must take it from that that this is a question not just of better value for money, but of more speed and clearer decision making in everything we do. That will be a hallmark of the way we develop our procurement reforms and our new industrial strategy, driven by the need to reinforce growth in this country as part of the success of this Government.
Iqbal Mohamed (Dewsbury and Batley) (Ind)
I congratulate the Defence Secretary and his Ministers and welcome them to their place. It is right that the UK stands with Ukraine to protect the lives and freedoms of the innocent people and the sovereignty of a free state. In addition to the military support provided, will the Secretary of State update the House on what diplomatic efforts are being made to negotiate an end to the Russian aggression, a full withdrawal from Ukraine and a return to peaceful co-existence as soon as possible?
John Healey
I will just say to the hon. Gentleman that it is the Ukrainians who are fighting, not us. It is the Ukrainians who will make the call about when to stop fighting and when to start talking, not us. Our task is to reinforce the Ukrainians now, to put them in the strongest possible position if and when they make that decision, and then to put them in the strongest possible position if they go into negotiations.
Graeme Downie (Dunfermline and Dollar) (Lab)
One of the key features throughout the statement and the discussion today has been the importance of consensus and co-operation in building a coalition. Will the Secretary of State give an update on what steps he intends to take next to ensure that we are supporting Ukraine with the broadest and best coalition possible?
John Healey
It was my first time at the Ramstein meeting on Friday last week—the 24th such meeting of that coalition, led by the US. Senior representatives of 50 other countries participated, and all pledged both more military support for Ukraine and to reinforce the unity with which we stand with Ukraine. I hope that that is not just reassurance for Ukrainians, but a signal to President Putin that we remain united, we remain resolute and, in the end, he will not prevail.
Sir Alec Shelbrooke (Wetherby and Easingwold) (Con)
I very much welcome the Secretary of State’s statement. He is quite right to outline the threats that Russia now poses to NATO territory. Last week, the NATO Parliamentary Assembly was in Alaska, looking at the missile intercept system, part of which is done through RAF Fylingdales. However, the UK and most of Europe is not protected by the missile intercept system. In relation to the comments he has made on the threat Russia poses, may I ask that, as we move into the strategic defence review, a NATO-led missile intercept system is something that he discusses? It is quite a hole in the defence of Europe at this moment in time.
John Healey
I grew up and went to school near RAF Fylingdales in North Yorkshire. Those big golf balls, when they were up, were a feature of the landscape for many years. I can say to the right hon. Gentleman that the strategic defence review, led externally but with the Department supporting it, has set out propositions that pose some of the questions he is interested in. I can confirm that this defence review will welcome and invite contributions from all parties, including not just those on the Front Bench but those on the Back Benches who are well informed and play roles in the wider defence and security world. I invite him to consider the propositions the review has published and to consider the sort of submission he might make as part of its deliberations; if he can do that, we will certainly welcome him.
Dr Scott Arthur (Edinburgh South West) (Lab)
I am proud of the role that service personnel in my constituency have played in training our Ukrainian brothers and sisters. I thank the Secretary of State for outlining the death toll of Putin’s brutal war; it is absolutely horrendous, and I hope that in time we will see Putin held to account for that and for the wider damage caused by the conflict. Despite the scale of the devastation, for many in the UK this war seems like quite a distant event. However, that could change almost overnight if one of the many nuclear reactors in the region is damaged. What discussions has the Secretary of State had with partners about that particular issue?
John Healey
May I pass on through my hon. Friend our thanks and tribute to any of his constituents who have been involved in the Interflex training programme to date? On the question of pursuing Putin for his war crimes, this is a Government—indeed, this is a country, which is a tribute to the previous Government—that has been willing to help fund the Ukrainian effort to gather the evidence required to prepare potential legal cases that will allow us to bring to justice those leaders in Russia who are responsible. The Ukrainian legal authorities are currently documenting 135,000 reported incidents of alleged war crimes in their country. That is a huge job and they cannot do it without our expertise and our support. Fundamentally, we are a Government that, in opposition, made the commitment to support the setting up of a special tribunal that potentially could try President Putin for the crime of aggression.
Jim Shannon (Strangford) (DUP)
I thank very much the Secretary of State for his statement and his very clear commitment to Ukraine and its people. Everyone in this House supports exactly what he is saying and we thank him for it.
With the breaking news that Ukraine has sent drones to Moscow and central Russia, it is clear that technology is very much at the forefront of this conflict. Will the Secretary of State underline the technical support that the Government have made available to our Ukrainian friends, and say whether we can be of further assistance to bring this war to an end to allow Ukrainian children back into education and Ukrainian families to rebuild their lives?
John Healey
I am grateful to the hon. Gentleman, who prompts me to say something that I did not give enough emphasis to. Never mind the Government support; the technology that he talks about, which is playing such a decisive role in the hands of the Ukrainians, is often developed and provided by the bright people in our and other countries’ industries. We pay tribute to all those in our British industrial and research companies, who in some cases are working with the Government and in some cases are working under contract to the Ukrainians to provide them with what they need to win this fight, to protect their country’s future and to regain their territorial integrity.
Mr Calvin Bailey (Leyton and Wanstead) (Lab)
I thank the Secretary of State for his statement and for the early opportunities he has provided for MPs from all parties to be briefed on the ongoing situation in Ukraine. I welcome the Government’s commitment and his personal commitment to keeping Members of the House updated regularly. May I ask that he ensures that the lessons identified from Ukraine, in particular those of the formations and structures that are allowing the Ukrainian forces to be so effective, are fed into the SDR?
John Healey
Yes, indeed. My hon. Friend served until very close to the general election in a very distinguished and senior capacity in our forces, so I say to him, as I did to the right hon. Member for Wetherby and Easingwold (Sir Alec Shelbrooke), that the defence reviewers will welcome contributions from all sides of this House, particularly when Members who have such deep expertise are willing to make that available. I appreciate his welcome of this early statement and say to him that it will not be the last.
Point of Order
(3 months, 1 week ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate
Mr Gregory Campbell (East Londonderry) (DUP)
On a point of order, Madam Deputy Speaker. Today the House is to debate and vote on a vital issue that affects millions of our senior citizens: the winter fuel payment. If absentee Sinn Féin Members from Northern Ireland—who have received millions of pounds over recent years for not having done their job and not taking their seats—were to take their seats today and vote with many of us, including some Labour Members, the outcome might be different. Has the Speaker’s Office been informed that the seven Sinn Féin Members intend to take their seats in the House today and actually vote to oppose austerity, as opposed to just talking about it?
Madam Deputy Speaker (Judith Cummins)
I am grateful to the hon. Member for giving me notice of his point of order, but that is not a matter for the Chair.
Royal Assent
Madam Deputy Speaker (Judith Cummins)
I have to notify the House, in accordance with the Royal Assent Act 1967, that His Majesty has signified his Royal Assent to the following Act:
Budget Responsibility Act 2024.
Social Security
(3 months, 1 week ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
14:59 - The House divided: - Ayes: 228 / Noes: 348 - Question accordingly negatived.
Madam Deputy Speaker (Judith Cummins)
Before we start, I inform the House that I will bring in the Secretary of State at the end of the debate. I call the shadow Secretary of State.
1.30 pm
Mel Stride (Central Devon) (Con)
I beg to move,
That an humble Address be presented to His Majesty, praying that the Social Fund Winter Fuel Payment Regulations 2024 (SI, 2024, No. 869), dated 22 August 2024, a copy of which was laid before this House on 22 August, be annulled.
The Labour party—the Government—said in the general election that it would bring in a new style of politics; politics centred on integrity and transparency. So it was that during the election, we held them to account and pressed them on tax, among other matters. We will find out, with the Budget at the end of next month, whether they were telling the truth—I have my suspicions. But we have already discovered one thing right now. We also pressed them on the winter fuel payment, from which millions of pensioners benefit up and down the country. Why? Because the Conservative party stands four-square behind our elderly. We believe that they should have security and dignity in their later years.
We received cast-iron assurances from the Labour party. In fact, the then shadow Chief Secretary to the Treasury, the right hon. Member for Bristol North West (Darren Jones)—[Hon. Members: “Where is he?”] That is a good question. He said when pressed that the Labour party had “no plans” to do anything in respect of the winter fuel payment. Indeed, Labour candidates up and down the country gleefully pointed to their manifesto as having no mention of doing anything on this particular matter. But look at what has happened in a matter of a few short weeks. What happened to integrity? What happened to transparency? They went out of the window—broken promises already. The special contract that Labour sought to have with the British people based on integrity and decency has been smashed into a million pieces.
What is the impact of these measures? To a degree, we do not know—I will come to that—but we do know that nine out of 10 pensioners will lose the winter fuel payment of up to £300 at a most difficult time of year for millions of them, and a time when the energy price cap is going up by 10%. There is a suggestion from Labour Members that somehow only the wealthy—the millionaires—are affected. Far from it: two thirds of pensioners living below the poverty line will have this benefit removed. [Interruption.] Labour Members do not like hearing it. The 880,000 pensioners who we know are eligible for pension credit but are not yet receiving it will also suffer—[Interruption.] Labour Members chunter from sedentary positions, but although they say that they will have wonderful campaigns to get everybody who is entitled on to pension credit, in reality, even if they did so it would cost the Exchequer £3.8 billion, which is over twice the money that they say they will save. It is an absurd policy that their own plans are actively working against.
The haste with which this has been carried out is simply jaw-dropping. We do not have any impact assessments.
Mike Amesbury (Runcorn and Helsby) (Lab)
Will the shadow Secretary of State give way?
Mel Stride
I will in a moment. We do not know what the impact will be across the income distribution. No Member of this House knows what the impact will be within their own constituency. We do not know what the recommendation of the Social Security Advisory Committee will be. Why? Because it will not be given the information until tomorrow, we are told. And of course, the measure does not form part of what it should: a major fiscal event with the Office for Budget Responsibility scoring it and an economic and fiscal outlook accompanying it.
Mel Stride
I will come to the hon. Gentleman.
In fact, the only authority to comment thus far on these measures is the House of Lords Secondary Legislation Scrutiny Committee, which said:
“We are unconvinced by the reasons given for the urgency attached to laying these Regulations and are particularly concerned that this both precludes appropriate scrutiny and creates issues with the practicalities of bringing in the change at short notice.”
That, I think, says it all.
Mel Stride
I will give way to the hon. Gentleman, who has been very patient.
Mike Amesbury
I thank the shadow Secretary of State for finally giving way. Will he clarify which Conservative leadership contender has called for the means-testing of the winter fuel allowance?
Mel Stride
I am left feeling that that intervention was barely worth the wait.
The fact that we even have a debate today is near miraculous given the resistance from the Labour party—we have it thanks to the scrutiny that the Conservative party is providing to the Government. We know that petitions have been railing against the measures: 100,000 people have signed the Silver Voices petition, a third of a million the 38 Degrees petition, and over half a million the Age UK petition. They are calling on the Government to think again. The press, particularly the Express newspaper, is doing a sterling job in bringing these matters to our attention. Even the trade union movement, including Unite, is pointing a finger at the Government and saying that they are picking the pockets of pensioners.
Graham Stuart (Beverley and Holderness) (Con)
There is a sense of disappointment. Yesterday, the Health Secretary was dragged in here because a multimillion-pound-making consultant in the health industry is wandering corridors with access to papers, and today pensioners are being betrayed. Does my right hon. Friend agree that when people voted Labour, they thought that they were getting change and transparency? They were promised higher standards; they are getting the opposite.
Mel Stride
I thank my right hon. Friend for his appropriate intervention. He is right, of course. The only surprising thing is how remarkably quickly this has all fallen apart.
The Government will take responsibility for what has happened. They will blame us, with this fictitious black hole. The Leader of the House has suggested—I invite Labour Members to support her in this assertion—that the measure is necessary in order to avoid a “run on the pound.” It is just as well that Labour is not in charge of the economy, or we might end up in a real mess.
Deirdre Costigan (Ealing Southall) (Lab)
Does the shadow Secretary of State agree that if a local council had run its finances into the ground, in the way that his party did to the country’s finances with a £22 billion black hole, he would have called in the commissioners in the morning and instigated swingeing cuts? Can I ask him—[Interruption.] Given that that is the case, and that he now seems to have decided that his party no longer cares about balancing the books, will he apologise—
Madam Deputy Speaker (Judith Cummins)
Order. I call the shadow Secretary of State.
Mel Stride
Thank you, Madam Deputy Speaker. That slightly lengthy question might be better addressed by way of a rather lengthy letter to the leaders of Birmingham city council.
Of course, all politics is about choices, and what this Government have done is cave in to their trade union paymasters. They have settled way above inflation. Junior doctors—22%. Train drivers—14%. They have stood up for their trade union paymasters on the backs of vulnerable pensioners, and that is not right. If it is not the case that the trade unions are running the Labour party, hands up everybody on the Government Benches who has not received money from the trade unions for their campaigning or their private office. [Hon. Members: “One!”] One person. Therein lies the truth about who is running the Labour party.
Of course, we have seen all of this before. Under the last Labour Government, we had the 75p pension increase, we had Gordon Brown’s stealth tax on private pensions—£118 billion in total—and was it any surprise that we ended up with the fourth highest level of pensioner poverty across the whole of Europe?
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
The right hon. Gentleman talks about choices and pensioners. When his party chose to suspend the triple lock in 2021 and give a below-inflation increase to pensioners, costing them £500, what was his concern then? Why did he say nothing?
Mel Stride
The hon. Gentleman is entirely wrong. We went into the election promising the triple lock plus. Unlike his party, under which millions of pensioners are going to be dragged into income tax spend, many of them for the first time, we were prepared to stand up and say that we would not do that.
Jim Shannon
I commend the right hon. Gentleman and his party for bringing forward this issue, which is massive for my constituents and those across the whole United Kingdom. I say this with respect to the Labour party: this policy does not conform to any Labour party policies that I have seen in the past. Pensioners who have contacted me say that they are concerned because the threshold is too low, because pension credit will take nine weeks to process even if it gets to the 28% who are eligible in Northern Ireland, and because the £400 that the Labour Government have approved will not come until spring next year. Those are three reasons why the motion has to be supported.
Mel Stride
The hon. Gentleman is entirely right, as always, and I completely agree with every word that he has just said.
We are the party of the triple lock, and we were the party of the triple lock plus. We are the party that has raised the state pension by £3,700 since 2010, and we are the party that has seen 200,000 fewer pensioners in absolute poverty since we came to office. That is now going to go into reverse.
I will now, rather more gently and rather more quietly, make an impassioned plea to Government Members: look to your conscience. You know in your hearts that these measures are wrong, that the Labour party has broken its promises, and that these measures will lead to untold hardship for millions of elderly and vulnerable people right up and down the country. You now have an opportunity to join with us and put a stop to it.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Before I start, I want to thank the House for putting its confidence in me to chair the Treasury Committee for the term of this Parliament. I am the servant of this House, and I will question without fear or favour those who appear before us. I look forward to engaging with the new Members I have yet to get to know. I also declare an interest: my husband has been in receipt of the winter fuel allowance, but if the vote changes that today, he will no longer receive it. For his own vanity, I should add that it is the lower limit.
The decision that we are being asked to make today is a difficult one, but sadly it will not be the only difficult decision facing the new Labour Government. Before the general election, I had the privilege of chairing the Public Accounts Committee for nine years. In that role, I saw all of the impacts on public finances—current, past and future. When I heard my right hon. Friend the Member for Leeds West and Pudsey (Rachel Reeves) talk about the challenges ahead and the dire consequences, I would say, “You think it’s that bad; I know it’s a lot worse.” We have heard of the Chuckle Brothers, but I described us as the Misery Sisters, because when she said it was bad, I said it was going to be worse. That is the reality. The chickens are coming home to roost on the spending of the previous Government.
We saw a number of problems, which I laid out in my last annual report as Chair of the Public Accounts Committee—factually accurate information. The NHS capital budget was raided to pay for day-to-day expenses, but the backlog of capital expenditure in the NHS was £10.2 billion in the year ending 2022.
Mr Mark Francois (Rayleigh and Wickford) (Con)
As I served with the hon. Lady on the PAC, I warmly congratulate her on her election as Chair of the Treasury Committee. The House has made a very good choice.
Members of the Rayleigh, Rochford and District Association for Voluntary Service, whom I met last Friday, were genuinely worried about this policy. In a nutshell, their argument was that if people on very modest incomes are now frightened to heat their homes, that could lead to illness for many of those people, who will then present themselves to hospital and increase the winter pressures on A&E. By that method, it would be a false economy. The game is not worth the candle. What does the hon. Lady, whom I respect, say to that?
Dame Meg Hillier
I thank the right hon. Gentleman, with whom I had the pleasure of serving on the Public Accounts Committee. That is an example of how the House works closely together; most people would not think that we would agree on many issues, but on that Committee we produced every report in tandem.
The right hon. Gentleman will know that the pressures on the NHS are legion, and that many of the same people who will be suffering this cut to their income—we will come on to some of the measures to ameliorate it—will be the same people queuing and waiting for a hospital appointment. I know too many pensioners who do not get that hip replacement if they cannot afford it, but many are cashing in their savings, when they have them, to pay for a hip replacement so they can have quality of life. That is not the NHS that the right hon. Gentleman or I want to see in this country, so we need to make choices. One choice that this Government are making is to ensure that we pull the NHS waiting lists back. I could digress into the NHS for a long time, but if he will forgive me, I will move on.
Looking at our schools estate, under the last Government the Department for Education asked the Treasury for capital funding for schools of £5.3 billion in 2020. It was allocated only £3.1 billion, so there is a big backlog there.
In the defence sector there are many examples, but I will pick just a couple. Not a single nuclear submarine that has come out of service has yet been decommissioned in this country. It will cost around £500 million in 2018 prices for a single one, amounting to nearly three quarters of a billion pounds in 2018 prices to complete all of those. It is getting to a critical point. These decisions have been delayed and deferred for too long—in this case, by Governments of all colours, not just the last Government—and there is a gap of at least £17 billion in the defence equipment plan over 10 years.
There is also a lack of transparency about local authority spending because of the crisis in local government audit, which was overseen by the last Government. Not enough was done to deal with it. I could go on: there is a long list of expensive things that this Government now need to put right because of neglect over a period of time.
Several hon. Members rose—
Dame Meg Hillier
Let me continue for a moment. There are budget challenges this year, and many decisions that were made in recent Budgets will hit the public finances in 2025, 2026 or beyond, because there was either huge optimism about the state of economic growth or a deferral of painful cuts. Different Members of the House will have their own views.
Paul Holmes (Hamble Valley) (Con)
I congratulate the hon. Member on the post to which she has been elected. She has just outlined a number of projects for which public money needs to be found. As the shadow Secretary of State outlined, the Government’s decision today will save £1.1 billion, and the replacements they are putting in place will cost £3 billion. How does that make economic sense, and how does it help the case that she is making?
Dame Meg Hillier
I give credit to the hon. Gentleman for his chutzpah in coming to the House today to say that it is this Government who have denuded pensioners of income. As my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell) highlighted, the previous Government have a track record in that area, and there are 880,000 pensioners who, on the hon. Gentleman’s watch, deserved pension credit but did not get it. Those pensioners have lost out on £3,900 a year, in some cases for many years, because the last Government fell down on the job. They protected some pensioners, but not all. Where was the urgency then? These are crocodile tears when those people were suffering, but it is right that pensioners should get what they are entitled to, and pension credit is not being abolished by this Government. Rather, it is being promoted to make sure that the very poorest pensioners get that income.
One of the things that is absolutely apparent is that we cannot take this issue in isolation. We have a Budget coming on 30 October, and knowing what I knew a few months ago as Chair of the Public Accounts Committee and what I know today, I am not going to change my tune about the dire state of public finances. However, we face a second challenge: at the same time that our public finances are in that dire state, many of our citizens face the same challenges in their personal finances. This Labour Government are rightly committed to growth, but that will require an approach to taxation that helps ensure growth. We will therefore hear many arguments about the need for a taxation system that will underpin growth.
Alicia Kearns (Rutland and Stamford) (Con)
I thank my honourable friend for giving way. I call her “friend” because we have worked together very closely over the past few years, and I welcome her election—I would have supported her for that role.
The difficulty is that the public are not buying it. The Government cannot claim that they need to take this money from vulnerable pensioners—over 20,000 in my constituency will lose the support they are currently getting—and then reward train drivers who work four days a week on 70 grand a year. That is the difficulty, so how is my hon. Friend explaining that to her constituents? I have not been able to give an answer.
Dame Meg Hillier
I could speak forever about the challenges that the last Government left. I have spoken about the NHS, but let us take the dire state of our train services. The previous Government refused to engage and stop the strikes, which meant that anybody travelling had no certainty about whether they could get to everything from work to a family funeral. Lives were put in havoc, so it is absolutely right that we begin to set right the chaos that the last Government left. Yes, there is a cost to that, so the challenge for my right hon. Friend the Member for Leeds West and Pudsey and this Government is how we address that, making decisions that will build up the future of Britain in the way that we all want to see.
We also need to address the issue of taxation. The biggest challenge in our taxation system is that those who face the greatest financial challenges often face the biggest challenges of all, because the greatest cliff edges in our taxation and benefits system affect not those who are starting to earn and accumulate wealth, but those who are most financially challenged. For those at the margin, we keep coming across examples—this is not the only one—where the marginal costs of a slight improvement in income can drastically outweigh that improvement, whether that is tax thresholds being frozen or the issues we have seen with child benefit. There are many more examples, and the debate we are having today is one of those. The solution is not to duck or defer the need for tough choices, so, for the record, I will be voting with the Government. Equally for the record, though, I want this Government to commit to tackling those cliff edges, because that is what progressive policy—including taxation policy—looks like.
Like many Members of this House, I know from bitter experience that rushed laws tend to be bad laws, so I do not expect some Houdini-like solution to be announced from the Front Bench by my right hon. Friend the Member for Leicester West (Liz Kendall) in her closing speech. Instead, I expect and trust that she will consider removing those chains of poverty as a key mission for this Government in a thoughtful, carefully planned way; one that is tied up with the next Budget but goes way beyond it.
I also know, as will many Members, that there are technical challenges in making changes. Look at what has happened with child benefit: the limits on income are dragging many people into tax returns, where households of the same income did or did not receive child benefit depending on who was earning the money. That is a lesson in why changes need to be made in a sustainable way and according to a plan. My right hon. Friend on the Front Bench and her colleagues have a plan, but the winter fuel allowance, which we are discussing now, is a prime example of the problems that those cliff edges create. Addressing those problems in isolation, however, will leave in place all the other cliff edges; we need to look at challenging poverty in the round.
I was honoured to be chosen yesterday to be Chair of the Treasury Committee. I do not yet have Committee members—they are yet to be elected, as is the Chair of the Work and Pensions Committee—so I cannot speak for a Committee that does not yet exist on a cross-party basis, but I will be urging the Committee to consider this wider challenge of cliff edges as a matter of urgency. I look forward to working with Ministers to find some practical steps forward.
We have to make tough choices as a Government in-year, because one of the challenges is that the hole in the public finances is not just about the hole today. In previous Budgets, decisions were made to defer spending to later years, so the real challenge is now. Too often I have seen calls for efficiency savings and cuts in-year that end up being deferred. If we look at what happened to the defence equipment plan under the Conservative Government in 2010, we see that there was a desire to balance the books. In doing so, the Ministry of Defence deferred spending—moved it to the right—which left us with aircraft carriers without aircraft and a raft of other problems. Deferring decisions and spending does not solve things, and this Government and this Cabinet are making the tough choices to make those difficult decisions in-year, because that is financially literate and the right thing to do.
Sir Edward Leigh (Gainsborough) (Con)
If I can reach out to the Labour party for a moment, there is a case for having a serious debate about the total package that we give to pensioners. We could have done that in a sensible way—I have raised it myself, having questioned some aspects of the triple lock a couple of years ago. It is a very difficult debate, but I understand that the total package paid to pensioners as a proportion of gross national product must not keep increasing every year, because that is the way ultimately to bankrupt the country. We need to have a social contract between older people like myself and younger people, particularly when it comes to house building. I understand all that. That is the debate we should have been having today, and we could have combined as a House to have that debate and protect the public finances.
However, that is not the debate we are having. We are debating the action of a Government who have not just gone against a manifesto commitment—there was no manifesto commitment to do this—but actually gave a specific promise that they would not do it. This is surely a question of public trust. They gave an absolute guarantee and I think that is why people are so upset.
I know that some people will say, and here I declare an interest: why should somebody like me receive the winter fuel allowance? All right, let us have a serious debate about that. But what about the people—these are the people I feel so strongly about—who have worked hard all their life, have served their country, receive a very small occupational pension, do not receive pension credit and are looking after every penny, and suddenly, because they do not and cannot receive pension credit because they have a very small occupational pension, their winter fuel allowance is taken away? That will make a real difference to them, so we really have to consider them, and have a serious debate about how we are going to protect those people.
May I make one suggestion to the Government? The hon. Member for Hackney South and Shoreditch (Dame Meg Hillier) alluded to the fact that there should have been a serious debate about tapering, or something similar. I will tell the House what this is all about. This is about a punishment beating. The New Labour Government decided they had to make their case that the public finances were in a dire state and that there was this—[Interruption.] Hang on—there was this £22 billion black hole. We spend £1,200 billion every year. The £22 billion so-called black hole is a mere accounting device. The Labour Government are trying to make the political point that the Conservative party ran the country into the ground, so we have to punish the pensioners. It is absolute and complete rubbish.
What those we represent cannot understand—the people who worked hard all of their life, who have done their bit for the country and whose total package is perhaps £13,000 or £14,000 a year—is that this so-called saving of public money is actually going to go to the train drivers, who earn £70,000 a year. So for God’s sake, let us have a serious debate, let us try to unite on this issue and let us not keep taking away benefits from people just above the pension credit limit. Of course, there are many pensioners who are entitled to pension credit who, for all sorts of reasons, will never claim it. They are suffering, so they will be even worse off.
There is another point to be made. The Government will argue that the total package will be worth more after the increase in the triple lock next year, but actually a pensioner who drew their pension before 2016, by the time they have had this cut, will probably be even worse off. The first cut in the state pension for years! This is not acceptable. This is not the right way to go about things. We should unite around a sensible package that rewards pensioners for their hard work, but does not just indulge in a political gesture.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I recognise the serious economic context of the debate today. The Institute for Fiscal Studies, for example, has estimated that 320,000 people are being pushed into poverty because of mortgage interest rate rises triggered by the disastrous autumn 2022 mini-Budget, and of course the then Prime Minister made many unfunded policies.
I recognise that the policy measures in the King’s Speech will go a long way to reduce household costs and increase incomes in the medium term, but those tackling the appalling poverty that we are seeing will not come in time for this winter. I am proud that Labour are continuing with the triple lock on pensions, something that will be worth an extra £460, but that will not happen until next spring. The setting up of a new energy production company, Great British Energy, alongside making homes more efficient, is a fantastic initiative that will contribute to our net zero targets and reduce energy bills for millions, but again that will not be in time to offset the 10% increase in energy bills this winter. I support our focus on growing our economy, but again that will not happen overnight.
The Joseph Rowntree Foundation estimated in its report earlier this year that there are 2 million pensioners living in poverty—about one in six of all pensioners. In areas such as my constituency, poverty rates are much higher. We have one in two children living in poverty. From the figures, we estimate that will be the same for pensioners. We know that four in 10 older people in Oldham East and Saddleworth have a disability, and almost half have a long-term health condition. We also know that, even before the escalation of energy costs, over one in six households were living in fuel poverty. Although pension credit provides extra financial support for the poorest pensioners, and opens up help such as housing benefit and council tax discounts for those who are eligible for it, only 5,500 of the 9,000 households in Oldham are eligible to claim it. Again, I welcome the automatic linking of pension credit to housing benefit to increase the uptake, but this again will not happen in time—in the next few months.
Debbie Abrahams
I am not going to give way. I thank the right hon. Member, but I cannot because I am under strict guidance from the Deputy Speaker.
One in three pensioners living in poverty are in the private rented sector, so what are we going to do about that? Even if everyone eligible for pension credit were claiming it, according to Age UK, there would still be another 2 million pensioners slightly less badly off who will not be eligible for pension credit and now the winter fuel payment. The cut-off threshold for pension credit is just under £12,000 a year for a single person. These are not wealthy pensioners. Poverty is poverty whoever experiences it, and we know that we have 8 million working people living in poverty, as well as 4.5 million disabled people, 4 million children and 2 million pensioners. As we did in previous Labour Administrations, I know we will tackle this, but again it will not happen overnight.
Could I point out what we know about the health effects of the cold? The Lancet published a very good paper reviewing data from the last 20 years, and it showed the extra deaths—the excess deaths—as a result of cold. I could mention dozens and dozens of cases from my constituents who have written to me and who, again, are just clinging on following the last 14 years. Is my right hon. Friend the Secretary of State able to say not just what other options she may have considered for offsetting the loss of the £300, but what alternative ways there are of raising the £1.4 billion we will get from means-testing the winter fuel payment? I know how complex and difficult our economic situation is, but, please, we must protect our most vulnerable citizens.
Madam Deputy Speaker (Judith Cummins)
I call the Liberal Democrat spokesperson.
Wendy Chamberlain (North East Fife) (LD)
Recent weeks have seen my inbox inundated with correspondence from pensioners in North East Fife, because it gets quite cold up there, who are deeply worried. I am sure—in fact, I know—that that is far from a unique experience across this House. Since the Chancellor’s announcement in late July, we have all heard the concerns of our elderly constituents. We know that the winter fuel payment provides vital support during the coldest months of the year. It is not a luxury, and the Chancellor’s decision will leave as many as 2 million people extremely worried about how they will afford their energy bills this winter.
We on the Liberal Democrat Benches accept that the new Government have been left with an unenviable task of rebuilding our economy after the mess left by the previous Government. No one is disputing that years of Conservative mismanagement have left the public finances in crisis, but this cut is simply wrong. It is wrong to strip support from many of the poorest pensioners just as energy bills are set to rise again, it is wrong to force vulnerable elderly people to make that choice between heating and eating this winter and it is the wrong answer to the challenges we face.
The way we treat the vulnerable members of our communities reflects who we are as a society. What sort of signal does it send to be turning our backs on millions of pensioners? In addition, I have campaigned consistently for unpaid carers since my election, as has my party and our leader, my right hon. Friend the Member for Kingston and Surbiton (Ed Davey). Census figures, with the proviso that Scottish census data is still awaited, suggest that almost 1.4 million people across the UK aged over 65 are providing unpaid care. Although Carers UK awaits data on how many will lose the winter fuel allowance, we know that those carers, and those they care for, are some of the most vulnerable in our society.
Steff Aquarone (North Norfolk) (LD)
On the disproportionate effects on certain groups, I am sure my hon. Friend is aware that North Norfolk is home to 28,000 pensioners and has the title of being the oldest constituency in the country. Many of them already face higher energy costs due to the huge number of North Norfolk homes that are off the gas grid. Does she agree that these cuts will have a disproportionate impact on older rural constituencies such as North Norfolk, and that the Government must go back to the drawing board with these misguided proposals?
Wendy Chamberlain
That is one thing often lost in relation to the energy price increases that we have seen in recent years: the price cap and guarantee does not support those who are using other forms of fuel. Those issues have been raised in the House before and I look forward to hearing what the Government are going to do to support those individuals.
A new Parliament represents an opportunity to move on from the chaos and misery of recent years, but this cut would be far from a fresh start. It would be a disappointing and shameful abandonment of poor and vulnerable pensioners. Age UK has strongly condemned the cut. It points out that it has been introduced with
“virtually no notice and no compensatory measures”.
I note from the debate this morning, when the Minister for Pensions was talking about compensatory measures, that there is real complexity around what will additionally be available to support people. We know the questionnaires that are needed for pension credit. We know that the household support fund has been extended, but we do not know what that will mean. We know that the £150 grant may be available for some, but after listening to the debate this morning, we are left in the position where the Government have made a decision to make the cut, but they have not properly thought through the consequences or the measures that will be available to support those most in need.
Rebecca Harris (Castle Point) (Con)
Does the hon. Lady agree that in 2010, when the coalition Government came in, we inherited a really serious economic crisis and a genuine black hole, and we had to make some very tough decisions as a coalition Government, but we never considered—and never did—this?
Wendy Chamberlain
Obviously, difficult decisions were made during the coalition. The Government are saying today that one of the things they are doing is continuing the triple lock. One reason why the Liberal Democrats supported and brought that move in during the coalition Government, and one reason why we continue to support it, is that still not enough has been done to best support our vulnerable pensioners.
Pete Wishart (Perth and Kinross-shire) (SNP)
I am sure the hon. Lady will acknowledge that Scotland has the coldest climate in the whole United Kingdom. We will be disproportionately hit. It is absurd that that will happen in energy-rich Scotland. Will she appeal to all Scottish Members to ensure their support tonight? Constituents right across Scotland will be watching carefully how Scottish Members of Parliament vote tonight, so will she encourage them to vote with us this evening?
Wendy Chamberlain
We all know that geographical disparities exist. There are differences in how cold parts of the country are. Different communities face differing energy costs and rates and have different means of fuel. We will be supporting the official Opposition’s motion tonight and I hope other MPs across the House do so.
Age UK has drawn attention to low take-up rates for pension credit. Around 1 million pensioners would be eligible for pension credit but do not claim it, often due to a lack of awareness. Since the Chancellor’s announcement, we have seen lots from the Government about how they are going to increase the uptake. Reports do suggest an increase in applications, but also that the wait times for that are increasing. If people are applying for pension credit and get it confirmed only after the date on which the winter fuel payment is made, will those people be caught up with?
An awareness drive is all well and good. The DWP has stated that its calculations assume an increase in the uptake of pension credit. That will still leave more than 700,000 eligible pensioners not getting pension credit, and therefore not getting winter fuel payments. Those of us in the last Parliament will remember numerous drop-ins and “dear colleagues” to outline the steps that the then Government were taking to encourage the uptake of pension credit, and what MPs could do. I remember writing regularly in my local newspaper column to outline how people could apply, but in reality the number of people taking up pension credit is stubbornly stuck at a ceiling of 70%. I would be interested to know what the Government are going to do that will be radically different in order to increase that figure.
The Government’s rationale is that an estimated £1.4 billion will be saved by means-testing the winter fuel payment, but have they made an assessment of what that saving would be if they fulfil that other stated aim of ensuring that all those eligible for pension credit claim it? Is there not a fundamental contradiction at the heart of this measure? How can the Government aim to boost pension credit on the one hand, while aiming to maximise the fiscal savings they are making through this cut? What will it cost to increase the take-up rate, and can the Secretary of State give an assurance that the Treasury will give its full support to any measures aimed at boosting the uptake of pension credit?
A separate but related issue is that of the cliff edge. Analysis by Policy in Practice shows that around 130,000 elderly people miss out on pension credit, as they are just £500 over the income threshold to claim the benefit. We know that those vulnerable elderly people will now be cut off from winter fuel payments with just a few months’ notice. That leaves me feeling that there is cruelty at the heart of this cut. Those vulnerable pensioners, who have spent years struggling under a Conservative cost of living crisis, are now faced with a double hit: an increase in the energy price cap from 1 October, alongside being stripped of those winter fuel payments.
It is important that we do not forget that energy costs are much increased from a few years ago, so arguably a winter fuel payment is needed more than ever. This House has an opportunity today to do the right thing and protect those vulnerable members of our society. The Liberal Democrats will support the official Opposition motion and oppose the move to strip pensioners of that support. I hope other Members will do the same.
Several hon. Members rose—
Madam Deputy Speaker (Judith Cummins)
Order. Members will have seen that there is a lot of interest in this debate, so I will impose a clear three-minute time limit from now on.
Anna Dixon (Shipley) (Lab)
I am pleased to have the opportunity to speak in this debate on changes to the winter fuel allowance. Like many of my colleagues, I have been contacted by constituents who are worried about the impact of these changes. I bring to this debate 25 years of experience of working in public health and with older people, latterly as chief executive of a national ageing charity. During that time I came to understand the impact of cold and damp homes on the health and wellbeing of older people, and the challenges of addressing pensioner poverty.
Let us be clear with those pensioners up and down the country who will be losing their winter fuel payments about where ultimate responsibility for today’s decision lies. It is not with my right hon. Friend the Chancellor, but with the right hon. Member for Godalming and Ash (Jeremy Hunt) and his party. It turns out that the Conservatives were pursuing a scorched earth policy: the NHS running on empty; the cost of housing asylum seekers spiralling; and hollow promises on capital projects across the country, including in my constituency. I know that the Chancellor and her colleagues have not taken the decision to means-test the winter fuel payment lightly; hard choices have to be made to put the country’s finances back in order.
We know that many pensioners will miss out, and I worry that they will be left in the cold. In my constituency 1,160 people are eligible for pension credit but not receiving it. I spoke to a resident in a sheltered housing scheme in Cottingley at the weekend. He did not know whether he was eligible, and was not sufficiently mobile to attend a local community centre. Will the Secretary of State work with colleagues in the Ministry of Housing, Communities and Local Government to urge housing associations and local authorities to support their residents to apply for pension credit and other benefits to which they may be entitled?
The other group who risk being left in the cold this winter are those with disabilities or health conditions, or those who live in cold and damp accommodation. Cold homes can cause and worsen respiratory conditions, cardiovascular disease, poor mental health, dementia and hypothermia. In 2019, the NHS spent at least £2.5 billion per year treating illnesses that were directly linked to cold, damp and dangerous homes.
Pensioners are more likely to be living in poorly insulated homes, leading to a higher risk of fuel poverty. I am worried about pensioners such as Barbara in my constituency—she is a full-time carer and her husband has dementia—having to spend more money because her and her husband are at home and he is ill.
Given the crisis that the NHS faces, as a direct result of the 14 years of funding pressure and cuts from the Conservatives, I urge colleagues to work with colleagues in the Department of Health and Social Care to ensure that winter planning guidance means that the NHS tackles fuel poverty.
Esther McVey (Tatton) (Con)
Who would have thought that a Prime Minister not even in office for 10 weeks would be so out of touch with the public? Yet here we are, and yes this Prime Minister is so out of touch, along with the Chancellor and the whole of the Cabinet who are going along with and supporting this cruel policy. The Chancellor should be under no illusion: the public know that this decision to rob millions of pensioners of their winter fuel allowance, for which the Government have no mandate, has nothing to do with economics and everything to do with cynical political calculation.
The haste with which the change is being made is breathtaking. All benefits regulations are required by law to be considered by the independent Social Security Advisory Committee. That is generally done in advance of the legislation being laid. In this case, however, the Labour Government has opted for the urgency provision, which allows SSAC consideration to be retrospective. Some say that is bypassing SSAC scrutiny. As well as evading that scrutiny, where is the Government’s impact assessment on removing winter fuel payment from these pensioners, particularly in the light of the latest information that bills will be rising by £150 this year?
Neil O'Brien (Harborough, Oadby and Wigston) (Con)
There are 18,900 people losing winter fuel payments in my constituency, and many of them are among the 800,000 people who are not eligible for pension credit, but are below the Government’s own poverty line. What are they supposed to do?
Esther McVey
Well said. What is worse, that this Labour Government are so out of touch so early on in their government, the unnecessary haste that this change is being brought in with, the lack scrutiny of this policy, or Labour’s breathtaking hypocrisy? Back in 2017, when the Conservative manifesto stated that we would means-test benefits, the Labour party’s reaction was one of horror, saying that this could not be done and publishing research showing that up to 4,000 pensioners’ lives would be at risk and that pensioners would struggle to heat their homes. The Conservatives did not do it.
What are we seeing here? We are seeing that a Labour party in office ditches its beliefs and its research. This Government have been telling pensioners that they did not want to do this, but that tough financial decisions must be made. We all know, however, that that is poppycock, as it was not the Government’s message to the already highly paid train drivers. When they met them, money was no object. They said, “Have as much as you want.”
The public are not as stupid as this Government think they are. This is good old-fashioned pork barrel politics, taking money away from the people who the Chancellor thinks do not vote Labour, such as pensioners, to hand to people who she thinks do vote Labour, such as train drivers and public sector workers. Millions of pensioners, many struggling to make ends meet, are being sacrificed in this political strategic game.
By announcing the scrapping of the forthcoming and long-awaited cap on care costs, as well as laying the ground to remove the council tax allowance for single people, Labour has basically declared war on pensioners, which will be neither forgotten nor forgiven. Our pensioners deserve better than this. It is time that Labour reversed this decision and restored the winter fuel allowance to all pensioners.
Andy MacNae (Rossendale and Darwen) (Lab)
In the interests of brevity, I associate myself with some of the remarks made by my colleagues on the Government Benches on the desperate financial legacy we have been left and the nature of cliff edges within the benefits system. We should do better than have cliff edges in the future.
Let us remind ourselves that the subject of this debate is the Opposition motion not to means-test winter fuel payments. Let us face it: that means maintaining payments to millions of people, including some Opposition Members, who are happy to admit that they do not need it. Given the dire legacy, the fragility of the economy and the immediate need for in-year savings, this is an emergency measure. With all the other calls on public spending, I cannot see how such payments are the best use of £1 billion or more.
At the same time, I know that many of my constituents on state benefits, with small private pensions, simply do not have the income to meet their everyday needs. They fear not just the winter cold, but every bill. Many have written to me with heartbreaking stories of everyday struggles just to maintain the basic qualities of life. We have heard some mitigations, and we will hear about more. Let us remind ourselves that that includes the fact that the poorest pensioners will retain their winter fuel payments. Let us remind ourselves that people just above the threshold can apply for household funding support through their councils. My office in Rossendale and Darwen is already working hard with residents to make sure that everyone in need gets the support they need. We have already helped a number of pensioners to get the benefits they deserve and need.
At the same time, we need to recognise that none of these steps, including the winter fuel payment itself, addresses the fundamental issues of pensioner poverty. We have to ask how this country can be spending more than £150 billion a year on pensioner payments when millions of Britons—people who have done the right thing all their lives, worked hard and paid in—are still living in deep poverty and unable to afford the most basic comforts. That is not something we should simply accept; such deep pensioner poverty should be a national embarrassment.
Successive Governments have ducked the issue. Winter fuel payments are one example of the sticking-plaster politics that has sought to kick the can down the road, responding to a problem but never fully addressing it. The benefit is poorly targeted, and for those who need it most, it is not nearly enough to make the difference. To truly address pensioner poverty, we need a fresh approach and to be willing to challenge the assumptions of the past, with ambitious policies that target the causes of poverty, not just the symptoms. Home insulation and lower energy prices with GB Energy are just two examples, but we can and must do so much more. We can only deliver real change with an economy that is fixed and stabilised. That is what this Government are utterly committed to.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
Today, hon. and right hon. Members will make a choice: whether to take vital winter fuel payments from millions of vulnerable pensioners, including 20,000 pensioners in my constituency. It is important, when Members vote today, that they understand the consequences of their choice. It is important that they understand that when they take winter fuel payments away from vulnerable people, some elderly people will die. Vulnerable elderly people on relatively low incomes will be unable to heat their homes adequately, and as a direct result, because they are cold, they will die. Why? They will die because cold is bad for people. A number of reports that Members may read demonstrate that.
When cold, people’s platelets get higher, they vasoconstrict and their blood pressure goes up, putting them at risk of stroke or heart attack. Their lungs become inflamed, which puts them at risk of pneumonia or chest infection. It makes people with chronic pulmonary obstructive disease more likely to suffer exacerbations and ill health. Studies have shown that physical performance and muscle strength—taking caps off things or walking about—are worse in people who are cold, particularly elderly people. That reduces their ability to complete the activities of daily living independently, and it makes them more likely to fall. Studies have also shown that elderly people who are cold in their home are more likely to need to get up at night to go to the toilet or to wake through the night. That again puts them at more risk of falls and therefore hospitalisation. Sleep disruption puts them at risk from a whole range of different illnesses.
We also know that as the home temperature falls further, the risks increase. It is a proportional dose-response relationship. The House does not need to take my word for it; there is a lot of medical evidence to this end.
The chief medical officer said in his annual report last year:
“Cold homes and fuel poverty are directly linked to excess winter deaths.”
Andrew Griffith (Arundel and South Downs) (Con)
My hon. Friend is making a powerful, emotive speech and quite rightly talking about some of the impacts on pensioners. Does she agree that those are exactly the impacts that should be captured in an impact assessment and brought before the House so that we can make an informed decision and that my 25,000 constituents in Arundel and South Downs, who may face a loss if the motion is not agreed to, are increasingly talking about the right hon. Member for Leeds West and Pudsey (Rachel Reeves) as “Reckless Rachel” in proceeding with this measure?
Dr Johnson
I thank my hon. Friend for that intervention. He is absolutely right. Why is there no impact assessment? I have my suspicions, and my terrified constituents know why there is no impact assessment—it is because they know what the impact will be. I am sure, Madam Deputy Speaker, that your terrified constituents know what the impact of the policy will be. Right hon. and hon. Members all know, too. As right hon. and hon. Members vote, they should be in no doubt that the Government’s first job is to keep people safe, and they are going to fail miserably.
Rachael Maskell (York Central) (Lab/Co-op)
It is a pleasure to follow the hon. Member for Sleaford and North Hykeham (Dr Johnson). We sat together on the Health and Social Care Committee and heard the evidence from Sir Chris Whitty. We know what Professor Sir Michael Marmot has been saying for decades, and the public health evidence is clear.
Our inheritance was 2.1 million pensioners living in poverty; we have to protect them every single day. They make the hardest budgetary decisions—harder than those made in the Treasury, where there are choices. They have no choice. They have to put a roof over their heads, they have to pay for their food, and they have to pay for their heating. We know that those sums are not adding up—we are getting letters coming in— and we look at the figures that our constituents have to look at every single day. They are scared, and they are telling us that. They will not switch the switch, because they know that if they do, they will have bills that they cannot pay. We need to protect those very vulnerable people.
I commend my right hon. Friend the Secretary of State for driving forward the ambition to get 880,000 pensioners signed up to pension credit. I really hope that people will test the system. There are 243 questions on the questionnaire, and then of course there is a nine-week wait for it to be processed, but we must drive that forward. The last Government failed in that endeavour.
We must also protect those that who do not apply. Many may not for a reason; we know that. They may have dementia, and the application is complex and stressful. Perhaps there is pride involved as well. We are talking about men and women who worked hard all their lives—they might have put a little bit aside or they might not—and ultimately we need to help them.
Then there are the million people who are above the threshold. They too need support, because they are fuel-poor and will struggle this winter. As the hon. Member for Sleaford and North Hykeham said, the cold puts greater demands on a person’s body. The body fights back but, sadly, as it does, people are at risk of heart attacks, strokes and worse. Of course, respiratory diseases prey on the most frail and vulnerable. When we look at where those people will go, we see that they will be queuing up at the GP and looking to the NHS. Sadly, many will not be with us.
It is with my conscience that I cannot vote for these measures, but I am determined to work with the Government to find mitigation, which is absolutely crucial. Age UK and many other charities are saying that it is too late to find alternatives; they say delay. I say, let us delay. Let us get this right—we cannot afford not to.
Kirsty Blackman (Aberdeen North) (SNP)
Some 860,000 pensioners in Scotland are set to lose this benefit. The Prime Minister and the Chancellor have chosen to cut the pensioner cost of living payment. They have chosen to cut the winter fuel allowance. They have made the political choice to scrap those payments.
The UK Labour Government are desperate to meet their self-imposed fiscal targets, but make no mistake: this is a political choice. They are trying to meet those targets by balancing the books on the backs of pensioners. Who out there in the real world voted for that?
This is a key test for Anas Sarwar and Labour MPs from Scotland. Anas Sarwar said:
“Read my lips: no austerity under Labour.”
If that is what he believes, the platform he put to the people of Scotland and what Scottish Labour MPs were voted in on, how can they possibly back the Government today? Who is the master of Scottish Labour MPs? Is it the Prime Minister, is it the Labour party, or is it the people who elected them—the people who put them here—who will go cold this winter because of their Government’s decisions?
This is not the change that people voted for. The UK Government are trailing broken promises behind them. They are refusing to scrap the two-child cap. They are refusing to allow pensioners the money to heat their homes this winter. That is not what people in Scotland voted for, and they will be devastated if their Scottish Labour MPs support the Government today.
Neil Duncan-Jordan (Poole) (Lab)
Thank you, Madam Deputy Speaker, for the chance to speak in this important debate. I felt compelled to do so because for nearly 20 years I was an active campaigner in the pensioner movement. I want to make it clear that the financial mess inherited by the Government is a result of 14 years of austerity and financial mismanagement, and I reject any suggestion that public sector workers are benefiting at the expense of pensioners. That is well known to be a crude attempt to divide working people, and we should reject it as such.
In the short time that I have, I want to make the case for universalism as the cornerstone of our welfare state. We know from the latest figures that 880,000 older people are eligible for pension credit but do not claim it. Means-testing is supposed to target help at those who need it most, but those people do not claim it. For decades, successive Governments have talked about needing to improve take-up, but even in the best year the take-up rate was 67%. Of course, some people do not claim it because they are unaware of what they are entitled to, but most are wary about having to answer more than 230 questions about their circumstances, and many charities such as Citizens Advice in my constituency do not have the capacity to help people fill the forms in because of cuts to funding over the years of austerity. We should also recognise that there is still a stigma attached to having to declare that you are struggling, and concepts around the deserving poor are as old as this building. I thought that in the 21st century we would be hoping for something better.
The key question with any means-tested-system is: where do we draw the line? By its very nature, the biggest losers will be those just above the cut-off point. In my constituency, around 19,000 people will miss out. The UK has long-standing problems such as poor housing that is difficult to keep warm, one of the lowest pensions in Europe, rising energy costs, and annual cold-related winter deaths among older people—I could go on, but I am running out of time. I urge the Government to think seriously about delaying this proposal and, in its place, putting forward a pensioner taskforce to look at how we can tackle pensioner poverty in the UK.
Saqib Bhatti (Meriden and Solihull East) (Con)
I stand to speak on behalf of my 18,500 pensioners who will be affected by this measure. Before I do so, I commend the hon. Member for York Central (Rachael Maskell) on a really impassioned speech. I know it is not easy to stand against one’s own party, but today’s decision is a choice between right and wrong. Members are defending the choice by the Government and the Chancellor to make this decision on the backs of pensioners, who have the sheer brass neck to go out and defend it, alleging a black hole when they have paid billions to unions without any savings in return. There is GB Energy—a shell company for £8 billion—and climate promises of more than £11 billion, and then they say that there is no money and they are going to get £1.1 billion on the back of pensioners.
Helena Dollimore (Hastings and Rye) (Lab/Co-op)
Will the hon. Member give way?
Saqib Bhatti
I will not, because I am sure the hon. Lady can participate later. The Government might be fooling themselves, but they are not fooling the British public or my pensioners. If they want to do the right thing, they should follow the example of the hon. Member for York Central. If there are issues, I am sure that even the Opposition will look into them in depth and we will do the right thing, but the Government are using our pensioners as some sort of political tool to make an ideological point. The Chancellor stood up and found this alleged black hole to try to justify that. It is a horrible situation—
Saqib Bhatti
I will not give way, as I will make some progress in the limited time I have. Many Opposition Members are absolutely enraged that this is happening. The Labour party talked about transparency, yet there has been no full impact assessment of the measure. Where is it? If the Government have nothing to be afraid of, where is the impact assessment? Why did they not wait until the Budget—the big fiscal moment?
Saqib Bhatti
I have already said that I will not give way. There could have been adequate scrutiny so that the House could analyse it and see the impact. Some 4,000 people are at risk of death—that is not my number; that is what the Labour party said in 2017. That is what Labour Members are voting for if they allow this measure to pass. They must do the right thing, and not use our pensioners as a political weapon for their own ideology. This is a horrible situation to put them in. The anxiety that Members are causing is outrageous. The Government really must step up their game if they are to convince the British public that this is the right thing to do.
John McDonnell (Hayes and Harlington) (Ind)
When an issue such as this has been so heavily whipped, it is very difficult. I have not the eloquence to persuade people to vote another way, to be honest. I just want to make this as a personal statement, so that my constituents know why I am voting the way that I will today.
I agree with the Government on so many points on this issue. First, this is the most toxic inheritance that any Government have ever had. I did a report last September that said that between 2010 and now we have lost £80 billion, not £20 billion. On the £20 billion black hole, we sat here and listened to a Government making commitments that they knew they would never have to fulfil, because they knew they were going out of power. I agree with the Prime Minister and the Chancellor of the Exchequer that we must ensure financial stability and that our income matches our expenditure. I agree with the Prime Minister on the principle, and always have, that any burden should be placed on those with the broadest shoulders. This is where I disagree: the heaviest burden is not being placed on those with the broadest shoulders but on some of the poorest.
Large numbers of my constituents do not claim pension credit, and I will be out there like everyone else trying to persuade them to apply, but a lot of my voluntary organisations have been savaged by a Tory council. We do not even have the advice mechanisms left. I think that, at best, we can get to 70% or maybe 75%, but one in four will not be able to claim that benefit. I have large numbers of people who, for example, worked at the airport and got a little pension at the end, and they will be tipped into not qualifying. They are living in accommodation that those on the Opposition Benches provided, which is squalor, to be frank—they are living in not insulated, freezing accommodation. They are the ones at risk, as the hon. Member for Sleaford and North Hykeham (Dr Johnson) said, of going to hospital and not even surviving.
We are in an unnecessary position, because there is so much else we could do. We do not need to put the burden on the poorest. We need to make sure that those who can afford it pay. That means redistributive tax measures, equalising capital gains tax, tackling the corporate tax relief issues that we must confront, and making sure that the City pays its way in financial transactions. We do not have to be here. I hope that people learn the lesson as we move towards this Budget not to put us on this position again, where we take a decision based on, I believe, misjudgment. It certainly flies against everything I believe in as a Labour MP about tackling inequality and poverty in our society. I was not elected to impoverish my constituents and put them in this hardship. I regret voting for a motion put forward by these characters in the Opposition, but I will have to because there is no other mechanism. I want to look at my people back in Hayes in the face and say that I did the right thing.
The Secretary of State for Work and Pensions (Liz Kendall)
This has been a really important debate about a serious issue, with many heartfelt contributions. My hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier), the new Chair of the Treasury Committee, forensically set out the delayed and deferred decisions by the former Government that have put such pressure on the public finances. My hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) rightly spoke about pensioners, children and disabled people in poverty, and the need to do much more to support them. The hon. Member for North East Fife (Wendy Chamberlain) talked about the crucial issue of pension credit uptake and what we will do differently. I will say more about that later, but I reassure her that the Treasury is fully behind the action that we are taking.
My hon. Friend the Member for Shipley (Anna Dixon), who has huge experience in health and social care, talked about the need to work with those in supported accommodation, housing associations and the NHS to ensure that pensioners get the help that they are entitled to. I will spell out some of that action. My hon. Friend the Member for Rossendale and Darwen (Andy MacNae) made a strong case for targeting help to the poorest pensioners and the need to tackle the root causes of poverty, including insulating homes and bringing down energy costs. My hon. Friend the Member for Poole (Neil Duncan-Jordan) mentioned, among many things, the very long and complicated pension credit form, which I have asked the Department to reduce to make it as simple as possible.
I would like to start by setting out why we have taken the difficult decision to means-test winter fuel payments so that they are no longer available to all pensioners whatever their income, but are focused on those in the greatest need. Put simply, it is because we must fix the foundations of our economy as the first step to rebuilding Britain and making the changes that our country desperately needs, and because when money is tight, our priority must be to target resources at those who need them the most.
Opposition Members do not want to be reminded of their record and the state they left the country in, but their economic failure and reckless decisions left a £22 billion hole in the public finances this year, with a £6.4 billion overspend on the asylum system, a £2.9 billion overspend on the transport budget, and new roads, hospitals and train stations announced but not budgeted for. There was one unfunded commitment after another, and the reserves were spent three times over—spending like there is no tomorrow, with no thought for the consequences today. That is before we even begin to deal with the challenges we already knew about: NHS waiting lists at 7.6 million, more than 1 million waiting for a council home, a totally broken prison system and more than 4 million children growing up poor. Opposition Members want to deny that is the case, but the Office for Budget Responsibility is crystal clear: it was made aware of the true extent of the pressures on the public finances only after we were elected—pressures it says constitute one of the largest overspends outside the pandemic. Faced with that reality and the need to get the public finances on track this year, we took the difficult decision to focus winter fuel payments on those in greatest need.
Lucy Rigby (Northampton North) (Lab)
I am grateful to the Secretary of State for giving way. Pension credit uptake is clearly critically important. From discussions I have had in my constituency, I know there are some myths around pension credit eligibility. Will the Secretary of State please confirm the efforts she is making on pension credit uptake, and does she agree with me that it is vital we ensure everyone who is eligible for pension credit receives it?
Liz Kendall
My hon. Friend is absolutely right. I would make that point in response to the faux outrage of Conservative Members, who left 880,000 pensioners, the very poorest, not getting the pension credit they are entitled to. I urge all hon. Members to work with us that their local councils to ensure pensioners get the money to which they are entitled.
As my right hon. Friends the Chancellor and the Prime Minister have said, this is not a decision we wanted or expected to make, but when we promised we would be responsible with taxpayers’ money we meant it, because we know what happens when Conservative Members play fast and loose with the public finances: working people and pensioners on fixed incomes pay the price with soaring interest rates, mortgages and inflation.
Dame Harriett Baldwin
I thank the Secretary of State. Will she confirm from the Dispatch Box that if every pensioner who is eligible for pension credit takes it up, the cost to the Exchequer will actually be substantially more than the savings from axing the winter fuel payment?
Liz Kendall
Is that the reason why Conservative Members never took the action needed to increase pension credit uptake? We take a different approach. All the savings the Chancellor has announced take into account the increased uptake that we want and intend to achieve. When money is so tight, it cannot be right that all pensioners, including some of the wealthiest pensioners, receive a payment worth £200 to £300 a year regardless of their income.
Gavin Robinson (Belfast East) (DUP)
I thank the right hon. Lady for giving way and allowing me the opportunity, at this late stage of the debate, to speak on behalf of the people of Northern Ireland.
Not in our name, Secretary of State. This is a political choice, irrespective of the debate back and forth between the Labour Government and the Conservative Opposition. It is not for us, it is not right and this measure is a measure of shame.
Liz Kendall
I know the right hon. Gentleman will care about the increase in uptake in pension credit that we need, and that he will also care about those just above the threshold, which I will turn to later on. That is a really important issue and I will address it head on, but first I want to spell out the principle underlying the approach we have taken, which is the most help going to those who need it most and significant support for all pensioners through the pension triple lock, backed by extra help available for those on low incomes.
Pension credit goes to 1.4 million of the poorest pensioners and is worth on average £3,900 a year.
Liz Kendall
I will not.
But the truth we had to confront coming into office was that up to 880,000 of the very poorest pensioners are not even claiming the pension credit that they are entitled to. That is a national scandal, and we are determined to make that change. The previous Government did nothing to tackle this issue properly. Indeed, in 2012 they promised to merge housing benefit and pension credit, which we know would significantly increase uptake, yet when I arrived in the Department I learned it would not happen until 2028—a decision that was taken on their watch. That is completely unacceptable and, unlike the Conservatives, we will change it.
Mike Amesbury
I thank the Secretary of State for giving way and welcome the increased measures to target the 880,000 who, because of the actions of Conservative Members when they were in government for 14 years, have not received pensioner credit. There are people who have legitimate concerns about the low level of the threshold—hard-working people who have tiny pension pots. What mitigating measures will the Secretary of State put in place?
Liz Kendall
I will come on to extra help for those just above the threshold in a moment, but I want to spell out what we are doing on pension credit.
We have done more to increase pension credit uptake in the last two months than Conservative Members did in 14 years. We have written to all local authorities to ask them to identify eligible pensioners, including by sharing data. We are joining forces with Age UK and Citizens Advice to ensure pensioners check and apply. We launched a major awareness campaign, to continue right up to the deadline to apply on 21 December—and yes, pension credit will be backdated by three months—backed by 450 extra staff to ensure claims are processed as quickly as possible.
The Deputy Prime Minister, my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner), is working with housing associations and supported accommodation providers so that their residents know what they are entitled to. I am working with the Secretary of State for Health and Social Care, my right hon. Friend the Member for Ilford North (Wes Streeting), to ensure that frontline NHS staff can signpost older patients who may be housebound because of disabilities and chronic conditions. For the very first time, we are writing to all pensioners on housing benefit who are potentially eligible to encourage them to claim, something the Conservatives never did. In the longer term, because the only way to guarantee uptake is to make the whole process more automated, we will bring forward the merger of housing benefit and pension credit, which Conservative Members never did.
That is the extra help for the poorest that we are determined to deliver, but it is built on a bedrock of support for all pensioners through our commitment to the pension triple lock, which has seen the new state pension increase by £900 this year and £970 the year before. Our continued commitment to the triple lock means that the new state pension is forecast to increase by a further £1,700 over the course of this Parliament, including, if today’s Office for National Statistics figures are confirmed next month, an extra £460 from next April.
Paul Waugh (Rochdale) (Lab/Co-op)
When Gordon Brown introduced pension credit and lifted 1 million pensioners out of poverty, in the teeth of the opposition of the Conservative party—let us remind them Conservative Members opposed pension credit—he also introduced savings credit. Savings credit was specifically targeted at pensioners who saved for old age with a small savings pot and a second pension. What happened in 2016? The Conservative party scrapped it. Does my right hon. Friend not agree with me that we should not listen to the crocodile tears of those in the Conservative party?
Liz Kendall
I could not have put it better myself: there is faux outrage from Conservative Members about those just above the pension credit threshold, when it was their former Tory Chancellor, George Osborne, who took a red pen to it, meaning its value decreased, creating some of the problems we are now having to deal with.
There is much more we are doing to help low-income pensioners, including those just above pension credit: the £150 warm home discount; the household support fund, which we have just extended, with £500 million of additional funding that councils can use to help low-income pensioners; our warm homes plan to tackle the root causes of fuel poverty; and the fact that, because the only way to really control energy bills is through cheap home-grown energy, we have already legislated for Great British Energy. That is the difference a Labour Government make: fixing the foundations, taking the long-term decisions our country needs, prioritising help for those who need it most, helping all pensioners with the pension triple lock, and providing more help for low-income pensioners too.
We will not shy away from our responsibilities, as Members now on the Opposition Benches did. We were elected on a platform to deliver economic stability, rebuild the country and make the changes that our country needs; making it better and giving it its future back. Pensioners deserve better than the faux outrage of Opposition Members.
Question put.
Business of the House (Today)
(3 months, 1 week ago)
Commons ChamberRead Full debate Read Hansard Text
Opposition Day
(3 months, 1 week ago)
Commons ChamberRead Full debate Read Hansard Text
Winter Fuel Payment
(3 months, 1 week ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
18:15 - The House divided: - Ayes: 214 / Noes: 335 - Question accordingly negatived.
Mel Stride (Central Devon) (Con)
I beg to move,
That this House regrets that the Government approved the use of the urgency exemption in section 173 of the Social Security Administration Act 1992 to make and lay the Social Fund Winter Fuel Payment Regulations 2024 before the Secretary of State had referred the Regulations to the Social Security Advisory Committee; further regrets that the Government decided it was not necessary to publish an impact assessment for the Regulations, despite, for example, the evidence which shows that living in a cold home increases the risk of serious illness for vulnerable people and those with disabilities and so restricting eligibility for the Winter Fuel Payment is likely to lead to increased burdens on the National Health Service; regrets that the Government made time to debate the prayer motion from the Official Opposition without the Social Security Advisory Committee’s Report, and Government response; and calls on the Government to lay those papers before Parliament without delay, and to publish a full regulatory and equality impact assessment for these Regulations.
The decision to remove winter fuel payments has come as a complete shock to millions of pensioners—pensioners on as little as £11,500 a year. We have had no adequate explanation as to why this measure is so urgent. We have had no explanation as to why the Government had to invoke the special emergency provisions that allow them to bypass the scrutiny of the Social Security Advisory Committee. We have had no explanation as to why no impact assessments were provided. This is a major policy change that will remove the entitlement for up to 10 million pensioners, including many who are already in poverty. It is a cut worth £7.5 billion over the course of this Parliament. Rushing such a policy through—without taking time to consider the impacts, ensure effective and fair implementation, and allow possible scrutiny—is impossible to justify. This is not the way to make good policy, and this is not good government.
It is worth considering the conclusions of one of the few bodies that have been afforded the opportunity to scrutinise these regulations. The Secondary Legislation Scrutiny Committee in the Lords has been damning in its criticism of the Government’s approach, and I refer the House to my remarks in the previous debate, when I quoted the Committee at some length. As the Committee points out, such measures would normally be subject to the SSAC’s consideration. That is an important part of the process for any legislation of this nature, as I know well from my time as Work and Pensions Secretary. Conveniently, Ministers have claimed that the measure is too urgent to wait for the SSAC’s scrutiny.
We understand that the SSAC is due to consider the measure tomorrow. Can the Minister commit to the House today that the SSAC’s report, and the Government statement responding to any recommendations, will be laid before Parliament before the regulations come into force next week? As the Lords Committee has pointed out, it would seem wholly inappropriate for the SSAC’s views to be taken into account only once the regulations are already in force. In the words of the Committee,
“It remains unclear what the practical impact of any statement might be on regulations which will have already come into effect.”
If the Government do not intend to provide us with the SSAC’s observations before the House rises on Thursday, why were Members asked to consider and vote on the prayer motion against the regulations today, before the SSAC has met?
The lack of any impact assessment means that we are severely hampered in our ability to scrutinise this measure. We were told in the explanatory memorandum that:
“A full Impact Assessment has not been prepared for this instrument because there is no significant new impact on business, charities or voluntary bodies.”
This seems a bold claim to make about a measure that removes hundreds of pounds of support from some of the most vulnerable elderly households in our country.
The guidance from the National Institute for Health and Care Excellence is clear:
“For a vulnerable person, living in a cold home increases their chance of serious illness or death.”
It also notes that
“being housebound increases both the exposure to an underheated home and the cost of heating it.”
So can I ask the Minister on what basis it was concluded that there would be no significant impact from this policy on those charities and organisations that support elderly people or on the wider health and social care system? Will he now commit to the publication of a proper impact assessment?
The only basis for the urgency seems to be a claim that this measure is vital for public finances. We have even been subjected to the Leader of the House claiming that it was needed to avoid a run on the pound. I might ask the Minister to comment on that when he appears at the Dispatch Box. The only real relevance of a measure of this kind to the public finances is its impact on the Government’s fiscal rules. Those fiscal rules are based on levels of debt and borrowing at the end of the Office for Budget Responsibility’s fiscal forecast period in five years’ time. The rules that the Chancellor has claimed she will sign up to were already being met when the Government came into office, according to the OBR’s own forecasts.
The Government could have opted to bring this measure in next year, with greater time for scrutiny, better notice for pensioners, more time to drive up pension credit uptakes and perhaps time to consider whether there were much better ways of going about it. It would still have been a broken promise, and we on this side of the House would still have opposed it, but it would have been a much better way to make policy and it would still have delivered exactly the same savings at the end of the forecast period.
Ministers will claim that they needed to make immediate in-year savings, but that is based entirely on a black hole that they have confected themselves. The real reason this is being rushed is pure politics. The Government want to rush this measure through while they can try to blame it on their predecessors in order to avoid proper scrutiny. There is no need whatsoever for the haste with which this is being done.
Graham Stuart (Beverley and Holderness) (Con)
Does my right hon. Friend, like me, find it inexplicable that the Government should fail to go through the proper process when their own research suggested that thousands of people could die as a result of precisely this measure? That is something that the whole House should find deeply uncomfortable.
Mel Stride
My right hon. Friend makes a powerful point. This is a very serious step that the Government are taking. Of all the steps that should be properly scrutinised, surely this is one of them. I remember when I was sitting on the other side of the Chamber, I could barely breathe without the cry going out that an impact assessment should be held. It is extraordinary that on such an important measure as this, affecting millions of the most vulnerable, the Labour party should be utterly silent on this issue.
Dr Andrew Murrison (South West Wiltshire) (Con)
Old people die in cold homes, and they die particularly if they are very old. Does my right hon. Friend think that if the Government are not minded to change their mind entirely, they might look at those aged over 80? Those people are in receipt of the higher rate of winter fuel payment, and paragraph 3 of the regulations points out that there is a difference between those over 80 and those under 80. That might be one way that the Government could make this slightly less worse than it otherwise is.
Mel Stride
I thank my right hon. Friend for his intervention. It has been suggested that the Government are examining ways of ameliorating some of the harshest effects of this policy, and that might be one of the things they consider. On that particular point, we cannot escape the fact that, whatever age people are, over two thirds of those who are currently pensioners below the poverty line will lose their winter fuel payments under the current arrangements.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
I have the honour to represent the most remote, the most sparsely populated and the coldest constituency. The Secretary of State, in responding to my hon. Friend the Member for North East Fife (Wendy Chamberlain), said earlier that the Government would try to maximise the take-up of pension credit, and I accept that, but would they accept that sheer remoteness and sheer distance can militate against people taking up this offer? I ask the Government, via the right hon. Gentleman, to please look at this issue, because it means an awful lot to my constituents.
Mel Stride
I am sure that those on the Government Front Bench will have heard the hon. Gentleman’s intervention.
The reality is that the Government want to rush this through so that they can blame it on their predecessor and avoid proper scrutiny. There is no need whatsoever for the haste with which this is being done, other than to meet the political ends of the Labour party. They are ripping the plaster off and hoping that the country will have forgotten by the time of the next general election. That is at the heart of it, but we will not forget. We would not have been given the opportunity to debate and vote on this measure without significant pressure from the Opposition and the wider public. This is nothing to do with fiscal responsibility and everything to do with political expediency—no scrutiny, no impact assessment, no notice. This is an appalling way to govern.
The Exchequer Secretary to the Treasury (James Murray)
This is a serious topic and we know from the debate earlier this afternoon that it is one on which Members across this House and people across this country have strong feelings. We understand that. This is a difficult decision to have to take. By means-testing winter fuel payments, we know that we will be ending future payments to most pensioners while maintaining our steadfast commitment to protecting those in greatest need. But although they do not like to be reminded of it, Conservative Members know exactly why we need to take this step. Because it was Conservative Members—and, indeed, former Members of this House who have now been voted out by the British public—who did such damage to our country’s economy and the public finances. The legacy of the last—
Dame Harriett Baldwin (West Worcestershire) (Con)
On a point of order, Madam Deputy Speaker. This is the second Government Minister we have heard from the Dispatch Box today, yet only moments ago we saw the Chancellor sitting on the Front Bench. It was the Chancellor who chose to spend billions on setting up Great British Energy. It was the Chancellor who chose to spend billions giving pay rises to their union paymasters. It was the Chancellor—
Madam Deputy Speaker (Caroline Nokes)
Order. I thank the hon. Lady, but she will be aware that that is not a point of order; it is more of a speech that she is seeking to make. Perhaps she will find an opportunity to contribute in the debate.
James Murray
Thank you, Madam Deputy Speaker. The hon. Member who just intervened, and indeed everyone on that side of the House, might like to reflect on what the legacy of the last Government truly was. It was one of irresponsible overspending, of uncosted commitment after uncosted commitment, and of Ministers running away from taking difficult decisions. As a direct consequence, when we came to power we were faced with a £22 billion black hole in the public finances for this year alone.
Paul Holmes (Hamble Valley) (Con)
I am genuinely grateful to the Minister for giving way. He is a Minister at the Treasury, so I am hoping he will be able to outline some of the facts and answer my question. He will outline today that the saving made by cutting the winter fuel payment is £1.1 billion. If everybody accepted the means-testing that he is proposing, it would cost £3.3 billion, so can he outline to the House, despite the bluster that he has just made about saving money for the great British people, how it will save money when it will cost more under his proposals?
James Murray
I thank the hon. Gentleman for his intervention. The announced savings include an assumption of an increased take-up of pension credit, which is in line with the highest levels ever achieved. Frankly, if more people are taking up pension credit when they are eligible for it, we should welcome it because it means that support is being targeted at those in greatest need.
Several hon. Members rose—
James Murray
I am going to make some progress.
The Opposition did not like to be reminded of their legacy when they were in government, but let us have a look, shall we? What do they have to show for their years of reckless overspending? A failed asylum system, prisons at breaking point, more than 1 million people waiting for council homes, 4 million children growing up in poverty, and more than 7.5 million people on NHS waiting lists. This Government and every Member of this House who stood on my party’s manifesto were elected to turn things around.
Kit Malthouse (North West Hampshire) (Con)
Yesterday, in the other place, the Transport Minister cast doubt on the continuation of travel concessions for pensioners, which has caused significant alarm in my constituency and others. Notwithstanding the discussion we are having today, could the Minister reassure us that travel concessions for pensioners will continue under a Labour Government?
James Murray
I thank the right hon. Gentleman for his intervention. The Chancellor will take all decisions in the Budget on 30 October—[Interruption.] Let me make one important point to him as we approach the Budget on 30 October: we know there are going to be difficult decisions that we have to take in the Budget and, frankly, that is a direct consequence of the decisions taken by him and his colleagues when they were in government.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
As he is a Treasury Minister, I wonder whether he could help me with this question. How many of the pensioners who will lose the winter fuel allowance today receive less than the average train driver the Government have just given a pay rise to?
James Murray
I understand the political point that the hon. Lady is trying to make. But let me be clear. If she is talking about pensioners, the foundation of state support for pensioners is the state pension, which is why the Government have committed to maintaining the triple lock for the duration of this Parliament.
Several hon. Members rose—
James Murray
I am going to make some progress.
The triple lock means that pensioners are receiving £900 more this year. Figures released this morning indicate that they may get well over £400 more next year. Over the course of this Parliament, they will get £1,700 more under the state pension. That is the foundation of state support for pensioners.
Several hon. Members rose—
James Murray
I am going to make some progress.
We have seen clearly how Conservative Members do not like to be reminded of their legacy in government, of the mess in which they left the economy, our public services and the rest of our country after their 14 years in office. This Government and every Labour Member were elected to turn things around.
Several hon. Members rose—
James Murray
I am going to make some progress.
We are under no illusions. We know it will be a slow and difficult process when the damage goes so deep, but we are determined to fix the foundations of our country so that, on the bedrock of financial stability and fiscal responsibility, we can get our economy growing after 14 years under the Conservatives.
Dave Doogan (Angus and Perthshire Glens) (SNP)
I thank the Minister for giving way on the point about fiscal responsibility. I am not sure of the morality of trying to balance this country’s fiscal books on the backs of pensioners. He referenced the manifesto on which the Labour party stood at the election. “No austerity under Labour” was said in Scotland, so what should the 37 Scottish Labour MPs do in this vote? Should they bow down to the Chancellor, or should they stand up for their Scottish constituents?
James Murray
Every Labour Member was elected on a promise to restore economic stability and fiscal responsibility to our country, and it is on that basis that we will get the economy growing to make people across the country better off and to put our public services on a sustainable footing. I remind the hon. Gentleman that winter heating assistance is a devolved matter in Scotland. The Scottish Government intend to legislate to introduce a means-tested payment this winter which is equivalent to the winter fuel payment in England and Wales.
Several hon. Members rose—
James Murray
I have taken several interventions, so I will make some progress.
The point of this debate is to focus on why we have to take difficult economic decisions, even if they risk us being unpopular. We know that the universal application of winter fuel payments was already recognised as unfair. In the face of our dire economic inheritance, it is simply unsustainable.
We should be clear that, when the winter fuel payment was introduced in 1997, a higher percentage of pensioners than people of working age were in poverty. That is no longer the case. Put simply, there are now pensioners receiving winter fuel payments who do not need them and that is a reality we cannot afford.
Let me put it in financial terms. Over a quarter of pensioners have wealth of more than £1 million, half have wealth of over £500,000 and a fifth of pensioner households have gross incomes equivalent to £41,600 a year. That is why it is right to means-test winter fuel payment.
Dame Caroline Dinenage (Gosport) (Con)
Pensioners in my constituency will be saddened by the way the Minister is caricaturing pensioners as wealthy and not in need of this winter fuel support. Age UK has said that, in the Gosport constituency alone, 15,000 pensioners stand to lose their winter fuel payment. These are not wealthy people; they are people who, in many cases, are just outside the pension credit limit and are hanging on by their fingertips. Does he agree that caricaturing them as wealthy and not in need is unbelievably insulting?
James Murray
I think the hon. Lady unintentionally misunderstood my point. I will put the question back to her. Does she feel that pensioners who have wealth of over £1 million or who earn more than £41,600 a year should get the winter fuel payment in the context of the financial circumstances? The argument we are making is that, given the dire economic situation we face and given our dire inheritance, we should means-test the winter fuel payment.
Several hon. Members rose—
James Murray
I will make some progress, because it is important to explain why we are choosing to means-test the winter fuel payment. Means testing will allow us to make sure that those in the greatest need still receive the help they need. We will make sure that all pensioners continue to benefit from the triple lock, and we will start to deal with the shocking state of the public finances that we have inherited.
Several hon. Members rose—
James Murray
I am going to make some progress, as I have taken many interventions already.
Under our approach, those eligible for pension credit will continue to receive winter fuel payments. We want to target winter fuel payments to those on the lowest incomes, which is why we are linking the payment to eligibility for pension credit and other qualifying income-related benefits and tax credits. That is the right approach to help those on the lowest incomes. We are determined to make it as effective as possible by making sure that people who are eligible for pension credit make a claim.
Jamie Stone
The point I made to the shadow Secretary of State, the right hon. Member for Central Devon (Mel Stride), is a fair one. Distance and remoteness militate against take-up. People living in very remote hamlets in the highlands do not necessarily perceive the Department that they should. Can I have an undertaking from the Minister that the Government will look at this issue?
James Murray
I thank the hon. Gentleman for his comment, and I know that my colleagues are aware of this issue. In fact, it is one reason why the automatic payment of pension credit and other benefits is so important. For instance, the merging of housing benefit and pension credit would help to overcome some of the problems. It would help some of the people in the situation he describes. That merger of housing benefit and pension credit was first mooted in 2012, and was delayed several times by the previous Government—I think they intended to leave it until 2028. My right hon. Friend the Secretary of State for Work and Pensions is looking at that as a matter of great priority, to ensure that people get the help that they deserve.
Several hon. Members rose—
James Murray
I am going to make some progress.
The important point to focus on in this debate is making sure that everyone eligible for pension credit takes up that offer, not only so they receive the benefit of pension credit, but so that we can better target the winter fuel payments, given the financial inheritance that we have. We estimate that 880,000 pensioners are missing out on pension credit to which they are entitled, and frankly the Conservatives failed to act on that for years. That is why it is so important that we are now conducting a campaign to make sure that as many people as possible make a claim.
Our approach is already showing signs of success. The Government have received around 38,500 pension credit claims in the five weeks since the announcement on 29 July. That is more than double the number in the previous five weeks, and we will continue to do all we can to encourage pensioners who are eligible to apply for pension credit. We have used a wide range of media to reach pensioners and key stakeholders, and have been working with voluntary organisations such as Age UK and Citizens Advice, local authorities and the devolved Governments to raise awareness through their networks and channels. The Secretary of State for Work and Pensions is taking the further unprecedented step of writing to 120,000 pensioner households who are in receipt of housing benefit but who are not yet claiming the pension credit that they are likely to be entitled to.
Our national pension credit campaign will run right through until the application deadline on 21 December.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
On 11 February 2021, the temperature in Braemar in my constituency sank to minus 23°. Some 17,000 pensioners there will lose their winter fuel allowance through a decision taken by this Labour Government. Can the Minister explain to those pensioners in one of the coldest constituencies in the country why they have to surrender that important support at the same time as the Government have found £11 billion to give pay rises to their union paymasters?
James Murray
I would be interested to understand why the hon. Gentleman is backing a candidate to lead his party who supports the means-testing of the winter fuel payment. He might want to have a conversation with that candidate before he starts criticising our approach of targeting support at those in greatest need. The critical point is that the combination of the state pension rising under the triple lock with those in greatest need getting winter fuel payments alongside pension credit, not to mention the extension of the household support fund, means that the right measures are in place to give all pensioners the support they need.
Opposition Members want to know why the legislation is being progressed urgently. I will be really clear: it is urgent because we need to deal urgently with the £22 billion black hole—the huge in-year spending pressure—that we inherited from the Government that they ran. It is crucial that we act quickly to restore responsibility to our public finances and stability to our economy. On top of that, it was important that we made sure that regulations were in place at the start of the qualifying week for winter fuel payments, while wasting no time in doing all we can to raise pension credit take-up.
Graham Stuart (Beverley and Holderness) (Con)
We have heard that the Transport Minister yesterday could give no assurance to pensioners about their transport concessions. Last week, I asked the Deputy Prime Minister about the single person council tax discount. There is a very real prospect that pensioners could lose even more than £300—another £300 or £400. Will the Exchequer Secretary take this opportunity to reassure pensioners that there is no way that the Government will remove the single person discount from the council tax? It would be politically good for him and the Labour party, and it would be enormously important for people who need to hear some reassurance at this time.
James Murray
The right hon. Gentleman will not be surprised to hear me say that the Chancellor will take all decisions in the Budget. However, he might like to reflect on the record of his party in office on encouraging take-up of pension credit. We have been painfully aware since taking office how little the Conservatives did to increase take-up of pension credit during their 14 years in office. That is why it is so urgent for us to make progress in getting those eligible to sign up for pension credit. By doing so, they will get pension credit, which they may have been missing out on for years under the Conservatives, and they will continue to receive the winter fuel payment.
Pensioners may well be angry at the Conservatives for how little they did to get people to sign up for pension credit while they were in office. Pensioners may well be angry at the Conservatives for leaving the country with a legacy of a £22 billion black hole in the public finances.
We on the Government Benches are committed to protecting the triple lock. That will mean that pensioners on the full new state pension, who have received an extra £900 this year, will, pending the uprating review by the Secretary of State for Work and Pensions this autumn, receive a boost that could be worth well more than £400, so by the end of this Parliament they could be receiving around £1,700 more than they do today.
Conservative Members are keen to play politics with the tough decisions that this Government are taking. They are desperate to take attention away from the fact that, as people across this country know, it is the Conservatives who are to blame for the economic mess we have gained. They created a mess and now they want to criticise us for cleaning it up. If they had governed more responsibly, they might not have been sitting on the Opposition Benches, in opposition to a Government who are fixing the foundations they left to rot.
Andrew Pakes (Peterborough) (Lab)
Does the Minister agree that the only shameful thing in this debate is the legacy that the Government were left? It forced the new Government—[Interruption.] The reality that 800,000 pensioners are not receiving pension credit is a shameful legacy. If Conservative Members wanted to show humility and learn from their party’s record in government, they would acknowledge that they are the ones who crashed the economy, left the NHS in a way that pensioners cannot get to see a doctor, and broke NHS dentistry. Does the Minister agree that it is our job to fix the economy so that we can keep on helping pensioners?
James Murray
My hon. Friend is absolutely right. Frankly, it is time for Conservative Members to recognise and accept what they have done to this country, and to show some contrition and accept responsibility. However, no matter what the Conservatives choose to do, we are getting on with the tough decisions that are necessary in government. By changing the winter fuel payment and making it means-tested, we are beginning to take the necessary steps to address the black hole they created, while protecting the most vulnerable in society.
The Prime Minister has said that we must be prepared to be unpopular if we are to govern responsibly, which means facing up to tough challenges and tackling them head-on. The motion laid by the Opposition sets out several “regrets”, but they have never once shown regret for all the reckless decisions they took and the damage they did to our public services, public finances and economy. Our task now in government is to fix the mess they made and to give our country the chance of the better future we deserve.
Madam Deputy Speaker (Caroline Nokes)
I call the spokesperson for the Liberal Democrat party.
Sarah Olney (Richmond Park) (LD)
It is a pleasure to see you in the Chair, Madam Deputy Speaker.
Liberal Democrats welcome the opportunity for this debate. We will continue to call on the Government to change course on their planned cut to winter fuel payments. We know the Government have inherited a mess, and we know that at the core of that mess is a legacy of reckless economic mismanagement by the previous Conservative Government.
However, that cannot be allowed to serve as a cover for measures that cause suffering for the most vulnerable in our society. Earlier this afternoon, Liberal Democrats supported the prayer motion to annul the social fund winter fuel payment regulation. Stripping support from many of the poorest pensioners, just when energy bills are set to rise again this winter, is the wrong thing to do, and we have tabled our own early-day motion to reject these plans. It should be noted that the Secondary Legislation Scrutiny Committee in the other place has said that it is
“unconvinced by the reasons given for the urgency attached to laying these Regulations and particularly concerned that this precludes appropriate scrutiny”.
We are supportive of this motion and particularly of the point that there should have been greater scrutiny of the Government’s decision to cut winter fuel payments.
It is well established that there are strong links between living in a cold home and an increase in the risk of serious illness for vulnerable people and those with disabilities.
Sorcha Eastwood (Lagan Valley) (Alliance)
I am extremely disappointed by the lack of creativity in this Government. I agree entirely with the hon. Lady that there is a legacy of unfunded promises, but it is not for my constituents in Lagan Valley to bear the burden. Does she agree that they do not have broad shoulders?
Sarah Olney
I thank the hon. Member for her intervention and for stating so passionately the case that we on the Liberal Democrat Benches are making in this debate. The Government should have done far more to understand the likely consequences of restricting eligibility for the winter fuel payment, and how that would translate into increased burdens on the national health service.
I and my Liberal Democrat colleagues have listened to our constituents and heard from countless pensioners who are worried about how they will afford their energy bills this winter. Since these cuts have been announced, I have been inundated with local people expressing their disappointment at this decision. That is why the Liberal Democrats have tabled early-day motion 121, calling on the Government to withdraw these plans, and it is why we voted in favour of the prayer motion earlier today. We believe that it is simply wrong to remove winter fuel payments from millions of struggling pensioners.
Dr Kieran Mullan (Bexhill and Battle) (Con)
I recognise the comments that the hon. Member has made about the economic inheritance, but does she not agree that, compared with the situation that we managed in coalition with the Liberal Democrats in 2010, the Labour Government are in a better position? They have unemployment lower than we inherited, employment higher than we inherited, the deficit lower than we inherited, and economic growth faster than we inherited. We, in partnership with the Liberal Democrats, managed to keep winter fuel payments in those circumstances. Does she not agree that Labour should do the same?
Sarah Olney
I thank the hon. Member for his intervention, but it is important to reflect on the disastrous legacy of the mini-Budget and the circumstances that many people continue to struggle with thanks to higher interest rates on their mortgage payments. Certainly, from the perspective of my constituents, that casts a much longer shadow, which the winter fuel payment cuts will do nothing to ameliorate.
Last week, I asked the Chancellor if she would give her full support to measures to boost the uptake of pension credit. I welcomed her commitment to work with the Secretary of State for Work and Pensions to maximise the take-up of pension credit by bringing forward the administration of housing benefit and pension credit—
Bobby Dean (Carshalton and Wallington) (LD)
We have spoken a lot about the take-up of pension credit in this debate already, but it is important to say that 800,000 pensioners—I think that is what the Minister said—are still not taking it up. Those people will, by definition, be harder to reach and the most vulnerable. I do not understand how the Government can, in good conscience, take away this guaranteed benefit at a time where there is no certainty whatsoever about their being able to get the other people signed up to pension credit in time.
Sarah Olney
I welcome my hon. Friend’s intervention. He makes an important point, although I would say that I welcomed the Chancellor’s commitment last week to work with older people’s charities and local authorities to raise awareness of pension credit. None the less, he is exactly right that many people will have this benefit taken away without knowing that there is pension credit for which they are eligible and should claim.
As the Lords Secondary Legislation Scrutiny Committee has highlighted, the DWP has assumed that the uptake of pension credit will increase by just five percentage points, and that will still exclude around 700,000 pensioners. Have the Government made a proper assessment of what the impact will be if uptake of pension credits increases by more than that amount? I continue to call for assurance that the Government will ensure that all those eligible for pension credit claim both the benefit itself and the winter fuel payment.
We will be voting against the scrapping of this stream of support for pensioners. Although we recognise that the Government face difficult choices given the appalling mess left by the Conservative party, the Liberal Democrats will continue to advocate for the necessity of winter fuel payments. The mismanagement of our economy by the outgoing Conservative Government has left formidable challenges and we understand that undoing that damage will not be easy.
Seamus Logan (Aberdeenshire North and Moray East) (SNP)
Whatever fiscal pressures are being addressed here today, we have heard about the additional deaths that could possibly result from this measure. Does the hon. Member share my disgust at some Members celebrating the result of the previous vote as if it were a football match?
Sarah Olney
I thank the hon. Member for his intervention. I am afraid that I cannot comment because I did not see that, but I thank him for raising it.
It is not right for the consequences of the decisions of the outgoing Conservative Government and this burden to be carried by some of the most vulnerable in our society. Those with the broadest shoulders should carry a heavier burden. Liberal Democrats have set out detailed proposals to tackle fuel poverty and we are calling on the Government to look at them very seriously. That includes steps such as: launching an emergency home energy upgrade programme, with free insulation and heat pumps for low-income households; introducing a social tariff for the most vulnerable to provide targeted energy discounts for vulnerable households; and implementing a proper windfall tax on the super-profits of oil and gas producers and traders, to raise vital revenue. We have also called on the Government to tackle the wider cost of living crisis, including by investing an extra £1 billion a year in our farmers to bring down food prices, increasing the carer’s allowance and expanding it to more carers, and removing the two-child limit and the benefit cap.
More than 2 million pensioners are currently living in poverty. They have had a tremendously difficult time during the cost of living crisis, dealing with record high energy bills and eye-watering food costs. That is why the Liberal Democrats are proud to have introduced the triple lock when we were in government, lifting countless vulnerable pensioners out of poverty, and why we are strongly committed to ensuring it remains in place. Pensioners deserve to have the support and the security of knowing that the triple lock will be there in the long term.
We acknowledge the dire economic situation the new Government have inherited, yet we have heard warning calls from sector representatives, including Age UK, Disability Rights UK and many pensioners themselves, regarding the damage that this cut might cause. As the Government try to clear up the Conservative party’s mess, they must ensure that that does not come at the expense of pensioners and families who will struggle to heat their homes this winter.
Stuart Anderson (South Shropshire) (Con)
On a point of order, Madam Deputy Speaker, you will know the rules far better than me, but this is a really important debate and I just want to ensure that the House is quorate. Can you tell me how many people have to be on the Government Benches for a debate? There are fewer than 20 Labour MPs who have decided to find this a worthwhile debate to come to, and I want to make sure we have enough people here for this debate, because it is really serious.
Madam Deputy Speaker (Caroline Nokes)
As the hon. Gentleman will know, the House is not counted, and the matter of quorum is not a relevant consideration at this time and therefore we shall move on.
Peter Swallow (Bracknell) (Lab)
I was proud to be elected on a manifesto that committed to delivering economic stability, security and growth. After 14 years of Tory recklessness with our economy and after the disastrous Liz Truss mini-Budget drove up inflation, food bills and mortgage repayments and pushed my constituents to the brink, the public voted for change. That change must start with getting our economy back on its feet.
When the previous Labour Government left office, Trussell Trust food banks were giving out 40,000 food parcels a year. Last year they gave out 3 million. When we on the Labour side of the House talk about the recklessness of the previous Government, it is not academic. We are talking about taxpayers’ money being poured into ideological gimmicks while children are going to school hungry, working adults are one rent rise away from homelessness and a broken NHS is stalling productivity and failing those who most rely on public services, including our pensioners. We face a £22 billion black hole in the public finances that they covered up and walked away from.
Stability means bringing the economy and the country back from the brink to which the Conservative party knowingly pushed it. No one doubts that this policy is tough, and it is not a measure we want to take, but we have been left a huge bill to pay. Means-testing the winter fuel allowance will allow us to support those pensioners most in need as we take the difficult steps we have to take to right the ship.
Members across this House know that in our communities there are too many pensioners struggling. That is why I welcome this Government’s commitment to the triple lock, under which the state pension has risen by £900 this year and will rise by more than £450 in April. I also support the extension of the warm home discount, worth £150 for more than 1 million low-wage pensioners.
Graham Stuart
The hon. Gentleman will be aware that the Tory triple lock was introduced by the Tories, precisely in order to deal with the legacy left by the previous Labour Government when, unless I have got this number wrong, there was a lower take-up of pension credit than there is today—we raised that. The triple lock raised pensioner incomes, and the first act of the Labour Government, of whom he is clearly aiming to be a loyal member, is to take £300 away from people who really need it.
Peter Swallow
Three million food parcels were distributed last year. That is the legacy of the Conservative Government. And the triple lock that the Conservatives purport to defend? They broke it in 2022.
I also support the extension of the household support fund to help the families most in need this winter, as well as the Government’s commitment to introducing tougher regulation to the energy market, which has let customers down for too long. I am working hard with Bracknell Forest council to ensure that pensioners in the Bracknell constituency who are in need but not claiming the support to which they are entitled are identified and encouraged to get help. I urge any pensioner who is concerned about their finances to go to Age UK’s benefits calculator to see what support they may be entitled to.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
What did the hon. Gentleman say to pensioners during the election campaign?
Peter Swallow
I said that the Labour party would restore the broken economy inherited from the Conservative party.
In the long term, there is only one permanent solution to ending fuel poverty: we must end our dependence on volatile foreign energy markets and deliver lasting energy security. The Conservative party failed to do that in Government, leaving energy bills higher for every household, including those most in need. That is why this Government’s plan to create GB Energy, a new national energy company, is vital. It will bring energy supply back into the hands of the British public and help to get prices back under control. That is the long-term solution to fuel poverty: home-grown, British-controlled power.
Dr Caroline Johnson
Roughly 13,000 people in the hon. Gentleman’s Bracknell constituency will not get the winter fuel allowance this year as a result of the changes that he has just voted for. How many of them does he estimate will struggle to pay their bills?
Peter Swallow
I have already set out the support that I want to see, as well as the support that the Government have put in place to help pensioners in my constituency and to bring energy bills down in the long term, which will help all households in Bracknell and across the country. That is a really important first step on the road to growth. Because of the triple lock, a growing economy means growing pensions and growing support for pensioners in need.
Future prosperity does not fall out of the sky. We have to create the conditions for it, and those conditions are sensible spending, bringing debt under control, and encouraging investment. To do those things, we must dig ourselves out of this financial hole, and that means tough choices. This policy is a difficult step—a step that I did not want to take—but it is a step away from the brink towards stability, security and growth. That is why I back it.
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
Order. I have no choice but to put a three-minute limit on Back-Bench speeches before I hand over to the next speaker, which I am very sorry to do. Members will be aware that more than 40 of you wish to take part. I call Priti Patel.
Priti Patel (Witham) (Con)
Who would have thought that one of the first acts of this awful, cruel and ideological Labour Government would be to assault the nation’s pensioners by removing winter fuel payments? Let us be candid: the nation’s pensioners are falling victim to an ideological decision—a betrayal by Labour as it succumbs to shovelling gross amounts of public spending into the pockets of many of its union paymasters.
It is quite interesting—[Interruption.] No. I have a time limit; the hon. Member has already spoken. It is interesting that there has been so little transparency around finances and the fiscal choices that the Government have chosen to make. There has been no impact assessment, no honesty around the cost of all this to the Exchequer in the long run, and nothing about the administration of the household support fund. How have Labour Ministers made the spurious claim that they have had no choice in this decision? Bear in mind that the Government—so desperate are they to justify this brutal cut—claimed a couple of weeks ago that there would be a “run on the pound” without the decision, which is just extraordinary and speaks to their fiscal ineptitude.
I have a series of questions on the mitigations. First, it is right to encourage more pensioners to take up pension credit where they are entitled to it. I know from my time at the Department for Work and Pensions that many on the Conservative Benches have spent years encouraging pensioners to take up pension credit. We should know how the targeting will work and what the cost will be.
Secondly, in recent days the Government have been spinning, yet again, that those affected by the loss of the winter fuel payment will benefit from an estimated £400 rise in the state pension. Will the Minister confirm what the net real-terms impact will be on overall household incomes for those who are losing the benefit, and will he confirm how it will add up over time and what the actual cost will be?
Thirdly, concerns have been raised throughout the day that if pensioners cannot afford to heat their homes there will be a serious impact on health. We do not have an impact assessment, so can we have some honesty now? What are the costs to the NHS? The Government owe it to the British people to be honest about this. We have heard that the household support fund will be extended, but how exactly will that £500 million be funded? Who will pay for it?
Finally, there are so many unanswered questions. The Government must be honest and answer them. There has been a lack of transparency, with no impact assessment whatsoever. It is right that we hold the Government to account and that they are honest with British pensioners about their intentions, even on the future of the triple lock.
Josh Simons (Makerfield) (Lab)
I am glad that we are having this debate. Perhaps the Opposition and parts of the media are bored facing something that they have not seen for years—Government Benches packed full of Members representing all parts of the United Kingdom who respect each other and support the Government—because they have stoked a frenzy that I fear is at risk of obscuring the most important arguments for the changes that we are debating.
Yes, there is the economic argument, which matters. As the Office for Budget Responsibility and Institute for Fiscal Studies have recognised, this Government inherited public finances in a shocking state, in
“one of the largest in-year overspends outside of the pandemic”
in history—or, as one Member put it earlier, an “accounting error”. Unlike the rapid succession of Conservative Chancellors, our Chancellor has levelled with the British people and been transparent about the nation’s finances. Restoring stability means hard choices. This is not the first, and it will not be the last.
However, it is not the economic case that I wish to emphasise today, but the principled one. Let me make a general point about the arguments we make in politics. Sometimes we politicians can be too quick to hold up our hands and say that we have no choice—the lawyers required this or the economists required that. That can leave voters frustrated: “Why vote if the people we vote for are not in charge, but lawyers or economists are? Can the people we elect not control the things that affect our lives?” To restore trust in politics, we must show that politics matters. That is why it is important that we articulate what we do in terms of principles and choices.
To govern is to choose. Targeting winter fuel payments is a choice. However difficult and necessary, it is the right choice for two principled reasons. The first is about the moral purpose of the policy. Gordon Brown designed the winter fuel payment to ensure that nobody was at home cold because they could not afford to turn on their heating. It was a time when state pension rises were miserly and, as many found, insufficient to heat their homes. But let me note that pensioners were better off after the last Labour Government. One million were lifted out of poverty by 2004. The changes we are debating today do not move from that position. In a time when the state pension has risen by £900, and will rise again by as much as £400, the changes target the winter fuel payment based on the principle of need. That is the right principle.
Let me be clear: I do not believe that taxpayers—
Madam Deputy Speaker (Caroline Nokes)
Order. There is a three-minute time limit.
Sir Roger Gale (Herne Bay and Sandwich) (Con)
My wife, Suzy, is over retirement age. She is also in full-time employment. I am over retirement age. I am also in full-time employment and a higher rate taxpayer. I have always believed that the winter fuel allowance should be means-tested, because while we give it to charity, there are other, perhaps younger people—such as the young and disabled, who cannot run around and keep warm—who could use the money. I have believed that for probably as long as the now Chancellor of the Exchequer has believed it.
Let us be clear: this has nothing to do with black holes in the economy, which Laura Kuenssberg identified while interviewing the Prime Minister on Sunday as being largely contributed to by inflationary pay increases for the unions—for railway workers and junior doctors. This is a policy dreamed up in 2014 by the present Chancellor of the Exchequer—that is on the record. It is a policy made in No. 11 Downing Street and endorsed by the nation’s undertaker in No. 10. It is cruel, it is heartless, and it is going to lead to deaths this winter, so while I believe that there should be a means test, the manner in which the Government are going about it is profoundly wrong and deeply flawed and will cause untold-of hardship. It has got to change.
Stuart Anderson
My right hon. Friend is giving a moving and compassionate speech. Will he tell us where, specifically, the responsibility for this cruel policy lies?
Sir Roger Gale
I am grateful for my hon. Friend’s question, because it does not lie with the hon. Member for Ealing North (James Murray). It lies with the Chancellor of the Exchequer and with the Prime Minister, both of whom should be on the Government Front Bench this afternoon, but neither of whom have been present during the debates—although the Chancellor did come in to vote, and then nipped out again. That in itself is shameful. I abhor the fact that there are politicians sitting on the Labour Benches who are quite prepared to fight to the last drop of somebody else’s political blood, because that is what is happening this afternoon.
Rachel Taylor (North Warwickshire and Bedworth) (Lab)
You say that our Chancellor and the Prime Minister are not here on the Government Benches, but where are your leader and your shadow Chancellor? They are not here either. You talk about means-testing being right: we have a difficult financial situation and difficult decisions that we have to take, so the right hon. Gentleman seems to agree with us on that.
Madam Deputy Speaker (Caroline Nokes)
Order. I appreciate that passions are running high this afternoon, and that there are many new Members in the House, but when we use “you” and “your”, we are referring to the Chair. There are good reasons for why we direct debate through the Chair. Please can Members remember that?
Sir Roger Gale
Thank you, Madam Deputy Speaker—I stand chastised. The Leader of the Opposition was in the Chamber earlier this afternoon, but I saw no sign whatsoever of the Prime Minister. However, the answer to the hon. Lady remains the same: the responsibility for this policy lies directly with the Chancellor of the Exchequer and the Prime Minister, and they are going to live to regret it.
Mr Gideon Amos (Taunton and Wellington) (LD)
The right hon. Gentleman has expressed the principle that means-testing could be accommodated. Does he agree that many of those who have written to us as Members of Parliament also sympathise with the principle that means-testing could and should come in at some point in the future? The manner in which this proposal is being brought in, before the 880,000 pensioners who are eligible for pension credit are registered for it, is the problem that particularly affects the 21,000 pensioners in Taunton and Wellington.
Sir Roger Gale
I am grateful to the hon. Gentleman for his intervention. I have made the point, and will make it again, that I have no quarrel with the principle. I have a huge quarrel with the manner in which this policy is being implemented, because it is cruel and heartless. It is going to leave thousands, if not millions, of pensioners literally out—or more probably in—in the cold this winter, and some of them will die as a result. It is not necessary, it does not have to be done, and it will not save money, so there has to be a rethink.
Just to conclude, I detect a degree of arrogance on the Government Benches this afternoon. The fact that there are only about 30 Members on those Benches speaks volumes to those outside who thought that Members were going to come and hear this matter being seriously debated. There seems to be a belief that the next election is five years away. The next general election may be five years away, but the next election is next May, and those voting in the county council elections in May—those pensioners and their families—will not forget this.
Sam Rushworth (Bishop Auckland) (Lab)
I have not written a speech—I have written down a few points—because, like many colleagues, I have spent the past week agonising over how to vote today. In the end, I decided to vote with my conscience, which meant that I voted with the Government. [Interruption.] Conservative Members laugh, but I will tell them why.
Today I listened sincerely to contributions from Conservative Members, and this is what I have learned. First, there were several interventions in which they criticised the Government’s efforts to improve the take-up of pension credit. [Interruption.] Well, they did—Members can go and read Hansard if they want to dispute that. There have been several criticisms of that, almost to the point that, when they talk about who is vulnerable, I wonder whether they have a blind spot for some of our most vulnerable constituents.
Secondly, I have learned about Conservative Members’ disdain for hard-working people, because we have learned that, in their spending plans, they intended to reject the pay recommendations of their own pay body.
Harriet Cross (Gordon and Buchan) (Con)
Does the hon. Member appreciate that some of the hardest working people are the pensioners we are now standing up for, and who we are trying to stop freezing in the winter to come and those ahead?
Sam Rushworth
I absolutely do, and Members may recall that I came to this House last week and asked the Chancellor a question about my own constituents. I represent the snowiest and coldest constituency in England, and I have had deep concerns about those pensioners. However, I have studied the detail and listened to pensioners in my constituency. In the last week alone, it has turned out that several people who have come forward to me expressing concerns about this policy are people who could be claiming pension credit but are not.
I want to make a broader point about the winter fuel allowance. The winter fuel allowance was introduced under the last Labour Government in 1997, when the state pension was £3,247 a year. If that had increased at the rate of inflation, today it would be £6,200 a year. Thankfully, it is more than twice that. [Hon. Members: “Because of us.”] Conservative Members say that it is because of them, but, again, they may want to look at the record. In fact, under both the previous Labour Government and the previous Conservative Government, the state pension increased at above the rate of inflation, and I absolutely welcome that. The winter fuel allowance, however, has not increased for 20 years. So the winter fuel allowance, in real terms, has become less and less year after year. The point I am making is that we need to consider our people. If the Conservatives’ argument is that, after 14 years in government, people on the full state pension are £100 away from death and destitution, what have they been doing for 14 years?
We need a new settlement for the economy, and this Government are actually answering the concerns of my constituents, who live in cold, stone-built, badly insulated homes, and who lost out when the previous Government chose to cut the funding available to insulate homes. This Government are setting up Great British Energy, which will help to cut bills over the long term. People are poor and struggling to pay their bills not because we do not give away enough taxpayers’ money in small pockets of benefits here and there. What we need are higher wages and better pensions, and I have been convinced by the Chancellor’s arguments that, under this Government, the pension will rise at or above the rate of inflation year on year, while energy bills will fall.
Finally, my constituents would not thank me if I did not take steps to stabilise the economy, because we need to get NHS waiting lists down and we need—
Graham Stuart (Beverley and Holderness) (Con)
It is interesting to follow the hon. Member for Bishop Auckland (Sam Rushworth), and to follow the angst-ridden journey with his conscience to ensure that he could abandon those in most need of their winter fuel allowance in this coming winter. It was good of him to highlight the Tory triple lock, which did take the absolutely woeful state of the pension left by the last Labour Government and transform it into a sounder one today. However, even in these conditions—where, thanks to the Tories, pensioners are much better off than they used to be—there are people, and this came from Labour research a few years ago, who will die, according to that research, if this policy, which he in good conscience thinks he should vote for today, is implemented. That is the truth.
That takes us to one key issue that we have been discussing today, which is process. The hon. Member for Bishop Auckland seems like an honourable and decent man—at least he used the word “conscience” in this debate, rather than purely political theatre. The point is that when something could lead to thousands of people dying, the Government have not done what they are legally obliged to do—they used some rare exemption requirement—and produce an impact assessment. So we do not know. People who in good conscience want to do the right thing, like the hon. Gentleman, do not know what the impact is. If it was in front of us, and if it validated the Labour party’s previous analysis, and showed that 4,000 people could be going to die, could he really support the measure in good conscience for £1.1 billion when we spend more than £1,200 billion?
The £22 billion black hole is a sort of political theatre from a Government who said they were not going to do politics as theatre and performance, and that they were going to do it properly. In fact, this is a miniscule amount. It is significant, but it is miniscule in the overall scheme of things. A choice has been made and rammed through on a timetable that is not in order and does not follow the normal and proper way of things or allow new Members of Parliament, like the hon. Gentleman, to look at the issue, weigh it up and come to the right conclusion. It is truly shameful. Peter, one of my constituents, is one of 882 people who signed a petition in my constituency against this measure. He and his wife are £12 over the pension credit limit.
Dr Zubir Ahmed (Glasgow South West) (Lab)
The right hon. Gentleman is citing concerns about the safety of vulnerable groups, and I wonder if he might reflect on the past 14 years, and that he enabled a Government that led to the decay and decline of every single public service. When public services decay and decline, that disproportionately affects vulnerable groups.
Graham Stuart
The hon. Gentleman knows full well that that is not true. I used to chair the Education Committee, so I know a little about that, and standards were lifted—[Interruption.] Look at the OECD or the PISA tables. It seems that the new Ministers do not want to take into account the most reputable international measure of educational performance, which showed that we lifted ourselves up massively. The NHS is under enormous tension and in crisis, but compared with five years ago we have 20% more doctors and nurses, if it was purely a budgetary matter. I wish the new Government well in reforming the NHS, but if we want to see what a Labour Government means for the health service, we can find it right now. We just need to travel to Wales, and the hon. Gentleman knows that that is not delivering.
Let me return to Peter and his wife. They are not the only people who are worried about this policy. I spent a little time yesterday reading Labour’s manifesto, as I hope Labour Members may have done, and I was touched by the quote from Gary on page 48:
“I’ve never struggled this much to keep warm. I can only afford to heat one room with a small portable heater. Sometimes I sleep in my armchair to save money…it’s no way to live.”
Surely Labour Members, in good conscience, recognise that he is right: it is no way to live. When 9.7 million people voted Labour, they voted for it on the promise of change. I do not think this is the change that Gary and others were led to believe they would receive.
Chris Murray (Edinburgh East and Musselburgh) (Lab)
I am glad that the right hon. Member for Beverley and Holderness (Graham Stuart) referred to the change in the Labour manifesto at the last election, because the first line of that manifesto was the promise to bring economic stability to Britain, and that would be a change from the previous Government. We knew that bringing economic stability would involve tough choices, but even at the election we had no idea of the scale of the mess we would find. Means-testing the winter fuel allowance is not an easy decision, but we must look at it in the broader context.
Let me make three points about the situation that pensioners face. First, the pension triple lock is a critical piece of public policy, which makes the state pension genuinely liveable. The triple lock means that pensions increase by £900 in this year alone, and the state pension will increase by over £1,700 over the course of this Parliament. That helps all pensioners. It is absolutely the right decision for the Government to prioritise the pension triple lock, even if that means means-testing the winter fuel allowance.
Secondly, the poorest pensioners will still get the winter fuel allowance. I am reassured by the push to increase the take-up of pension credit.
Several hon. Members rose—
Chris Murray
Sorry, I will not give way, I must make progress. Thirdly, we must look more broadly at all the challenges that older people face. Waiting lists are appallingly long. Older people in my constituency can wait 18 months for a hip replacement; others spend their life savings on private healthcare. I understand that people are concerned, but we do people no favours by pretending that tough choices do not exist. Delaying that decision only leads to tougher, less enviable choices ahead.
Chris Murray
Let me make progress. If the House wants to understand tough choices, look no further than my home of Scotland. Despite having higher public spending and higher taxes than the rest of the UK, our pensioners face the longest waiting lists on record. Today, the SNP will oppose means-testing the winter fuel allowance in Westminster, while bringing in its means-testing in Scotland. That is not to clean up the mess that the Tories left them, but to clean up their own mismanagement of Scottish finances. We can do better.
In taking this step, we must recognise that the country has changed since the winter fuel allowance was introduced. Today, when I look around my constituency, I see that age is no longer the main factor in whether someone can afford to heat their home. It cannot be right that we continue to give the wealthiest pensioners £300 a year. As society changes, we must adjust. We do today’s pensioners a better service by targeting those who need help the most.
Jim Shannon (Strangford) (DUP)
I rise to publicly oppose this proposed change. I understand the need to balance the books—we all do, and we know how it works—but to be perfectly frank, and it gives me no joy to say this, I never imagined ever in my life that a Labour Government would seek to balance the books on the backs of pensioners throughout the United Kingdom. I put that on record at the beginning. I say it respectfully, but with great grief.
I fully comprehend that the system could do with an upgrade. Perhaps we should look at a household cap, as we have with the child benefit payment. Perhaps we could look at allocating per household, rather than per person. Perhaps we could look at ensuring that everyone who is still earning more than their pension through employment can have deferred payments until full retirement. Perhaps we could look at an opt-out scheme for pensioners such as me. I do not need the money; I asked not to take the money. I give the money to charity. I am not better than anybody else—never am I better than anybody else—but I realised that I did not need that money, so I gave it away. Others might want to do the same thing.
It should be direct face-to-face applications for pension credit. There should not be a nine-week wait for the application to be processed. My goodness, people need the money now. The threshold should be raised. The Government and the Minister have said about the £440 that is coming next spring, but pensioners need the money this winter and as soon as possible.
In Northern Ireland, 68% of homes rely on oil-fired boilers for heating. There are high levels of fuel poverty, with 22% of the population currently spending more than 10% of their household income on heating their homes. I think about the women who have a tiny workplace pension from the hours they worked while their children were in school. The women of the Women Against State Pension Inequality Campaign have already been disadvantaged and will pay a further price for not being allowed to save for their needs. I am begging this Government on behalf of my constituents in Strangford not to remove the benefit from everyone in one fell swoop.
Carla Lockhart (Upper Bann) (DUP)
National Energy Action estimates that close to 45 people die every winter’s day in the UK due to cold homes. This Government, in their wisdom and through this decision, have decided to imperil many more. Does my hon. Friend agree that it is wrong, it will have an impact and it will cause deaths right across the United Kingdom?
Jim Shannon
My hon. Friend is absolutely right. We all recognise that this winter will be one where pensioners will feel the gravity of this and the pain of the cold. I stand for all those who are making do with less than £1,000 a month and those pensioners who will be impacted by the winter fuel allowance being taken away from them. For them, this is a lot of money. It is the difference between being warm this winter or simply surviving. It is not an exaggeration; it is life for my constituents and, respectfully, for the constituents of those on the Government Benches.
I will conclude. The clock for speeches has stopped. I will be respectful of the time, as you would expect, Madam Deputy Speaker.
Those who have worked all their lives deserve to be paid for what they paid in. There is a basic standard, along with women and children go first in the lifeboat: protect those who cannot survive the icy cold. So let us slow down the ship—I look to Labour to make that happen—and veer away from the iceberg, which some Members only see the tip of at the moment, which could be the destruction of the Government before their first journey even begins. Let us correct course and get this right. Let us support the Opposition motion, which reflects the mood and opinion on the Opposition Benches. I hope that the Labour party will realise that it is going the wrong way. We are trying to direct them the right way.
Matthew Patrick (Wirral West) (Lab)
I am grateful to follow the hon. Member for Strangford (Jim Shannon). I have had a short time in this place, but I already know that he often sits in the Chamber and listens to everyone: to Members across the House. I listened to his points as well and will make these points to him. On this issue, like so many others, when it comes to our economic inheritance—which is a £22 billion in-year black hole—we have to make difficult decisions. We can choose to ignore the situation we are in and duck those decisions—the well-trodden path that was too often taken by the last Government—but the price of entry to that path is not free. There is a cost. It means accepting a failing economy and failing public services. It tries to shift the problem again and again to future generations. It is an easy path, but not a responsible one.
The alternative is that we govern as we campaigned—not just on economic stability but on credibility and truth in politics—and are honest with people about the mess that we are in and, crucially, about the path that we will take to bring about brighter days: to lower waiting times in our NHS, to get more teachers into our schools and more police on our streets, delivering again for people across the country.
Failure to deliver has become the norm; that must change. If we ignore the problems, we cannot fix them. Since records began, no Government front-loaded spending so much to leave the cupboard so bare for the second half of the year. That was an easy path, but not a responsible one. I believe that Opposition Members know that.
Indeed, there have been calls over the years from Conservative and Liberal Democrat Members to target winter fuel payments to those most in need. The Government are combining responsibility with compassion, and I know—
Wendy Morton (Aldridge-Brownhills) (Con)
Madam Deputy Speaker,
“The winter fuel payment gave me peace of mind that I would be able to heat my home and stay warm during the winter”—
not my words, but those of a constituent, and they are typical of the many comments I have received in my inbox and those I have heard when I have been out and about across my constituency.
In my constituency, there are just 2,138 recipients of pension credit, yet an estimated 18,300 pensioners will lose out this winter. This political choice, because that is what it is, means that those very same pensioners—those 18,300—will lose up to £300 of winter fuel payment; in addition, the energy price cap rise of 10% puts further financial pressure on them of about £149. It impacts pensioners earning as little as £13,000 a year. Contrast that with the inflation-busting pay rises that the Government have handed out. Contrast that with the billions that the Government are spending on GB Energy, a state-run company that will not produce any energy, nor will it cut their bills. What is more, when the vast majority of my pensioners, who are waiting for their annual increase of £460 next year—thanks to our work when we were in government—deduct £300 for losing the winter fuel payment, they will be left with an increase equivalent to just 44p a day: less than the cost of a pint of milk.
Dr Caroline Johnson
I wonder how many of my right hon. Friend’s constituents who will lose that vital payment earn less than the train drivers who have had all that extra money.
Wendy Morton
My hon. Friend makes an important point. It comes back to how this is about political choice, and I am here to stand up for my pensioners in my constituency.
I also point out that it was the Conservative party in government that drove up pension credit applications by 73% in just 12 months. It is important that we do not forget that. Pension credit take-up is often an entrenched issue. People in my constituency are often too proud to apply. The process is too complicated: 22 pages, 243 questions and, as we have heard, nine weeks to determine the outcome of the application.
Tackling pension credit take-up is important, but it is not the solution to the crisis that pensioners face today. Only weeks ahead of the winter, they need help now. According to Age UK, across the UK, around 2 million pensioners who badly need the money to stay warm this winter will now not receive it. Losing the winter fuel payment will make it significantly harder for them to keep warm, which undermines their health and wellbeing. As we have heard, pensioners often have serious health conditions and disabilities. Often, they live in older properties, and in the north or in my constituency in the west midlands it is often colder than in other parts of the country. Pensioners are all disproportionately affected, yet there is no sign of an impact assessment, just a Chancellor who, seemingly, storms ahead with her political decision.
Patrick Spencer (Central Suffolk and North Ipswich) (Con)
Will my right hon. Friend give way?
Wendy Morton
I will continue because I am conscious that others want to get the chance to speak.
There is no time for older people on low incomes to set aside money—if they have it—to help them get through the winter. Being at home in the cold increases the risk of raised blood pressure, stroke, heart attacks and hypothermia. I did not vote for this callous cut earlier today. I will not pick the pockets of those who have worked hard all their lives, doing the right thing by their families and this country. I will continue to speak up for my constituents, who deserve better than this. This is so wrong.
Laurence Turner (Birmingham Northfield) (Lab)
I associate myself with the comments of Labour colleagues in this debate, but I want to speak about the particular issue of public sector pay and the attempts made in this debate and the preceding one to turn pensioners and public sector workers against each other, including the public sector workers who have been driven to rely on food banks and payday loans, who I was proud to represent as a trade union official. The 6,000 public sector workers in my constituency must wonder what the Opposition have against them in this debate.
A strong economy needs strong public services, but the problem for the last Government—and the public sector workers who worked for them—was that their public finance strategy rested on
“imposing the biggest real wage cuts in living memory.”
Those are not my words but those of the former permanent secretary to the Treasury, Nicholas Macpherson. The consequences for the services that we all depend on are clear: teaching vacancies have doubled over the past three years, there is an 8% vacancy rate in the NHS and one in 10 999 call handler posts is vacant. We all know the consequences of ambulance delays for pensioners and of cancelled operations and appointments. [Interruption.] Does the right hon. Member for Basildon and Billericay (Mr Holden) wish to make an intervention?
Mr Richard Holden (Basildon and Billericay) (Con)
Thank you, that is kind. In Basildon and Billericay, 15,000 pensioners will lose out because of this callous cut by the Labour Government. The hon. Member pointed out the impact on public services, but how many more hospital admissions will we have, and how many more people will need operations because of his party’s cut? Will we be unable to find out, because his party will not even put forward an impact assessment so that we can know who is affected?
Laurence Turner
We will take no lectures on hospital admissions, given the state of the NHS that the right hon. Member’s party left us.
The Conservatives claimed that they did not know what the pay review body recommendations would be, but the School Teachers’ Review Body recommendations were known to Ministers before July. They will know also that the different PRBs tend to make similar recommendations. Why were most of those recommendations not submitted in good time? Because Ministers were late in submitting their evidence, pushing the timetable until after the election. The Office of Manpower Economics has said:
“The work of the PRBs is demand led and essentially non-negotiable—departments set the remits and timetables.”
Shadow Ministers talked about productivity gains, but when it came to NHS negotiations under the last Government, productivity was just a slogan. The cupboard was bare. They had nothing to actually ask for.
Dr Caroline Johnson
The hon. Gentleman is making a case comparing the salaries of working individuals with the pensions of the elderly. Could he tell me how many of the people who will lose the winter fuel allowance in his constituency earn or receive less than the minimum wage?
Laurence Turner
In my constituency, there are approximately 2,600 pensioner households that do not receive pension credit—that is one of the legacies of the previous Government—but are entitled to it.
The Conservatives suggest that they would have rejected the pay review body recommendations, forgetting that one of the first acts of the Margaret Thatcher Government in 1979 was to accept the recommendations of the Clegg commission on pay comparability. If only the Conservative party had more courage today.
The winter fuel allowance exists because of a Labour Government: a Government who increased the value of those payments fivefold in 13 years, compared with an increase of zero under 14 years of the previous Government—a real-terms cut of 33%.
Mark Ferguson (Gateshead Central and Whickham) (Lab)
It is fascinating to hear the recent converts to the fight against poverty on the Opposition Benches, particularly the right hon. Member for North West Durham—sorry, Basildon and Billericay (Mr Holden)—yet they seem far quieter about the fact that the average food shop went up by £1,000 in the last Parliament, the average energy bill went up £400—[Interruption.] Listen and you might learn something. The average mortgage went up £2,880 because of your lot. [Interruption.] Apologies, Madam Deputy Speaker.
Dr Luke Evans (Hinckley and Bosworth) (Con)
On a point of order, Madam Deputy Speaker. I seek your guidance. I was under the impression that in the Chamber we should refer to Members, Friends or even the constituency. Is that correct?
Madam Deputy Speaker (Caroline Nokes)
The hon. Member is absolutely correct. May I just helpfully point out to all hon. and right hon. Members that, in seeking to make repeated interventions, they are actually cutting into each other’s time? I have made the point previously about the correct way to address each other, through me as Deputy Speaker. Interventions need to be a great deal shorter because they are just cutting into the time for the debate and there are an awful lot of Members who wish to contribute.
Nick Timothy (West Suffolk) (Con)
On a point of order, Madam Deputy Speaker. I would like advice from the Chair, please. Reportedly, more than 200 Labour MPs received more than £2 million in donations before the election from the trade unions. Before other Members give speeches about issues such as public sector pay, would it not be in order for them to declare that interest at the beginning of their speeches?
Madam Deputy Speaker
As the hon. Member will know, it is for individual Members to declare their interests, if one is applicable.
Laurence Turner
I declared my background in the trade union movement, and I note that the hon. Member for West Suffolk (Nick Timothy) wrote the manifesto, which he stood on, that proposed cutting the winter fuel allowance.
Now that the winter fuel allowance is to be means-tested, we must boost the uptake of pension credit. I welcome the measures Ministers have announced today, so that the allowance can be protected for the very poorest pensioners.
Mike Wood (Kingswinford and South Staffordshire) (Con)
The Government’s choice to remove the winter fuel payment from 21,365 of my constituents is cruel. The payments have been a lifeline for so many pensioners, helping them to stay warm during the harsh winter months. Most pensioners live on fixed incomes, so having almost no notice—no time to prepare—means that the impact of this loss of income on many pensioner households will be that it is increasingly difficult for them to afford basic necessities.
A number of Labour Members have talked about difficult choices, but the reality is that the Government have run away from difficult choices. They have ducked the difficult choices. The difficult choice would have been to be upfront with voters during the election campaign, to explain why they felt this was necessary, appropriate and, as some have said, morally right, and to trust voters to decide whether to give them that mandate. Instead, they ran away. There are difficult choices, but unfortunately the difficult choices are the ones that they have left our constituents to face.
Mr Peter Bedford (Mid Leicestershire) (Con)
Does my hon. Friend agree that this choice sets a dangerous precedent? Free bus passes, prescription charges and, indeed, access to healthcare itself are all now at risk because of the logic being put forward by the Labour party in respect of pensioners’ ability to afford them.
Mike Wood
My hon. Friend is clearly correct. Many people, but particularly pensioners, will be worried about what this Chancellor will take away from them next. Without these payments, many will be forced to choose between heating their homes and other essential expenses such as food or medication—people such as my constituent Linda, who wrote to me:
“My husband has several medical issues this year and I am very worried about the heating situation…I think it is likely that we will cut back on nourishing food.
I cannot believe that a British Government would penalize our generation like this.”
Another constituent, Dawn, wrote:
“Now I fear the winter months, and afraid…of hypothermia.
I personally am just above the threshold to qualify for pension credits. I am a single person claiming state pension and also have a small NHS pension…I can foresee me not using my central heating this winter.”
Those are difficult choices that this Chancellor and this Government have forced on too many of our pensioners, and they are choices that no one should have to make, and particularly not those who have contributed so much to our society.
Joe Morris (Hexham) (Lab)
The Government the hon. Gentleman supported were responsible for driving living standards down, in the first Parliament on record in which that happened. Does he not agree that it is traditionally bad form for the arsonist to start criticising the fire brigade?
Mike Wood
I think that the hon. Gentleman has a huge amount of cheek. He should consider first the inheritance of that previous Conservative Government: the present candidate for the chairmanship of the Business and Trade Committee had written that there was no money left. He should also bear in mind that what we saw during those 14 years was not only restoration in the economy but a huge growth in pensioner income, and what we see now is the fastest growth in the G7, unemployment at record low levels, and inflation also back at low levels.
The Chancellor wants us to believe that this decision suddenly came to her at some point in the run-up to the King’s Speech, some time after the general election, and that it would not have been possible for her to imagine it before polling day. She claimed in July that it was not a decision that she wanted to make. However, as has already been pointed out, in March 2014 she stood at the Opposition Dispatch Box, barely feet away from where I am now, demanding that winter fuel payments be means-tested. In July she said that it was not a decision that she expected to make, yet, miraculously, this year’s Labour manifesto was the first in almost two decades without that specific commitment to protect winter fuel payments.
This is a decision that had been a decade in the making—a decade in the planning. Labour had a decade in which to prepare and get it right, but we are seeing how poorly thought through it was. We cannot have a Social Security Advisory Committee report, and we cannot have an impact assessment. Labour imagined that it could take the money away from pensioners with no impact on our NHS or on charities. This decision is wrong, and it needs to be reversed.
John Slinger (Rugby) (Lab)
Many Opposition Members have thrown the word “choice” at us. Their party chose empty promises, chose unfunded policies, chose a course that led to the decimation of our public services and to higher mortgage rates and higher bills, and chose to make the former Member of Parliament for South West Norfolk Prime Minister.
We did not want to make this choice, but some choices are thrust upon us. We on the Labour Benches do not duck choices. This Government are choosing long-term economic stability, economic security and growth. This Government are choosing to maintain the triple lock, which will see the state pension rise year on year. This Government are choosing to do all in their power to make sure that hundreds of thousands of pensioners claim pension credit, and they will do a lot more.
Dr Mullan
Does the hon. Member agree that it is deeply disingenuous for him and other Labour Members to talk about the drive to increase the uptake of pension credit? He knows full well that if the Government were able to do that, it would wipe out the saving that they are claiming to make. They do not actually want people to increase their uptake of pension credit, because the Government would not save any money.
Madam Deputy Speaker (Caroline Nokes)
Order. I remind the hon. Member that the word “disingenuous” is almost akin to suggesting that someone is lying. Perhaps he would like to withdraw his remark.
John Slinger
I thank the hon. Gentleman for his intervention, and for clarifying his use of language. I can assure him that everyone on the Labour Benches, including my colleagues on the Front Bench, are doing everything they can to make sure that vulnerable pensioners who need pension credit receive it. We say that in good faith, and we mean it.
Gregory Stafford (Farnham and Bordon) (Con)
What does the hon. Member say to the 18,883 pensioners in my constituency who will lose the winter fuel payment? They include Rita, who looks after her husband who has multiple sclerosis. She wrote to me today to say that she has to make the choice this winter between heating their home and paying for essential medication.
John Slinger
I thank the hon. Gentleman for his intervention. I say to him and his constituents that the Government are making every effort to ensure that vulnerable pensioners and pensioners who need pension credit receive it. We are sticking by the triple lock to make sure that pensioners are better off year on year, and I am glad and proud that we are doing so.
John Slinger
I will make some progress, if I may. I have already taken two interventions.
This Government are choosing to move on from the terrible choices of the previous Government. We are choosing a stable, strong economy that will benefit all of the people of this country—all demographics in all regions, the next generation and definitely pensioners.
Ellie Chowns (North Herefordshire) (Green)
Fuel poverty is an enormous issue in my constituency due to a combination of demographics, geography, the housing stock and, indeed, living standards. I rise to speak on behalf of the many hundreds of my constituents who have written to me to express their deep concern about the Government’s policy. I do not have time to read out extracts from their very moving emails, but I know that Judy, Kenneth, Pat, Tom, Robert and Gwen are all deeply concerned about the impact that it will have. They have reported their health issues, their partners’ disabilities, and the fact that they are just over the limit and will not be able to access the winter fuel payment. That will force them into the classic, depressing choice between heating and eating that this country must avoid.
I have voted against the Government’s policy today for three reasons. First, it is socially regressive and will increase poverty among about 2 million people, nearly 1 million of whom ought to be getting pension credit. The Labour party’s efforts are nowhere near fast enough to avoid increased poverty this winter.
Secondly, the policy is economically innumerate. It will not save the money that the Government argue it will save. There are far better ways to save that money, and to fund the action that is certainly needed to support our public services.
Thirdly, the policy is, frankly, politically inept. I really cannot believe that this Government have spent political capital on making such an unfortunate and unjustifiable political decision.
The winter fuel payment is not, and never was, a perfect policy. I have some sympathy with Members who have spoken today about the inequity of the inclusion error, whereby those who have significant wealth were still receiving the payment, but that has been replaced by a policy with an enormous and dangerous error of exclusion for those 2 million people who will no longer get the support that they need.
Ben Maguire (North Cornwall) (LD)
Of course millionaires do not need the winter fuel payment, but does the hon. Member agree that there must be support for pensioners who really need it, rather than this cruel cliff edge, especially for those living in rural areas such as my constituency who are not connected to the mains gas grid?
Ellie Chowns
I thank the hon. Member for his point. Like him, I live in a rural constituency with many people who are not connected to mains sources of power. This cliff edge is a key problem, and it has been referred to today by Members from across the House.
There must be a better way, and that requires a better sort of politics. I have been in this Chamber today for the entirety of this debate and the one before on the statutory instrument and I have been very disappointed by the tone of some of the comments, the discussion, the debate and the argumentation that I have heard. It is the sort of politics that puts people off what we do here in this Chamber. This is a classic example of how we need to find ways to speak better about such fundamental issues. There must be an option to find some common ground.
In the spirit of constructive criticism and constructive engagement, I urge the Government to stop, to review, to think again and to work out a way of meeting their need to find funding for public services in such a way that it does not place the burden on those not with the broadest shoulders but effectively with the narrowest. We need to find a way of talking not just about how we deal with fuel subsidies but about making sure that every house is warm and well insulated, so that the money is not just going up the chimney, out of the windows and into the pockets of the energy companies. We must invest for the long term so that every home is warm and every pensioner can keep warm.
Dr Neil Hudson (Epping Forest) (Con)
Two months ago, the Labour party was elected promising change and a Government of public service. Although their announcement to cut winter fuel payments is change, I doubt it is one that millions of pensioners up and down the land thought that they would make. In terms of a Government of service, I struggle to think of a greater disservice to millions of pensioners than taking away the winter fuel payment on which they rely. Pensioners who have worked hard all their lives deserve dignity and respect in their retirement, instead of this harsh and ill-judged policy from Labour.
Many of those pensioners will be forced to make a tough decision this winter about whether to have the heating on, as energy prices rise and temperatures drop. The Government have admitted to me in a response to a parliamentary question that, shockingly, they believe that 15,744 of my constituents in Epping Forest will have their winter fuel allowance withdrawn by the Labour Government this winter, among the more than 8.6 million pensioners right across England who will have this lifeline withdrawn. This could have so many implications for the health of older people, who spend more time inside their homes when facing conditions, some of which need social care.
There is a real concern that being cold at home may have a detrimental effect on people’s health, as we have heard from some of our medical colleagues today, resulting in respiratory disease, rising blood pressure, an increased risk of strokes and heart attacks and even hypothermia. It is recommended by the UK Health Security Agency that the temperature should be 21°C in living areas and 18°C in bedrooms, which pensioners are going to struggle with this winter.
Sir Gavin Williamson
In Stone, Great Wyrley and Penkridge, over 19,600 pensioners are going to lose their winter fuel payments. Of course, so many of them are incredibly proud and do not want to apply for additional benefits, and so many will be just outside of being eligible. The decisions of this Government are condemning them to a cold and incredibly hard winter.
Dr Hudson
My right hon. Friend is exactly right that many people are too proud to claim these benefits, and that many people are just above the cut-off point. These people have been portrayed by some Labour Members as rich and able to deal with it, but that is not the case.
I am proud that our Conservative Government not only provided winter fuel payments, but extensively supported older people and the country through difficult times during the pandemic and the effects of the war in the Ukraine and, very importantly, that they honoured the Conservative triple lock, meaning that pensioners got the pension increases they deserve.
I am also proud that my party is continuing to defend older people, including through the compassionate Conservative motion that triggered this debate and vote, and that I was proud to sign. The economic decisions we make speak volumes about our values as a society and a country. How the Labour Government respond to this debate on winter fuel payments, and how they respond in the upcoming Budget, is their chance to show where their values truly lie. This Government need to confirm that, now and in the upcoming Budget, their need to save money will not come at the expense of older people and the financial support they need.
This Government really need to think again about their move to cut winter fuel payments, for the sake of the millions of older people who need them and for the implications it will have. If Labour chooses to continue with this heartless policy, my constituents and the constituents of Conservative colleagues can be assured that my party and I will continue to stand up for our pensioners and will maintain our call that the winter fuel payment cut be reversed.
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
I will reduce the time limit still further, to two minutes, after the next speaker.
Yuan Yang (Earley and Woodley) (Lab)
My volunteers and I have been out speaking to residents across my constituency every weekend since the general election. Like many others, Earley and Woodley is a very diverse constituency with diverse needs. Last weekend we spoke to relatively well-off pensioners who told us that they feel it is right that winter fuel payments be means-tested and that, with their sense of dignity and generosity, they do not need state aid in this respect.
Pensioners in other parts of my constituency are less well off, and I was shocked to find that one in three pensioners in my constituency who are eligible for pension credit, which is roughly 1,000 pensioners—as well as one in three across the UK who are eligible for pension credit, or 880,000—do not claim it.
Over the weekend I held one of my first constituency surgeries at the Whitley community development association café. A staff member told me that they talk to the pensioners who come in about the struggles they face with the cost of living crisis that has unravelled over the last few years. They talk to them about support, but these elderly people respond, “No, I don’t need benefits. I don’t need help.” I recognise that as part of the broader societal stigma around being a recipient of benefits and state aid, which this Government must challenge and defeat.
A compassionate, generous and dignified society recognises when people require help, when people do not require help and when people can help others, and accepts that people sometimes fall on hard times due to an accident, bereavement, illness or other reasons outside their control. For those who need help, it is not undignified to seek it. In fact, it is very important that every pensioner listening to my speech, whether they are in my Earley and Woodley constituency or elsewhere in the UK, knows how to seek help and can seek it if they need it. I am determined that we bring about a dignified and fair means-tested benefit and tax system. Fairness and dignity will keep that system functioning.
Members on both sides of the House have talked about civility. We too often hear about individuals and societal groups being pitted against each other. Pensioners in Earley and Woodley are part of the broader community, and they have children and grandchildren who work in hospitals, who require care, who are supported by teachers, who take buses and trains and, yes, who avail themselves of all the means of support provided to maintain our flourishing and cohesive society. It is unacceptable—
Rebecca Harris (Castle Point) (Con)
About 20,000 pensioners in Castle Point are set to lose their winter fuel payment under this cruel and vindictive policy that the Labour Government have chosen to adopt. Contrary to the accusations from the Government, I have, with the support of former Work and Pensions Ministers, run campaign after campaign to increase the uptake of pension credit. Only 2,076 pensioners receive it in my constituency, despite campaign after campaign and leafletting groups and churches. It is not easy to get people to take it up—some are proud. I have raised my voice with elderly ladies who have said it is charity, and told them, “No, it’s not. It’s not charity—we don’t think you can live without it.” We have tried very hard.
Hundreds of worried constituents have written to me about heating their homes. We have lots of low energy efficiency homes, including one of the biggest park home sites in the country, and I have many park home sites. Fortunately, we managed to find £2.5 million from the previous Government to retrofit some of them, but we still have a lot of people living in fuel-inefficient homes that are hard to retrofit. The worry that this is causing people is the biggest issue I see now, and it shows how out of touch and arrogant the Labour Government are that they do not understand this about pensioners. People who are 75 and on a fixed income may have a little bit of savings or a modest private pension—
Patrick Spencer
I think all hon. Members are very disappointed not to see a proper impact analysis of this decision. Does my hon. Friend agree that the best way to analyse the impact of such a policy is to speak to the people who sent us to this place, as she is saying, and to hear the utter fear and concern they have about its impact?
Rebecca Harris
My hon. Friend is spot on. It is the anxiety that it causes people. They do not know if they will live another 18 months or 25 years. People on fixed incomes, with no ability to raise that income, are very worried about spending money. There is also a large and, sadly, growing cohort of elderly residents who are developing dementia, and one of the early symptoms, often, is financial anxiety, including in people whom we would think of as really quite wealthy. I have known residents who have regressed to thinking that they are still living under rationing because they grew up as a lad in abject poverty, and they will not spend money. Being told, “Here’s £300 for fuel,” makes a world of difference to those people.
I was not a fan of Gordon Brown, who once gave a derisory 75p increase to pensioners, but this policy was a huge success—credit to him. That is why my Government never changed it. For £300 for every pensioner, we give incredible peace of mind that they can put their heating on—
Dr Caroline Johnson
Does my hon. Friend worry, as I do, that some of our constituents will die this year as a result of this policy?
Rebecca Harris
I do not think that I need to worry; I think we know that will happen, because we know about their behaviour and their concerns about putting the heating on, and their lack of understanding of how much every heating bill will cost them. This £300 was psychologically very important to knowing that they could put their heating on to keep them healthy and out of hospital. Of all the tough decisions that we had to consider when we came into office in 2010, when there was no magicked-up, home-made £22 billion black hole excuse—there was a vast deficit and we had to make a lot of tough decisions—we never made this one.
Stuart Anderson (South Shropshire) (Con)
I am sure Labour Members never thought in the general election campaign that they would be giving pensioners the choice between heating and eating. Many Labour Members have not even bothered to turn up for a debate on something so critical for many pensioners across this country. We have talked about choices, and this is all about choices. The Government have made a political choice. Labour Members will all have to make a choice, and face their constituents whether they vote for or against. I urge them not to cut the winter fuel allowance.
Let me go on a journey and set out the narrative. The Government say there is a debt and imagine there is a black hole they have to fill, so let us have a look at the numbers. They say they have to find £22 billion, so let us cut £1.1 billion but in the same breath add £9 billion for the pensions. At the same time, the red herring that is the Great British Energy flop adds another £8.4 billion. That is a decision that the Government have made, but why would the Labour party let numbers get in the way of a good story? The numbers show the Government have no issue making decisions against pensioners.
I am a proud veteran. In November, on Remembrance Day, we ask people to remember those who paid the ultimate sacrifice in the service of their country. I challenge Labour Members to look at pensioners who have served and say, “We will never forget,” because those pensioners have already been forgotten.
Bradley Thomas (Bromsgrove) (Con)
In the spirit of what my hon. Friend describes, I will cite the example of Betty Webb, a constituent of mine who received an MBE for her work as a codebreaker at Bletchley Park. She is 101 years old. She is a widow who lives alone. She is living in fear not just that the Government will take away the winter fuel allowance, but that in future they will snatch away the 25% single person’s discount on council tax. Many other constituents of mine are fearful of the same thing.
Stuart Anderson
My hon. Friend makes a great point. Pensioners, including those who have given a life of service to this country, are living in fear of what is coming next. Almost a third of residents in South Shropshire are pensioners, and they have been writing to me and they are absolutely livid. They feel like they have been led down the garden path—taking away this payment was not what was promised. It is cruel, heartless and callous. This policy needs to change.
The Chancellor has made a rookie error. She has gone into the Treasury and, with everything in front of her, said, “Do this,” and she has removed the personal view. She has made a political decision—[Interruption.] Of course it is a rookie error. This is a massive error. She has listened and removed people from the equation. When people are removed from politics, it is a road to nowhere. Will the Chancellor go and see the Downing Street chief of staff and ask for permission to reverse this proposal?
Rebecca Smith (South West Devon) (Con)
Nearly 22,000 of my constituents will lose their winter fuel payments. Currently, only 1,500 will receive it. That is a massive cliff edge for those 22,000 residents. While many of them may feel that they do not require that payment, as has been mentioned by other hon. Members, the vast majority of those pensioners fall into low and middle-income brackets because things do not have such high financial value in the south-west.
As the hon. Member for North Cornwall (Ben Maguire) alluded to, many properties are off-grid. Members may not have realised that 24% of homes across the south-west do not have gas, which is a much cheaper source of energy. They resort to using oil and logs to heat their homes, with the enormous costs that go with them. That is an additional challenge.
Concerns have been raised about those who are single, those in receipt of the older basic state pension, which is not as high as the new state pension, and those with health conditions. The first resident to contact me was a 74-year-old single man, on an older-style pension, who was just outside the bracket for pension credit or any other form of benefit, who was deeply concerned about this winter.
Joe Robertson (Isle of Wight East) (Con)
My hon. Friend makes a good point about those with health conditions. Does she agree that there is no provision in the proposal for those living with dementia or long-term frailty? Those are not means-tested diseases or conditions, yet the Government have not made any provision or assessment of how those living with dementia will miss out.
Rebecca Smith
I agree. My hon. Friend makes an incredibly important point about those vulnerable older people who live with dementia; many of our constituents will be in that situation.
Why are we not looking at alternative ways to deal with this cliff edge? A couple of years ago, the Conservative party proposed the council tax rebate scheme, which used the council tax system as a mechanism to ensure the most vulnerable received support. Single-person households, those where someone had dementia, or households in receipt of council tax credit because they did not have a particularly high income received a discount through the council tax rebate scheme. That system could be replicated with the winter fuel payment, which would offer an alternative way of avoiding that cliff edge for so many residents.
Finally, I know that health has already been mentioned, but I wish to use this as an opportunity to highlight the fact that so many more elderly people will need hospital care this winter, but that is massively impacted and at risk because the Government will not confirm which of the new hospital programmes are going forward. In particular, the emergency and urgent care centre in Plymouth will be vital to providing the healthcare that our older people will need if they are unable to heat their homes or to look after themselves, and to ensuring that they have all the support they need.
Ann Davies (Caerfyrddin) (PC)
It was only two months ago that Labour won a majority in the general election on a message of change. But in those two months the new Labour UK Government have refused to abolish the cruel two-child benefit cap and now seek to take away winter fuel payments of up to £300 from millions of pensioners across the UK, by limiting it to recipients of pension credit. Well, nothing has changed.
Some 68% of households in Carmarthenshire lived in homes with poor energy efficiency in 2022, and 60.4% of households in my Caerfyrddin seat live off the gas grid, often relying on oil as a heat source. But the price of oil is very volatile, and in winter we can see it going up by 20p or 30p a litre, causing uncertainty for people budgeting over the winter.
Not heating a home can have serious consequences. A cold home brings with it a higher risk of stroke, respiratory infection and falls or other injuries. The End Fuel Poverty Coalition estimated that nearly 5,000 excess winter deaths were caused by living in cold homes during the winter of 2022-23. And many older, vulnerable people have higher energy costs due to health reasons.
It is a shame that the Minister of State for Crime, Policing and Fire misspoke earlier this week, as the consideration of other options, such as a social tariff or different ways of means testing, would be welcomed. As constructive criticism, can the Government bring the winter fuel payment within the definition of a taxable income to ensure that pensioners get what they need?
In closing, I call on colleagues to consider whether they can justify—
Alicia Kearns (Rutland and Stamford) (Con)
I rise to speak on behalf of the 20,800 pensioners in Rutland, Stamford and the Harborough and South Kesteven villages who will lose their winter fuel payment this winter. This decision affects millions of people who bought into our country’s social contract: you work hard, you pay your taxes and when you grow old, we will support you through your retirement.
I make two requests of the Labour Government, although I know that they will both be rejected. First, I ask them to delay implementation to give people more time to prepare. Older people are some of the most financially cautious in our society. They save, they go without, they avoid debt, and they give what they can to their children, their grandchildren and their friends in need. A delay of a year would give people the time to claim pension credit, if eligible, to face the upcoming increase in energy bills and to plan for the next winter.
Secondly, I ask the Government to give an exemption to anyone suffering from a chronic or life-shortening illness. Since this cut was announced, I have heard from so many people, including Di, who emailed me out of concern not for herself, but for her husband Jeff, who suffers from cancer and has to wear three layers of clothes all year round, even in the summer. As Di put it, the decision—and it is a decision by the Prime Minister—is penalising the ill. Her “hubby will suffer” and she is shattered.
We will hear a lot from the Government about hard choices, but if I were asked to choose between heating the homes of the elderly, cancer sufferers and dementia sufferers or giving a no-strings-attached pay rise to train drivers already on nearly £70,000, the choice would be pretty damn obvious to me. But then, ASLEF did not donate to my election campaign.
People say that we can tell a lot about a society by how it treats its most vulnerable and its eldest. If we apply that test to this cut, anyone with a heart will know that it is wrong. I, for one, will never vote to deprive the most vulnerable and our elderly of warmth.
Lincoln Jopp (Spelthorne) (Con)
When I was 14 years old, I started delivering Meals on Wheels on Christmas day for the disadvantaged around west London, and I have done so every year since that I have lived in London. The scheme is organised by Age UK and it is a privilege to be invited into people’s homes in midwinter. I look forward to doing it again this Christmas, and I hope that those I visited last year will be there this year.
The Government are seeking to raise money, and I get that. They are seeking to do so by getting those with the broader shoulders to take the heaviest load, and I get that too. In order to achieve those goals, the Government are means-testing the winter fuel payment—and there is the rub. By choosing that means test, the Government are indeed taking the winter fuel payment from millionaire pensioners, but they are also taking it from the much less well off and from the not well off at all. In short, they are cutting too deep.
Mistakes happen, but it is how we deal with mistakes that is important. I spent the weekend listening to the Prime Minister using the word “tough” as many times as he possibly could. On the battlefields of the world, which I have been on for the last 25 years, toughness was not one of the things that people looked for in their leaders. The two things they looked for were courage and competence. Courage—moral courage—sometimes means that people need to admit when they have made a mistake and change their plan. However, the people of Spelthorne—and, I suspect, the pensioners across the country—would just settle for a bit of competence. This Government need to get good at governing, and they need to do so quickly.
John Cooper (Dumfries and Galloway) (Con)
We have heard descriptions today of pensioners as millionaires. We have heard that this is a principled decision to cut money from them. I am astonished at that description. Like my hon. Friend the Member for South West Devon (Rebecca Smith), I am from the south-west—the south-west of Scotland—and I can count on one hand, I would suggest, the number of millionaire pensioners there. Even if their homes were worth millions, having risen in price through no fault of theirs, they are asset-rich, and that is very different from being cash and liquidity rich. If they are hit with a bill, they cannot sell their home. That leaves people in an absolute bind.
We have heard very little today from the SNP, because in Scotland the SNP Government have the ability to ameliorate this decision, should it go ahead. It will cost, they estimate, £160 million. I accept that is not buttons; it is not peanuts. However, the last Conservative Government sent £41 billion to Scotland and I think we should be able to find that money in Scotland to help the worst-off in our society. This is a wrong-headed decision, and I am astonished to hear it being described as a principled decision.
Jess Brown-Fuller (Chichester) (LD)
Since the announcement of the Government’s plans, I and colleagues across this House have been inundated with heartfelt stories of elderly people across the country who will be unfairly harmed by the removal of the winter fuel allowance. It is concerning that the impact was not properly assessed before the Government took this step.
In Chichester, we have 24,000 pensioners who are not receiving pension credits, many of whom sit just above the threshold—constituents such as Sherry, who is 80 and registered disabled. She has to maintain an even living temperature to deal with conditions while living in a 100-year-old cottage with poor insulation. Roy and his wife are in their late 80s and have burned through their meagre savings covering their rising energy bills during this cost of living crisis. Vicky writes to me about having to choose between eating and heating in the current winter months because she will not be able to afford to do both.
Our elderly, who have worked hard throughout their lives, are now being abandoned by a Government that should be supporting them when they need help the most. The Liberal Democrats understand the disastrous state our public finances have been left in, due to the fiscal mismanagement of the previous Conservative Government, and we recognise that tough decisions need to be made. However, those decisions should not be made at the expense of our elderly.
The burden of this Conservative fiscal chaos needs to be spread to those with the broadest shoulders, rather than punishing those who have already been hit hardest by it. Cutting the winter fuel allowance in the midst of a cost of living crisis will leave thousands of elderly individuals across Chichester and millions across the UK without the financial support they need to stay warm and healthy this winter. With the price cap due to rise in October, it could be argued that the winter fuel allowance is needed this winter more than ever.
Paul Holmes (Hamble Valley) (Con)
The change that the Government announced this morning will mean than 18,300 of my constituents will go without their winter fuel payment this Christmas. In the brief time that I have, I will set out why I believe that is just the start from the Government.
The first reason is that cutting winter fuel payments for poorer pensioners is a political choice, not a necessity, despite what the Leader of the House says. Over the election period, Labour said that it would not cut the winter fuel payment. It has broken its promise to the British people, and they will remember that. Labour also said that it would possibly do more, although it has denied that it would not do more. Today’s measures will save £1 billion, as I outlined in my earlier intervention, but Labour has awarded inflation-busting pay rises of £9 billion to its union paymasters.
Peter Swallow
Can the hon. Member explain to the House and to his constituents why he would not back fair pay rises for teachers, nurses, prison officers and members of the armed forces in his constituency?
Paul Holmes
I will not take any lectures from the hon. Member, but I say to him that I always defend pay rises for people in this country who deserve them, which is exactly what the Conservative Government did. What our Government did not do was award inflation-busting pay rises of 22% to the people who paid for our general election campaign, increasing inflation in this country. I believe that people deserve pay rises, but that should be done within a responsible fiscal envelope. The Labour Government simply have not done that.
As we heard from the Chancellor earlier, the measures that she has announced will cost more than the savings generated from scrapping the winter fuel payments—that is a shambles. The Government have done this at a time when energy bills will increase by 10%, despite the Labour party’s promise in Opposition that it would freeze energy bills—another broken promise that pensioners will have to face this Christmas. The Government have also refused to rule out scrapping the 25% single occupancy discount for pensioners and single people. If that goes ahead, they will deprive pensioners of another £600 on average. That is a political choice and a cost of living bombshell that this Labour Government—supposedly the party of hard-working people—will impose on vulnerable and poorer pensioners across the country.
Labour Members have a choice this afternoon and going forward. They should reverse the cut, stand up for the thousands of people in their constituencies who will be made poorer by the Government, and reject the measures that they outlined earlier. Let me put it this way: 18,000 people in my constituency rely on the winter fuel payment, as do thousands of Labour Members’ constituents. When we go to the ballot box in four years’ time, I look forward to Labour Members standing up and explaining to those pensioners why they made them poorer.
Lewis Cocking (Broxbourne) (Con)
In my first speech in this Chamber, I assured the House than my nan would keep me on my toes. Even before the cut to the winter fuel payment had hit the news headlines, she was on the phone to me to sort it out. My nan is one of 15,000 pensioners in Broxbourne who will end up losing £300 a year—a vital sum of money that would help them to keep their homes warm this winter. The Government’s priorities are clearly dictated by their union paymasters, so I am tempted to advise my nan to start her own pensioners’ union. If there were one, I am sure that pensioners would have seen their winter fuel payments go up rather than be abolished.
When we put the Chancellor’s decision into context, it is even more staggering. Labour’s deals with the unions, which have cost the taxpayer £14 billion, will see the average salary of train drivers, who are already well paid, rise from £60,000 to £70,000 a year. Help for heating bills is being taken away from the elderly, but the energy price cap is going up by 10% in a few weeks’ time—a double blow for pensioners. Was making it more expensive for pensioners to heat their homes in Labour’s manifesto? It was not. In fact, we were told that Labour would slash fuel poverty and save families hundreds of pounds. That is yet another broken promise, and Labour has been in power for only 10 weeks.
My nan is not the only one to have got in touch with me about this; I have been inundated with letters and emails from hundreds of constituents. Winter is coming, and I strongly urge the Government to change course.
Aphra Brandreth (Chester South and Eddisbury) (Con)
My constituency has a higher proportion of people in receipt of winter fuel payments than most other constituencies. Over 21,000 of them are set to lose that vital support. Constituents have told me that they face a choice between eating and heating. Others have told me that they are concerned for their health during the cold winter months. Their stories are a powerful reminder of the human cost of this decision.
Maggie is 86 and lives in Handbridge in my constituency. She worked as a midwife in the NHS for 40 years, so has a state pension and a small NHS pension. She is not eligible for additional benefits because she was careful with what she earned and saved wisely. Maggie is just above the threshold to be eligible for continued support. She is also a dual cancer survivor, having beaten breast cancer in 2013 and bowel cancer in 2016. Maggie is understandably worried about the consequences of being unable to heat her home this winter. There is also the story of Jackie and John, who live in Audlem. Like many people living in a rural village, they live off grid and do not have access to mains gas. They must rely on heating oil to heat their home.
Pensioners who have paid into the system all their working lives ought to be able to enjoy their retirement with dignity, security and respect. We all know in this House that to govern is to choose. Labour has chosen. It has chosen its union paymasters over our vulnerable pensioner communities. It has let down Maggie, John and Jackie, and many others like them. I urge the Government to listen with compassion and reconsider this political decision.
Kirsty Blackman (Aberdeen North) (SNP)
For over five years, I have been raising the issue of impact assessments and the fact that they do not make sense. I see the Opposition Front Benchers nodding along, because they know that I have been raising that issue.
Impact assessments are done on a stupid basis that does not make any sense, and certainly not in today’s world. If the Opposition Front Benchers had only changed it when they had the opportunity, we would not be in this situation today. But the Labour party has the opportunity to change the way we do impact assessments so that they actually make sense. They should be about not just whether businesses will be impacted to the tune of £5 million, but what matters to people and whether their lives will be impacted by a change in policy. That is the point at which impact assessments should be done.
We do not have an impact assessment for this policy. Do the Labour party and the UK Government know that single women are three times more likely to be missing out on pension credit than single men? Does the Labour party know that pensioners who are black or from Asian ethnic backgrounds are more likely to be in poverty than white pensioners? Does it therefore know that this decision has a differential impact on minority communities? Is that why it has refused to share the impact assessments with us? How will this policy grow the economy? How will ensuring that pensioners, who we know spend in their local communities, have less money to spend in those local shops grow the economy?
The issue with all of this is not whether we have a Tory or a Labour Government. It is that Westminster consistently fails to work for the people of Scotland.
Joy Morrissey (Beaconsfield) (Con)
I find it slightly ironic that we are debating this policy today. This is about political choice. A policy that was brought in under Gordon Brown—a social democratic policy of inclusivity under which everyone buys into the state—is being scrapped in favour of a neoliberal means-tested policy, one that I think most actual Labour socialists would be ashamed of.
I declare an interest: I am a member of Care Campaign for the Vulnerable, which helps elderly residents who have medical issues or are in care. One of the issues for those elderly people is heating. These are the elderly who fought for the reconstruction of Britain in post-war London and across the UK, had rationing for years and years and paid their taxes. We have built this country on the back of their hard work and sacrifice, only to turn around and say, “No. We did not scrap this policy under 14 years of a Conservative Government, but we are scrapping it as the first thing we do as a Labour Government.”
I am not even blaming the Minister, the hon. Member for Ealing North (James Murray). I knew the Minister and his parents when they were councillors with me in Ealing—true socialists, for the many, not the few. I am not sure that applies here. This is a political choice to give Labour’s union paymasters a pay rise over vulnerable pensioners. This is about paying £8 billion or £9 billion for an energy company that will not generate a single watt of energy. This is about political choice and political will. If we, the Conservatives, could keep a Labour policy for our entire time in government, it is shocking and disheartening that the Labour party is making this choice now.
Dr Luke Evans (Hinckley and Bosworth) (Con)
Maybe in two minutes, this debate can best be summed up with a lesser-known fable: the farmer and the viper. A farmer was walking through his field. It was very cold in the winter, and he found a viper just under the bushes. The viper was cold, limp, and almost dead. The farmer knew it was poisonous, but he felt compassion for the creature, picked it up and put it in his pocket. As the creature became warm, it reverted to type and bit him and, as he died in that field, he said, “I got what I deserved. I shouldn’t have shown kindness to a scoundrel.”
That rings true, because after 14 years of the Labour party being out in the cold, the pensioners of this country backed Labour into government, under an impression created by the Prime Minister. Only in May 2024, he goaded our Government, asking
“Will the Prime Minister now rule out taking pensioners’ winter fuel payments off them?”—[Official Report, 1 May 2024; Vol. 749, c. 255.]
If we scratch the surface a little bit deeper, though, we find that, on 25 March 2014, the now Chancellor said that
“We are the party who have said that we will cut the winter fuel allowance for the richest pensioners and means-test that benefit to save money”—[Official Report, 25 March 2014; Vol. 578, c. 174-175.]
so this is not a response to a concocted black hole. This was a choice—as Laura Kuenssberg pointed out, it was a choice to pay the unions on the back of our pensioners.
The public are not stupid. The cartoonist Matt sums it up perfectly when he says, “Surprisingly, Robin Hood, nobody likes your plan to steal from pensioners to give to train drivers.” I was in the Chamber last week when the Secretary of State for Energy Security and Net Zero said that Conservative Members should
“show a bit of bravery—even break the Whip and stand out from the crowd.”—[Official Report, 5 September 2024; Vol. 753, c. 461.]
I am disappointed that Labour Members did not take that advice, with only one Labour MP doing so.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call another doctor, Dr Kieran Mullan.
Dr Kieran Mullan (Bexhill and Battle) (Con)
I rise to express my strong opposition to the Government’s decision to remove the winter fuel payment from millions of pensioners, a move that will strip vital financial support from thousands of my constituents—people who have contributed to our country and helped to build it. The impact in Bexhill and Battle will be profound: Age UK estimates that more than 25,000 pensioners will lose their winter fuel payment as a result of this decision. I hope the Government understand just how significant their decision is in constituencies such as mine.
The Government say that they are focused on increasing the uptake of pension credit. If all those who are eligible to claim pension credit do so, though, the £1.4 billion that the Treasury is expected to save by means-testing the winter fuel payment will be dwarfed by the increase in the cost of pension credit, so the Government have to admit that, ultimately, they do not actually want all those pensioners to take up pension credit.
Our pensioners deserve better. The fall-back of this Government since they took office is to blame the previous Government for all the unpopular actions they have decided to take. They claim the state of the economy is a reason to remove this vital lifeline for pensioners, but let us be clear about the facts. On a broad range of indicators, the situation they have inherited is significantly less challenging than the one we inherited in 2010. We inherited an economy just out of the deepest recession since 1955. Labour left us with public sector net borrowing at 10.3% of GDP; today it is at 4.4%. Unemployment in 2010 was 7.9%; unemployment now stands at 4.1%.
However, from 2010 onwards, through all these difficult times, we made decisions to protect pensioners, and we made sure to keep the winter fuel payment. It was the right thing to do then, and it is the right thing to do now. I ask the Government to listen to MPs from across the House, including some on their own Benches, and think again.
Carla Lockhart (Upper Bann) (DUP)
The Prime Minister and Labour Members tried to bring this country together after division and turmoil, and today I have to say they have succeeded. They have united the country. They have united it in opposition to this new Labour Government and their attack on older people—the very people who deserve compassion, dignity and respect after their lifetime of hard work.
I stand unashamedly shoulder to shoulder with pensioners in Upper Bann and across the United Kingdom in their opposition to this reckless decision. Our pensioners are being left out in the cold by a Government who promised to restore hope. Where is the compassionate Labour we were promised? Where is the restored hope? What hope do pensioners have in Upper Bann? What hope do they have that this Government might listen, care for them and stop neglecting them? They now feel like they are the target.
To be fair, this Government have offered pensioners something to keep them busy through the cold winter months by suggesting they take a stab at completing the pension credit application form—a form with 243 questions across 24 pages, with a delay of nine weeks for a decision. They are asking pensioners to navigate a bureaucratic nightmare just to receive a fraction of what they need to survive. I stand here today united with my constituents and united with pensioners across this country in opposition to this baseless decision.
In conclusion, no one is arguing that millionaires should get the winter fuel payment, but over 6 million of the pensioners set to be impacted by this decision are living on the state pension. They are living on just over £11,000 a year. Could anyone in this House live on £11,000 a year?
George Freeman (Mid Norfolk) (Con)
Mid Norfolk is a profoundly rural constituency, with 130 villages and four towns, and in that very rural constituency, as with all rural areas in this country, people are paying a surcharge because of energy costs and because of rurality. There will be colder weather, and many of my houses are not on the gas grid, while rural areas traditionally have lower incomes and we have an elderly population.
The Treasury, very helpfully—it is a shame Ministers did not read it—did a piece of work last year looking at the risks of rural poverty and the higher risk of rural areas falling into real poverty. The Treasury’s own figures showed that the average household at risk of poverty in rural areas needs an extra £800; or in layman’s terms, there is a two and a half times—or 250%—higher risk of rural houses falling into rural poverty. So I find it completely extraordinary that Labour, which in government professes to care about poverty and berated my party when in government about the risks of rural poverty and of pensioner poverty, has decided as their first act to punish people in rural areas.
It is because of those rural risks that, earlier this year, I and a number of colleagues set up a fair funding alliance, supported by Action with Communities in Rural England, the Countryside Alliance and rural bodies. Higher fuel and energy prices are hitting rural areas, and we would have hoped that this Government might have listened. I am proud that the Conservative party in government upgraded pensions, protected the triple lock and took 200,000 pensioners out of poverty.
Ben Maguire
The former Member for Thornbury and Yate introduced the triple lock, which was actually a Liberal Democrat policy. Would the hon. Member care to correct the record on that point?
George Freeman
It was my good friend the now noble Lord Willetts in a coalition Government with the Liberal Democrats, and I will happily debate with the hon. Member some of the brave decisions we took.
The point is that this party, the Conservative party, protected pensioners, protected the triple lock and lifted 200,000 people out of poverty, but we see this Labour Government make this decision. The Minister put it very clearly earlier. This is an attack on people who own their own homes, people who have retired in rural areas and those just over the threshold, and in Labour world they are millionaires. This will not be forgotten by people in my constituency, the low-income rural pensioners who have saved up to be able to afford their own home and are now being clobbered. It is unfair, it is unjust, it is unjustifiable, it is unprecedented, and I urge and beg Ministers to think again.
Robbie Moore (Keighley and Ilkley) (Con)
I rise to voice my strong opposition to the Labour Government’s cruel choice to scrap the winter fuel allowance for an estimated 10 million pensioners across the country. I have been contacted by hundreds of pensioners in my constituency who are all incredibly concerned about the dire consequences of this Government’s decision. I met many of them in surgeries and at Keighley agricultural show this weekend, and they are telling me that they are going to struggle to pay their bills this winter. Statistics show that just over 64,000 pensioners across the Bradford district, including 20,000 in my constituency, will be negatively impacted as a result of the Labour Government’s decision. That, quite frankly, is a disgrace.
Citizens Advice, Age UK and hundreds of charities across the UK have also come out against these proposals, warning that low-income households that are already struggling to make ends meet will be forced this winter into impossible choices between heating their homes or putting food on the table. It is incredibly disappointing to see the hon. Member for Shipley (Anna Dixon) from the Bradford district, vote with the Government this evening, ensuring that she does not stand up for the wider Bradford district, as I will be doing.
It is Labour’s choice that we are putting pensioners at risk as a result of this decision, and Labour’s choice that is putting my constituents, pensioners who are vulnerable, in the dire position of having to decide whether they heat their homes or put food on the table this winter. I only hope that quick changes will be made to ensure that pensioners are looked after in the run-up to winter.
Dave Doogan (Angus and Perthshire Glens) (SNP)
Some 19,500 pensioners in Angus and Perthshire Glens will be stripped of their winter fuel payment by this Labour Government. I cannot tell the House how cold it gets in Angus and Perthshire Glens in wintertime, but if anyone on the Labour Front Bench wants to come and sit in my garage on a January day, I will turn the heating off in the whole property and they can see what it will be like for some pensioners in my constituency.
I will not be supporting this measure because it is incompetent. It is incompetent operationally, because it does not take cognisance of co-morbidities in already frail people, or of what will happen to those people as they budget to try to accommodate this unnecessary cut to their income. It is fiscally incompetent, because it does not take cognisance of whole-system costs—people presenting at hospital or going into care prematurely because they cannot stay at home, because of what they do to try to make ends meet. It does not take account of the cost to the supposed saving of £1.5 billion once pension credit is taken up fully, rendering the saving meaningless. It is morally incompetent because, as we have heard from professionals in the Chamber, as a result of this decision, people will die.
Moreover, this measure was not in the Labour party manifesto, which is reprehensible, and it ignores the cultural sensitivities of older people, many of whom find asking for help anathema; they will never do it, no matter how entitled they are. I very much hope that when the Minister sums up the debate, she will estimate how many of the 209 extra Labour MPs in this House, including 37 in Scotland, would be here if cutting the winter fuel payment had been on the face of their manifesto. It would be very many fewer.
Sir Ashley Fox (Bridgwater) (Con)
I speak on behalf of 19,300 pensioners in my constituency who are set to lose their winter fuel allowance. Some 23% of my constituents are aged 65 or over, which is well above the national average. Many retired people in my constituency have done the right thing: they have worked all their lives, paid their national insurance stamp, and now have a small private pension and modest savings. It is because they have done the right thing that many of those pensioners are not eligible to claim pension credit. This Government are choosing to punish them for the prudent and conscientious choices they made through their working lives by withdrawing this important means of support.
Labour justified the decision to cut the winter fuel allowance by talking about its alleged poor economic inheritance. Let us take a moment to clear up some facts. In 2010, the budget deficit was about 11% of GDP at £157 billion. Today, it is about 4% of GDP. In 2010, unemployment was about 8%, and today it has halved and is about 4%. In May 2010, inflation was 3.4%. Today it is 2%. This is not the worst economic inheritance since the war.
Patrick Spencer
I am sure my hon. Friend will agree when I say that the economic inheritance that the Government received is incredible, considering that we had to deal with the covid pandemic crisis as well as the Russian invasion of Ukraine. That put huge pressure on our economy.
Sir Ashley Fox
My hon. Friend makes an important point. It just emphasises the fact that when the Chancellor says that it is a tough decision that has to be made, she is actually making a political choice. She has chosen to give train drivers earning £60,000 a year a pay rise of 15%. She has chosen to cut the income of retired people with a pension of £15,000 a year. That was her choice, and the British people will judge her and the Labour party on it.
Nick Timothy (West Suffolk) (Con)
Let us be absolutely clear about what has happened today: every single Labour MP who voted to cut the winter fuel allowance has broken their promise to the country. Pensioners know that before the election Labour denied that it was going to do this, but they might not know that the Chancellor had been planning it for 10 years. In 2014 she said:
“we will cut the winter fuel allowance for the richest pensioners and means-test that benefit to save money”.—[Official Report, 25 March 2014; Vol. 578, c. 174.]
Are we supposed to believe that she changed her mind after that and then changed it back again shortly after the general election? I do not think so.
There may be a case for means-testing, but the Chancellor is cutting the payment not just for the richest pensioners, but for pensioners on very modest incomes. She is also not making the case for it. She is asking the Secretary of State for Work and Pensions to do her dirty work for her. If winter fuel payments are to be means-tested, surely the proceeds should go towards low-income pensioners and the cost of social care, but they are not. They are going on above-inflation pay rises for the likes of Labour donors ASLEF.
Richard Tice (Boston and Skegness) (Reform)
Last Friday in Boston I was stopped by a pensioner, a lovely lady called Elizabeth, who shook my hand and burst into tears—uncontrollable tears of genuine fear. She represents more than 22,200 pensioners in Boston and Skegness who will lose out through this cruel policy. It was the fear of being cold this winter—not knowing how cold—and the fear of what will happen to energy prices in October. How high will they go in January? It was the unbelievable fear of not knowing whether she will see the end of winter, because that is the reality: older, colder people die early.
We have heard about choices a lot today. It is true that this Government have made a calculated deliberate, heartless, cruel choice to enrich their union paymasters, to enrich public sector workers with no requirements on productivity, to enrich well-paid train drivers and to impoverish pensioners. Let me tell this House that voters will not forget and they will not forgive.
Harriet Cross (Gordon and Buchan) (Con)
Some 17,047 pensioners in Gordon and Buchan will lose their winter fuel payment following today’s vote by the Labour party, but this decision for my constituents shows that they are being let down by their Governments at Holyrood and at Westminster. The Labour party is choosing to let them down by cutting the winter fuel payment, and the SNP is choosing not to pass on Barnett consequentials. In north-east Scotland, winters are longer and harsher than in most of the country. Our temperatures often fall below minus 10°C for a sustained period, and in recent years it has not been unusual to have had minus 20°C in Aberdeenshire. The winter fuel payment is not a luxury for our pensioners; it is a lifeline.
This is the Labour party’s choice. As much as it would like to explain that choice away, it has chosen to cut the winter fuel payment, and it must face what that means. Labour’s choice means that our pensioners now have to make their own choices, so Labour’s choice has become a pensioner’s choice.
Perhaps most shocking of all is Labour’s breathtaking hypocrisy on this issue. In 2017, Labour Members on these Opposition Benches had their own research showing that cutting winter fuel payments could lead to almost 4,000 excess deaths. They then vehemently opposed any changes to what they called that “vital” support. What has changed? Have pensioners suddenly become more resilient to the cold, or has the Labour party simply abandoned its principles to fund its own political choices?
Many pensioners in my constituency still rely on solid fuels such as oil, so once a year, going into winter, they fill up their tanks. Payment for that will be coming shortly—before November, and way before next year and any pension rises. How will those pensioners afford to fill their tanks and heat their homes in the months to come?
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
I am grateful for all the bobbing, but we must now go to the Front-Bench speakers. I call the shadow Minister.
Mims Davies (East Grinstead and Uckfield) (Con)
I welcome the Under-Secretary of State for Work and Pensions, the hon. Member for Wycombe (Emma Reynolds), to her place and wish her well. It is a pleasure to close the debate on behalf of His Majesty’s official Opposition, but sadly that is where any pleasure at being at this Dispatch Box on this matter ends.
We have debated a clear and stark choice made by the new Labour Government, the Prime Minister and his “This black hole is what made me do it” Chancellor. It is a patently poor political choice that is wrong-headed and frankly a disgrace. It is a blatant choice for union paymasters while axing key support for 10 million pensioners. It is a reward for Labour’s funders. None of that was in the manifesto or on election leaflets—it is pure subterfuge and hoodwinking.
No charity or group fully backs this measure, given the timescales and its cack-handed and draconian delivery. The Government can bluster and say with the faux anger we heard earlier that they have been acting with the hand they were given. They can say that they simply had no choice and that this was a necessity due to the fantasy inheritance they were allegedly left. Let us look at the facts. UK unemployment sits at 4.1%, sterling is up against the dollar and growth is outpacing inflation. Despite some loyal speeches from new Government Members and passionate speeches from all around the Chamber, Labour Members know—many of them were blank, mute, absent or perhaps even stunned—that Ministers are targeting our pensioners with so little notice.
As the nights draw in, higher winter fuel bills loom. To dress up this measure under the cloak of financial necessity is staggering. It is a costly mistake from the Treasury under the Labour Chancellor that the DWP will have to shoulder, moving staff swiftly to cover the incoming impact of those applying for pension credit. What about those who had planned to pay for their pre-Christmas tank of off-grid oil with their £300 of expected support? The demand surge for pension credit must be met in both cost and delivery, and DWP Ministers will be scratching their heads about where the resource will come from for the reported surge in pension credit applications.
Mims Davies
I will give way to the hon. Gentleman if he can tell us why he thinks this is a good idea.
Robin Swann
I can assure the shadow Minister that I do not think it is a good idea. On the point that she and others have raised about no assessment having been done, I represent Northern Ireland, where 49.5% of homes rely solely on oil for heat. Does she think that the Government realise the additional pressures that will be put on Northern Ireland pensioners following the decision? Our Minister for Communities announced today that 306,000 people will lose the payment.
Mims Davies
I thank the hon. Gentleman for standing up for his constituents. I agree about the disproportionate and deep impact on our cold spots in Northern Ireland, rural areas, the north and Scotland.
This benefit reform will not be easy. We bear the scars on the Opposition Benches from universal credit, but the change was truly worth it. As the hon. Gentleman said, what does the impact assessment actually say? Who gains, and does it stack up financially? I think we all know that it does not, else the Government would have not ignored the Social Security Advisory Committee process and its scrutiny. They would have done a proper impact assessment and a regulatory assessment, and they would not have tried to avoid a vote on the Floor of the House.
Government Members will troop through the Lobby again, as fodder for an out-of-touch Prime Minister, or they may abstain to avoid the eyes of the Chancellor, deep in the hope that spraying billions of pounds on gimmicks like a shell company called GB Energy will be worth it. They must be aware that they will have to face people in their communities who will want to understand why a few millionaires were worth the attack on millions. Let us take June. She told the BBC that she will struggle to stay warm this winter. She is already planning her jumpers, cardigans and candles. My constituent Valerie from East Grinstead wrote to me—one of almost 20,000 affected—and said:
“I am 80 years old and live on a State Pension of less than £11k, not the…£13k that I keep reading about… I don’t know who gets that much but I certainly don’t!”
She goes on to say that it will be
“a long, cold winter… please do what you can to get this dreadful decision reversed.”
Labour Members could join us in the Lobby to back pensioners like Valerie.
The Opposition welcome the household support fund extension and the commitment to the Conservatives’ triple lock, but we knew going into winter, with energy bills going up, that the right thing to do was to help with cost of living payments. In my experience as an MP and a Minister, I know that the worries and responsibilities of this job come to all Members in the dead of night. It will be in the darkness and the cold in the small hours that women and men who have served this country and supported families and communities will be lying awake worried, fretting and feeling afraid. For those who are frail and living with a disability or a health condition, warmth matters to their health, Loneliness, isolation and worry will eat away at them, because they cannot take a job or do some extra hours to help make ends meet. Medics have warned that this will have serious health threats, as has Age UK.
Pensioners on low incomes matter. They truly are the people who know how to budget. They are the people who eke out and work out their finances. Nobody will work out how this new Labour Government of service has targeted those people so shamefully this autumn. Those families will not forget. They are not statistics. They are Valerie and June, and thousands of others in every community and constituency. They are proud pensioners, who too often go without but do not tell others that they are. Again this winter, they will go without for others. This is horrific. It is a blight on this new Government. It is not right for this to happen to pensioners on their watch. It is their choice. I ask that hon. Members and Ministers do the right thing and stop this callous cut now.
The Parliamentary Under-Secretary of State for Work and Pensions (Emma Reynolds)
This has been an important debate, with many hon. and right hon. Members making important contributions. My hon. Friends the Members for Wirral West (Matthew Patrick), for Bracknell (Peter Swallow), for Bishop Auckland (Sam Rushworth), for Edinburgh East and Musselburgh (Chris Murray), for Rugby (John Slinger) and for Makerfield (Josh Simons) rightly spoke about the importance of this Government’s action to restore economic stability so that we can rebuild our economy and our public services. My hon. Friend the Member for Birmingham Northfield (Laurence Turner) rightly reminded us that a strong economy needs strong public services. Many hon. Members, both on—
Alison Griffiths (Bognor Regis and Littlehampton) (Con)
Will the Minister give way?
Emma Reynolds
I am going to make a little bit of progress.
Many hon. Members, both on—
Emma Reynolds
I said I will make some progress, thank you.
Many hon. Members, both on the Government side and on the Opposition Benches, including my hon. Friend the Member for Earley and Woodley (Yuan Yang) and the hon. Member for Castle Point (Rebecca Harris), spoke about the work they are doing to encourage pensioners in their own constituencies to apply for pension credit to get the support they need.
I want to start by saying some more about the principles that underlie the Government’s approach to means-testing winter fuel payments. First, most help should be targeted to those who most need it. Secondly, significant support for all pensioners will come around via the triple lock. Thirdly, alongside that, extra help will be available to those on low incomes.
Emma Reynolds
I will in a minute.
Before I do that, I want to say something about means-testing. I have found, both in this debate and in the earlier debate in Westminster Hall where no Conservative Members were present, that there is a lot of support for means-testing the winter fuel payment. We heard from the right hon. Member for Herne Bay and Sandwich (Sir Roger Gale), who said in this debate that he supports means-testing this benefit. We heard that the right hon. Member for North West Essex (Mrs Badenoch), who is the Conservative leadership contest favourite, also supports means-testing this benefit.
Sir Roger Gale
The hon. Lady has misrepresented me. She knows perfectly well that while I said I supported the principle, I abhor the way she is going about it.
Emma Reynolds
The right hon. Gentleman did indeed say that he supported the principle. The Liberal Democrats, in their manifesto of 2017, also said that they supported means-testing this benefit.
Christine Jardine (Edinburgh West) (LD)
I thank the Minister for giving way, but I think she fails to understand that while we accept the principle of means-testing—we accept that there are many pensioners who can afford not to have the winter fuel payment—it is the manner in which the Labour Government intend to bring it in, with a sharp cliff edge and no accounting for the people close to the pension credit limit, that we find abhorrent.
Emma Reynolds
I will come on to that point, but first I want to say how crucial it is to boost the uptake of pension credit.
We are taking immediate action to increase that take-up, given that up to an estimated 880,000 eligible pensioners are missing out on this support, worth £3,900 on average. I hope there can be some consensus across the House that we need to work together to boost that uptake. That is why last week we launched an initial pension credit week of action to boost awareness. We will continue to raise awareness until the deadline, 21 December, for making a successful backdated pension credit claim.
Dave Doogan
I grateful to the Minister for giving way. On awareness, is she aware how much more it costs to heat a home in winter in Blairgowrie, compared with Brighton or Belgravia?
Emma Reynolds
I will come on to the issue the hon. Gentleman raises in just a moment.
On pension credit, my right hon. Friend the Member for Leicester West (Liz Kendall) the Secretary of State for Work and Pensions and the Deputy Prime Minister, my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner) have written to all local authorities asking them to redouble their efforts to reach those pensioners who could benefit from pension credit. [Interruption.] The Opposition Front Bench might grumble, but it is a far sight more than they ever did when they were in power. We are joining forces with charities such as Age UK and Citizens Advice to encourage pensioners to check their eligibility and apply. We will be delivering a major campaign in print and broadcast media, including to urge people to reach out to retired family, friends and neighbours to get them to check if they are eligible.
Emma Reynolds
No, I will not.
For the very first time, we are writing to all pensioners in receipt of housing benefit who are potentially eligible to encourage them to claim pension credit—again, something that the last Conservative Government never did.
Emma Reynolds
No, I will not.
Over the last five weeks, we have already seen claims for pension credit more than double, and, backed by more than 450 additional staff, we will ensure that claims are processed as quickly as possible.
As my right hon. Friend the Secretary of State for Work and Pensions said in the earlier debate, we will bring forward the merger of housing benefit and pension credit as soon as that is operationally possible, something that the last Government promised but failed to deliver. We are also taking action to ensure that all pensioners get the income that they deserve. Despite being urged by the Institute for Fiscal Studies and others to drop the triple lock during the election campaign, the Government are steadfast in their commitment to it. The triple lock has seen the state pension increase by £2,700 over the last five years, and it was increased by £900 this year and by £970 in the previous year. According to figures released today, which still need to be confirmed, in October we will see the provision of an extra £460 a year from next April.
Stephen Gethins (Arbroath and Broughty Ferry) (SNP)
Will the Minister give way?
Emma Reynolds
No, I will not.
Moreover, the warm home discount of £150 will help low-income pension households this year. That is critically important, because it is not just for the lowest-income pensioners on pension credit. It is for pensioners on low incomes who have high energy costs, and it will be open to application in October.
Emma Reynolds
I have said to the hon. Lady that I will not give way, and I will not give way, so she should sit down.
The Government encourage Members to boost awareness and encourage people to apply for the warm home discount.
Alison Griffiths
I thank the Minister, but I should like her to explain why this Government have failed to extract any concessions from the train drivers and their union paymasters.
Alison Griffiths
I have not finished. The Government’s “digital centre of government” was all ready to use technology to improve public services, but there has been a complete failure of negotiation, and the price is being paid by our pensioners.
Emma Reynolds
I honestly think that Conservative Members have some brass neck. During their time in power, we lost an average of 3 million working days a year to strikes because of their failure to deal with industrial action, and we lost 1.4 million NHS appointments which were cancelled, which meant that pensioners and others were in pain for longer than they needed to be. We will not take lectures from the Conservatives. We have had to take this difficult decision to means-test the winter fuel payment because of the £22 billion black hole in year, this year. [Interruption.] They may not want to hear it, but they should apologise for leaving that black hole. It was created by repeated and reckless unfunded spending—
Madam Deputy Speaker (Ms Nusrat Ghani)
Is the point of order directly relevant to the current proceedings?
Graham Stuart
Yes, Madam Deputy Speaker. I just want some guidance from you on whether it can be appropriate for Ministers and others on the Government Benches who have been directly funded by the trade unions not to declare that personal benefit before doing something like this, which is hurting millions of pensioners.
Madam Deputy Speaker
Members are guided to talk about any such conflict before they speak on the Floor of the House. I am not sure that this has a direct impact on proceedings, but the right hon. Gentleman’s point has been noted.
Emma Reynolds
Again and again, the Conservatives are dividing working people and pensioners, and that is disgraceful.
In conclusion, means-testing the winter fuel payment is a difficult decision. [Interruption.] I receive no funding from ASLEF, so the right hon. Gentleman can withdraw his comment. We are targeting support at the poorest pensioners, boosting the uptake of pension credit, maintaining the triple lock for pensioners, extending the household support fund and the warm homes discount and, in the longer term, introducing a warm homes plan to insulate people’s homes. These are the right decisions to take. This Government are determined the fix the foundations of our economy so that we can deliver the change on which we were elected, and which this country and our pensioners so desperately need. Bringing down NHS waiting times—
Stuart Andrew (Daventry) (Con)
claimed to move the closure (Standing Order No. 36).
Question put forthwith, That the Question be now put.
Question agreed to.
Main question put accordingly.
Dynamic Ticket Pricing
(3 months, 1 week ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Dame Caroline Dinenage (Gosport) (Con)
I welcome the Minister to his place and very much look forward to working with him to promote our world-class creative industries, including our music industry and all the other fantastic sectors that his Department promotes.
Today, I want to talk about music ticketing and recognise the remarkable circumstances that have provoked this debate. News of the Oasis reunion has dominated the news cycle for the last week or so, but some might say for all the wrong reasons. What should have been a moment to celebrate one of the UK’s most significant cultural exports—and the chance to revisit the music that, for many, me included, was the soundtrack to our youth—has morphed into a conversation about exploitative practices in the music industry that hurt fans and the grassroots sector. Some of the issues have been rumbling away for years. In fact, earlier this year, the Select Committee on Culture, Media and Sport published a report on grassroots music that outlined some of the major challenges facing the live music ecosystem and suggested some ways forward.
The Minister knows the facts. On 31 August, some 14 million people from 158 countries logged on to a digital queue to buy tickets to the Oasis Live 25 reunion tour, 15 years after the band broke up and 30 years on from their seminal first album, “Definitely Maybe”. Fans were locked in an online queue for up to 10 hours and, when many of them, it seemed almost at random, made it to the front of the queue, the tickets were in many cases more than double the price that had been advertised. The dynamic pricing mechanism employed by Oasis, their promoters and management via Ticketmaster served to increase the price of tickets in line with demand, but in reality it resulted in a kind of lucky dip game in which the price got worse and worse by no clear mechanism except the secret and opaque rules of a computer algorithm in the hands of Ticketmaster.
I should declare an interest: after four hours of queuing, I had become wistful about the halcyon days of real-life physical box offices, where we queued almost overnight to get our tickets, but at least we could see the queue in front of us and we knew how long we would have to wait.
Jim Shannon (Strangford) (DUP)
I commend the hon. Member for bringing this debate. She is right and many of my constituents experienced the issue that she mentions. We understand the economic principles of supply and demand, but we also understand the principle of price gouging. For those who believed they would be charged one price to have just a few moments to decide whether they would be prepared to pay double is unfair pressure. We must always encourage free trade, but we must also be mindful of consumer protection in Strangford, Gosport or any part of this United Kingdom of Great Britain and Northern Ireland.
Dame Caroline Dinenage
I could not have said it better myself—that is exactly what it is. We understand the laws of supply and demand, but we also understand the laws of transparency and fairness. What is more, once ticket purchasers were through to the payment screen, fans realised that they only had a very limited time to decide whether the hugely inflated prices were worth paying. Someone compared the ticket purchase after such a long wait to the dopamine rush of a gambler. The £150 to £400 price increase meant that the transaction was no longer a choice, but more of an impulse buy.
I have heard many people say that the dynamic pricing method is used effectively in other sectors, and that the technology is a perfect demonstration of the dynamism of a free market. Even within the music industry itself, there is dispute as to whether dynamic pricing has a place and is an acceptable way forward.
Pete Wishart (Perth and Kinross-shire) (SNP)
I congratulate the hon. Lady on securing the debate. I was hoping to secure a debate on the subject myself but she beat me to it. There seems to be an issue about who is to blame for all of this—no one is taking responsibility for the issue of dynamic pricing. Ticketmaster is blaming the management and artists, and they are blaming those who were promoting the events. As she is now the Chair of the Culture, Media and Sport Committee, will she look into this on behalf of the House and find out exactly why this has happened, with a view to having it stopped and outlawed entirely?
Dame Caroline Dinenage
I am very fortunate to have been re-elected as the Chair of the Culture, Media and Sport Committee, but we do not have any members of the Committee yet. Any decisions about what the Committee will look at will very much be a group decision jointly taken, but this is certainly something I will be putting forward. I know the Minister has already announced some consultation of his own.
To return to dynamic pricing and the laws of supply and demand, mentioned by the hon. Member for Strangford (Jim Shannon), this is something that is used across different marketplaces. Uber employs a smart dynamic pricing mechanism that adjusts the cost of journeys in line with changing variables, such as traffic and current rider-to-driver demand. Hotels and airlines are another market that uses dynamic pricing, but they are very different. If people are stuck at Waterloo station, as I sometimes am, an Uber is not the only option of travel and, when people go on holiday, multiple airlines offer flights to the same city and different hotel options, but when it comes to live music, particularly in cases such as this one, there is one artist and one opportunity to buy a ticket.
The imperfections of the dynamic pricing mechanism were obvious to anybody who attempted to buy a ticket on this occasion, but whatever the rights and wrongs of its suitability for music ticketing and this market place, the most important issue is that fans were not warned about the use of dynamic pricing before they entered the digital queue. Those are the faults that led the Competition and Markets Authority to open its investigation into this debacle. It meant that people had no idea how much a ticket would cost when they logged in. Many fans ended up paying at least double the original listing price of £148, so four standing tickets could cost an eye-watering £1,400 once service and order processing fees were included. The CMA says that it will investigate whether fans were given “clear and timely information”.
Any free market economist would call this a classic case of information asymmetry. There was certainly a lack of clarity over how high ticket prices might eventually go, with the additional chaos of a time limit putting pressure on fans to make an imminent decision about whether they were going to buy.
Ticketmaster claims that the dynamic pricing mechanism is the best way to deter ticket touts, the logic being that any tout buying tickets in bulk would increase demand and therefore see his or her prices and margins slashed. The Guardian has already said that secondary ticketing platforms are advertising more than 4,500 tickets for this tour already, including from one tout who claims to have at least 33 tickets for Cardiff, Wembley and Murrayfield listed, for a combined price of over £26,000.
I am glad that this summer the Government announced a consultation on the secondary ticketing market, where tickets are sold in bulk by touts who often use bots to scout for tickets at face value and sell them well beyond the market value, but will the Minister set out the parameters and timescales for the work? When will it happen and what is it likely to include? He has now announced that the investigation will be widened to consider dynamic pricing and what happened in the Oasis situation, so can we have a reassurance that the eye will not be taken off the ball of the original consultation that he announced in the summer?
There are so many aspects at play. This method of resale is also the culprit for a large amount of money lost to fraud, with Lloyd’s estimating that £1 million was lost to scammers during Taylor Swift’s Eras tour alone. Will the Minister tell me whether the secondary market consultation will include conversations with digital search engines that are signposting customers into the hands of touts and not doing enough to get them direct to principal sales sites?
There is scope for an entire primary market review and for ticketing to be reviewed on a much wider scale. The Oasis episode has opened the eyes of fans to potential anti-competitiveness within the industry. As complaints about the ticketing process began to flood in, Oasis said it was their management and promoters who had agreed a dynamic pricing strategy with Ticketmaster. But, of course, their three tour promoters all have links to Live Nation, Ticketmaster’s parent company and, in effect, they are all the same party. So that party is making money hand over fist through the system, which keeps everything under the Live Nation umbrella.
For a typical tour, a Live Nation subsidiary promoter might take 10% of the face value of a ticket. A service charge of perhaps a quarter of that face value will then be applied, and some of that money will be going to Live Nation-owned Ticketmaster. The venue will take a cut at this stage, which, in all likelihood, will be a Live Nation-owned venue, too, as it owns 28 festivals and venues UK-wide. The process is repeated at resale, if people go through Ticketmaster at a higher cost than before, leaving Live Nation with an even greater cut.
The Minister does not need to be a public intellectual to see that there is a real perverse incentive for Ticketmaster to see tickets in the hands of touts. He will know that the US Department of Justice has slapped Live Nation with a lawsuit, citing anti-competitive conduct, while it is now well established that the company has a near monopoly in the UK.
Dynamic pricing is quite an effective way of rewarding a near-monopoly, with no upper limit on ticket prices, meaning a greater cut for the parent company. The great sadness of all this is not only that the system is punishing the fans—in this case, those Oasis fans for whom the music was so totemic, so life changing back in the ‘90s—but that, to add insult to injury, there is no trickle down to the live music ecosystem, like the grassroots music venues that Oasis first played in while honing their skills, the venues that made them, such the Boardwalk in Manchester and King Tut’s in Glasgow.
Although Oasis have since announced further tour dates, tickets to new dates will be sold at face value via invitation-only ballot. I cannot help feeling that the fans who paid through the nose via dynamic pricing are going to feel very hard done by.
I encourage the Minister to look at ways to amplify fans’ voices within the live music ecosystem. He might start by responding to the Culture, Media and Sport Committee’s report into grassroots music, which I have already mentioned. It was published in May. I know that we have had the small matter of a general election since then, but I would like to know when the response is likely to be forthcoming and whether the Government are minded to accept its recommendations. The recommendations include one for a fan-led review of music—something like the fan-led review of football that was led by my still friend, my former hon. Friend, the former Member for Chatham and Aylesford, Tracey Crouch—to look at how the music pyramid functions and how the money trickles down from the big players to those small venues and fledgling songwriters and artists.
The recommendations included a targeted VAT cut, which to grassroots venues would have represented a final hour of salvation in a sector that is widely accepted to be in crisis, and a live music levy, which would take a small proportion of the service fee from the pockets of the big venues and bring them right down to the struggling businesses at the grassroots. What is most pertinent to me about all this is that, while many of the 28 venues and festivals in which Live Nation owns a stake are flourishing, grassroots music venues are closing at a rate of two a week.
I am sure that the Minister is aware that, of the 34 music venues in which Oasis played on their first tour back in 1994, only 11 are still open today. And those venues are so crucial. They are absolutely fundamental to incubate our world-renowned talent. They are the R&D department for the music industry. They are a massive feeder into something that is fundamental to the UK economy and crucial to our soft power around the world. In a ticketing market gone wrong, there might have been a gram of comfort to some of the fans paying through the nose for their ticket if they knew that, in paying it, some of the money was protecting grassroots music venues in their communities and germinating the Oasis of the future.
I know that, like me, the Minister wants nothing more than to see our musical talent continue to thrill fans both at home and around the world, but behind every great act is a chance performance at a low-capacity venue that is struggling to keep the lights on, that is at financial breaking point, and that is a hair’s breadth away from closing its doors.
The Minister for Creative Industries, Arts and Tourism (Chris Bryant)
It is a particular delight to see you in the Chair, Madam Deputy Speaker; I have not had an opportunity to congratulate you on your election—hurrah!
It is also a great delight to see the hon. Member for Gosport (Dame Caroline Dinenage) and to congratulate her on her election. Not many Tories have been elected to many things this year, but it is a great delight to see that she is returning as the Chair of the Select Committee on Culture, Media and Sport. She knows a lot about this subject and has devoted a lot of her time and energy to it, and I look forward to working with her. I am sure there will be times when she has cross words with me, but sometimes cross words make Governments better. That was certainly my policy when I was sitting on the Opposition side of the House, so I am sure that what is good for the goose is good for the gander.
Live events are really important to the British creative economy, and to the whole economy in the UK. It is the joy that they bring. I am sorry to start with a Kylie reference—well, actually I am not—but I would defy anybody to have gone to the Kylie concert in Hyde Park this summer and not come away bouncing with joy and full of the joys of spring. It was beautiful. It was amazing. It was thousands and thousands of people in a royal park enjoying themselves and celebrating. For others who went the night before, it was Stevie Nicks, in a completely different vein, but none the less providing that same sense of joy. That is an important part of what live events can do—that sense of being part of an enormous crowd of people enjoying either singing along or listening and that special sense of being together.
Live music is really important to our economy. I remember, it must be a year ago now, being in Newcastle: Sam Fender was performing at St James’ Park and we went to see P!nk, who was on at the Stadium of Light. That must have brought millions of pounds into the local economy. It was certainly an awful lot of money for the local hotels. Down in Cardiff we have lots of concerts, which many people from the south Wales valleys go to, and people come from all over the world. When Springsteen was there earlier this year, Cardiff basically had to be closed off, but the knock-on for the hotels, the bars and the hospitality industry was really significant. It was also significant for tourism, for which I am also the Minister.
It was reckoned that 200,000 people in the UK worked in the live events industry last year and it is an important part of what we do. It is part of the reason many people want to come to the UK. If I may gently say so, one of the things we would like to sort out is British acts being able to tour elsewhere in Europe, but it is good that Europeans are able to come here to see some of our acts.
The hon. Lady makes a really important point that this issue is not just about very big venues; it is about small venues as well, and I do have anxiety about the state of play for many of them. Some of those problems are shared with the whole of the hospitality industry, incidentally—skills, staffing, the costs of fuel, security and so on—but it is a simple fact, as she points out and as her Select Committee has pointed out, that there have been far too many closures over recent years. We stand ready to do what we possibly can to try to slow down, if not halt, that process of closure, because she is right: if an act does not have somewhere to start with a capacity of 250 or 300 or 500, how will they ever grow to end up filling Wembley or any of the arenas we have been talking about? The value in live events is created by the artist, the fans and the venue—it is a combination of the three; it is not created by ticket touts—and it is that combination that we really have to work on.
The hon. Lady is absolutely right that ticketing has changed. I remember once when I was in Saint Petersburg, or Leningrad as it was then—that is how old I am—I went to buy tickets for the opera and we bought tickets that were rolled up in a little peg hole. That is what a ticketing system used to be. That is what theatres used to have in the UK. Then we changed over to a system of having a physical ticket that we presented. Many of us have kept all our tickets for all the shows we have ever been to; I know friends who have collections of Orchestral Manoeuvres in the Dark tickets through the years and so on. Now, of course, we have a completely online, digital system. That is great in many ways. It can be easier and enhance security, but it can also be much more difficult, and has produced a whole set of new challenges for fans, artists and venues to make the market work effectively: barcodes, QR codes and all the rest of it; transferring a ticket from one person to another; different apps developed by different venues, and so on.
There are very new challenges. First, there is security, to which the hon. Lady referred, and someone getting the ticket that they actually paid for, rather than a ticket that did not exist in the first place. We have all heard hideous examples of that, and it is an embarrassment for us all that over recent years we have seen so few prosecutions in that area, despite the fact that nearly all of us can cite instances of constituents falling prey to those who are effectively selling tickets that they thought they might be able to buy online but do not possess. People then turn up to the venue and find that their tickets are not being honoured because they were not tickets in the first place. That is a security issue in the modern market.
There is also a fairness issue. The hon. Lady points out the experience of people logging on at 9 o’clock and sitting there for hours and hours. It is a system in which we have no idea how somebody gets to be number 1,273 rather than 1,884 in the queue. It seems completely and utterly random, but one suspects that there might be clever means by which people who have deep pockets and know how to navigate the system are able to manipulate it. It is clear that there are many instances of bots effectively hoovering up a large number of tickets using lots of different IDs, credit cards and the rest of it. That is an issue of fairness. Is everybody queuing fairly or not?
Then, there is the question of transparency. Online sites are not as open as they might be about the real or original cost—the face-value cost—of the ticket that they then sell for a different price. Some people say to me, “Well, it says ‘FV’, and all you have to do is click on the FV,” but why do sites not make the face value immediately obvious? Let me give the House one instance of inflated pricing, which is much more excessive in the secondary market than the hon. Lady said.
If someone who wants to see Dua Lipa at the Royal Albert Hall on 17 October visits the Viagogo site, they can either buy a ticket with a face value of €63 for £912— I do not know why it is cited in euros—or they can buy a ticket with a face value of £70 for £1,000. Or—and this is my favourite—they can buy for £9,444 a ticket that has a face value of £126.38. As the hon. Lady rightly said, not a single penny of the difference between £126 and £9,444 will go to the artist, the venue, the cleaner or lighting expert in the venue, the person who wrote the songs that Dua Lipa will sing, or the fans. It is simply going to Viagogo, and I think that that is unfair. It is not right; it is inappropriate. I know dozens and dozens of artists who are utterly embarrassed about the situation in which they find themselves, and they want us to act in this sphere.
Pete Wishart
We are delighted that the Minister is on top of this and knows about the issues and difficulties, but we are more interested to hear, in the time that he has left, about what he will do to resolve it. There have been reports from the Competition and Markets Authority and the Select Committee of the hon. Member for Gosport (Dame Caroline Dinenage). Will the Government look at them constructively and bring in legislation so that this is no longer a feature of live ticket sales?
Chris Bryant
The hon. Gentleman is a terribly impatient man; I am just coming that. [Interruption.] No, we have until 7.30. He is right that we must take action on the secondary ticketing market, and we committed ourselves to doing so during the general election. We believe that those people are denying true fans the opportunity to buy tickets on the primary market and are pocketing any profit for themselves. As I said, very little of the additional revenue actually goes to artists, venues or anyone working in the live venue sector more generally. The Government are committed to putting fans back at the heart of live events, and to clamping down on unfair practices in the secondary ticketing market.
That is why we have committed to introducing new protections for consumers on ticket resales, and we will be launching a consultation in the autumn to find the best ways to address ongoing problems on the resale market. The consultation will consider a range of options, including revisiting recommendations from the Competition and Markets Authority’s 2021 report, such as putting limitations on the price of tickets listed for resale over the face value; limiting the number of tickets that individual resellers can list to the number of tickets that they can legitimately buy via the original platform; making platforms accountable for the accuracy of information about tickets that they list for sale; and ensuring that the CMA has the powers that it needs to take swift, decisive action against platforms and touts to protect consumers.
We want live events ticketing to work for UK fans. I would say that the market was made for humanity, not humanity for the market, and sometimes Government need to intervene to ensure that the market does indeed work for humanity.
John Slinger (Rugby) (Lab)
As an Oasis fan, I too was queuing endlessly, and it proved to me that badly regulated markets have no morality. The conclusion from the dynamic pricing policy in that incident was that people with more money or touts could get those tickets. I speak as someone who played in rock bands when I was a younger man, although none so famous and successful as that of the hon. Member for Perth and Kinross-shire (Pete Wishart). Live music is universal in that it reaches out to the souls of people of all backgrounds. I would be grateful for the Minister’s view on what he can do to ensure that as many people as possible can get tickets for live music.
Chris Bryant
Persuade people to do more gigs, I guess. Obviously, there are only so many tickets for certain events, but what people want to have guaranteed is that the market is not excluding them solely on the basis of price. Sometimes there is a ballot for tickets, as there is for Wimbledon, and I gather that Oasis has now introduced a partial ballot for the next round of gigs that are being advertised, but we want to look at all these issues in the round.
I should say something about the CMA announcement. Like many Members across the House, I know lots of people, including my hon. Friend the Member for Rugby (John Slinger) and the Leader of the House, with stories about their process of trying to buy tickets two weekends ago for the Oasis reunion tour—I should point out that Oasis only reunites under a Labour Government. In the light of the concerns expressed by fans about the sales process, we welcome the CMA’s announcement that it has launched a formal investigation into Ticketmaster. The CMA has said that it is
“concerned that fans trying to buy Oasis tickets through Ticketmaster may not have been given clear information about ticket prices”
and has asked fans to share their experiences. Its investigation will look at whether the sale of Oasis tickets by Ticketmaster may have breached consumer protection law.
Others have greater freedom in what they can say than I do as a Minister. This is a live investigation and the CMA is an independent law enforcement body, and it is important to ensure that the independence and integrity of any investigation is protected, so, in order to avoid prejudicing the process, I am not going to comment on that investigation. I look forward to reading the CMA’s findings and I merely note that lots of people have said that they would like their money back. Following recent events, however, the Government will look at issues concerning the transparency and use of dynamic pricing in the live events sector, and we are carefully considering how that is taken forward in the light of the CMA’s announcement.
I want to talk specifically about dynamic pricing for a moment. In general terms, dynamic pricing involves a business adjusting its prices according to changing market conditions such as high and low demand. It is an established pricing strategy and it has been a feature of our live events industry for some time, at least in certain forms. As an example, I am sure that many Members will have managed to snap up cut-price tickets to popular west end shows by purchasing them on the day of the event. We are used to seeing organisers or venues slash their prices in that way in order to fill the few remaining seats.
It is also common to see early-bird tickets released at lower prices—punters essentially receive a discount on full-price tickets for an event by buying their tickets within a certain period after they go on sale or until a limited batch has been sold. Glastonbury does that, Wigmore Hall does that for people who are signed up to its programme, and for that matter, the Rhondda arts festival in Treorchy also does that. I urge people to look online and buy some tickets for next year.
In both of those scenarios, there are fans who benefit from a better deal than they might otherwise have been able to secure had they bought their tickets at another time. Equally, there will be other fans who bought their tickets at another time and had to pay a different, or indeed higher, price. Hon. Members will have their own views on all this, but I suggest it is a trade-off that most people are accustomed to, and one that we can generally accept.
Chris Bryant
We would not want half-empty venues—despite looking around the Chamber—due to tickets being priced too high, nor venues and festivals that are not economically sustainable. What we should not accept, however—I am very clear about this, as are the Government —are practices that see fans of live events blindsided by price hikes, either because they were not provided with the right information up front or because that information was not provided clearly enough. Doing so might be in breach of existing consumer law, which requires businesses to be fair and transparent in their dealings with consumers. It is the responsibility of the CMA to investigate potential breaches of consumer law arising from or involving the use of dynamic pricing methods, and to take enforcement action where appropriate. I have already referred to its investigation in this case.
It is the responsibility of Government, however, to confront the wider policy questions around the use of dynamic pricing for tickets to live events. We have already said that we will look at this issue further to establish whether consumers are adequately protected under existing law, or whether more needs to be done. The hon. Member for Gosport asked whether this means that we are going to take our eye off the ball on the secondary ticketing market—it does not. We are very clear: we have a set of manifesto commitments, and we will bring out our consultation this autumn. Once we have completed that consultation, we expect to take the necessary action that we committed to in our general election manifesto. Since most of that action is in line with what the Select Committee was advocating before the general election, I hope we might still enjoy the Committee’s support for it.
The hon. Lady is right that we will also be looking at websites: that is part of the whole panoply of action. She also effectively referred to vertical integration within the ticketing system. Of course, that has to be part of our considerations, because it is another part of making sure that the market works for humanity—for fans, artists and the creative industries—rather than all of us having to operate as slaves of the market.
The Prime Minister has said that we are committed to putting fans at the heart of music and ending extortionate resales. As I have said, we will launch a consultation this autumn to work out how best we can do that. That consultation will look at tickets for live events, and a call for evidence on the topic of price transparency, including dynamic pricing, will be sent out. That will help us understand the needs of fans and the live events industry. To be absolutely clear with the House and the hon. Lady, that will be about tickets for live events, not the whole of dynamic pricing across all industries in the UK.
The hon. Lady asked when we will respond to the grassroots venues report from May. We have been getting our feet under the table as fast as we possibly can, and I am very eager to respond to that report in swift order. I take the responsibilities of Select Committees very seriously—I sat on the Culture, Media and Sport Committee from 2001 to 2005; it is one of the most important things I have done as a Member of Parliament—so we will respond as soon as we can. It will certainly be in the autumn, and I would like it to be as soon as possible after the Committee is fully formed.
In conclusion, I would like to thank the hon. Lady for securing this debate. I am not allowed to refer to what she tried to get as urgent questions, but I have now. We have a world-class live events sector in the UK, and I am absolutely determined that fans have every opportunity to experience it at first hand.
There is nothing better than someone standing in an audience—in a crowd, along with hundreds of other people—either experiencing an artist they have never seen before and suddenly realising, “My God, that’s just pierced right through to my heart”, or going to see somebody they have seen 50 times before, having listened to the album 75 times in the past week, and having that joyful moment. They will be different artists for every single one of us, but I want far more people in this country to be able to enjoy that opportunity. I want every child to have a creative education, and I want them to have the opportunities that so many others enjoy in my constituency and every other.
I acknowledge that dynamic pricing can help match supply with demand, resulting in both higher and lower prices, but when it is used as a business model it needs to be transparent and fair, and that is what we want to ensure.
Madam Deputy Speaker (Ms Nusrat Ghani)
It was wonderful to hear from two musicians, and Sir Chris Bryant has given away his true old age.
Question put and agreed to.
Westminster Hall
(3 months, 1 week ago)
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COP29: UK Priorities
(3 months, 1 week ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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Deirdre Costigan (Ealing Southall) (Lab)
I beg to move,
That this House has considered UK priorities for COP29.
It is a pleasure to serve under your chairship, Dr Huq. I feel very lucky to have secured my second Westminster Hall debate as a brand new MP, and on this very important subject. I am also delighted that members of the all-party parliamentary group on climate change are here today and I look forward to hearing contributions from hon. Members from across the House.
It sometimes seems from the TV or the internet that the climate emergency affects other people. Floods, droughts and food shortages are certainly becoming more common, but the threat is often seen as only hitting those in far-flung places. But when I knock on doors in my constituency of Ealing Southall, as I do regularly, people tell me that they are worried about the climate emergency and the damage being done to nature, our environment and our economy right here in the UK.
Already, climate breakdown has seen more extremes of weather in the UK. Flash flooding is an increasing risk to homes, businesses and even lives. Food shortages are becoming more regular as UK and European farmers struggle with a climate that we can no longer rely on, and hotter summers have led to a health emergency, with an estimated 2,500 people in the UK killed by heatwaves in 2020.
My constituents in Ealing Southall are worried both about how climate breakdown is affecting them right now and how it might affect their children in the future. Given that more than half my constituents were born outside the UK, many are also concerned about friends and relatives at the sharp end of climate breakdown, whether from rain-induced landslides in Pakistan or heatwaves in India.
So what is the world doing? The COP29 climate conference in Azerbaijan in November is a crucial moment for countries across the world to work together to prevent further climate breakdown and to try and undo the damage done so far. The conference will ask countries including the UK to sign up to new, more stringent targets to reduce harmful emissions that cause climate change.
The conference will also try to agree new funding to help developing countries pay some of the costs of reducing and adapting to climate breakdown—funding, primarily from developed countries like the UK, which have been responsible for so much of the historic emissions from industrialisation. It will also look at further steps to end our reliance on oil and gas, which are a big part of the causes of the climate crisis. It is vital that the new targets are robust enough to keep global temperatures down and that the funding agreement is fair to developing countries.
But we have been here before. In 2021, at the COP26 climate conference, the UK agreed to targets that we have not delivered. Indeed, the Climate Change Committee found that the previous Conservative Government only had plans in place to deliver about one third of the targets they had agreed to, with almost all targets off track. Although the UK agreed to pay £11 billion over five years to help developing countries, the former Conservative MP Zac Goldsmith resigned when it became clear that the Conservative Government planned to ditch that promise, having delivered just half of the money. On top of all that, despite signing up to start to end our reliance on oil and gas, the previous Government instead granted 27 new licences to dig for oil and gas in the North sea.
I am sorry to say that it is not at all surprising that the previous Government would make agreements that they did not intend to honour, sign up to targets that they had no plans to deliver, and shake hands on a funding deal that they did not intend to pay for. Their entire approach to the climate emergency is to stick their heads in the sand and hope it goes away.
For example, in the UK we have the leakiest homes in Europe—homes that are too cold in winter, but too hot in summer and cost a lot more money than they should to heat. We desperately need a massive retrofitting programme to insulate millions of homes, to stop so much precious energy being wasted as it escapes through walls and roofs, and to reduce energy bills as a result. However, the previous Conservative Government effectively halted home retrofitting programmes and completely failed to take the need to insulate homes seriously. They stopped the growth of renewable energy through a moratorium on wind farms—a self-destructive move that has only kept British families more reliant on Russian gas.
When the Conservative Government did not have their head in the sand, they lost their head entirely. Like headless chickens, they continually changed their mind and U-turned on key promises. They backtracked on the 2030 deadline to end the sale of new petrol and diesel cars and did similar with the phase-out of gas boilers. It is bad enough that our lungs will continue to be assaulted by toxic fumes for longer, but car and boiler manufacturers also wasted millions of pounds getting ready for a deadline that was then pulled out from under their feet. And guess who pays the bills—the consumer of course, so our first priority for COP29 must be to undo the damage done by the previous Conservative Government. We must showcase the clear evidence that under Labour, the UK can again be trusted to deliver on the international agreements that we make.
Where the previous Government failed, local authorities often stepped in. Ealing council has done amazing work in finding ways to reduce flash flooding by using natural solutions and more innovative approaches. Concrete verges have been replaced by wildflower rain gardens in many places across my constituency. In Dean Gardens—a small park in west Ealing—six street drains have been connected to a huge underground container, made of sustainable material, that is covered by a new wetlands area where water can slowly be released throughout the year. That should significantly reduce the regular flash flooding on Uxbridge Road. Work is currently under way at Lammas Park, also in my constituency, to create seasonal ponds that will help to protect properties around the park from flooding during periods of heavy rainfall. Ealing has also planted tens of thousands of new trees, which offer shade in summer and provide space for birds and other wildlife.
However, after 14 years of austerity, councils struggled to fill the gap left by a Conservative Government who had virtually left the stage, so there was a collective cheer across the country when this new Labour Government took power and immediately showed their commitment to taking action on what is the biggest threat to our health and prosperity. The new Secretary of State straightaway announced an end to our reliance on expensive and unreliable oil and gas and has backed that up by setting up Great British Energy. That will see massive investment in renewable energy, ending our addiction to fossil fuels, increasing our energy security and reducing bills for families.
Already, the new Government have doubled investment, resulting in 131 renewable energy projects coming forward to power 11 million UK homes, demonstrating that business has faith in Labour’s commitment to clean energy. That is a huge contrast to the situation a year ago when no energy companies at all expressed interest when the Conservative Government went out to tender. The new Government have ended the moratorium on offshore wind farms and we have gone even further—we have committed to becoming a world leader in floating wind farms. Our warm homes plan will see the Government work hand in hand with local councils to insulate leaky homes, and we will move swiftly to decarbonise public buildings.
Finally we have a Government who are serious about climate breakdown here in the UK, so a further priority for COP29 must be to develop new targets for reducing our own country’s emissions over the next five-year period. We have an opportunity to set the pace globally by making those as robust and stretching as we possibly can, and if we can sketch out our ambitions in advance of the November conference, we can establish a high bar for others to aim at. By February we will need detailed plans on how we will deliver on the targets, so that we do not repeat the Conservatives’ approach of promising everything and delivering little. It will be important to include detailed plans with local authorities and regions—key delivery partners on the ground that were often ignored by the previous Government. In fact, in 45 pages of targets agreed by the Conservatives, there were just six sentences on what local councils could do.
Finally, we need to come to an honest agreement on how much we can commit financially to repairing the damage done to many developing nations. I am confident that, unlike the Conservatives, this Government will stick to the agreement we make and will deliver it in full.
Afzal Khan (Manchester Rusholme) (Lab)
I thank my hon. Friend for securing this important debate, particularly as we come up to COP29 in Azerbaijan, which I am looking forward to attending, and I congratulate her on an excellent speech. At COP28, a historic agreement was reached to establish a loss and damage fund for vulnerable countries. My heritage is from Pakistan, which, like Bangladesh, has contributed the least to the problem yet is among the most vulnerable to it. The compensation will only come into effect in 2025. Does my hon. Friend agree that the UK must work with allies to prioritise pushing forward on this fund, to ensure that countries growing more vulnerable to climate crisis have the means to protect their civilians and infrastructure?[Interruption.]
Dr Rupa Huq (in the Chair)
Order. I remind all Members to put their phones on silent.
Deirdre Costigan
I thank my hon. Friend for his intervention; he makes a good point. As I said, we had a Conservative Government who made promises that they had no intention at all of keeping. I am confident that this Government will come to an agreement that we will stick to and deliver in full.
The climate emergency is not something happening to other people in faraway places. If we do not act now, more people will be killed by flooding, drought, wildfires and extreme heat than by war. Millions of refugees will pour across borders as cities and whole nations become uninhabitable due to rising sea levels. Our entire economy will be destroyed, and life as we know it will be changed utterly, as we lose access to basic commodities like food and water. That is the worst case scenario, if we do not take action. It is a scenario that the Conservatives were content to sleepwalk us into.
Under this new, Labour Government we have already shown that we can be world leaders in undoing the harm of climate breakdown and preventing further damage. If we get our priorities right, then this COP29 climate conference is our chance to fearlessly lead the way to a better future, both at home and abroad.
Dr Rupa Huq (in the Chair)
Order. I remind members to bob if they want to speak, so we can work out the order of speakers and how long everyone has available to speak.
Carla Denyer (Bristol Central) (Green)
Thank you, Dr Huq, for reminding me of process and having patience with me during my first Westminster Hall debate. Thank you, too, to the hon. Member for Ealing Southall (Deirdre Costigan) for facilitating this debate.
At the end of a year of record-shattering temperatures and climate extremes, COP29 will prove a test of our collective willingness to respond to the climate crisis with the urgency and resolve it demands. We know that there is no room for new fossil fuel infrastructure if we are to have any chance of staying within safe climate limits. That is a scientific fact—one that the International Energy Agency, the Intergovernmental Panel on Climate Change and countless experts have made clear.
Historic progress was made at COP28, when the UK joined nearly 200 countries in agreeing to transition away from fossil fuels, marking a major breakthrough for international climate action. One year on, COP29 has the vital task of locking in momentum towards that promise. Yet despite the science and the consensus reached in Dubai, Governments around the world plan to produce 110% more fossil fuels in 2030 than is consistent with just a 50% chance of limiting warming to the Paris agreement goal of 1.5°.
About half of all planned oil and gas developments between now and 2050 will be sanctioned by five wealthy Governments who position themselves as climate leaders, one of which is the UK. With the COP29 summit being hosted in a country with plans to increase its fossil fuel production by a third over the next decade, there is an urgent need for other big polluters, such as the UK, to show better leadership. Unless the promise made in Dubai is seen as a clear instruction to quit fossil fuels, last year’s hard-won consensus is destined to fall apart. Rhetoric must be met with action.
In that context, the Government’s intention to consult on ending licences for the exploration of new oil and gas fields is a welcome relief from the previous Government’s dangerous obsession with maxing out fossil fuels. It marks a small step towards ending years of climate hypocrisy, which have undermined our position in international negotiations. However, it is only the bare minimum of ambition. To do what is necessary for both the climate and the UK’s credibility in international fora, the Government must move quickly to lock in their no new licensing position, and take the urgent next step of stopping development consents for all new oil and gas fields. That must be done alongside bringing forward a coherent plan to transition oil and gas workers into the clean energy jobs of the future, so that we can show other countries that that transition can and will be done in a fair and just way.
Let us take the example of Rosebank. Bringing that oilfield online would be catastrophic for our climate and our international reputation. Burning the oil and gas from that huge field would produce over 200 million tonnes of CO2—more than the 28 lowest-income countries combined produce in a year. The emissions created just by extracting the oil from Rosebank would see the UK’s oil and gas industry blow past its emissions reduction target.
Aside from being a climate crime, the new field would go against what is needed to strengthen the UK’s energy security—lower bills and a just transition. I welcome the Government doing the sensible thing and deciding not to defend in court the previous Government’s approval of new oil drilling at Rosebank, which makes it even more likely that the legal challenge against the field will be successful. If Equinor then seeks approval for the field again, the Government will have the opportunity to make a fresh start and a fresh decision on Rosebank. If presented with that opportunity, will the Government make the right choice, reject the field and mark the end of the road for climate-wrecking oil and gas projects in UK waters? Only then can we begin to rebuild our credibility on the global stage and reasonably look other countries in the eye at the negotiating table as we ask them to keep their own oil and gas reserves in the ground.
As a country with broad shoulders and historic responsibility for accelerating climate chaos, the UK not only has a duty to deliver the transition away from fossil fuels here at home, but must play a leading role in supporting those countries that are least responsible for, but worst impacted by, climate breakdown. Baku’s big test, therefore, will be the delivery of the new collective quantified goal on climate finance. This is a crucial opportunity for richer countries to contribute their fair share, following years of broken promises and failure to deliver the $100 billion on time.
At this COP, we must ensure that past mistakes are not repeated. That means agreeing a new goal that is not just a political deal but a real number, based on the needs of people in the global south and of vulnerable populations on the frontline of climate impacts. A black-box headline figure without clarity on how it will be delivered will not do. We must ensure that the goal results in funds that are genuinely new and additional, not double-counted from existing aid budgets—a reprehensible practice that has played a huge role in allowing the climate finance gap to widen over the past decade. Indeed, in February, the Independent Commission for Aid Impact found that under the previous Government the Foreign Office reclassified around £1.7 billion of existing UK aid as international climate finance. The UK has one of the largest gaps between its fair share and the climate finance it has delivered. We are letting the world down—it is right there in black and white—so will the Government ensure that UK negotiators show up to COP29 with a mandate to champion an ambitious new climate finance goal, and will they unlock the necessary public finance in addition to private finance?
There is much more the UK could be doing, from tackling tax abuse and evasion by the extremely wealthy and corporations, removing subsidies for fossil fuels and looking at undertaxed sectors such as aviation, where the “polluter pays” principle is simply not being upheld. Justice requires that the nations most responsible for the climate crisis step up. That is our cue.
Josh MacAlister (Whitehaven and Workington) (Lab)
I thank my hon. Friend the Member for Ealing Southall (Deirdre Costigan) for securing such an important and timely debate.
The world has slowly come round to the fact that there is no net zero without nuclear. COP28 was a milestone for the industry, with the conference formally recognising for the first time the crucial role nuclear will play in tackling climate change. Twenty countries, including the UK, committed to tripling nuclear energy capacity by 2050.
The recognition of the role of nuclear in tackling climate change was long overdue. Nuclear is the only large-scale, low-carbon energy source that can operate 24/7. Its ability to provide constant, reliable baseload power at scale allows it to complement more intermittent renewable energy sources, because we need the lights on, even when the sun does not shine and the wind does not blow.
Nuclear also has a critical role to play in decarbonising hard-to-abate sectors of industry. As we approach the last two decades of our mission to reach net zero by 2050, the challenge of decarbonising sectors such as steel, cement and heavy chemicals will receive more and more attention in this place. We are also waking up to the fact that revolutionary technologies such as artificial intelligence, which will play such an important role in economic growth globally and here in the UK, will require vast amounts of energy. Those challenges will only increase the importance of nuclear and the sheer volume of low-carbon power and heat it can produce.
The Sizewell C project here in the UK is a great demonstration of what nuclear can achieve. Plans have been drawn up to use power from the station, when the needs of the grid have been met, to produce hydrogen, which can go towards reducing emissions by means of clean transport and machinery, and direct air capture, a critical part of Britain’s net zero road map.
Aside from clean energy production, nuclear plays a vital role in economic growth and provides high-quality jobs around the world. Here in the UK, the nuclear industry supports nearly 90,000 direct jobs, including 16,000 in my own constituency. It contributes nearly £6 billion in added value to our economy, and provides a pathway to a just transition that creates rather than cuts jobs.
With COP28 having been the moment when the world recognised the role that nuclear can play, COP29 needs to be the moment when we agree on how to make that happen. There are three barriers that need to be addressed, and the first is financing. Nuclear power plants have historically found it difficult to attract funding, given the upfront capital involved. The move to include nuclear in the EU’s green taxonomy is welcome, and the UK should seek to mirror it. Our own green taxonomy is still waiting to be published, after multiple delays under the last Government. The inclusion of nuclear, when it is published, is imperative to mobilise the capital needed to deliver our nuclear ambition.
Secondly, the conference needs to examine the role of regulation and Governments, ensuring that we keep standards extremely high and focus on speed in our planning processes. Despite their designs being exactly the same, Sizewell C’s environmental impact assessment was 30% longer than that of Hinkley Point C, reaching over 40,000 pages. Global co-operation on regulation and standards could unlock much faster roll-out of nuclear technologies. Regulators from economies with developed nuclear sectors, such as the Office for Nuclear Regulation in the UK and the Nuclear Regulatory Commission in the US, should be working together closely to cut the time it takes to approve new technologies and designs.
Thirdly, the Government should continue to focus on how they can support technologies such as advanced modular reactors and fusion programmes. Government support and global co-operation on research and development on those technologies can speed up economic growth and bring about research into their deployment much more quickly, as well as putting the UK at the forefront of such development.
I encourage the Government to include those considerations as part of their priorities for COP29, but I also encourage them to consider this: it is becoming increasingly difficult for Britain to be an influential, respected voice on nuclear energy, given that we have not allowed our nuclear sector to grow. Dithering by the previous Government has stalled our nuclear industry, and next year will mark 30 years since we successfully completed a new nuclear power station.
Lizzi Collinge (Morecambe and Lunesdale) (Lab)
I thank my hon. Friend the Member for Ealing Southall (Deirdre Costigan) for bringing forward this debate. Does my hon. Friend the Member for Whitehaven and Workington (Josh MacAlister) agree that constituencies such as mine, where the Heysham 1 and 2 nuclear power stations provide good jobs and clean energy, are perfect locations for new nuclear projects, such as those he discussed? We have the skills, the ambition and the will, and we are ready, willing and able.
Josh MacAlister
I wholeheartedly agree. In the past 30 years, eight nuclear power plants have closed, and installed nuclear capacity in the UK has dropped by 25%. A decision is due in the constituency of my hon. Friend the Member for Morecambe and Lunesdale (Lizzi Collinge) about extending the life of an existing reactor, and it will be important to secure that for all the reasons we have discussed.
By 2028, Sizewell B is scheduled to be Britain’s last remaining operational nuclear power plant, which should be sobering for all of us. Unfortunately, my constituency is a great case study of where things have gone wrong—and can go wrong in the future. In 2008, the Moorside land next to Sellafield was designated for new nuclear use. Now, in 2024, after 14 years of Conservative failure, we have not only stayed at square one, but actually moved backwards, with new disputes about how the land should be used. If Britain cannot demonstrate an ability to build new nuclear on land designated for it, in a community calling for it and with a supply chain ready to deliver it, how can we expect to be a serious voice at the table when it comes to pushing the world to accelerate the deployment of this crucial technology?
COP29 will be a moment to decide how we roll out nuclear, how it is financed and regulated, and how future technologies are developed and brought to the market at speed. The UK should prioritise playing an important role in those discussions, but we must recognise that unless we fix our own industry, our ability to have influence on the global stage will be limited.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Member for Ealing Southall for introducing this debate. Last week, she talked about waste; this week she is talking about COP29, and it is pleasure to hear her speak on both those matters. I look forward to many more contributions from her in Westminster Hall.
The COP29 climate summit in Baku, Azerbaijan, will be the first “COP of peace”. We hope that will be the case and we will see how it goes, focusing on the prevention of future climate-fuelled conflicts and using international co-operation and green issues to help to heal existing tensions. In terms of our climate, and green success, there is still much to be done, so it is great to be here and talking about that subject.
Hon. Members who have made contributions have grasped that. I thought the balance that the hon. Member for Whitehaven and Workington (Josh MacAlister) aimed for in his contribution summed up where I am as well. I hope to develop the idea of balance in my thoughts.
One of the themes of COP29 is that of an inclusive process for inclusive action, which is one of those statements we need to think about for a wee minute to see what it actually means. It aims to encompass the host’s plans to engage with international stakeholders to ensure that everyone’s voice is heard.
Mr Gregory Campbell (East Londonderry) (DUP)
On international stakeholders, does my hon. Friend agree that in taking the balanced approach which he and others have recommended, we need to ensure that the major polluters—those who are polluting more than all the other undeveloped nations together, such as Russia, China and so on—are persuaded and pressurised to reduce their emissions, because if they do not, many of the actions that are being promoted among developed countries are going to be of little or no effect?
Jim Shannon
I thank my hon. Friend for his intervention, and his as always wise and salient words. The big countries in the world, such as China, Russia and others, have a disregard for fossil fuel pollution and seem to wish to pollute the rest of the world from their own countries. There is a real need for them to do something.
I am really pleased to see the Under-Secretary of State for Energy Security and Net Zero in her place. She sat on the Opposition side of the Chamber in many debates; she and I would have been alongside each other on many things, supporting the same objectives and the same targets. It is a real pleasure to see her today and I wish her well. It also nice to see the shadow Minister, the hon. Member for Wyre Forest (Mark Garnier), in his place.
I always bring the Northern Ireland perspective to debates, because it is important that we understand—perhaps appreciate is a better word—things that are happening in Northern Ireland and how they contribute to policy at Westminster. In Northern Ireland, as a smaller nation of the United Kingdom, we are not shy to the feeling of being left behind, so it is important that efforts are made to engage with international stakeholders, which my hon. Friend referred to.
I will give an example. Climate Northern Ireland brings together members from the key range of sectors to share best practice and enable positive action to address the impacts of climate change. It is funded by the Department of Agriculture, Environment and Rural Affairs of the Northern Ireland Assembly, and aims to support the development and implementation of climate policy—it is really important, and core to the Department’s policy—by enabling the exchange of expertise and advice between Government Departments, public bodies and civil society. It brings them all together under one umbrella to pursue a policy that coincides and works alongside the one at Westminster.
I live in Greyabbey in Strangford and am a farmer there. I was saying to some people I met earlier this morning that I love to come here for the history, but I do not enjoy the concrete. I like to get back home to where the fields are green and where I can walk out and breathe the fresh country air, but that does not take away from where we are. Numerous neighbours of mine own farms themselves. It is really important that we have balance in this debate.
Pippa Heylings (South Cambridgeshire) (LD)
The hon. Member talked about peace and working together with international stakeholders. I would like to add to the calls on the Government for a special climate envoy nominated for our country, because all the things that are being said here today require diplomacy, negotiation and preparation before any climate summit.
I have 15 years’ experience of working in international climate negotiations, from the developing country aspect. I have witnessed how important the roles of special representatives, other climate envoys around the world and climate ambassadors are. Would the hon. Member, and the hon. Member for Ealing Southall (Deirdre Costigan) who introduced this debate, agree that the climate envoy should be nominated by the Prime Minister, so that it has the gravitas to put the UK back into a global leadership position, which the former Conservative Government trashed?
Jim Shannon
I thank the hon. Lady for her intervention and for the work she did in her previous occupation. That brings a wealth of knowledge to debates here; we can all learn and be the wiser for that. The Minister might be able to respond to our thoughts. We are looking for a climate envoy, as the hon. Lady referred to. We should all recognise the justification for that. I look forward to hearing in the Minister’s response on how that is to be taken care of.
In the farming community where I live, we understand the huge significance of farming and agriculture for our climate, as well as the contribution to the local economy. That is why it is important to get the balance right. I work closely alongside the Ulster Farmers Union and the National Farmers Union. I declare an interest that I should have mentioned earlier: I am a member of the Ulster Farmers Union and work alongside it on many policies. It has pledged support for issues such as measures on emissions. It is important to bring people along; it is important to bring along the farming community. It is important to understand the goals, then we can work together. That is what everyone wants but it is never easy to achieve. As I have said before, these things are hard to do without the commitment of funding for our Government. Maybe we can get some clarity from the Minister on the commitment to Northern Ireland.
The Minister’s interest in Northern Ireland has never been in dispute, but I would like to hear whether she has had an opportunity to talk with the DAERA Minister in Northern Ireland, Andrew Muir, or with civil servants and Government officials, to see how we can work on this together. If we are going to do it, it is always better to do it together.
I understand the Labour Government have not yet published their priorities for COP29. I am keen to see what they are. When we reflect on the most recent policy document, that sets out a commitment to keeping 1.5 alive. Limiting global temperature increases is really important. Some people believe that is not happening but, as we look about us around the world, we know we have to address this key issue. Building resilience and reversing biodiversity loss were priorities set out in the Paris agreement. I understand that the Secretary of State for Energy Security and Net Zero has met current and past COP presidents.
Other roles are taken by local councils, stakeholders and small, medium and large businesses. Most importantly, I honestly believe our constituents want to do their bit, but they must be given the means to do so. My way of doing politics has always been to try to bring everyone with us. It is in the nature of life that we might not agree on everything but, when we have a joint goal, we can focus better together. We are always better together and have roles to play at councils, at the Northern Ireland Assembly, and at regional and Westminster level.
COP provides a fantastic opportunity for the United Kingdom of Great Britain and Northern Ireland to pave the way in climate success, by being adaptable and showing that we are willing to learn as a collective. There is a lot to learn and a lot to do; let us do it together.
Uma Kumaran (Stratford and Bow) (Lab)
I pay tribute to my hon. Friend the Member for Ealing Southall (Deirdre Costigan) for securing this timely debate. There seems to be an Ealing bias at the top. I look forward to working with her and others across the House as we tackle one of the biggest challenges of our time. I look forward to supporting the Government’s mission to become a clean energy superpower, and ensuring that tackling global climate change is a focus for this Parliament. In my previous role, before I came to this place, I worked internationally with cities around the world to tackle climate change, using science-based action.
My remarks will be restricted to setting out the need for the Government to prioritise making progress on phasing out fossil fuels at COP29 this October. It was a privilege to be at COP28 last year, alongside other hon. Members in the Chamber, including the hon. Member for Bath (Wera Hobhouse). I welcome the Minister to her place. She was not a Minister at COP28 last year, so it is great to see her in position now. We were there to see at first hand the breakthrough moment for ending the fossil fuel era. Nearly 200 countries made an historic commitment to transition away from fossil fuels. For the first time ever, language on fossil fuels was mentioned in the final United Nations framework convention on climate change negotiating text. However, since COP28, there has been little progress in this area. Negotiations on the topic stalled at Bonn and, instead of generating momentum on delivering this pledge, the COP presidency, Azerbaijan, has made little reference to it beyond reiterating the original commitment. That should not be a major surprise to us, not just because global climate-negotiation spaces are often undermined by the presence of the oil and gas lobby, but because there has been an absence of genuine political leadership by countries, including our own—until recently—on this issue.
Just weeks after the United Arab Emirates consensus was signed, the previous Government issued new exploration licences to max out North sea fossil fuel reserves, with an attempt to ram legislation through Parliament to grant annual licensing for oil and gas. Just when the UK should have been increasing global ambition on moving away from coal, oil and gas, that Government were undermining confidence in the COP28 agreement and losing trust and credibility among key partners on the world stage.
More than half of the global population lives in cities, and urbanisation is accelerating rapidly due to climate-induced human migration, economic growth and demographic shifts, but many cities around the world are at the forefront of the triple challenge of tackling the climate crisis, building social licence and acceptance for climate action, and fighting the rising climate denial that is fuelled by vested interests.
During the last COP28 negotiations, the G77 president noted that new UK fossil-fuel drilling licences would contribute to failure of the COP28 agreement. The world cannot afford for this agreement to fail. We need Governments in each corner of the world to step up before and at Baku for success to be achieved. It is therefore an immense pleasure to see the reset that this new Government are leading. In under 100 days, the Labour Government have lifted the ban on onshore wind, introduced legislation to establish GB energy, acknowledged that the last Government’s approval of the massive Rosebank oil field was probably unlawful for failing to consider the climate impact and, just last week, secured 131 new clean energy projects to power 11 million homes—the most successful auction round ever. This change in domestic policy is helping to restore faith in the UK as a Government and as a climate leader that others can rely on, and it is providing us with new leverage to generate further ambition from others in phasing out fossil fuels at COP29 and beyond.
There is always more room to be bold. I encourage the Government to consider positive steps that would not just support the delivery of UK climate targets, lower household bills and boost energy independence, but support workers and accelerate a just transition away from global fossil fuel production at a time when climate change presents a code-red emergency for the planet.
First, we must end new oil and gas licensing. The 2024 Labour manifesto was arguably the most ambitious climate and clean energy manifesto that any Government have ever been elected on, and I am proud that it includes a world-leading promise which, when realised, will make the UK the first producing nation in the G7 to end exploration for new oil and gas. That is a huge and important first step on the path to ending oil and gas expansion and aligning the UK policy with meeting the 1.5 goal.
I understand that the Government will soon be consulting on how to implement that position, and it is my hope that they will lock it into law through a legislative ban. That would send an unmistakeable message that new fossil fuel projects are not welcome, provide much-needed certainty for the industry, and ensure that the move has longevity, surviving long into the future.
Secondly, we must engage in a just energy transition. The just energy transition is well under way, and the number of jobs supported by oil and gas have halved over the past decade despite hundreds of new oil and gas licences being issued in that period. Workers and communities were let down by the last Government. The transition must be managed fairly. To provide workers with certainty, we cannot pretend that new licences will provide them with secure employment. It is critical that we put them at the heart of the journey towards a clean-energy future. Unions, workers and communities must have a voice in the transition, and they are right to demand a detailed, coherent plan that uplifts their concerns and ensures that they benefit from the transition to renewables.
The UK can lead the way in delivering an energy transition that is just and fair for the workers and communities dependent on oil and gas if it puts those workers and communities at the centre of transition planning. If done successfully, the UK’s efforts to move away from fossil fuels can be a model for other coal, oil and gas producers—and if other countries adopt it, then this must be popular. Putting fairness at the heart of the journey is not only the right thing to do but key to making that happen
By the same token, the UK must work with climate-vulnerable countries to ensure they have the financial resources, technical expertise and ability to fairly transition. Indeed, some of the cities in the global south are absolutely leading the way in the best and fairest just transitions the world has ever seen. That is why supporting the adoption of a new collective quantified goal for finance is crucial at COP29.
Thirdly, the Government must include commitments to phase out fossil fuel production in its updated nationally determined contribution. The final thing for the Government to consider at COP29 is working more closely with others to put cities at the heart of the just transition. Cities are leading the way in climate ambition around the world, and they are reducing omissions at a faster rate than their respective national Governments. They are the doers, greening housing, planning, transport and waste, and preparing for the impacts of climate change. According to the Local Government Association, local climate action can achieve net zero for half the cost of a national approach, and deliver three times the growth in jobs, skills and health benefits. London has been a world leader, and has been acknowledged by the United Nations and the Secretary-General not only for its action but for its ambition.
At COP28, 72 Governments recognised the transformative potential of collaboration between national and local Governments by joining the coalition for high ambition multi-level partnerships, known as CHAMP, committing to integrate cities into their national climate planning and strategies. That is how crucial the next round of climate targets and NDCs will be in 2025. I hope the UK will consider joining CHAMP and following the number of Governments around the world working with their cities—as soon as we bring Britain back as an international climate leader.
Dr Rupa Huq (in the Chair)
I will call the first of the three Front Benchers by 10.28 am, and I want to allow Deirdre Costigan time to sum up. The last two Back Benchers were not on the list that was submitted to the Speaker’s office, but if they stick to five minutes each, everyone will get in.
Lee Pitcher (Doncaster East and the Isle of Axholme) (Lab)
I thank my hon. Friend the Member for Ealing Southall (Deirdre Costigan) for securing this debate. I refer Members to my declarations of interests in respect of my former career.
Our world is facing dramatic change. Too little water, too much water, or water that is too dirty leads to floods, droughts and pollution in our rivers, streams, ditches, dikes, seas and oceans. Not too long ago, I did some work with the Rockefeller Foundation, Arup, the Stockholm International Water Institute and the University of Massachusetts, and with wonderful projects such as Living With Water. We looked at the 100 resilient cities around the world and found that for 60% of them the biggest shock or stress that could impact them at any one time was having too much or too little water—droughts or flood.
Of course, it is not just about the economy: it is about animals and people as well. The great legend that is Sir David Attenborough tells us that right now our animals are dying out at 100 times the normal evolutionary rates of extinction. When it comes to people, I think about some of the research I have seen. When children who have experienced flooding go to sleep hearing rain outside, they no longer dream about the wonderful things that could happen to them the next day, and playing with their friends in the playground—they have nightmares. That means they cannot sleep and sometimes then cannot go to school the next morning. During those nightmares they think about how they could lose not just their possessions but their mum and others as well. That is the kind of impact that climate change and flooding can have on us as people.
I spoke as a keynote speaker at COP26 and at the World Water Congress in the lead-up to COP27. I talked about how we need to think about a future that is all about co-creation—working with communities, families and schools to think about the future. We need to think about how we turn the world’s greatest threat into the world’s biggest opportunity, because that is what it is, and we see rays of light in every area of the country right now. For example, in my constituency of Doncaster East and the Isle of Axholme, we have in Keadby the largest inland wind farm, owned by SSE, which I went to see the other day, and we have innovative carbon capture ideas. We also have youth parliaments and student councils, made up of passionate children who want to make a difference to our world, which is just amazing. We need to harness that passion. I even have residents writing to me who want me to come and work with them in places such as Westwoodside to try to solve some of their key flooding issues.
Now is absolutely the time to act; now is the time when we need to work with children and communities, because we need to create a sustainable future together. COP29 should not be called an opportunity: it is a must-do place to take action. It is a place where we can work together and co-create at a local, national and global level. We in this country can do that as leaders to facilitate a much better, cleaner and greener future for everybody.
Ellie Chowns (North Herefordshire) (Green)
I warmly thank the hon. Member for Ealing Southall (Deirdre Costigan) for securing this debate on such an important topic.
In the spirit of focusing on what brings us together highlighted by the hon. Member for Strangford (Jim Shannon), I will not spend too long responding to the comments of the hon. Member for Whitehaven and Workington (Josh MacAlister) regarding the nuclear industry. Although I agree with him about other areas where he has policy expertise, in this particular policy area we need to focus on the quick, clean, green renewable energy investment that, luckily, his Government are driving forward. That should be our focus.
Will the Minister comment on three specific points? The first is related, actually, because although we talk about energy supply mechanisms, and the Government are taking measures in that area, the hon. Member for Ealing Southall highlighted the urgent need for us to upgrade the UK’s housing stock and to put our money where our mouth is in terms of energy efficiency, thereby reducing the need to generate more and more energy. That means both retrofitting existing housing and putting in place the new build housing standards that will mean every home is warm and affordable to heat, because it is not leaking heat. That will also help with the need to subsidise people’s heating bills. Will the Minister please assure me that she will work with her colleagues to introduce measures in the planning and infrastructure Bill to ensure that all homes are warm homes? We need to put our money where our mouth is and lead by example in this country, in this policy area as well as in others.
Secondly, will the Minister comment on whether the Prime Minister will attend COP29 to demonstrate the leadership that is so urgently needed? Will he show leadership, not followership, regardless of the outcome of the American election and regardless of what is happening in terms of policy elsewhere in the world, including in China and the EU? We need UK leadership on the global stage at COP29; will the Prime Minister provide that?
Finally, the new collective quantified goal that colleagues have referred to is urgently needed. Will the Government commit to increasing overseas development assistance back up to 0.7% of GNI as soon as possible? Will they commit to international climate finance that is new and additional to official development assistance? Will they also commit to putting in place the “polluter pays” fiscal mechanisms that are required to finance our nationally required contribution to recognising our historical responsibility for the global problem of climate change, and to putting in place the measures necessary to enable every country globally to reduce emissions and adapt to the effects of climate change that are coming down the road whether we like it or not?
Wera Hobhouse (Bath) (LD)
I congratulate everybody who has contributed to this important debate. Many different points were made, and all were made well and passionately.
The new hon. Member for Ealing Southall (Deirdre Costigan) was absolutely right to say in her passionate opening speech that it is unacceptable when Governments make international agreements and then do not honour them. That is not only catastrophic for our climate action but it undermines our international reputation.
The hon. Members for Bristol Central (Carla Denyer) and for Stratford and Bow (Uma Kumaran) were absolutely right to say that the UK has a huge responsibility to show climate leadership.
The hon. Member for Whitehaven and Workington (Josh MacAlister) made a strong plea for developing our nuclear capacity. I, too, am not entirely certain about his point, but I am sure the Government will be able to persuade us on that—or not, as the case may be.
The hon. Member for Strangford (Jim Shannon), who never misses an opportunity to speak in debates about net zero, spoke up for the nations that are being left behind and made the point that we need to bring everybody with us. I do not agree with everything the hon. Gentleman says about climate change, but we definitely agree on that point.
The hon. Member for North Herefordshire (Ellie Chowns) asked the Government what progress we are making on energy efficiency in housing. She made her point well, and it has very much been heard by us Liberal Democrats.
I pay tribute to my hon. Friend the Member for South Cambridgeshire (Pippa Heylings) for her intervention, in which she said that we need, and should work towards having, a climate envoy at COP29.
Last but not least, we heard powerful points on the importance of water, which is becoming a massive issue with climate change, as water shortages will drive a lot of displacement. Those points were well made.
The UN is not a world Government, and COP can work only on a consensual basis. Effective diplomacy is therefore essential in coming to arrangements. Although the agreements made at COPs are not legally binding, we must not underestimate their importance in setting the global agenda on climate change. COPs are also crucial to getting polluters to engage with climate-vulnerable countries, many of which have been severely impacted by climate change and are on the brink of climate catastrophe.
COP28 resulted in countries agreeing to “transition away” from fossil fuels, using the strongest language ever used in respect of the phasing out of fossil fuels. This marked a significant step forward. Regrettably, despite excitement that the COP28 agreement saw the beginning of the end for fossil fuels, the actual text was undermined by loopholes and was flawed given the absence of timescales. That means there is even more emphasis on the upcoming COP29 summit, which will be more important than ever. Strengthening the wording on the acceleration away from fossil fuels must be the first priority. That will require rapid and sustained emission reduction, and increasing renewables will be crucial.
The Liberal Democrats absolutely agree with the Green party about the focus on renewables. At COP28, a commitment was made to triple renewable energy. The commitment marks progress; now, action must follow. Climate finance must be increased if the agreements of COP28 are to be honoured.
Here at home, I urge everybody to support the climate and nature Bill. Nature is critical for effective climate action, and biodiversity is our greatest natural defence against climate change. The CAN Bill would require the Government to rapidly reduce our carbon footprint and protect and restore ecosystems, and would ensure that the Government take responsibility for the environmental damage caused by our supply chains.
Halting and reversing deforestation made it into the final text of a COP agreement for the first time at COP28, with Governments agreeing on the need to halt and reverse deforestation by 2030. But forests continue to be decimated for crops. Reversing deforestation is also a responsibility for importing countries such as the UK, which must eliminate deforestation from their supply chains. Deforestation must be a big focus for COP29, and ideas such as a compensation fund for conserving standing rainforest should be part of the discussion.
No country should be left behind in our shared goal of halting warming. Article 6 of the Paris agreement is all about helping countries to work together to meet their climate goals through the voluntary transfer of carbon credits. At COP28, we were unable to finalise this; we look ahead to COP29 to make it easier for countries to collaborate on lower emissions.
Finalising the new collective quantified goal on climate finance must also be a focus. The NCQG aims to set a new financial target for supporting developing countries in their climate actions. The timeframe for the goal is crucial: a short goal will inspire a sense of urgency to get finance flowing where it is needed.
It is reassuring that the new Government have committed to ending licensing for exploring new oil and gas, and I hope Labour will take this promising start on to the world stage and negotiate for an agreement that goes further and faster than the agreement made last year. It is particularly important that the more developed nations remain the driving force behind the global journey to net zero, setting a good example and bringing the international community along with us.
At COP28 we understood that COP’s work was based on three pillars of action: mitigation, adaptation and loss and damage. Mitigation is where we have made reasonable progress; adaptation is the next challenge.
The second pillar of climate change is adaptation. It is essential to adjust to climate change as it is happening. As we speak now, we see it everywhere. The Climate Change Committee has advised that the gap between the level of climate risk we face and the level of adaptation under way has widened in the past few years. Estimated adaptation costs in developing countries are five to 10 times greater than current public adaptation finance flows. At home, sea levels could rise by over a metre by the end of the century.
The more we put off adaptation measures, the more difficult and expensive it will be in the future. National adaptation plans or NAPs—another acronym—are a vital part of this. COP29 must focus on financial and technical assistance, and close the adaptation finance gap. Another part of the COP28 agreement that needs action is the overreaching global goal of adaptation. A long time in the making, that agreement is welcome, but its framework does not adequately address the financial support needed. The GGA requires quantified, measurable targets to mobilise finance.
The third and final pillar, and the one of most importance if we look around the planet, is loss and damage. The launch of the loss and damage fund at COP28 was a breakthrough: it marked an important step in Britian’s relationship with climate-vulnerable countries. However, the money that was pledged was miserable. It is shameful that we, a rich nation, could not come up with more. COP29 should establish long-term commitments from countries to make adequate annual contributions.
Under the previous Conservative Government, the UK’s contribution to the loss and damage fund came from pre-existing climate finance commitments and the foreign aid budget. Foreign aid is vital, but it is separate from climate action; it is about education, health and so on. To put the two together was either cynical or a huge misunderstanding; it makes a mockery of the whole principle. The idea of the fund is that richer nations should support poorer ones, no strings attached. Simply redirecting pre-pledged finances to the fund was a real dereliction of duty. COP29 is the moment for countries to stand by their pledges by announcing concrete steps to achieve them. The implementation of the fund must be led by the needs of countries vulnerable to climate change, rather than the interests of donor countries.
To conclude, national and international action on climate change is not a nice-to-have luxury, but an imperative to avoid the inevitable destruction of livelihoods around the world and the potential of large-scale conflict and mass displacement. The stakes could not be higher. We might have to reinvest a fraction of our wealth, but the benefits of that are immeasurable.
Mark Garnier (Wyre Forest) (Con)
It is a pleasure to serve under your leadership, Dr Huq, and to respond to the hon. Member for Ealing Southall (Deirdre Costigan), who gave a passionate speech. I have been a Member of Parliament for 14 years, and it is a great joy to see so many new Members present for the debate and contributing to it. All the speeches so far have been by new Members, with the exception of that by the hon. Member for Strangford (Jim Shannon)—a regular feature that new Members will get to know well. Parliaments need to refresh, and we have seen a great refreshment over the last election. It is a delight to respond to some very passionate and thoughtful speeches.
The hon. Member for Ealing Southall raised a point that we all agree on, and which is the most important thing to remember: all of us in every part of this House want to achieve net zero, become carbon-neutral and get to a point where we are not relying on fossil fuels; but at the end of the day, we have to look at how we achieve that. It is the detail that I suspect we will find ourselves disagreeing on.
As we discuss the future of our climate commitments, it is essential that we recognise the substantial progress that the Conservative Government made over the last few years. There have been a lot of speeches about how we have not done well, but I remind the House that we had some successes. From 2010, the Conservative Government led the way on climate change by making the UK the first major economy to legislate a 2050 net zero emissions target. We achieved a remarkable feat: the UK cut its emissions by 50% between 1990 and 2022, while growing the economy by 79%. That is a clear demonstration that we can achieve economic growth while reducing our carbon footprint—a very important point. It is worth putting that in perspective. During the same period, France reduced its emissions by only 23%, and the USA saw no change in its emissions between 1990 and 2021. The independent Committee on Climate Change affirmed that our net zero target was feasible, deliverable and could be met at the same cost that was estimated for our previous target of an 80% reduction.
Since the election, there has been much discussion on the plans to make the grid carbon-neutral by 2030, yet since coming to power the new Labour Government have been relatively quiet on their plans for net zero targets—something that I hope the Minister will change today. We are looking at net zero, not making the grid carbon-neutral, but if the Government’s plans to decarbonise the energy grid are anything to go by, we could face the risk of being over-ambitious. That means they may leave working families faced with the prospects of picking up the bill, and I hope the Minister today will be honest with the public about the costs and the trade-offs that will be involved.
The Opposition believe it is vital that the Government take a more pragmatic, proportionate and realistic approach, to ensure sustained public support for our goals. That is an important point—we have to win the support of the public in doing this. Otherwise, the current Government may find—as we did—that if they get things wrong, there may be a change in Government and a different approach could be brought in by an electorate who do not necessarily understand the technicalities of achieving net zero.
Before I go into the latest rounds of negotiations in Baku in November, I want to reflect quickly on our global leadership, as well as the success we had at COP26 in Glasgow. It is worth mentioning that Alok Sharma, who was the president, took his seat in the House of Lords yesterday. He attended Cabinet in the last Government and acted as a quasi climate envoy—a point that a number of people have raised. So we did have somebody championing the climate in Cabinet, and he is now in the House of Lords and will continue doing so.
The historic Glasgow climate pact ensured that we kept alive the 1.5 degree commitment. Since the UK took over the COP presidency, over 90% of the world’s GDP is now covered by net zero commitments, and that is up from 30%. More than 153 countries have put forward new 2030 nationally determined contributions, which effectively amount to climate plans. Record levels of finance have been pledged to help countries adapt to the effects of climate change through the adaptation fund and the least-developed country fund, both of which were established under the UK presidency. Finally, after six years of negotiations, we confirmed the Paris rulebook, which sets out the instructions and products needed to fully implement the Paris agreement on climate change.
Looking ahead to COP29, we need to focus on balancing our ambitious climate goals with the realities faced by British families and businesses. As a Conservative Government, that meant that we were committed to practical adjustments where necessary, but British families still want to know where a Labour Government stand with the net zero plans. Will they stand by their manifesto commitment to reverse the extension on the ban of petrol and diesel cars from 2030 to 2035? Will they commit to moving homes from gas boilers to heat pumps? How will they help landlords in getting homes ready for their new minimum energy performance certificate requirements? How will they manage to maintain energy security and independence for the UK while banning the extraction of oil and gas in the North sea? I know that point has been raised on many occasions, and the co-leader of the Green party, the hon. Member for Bristol Central (Carla Denyer), raised a very important point about Rosebank and what is going on in the North sea.
While the hon. Lady was making her speech, I checked how the grid was using energy. At 9.45 am we were using about 30 GW of power. Wind accounted for 37.5% of that, which is fantastic, but gas was 17%, nuclear was 16% and solar was 7.5%. We were importing 16.3% from Denmark—where the state of green energy is fantastic—Norway, France, Holland and Belgium. The bottom line is that we all want to get rid of fossil fuels, but we do not want to be reliant on foreign fossil fuels. That is a vulnerability, and that is why we have to be pragmatic. I absolutely take the hon. Lady’s point about getting away from Rosebank, but we do not want to be importing from Russia. We want to have security as we transition to net zero. That is a really important point.
In his speech on nuclear, the hon. Member for Whitehaven and Workington (Josh MacAlister) raised the most important point about this: what we need is dispatchable baseload power. We must have dispatchable baseload power, and wind and solar do not provide that.
Wera Hobhouse
The hon. Gentleman just said “dispatchable” baseload power, and that is exactly what nuclear is not. If we just have a baseload that trundles along, renewables will be the ones we turn off and the nuclear will keep going; that is a waste of a lot of renewable energy, and it already happens. Does not the hon. Gentleman agree that we need to rethink our idea about baseload as we move into a more flexible, renewable world?
Mark Garnier
Let me quickly respond to that point, but it is great to get a debate going. Dispatchability and baseload are crucial, and the hon. Lady is absolutely right: nuclear is baseload, but gas is dispatchable. It is important to be able to switch on and off, because one has to be able to take the wind when it is blowing.
Josh MacAlister
There is a reason why the last COP recognised the importance of nuclear—it was because of such debates among experts. It is not enough to will the ends of net zero goals without willing also the means and being prepared to deal with our reality. Look at the debate in Germany: ideological positions have been taken against nuclear, and some of the industrial processes and hard-to-decarbonise parts of the economy are exposed to that recklessness. I encourage those in the debate to keep that in mind when they make their points.
Mark Garnier
The hon. Gentleman is a fantastic chap, and we are absolutely agreed on this. I urge him and other Members to join my all-party parliamentary group for energy studies, where we are looking at exactly this stuff, which is incredibly important. This brief discussion illustrates that it is difficult to ensure that energy can be delivered in the way that it is wanted and when it is in demand. That is the problem with energy, and that is what we have to get right.
Mark Garnier
I will make progress, because I do not want to go round in circles.
Although is right that we continue to lead on climate action, it is also crucial to consider how the cost of these measures is distributed over the long term. We face significant indirect impacts, such as disruptions to global supply chains affecting trade, the rising cost of imported goods, and changes in migration from regions heavily affected by climate change, as we have heard from other Members. How will the Government weigh those challenges against the need to grow the British economy?
I also want to draw Members’ attention to the briefing published by the Local Government Association ahead of this debate. Local councils are directly responsible for 2% to 5% of local emissions, and they can influence up to 80% of emissions through their roles in housing, transport and energy. Their leadership in place-shaping community engagement is vital. From retrofitting homes and implementing active travel programmes to investing in flood prevention and creating green jobs, councils are actively working to address climate risks and promote sustainability. To empower local government further, the LGA has proposed a number of core initiatives for the new Government. Key to these are a renewed local climate action delivery programme to provide a clear framework for local and national collaboration on climate action. I hope the Minister will update Members on how the Government can work with councils and communities to deliver a grassroots net zero plan, not just one that is internationally driven.
We know that Baku and COP29 will be focused on climate finance and a vital new deal on the global response. I think all Members appreciate that developing countries are often the most vulnerable to climate impacts. They require significant support to transition to clean energy, build resilient infrastructure and protect their communities from the effects of climate change.
The new collective quantified goals on climate finance are set to replace the previous target of $100 billion per year. They rightly aim to provide a more ambitious and equitable finance network framework for developing countries. However, success will depend on clear guidelines, transparent reporting and inclusive negotiations that consider the needs of all countries, including those with emerging economies.
With that in mind, there are several key questions that I am sure Members would appreciate answers on ahead of the negotiations in Baku in November. The new collective quantified goal aims to provide a more ambitious financial framework for developing countries, but the UK Government need to clarify their specific financial commitment. How much will the UK pledge, and over what timeframe? How will that align with the financial needs identified by developing countries? Public finance alone will not be sufficient to meet the vast financial needs of developing countries for climate action, so what role do the Government see private finance playing in meeting our climate targets? Do they see an opportunity for the City of London to develop itself as a world leader in private finance for green initiatives?
Outside COP29, how will the UK advocate for reforms within international financial institutions such as the World Bank and development banks to channel more finance towards low carbon, climate resilient development in developing countries? With new nationally determined contributions due shortly after COP29, which diplomatic and strategic measures will the UK employ to encourage other nations—particularly major emitters—to set more ambitious and actionable targets for reducing emissions in line with limiting global temperature rise to 1.5°C?
I am sure that the new Government will continue the previous Government’s efforts to ensure that the UK plays a leading role in delivering net zero across the globe. The Minister will agree that it remains vital for the UK to meet the commitments set out in the Paris agreement. We must remain committed to reducing carbon emissions and combating climate change, yet we must also be honest about the cost and practicalities of achieving these goals. In the previous Government, we were honest about the need for a pragmatic and proportionate net zero strategy that put British families first while maintaining our global leadership on climate action. Opposition Members will of course continue to hold the Government to account on these issues, and urge Ministers to ensure that climate policies are ambitious but achievable, balancing environmental, economic and social needs.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Kerry McCarthy)
It is a pleasure to see you in the chair, Dr Huq, and even more of a pleasure to be standing here in the Minister’s place rather than on the Opposition Benches. I thank my hon. Friend the Member for Ealing Southall (Deirdre Costigan) for securing this important debate. She has certainly hit the ground running, as this is her second Westminster Hall debate—I think many new MPs are yet to discover where Westminster Hall actually is.
My hon. Friend was a powerful voice on climate issues as deputy leader of Ealing council and as its cabinet member for climate action. I acknowledge from the outset—it has been brought up by a few Members—that local government has a huge role to play in helping us to deliver net zero. As a Bristol MP I would be expected to say that; I have previously boasted about the many achievements of Bristol council on that front in this House. I will not do that today, but it is really important and we are looking at how we can make the local net zero forum work more effectively.
My hon. Friends the Members for Ealing Southall and for Manchester Rusholme (Afzal Khan) mentioned the impact on diaspora communities living here, including on constituents of Pakistani and Indian heritages. As a Bristol MP, we have a significant Somalian community and we know that the Horn of Africa has been absolutely ravaged by droughts and floods. We are dealing with the consequences of climate change here in the UK, but some people are also dealing with the consequences where their families and friends are based. I look forward to working with my hon. Friend the Member for Ealing Southall, and I am sure that she will continue to drive this agenda forward in Parliament. I also thank other Members for contributing to the debate and I will reply to some of their specific points later.
We are almost halfway through what is a decisive decade to halt climate change. As global surface temperatures continue to rise following 12 months of record-breaking warmth; as people around the world face the very real effects of this crisis with rising sea levels, nature loss and food insecurity; and as we see climate vulnerable countries devastated by extreme weather events, it is clear the decisions that we make now will define our planet’s tomorrow. If we want to leave future generations a world that is liveable and safe, we must stick to the Paris agreement and keep 1.5° of global warming within reach.
As we have heard, we are currently way off track. Last year’s global stocktake confirmed that emissions need to peak by next year and fall by 43% between 2019 and 2030 to reach the Paris goal, yet we are currently on course for global emissions to fall by just 2%. We need to increase climate finance at least fivefold, phase out coal seven times faster, and reduce forest loss at least twice as fast.
Here in the UK, the Climate Change Committee’s July report provided a wake-up call. It found that the UK is not even on course to hit our own 2030 target of 68% emissions reductions, and highlighted a slowing of pace and reversed or delayed key policies. I will not reply here in detail, but the Government’s response to that report is coming. We will address some of the specific criticisms about domestic policy, including on the new homes standard and energy efficiency. I hope that the hon. Member for North Herefordshire (Ellie Chowns) has heard enough about retrofitting and the warm homes agency in other forums. We will very much be announcing our policies across the piece.
Ellie Chowns
The whole point is that I have not heard anything about it. I have heard two speeches by the Secretary of State for Housing, Communities and Local Government and she has not mentioned it at all, which is why I asked that specific question. I look forward to a written response, but I urge the Government to take the point on board, because even the warm words are not there yet, let alone the action.
Kerry McCarthy
The hon. Member will know that a consultation on the new homes standard closed in March and we are looking to respond to that. Obviously, we want to make sure that our housing stock is as sustainable as possible, as well as setting up the warm homes agency to retrofit the 5 million homes that we have made a priority. I am pretty sure I have heard her mention retrofitting and get an answer from our Department, but I digress.
We very much need to up the pace. We are determined as a Labour Government to get us back on track by becoming climate leaders at home and abroad. That means decarbonising our power sector by 2030. We have already taken ambitious steps by lifting the onshore wind ban, giving the go-ahead to major solar proposals despite opposition in some quarters and setting up Great British Energy. We will also ensure that every large company has credible 1.5°-aligned plans for transition. As I said, we will be revealing more details as we move on, particularly in terms of setting out the next carbon budget, but also in our response to the CCC report.
Demonstrating strong leadership at home will give us the credibility that has been sadly lacking in recent years to demonstrate strong leadership abroad. Several Members, including my hon. Friend the Member for Stratford and Bow (Uma Kumaran) and the hon. Member for Bath (Wera Hobhouse), mentioned that we were in Dubai last year. It was quite a depressing experience, particularly when we met climate activists from climate vulnerable countries who pressed us on what the UK was doing—the country that led with the groundbreaking Climate Change Act 2008 and then raised the ambition to net zero—and whether it had completely abdicated its sense of international leadership. That was a constant refrain.
That is why in my first few weeks in this role, I spoke with key climate organisations about how we could restore the UK’s global leadership. I also held a roundtable with non-governmental organisations to discuss their priorities on climate action, as I will do again before Baku. In fact, I will be holding a series of roundtables with various stakeholder groups.
The Energy Secretary hosted the COP29 and COP30 presidencies, as well as Lord Sharma, who presided with distinction over COP26 in Glasgow, at a recent event in London to discuss how we can ramp up global ambitions. He then travelled to Brazil to strengthen ties ahead of next year’s Amazon COP, reflecting that this is a sequence. It is not just about what happens in Baku; we are already looking ahead to COP30 as well.
As we prepare to head to Azerbaijan this autumn, it is worth reflecting on the progress that has been made by the UK delegation in recent years. I make it clear that, after a couple of months in the Department, I have no criticism of the civil servants. They are incredibly dedicated and hard-working, and it is down to them that a lot of what I am about to mention has got over the line, regardless of a lack of political direction.
In Glasgow, we saw the proportion of global GDP committed to net zero go from 30% to more than 90%. In Sharm El Sheikh, we agreed a landmark fund to support those most vulnerable to the effects of climate change. Last year in Dubai, we saw real progress on the pledges made in previous years. We welcomed 13 new members to the Powering Past Coal Alliance, including the USA and the UAE, meaning that 180 Governments, businesses and organisations have now committed to phasing out unabated coal power.
We were one of 123 countries to support the global pledge to triple renewable energy and double energy efficiency by 2030. We expanded the breakthrough agenda, which is our clean technology accelerator. We announced £1.6 billion of new international climate finance projects. We agreed half a billion pounds to protect forests and the rural communities depending on them. We committed £50 million for loss and damage to help developing countries to deal with the impact of climate change, and we signed an international green public procurement pledge to boost the use of green steel, cement and concrete.
We are absolutely determined to build on those successes in Baku, so the Energy Secretary will be breaking with recent tradition and leading the delegation himself, demonstrating the importance we attach to international negotiations at this critical time. I will be accompanying him, and we will hear more in due course about whether other Government Members will be coming with us.
Going into this COP, we have three priorities. The first is increasing finance. COP29 presents the first opportunity in 15 years to agree a new post-2025 finance goal. It is critical that the new collective quantified goal addresses the needs and priorities of developing countries, and we stand ready to work with Azerbaijan and its COP29 presidency to make that happen. As I said, meetings have already been taking place with them.
The second priority is raising ambitions to speed up the global net zero transition. In particular, we want to use COP29 to build momentum for the new nationally determined contributions, which are due by February 2025. We have already started planning our next NDC and we will do everything we can to encourage partners to be ambitious and wide-ranging with theirs. We will also develop a clean power alliance to bring together a coalition of countries at the cutting edge of ambition. Every country must show domestic action to contribute to the critical targets agreed last year on energy, methane, forests and more.
Thirdly, we must deliver on existing commitments and continue to support people on the frontline of the climate crisis, championing their voices through initiatives such as the climate and development ministerial, which places developing countries at the heart of work to improve access to finance for climate adaptation. I know that the hon. Member for Bath feels strongly about that. We look forward to co-chairing the fourth climate and development ministerial in Baku later this year. We also want to encourage even greater action on deforestation, which accounts for about 10% of global emissions, and we are committed to co-ordinated action outside the main negotiations, including making vital clean technologies accessible and affordable through the breakthrough agenda.
I will quickly turn to some of the key points made in this debate. I welcome the fact that the hon. Member for Bristol Central (Carla Denyer) and my hon. Friend the Member for Stratford and Bow support what we are doing in the consultation on no new oil and gas licences. As they said, it is important that this is a just transition and that we take local communities with us. My hon. Friend the Member for Whitehaven and Workington (Josh MacAlister) talked about the importance of nuclear to his constituency. He has already proved to be a real champion for that; nuclear is very much part of the mix.
I say to the hon. Member for Strangford (Jim Shannon) that one of the first things I said when I got into the Department was that I wanted to make sure that the devolved Administrations were part of the conversation as we headed into COP, and officials have been talking to the Department of Agriculture, Environment and Rural Affairs; we know that we want to have those conversations. Members asked about the appointment of an envoy, which is under consideration—again, watch this space. My hon. Friend the Member for Stratford and Bow talked about the role of cities, which I have already said is important. She will know that I recently met the head of C40 Cities, Mark Watts, and we talked about whether the UK can sign up to CHAMP—the Coalition for High Ambition Multilevel Partnerships—so that is on my radar.
I have covered the main points and I want to leave a minute for my hon. Friend the Member for Ealing Southall to reply. Although that was a quick canter through things, I hope that it has got across that we want to be in the driving seat when we go to COP. We can do that only if we have established our credibility at home, and I hope that we have done so.
Deirdre Costigan
Thank you for your excellent chairship of this debate, Dr Huq. I also thank all the Members who spoke in the debate for their valuable contributions. I do not have time to respond to all the points made, but I will pick up on a couple. I was very interested in the remarks by the hon. Member for Bristol Central (Carla Denyer) on moving away from fossil fuels. I wonder, however, if she has spoken to her co-leader of the Green party, the hon. Member for Waveney Valley (Adrian Ramsay), who says he is in favour of clean energy and wind energy, but wants to block the only viable way of bringing that clean energy on to land and to the homes that need it.
I would also like to respond to the shadow Minister, the hon. Member for Wyre Forest (Mark Garnier), and thank him for his helpful words. He said at the beginning that people had voted the Conservatives out of power because of their lack of action on climate. That was refreshing honesty, and I thank him very much for it.
Dr Rupa Huq (in the Chair)
Order. At 11 o’clock, we start the next debate.
Motion lapsed (Standing Order No. 10(6)).
Winter Fuel Payment
(3 months, 1 week ago)
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Dr Rupa Huq (in the Chair)
I remind everyone that this is a short debate, so everything is a bit squished, and most Members will not be able to make proper speeches. We have two Members down as intervening—we will seek clarity on the rest—and the Minister has 10 minutes to respond.
Rachael Maskell (York Central) (Lab/Co-op)
I beg to move,
That this House has considered the Winter Fuel Payment.
I am pleased to see you in the Chair, Dr Huq. Charities, medics, academics, economists and constituents have evidence showing why the Government must ensure that mitigation is in place to protect pensioners in fuel poverty this winter. Winter fuel payments have provided a layer of protection, with £300 for the over-80s, which is insufficient for some, but excessive for those who need no energy support. Housing costs, food prices and energy costs have exacerbated the situation, leading to the hardest of choices for the 2.1 million pensioners in poverty—a legacy of the last Government. However, once people secure their home, they have to ensure that they can eat and keep warm, and we need the Government to provide an assurance that pensioners will have the help they need to stay warm and well. I know that the Government are working hard, but in 20 days the energy price cap will rise, and people are looking for answers, as am I.
Governments do not choose their inheritance, but they can determine the future. On discovering a £21.9 billion legacy deficit, the Chancellor was right to protect the economy and to prevent interest rates and mortgage rates from soaring in the way they did during the Truss-Kwarteng experiment. However, the winter fuel payment is in a different league.
Jim Shannon (Strangford) (DUP)
I thank the hon. Lady for bringing this matter forward, and I suspect there is no one here who does not support what she has said. Does she agree that the way this change is being foisted on our constituents, with no time for them even to save towards winter fuel bills, is reminiscent of the Women Against State Pension Inequality Campaign scandal, which the ombudsman said was a failing? Does she agree that the Government must consider putting off any changes until winter 2025, and that any changes should be targeted at those who can afford to lose the winter fuel payment?
Rachael Maskell
A Labour Government must always protect the poorest in our society.
The total saving for this year—£1.3 billion—is 0.1% of the total Treasury spend. However, when only 1.6 million pensioners not on pension credit need energy support, that drops to 0.04% of the Government’s budget, assuming that all get the top rate of £300, although most will get less. If we add in additional health and care costs, the saving shrinks again.
Andy McDonald (Middlesbrough and Thornaby East) (Lab)
I congratulate my hon. Friend on securing this debate. The Social Fund Winter Fuel Payment Regulations 2024 will take up to £300 per household from two groups of low-income pensioners: those eligible for pension credit who do not claim it and those who are just over the pension cliff edge but still living on very little. As I understand it, pension credit take-up rate is around 63% and, at best, will be around 68%. The saving to the public purse is predicated on that basis, but the savings will be wiped out if everyone eligible for pension credit took it up, which surely should be the goal. Does my hon. Friend agree that this proposal simply does not stack up?
Rachael Maskell
My hon. Friend has done the maths, and I think it speaks for itself.
The Chancellor cannot make this just an economic argument, because there is also a humanitarian cost. We need the capacity to find an “escape route”, as the former Chancellor, Ed Balls, stated, because people need a safety net. When Labour’s Gordon Brown came to power, he said he was
“simply not prepared to allow another winter to go by when pensioners are fearful of turning up their heating, even on the coldest winter days”.—[Official Report, 25 November 1997; Vol. 301, c. 780.]
Now, they are fearful. The winter fuel payment covered around a third of people’s bills, but it now covers only 12% to 17%. With the 10% rise in the price cap on 1 October, and without cost of living payments, pensioners are exposed to far greater risk. The average bill is £1,717, but older people are at home more, and more likely to live in homes that are less efficient, so they will pay even more.
Melanie Onn (Great Grimsby and Cleethorpes) (Lab)
I thank my hon. Friend for giving way and for securing this important and timely debate—this is an issue of concern across all our constituencies. On the economics, is she aware of the savings credit available to over-75s who are not in receipt of pension credit but who do have a small amount of savings? This is a Government payment and gives people access to other benefits as well, operating as a gateway in the same way as pension credit. Does my hon. Friend think the Government should do more to publicise that payment?
Rachael Maskell
I am grateful to my hon. Friend for doing just that, and I trust that people will follow through.
David Smith (North Northumberland) (Lab)
I thank my hon. Friend for giving way and for securing the debate, and I am sure she will agree with me on two points. The first is that it was the last Conservative Government, through their mismanagement of the economy and the nation’s finances, who got us into this financial black hole, and it is disappointing to see the Conservative particularly poorly represented in the debate. Secondly, does she agree that, as means-testing is introduced for the winter fuel payment as a result of that mismanagement, consideration should be given to pensioners in rural constituencies, such as my own in north Northumberland, who are living off-grid in energy-inefficient homes, and that we should target them through things such as the warm homes fund and the household support fund?
Rachael Maskell
I am grateful for that intervention, because the previous Government clearly cannot defend their record. I absolutely recognise that people in rural communities live in some of the draughtiest homes and, in Northumberland, some of the coldest too.
One constituent, who will just miss out on the winter fuel payment, has just been billed £34 more this month. He cannot pay it. That is how we know that things are worse now. As we have seen, pension increases are simply not covering the sharp rises in the cost of living as a result of things such as rent. This year in York average rents rose by 11.9%—or by 12.5% for a flat—exceeding the April pension triple lock rise by at least £382, and rents continue to rise.
Stripped of the winter fuel payment, the elderly poor will be exposed to greater financial risk. They have the hardest of all budgets to balance and no alternative choices. I welcome the extension of the household support fund, but the scale of demand means that it will be insufficient.
Victoria Collins (Harpenden and Berkhamsted) (LD)
I thank the hon. Lady for securing the debate. Constituent after constituent has written to me, including an elderly couple who have just recovered from cancer. They said that they will slip through the net and are considering going around on a bus in Harpenden and Berkhamsted to keep warm in the winter. Does the hon. Lady agree that the Government need carefully to consider those who are vulnerable and in need, so that they do not slip through the net, and that they should consider reversing their decision on the winter fuel payment?
Rachael Maskell
Real stories speak so powerfully, and that is obviously an issue we need to address. I will make some progress now.
I applaud the Work and Pensions Secretary for her mission to get 880,000 eligible people on to pension credit in time to receive the winter fuel payment. After people complete the 243-question application, there is a nine-week wait to process it. I know that the Secretary of State will change that in time, but it just shows what she is up against and how years of neglect have handed her a broken system. Charities say that that cannot be done in time. There is a reason why 37% of those eligible have not claimed pension credit: it is complex; there is pride; some people have dementia and complex needs; and others simply find the thought too stressful. But I ask people to please sign up.
With the winter fuel payment, people had some cover; now, they are exposed. Of course, many do not need it, but for those that do, it is a lifeline. According to the University of York briefing I had on Sunday, 47% of recipients spend it directly on their energy.
The Energy Security and Net Zero Secretary is again showing his leadership by driving down energy costs through his renewable sprint, with GB Energy and the retrofitting of homes. In the light of the report from the Committee on Fuel Poverty, highlighting how progress to achieve fuel security slowed under the last Government, he completely gets the opportunity of power. I simply urge him to achieve a social tariff, so that the oil and gas giants, profiteering to the tune of tens of billions, are made to help those wrapped in jumpers and blankets.
When we scrutinise the medical evidence, we see that the cost gets greater. The elderly cannot retain body heat. When the body is cold, it fights harder, causing hypertension, heart attacks and strokes. As blood pressure rises, hypothermia creeps in. As infection biomarkers show, viruses prey on the weakest, and respiratory illnesses are exacerbated by cold, damp air. If people choose heating over food, the lack of calories causes its own challenges. If a person has dementia, the situation is more complex, because some cannot judge their temperature. Other diseases, such as cancer, demand keeping warm.
All those issues create huge cost to the NHS, which is already in permacrisis. As the Health Secretary knows, the NHS is broken, and the only route out is prevention. In taking this protection to prevent fuel poverty, we need a safety net for those at risk. People should read the work of the chief medical officer, Sir Chris Whitty, and of Professor Sir Michael Marmot, which says everything we need to know about why mitigation is urgently needed.
Calum Miller (Bicester and Woodstock) (LD)
I thank the Member for securing the debate. I have more than 16,000 residents at risk of losing the winter fuel payment, so I am grateful for the opportunity to address it. In the light of her comments about the social tariff, does she agree that this announcement comes far too early and raises a great deal of concern for many of our residents? Should the Chancellor not have waited longer to address in her Budget the wider pressures she has identified, rather than putting so many constituents in fear of not being able to heat their homes this winter?
Rachael Maskell
The hon. Member makes a powerful point, and I will talk about the mitigation that absolutely must be there.
I talked to a director of public health this morning who said we should implement a warm homes on prescription scheme. Evidence from the Energy Systems Catapult and the NHS pilot in Gloucestershire found that such a scheme was value for money and helped people stay well. Government could really help.
Sadly, demand on GPs will rise, queues at A&Es will grow, more beds will be occupied in the NHS and social care will be placed under more demand. Tragically, according to University College London and the Institute of Health Equity, there were 4,950 excess winter deaths due to cold homes under the previous Government. I feel sick to the stomach each time I repeat that reality, because I cannot process how Governments past did not protect those vulnerable people—Labour must be different. We need mitigation, because we must protect those under our care. Otherwise, what is the point of power?
One constituent has had leukaemia. They need to put the heating on to keep warm, but they cannot afford to because it costs £300 a month. A recently widowed constituent, at the depth of their personal sadness, is now scared they will not survive the winter; they cannot afford their heating. Another constituent goes to bed at 5 o’clock to keep warm. One constituent told me he wears jumpers, a coat and a warm hat, but the air is still cold and damp. Then there is Rose, who is registered as severely vision-impaired and living alone, who said:
“I am a council tenant with no extra assets”.
She told me she was scared and “abandoned”—the winter fuel payment was her lifeline. I have many, many more accounts like that.
It is colder in the north, so costs are higher. The UK Health Security Agency recommends indoor temperatures should be at least 18°C. Some people need higher temperatures to keep warm. It is not just the physical impact that matters; people are anxious, tearful and scared each year.
Anna Dixon (Shipley) (Lab)
I thank my hon. Friend for securing the debate. Like many in the House, I have been touched by some of the tragic correspondence I have received about those who are being impacted. I am concerned about women such as Barbara, a carer in my constituency who looks after her husband, who has dementia. I echo my hon. Friend’s comments about the need to protect people who have a disability, ill health or chronic conditions, because we know that fuel poverty and cold homes exacerbate those conditions. Does she agree that we must urge the NHS, in its winter planning guidance, to do more to work with others to tackle fuel poverty, and to target vulnerable people so they do not go cold this winter?
Rachael Maskell
I welcome my hon. Friend’s expertise, and she is right: the NHS is where this issue will present itself. It is already under huge pressure, so we have to find a way out of this issue.
We have all had the emails, the handwritten letters and the people queuing up, pleading—I certainly have. These pensioners have worked hard all of their lives. Some have put a little bit aside; others have not. Winter is always a challenge. This Government must have the capacity to find another way. People put their hope in Labour because, like me, we believe that it exists to fight for working people, to protect the poor and to seek justice, equality and fairness. I know that the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Wycombe (Emma Reynolds), does too.
With the economic imperative shredded and the medical case so powerful, the House of Lords Secondary Legislation Scrutiny Committee has provided a path out. It is unconvinced that the measures should be pushed through so urgently and wants scrutiny. It highlighted that the DWP needs to assess the risks of those eligible and ineligible for pension credit. While the triple lock fails to provide protection, the triple hit of the energy price cap rising by 10% on 1 October, the Tory freeze to the personal allowance and the removal of the winter fuel payment, without the cost of living payments, leaves people exposed. The Committee says that the measures could be delayed by changing the trigger dates. Delay is still possible.
The Committee also highlights that the Social Security Advisory Committee, which has a legal role in reviewing legislation before debate, will not meet until after the measures have passed. That means that MPs and Lords will not have the opportunity to debate its findings. We need these reports to debate the proposals. Furthermore, no impact assessment has been published.
As has already been said, according to academia fuel poverty is deeply rooted in inequality, disproportionately impacting on women and black and minority ethnic and disabled people, as well as the socio-economically disadvantaged. I have been contacted by many charities highlighting cancer, neurological conditions and others—and, of course, dementia too. Labour must always ensure that those with protected characteristics experience no detriment.
Our constituents are worried sick. They are frail and frightened. I see desperation in their eyes, and I hear it in their voices. As they grip my arm in the street and look at me, they know what I know—and if we are honest, what we all know. They are worried that they will be that statistic. Our duty is to take away that fear.
Mitigation is still possible: from delay to a social tariff or social prescribing, where consultants and GPs can authorise payments. I want to know what work the Government are doing in these areas. What measures are they looking at? What mitigation is possible, and by when? The household support fund will simply not be enough. The pension increase is insufficient. We need more, and we need it urgently.
I want this Government to do much better than the last, and I believe that, over time, we will, but winter is upon us now and we must reassure the fuel-poor pensioners that they will have the support they need. My constituents plead that I do something—my goodness, I am trying, but the Minister must too. Please, let us mitigate. Let us give people confidence and the comfort and care they need—the help and protection to keep them safe, warm and well this winter. If that cannot be done, then delay these measures. I rest my case.
Dr Rupa Huq (in the Chair)
I see that there is another name down to speak. We have actually run out of time for that, but the Clerk is advising that Neil Duncan-Jordan can intervene on the Minister—that is a possibility. I call the Minister, Emma Reynolds.
The Parliamentary Under-Secretary of State for Work and Pensions (Emma Reynolds)
This is the first time I have served under your chairmanship, so thank you, Dr Huq. I start by thanking my hon. Friend the Member for York Central (Rachael Maskell) for providing the opportunity for this debate, and thanking her and others for their attendance.
The previous Government left us with unfunded and undisclosed spending commitments. It is very surprising that none of them is in their place for this debate. I may not know some of the new Conservative MPs, but I see empty places opposite me, although elsewhere there are hon. Members from other parties. Hon. Members are acutely aware of the £22 billion black hole in this year’s public finances left by the previous Government. The Office for Budget Responsibility has said that that represents
“one of the largest year-ahead overspends against…forecasts outside of the pandemic years”,
and the Chancellor only discovered this after the election. She has been clear that the decision about means-testing the winter fuel payment was not one that this Government expected or wanted to make, but given the in-year overspend that we uncovered, it is a necessary one. While protecting the poorest pensioners on the lowest incomes and with the greatest need, it is the right decision given the tough choices that we face.
To be very clear, I have spoken to a number of the hon. Members present about the Government’s decision, and there is actually fairly widespread agreement that the benefit should not be universal. Plenty of very wealthy pensioners who do not need it are getting transfers of £200—or £300, if they are over 80—into their bank accounts. It is right that we target the support at the poorest pensioners.
Neil Duncan-Jordan (Poole) (Lab)
Does the Minister agree that the problem is that wherever we draw the line, there will always be those just above who end up being poorer because they do not gain the benefit and do not get the passported access that gaining the benefit gives? Those individuals end up being worse off than the people who do claim. That is one of the problems with the means-tested system.
Emma Reynolds
I thank my hon. Friend for his intervention. For those just above the threshold, we have extended the household support fund. I urge hon. Members to work with me, the Secretary of State for Work and Pensions and the Deputy Prime Minister, who have written to local authorities to encourage them to ensure that those just above the threshold who are struggling get the support they need with bills. Obviously, that is discretionary, but we encourage local authorities to use that.
In addition, the Minister for Energy Consumers has met with the 15 largest energy providers and urged them to give all the support they can to those who are either likely to get into debt, or who are already into debt on their fuel bills. Support is available. There is also the warm homes discount, which is available to a larger cohort than those on pension credit. That will go live in October; again, I encourage hon. Members to join us in urging those struggling with their bills to apply for the warm homes discount, which is worth £150.
There are measures that the Government are taking. We are absolutely determined to boost the uptake of pension credit. It is a national scandal that up to 880,000 eligible pensioners are missing out on pension credit thanks to the previous Government. That is worth on average £3,900 per year, but obviously depends on personal circumstances. If people apply for pension credit and are successful, it passports them to all sorts of other benefits.
My hon. Friend the Member for Great Grimsby and Cleethorpes (Melanie Onn) rightly said that pensioners eligible for the savings credit part of pension credit are also eligible for pension credit, and therefore will be passported to receive winter fuel payments. It is quite a complex area, because it depends on whether someone is on the old or new state pension. Gordon Brown, when he was Chancellor, introduced the savings credit precisely to help the cohort of people that hon. Members are concerned about. George Osborne, on taking office, cut that benefit and made it unavailable for younger pensioners, so the cut off is 2016. That is something that we have been left; as my hon. Friend the Member for York Central said, it is not a legacy that we have chosen. I hope to work with all hon. Members present, who are clearly concerned about their constituents, to boost the uptake of pension credit.
Andy McDonald
I wholeheartedly agree that the Minister has inherited the most dreadful legacy from the absent Conservative party. Could she clarify for me the issue of take-up of pension credit? It currently sits at 63%; the ambition is 68%. What would happen to the proposed savings of £1.4 billion if pension credit was successfully rolled out to everybody entitled to it? Would those savings not disappear?
Emma Reynolds
The savings we have estimated—£1.4 billion this year and £1.5 billion in the next financial year—take into account a boost in the uptake of pension credit. We are absolutely determined to see an increase in that uptake, so the Secretary of State and I have already engaged with charities and local authorities. The Secretary of State spoke to Age UK and Citizens Advice about how we work together.
Last week was Pension Credit Week of Action. I encourage hon. Members to look at my X, although I know it is not so fashionable with everyone these days, for a video of a visit I did last week precisely to raise awareness of pension credit. Pension credit is not a simple process—we are looking at how to simplify it—but charities such as Age UK and Citizens Advice will help pensioners to go through it online. The online version is much simpler than the paper version, believe it or not, as the paper version has lots of questions that will not be applicable. We are also delivering a major campaign in print and broadcast media, including for people to reach out to retired families, friends and neighbours to urge them to check if they are eligible.
We will write to all pensioners about housing benefit; this is a question that one of my hon. Friends asked me yesterday. He had a constituent on housing benefit who was concerned that that would be taken into account as a form of income when the Government looked at his eligibility for pension credit. I confirm that that is not the case: housing benefit is not taken into account with regard to income. Please, I urge pensioners on housing benefit, who will be receiving a letter from the Department, to apply for pension credit.
As a Government, we are looking to merge the administration of housing benefit and pension credit to make that much simpler for people. The previous Government promised they would do that—some years ago, in fact—but were not going to until 2029. We think that that was slow decision making, and we are seeking to do it as soon as is operationally feasible. It is not a simple exercise, but it is something that we should do.
Calum Miller
I congratulate the Minister on the speed with which you have got up to speed in this fiendishly complex area. That in itself demonstrates a point. Do you not agree that this has been a premature decision, which has left many of our constituents deeply anxious about how they will heat their homes this winter? If you as the Minister are telling us that it is complex and not straightforward, and a difficult set of issues to navigate, how can we expect people worrying about illness, caring for their partners, or living on the poverty line because they are just above the pension credit limit, to get through this winter? Do you not agree that it would have been better to consider the issue in slightly slower time?
Dr Rupa Huq (in the Chair)
Order. The Clerk always reminds me that Members cannot use “you” because it means me, even when used with “Minister”. We have had it all morning.
Emma Reynolds
Dr Huq, I am sure Members will soon get used to the bizarre ways of this House.
I thank my hon. Friend the Member for Bicester and Woodstock (Calum Miller) for his question. As I set out, the Chancellor was not expecting to do this but had to do it urgently because of the £22 billion black hole in our public finances. The black hole is in-year. What if we did not tackle it? Look at what happened under the previous Government, with Liz Truss’s mini-Budget: they put forward unfunded tax cuts and sent the markets into turmoil. Interest rates increased, putting mortgage rates and rents up, and that led to higher inflation.
People on fixed incomes, such as pensioners, would really suffer were we not to secure economic stability. Economic stability is the foundation of all that we want to do in Government. I say to pensioners and others across the country: this is a necessary step to make the improvements that we want in our NHS, bringing down waiting times, and in our schools, ensuring that we have the highest standards.
Emma Reynolds
I am afraid I cannot give way at this point, because I only have a few seconds left, but I thank my hon. Friend once more for providing the opportunity for this debate.
Unfortunately, given the fiscal inheritance, we have had to make some very difficult decisions. We made other decisions in July as well, such as pausing the hospitals programme to review what we will do with it. There are other decisions to come. However, it is right that we take the difficult decisions to protect our economic stability, and to drive growth in our economy, higher tax receipts and improvements in our public services. We are absolutely determined as a Government to deliver a better NHS, with waiting times down, and better public services, which will benefit pensioners and people across our economy and our country.
Question put and agreed to.
Illegal Immigration
(3 months, 1 week ago)
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Neil O’Brien (Harborough, Oadby and Wigston) (Con)
I beg to move,
That this House has considered illegal immigration.
I must start by saying that our numbers in this debate are more select than they might otherwise be, were it not for the fact that many Members are taking part in the vital debate on the Government’s decision to take the winter fuel payment away from 10 million needy pensioners.
Since 1971, it has been a criminal offence for a person who is not a British citizen to knowingly enter this country without leave to do so. Yet since the start of 2021, more than 125,000 people have come to the UK illegally in small boats—about 94 people every day. In the period since Labour came to power alone, about 8,400 people have come—about 137 every day. Of course, people also come via other illegal routes, and, for obvious reasons, it is difficult to estimate the total number of people in the country illegally. However, the numbers are clearly significant. A 2020 report for the Pew Research Center estimated that at the end of 2017, 800,000 to 1.2 million people were already living in the UK without a valid residence permit, which is about 1.2% to 1.8% of the whole population.
Illegal immigration is unfair on those who have played by the rules and come here legally. It undermines attempts to get the kind of high-skill, high-wage migration that all politicians say they want and it blows a hole in our attempts to keep dangerous people out of the country. It is a huge issue.
Many of the people coming here in the small boats are, in reality, economic migrants—not all, but many. At present, the No. 1 country of origin is Vietnam, which is a friendly and peaceful country. However, as the University of Oxford Migration Observatory pointed out, it is also a country where there are lots of strong connections to organised crime for those crossing from Vietnam, or being trafficked from there.
Most of the people in the small boats are young men—nine out of 10 are men, and about three quarters are aged 18 to 39. Few have any documentation, with only about 2% having passports, which makes it difficult to prove who they are or where they are from, and, coached by the people smugglers, most destroy any evidence —pocket litter, SIM cards and the like—that would tell us where they are from.
The overwhelming majority of these people will claim asylum. They know that if they can make it to the UK, they will be able to stay by one means or another—most will be granted asylum, and, of those who are not, very few will be removed. Looking at the period 2019 to 2022, we see that only about a fifth of applications were refused, and only one in 20 people was actually made to leave the country through enforced or voluntary returns.
Asylum grant rates have steadily climbed in recent decades, from less than a third in 2004 to around four fifths now, while the proportion of people who are ultimately removed has dropped sharply over the past 10 years. Previously, around a quarter of those who claimed asylum were returned; now, the figure is only around one in 20. Many of those who are not granted asylum simply disappear. In November 2023, the Home Office admitted that it does not know the whereabouts of around 17,000 asylum seekers whose claims have been discontinued. Those coming in the small boats know the bottom line: if they can get to the UK, they can stay. As long as that is the case, more and more people will come.
The Government say they are trying to address the issue in a variety of ways, which I will work through. First, they are trying to process people faster, which, in practice, means granting more people asylum more quickly. That means that the costs of the asylum system disappear into the costs of the wider welfare system, but, of course, the costs in the real world do not go away. A number of local councils are concerned that people will shift from asylum accommodation to presenting as statutory homeless and in need of council housing.
These trends are quite difficult to get a handle on in the UK, because, while lots of other Governments are publishing more and more data, we in the UK are publishing less and less. The Department for Work and Pensions has stopped publishing data on welfare claims by nationality, and His Majesty’s Revenue and Customs has stopped publishing tax paid and tax credits received by nationality. The Home Office will not answer questions on the immigration status of prisoners, such as whether a prisoner is here illegally—although it has the data, it does not publish it—and it does not collect data on the nationality or immigration status of those who are arrested.
When asked basic questions such as how much it spends, on average, per night on hotel accommodation, the Home Office says such information is commercially confidential. When asked about spending programmes such as the refugee integration loan scheme, the Home Office says it does not know how much it has spent, it does not know how many loans it has made, and it does not know how many have been repaid. That is a pretty shocking way to handle taxpayers’ money and it all breeds huge mistrust, meaning that we cannot have a sensible debate about the costs and benefits of different migration policies. The first question that I hope the Minister will answer is this: will she publish the data, so that we can at least have a sensible discussion about the facts?
The second thing that the Government say they are trying to do is to increase deportations of those who should not be here, which is obviously an idea I welcome. In some ways, however, this is surprising because when the Prime Minister was campaigning to be the leader of the Labour party, he signed a letter calling for the suspension of a flight to deport 50 offenders to Jamaica and the suspension of all such future charter flights. In total, 151 Labour MPs and peers signed that letter.
Among those who escaped deportation that day were Ikiva Heaven, a heroin dealer who had already served four years in prison and who went on to be jailed again in May 2021 for dealing cocaine and heroin. If that was not bad enough, one of the other criminals who Labour Members so generously campaigned on behalf of, Ernesto Elliott, went on to commit murder.
The Prime Minister has previously claimed that there is a
“racist undercurrent which permeates all immigration law”.
None the less, I take it on trust that a new leaf has been turned over and that the Government really do want to increase deportations. However, we need some clarity about exactly what the Government’s target and promise are. The Home Secretary has said that she will
“reverse the collapse in removals that has taken place since 2010”. —[Official Report, 22 July 2024; Vol. 752, c. 386.]
As the Minister will know, I was quite critical of the last Government on this issue so I would welcome an increase in deportations. However, my question to the Minister is this: what will the Government achieve, by when? Are we talking about enforced returns or all returns? By when will we reach what level of deportations? For background, the number of enforced returns was 21,425 in 2004; by 2009, that figure had declined to 13,938. It declined further to just 9,236 by 2018. It then ran at about 3,000 a year during the pandemic, when no one was flying—fair enough. However, it then went back up to 7,119 in the year ending June 2024.
What is the Government’s ambition regarding enforced returns? Is it only to bounce back to pre-pandemic levels? If so, that would leave the figure substantially below 2010 levels and at about half the rate that we had in 2004. That would not be very ambitious. Will the Government figure also include voluntary returns? If that is the case, the Home Secretary’s recent announcement that she wanted to raise levels up to the “highest level since 2018” involves a very odd target, because returns have already increased to above that level. In 2018, they were 24,938; in the year ending June 2024, they were 29,551. She could go backwards and still hit her target, which is hardly a stretching ambition. The second question that I hope the Minister will answer when she responds to the debate is about what exactly the Government are promising, by when, and on what kind of deportations. We urgently need clarity.
That brings me to my third question for the Minister. For some countries of origin, such as Albania, we have already secured returns agreements; that has been very effective. Given that the number of people coming from Vietnam is now very high, I am sure that the Government will quickly secure a returns agreement with that country. However, what do the Government plan when it comes to countries that will not take their nationals back or countries that the Government will not want to send nationals back to—such as Afghanistan, Iran and Syria, which account for a very large share of illegal immigration to the UK? I take it that the Government will not negotiate returns agreements with the Taliban, the ayatollahs of Iran or Assad in Syria.
To solve the problem, Governments across Europe are negotiating deals with safe third countries. Last week, we got the news that a senior Minister in Germany was looking to take up the relationship with Rwanda that the Labour Government have rashly abandoned without putting any alternative in place. It is not just Germany that wants to do this; two camps will be built in Albania to house migrants rescued at sea by Italian boats while Italy processes their asylum claims. The EU has ruled that that is legal under European law. Denmark passed legislation allowing for the processing of asylum claims in third countries in 2021. The Chancellor of Austria praised the last Government’s agreement with Rwanda, saying that it was a
“pioneer for us being able to put asylum proceedings in safe third countries”.
In May, 15 EU member states wrote to the European Commission to back the creation of centres in third countries. The signatories included Austria, Bulgaria, Cyprus, the Czech Republic, Denmark, Finland, Estonia, Greece, Italy, Latvia, Lithuania, Malta, the Netherlands, Poland and Romania.
Lots of Governments are looking at this issue and responding. In a recent letter, Ursula von der Leyen, the EU Commission President, noted that
“Many Member States are looking at innovative strategies to prevent irregular migration by tackling asylum applications further from the EU external border”.
She promised to look at the issue during the current European Parliament cycle.
The use of safe third countries is not a new idea. Outside Europe, Australia has been intercepting boats at sea and putting people in safe third countries since 2001. Here, Tony Blair’s Government worked to get a deal with Tanzania to send failed asylum seekers there, and that Government also worked to get a deal with other EU member states that would have seen asylum processing in third countries—an idea that is clearly coming back again. Of course, there are differences between the schemes: between sending failed asylum seekers to other countries, processing asylum claims offshore or doing both the processing and accepting of asylum claims in other countries. They have different merits, but all stop failed asylum seekers from remaining here illegally.
It seems certain to me that this Government must and will end up negotiating similar agreements with third countries of their own, which is why it was so rash of them to trash the Rwanda scheme with no alternative. My third question is: having rashly handed over all the work we did with Rwanda to Germany, will the Government now U-turn and start working on third-country deals of the kinds that many other countries now have or are setting up?
I have already mentioned Australia’s policy of intercepting boats at sea, and my fourth question relates to that. What will the Government do to ensure that people intercepted at sea are towed back to France rather than the UK? That is an increasingly important point because the small boats crisis has entered a new and more dangerous phase. The average number of people in each boat has been increasing, and partly because of the success of the last Government in increasingly intercepting engines—the most difficult element of the people smugglers’ kit—we are seeing very large and increasingly overcrowded boats putting out to sea with really small engines. Those things are death traps by design; they are not even intended to get across the channel but purely to get a few miles out to sea and then rely on being rescued. Other innovations by the criminals, such as taking the hard floor out of the boats, have already had deadly and tragic consequences.
The legal argument has always been made that, under the law of the sea, those things are by definition a risk to life at sea. It has got even stronger, which shifts the argument for us to turn more of them back to France. I know that the French have occasionally allowed those boats to be towed back to France when the circumstances have been acute enough, but the argument has got stronger. Will the Minister commit to doing just that? Everything we do at every stage to disrupt the people smugglers’ business model helps to make it unviable and to stop this evil trade.
That brings me to my final question for the Minister: what will the Government do about the underlying reasons why people come from safe third countries to the UK? I said at the start that people know that, as long as they can make it to the UK, they will be able to stay. As long as they know that, they will continue to come. Successive Governments since 2018 have worked with France and other allies to improve enforcement. There have been some results from that, but on its own, it is not going to be enough. We need people to realise that crossings are futile so that they do not step into a deadly boat in the first place.
Some people think that we can solve the problem by just granting more visas for people to come here legally—so-called safe and legal routes. They are saying, “Just make illegal immigration legal, and the problem is solved”. The problem is that, unless we are prepared to have completely open borders and to impose no limits at all, there will always be people who come illegally. For example, 2,233 people from India have come on small boats. India is the world’s largest democracy with a booming economy and an impressive space programme, but we have given—over the same period that the boats have been operating—1.3 million non-visitor visas to people from India. There are loads of opportunities to come here legally from India, and yet thousands of people have still come here illegally. That shows us that we can never solve this problem by having slightly more or slightly bigger safe and legal routes.
It is true that we have created, quite rightly, a number of additional routes on top of the asylum system. Through those humanitarian routes, plus the asylum system, we have taken about half a million people over the last five years; some of them lived in my house—I had Ukrainian refugees living in my house. But sadly, we cannot have an unlimited scheme for every country in the world that is poorer or more oppressive than the UK, because that is a very large share of the world’s population. According to a 2021 Gallup poll, about 16% of all adults worldwide say that they would leave their own country permanently if they could—that would be about 900 million people. They are not wrong to want to move to a richer country, but we simply cannot take all those who would like to move here. Doing things that simply increase the acceptance rate in the asylum system to “clear the backlog” is likely only to increase the pull factor and encourage more people to take that dangerous journey across the channel.
If we look at the countries of origin that account for most of those crossing the channel, we can see that the grant rates have been increasing dramatically over recent years. Even on initial, first-round decisions, acceptances from Vietnam have gone up from about 20% to 60% in recent years. From Eritrea and Sudan, the rates have gone up from 20% to about 100%, and from Afghanistan and Syria, they are about 100%. The figures on final decisions, and on the proportion of people who are actually removed, are even starker. The share of those coming from Vietnam who are returned has declined from about two thirds in the mid-noughties to just 1%. For Turkey, it has gone from 0.5% to 1%. From Iran, from one in five to just 1%. Even for friendly countries like India—booming economies, superpowers in the making—it has gone from half to just one in 10.
There are multiple reasons why someone’s chances of remaining in the UK having come here illegally have increased so much over time. Case law has gradually broadened the definition of groups that are at “risk of persecution”, allowing more and more people to come to the UK if their own countries do not meet the very high standards of western liberal norms. The expansion by the courts of the concept of persecution has left immigration officers facing almost impossible questions of judgment: is someone really a member of this political party or this religion, do they practise their lifestyle or faith openly or quietly, or are they a prominent target? Often there is variation within countries and between time periods.
In some cases, people are not being persecuted in their own country, but they argue they would be persecuted if they returned. For example, military men from Eritrea who have left without permission can be made to do military service, which is then used as an argument to stay in the UK. Should we have to accept any young man who comes here from Eritrea for that reason? I do not think that just because someone’s country is poorer or more oppressive than the UK that gives them a right to come to the UK, but that is the direction that judicial activism has taken.
To create some accountability and transparency around this, I have pushed for the decisions of the first-tier immigration tribunal to be published rather than kept secret, as at present, but that still has not happened. Hand in glove with judicial activism, the Shaw review and the decline of immigration and detention have made the practicalities of deporting people much harder.
Far and away the biggest legal change is the growth in case law associated with the European convention on human rights, signed in 1950. While the 1951 refugee convention had no court or enforcement mechanism at the start, the convention of course has its own court in Strasbourg. Unlike Germany, the UK has a dualist legal system, meaning that treaties do not directly apply, so historically it was able to ignore rulings of the European court. However, in 1998, the Blair Government incorporated the convention into domestic law, meaning people could use their ECHR rights in the domestic courts, directly. I think Tony Blair regretted that very quickly, because in 2006 the courts ruled on the case of nine Afghans who hijacked an airliner in Afghanistan and held its occupants at gunpoint for four days at Stansted airport in 2000. The court granted them leave to remain in this country in a claim heavily based on ECHR rights.
Case law has shifted the meaning of some of the very vaguely defined rights in the convention in a way that would have stunned the original signatories. As an example, a Government consultation listed some cases showing how the balance has shifted. I will mention some of those in this debate. Take case X, a foreign national who had leave to remain in the UK, who committed a series of crimes including common assault, battery, destruction of property and grievous bodily harm. The immigration and asylum tribunal found it would be a disproportionate interference with the appellant’s rights to deport them, given their relationship with their child. If we take case AD, a Turkish national who was convicted of an offence of grievous bodily harm and sentenced to 54 months’ imprisonment, in September 2019, the first-tier tribunal allowed his appeal against deportation on human rights grounds. After protracted litigation relying on his period of lawful residence and marriage to a UK national, the upper-tier tribunal allowed the appeal on article 8 ECHR grounds.
In the case of OO, a Nigerian national convicted of intent to supply crack cocaine and heroin and two offences of violence, in 2020, the first-tier tribunal allowed his appeal against deportation, again on article 8 ECHR grounds, and the upper-tier tribunal upheld these findings, relying on what it called OO’s “significant obstacles” to integrating back in Nigeria.
I do not think that any of these decisions were what Winston Churchill intended when he set up the Council of Europe. Jonathan Sumption, one of our leading jurists, is right to say that these incredibly vaguely defined rights are “dangerous for democracy”. ECHR rights are being used to block us from doing many of the things that we need to do to prevent people who arrive here illegally from lying about their age.
A recent freedom of information response released by the Home Office makes it clear that many people are lying about their age. We can now see that supposedly there are 50% more 16-year-olds arriving here than 18-year-olds, and there are also 50% more 20-year-olds than 18-year-olds, leaving a suspicious dip in the numbers around the age of 18. However, the medical examinations that would enable us to stop people lying about their ages are often barred by ECHR rights. We saw a tragic case of a dangerous person lying about their age with Lawangeen Abdulrahimzai, who claimed to be 14 when he was 19, and went on to kill Tom Roberts, an aspiring Royal Marine. That awful and dangerous case showed in multiple ways how the system elevates the rights of dangerous people over the rights of people in this country who just want to stay safe.
Enforcement is very important, and I hope the Minister will let us know when the head of the new border security command is going to be appointed, as several months have passed now. It is essentially a rebadging of existing measures, but it is still not good that the post has remained vacant for so long. Perhaps the Minister will tell us that someone has finally been appointed.
There are, however, limits to what enforcement can do. Tony Smith, the former head of Border Force, has pointed out that just relying on enforcement alone is like playing whack-a-mole. One gang can be shut down, but another one will always pop up. That is why he calls the decision to scrap the Rwanda scheme “rash”. Those who come on the small boats know the bottom line. If they can get to the UK, they can stay. Until we change that, more and more people will force their way into this country illegally. That is not fair on British citizens and it is not fair to legal migrants to this country. It brings significant costs to the British taxpayer and lets dangerous people into our country.
During the election I met many people who were in despair about the small boats. They felt it was profoundly unfair, and that the rights of people who forced their way into this country were considered more important than their rights. They are right to feel that way. I was critical of the previous Government, but I am not optimistic about the current Government fixing any of these things. Perhaps the Minister will prove me wrong when she responds to the debate.
At the very least, I hope that the Minister will answer some questions directly. First, will the Government publish the data that the DWP and the Home Office keep secret? Secondly, will the Government set out a clear, measurable and specific target for removals with a date on it? Thirdly, will the Government U-turn and start talks to create third-country agreements of the kind that they have just abandoned? Fourthly, will they start to tow boats back to France, given the overwhelming risk to public safety and the clear legal arguments for doing that? Finally, and above all, will the Government start to address the deeper reasons why illegal immigrants and people-smugglers know that, if they force their way into the UK, they will be able to stay?
Several hon. Members rose—
Sir Mark Hendrick (in the Chair)
I remind Members that they should bob if they wish to take part in the debate. Given the length of the opening speech, and the amount of time available, I will try to limit each Member to about five minutes, with the exception of the two Front Benchers. I call Fred Thomas.
Fred Thomas (Plymouth Moor View) (Lab)
Thank you, Sir Mark. I will not take five minutes. Like many of my neighbours and the people I represent in Plymouth, I served our country in the armed forces. We are really proud of the armed forces community. For us and our families, national security and the security of our borders is paramount.
We came into government nine weeks ago and inherited a dire situation from the outgoing Conservative Government. Unfortunately, they had lost control of our borders. I am proud that the Labour Government will regain control of the situation by creating the border security command, which will draw together the best of British security personnel, from the National Crime Agency, Border Force and the finest intelligence officers in the world. Together we will better protect our borders and, for the first time in many years, go after the criminal gangs that are facilitating and profiting from these crossings.
There is a huge human element that is often left out of these conversations. Last week, we saw a truly horrific loss of life in the channel. There were 12 deaths, including six children and a pregnant woman. That was one of many such incidents so far this year alone. We must never allow ourselves to become inured to that kind of tragedy and the loss of life, especially of children. Sadly, the one set of people who do not care about that loss of life is the smuggling gangs who are responsible for putting people on those terribly overcrowded boats. That is why, to tackle the small boats crisis at its source, we must smash the criminal gangs.
Lee Anderson (Ashfield) (Reform)
We keep hearing this slogan, “smash the gangs”. Does the hon. Member not realise that when a gang is smashed, there are another 20 gangs ready to take that gang’s place and carry on the people smuggling? I am sure that he will agree that what we need in this country is a deterrent that stops people wanting to come here in the first place.
Fred Thomas
For me, the UK is the best country in the world; I do not think we should make our country a less good place so that fewer people want to come here. That is not the route to go down.
Mike Tapp (Dover and Deal) (Lab)
I have worked for the National Crime Agency in the past, and also in a counter-terror role. There are ways we can deal with this. The fact is that what the previous Government set up only dealt with the processing of those who arrived. The new border security command can bring in not just enforcement but disruption, which will ensure that people are not even getting on to the boats. There is not just one way of cracking this nut. If we bring in the likes of MI5, with new counter-terror powers, tools and a culture of disruption, then it can have a massive impact. I have been part of that in the past and have seen it happen, so it can work and I have full faith—
Sir Mark Hendrick (in the Chair)
Order. I ask for interventions to be quite short. Those who are intervening are subtracting time from those who want to speak later in the debate.
Fred Thomas
I thank my hon. Friend the Member for Dover and Deal (Mike Tapp) for his intervention and his fantastic service to the nation. He worked in those organisations that keep us safe, and is not just commenting from the side.
The inheritance from the previous Government was dire. When Labour took office it was against the backdrop of record small-boat crossing numbers. The last number I saw for this year so far was 13,489; that is an astonishing number that represents a total loss of control. Of course we are not going to turn that around within nine weeks of being in office. Let us not forget the situation that we are inheriting.
Net migration has trebled since 2019. Meanwhile, the Rwanda scheme, which we have heard about today, has already cost taxpayers more than £700 million; we have sent four volunteers to Kigali—that is an expensive trip. Had the Conservatives returned to power, they intended to spend £10 billion over six years on the same failed policy. Will the Minister assure my neighbours, the people I represent and the armed forces community in Plymouth, that the situation is going to turn around under the new Labour Government?
Lee Anderson (Ashfield) (Reform)
It is a pleasure to serve under your chairmanship, Sir Mark. I thank the hon. Member for Harborough, Oadby and Wigston (Neil O'Brien) for securing this important debate. It is a shame that there are not more Members here today.
I will choose my words very carefully in this debate, because words and language are important. We need to get tough in this place about the problem of illegal migration. I hear time and again that these people are fleeing war-torn countries—they are desperate people fleeing persecution. Well, let me say, I have been to France and it is quite a nice place. There is no war in France and they are not persecuted there. I served on the Home Affairs Committee for two years. I went to the camps in Calais, and the first thing we noticed was that it was all young men—there were no women, children or families. They were young men between the ages of 16 or 17 and 30. They all said the same thing to us: they would point at the white cliffs of Dover and say, “El Dorado”. They wanted to come to this country because they thought that the streets were paved with gold—and they are paved with gold, if someone is coming from a country such as Eritrea or Sudan.
The most annoying part for me was that there was a charity there called Care4Calais, which would attract those people. It would give them the co-ordinates in whichever country they came from, and it would take weeks or months for people to get there. Once they got to the camp, Care4Calais would set up a school to teach them how to speak and write English. It would give them new phones with data, give them shelter, and get them ready for the crossing to the UK. I take issue with the hon. Member for Harborough, Oadby and Wigston, who said that once they get to England they are never leaving—it is once they get in the channel. Once they get in the channel they are picked up and ferried to our country. When they get to our country, they are placed in hotels—[Interruption.]
Sir Mark Hendrick (in the Chair)
Order. There is a Division. We normally add injury time to debates such as this. As soon as everybody is back in the Chamber, I will be in the Chair and any time we have lost as a result of the vote will be recouped.
Sir Mark Hendrick (in the Chair)
With injury time, the debate will now continue to 4.15 pm. I call Lee Anderson to continue.
Lee Anderson
Thank you, Sir Mark.
Once the illegal migrants—let us get the wording right: they are illegal migrants—get into this country, there is no way they are ever going to be deported. It only happens in very rare circumstances.
The most important thing for me is to get the terminology right. They are illegal migrants. They are young men coming into our country. Quite frankly—people can say what they want about me—I do not want these people in my country. They have broken into our country. They have thrown their documents away. They are undocumented. We do not know where they have come from. We do not know what they have been up to in their own country. We do not know whether they are criminals. We do not know what their intentions are when they get here.
We are a soft touch. These are illegal migrants posing as asylum seekers. We have heard some horrific cases over the past two years, with some of these illegal migrants being granted asylum status and then going on to commit horrific crimes—again, abusing our asylum system.
I get reports as a Member of Parliament, and I know my colleagues do, of young, undocumented men roaming around our town centres, intimidating people. That has to stop. Yet we see the non-governmental organisations, the lefty lawyers and the Labour party together encouraging these illegal migrants to come over the channel by using the same old slogan: “smash the gangs”. I am telling everyone in this room that that slogan is a complete nonsense. We have to stop the pull factor for people coming to this country.
Once these young men in northern France—I have to been to the camps—get into the channel, they are in this country. We may stop 100 boats a month, but those same people will get on to another boat and keep coming. Once they are in this country, they are going absolutely nowhere, and they are costing us a fortune. At the same time as we are waiting for the results of a vote to rob our pensioners of their winter fuel payment, supported by the Government, we are spending nearly £6 billion or £7 billion on illegal migration.
In the minute I have left, I will tell a quick story. In 1941, my grandad Charles William Waterfield left the Nottinghamshire coalfields. He left the pits before mining became a reserved occupation. He put a uniform on and went to north Africa. He left a wife and two children behind to fight for King and country. He did that. He did not run away. He did not go to another country and leave his wife and children behind, which is exactly what these young men are doing. They are leaving women and children behind in a supposedly war-torn country. Quite frankly, I do not want these sorts of people in my country and neither do the vast majority of the British public.
Nick Timothy (West Suffolk) (Con)
I congratulate my hon. Friend the Member for Harborough, Oadby and Wigston (Neil O’Brien) on securing this debate and on his excellent speech. I also congratulate the Minister on her appointment to the Home Office. She won the lottery with that job.
The starting principle of a functioning immigration system is that it has to work in the interests of the citizens of this country and we must decide who comes here. Illegal immigration destroys this principle for all the reasons set out by my hon. Friend in his speech. That is why we must have no tolerance for the channel crossings, and why we need a policy that breaks the link between entering the country illegally and staying here for good thereafter.
Just before the summer recess, the Home Secretary made a statement in which she set out the Government’s policy on illegal immigration, including getting rid of deterrents through deportation to third countries and scrapping the retrospective element of the duty to remove that was set out in the Illegal Migration Act 2023. She said that her policy was instead to consider the asylum claims of all illegal immigrants subject to the retrospective duty and admitted, in the impact assessment if not in her speech, that that meant granting asylum to up to 70% of them.
I will come to the cost of that decision, but I want to address the Home Secretary’s claim about the cost of the previous Government’s policy. She claimed that by making the change, she would save the taxpayer £700 million a year for a decade. Labour MPs are repeating that statistic, not knowing that they have been sold a pup, because the claim is clearly ridiculous. After that statement, word soon reached me that Home Office officials were appalled that it had been used. If any Labour MPs want to dispute that, I suggest that their Ministers speak to Home Office civil servants as often as I do.
I wrote to the permanent secretary on that news, and went through the impact assessment. The numbers were the result of what might be called the Reeves method, because they were a work of political fiction. We know, for example, that the Home Secretary’s calculation double-counted costs. On the one hand, Sir Matthew Rycroft in his letter to me said it included expenses for implementing the Rwanda policy, while on the other hand, the impact assessment assumed Rwanda would never be implemented.
Indeed, the impact assessment assumed not a single migrant would be deported under the Conservative policy and that migrants would have stayed in hotels for 10 years, which is clearly an absurd proposition. However, the Labour policy excluded massive costs from welfare bills and categorised them as housing policy, which it admitted as “significant” and that it
“could undermine…this impact assessment”,
yet the results of the impact assessment were presented to the House of Commons as unquestionable fact.
The impact assessment reveals the real Government policy: to deal with the huge number of claims by accepting them and to deal with the cost by hiding the numbers from the public in the welfare system. The Home Office admits that 63,053 illegal immigrants previously due to be deported will have their asylum claims heard instead, and up to 70% of them—that is 44,137 people—will be successful. But it also admits that, for those refused,
“the scale and timing of removals is highly uncertain”,
and that
“the Home Office may continue to support a number of”
them.
These figures are just the beginning, because they apply to only one cohort of migrants, with the duty to remove unlikely ever to be implemented by Labour. Unless the Minister corrects me by naming a start date, the Home Office admits its policy
“is expected to increase the number of asylum claims”,
which “consequently increases…costs”. Instead of facing deportation, hundreds of thousands more migrants will stay here for good. The policy is to shift migrants from the Home Office budget, the costs of which are published clearly, to the welfare and local authority budgets, the costs of which are not published clearly.
The impact assessment says:
“Any asylum seekers who are granted asylum will have full access to…the welfare system”,
and local authorities will also “incur costs”. So lacking in transparency is this approach that the impact assessment says the Home Office has
“not been able to establish a generally usable figure.”
That is obviously ridiculous.
We know from studies in Europe that the average channel migrant will be a net lifetime recipient of public funding, not a contributor. In a Danish Government study, immigrants from the middle east, north Africa, Pakistan and Turkey were shown to cost a net £10,000 per year. A study at the University of Amsterdam calculated that, over a lifetime, the average asylum migrant costs the Dutch public more than £400,000.
On that basis, for those granted asylum in just this one cohort, the lifetime cost of Labour’s new policy is £17.8 billion, which is far more than the bogus £7 billion figure cited by the Home Secretary, which she said was the cost of the duty to remove policy. Hundreds of thousands more people will be claiming asylum here in the next four to five years, so the final cost of the new Labour policy will be many multiples more expensive than that. That is the reality of the Government’s illegal immigration policy—more illegal immigration, not less, and vastly higher costs. For that, we will all pay the price.
Mike Tapp (Dover and Deal) (Lab)
I apologise for my late arrival after the vote, Sir Mark. My constituency is Dover and Deal, so I have been engaging on this serious issue for a number of years and it means a lot to my constituents. The Labour party has made it clear that what matters to voters matters to us, too, and that is why we are taking this so seriously.
In 2018, 299 people crossed in small boats. Since then, we have had 136,000 crossings. The asylum backlog reached record highs, which has cost £8 million a day in hotels. The hon. Member for Harborough, Oadby and Wigston (Neil O’Brien) made the point that we will speed up the processing and therefore grant more asylum claims, but the alternative is to have a backlog of five years that costs £8 million a day. We will also deport those who should not be here, which the Conservatives completely failed to do.
Our plan is sensible and pragmatic. The border security command, as I touched on earlier, is not the same as what was previously in place to deal with those arriving at the borders. It will work upstream and bring in counter-terror powers. Let us give that a chance—we have had eight weeks, so I am surprised even to be having this debate right now. We have had 13 flights off the ground, one of which was the largest on record. That is a show of intent as to exactly how seriously we take the matter.
My final point is that the Labour party has strong values on this. We believe in secure borders, but we play the ball, not the player. Those seeking a better life are doing nothing wrong, but we will secure the borders and take out the smuggling gangs.
Sir Mark Hendrick (in the Chair)
The number of Members wishing to speak has dwindled slightly since the Division, so I will relax the time limit from five to six minutes to more like seven to eight minutes. Members will have a bit longer. I know that does not help those who have already spoken, but they spoke before the vote.
Rupert Lowe (Great Yarmouth) (Reform)
It is a pleasure to serve under you, Sir Mark. I hope to stay within five minutes, just about.
When we see pictures of boats entering Dover packed full of supposedly desperate asylum seekers, I want to ask, “Where are the women? Where are the children?” The craft are filled almost exclusively with men—young men. How did they secure the rumoured £5,000 to pay for the cost of their crossing? Even according to the Home Office’s own 2022 figures, 87% of these people were men. We must be abundantly clear and honest with the British people: these are foreign males looking to take advantage of our soft borders and our incompetent establishment. They are not, in the vast majority of cases, people genuinely fleeing war and persecution.
Now we are told we should refer to these people as “irregular migrants”. Language matters. The vast majority of these men are not “irregular”, or asylum seekers; they are illegal immigrants and should be labelled as such.
What have we done with these males who have illegally entered our country—unchecked, undocumented, unknown individuals? We have spread them across the UK, often putting them up in luxury accommodation—all at our expense—and damaging the fabric of our country, particularly in my constituency. They are free to come and go as they please. Why? If any reach our shores, they should be securely detained until rapid deportation can be arranged. Allowing thousands and thousands of foreign young men free rein across our country is pure, unadulterated insanity.
The public are furious. In no way does that justify any violence, but we must accept the reasons behind so much of the anger. Starmer has misread the room badly, and the fury will not dissipate until the crisis is taken seriously by the Government. The boats could be stopped virtually overnight with the correct will. Put the Navy in the channel, send the boats back to France, and ensure that no one setting foot here illegally stays. That means deportations, and lots of them.
The Australians deployed a zero-tolerance approach. It worked. We must do the same, and urgently. The first step to delivering that is to declare a national emergency. Send a clear message to the illegal migrants and the smugglers: if you come here illegally, you are not welcome. Until that happens, more and more will come.
Does the Prime Minister have the political will to tackle this crisis? The British public will not forgive him and his colleagues for failure to deliver now. Tony Blair opened the floodgates in 1997 via the Human Rights Act, and the Tories accelerated the process. The Prime Minister must now close them as a matter of urgency. Illegal migration is mortally damaging our sovereign nation. Given that the Department is having trouble maintaining its staff, as are most Government Departments of which I have experience, none of us believes that smashing the gangs has any hope of getting any traction.
Nigel Farage (Clacton) (Reform)
I thank the hon. Member for Harborough, Oadby and Wigston (Neil O’Brien) for calling this debate. He must find it excruciatingly embarrassing how badly the previous Government dealt with this issue.
With my strong connection in Kent and Sussex with the commercial fishing industry, the angling trade and indeed the lifeboats, I started to feel in early 2020 that —after the odd boat had crossed in 2018 and 2019, as the hon. Member for Dover and Deal (Mike Tapp) mentioned—something big was about to happen. The gangs had realised that the chances of deportation from this country were very low. So I went out repeatedly from Dover into the English channel, filming boats and meeting face to face with boatfuls of the young men who have been described—in many cases, very aggressive young males.
I also got to the bottom of the use of the word “escorts”. I kept being told that escorts were crossing the channel. I was not quite sure what that meant, to begin with, but then I understood that it was the French navy—that the French navy literally escorted boats across the English channel and handed them over to Border Force or the Royal National Lifeboat Institution —so I made a bit of a fuss about the whole thing. I said that unless something was done, huge numbers would come. I said that there might even be an “invasion”, a word that got me in very big trouble. Given that we are pushing up towards 140,000 who have come, I do not think I misused the word.
The efforts of the last Government to deal with this were frankly pretty pitiful. Rwanda might have worked in theory, but of course in practice it was not going to work. All the while, we are subject to that Court in Strasbourg, as we saw that evening. More interestingly, the incorporation of the convention into British law means that actually British judges will always rule in favour of the ECHR, so we have to face up to that reality.
I also believe that what we are facing is a national security emergency. When ISIS boasted in 2015 that it would use the Mediterranean to get its operatives into Europe, perhaps the European Union should have taken it more at its word. It was interesting to note that Sir Keir Starmer himself used the phrase “national security emergency” during the general election, so he is going to have to act accordingly.
Appointing a new border chief commander? Yes, we may get some better intelligence—fine, but the French, whom we have given hundreds of millions of pounds, already stop a lot of dinghies from crossing. They put knives in the dinghies, but the problem is that the prospective illegal immigrants just hide in the dunes and come back the next day. So that is not going to work.
Smashing the gangs? Well, I don’t know. What I have been hearing for the past 30 years is that we are going to smash the drugs gangs in this country, and yet there are more class A drugs being taken today than there ever were before. A good operative gang, working out of those sand dunes in northern France in a reasonable week of weather, can expect to make at least €2 million. The financial rewards are very, very high.
Really, what this comes down to is two things. No. 1 is political will. Successive Australian Prime Ministers attempted to deal with the problem; they all failed. They tried offshore processing and so on, until in the end Tony Abbott just towed the boats back to Indonesia. There was international outrage from the UN, the EU and indeed the Foreign Office.
Sir Mark Hendrick (in the Chair)
Order. Can I just say that if somebody intervenes, you should sit down?
Nigel Farage
Just a few weeks ago, for the first time, Border Force did an emergency pick-up on the other side of the line. Rather than bringing the people back to this country, as previously Dover lifeboat and Dungeness lifeboat had done, it actually took them into Calais. That is the way we do it. Yes, these are far flimsier vessels, but the principle of taking people back whence they came is the point that I am trying to make.
We can do this. We can do it under the international law of the sea. I ask the Minister to say that, given the money that we have given to the French, we will no longer accept escorts from the French navy. The day after 12 people died in the channel, a French naval vessel escorted a dinghy from a couple of hundred yards off Wissant all the way to our 12-mile line. No more French naval escorts—I think that is vital.
We need political will. The Germans, of course, are now showing it. The Germans will ignore the ECHR; the Germans, by the way, sent a plane full of young men back to Afghanistan the other week. With political will and by leaving the ECHR, we can solve this.
I promise the Labour Government one thing. This issue caused great pain to the Conservative party, and it had an impact in the general election. This issue of illegal migration and the crime that it leads to, which is a conversation that has barely started in this country but that in France and Germany is now very big, will do massive damage to Labour’s electoral chances. You are going to have to get tough, and I am afraid your leader is going to have to rethink his position on the ECHR.
Several hon. Members rose—
Sir Mark Hendrick (in the Chair)
Order. Before we move on to the Front-Bench contributions, may I remind some of the newer Members, who have been saying “you” or referring to other Members by name, that the convention is to refer either to the office that a Member holds, such as Prime Minister, or to the seat that they represent?
Matt Vickers (Stockton West) (Con)
It is a pleasure to serve under your chairmanship, Sir Mark. I thank my hon. Friend the Member for Harborough, Oadby and Wigston (Neil O’Brien) for securing this very important debate. As he says, people are arriving here confident in the belief that they will get to stay, and that must change. The cost to the taxpayer is increasingly beyond scrutiny, and we have yet to see the targets set out by Labour.
I echo the comments of colleagues about the concerns associated with illegal immigration, which are undoubtedly incredibly serious and shared by many of those we represent. The hon. Member for Rother Valley (Jake Richards) talked about the real and horrendous human cost of this issue, as we have seen in recent weeks, which is one of the many reasons we need to work urgently to get a grip on it. My hon. Friend the Member for West Suffolk (Nick Timothy) talked about the bizarre creative accounting put forward by the Government in an effort to defend the scrapping of the deportation deterrent, and the fact that moving the cost from one Department to another will not solve the problem.
The hon. Member for Great Yarmouth (Rupert Lowe) made valid observations about the nature of the many people arriving and their motivations. The hon. Member for Ashfield (Lee Anderson) asked why it is that people are fleeing from France. He talked about the important need to stop the pull factor that draws people to get into the small boats. The hon. Member for Clacton (Nigel Farage) told us of his learnings about escorts and the issues created by the ECHR, which have been debated many times in this place and will continue to be debated in the coming weeks, months and years. He talked about the concerns that those issues rightly pose for national security.
With the other business going on in the House today, it seems apt to start by looking at the cost of illegal immigration. Asylum accommodation is costing the taxpayer over £8 million a day and now looks set to keep rising. We have seen this Government grant an asylum amnesty to 100,000 arrivals, without any proper costing in their impact assessment. Government is about priorities. This amnesty is seeing the Government pulling up a chair for people who have entered the country illegally, at the same time as turning off the heating for our pensioners.
Journeys by small boat across the channel are illegal, dangerous and unnecessary. They are unfair on those who are in genuine need, and the country’s finite capacity is taken up by people coming into the UK from a place of safety in France. Furthermore, they are unfair on the British public, due to the huge impact that they have on public services. Thanks to the measures brought forward by the last Government, migrant returns in the year from June 2023 to June 2024 rose by a fifth, enforced returns rose by a half, irregular arrivals fell by 26% and there was a 36% reduction in the asylum backlog. Most importantly, the previous Government changed the law so that when people arrived here illegally, they should not have been able to claim asylum in the UK and so they could be returned to their home country or a safe third country.
We need a deterrent to discourage people from paying the criminal gangs of people smugglers who profit at the peril of others; to prevent people from leaving the safe country that is France, on the assumption of a soft-touch approach here in Britain; and to protect our already overburdened public services and housing supply. This Government’s first act on illegal immigration was to scrap that essential deterrent. It is a deterrent that the National Crime Agency says is essential to tackling the issue, a deterrent whose removal the former chief immigration officer says will create open season for small boats, and a deterrent that is now being looked at by 19 EU countries.
Lee Anderson
I thank the shadow Minister for allowing me to intervene. Does he agree that if the previous Conservative Government had had the political backbone and courage to get that first Rwanda flight off and ignore the ECHR, it might have stopped this?
Matt Vickers
The hon. Gentleman has walked through the Lobby with me and has been as frustrated as I have in trying to look for a solution to this problem. With the removal of the deterrent, we are basically doing a U-turn on everything that we have put forward and everything that looked as though it could make a difference. We have seen what is happening in Ireland as a result of it. The deterrent would work. If people can arrive in this country and know that they are never going to be sent back, we are going to have a problem.
Just this week, Germany asked the EU if it could use the accommodation that we—British taxpayers—have built in Rwanda, so that it could send asylum seekers there. It is clear that the Conservative Government were making progress on this issue and that Labour is behind the curve. Labour has wasted taxpayers’ money on scrapping this deterrent, and now the EU wants to copy the UK’s scheme. Usually it is the Labour party that wants to copy the EU. The reality is that the new Government have no plan to stop the boats and nowhere to send asylum seekers who cannot be returned home. Where are they going to return the people from countries like Afghanistan, Iran and Syria? If it is not Rwanda, is it Romford? Is it Richmond? Is it Redcar?
Labour got through this election talking tough and saying that it would smash the gangs, but it is quickly realising that it is not a workable policy. Over 8,000 small boat arrivals have landed in the UK since Labour took office, and it still has not even appointed a head of its new border command. More press releases and warm words simply will not cut it now that Labour is in government. In recent months, most people in this room will have knocked on thousands of doors and heard real concerns from residents about what uncontrolled illegal immigration can mean for their community, the pressure on public services and housing, questions around integration, and the tough choices that have to be made about public spending.
When the Minister gets to her feet, will she finally tell hon. Members when the new Labour Government formally told the Rwandan Government that the Rwanda scheme was scrapped? What advice has she received from the National Crime Agency about the need for a deterrent? How many more small boats will cross before the Government appoint a new border command? Will asylum hotels be reopening in the autumn? Where does she plan to send asylum seekers who cannot be returned home?
The Minister for Border Security and Asylum (Dame Angela Eagle)
It is a pleasure to serve under your chairmanship, Sir Mark. I congratulate the hon. Member for Harborough, Oadby and Wigston (Neil O'Brien) on securing the debate—he made it here with 30 seconds to go, after taking part in several very important votes. We were wondering whether the debate would be able to start on time, but he managed to make it, although somewhat out of breath.
Listening to the debate—I am sure it will be the first of many we will have in this place and other places—it struck me that there are some things we agree on across all parties. First, we have to stop irregular immigration and deal with the appalling gangs behind the small boat crossings. Those gangs care only about the profits they make, which fuel other criminal activity, and are careless, to say the least, of the lives they put at risk in these dangerous crossings. In the recent past these gangs have grown increasingly violent; they have attacked the police and those on the beaches in France whom they have promised to transport to safety. It is therefore vital that we dismantle the gangs and strengthen our border security—I think all of us can agree on that.
The crossings have increased hugely in recent years, and the boats are becoming more and more crowded, unseaworthy and dangerous—a point made by several hon. Members.
Lee Anderson
The Minister is making some good points, but does she agree that while the Prime Minister is smashing the gangs, it will be more difficult for boats to get into the sea, so more people will clamber on to the boats and we will have more deaths in the channel?
Dame Angela Eagle
We have to do what we can to disrupt this trade. We have already seen that the boats are becoming more unseaworthy and that more people are getting on them. Just because that is happening, it does not mean we should do nothing to get in the way of the supply of boats and engines that criminals use to facilitate this trade. Even though they have not agreed on the wherewithal, all Members in the debate have agreed that we should be doing our best to stop this trade. No Government would not want to be in control of their external borders—I think we all agree on that. It is therefore important that we take a much more sophisticated and integrated approach to dealing with these increasingly integrated cross-border gangs.
We must not leave the gangs to flourish or organise, reaching even deeper back into places such as Vietnam, but instead harass and disrupt them and their financing. My hon. Friend the Member for Dover and Deal (Mike Tapp) was spot on to say that this has been done before in different contexts, particularly drugs and international crime, and it can certainly be done with this trade. We should try to be a bit more optimistic about the potential for concerted, cross-border action among states to deal with the issue.
A different approach must be workable. We believe it must respect international law, which is why the Government scrapped the partnership with Rwanda. The Opposition, and particularly their Front-Bench spokesperson, the hon. Member for Stockton West (Matt Vickers), have been acting as if the Rwanda deal was somehow a deterrent, but from the day it was agreed to to the day it was scrapped, more than 84,000 people crossed the channel in small boats. That does not sound like a deterrent. Since it was scrapped, the number of small boat arrivals has gone down 24% compared to the same period last year, and down 40% compared to the same period in 2022. If it was a deterrent, it worked in an extremely odd way.
Nick Timothy
Can the Minister explain why, in calculating the figure the Home Secretary presented to the House of Commons—as part of the claim that scrapping the retrospective element of the duty to remove would save £700 million a year for 10 years—the impact assessment assumes absolutely no deportations to Rwanda at all? In a letter to me, the Home Office permanent secretary said that the cost of removing people to Rwanda is included in the number.
Dame Angela Eagle
I have not seen the letter to the hon. Gentleman, but I am happy to write to him if he wants a further explanation. We must remember that in its three years in existence, the Rwanda scheme cost hundreds of millions of pounds. We were going to pay £150,000 per person deported to Rwanda; that was part of the agreement. In those three years, only four people were sent to Kigali, and they went voluntarily, so I do not think the Conservatives’ view that the Rwanda scheme was an answer to all their problems and prayers was borne out by the experience of it. Scrapping it has not made a blind bit of difference to some people’s desire to get into this country.
Jake Richards (Rother Valley) (Lab)
On the Rwanda scheme, does the Minister agree with the comments, reported in the press, of the right hon. Member for Braintree (Mr Cleverly)? When he was Home Secretary he clearly understood that it would never work, when the Leader of the Opposition was Chancellor he clearly thought it would not work, and in the three years of its existence it did not work, so the fact that Conservative Members are still clutching on to it does not bode particularly well for their prospects of coming back to reality.
Dame Angela Eagle
I agree with my hon. Friend’s observations. Rather than clutching on to something that was clearly very expensive and has not worked, the important thing is to get down to doing the day job. While the Rwanda scheme was being developed, the Home Office stopped doing a lot of other things that it should have been doing. Returns completely plummeted: the Illegal Migration Act 2023 made it impossible to process a range of people, so they were literally sitting in hotels, costing £8 million a day.
There are no easy answers—I am not the first Minister for illegal immigration and asylum to say that there are no easy fixes, and I will not be the last—but we have to be able to administer the system, deal with returns and do all the things we have to do to make asylum system outcomes meaningful. If a person’s asylum application fails and their country is safe, they should be returned; there should be a consequence to the asylum decision. The Government have a duty to speed up the asylum system and make it fair, but there must be a consequence if the outcome is not what the asylum seeker wants.
Neil O'Brien
I want to press the Minister on the question I asked about third countries. Tony Blair has advocated third-country agreements, and many other European countries are signing them, although there are countries that we would not, for obvious reasons, want to return even failed asylum seekers to. Are the Government ruling out any such third-country agreements?
Dame Angela Eagle
I am unsure what sort of third-country agreements the hon. Gentleman is talking about. There are various agreements that might be relevant, such as the return agreement with Albania, and hopefully work we are doing with Vietnam to return people. Returns for failed asylum seekers and those who have no right to be here are an important part of ensuring the system works properly. I suspect that the hon. Gentleman is going down another path, so I will give way if he wants to come in again.
Neil O'Brien
I thank the Minister for giving way again; it is kind of her. The question is not about return agreements but about third-country agreements, whereby those seeking asylum in this country are sent to a third country that is not their home country if their application fails or to have their processing done. That is the kind of agreement that Tony Blair argued for. The Italians, for example, already have one up and running, and many European countries are setting them up.
Dame Angela Eagle
At this stage, eight or nine weeks into the job, I would not want to rule out any such thing, but tests would have to be applied to it. It would certainly have to be in keeping with international law, and we would have to ensure that it provides value for money and has a reasonable chance of working. I do not want to come here at this stage of the Government’s life and rule anything out, but we would have to think about certain issues—such as schemes according with international law and being good value for money—which would apply to any such potential scheme. However, the Government’s key priority at the moment is to deal with the channel crossings in small boats. That is why we are focusing on creating the border security command, which will help us to get a grip on this difficult but important issue.
Border Force maintains 100% checks for scheduled passengers arriving into the UK and facilitated 129 million passenger arrivals last year. The UK is recognised as a global leader in the use of automation at the border, embracing innovation to simplify processes for legitimate travellers, including families, alongside improving the UK’s security and biosecurity. As part of the ongoing development of the entire system, we will extend the use of automation, such as passport gates and e-gates at the UK border.
However, we also need to stop those who come here in an irregular manner. Border security command will bring together our intelligence and enforcement agencies, with hundreds of new cross-border police, investigators and prosecutors. It will be equipped with new powers to disrupt and dismantle criminal networks upstream and to prevent the boats from reaching the French coast in the first place. That will be led by a new border security commander, who will provide cross-system strategic leadership and direction across several agencies. That includes the National Crime Agency, Border Force, policing, our intelligence community, immigration enforcement and the Crown Prosecution Service.
Work is advancing on the planned border security, asylum and immigration Bill, which will be introduced to this House at the earliest opportunity—I am sure I will see some hon. Members here taking part in the Bill Committee and other processes as the Bill makes its way through this place.
The Sandhurst agreement, signed by the last Government, is important, and we have always supported it, but it does not go far enough. It focuses on the French beaches, but we should be stopping the gangs and the boats long before they get that far. This issue is a threat to our security, and that should be reflected in our approach. Our co-operation with key international partners must be as robust as it is for terrorism and other security threats. We will therefore be looking for closer partnerships, with different and better ways of making these criminals pay.
We have already spoken to the Prime Minister of Bulgaria, and to interior Ministers in Italy, Germany and Turkey, about how to strengthen operations against criminal gangs. We have begun supplying other European countries with more intelligence gathered by the UK on people-smuggling into their countries. We also support Italy in its Rome process, and irregular arrivals to Italy decreased by 17% in the year ending June 2024 compared with the previous year. But we lack important information and are seeking much stronger data-sharing agreements with partner countries. That is how we can actually ensure that the intelligence we share deals with some of the cross-border threats.
Those with no right to be here must be removed. The Government have established a new returns and enforcement programme to ensure that asylum and immigration rules are properly respected and enforced. By the end of the year, more of those with no right to be here—including foreign criminals and failed asylum seekers—will have been removed than in any other six-month period over the past five years. As my hon. Friend the Member for Dover and Deal said, we have also had 13 bespoke return flights, which have been chartered since 5 July, returning individuals to a range of countries, including Albania, Poland, Romania, Vietnam and Timor-Leste.
Neil O’Brien
Can I press the Minister on my specific question about what the Government’s target is? The hon. Lady talked about getting to the highest six-monthly rate by the end of this year. What is the Government’s longer-term target? If we were to believe what the Home Secretary said when she was the shadow Home Secretary, they are going to reverse and get back up to the level of deportations we had in 2010—that is the logical reading of what she said. Is that the Government’s target? Are they going to get deportations back to 2010 levels?
Dame Angela Eagle
We certainly have the ambition to do so. If we have a look, returns plummeted during the period when the last Government were in office. In 2023, 3,225 returns were made; in 2010, we returned 7,157, and of course, in the meantime, levels of illegal immigration have grown exponentially, so we certainly have the view that we want to return to those kinds of levels and do much, much more to ensure that if someone gets to the end of the asylum system and they have failed, there will be consequences and they will be returned.
We have also, at the same time, been taking some time to invest in intensive immigration enforcement operations. Over the last few weeks, we have targeted rogue businesses suspected of employing illegal workers. More than 275 premises have been targeted, with 135 receiving civil penalty referral notices for employing illegal workers; 85 illegal migrant workers were detained for removal. We are rapidly expanding this kind of work and certainly have the ambition to continue to do so. We also have voluntary return schemes, which we will continue to use.
In order to reduce the foreign national offender prison population and support the Ministry of Justice in alleviating current prison capacity issues, we are also focusing on those who are serving custodial sentences and on maximising returns directly from prison. We are taking rigorous action against foreign national offenders living in the community by actively monitoring and managing cases and resolving barriers to removal. So it is our intention, I emphasise again, to make certain that we can do a lot better than the previous Government did in removing foreign national offenders, which is why immigration removal centres, which can play a vital role in controlling our borders, need to be strengthened and we are increasing our estate capacity to ensure that we have enough detention space for swift, firm and fair returns.
The Government are working at pace to optimise the use of the current immigration return estate in the immediate term, and expect to deliver an extra 200 male beds by the end of September. A further 78 beds are expected to be delivered by March 2025. Alongside that uplift, we are increasing vital ancillary provision such as healthcare, legal services and welfare facilities, so that we can expedite returns.
I think this is probably the first of many such debates we will have. Actually, I think there is quite a lot we can agree about in terms of the requirement to secure our borders. I can see the hon. Member for Harborough, Oadby and Wigston leaping up and down, so I am happy to give way.
Neil O'Brien
The Minister is kind to give way in the middle of her peroration. I just wondered whether I could press her on the point about towing more of the boats back to France. The legal arguments are so strong: the chances of us saving lives at sea are so strong that the legal arguments are absolutely crystal clear. Is it the Government’s ambition that a greater share of these boats will be towed back to France rather than towed to the UK?
Dame Angela Eagle
Well, it is difficult—a difficult thing to do. I think that part of what we need to do in our relations with France is do things in co-operation. It is quite difficult to try to work across the border if you alienate the people that you are working with, so any such things have got to be done operationally with agreement. The co-operation from that point of view is crucial, as is, obviously, saving life at sea. If there is any danger with respect to towing boats, it is very, very difficult to intervene in what is one of the world’s busiest shipping lanes, in a context where the boats that are being put to sea at the moment are extremely flimsy and are actually falling apart in the water and often, as we saw tragically last week, contain people with no effective lifejacket and no way of staying afloat. So we have to be very, very careful.
We have to work with our colleagues in France and co-operate operationally on where we take those in the water; many are returned to France, as it happens, when rescues happen in French territorial waters. It is a balance. I will certainly keep it under review, and I am happy to keep the hon. Member for Harborough, Oadby and Wigston in touch with thinking as it develops.
I was on my peroration when I was interrupted very politely by the hon. Gentleman. I congratulate him once again on securing this debate, and congratulate and thank all Members who have contributed to it. I know this is an issue to which we will return.
Neil O’Brien
I thank all Members who have taken part in what I thought was a good-tempered and interesting debate, in which many made good and important contributions. I actually agree with many of the things that the Minister said, such as her point about the powerful link to wider criminality from the criminal gangs that operate the illegal trade across the channel. Her comments also give me the opportunity to thank our European partners with whom we have been working intensely, over the last couple of years, particularly in Bulgaria, to stop the flow of boats and engines to the criminal gangs. This is a shared European challenge and it can only grow over time, because of the growth of the population—particularly the young population —in the countries of origin. So there are things we do agree on.
We got some interesting answers to the five questions that I asked. I am afraid we did not hear much on data. There are lots of interesting pieces of data that the Government really should be—but are not—publishing at the moment. I encourage the Minister to start publishing things that the public really deserve to know. On the deportations target, which has the ambition to get back to 2010 levels, I will support anything that will increase levels of deportations. It was interesting that the Minister did not rule out signing third-country agreements of the kind that other European countries have. I encourage her to get on with that, and to go as fast as she can towards doing that. On the question of towing boats back to France, the Minister said it was tricky and that she was thinking about it. I encourage her to really go for it, because that will help us profoundly to disrupt the people smugglers’ business model.
However, what we did not really get into—I thought this was interesting in some of the comments made by Labour Members—was the point about the underlying causes, pull factors and reasons why so many people come, which is because they know they will be able to stay. There were some interesting and important contributions on enforcement, but I encourage the Members present to listen to three Tonys: one is a Labour politician, one is a Liberal and one is a civil servant. One is Tony Smith, the head of UK Border Force, who said that enforcement on its own will never be enough; he is right about that. He has said it is rash to scrap the Rwanda scheme. The second Tony we have to listen to is Tony Blair, who was trying to set up third-country agreements. I hope that will persuade Labour politicians that they need to be doing the same thing—even Tony Blair agrees that it is the right thing to do. The third is Tony Abbott, the former Australian Prime Minister, who pioneered interception at sea and ended Australia’s small boats crisis by towing the boats back to third countries, as we should be doing here between the UK and France.
There are things we can agree on. But I think there are things the Government say about enforcement that imply that no one has thought of enforcement before, and that we have not worked with lots of European countries before—we have; we have been doing this for years. However, that on its own is not enough. At some point—perhaps it has already happened—the Minister will realise that is the case. I hope that when she does so, she will join us in thinking about how we can tackle the underlying reasons that so many people are getting into these deadly boats and putting money in the hands of dangerous criminals to risk their lives crossing to this country.
Question put and agreed to.
Resolved,
That this House has considered illegal immigration.
Hinckley National Rail Freight Interchange
(3 months, 1 week ago)
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Sir Mark Hendrick (in the Chair)
We are running a bit late, obviously, because we had a Division earlier.
I will call Alberto Costa to move the motion and then I will call the Minister to respond. There will not be an opportunity for the Member in charge to wind up, as is the convention for 30-minute debates. However, I understand that there may well be one or two interventions.
Alberto Costa (South Leicestershire) (Con)
I beg to move,
That this House has considered the Hinckley National Rail Freight Interchange.
I will call Hinckley National Rail Freight Interchange the HNRFI from now on.
It is a pleasure to serve under your chairmanship, Sir Mark. I begin by welcoming the Minister to her place and I thank Mr Speaker for granting this debate on what is an incredibly important matter, not just for Leicestershire but indeed for our country.
I also thank colleagues who have joined me in Westminster Hall for this important debate, particularly my hon. Friend the Member for Hinckley and Bosworth (Dr Evans), who has worked alongside me on this important matter, because, as we will hear, the proposal would have as great an impact in his constituency as it would in mine.
I start by informing the Minister that I cautiously welcome the news today that the Secretary of State is minded to follow the Planning Inspectorate’s recommendation that she should withhold consent for the proposed HNRFI. The Planning Inspectorate has carefully considered the views of local stakeholders about the HNRFI and recommended against its proposal. I hope the Minister can explain why the Government chose, just a few hours ago, to delay making the final decision until March 2025.
What we really want to ascertain is this: what do the Government hope to achieve by pausing or extending the time available to make this decision? At the outset, I will say that one of my principal asks will be to meet the Minister or any of her colleagues, along with my hon. Friend the Member for Hinckley and Bosworth, to discuss the process of the matter. I appreciate that she cannot in a meeting discuss the specifics of the case, because she has a quasi-judicial role, but we would appreciate a follow-up meeting after this debate to discuss process.
The Planning Inspectorate’s recommendation gives this new Labour Government the opportunity to respond to local people’s concerns and frankly, if I may put things colloquially, calm the nerves of literally thousands of people in and around Leicestershire who will continue to anxiously await confirmation that this wholly inappropriate development will be rejected.
Dr Luke Evans (Hinckley and Bosworth) (Con)
I, too, have constituents who are grossly concerned about this matter. Although it is, I say cautiously, good news that the decision has been delayed, part of what the Secretary of State seems to be saying is that the impact locally outweighs the benefit to the nation. That is what I myself and all the organisations and local people involved have been saying. Therefore, the question remains as to why a delay will change that position. Does my hon. Friend have any thoughts as to what the reason might be, and on what we can do to get an answer before the end of March?
Alberto Costa
My hon. Friend has worked assiduously on this matter over the months—in fact, years—during which this unwelcome proposal has been introduced. In answer to his question, what we can do is say, as I put it to the Minister, Labour are now in charge and I should be very grateful if she would meet both of us, to explain why there has been this decision, which is not the normal decision in these processes. When the Planning Inspectorate makes a recommendation, more often than not the recommendation is approved. And for the Planning Inspectorate to reject a proposal, or consider withholding consent for it, is very rare in such cases; usually the Minister does that. So, a meeting with the Minister might help to answer my hon. Friend’s questions.
The proposed 440-acre site for this development sits between the M69 and the Leicester to Birmingham railway line at the heart of a cluster of rural communities, all of which are within two miles of the site and in some cases less than a mile from its boundary. It is important to mention the communities, which include Aston Flamville, Barwell, Elmesthorpe, Earl Shilton, Sapcote, Stoney Stanton, Sharnford, Burbage, part of Hinckley and the long-established Traveller settlement of Aston Firs. Those communities are within both my South Leicestershire constituency and that of my hon. Friend the Member for Hinckley and Bosworth. So, too, is Burbage common and woods, which is a site of special scientific interest and a beautiful 200-acre area of woodland and grassland that lies in my hon. Friend’s constituency. Many people have their home in this area and would be affected by this development were it to be given consent—of course, we are hoping that it will not be. According to the Stoney Stanton Action Group, over 92,000 people stand to be directly impacted by this development: an enormous number of people.
Under the current system, Liberal Democrat-run Hinckley and Bosworth borough, Conservative-run Blaby district council and Conservative-run Leicestershire county council are statutory consultees in the process. All the stakeholders voiced serious concerns about the HNRFI, as did Labour-led Rugby council, Warwickshire county council and National Highways, which raised concerns over
“missing or deficient transport documents and statements of common ground.”
Dr Evans
For me, that was the key deficit when we made our appeal to the inspectorate. It seems like that has been upheld because, although there are the environmental and infrastructure impacts that will hurt our communities, the fundamental premise of what was being put forward was faulty because the information simply was not there and there was a hostile approach from some of those statutory bodies that made getting information out really difficult. Does my hon. Friend believe that that is the reason why this should not go ahead? We cannot even make a judgment call on that basis, and that fits with what the Planning Inspectorate has come out to say—that this should not go ahead.
Alberto Costa
I entirely agree with my hon. Friend, and there is no surprise in that—both of us have worked so assiduously over the years on this matter, particularly behind the scenes when we have highlighted to previous Government Ministers the very issues that my hon. Friend has raised. I pay tribute to the many individuals and stakeholders—there are too many to name—who have closely considered this application, raised legitimate concerns on behalf of their communities and meaningfully contributed to the six-month Planning Inspectorate hearing process. I am glad that the Planning Inspectorate has taken on board their views.
I am pleased to name just a couple of local Blaby district councillors who are observing this debate closely —Ben Taylor and Mike Shirley. I put on the record that they have worked tirelessly for their constituents to voice concerns over this proposed development, as has the leadership of Blaby district council. There are many local groups too, such as the Friends of Narborough Station, the Stoney Stanton Action Group, the Save Burbage Common group and Elmesthorpe Stands Together—to name just a few. They have brought their unique expertise and local knowledge to help illustrate why the proposal is wholly inappropriate.
This development was unpopular from the outset; I issued a survey to constituents living within the vicinity. Of nearly 6,000 surveys sent, I had a very high response rate of 27%, and an overwhelming 94.5% of respondents opposed the proposals. Many of the villages closest to the proposed site are rural in nature and there are widespread and legitimate concerns that local country roads will become too busy with traffic, leading to gridlock in village centres and causing a safety concern, as has been correctly highlighted by the Planning Inspectorate. The applicant did not give enough consideration to that issue, in part because of poorly conducted traffic assessments, incorrect modelling and inadequate mitigations.
While the proposed location of HNRFI is in the so-called golden triangle, constituents in Hinckley and Bosworth and in South Leicestershire frequently write to their respective MPs to raise concerns about what is frankly gross overdevelopment of commercial areas. This is not a question of nimbyism. If she looks at the map of this part of Leicestershire, the Minister will see an enormous amount of housing and commercial development. Indeed Magna Park, a huge logistics park —at one time the largest in Europe—is only a few miles away from this proposed development, and it is shortly to regain the title of one of Europe’s largest logistics parks. It is currently doubling in size, with 13.1 million square feet of floor space across 47 enormous warehouses.
Would the Minister agree that over-development, not nimbyism, has gone too far in constituencies such as South Leicestershire and the adjoining area? I politely ask whether the Minister can expand on why the Secretary of State requires an extension when there is overwhelming evidence, as the Planning Inspectorate report seems to suggest, that the development should not go ahead.
Dr Luke Evans
I am grateful to my hon. Friend, who has made some fantastic points. One of the key points is the Planning Inspectorate report. Many members of the public felt that the development was a done deal and something being done to them. Can I thank the Planning Inspectorate, which is now minded to refuse consent? Our communities have been heard. We know the deficits, have seen the deficits and have now proved those deficits. I hope that that will go some way towards the Secretary of State making the right decision. But there is anxiety now, given the very unusual delay of several months. Minister, how can we allay fears that this will all be ridden roughshod over, given the unusual nature of what we have in place?
Alberto Costa
I entirely agree, which is why it was important to put on the record at the outset that there is still anxiety among thousands of Leicestershire residents, who are asking why consent has not been withheld when the Planning Inspectorate have said it should be.
I would like to assist the Government. The draft national policy statement for national networks states:
“Whilst there is likely to be a natural clustering of SRFI proposals in the distribution heartland of the nation…consideration should be given to proposals for SRFIs in areas where there is currently lesser provision.”
Developers argue that purportedly tens of thousands of jobs can come with SRFIs. Why not put these in areas where there is less provision? Will the Minister outline what consideration the Secretary of State might give to putting SRFIs in areas with less provision?
My hon. Friend the Member for Hinckley and Bosworth and I generally support appropriate commercial developments in our constituencies. However, as we have said, South Leicestershire and that part of Leicestershire as a whole already take a fair share of large scale commercial developments. Indeed there is another unwelcome proposal, put on the table just a few weeks ago, for enormous warehousing to the east of Lutterworth, under what is called Lutterworth East Commercial Area. It is not just the rail freight interchange; I appreciate the Minister does not have responsibility for that which I have just mentioned, but the point I wish to highlight is that there is ongoing gross overdevelopment in that area.
We already have Daventry international rail freight terminal just 18 miles away from the HNRFI site, four national rail hubs within 45 miles and Northampton gateway rail freight interchange just 31 miles away. Having looked at the record, I think it is important to analyse the damage that having a cluster can actually do.
Local planning is one of the most contentious issues that any MP deals with in their casework, as the Minister will understand. It is also the one in which we as MPs have the least power or authority. We have no formal role in the planning decision making—rightly so, because most planning decisions are made by locally elected and locally accountable councillors. However because the Hinckley national rail freight interchange is categorised as a nationally significant infrastructure project, these matters are ultimately decided by the Minister and her team. In other words, unlike most planning decisions, which are approved or rejected at local authority level, these matters ultimately go to senior Ministers to decide.
One of the key national objectives of rail freight interchanges is to get freight off the roads and on to rail tracks, and reap the environmental and cost-saving benefits of doing so. I am sure the Minister and I would agree that that is something to welcome, but it is very important that we do not have the wool pulled over our eyes, and see rail freight interchange proposals as a fig leaf for just another excuse for enormous warehousing.
I want to quote Dame Andrea Leadsom, the former MP for South Northamptonshire. She stood in this Chamber less than a year ago and said:
“SEGRO took over the development of the site and—lo and behold—as the site neared completion last year, it applied for a development consent order waiver, asking the Department for Transport to overturn the condition requiring the rail link to be completed so it could start to fill up its warehouses and flood local roads with HGVs even before the rail link was established.”
She added:
“It seems clear to me that this project was always about forcing more warehousing into the heart of England to take advantage of motorway access from south Northamptonshire and never about making it easier to move freight off the road and on to the rail network.”—[Official Report, 17 October 2023; Vol. 738, c. 22WH.]
I say to the Minister that the case of the HNRFI is the same.
What would I suggest that the new Labour Government could proactively look at? The issue is the lack of a proper framework policy, which colleagues and I have raised many times before. Such a policy would help the Labour Government to identify appropriate sites where these forms of logistics parks should be located.
The first area that a national framework should address is site selection. The current nationally significant infrastructure project regime is developer-led, with developers responsible for justifying their site choices. At present, there is only general guidance in the national networks national policy statement, with no formal national level framework guiding the Government or local authorities on where SRFIs should be located.
A national framework could assist the Government by helping them to prescribe specific location criteria for SRFIs, such as proximity to major freight corridors and alignment with regional logistics hubs. Such proactive planning could avoid unsuitable locations and, importantly, minimise planning disputes from the outset. That could help ensure that SRFI proposals are not only appropriately located but are also in line with whatever the Labour Government’s policy would be.
I would also welcome measures that ensure that SRFIs actually serve their purpose and handle sufficient rail traffic, rather than just becoming another excuse for gargantuan logistics parks. That would ensure that freight really does end up off the road and on rail, while providing clear expectations for developers, which would, in turn, promote confidence from stakeholders.
The most critical point I want to address is strategic co-ordination. As it stands, the nationally significant infrastructure projects process is largely reactive, led by individual developer proposals, and reviewed on a case-by-case basis. While there are broad goals to shift freight from road to rail, which I support, there is no comprehensive national strategy that specifically addresses the planning of SRFIs. That results in inefficiencies, regional imbalances and in our particular case, not nimbyism, but the grotesque—I choose the word carefully —overconcentration of SRFIs and enormous logistics housing in our region. With a national framework drafted by the Labour Government, we could ensure that logistics facilities are distributed more evenly across the country, balancing the benefits and impacts across the nation.
In summary, while the UK’s current NSIP regime provides a structured process for approving SRFIs, it remains reactive, fragmented and developer-driven. A national framework would change that by introducing greater consistency, strategic oversight and national level co-ordination. I think that is exactly what the Labour party said during the recent general election campaign that it wants to do when it comes to planning. That is the future I propose that this Government pursue.
I hope that the Minister, along with her ministerial colleagues, takes the opportunity in her new role to come up with a national freight strategy, so that the whole country can share the burden and benefit of these developments and so that local communities can buy into these developments and not have them forced upon them. I urge the Minister and her team to speak carefully with the Secretary of State to follow the Planning Inspectorate’s recommendation to withhold consent to the Hinckley national rail freight interchange, and to make the decision in a timely manner.
Only by doing so will the Labour Government show the people of Leicestershire and the surrounding area that they really do listen on planning and that they do have a plan to share these nationally significant projects across the country. At a local level, that would help alleviate any anxiety that my constituents and those of my hon. Friend the Member for Hinckley and Bosworth have over this proposal.
The Parliamentary Under-Secretary of State for Transport (Lilian Greenwood)
It is a pleasure to serve with you in the Chair, Sir Mark. I begin by congratulating the hon. Member for South Leicestershire (Alberto Costa) on securing today’s debate. I would also like to thank him and others for their engagement on this matter. The hon. Member for Hinckley and Bosworth (Dr Evans) is temporarily not in the room. I am aware that the hon. Member for South Leicestershire wrote to my Department and has previously tabled other debates to express concerns about this scheme, which is a nationally significant rail freight interchange infrastructure project, located partly in his constituency in Leicestershire.
Sir Mark Hendrick (in the Chair)
I should let the Minister know that the Member concerned did apologise that he had to leave urgently.
Lilian Greenwood
Absolutely. I have also noted the relevant contributions made by the hon. Member for South Leicestershire in the King’s Speech debate on planning, the green belt and rural affairs on 19 July this year and on the Passenger Railway Services (Public Ownership) Bill debate on 29 July. I am also aware that the hon. Member participated in the examination of the application as an interested party. I thank him for the contributions he has made in that respect.
The concerns that the hon. Member has raised include the impact due to the proximity of the application site on the local Fosse villages of Elmesthorpe, Stoney Stanton, Sapcote, Sharnford, Aston Flamville, Potters Marston, Croft, Huncote, Thurlaston and Wigston Parva; impacts from an increase in heavy goods vehicles on the local road network; the lack of a national strategy for the location of logistics parks; the proximity of other rail freight interchanges; public engagement on the application; the impact and delays at Narborough railway station and level crossing; impacts on Burbage common and woods nature reserve, located in the neighbouring Hinckley and Bosworth constituency; and the impact on local amenities as a result of increased job opportunities. I am also aware of the petition which the hon. Member presented to Parliament in October last year on behalf of local residents of the constituency of South Leicestershire. Both he and the hon. Member for Hinckley and Bosworth have again represented their constituents’ concerns very effectively today.
The application for the Hinckley national rail freight interchange development consent order was made under the Planning Act 2008. Under that Act, the Secretary of State for Transport has a quasi-judicial role in issuing decisions of applications for development consent orders for strategic rail freight interchanges, provided that they meet certain threshold conditions set out in the Act. Following the examination of the application by the Planning Inspectorate’s examining authority, the Secretary of State received the report containing its recommendation on 10 June this year. As the hon. Member for South Leicestershire acknowledged, the Secretary of State issued a “minded to refuse” letter this morning, having carefully considered the examining authority’s report. Her letter sets out that, while she is minded to agree with the examining authority’s recommendation to refuse the application, she first wishes to gather further information on certain matters. The Secretary of State requires further information on the safety concerns raised in respect of M1 junction 21 and M69 junction 3, and the lack of adequate transport modelling at that junction; the increased highway safety risk at Sapcote identified by the examining authority; the concerns raised by the examining authority on the impact on Narborough level crossing, particularly on people who might find using a stepped footbridge difficult; and any measures that might avoid or mitigate the potential harm identified by the examining authority to the occupiers of the Aston Firs Travellers’ site.
The Secretary of State’s letter also invites comments on the revised sustainable transport strategy, the suggested amendments to the heavy goods vehicles route and the management plan strategy, and specific submissions in respect of noise impacts referred to in her letter. As the hon. Member for South Leicestershire said, a written ministerial statement was laid in Parliament this morning to extend the statutory deadline for a decision on this application to 10 March 2025. I appreciate that the extension is unwelcome to him and his constituents, but my understanding is that this is not particularly unusual.
The extension to the deadline is required to allow for the submission of further information on the issues I have just mentioned before the Secretary of State takes a final decision on the application. The extension will also allow time for all interested parties to comment on that further information. The final decision will be taken as soon as possible, but it is important to allow time for those issues to be properly considered by all parties. The extension of the deadline means that the application remains a live planning application. I am sure that the hon. Member for South Leicestershire understands that it would not be appropriate for me to comment on the merits or otherwise of the application while it remains live.
It would also not be appropriate at this time for me to elaborate on or add to the reasons set out by the Secretary of State in her letter. That is because, as the hon. Member for South Leicestershire acknowledged, the decisions by the Secretary of State on applications for development consent orders are quasi-judicial, and the decision is a matter for the Secretary of State alone. It would not be appropriate for me to take part in any discussion of the pros and cons of the proposal. I know the hon. Member understands that we must ensure that the process is correctly followed and remains fair to all parties.
The examining authority’s recommendation report, which was published today alongside the letter from the Secretary of State, covers many of the concerns expressed by the hon. Member for South Leicestershire, and I encourage him and his constituents to read the report alongside the letter from the Secretary of State—I am sure he has already done so. Should he or his constituents have any further issues they would like to raise, I encourage them to write formally to the Department when invited, as part of the next-steps process for the application. The process going forward is outlined in the letter from the Secretary of State. I am loth to decline a meeting with hon. Members, but it could be perceived as bias if the Department meets objectors, but not the applicant and supporters. I understand that we have declined requests for other meetings.
I highlight the need for nationally significant strategic rail freight projects more generally. The Government’s view is that the economic and environmental potential of rail freight is significant, and they are fully committed to supporting its growth. Under its plans to deliver the biggest overhaul of the railways in a generation, Great British Railways will have a duty and target to grow the movement of freight on our railways. I am sure it will be interested in the comments that the hon. Member for South Leicestershire made on ways that might be done.
The Government support the development of an expanded network of SRFIs to facilitate the modal shift of freight from road to rail. Rail freight offers substantial economic and environmental benefits, as well as helping to reduce congestion on our roads and cost to industry. Strategic rail freight interchange projects are a key element in reducing the costs of moving more freight by rail, enabling goods to be efficiently transferred between transport modes, which is important because many rail freight movements cannot provide a full end-to-end journey.
The sector also delivers economic and social benefits through cost savings to industry, creating employment and reducing congestion. Industry estimates that a single rail freight service can remove up to 129 heavy goods vehicle movements from our roads. Moving goods by rail results in about 7 million fewer lorry journeys each year. In 2018-19, it is estimated that rail freight contributed £2.45 billion in economic and social benefits to the country, 90% of which were likely to accrue to freight customers and wider society outside London and the south-east.
Rail freight also offers benefits to the environment. A diesel-hauled rail freight service produces 76% less carbon dioxide per tonne of kilometre moved compared with road. Recent improvements using longer, heavier trains and alternative low-carbon fuels such as hydrotreated vegetable oil are reducing rail freight’s carbon footprint even further, making it one of the most carbon-efficient ways to move goods over long distances.
Having said all that, it is of course important that every application for a new strategic rail freight interchange is carefully assessed to ensure that its benefits outweigh its impacts, including those on the local environment that the hon. Member for South Leicestershire described. I know, however, from his contributions to the debates on the Passenger Railway Services (Public Ownership) Bill that he does not oppose rail freight interchanges per se. He made that point again today in calling for a national strategy.
Finally, I take the opportunity to reassure the hon. Member that the Secretary of State, in making a decision, will take into consideration the content of the examining authority’s report, the relevant policies, responses to her consultations and any representations received after the close of the examination. I assure the hon. Member that she will listen to the views of him and his constituents. I thank him and the hon. Member for Hinckley and Bosworth for the opportunity to debate this matter today.
Question put and agreed to.
Exempt Supported Accommodation
(3 months, 1 week ago)
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Preet Kaur Gill (Birmingham Edgbaston) (Lab/Co-op)
I beg to move,
That this House has considered exempt supported accommodation.
It is a pleasure to serve under your chairmanship, Sir Mark. I am pleased to have secured this debate on exempt supported accommodation. I start with thanks to a number of people with whom I have worked during the course of this campaign: Jane Haynes at Birmingham Live, Birmingham City Council, the Local Government Association, the HMO Action Group in Birmingham, my local police, and the many residents I have worked with over the years, including my constituents on Carisbrooke Road and Fountain Road.
Since my election in 2017, issues with exempt supported accommodation has been a long-running problem in parts of my Birmingham Edgbaston constituency. I have called this debate because, after years of inaction and stalled progress under the previous Government, I am keen now to see fit-for-purpose regulations introduced to finally deal with this issue. Ministers have been left with no shortage of housing challenges by the previous Administration, whether it is the failure to build enough houses, homelessness, cladding removal or years of inaction on renters’ rights. Exempt accommodation reform should have pride of place among the new Government’s packed agenda, because there is a great deal on the line for vulnerable residents in communities such as mine.
As I am sure the Minister knows, Birmingham has the most units of non-commissioned exempt accommodation in the country, with nearly 28,000 exempt claims across more than 9,000 properties. Exempt accommodation is a type of supported accommodation often used for people with very few housing options, such as prison leavers, rough sleepers, those experiencing substance misuse issues, and so on. It is exempt from the local housing allowance cap because an element of care, support and supervision is supposed to be provided to claimants—although often it is not. As a result, organisations that provide this type of accommodation can charge very high rates, and that has unfortunately led to unscrupulous providers coming into the market. It has had the unintended consequence of distorting the local housing market in Birmingham, given the buying up of family homes to be converted into exempt provision. Quality concerns are rife among the properties, and in recent years several of the city’s largest providers have been issued regulatory notices by the Regulator of Social Housing.
Over the past few years, I have worked closely with providers, residents, the police and community groups with on-the-ground experience to get to the bottom of why the sector has almost trebled in our city since 2018, and why so much of the accommodation is substandard and poorly managed. The causes are multifaceted and complex, but it is the view of me and my constituents that the new regulations to be introduced by the Supported Housing (Regulatory Oversight) Act 2023 are well overdue.
My closest experience of the sector was in 2021, working with the council, police and community to shut down Saif Lodge in my constituency, which had become infamous in the area as an epicentre of crime. It was the first case in the country of an exempt property being shut down, after residents and I presented extensive evidence of incidents of prostitution, drug dealing, aggression and other antisocial behaviour. We found vulnerable residents with substance abuse and mental health issues being let down by filthy, cramped, poor-quality accommodation, and a dire lack of support.
I had been aware of some of the issues of Saif Lodge since I was elected, but after my constituents alerted me to the shocking rise in crime surrounding the property I carried out a spot check with the police to see for myself what was actually happening. I was shocked by what I found: housed there were 25 men and women, including ex-offenders, with several issues ranging from addiction and substance misuse to mental health problems. There was just one solitary support worker on duty, who told me that the hostel was manned only on weekdays, with residents otherwise left to their own devices. The conditions were utterly substandard: cold, filthy and cramped. The downstairs toilet was broken, flooded and left unfixed; the smell was hair-raising. Access to the property was via a code that was regularly shared with strangers who were always in and out. The communal spaces were in a state. It is no wonder that residents were frequently found spilling out and loitering outside. It was not a place where any of us could happily live, let alone get a life back on track following a crisis.
As part of the campaign, I set up an exempt campaign group with residents, and conducted a number of spot checks of such properties in my constituency. Through that work, and working with the council, MPs, providers and community groups across Birmingham, I got to see up close how poor much of the provision can be across my constituency and Birmingham city. In the case of Saif Lodge, we were successful in securing an order for it to be shut down. Good, we might think—but substantial time and resources went into the campaign. It took more than a year to see it through, and it is only one example among many across Birmingham that have been letting people down. That is why councils and the police need powers to address the ongoing concerns in the exempt sector. Saif Lodge was a symptom—a feature of the system, not a bug.
It is telling that since Saif Lodge was boarded up it has been found to have been turned into a cannabis farm housing marijuana with a street value stretching into the hundreds of millions of pounds. The owners even applied to change the use of the property to provide support for women and children. Clearly, they should never be allowed to provide any supported accommodation. I have always contended that organised crime has been attracted to the sector, and this situation has reinforced my suspicions that some people are targeting it for all the wrong reasons. With the regulations Parliament agreed to last year, that must change.
In the previous Parliament I campaigned strongly for a new regulatory regime to be introduced to clamp down on poor-quality exempt provision. That regime should include the introduction of minimum standards of support; changes to housing benefit regulations to include a definition of the minimum standards of care, support and supervision; and new powers for local authorities to manage their local supported housing market better and ensure that rogue landlords cannot exploit the system.
I was pleased to see many of my recommendations in the Levelling Up, Housing and Communities Committee’s excellent report on this issue. Some were subsequently translated into law in the Support Housing (Regulatory Oversight) Act 2023, which requires local authorities to review and develop strategies to deal with exempt accommodation in their areas. It also gives the Secretary of State power to introduce national support standards and consider a new planning use class for exempt provision, and give councils powers to create local licensing schemes. It is an important piece of legislation to clamp down on those private providers that have opened large buildings that purport to provide support for people but are at best accommodation, and at worst dangerous places to live for the vulnerable people placed there.
A year since the Act was passed with cross-party support, we still do not have the operating regulations or even the consultation promised by the previous Government. A consultation on the regulations was first promised in early 2024; it was delayed to March, and then delayed again by the general election. I would therefore be grateful to the Minister if she would set out the new timelines for when she intends to begin consultation and lay the new regulations.
After the previous Government’s failure to get on with this matter, I know that councils will be listening closely to this debate, seeking more clarity on what to expect over the coming year. The delays have left councils with few means to challenge poor providers other than through housing benefit claims, which are of course problematic for residents. They have also left councils that are in receipt of funding through the supported housing improvement programme facing a cliff edge in support. With funding due to end in March 2025, a gap in funding between SHIP funding and new burdens funding for the Act could mean that many councils have to let go of skilled staff members, which I am sure the Minister would agree would be completely unsatisfactory.
Birmingham city council used its funding for a programme of inspections of exempt accommodation in the city, and what it found is genuinely shocking. It discovered more than 10,000 category 1 and 2 health and safety hazards in exempt properties since 2020, 97% of which have now been removed. In that time, thousands of support plan reviews have been completed and overpaid housing benefit of more than £7.23 million has been reclaimed. I am sure the Minister will agree that the SHIP funding has been a valuable investment, and I seek her reassurance that it will continue while we await the new regulations.
What is most revealing is what the inspections programme has revealed about the state of the sector and why regulation is sorely needed. Through its work, the council has seen an increase in social issues around community safety and poor-quality support. It decommissioned 73 properties and reviewed over 2,000 support plans for adult social care. Some 88 adult safeguarding reviews were initiated, and more than 2,600 claims were cancelled due to the care, support or supervision failing to meet the council’s more-than-minimal threshold. That really is saying something considering how weakly it is defined through the so-called more-than-minimal test.
I remember that when I visited Saif Lodge I talked to the security guard and asked whether they were the support worker. They were not, but if a resident asked them for support, they said they would simply make a phone call to refer the resident or signpost them to a service. That was their version of care, support and supervision. That is what the uncapped housing benefit was paying for while the property’s owners raked in the profit. In addition, the council states that, from inspections, it has logged thousands of community safety incidents connected to such properties. There have been more than 1,700 investigations, leading to 544 evictions and 48 arrests.
A key concern of mine is how people are referred to and placed in the properties. Members can imagine the chaos when it comes to assessing compatible residents and placing them together. Indeed, many residents are not properly assessed at all. I have heard cases of vulnerable women being put with men who have serious issues, and alarming cases of women being assaulted in the properties. That is why the regulations are so important: clear operating guidelines are needed for councils now.
Despite the good work done through the supported housing improvement programme, for which I give the previous Government credit, until we have regulations councils will remain unequipped to enforce the minimum standards of care, support and supervision that vulnerable residents need and deserve. In turn, I have no doubt that regulation will improve the levels of antisocial behaviour and other forms of crime that have sprung up around some of the exempt provision in my constituency and caused considerable grief for the residents of Fountain Road, Gillott Road and other roads leading off Hagley Road. I think everyone in the supported housing sector, councils and my constituents will welcome clarity from the Minister.
Let me move on to some specific questions. I remember a meeting in 2022 at which Government officials remarked that they were too light on data to get on with reform at that point. I found that a startling admission, and I sincerely hope it is not the case now. The Government previously committed to improving the data that they collect on the sector; will the Minister provide an update on that work? Will she also update us on the progress she has made on developing national support standards, including in respect of what constitutes a minimal level of care, support and supervision? It is vital that such regulations are put on the statute book.
I am sure the Minister is aware that, in the absence of the promised regulations due to the aforementioned delayed, some councils are pre-emptively setting their own standards. From their point of view, they will prepare the sector for the introduction of new standards, but from the supported sector’s perspective, they risk creating policy inconsistency that may have negative consequences for smaller providers that are otherwise doing a very good job. Does the Minister agree that the repeated delays to the consultation on and development of the regulations promised by the previous Government have created a lot of uncertainty, which is ultimately unhelpful to the good providers of supported housing in the sector and the residents they protect?
It is welcome that Birmingham city council has its own quality standards scheme, but without regulations it can only be voluntary, and thus only 45% of providers currently engage with it. That is a huge challenge to all of us who want to drive up standards in the sector and do not want a continuation of the race to the bottom that we have seen over the past 14 years.
I seek the Minister’s view on creating a new planning use class for exempt accommodation, to help councils to identify exempt provision at an earlier stage and therefore better manage it in parts of the city where exempt accommodation is already saturated. That is part of the problem with crime hotspots in my patch, which have an incredibly negative impact on my constituents who live in them. I am sure the Minister agrees that the Government’s commitment to restore community policing will help in that respect. My constituents know keenly the value of a local officer who knows the community. We need to see more of our officers on our streets.
New regulations to tackle poor provision in the exempt accommodation sector are desperately overdue. Birmingham now has an excess of 28,000 exempt units, and the number continues to grow. Since reforms to the supported housing system were shelved in 2018, the exempt accommodation sector has ballooned. A freedom of information request from Crisis revealed a 62% increased from 2016 to 2021, so the longer we delay, the greater the challenge when new regulation inevitably comes.
Over the past decade, too many bad landlords have been getting into the sector for precisely the wrong reasons. They have exploited under-regulation, a Conservative housing crisis and an epidemic of unmet need after years of council cuts. There are fantastic providers that also operate in Birmingham that try to do the right thing, but they are being undermined by those seeking to profiteer and short-change vulnerable people in their care. That is bad for the supported housing sector as a whole.
My one ask of the Minister today is for her to make sure that the new Government get on with the urgent task of reform after the previous Government dithered and delayed, and to ask whether she can set out a refreshed timeline today. Survivors of domestic violence, prison leavers, care leavers and people with mental health and substance abuse issues deserve a supported housing system that supports their transition to happier, more independent lives; our communities in Birmingham deserve neighbourhoods that are peaceful and safe, not epicentres of antisocial behaviour; and the taxpayer deserves to know that their money is going to support people who need it and is not lining the pockets of rogue landlords. I thank the Minister in advance for her response to the debate.
Helen Morgan (North Shropshire) (LD)
It is a pleasure to serve with you in the Chair, Sir Mark.
I congratulate the hon. Member for Birmingham Edgbaston (Preet Kaur Gill) on securing this debate and on her excellent speech, in which she highlighted all the difficulties that we knew existed in this sector. She also provided some real colour about what those difficulties mean for residents of exempt supported accommodation units, for local residents who are impacted by some of the bad-faith actors, and for local communities. I do not want to go back over some of the ground that has already been covered, because she covered it so well, but I am afraid that I will have to. Before I go any further, however, I should declare that I am a vice-president of the Local Government Association.
In 2022, I served on the Public Bill Committee for the Supported Housing (Regulatory Oversight) Act 2023, which was introduced by the hon. Member for Harrow East (Bob Blackman) as a private Member’s Bill. It was an important step forward that had cross-party support from the then Conservative Government, the Labour Benches and the Liberal Democrat Benches, because the issue had become so severe.
The system of exempt accommodation was well described in the October 2022 report by the Levelling Up, Housing and Communities Committee as:
“a complete mess. There are many good providers, but in the worst instances the system involves the exploitation of vulnerable people who should be receiving support, while unscrupulous providers make excessive profits by capitalising on loopholes. This gold-rush is all paid for by taxpayers through housing benefit.”
That is a sorry state of affairs.
The then Government supported the Bill introduced by the hon. Member for Harrow East, because it was seen as a good way to deal with the situation that was described by the Select Committee and by the hon. Member for Birmingham Edgbaston today. In response to the Select Committee’s report, in early 2023 the Conservative Government said that the Supported Housing (Regulatory Oversight) Act 2023 would address most of the concerns that had been raised in the report, because it would introduce national standards for support and give local authorities the powers they need to set up licensing schemes to tackle poor-quality supported housing in their area.
The Act provided for local authority supported housing strategies to review the situation in their area and the availability of and need for supported housing, and those strategies were to be renewed every five years. It also required the Secretary of State to set up a supported housing advisory panel to provide information and advice about supported housing; it allowed for the Secretary of State to set standards for the support provided in supported housing; and it allowed for regulations to be made to establish licensing schemes, which would include consideration of the condition of the property, the adequacy of the care and support provided, interactions with other licensing schemes, the costs, the financial penalties and all the things that needed to go with a properly functioning licensing scheme
The Act also required the Ministry of Housing, Communities and Local Government, as it is now called again, to formally consult on elements contained within it, including the licensing regime, standards and any additional measures for securing compliance with the standards. As we have heard, however, much of that has not yet happened, despite the Act going through Parliament in 2023.
The Act provided for better planning regulations; it said that somebody would not be treated as intentionally homeless if they left supported accommodation; and it provided for information management and sharing powers for those involved in the provision of supported housing. All in all, it seems to have been a pretty good piece of legislation, and the problem that we are experiencing now, as the hon. Member for Birmingham Edgbaston described in great detail, is that those provisions have not been enacted quickly enough. Today’s debate is about urging the Minister to bring forward the actions that are needed now to make sure that we improve the sector.
The LGA is supportive of that legislation and has been a main stakeholder working with the Ministry to ensure that the Act works for councils, providers, and most importantly, residents in supported accommodation. But the LGA has raised significant concerns about the time taken to implement the Act and about the fact that councils have limited means to challenge poor providers, other than through housing benefit claims, which is problematic. We heard from the hon. Member that Birmingham city council has actually been able to challenge providers, so it would be interesting to find out from the Minister whether that is likely to be a model in future or whether better mechanisms will be put in place.
As the hon. Member said, the delayed implementation of the Act is a problem for councils that have used the SHIP payments to improve supported housing in their area. The gap in funding between the SHIP payments and the new burden spending that comes with implementation of the Act means that councils will potentially have to let go of their skilled workforce and people with good experience of dealing with the problems and social implications of poor housing.
It seems that in every debate at the moment, we must talk about the funding crisis for all councils. They need long-term funding arrangements with ringfenced support for housing, because the increased pressure on council budgets from that sector means that not only are we letting people down who have an acute housing need, but we are letting down everyone else whose services are impacted by the exorbitant cost of providing housing across the whole of England, particularly in communities where the sector is out of control, as the hon. Member alluded to.
The calls of the LGA are, as always, very sensible. We need to review the current funding regime for supported housing. We also need to recognise the savings to the public purse that will come from not giving those unscrupulous providers limitless amounts of public money for a very poor service that will not realise any of the benefits that supported housing should realise for its inhabitants and wider society by providing the support they need.
We need to ensure that the SHIP funding is there in the interregnum between now and the new burden spending, so that councils can continue the work that they are already doing, and crucially, can retain the skilled officers who are experienced in dealing with this situation. We also need to acknowledge that a licensing scheme and its enforcement, with improved standards for supported housing, will require proper funding. Otherwise, councils will be unable to deliver on the statutory requirement that we are about to place on them.
The funding is so important. I know that the Government are dealing with a financial crisis, that they have extremely difficult choices to make, and that almost all Members will standing up in every debate to ask for more money—it is a difficult position to be in—but I urge the Minister to consider that, as taxpayers’ money is wasted so flagrantly on these unscrupulous providers, it would be a good use of public money to establish a proper licensing scheme. That would mean that we were not wasting taxpayers’ money and were instead putting it into support for the individuals who have had a crisis, hopefully turning their lives around, and costing the taxpayer less in future. That would be a wise investment of taxpayers’ money.
On the important issue of resource, many councils are having to let staff go because of funding pressures. We cannot enforce and practise a licensing scheme without the right people in officer roles in councils, so the recruitment and retention of those critical staff is also extremely important. I honestly do not think that I have added much to the hon. Member’s excellent speech, but I hope that I have added my voice to her cause on regulating the sector properly.
David Simmonds (Ruislip, Northwood and Pinner) (Con)
It is a pleasure to serve under your chairmanship, Sir Mark. I add my congratulations to the hon. Member for Birmingham Edgbaston (Preet Kaur Gill) on securing today’s debate. I must draw attention to my entry in the Register of Members’ Financial Interests because, like the hon. Member for North Shropshire (Helen Morgan), I am also a member of the LGA’s parliamentary team of vice-presidents.
I recall from my work on the Kerslake review into the governance of Birmingham city council that it has the highest proportion of residents needing to access social care during their lifetime of any local authority in England. The level of need is patently particularly acute, which is why one of the five pilots introduced following the “Supported housing: national statement of expectations” in October 2020 was in Birmingham.
Anybody with local government experience will be familiar with these challenges, which go back many years. They often result from reforms, such as those in the 1980s with care in the community, those in the late 1990s with the fair access criteria, and the introduction of extra care housing supported living. They all had a high degree of cross-party support based on the idea of improving the level of independence and autonomy that could be provided to people who need extra support through a combination of housing and social care.
All Members’ inboxes will contain at least some examples of concern about abuses in the market; some examples where the quality of care provided is not reaching the appropriate standard; and, of course, some examples where the quality of care is exceptional and supports our constituents to enjoy the fullest, most autonomous life and the greatest degree of independence in pursuing their interests. As we have heard, in response to the abuses that were identified in the market, my constituency neighbour, my hon. Friend the Member for Harrow East (Bob Blackman), brought forward a private Member’s Bill, which was adopted by the Government and enjoyed cross-party support in the last Parliament, with a view to bringing a clear legislative and regulatory focus to the sector.
As we know and have heard in the debate, the combination of challenges around resourcing the implementation of that measure—for example, the ability of local authorities to make good use of feedback from residents who may be extremely vulnerable, and ensuring that that new regulatory environment is enforceable when it sits outside of the planning system to a great degree, as the hon. Member for Birmingham Edgbaston identified—remains significant.
When we consider recent work, it seems that the Minister has a great deal to build on. As has been highlighted, there has been a good degree of cross-party support for improved measures to address the issue, and, following the publication of the “Supported housing: national statement of expectations” and the implementation of the five pilots, an evaluation was published in the last Parliament, around April 2022. A written ministerial statement from the then Minister, Eddie Hughes, set out the future plans and funding aimed at implementing the regulation that those pilots had identified as being necessary. That work led to and fed into the Supported Housing (Regulatory Oversight) Act 2023 and interacted with the Social Housing (Regulation) Act 2023. The issue was also the subject of a Levelling Up, Housing and Communities Committee inquiry in 2021.
The debate and discussion in Parliament has significance only in so far as it can be implemented at a local level. Both the Select Committee inquiry and the learning from those pilots was very clear that local authorities need to have sufficient resource and flexibility to implement it at a local level. I welcome the fact that, in the previous Parliament, the Government provided a £20 million fund to begin ensuring that all local authorities could learn from that and had a degree of resource. However, it is clear from the level of wider need, and in particular, from the emerging evidence of market abuse not just in this sector but in areas such as children’s homes and care homes, where significant rip-off fees are being charged by some providers for a service that is simply inadequate to meet the needs of those residents, that further work is needed. Clearly, the Minister has taken office at a time when the Department has accumulated a high degree of evidence as a result of the pilots, the debates and the work done in the previous Parliament. I hope that that will be enormously useful in ensuring that the expectations set out in that Parliament can be fulfilled.
I would like to add my support on this matter. I do not think that this Minister is responsible for planning, but the point that was made about how we support the identification of exempt accommodation through the planning process is important. I think we all recognise that this is a marketplace in which we have a combination of local authority providers, private providers, charities and voluntary organisations, and we do not wish to place undue impediments in the way of those who wish to convert existing buildings—for example, houses in multiple occupation—to provide additional support to residents who may be able to make the most of it. At the same time, in all communities, in order to avoid the problems we have seen—with particular settings, for example, requiring a high degree of police and law enforcement input—there needs to be that earlier identification process.
As the Government bring forward their proposed review of the planning system, I hope the Minister and her colleagues will give some consideration to how changing the use classes that relate to exempt accommodation or making that part of a wider review—for example, of change of use of residential accommodation to become children’s homes, houses in multiple occupation, care homes and so on—would enable the earlier identification of sites and input to be gathered from the likes of police and NHS services. That would then influence the planning committee in deciding whether a location was appropriate in order, for example, to avoid the clustering of problem locations. As we have seen in the past with local authorities at the coast, we may find a combination of bail hostels next to children’s homes next to asylum accommodation, all of which can create a very challenging social mix for a local authority and other local authority services to deal with.
This has been a very helpful debate. I again congratulate the hon. Member for Birmingham Edgbaston. I hope that the Minister will be able to build on the constructive work done in the last Parliament and that we will see that feed into a significant change in the experience of the most vulnerable people, who need to access exempt accommodation, but also in the communities in which it is located and their experience of it in the coming years.
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rushanara Ali)
It is a pleasure to serve under your chairmanship, Sir Mark. I congratulate my hon. Friend the Member for Birmingham Edgbaston (Preet Kaur Gill) on securing this important debate and thank her for the work she has already done to tackle the poor quality of supported accommodation schemes in her constituency.
Housing is a priority for this Government. We are already committed to building 1.5 million new homes, and that will include good-quality supported housing to ensure that residents have the right home to meet their needs. But as we have heard, we need to make sure that the supported housing that already exists is delivering good outcomes for its residents. As the Minister responsible for supported housing, I am determined to tackle the problems discussed in today’s debate. I know how important it is to get this agenda right, because my constituents suffer just like those of my hon. Friend and a number of other Members who have been very active in campaigning to improve the quality of supported housing.
My hon. Friend highlighted the many serious issues—as did the shadow Minister, the hon. Member for Ruislip, Northwood and Pinner (David Simmonds), and the Liberal Democrat spokesperson, the hon. Member for North Shropshire (Helen Morgan)—and the suffering caused by poor-quality supported housing where residents receive little or no support and landlords charge huge rents paid for by the taxpayer, with local authorities lacking the powers to challenge that.
Of course, as my hon. Friend pointed out, we are not speaking about all providers. The majority do a fantastic job supporting their residents to live fulfilling and independent lives, and I commend them for the work they do. We want to see more of those kinds of providers and to help them continue to give their residents the best support they can.
However, in the worst examples I know of, there are harrowing stories of residents being left with no support at all, of criminal gangs taking advantage of vulnerable residents and of women who are fleeing domestic violence and domestic abuse being housed with sex offenders. As my hon. Friend mentioned, there are also examples of lack of support, criminality and dangerous situations for residents, who are put into accommodation by landlords who simply do not care about them. That situation cannot be allowed to continue. As my hon. Friend highlighted, that is a serious and growing problem in Birmingham, but it is not unique to the city and is an issue in other parts of the country.
The Government will take firm action to stop rogues who continue to exploit vulnerable residents and rip off taxpayers by charging excessive rents, which are met by housing benefit. Those abuses have gone on for far too long, and this Government will act to put a stop to them. I look forward to working with colleagues in the different parties, building on the consensus from the previous Parliament.
Poor-quality, expensive and ineffective supported housing was first highlighted in Birmingham in 2018 by the Housing and Communities Research Group, working with the Birmingham Safeguarding Adults Board. The then Government tested ways to increase the oversight of supported housing in a number of areas, including Birmingham, through the supported housing oversight pilot, followed by the expanded supported housing improvement programme, known as SHIP. I agree with my hon. Friend, who was quoted at the time as saying that the schemes were welcome but fell far short of the action needed.
I am pleased to say that the 26 local authorities involved have been reporting good progress against their delivery plans since the start of the initiative. Over 2,400 properties have been inspected, over 8,000 reviews have been undertaken of the support provided to tenants and over 9,400 benefit reassessments have been carried out. My hon. Friend asked about the decision on further funding for SHIP, which is, as she will be aware, a matter for the spending review.
I commend the hon. Member for Harrow East (Bob Blackman) and other colleagues on the work they did in getting the Supported Housing (Regulatory Oversight) Act 2023 on to the statute books. As we have heard, implementing the Act will equip local authorities to go further and to finally put an end to this appalling problem. The Government are determined to get these measures implemented as soon as possible.
My hon. Friend the Member for Birmingham Edgbaston highlighted the lack of data under the previous Government. I am pleased to say that the data position is improving, and an initial research phase looking at supported housing in Great Britain—covering the number of units, the cost, and estimates of need and future demand—has been undertaken on behalf of the Government. A report setting out the findings will be published soon.
I want briefly to set out how the Government intend to address these important issues. As I have mentioned, the Supported Housing (Regulatory Oversight) Act, introduced by the hon. Member for Harrow East, is central to our plans. To be clear, the Government will implement the measures in the Act as soon as possible. These problems have been going on for far too long and action is long overdue. As required by the Act, I will shortly issue a statement to the House about progress on implementing the measures in it, but I am grateful for the opportunity to inform Members of the way forward today.
Work will shortly resume on appointing the supported housing advisory panel. I am grateful for the applications the Department received prior to the general election, and I hope to be able to inform applicants shortly on the next steps.
The Government are finalising a consultation on national standards and plans for a licensing regime for supported housing schemes in England, as well as on the new planning use class that was called for during the Act’s progress through Parliament. We will publish the consultation as soon as possible.
Local supported housing strategies are another vital part of the Act and will ensure that the needs of vulnerable people can be met in the future. Work on them is progressing, and the Government will work closely with local authorities and other stakeholders to develop the comprehensive guidance needed.
The 2023 Act proposes a licensing regime that will give local authorities proper control over who delivers supported housing in their district, and greater powers to intervene when things are not right. We will shortly consult on a locally led national licensing regime that will enforce a set of national support standards in England, and will add further conditions to ensure that rogue providers cannot continue to operate. Conditions will include a fit and proper test for licensees, conditions relating to the condition and use of the accommodation, and a condition requiring all residents to have had their needs assessed. Those conditions will ensure that only good-quality supported housing is licensed and allowed to continue to operate. Providing unlicensed supported housing will be an offence. The Government want to implement these changes carefully to avoid any unintended impacts on the much-needed supply of good supported housing, so it is critical that we consult both the statutory consultees, as set out in the Act, and wider stakeholders and residents.
My hon. Friend the Member for Birmingham Edgbaston asked about progress on developing the national standards. As she and others will be aware, the Act enables the Deputy Prime Minister to set standards for supported housing. While some regulation applies to supported housing, it is not specifically aimed at the support services provided to residents, and applies either to the provider or the physical condition of the property.
It is clear from the problems in supported housing that the current regulations are not enough and that there needs to be specific regulation for this type of housing. That is why the Government will be setting standards that, combined with supported housing licensing, close the gap in regulation and clearly set out what good support services look like and how they must be delivered.
Preet Kaur Gill
I thank the Minister for saying that, because I was going to ask her to touch on the national minimum standards. Can she give us a timeline? My worry is that the funding is ending in March 2025 and councils do not have the operating guidelines they need. There are also all the issues she raised in terms of making sure that councils understand how many units they have—let us not forget that Birmingham has the most units in the whole country, which is why I was encouraged that the previous Government included it in the pilot. I think the pilot has produced an evidence base showing why this issue is important: we will save money in the long run, whereas at the moment the taxpayer is almost paying twice. Unless the council intervenes and closes some of these properties, where support is not being provided, it will continue to be extracted from wider council services, which these providers are not paying into. Local government is no doubt listening to this debate, so I urge the Minister to give us a clear indication of what the timeline looks like.
Rushanara Ali
I am grateful to my hon. Friend for raising those points, and I fully appreciate her desire to see action being taken at pace. I want to reassure her that, with colleagues, I have hit the ground running two months into government. I hope she can see that we are making progress and that we want to ensure the consultation resumes as quickly as possible. That is the first step towards making the change that is needed, and it is important that we get it right. We must make sure that local partners —local authorities—are integral to that consultation and that there are no unintended consequences. However, I hear my hon. Friend loud and clear on the need for working at pace, and that is very much the spirit in which I have been working with officials in the Department.
We must give confidence to providers of supported housing that they are doing the right thing and, more importantly, set out to residents what they should be able to expect from their accommodation. My hon. Friend and other speakers have highlighted the urgency of ensuring that that happens. As I have said, we will consult on the standards before publishing guidance and we will continue to work with the Department for Work and Pensions to ensure that work on defining “care, support and supervision” is aligned.
The Government action that I have spoken about is very much targeted at poor-quality providers and is intended to put a stop to those that cannot or will not improve, and to help those that are well intentioned but are falling short in raising their game. It is equally important, however, that we recognise the fantastic work that providers are doing in the sector more widely in supporting vulnerable residents day in, day out. The reforms that we make as a result of the Act must be implemented with great care to ensure that good providers are not overburdened by bureaucracy and the cost of obtaining a supported housing licence.
In conclusion, I would like to thank my hon. Friend the Member for Birmingham Edgbaston once again for securing today’s debate and for speaking so passionately about the impact this important issue has had on her constituents. Her campaigning and work will benefit people up and down the country because she, along with other hon. Members in the previous Parliament—including the hon. Member for Harrow East, who successfully managed to change legislation—is going to make a significant difference to people’s lives. The Government’s position is clear: we are determined to take action to put a stop to this appalling problem that has blighted communities and put vulnerable people at risk of harm. We need to put a stop to it. This Government will deliver the improvements in supported housing quality—the previous Government made some progress, but we need to do much more. I look forward to continuing to work with hon. Members on both sides of the House as we consult and go on to lay regulations that will finally put an end to these issues and ensure that every resident in supported housing is supported in a way that this Government would expect. I look forward to getting that serious work under way as soon as possible.
Preet Kaur Gill
I thank the Opposition spokespersons —the hon. Members for North Shropshire (Helen Morgan) and for Ruislip, Northwood and Pinner (David Simmonds) —for their very thoughtful contributions in this debate. It is really good to see consensus on the introduction of these regulations and I hope we can work together to get this right. There was a lot of cross-party consensus and joining-up previously in understanding both the issue within the exempt provision and what is really required. Fundamentally, it is about how this can be implemented in practice by councils—that is where the difference is going to be felt. I am really encouraged by the Minister’s response and I hope that we can keep in close contact following this debate on the progress that the new Government are making on this issue. I really look forward to her statement in the House on the timeline and the commitments.
The hon. Member for Harrow East (Bob Blackman) rightly included a number of recommendations in the Bill he brought to the House, and I am sure that local government will want to voice other things they are finding more widely. I thought that Birmingham’s response was quite telling on both the SHIP funding and being able to have a team that can go out and do the inspections—I know the Minister has talked about that more broadly. The findings are concerning—the very fact that the council has been able to recoup £7.23 million in housing benefit overpayments makes it clear that much more joining-up is needed between the DWP and housing. We must be good at how we do that, how we have the advisory board there to support some of the thinking and how we implement that practically.
There are councils that do this better, but I think simply the size of Birmingham is the challenge. It is sad and shocking that a lot of people who cannot be placed elsewhere are being placed in Birmingham. They are vulnerable people and, even more worryingly, they do not have local links, which makes a difference to the level of exploitation—someone’s level of vulnerability increases as a result. We have to think about where we place people, especially if they already have good links in areas that they know and with services that they know. Otherwise, we are just shifting the problem from one place to another, exacerbating the issue of resources and services in Birmingham more broadly.
The Minister is welcome to visit Birmingham city council and our city to see some of the exempt accommodation at first hand. I think that that would help her to get a sense of what the new regulations will need to look like. She could meet the organisations. As she has mentioned, there are lots of good providers and good provision. It is important to get the balance right. Equally, lots of providers are exploiting the situation. The very fact that the Regulator of Social Housing has had to intervene tells us the state of the situation.
This is about protecting the small providers. No one wants to see endless bureaucracy; however, regulations are important. We already have HMO licensing schemes, for example, and we are able to manage and ensure that certain areas do not become saturated, which can simply blight them. Residential accommodation in residential streets should be exactly that—somewhere people feel safe and secure, and not wondering who lives next door, worried about the level of antisocial behaviour or crime, which does spill out on to the streets.
That is exactly what my constituents had to deal with. It should not have taken more than a year and a half of my resource, and the residents, the council and the police working together to build the case and the evidence to take the cases to court. A lot of the providers can pay for good legal advice and representation, and councils just do not have the capacity to be challenged constantly when they are trying to put in place necessary measures. Only through reform can we create a system that is better for housing benefit claimants, residents and our communities alike. That is what we want to see change.
Question put and agreed to.
Resolved,
That this House has considered exempt supported accommodation.
Written Statements
(3 months, 1 week ago)
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National Security and Investment Act 2021: Annual Report
(3 months, 1 week ago)
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The Chancellor of the Duchy of Lancaster (Pat McFadden)
I am today laying before Parliament the annual report covering the operation of the National Security and Investment Act 2021 for the period 1 April 2023 to 31 March 2024. This fulfils the requirements under section 61 of the NSI Act and a copy of the report will also be published on www.gov.uk.
The Government are committed to ensuring the Act protects our national security and does so as effectively, efficiently, and transparently as possible—giving investors the certainty they need to kickstart growth across the UK.
The report shows the vast majority of notified acquisitions—95.6%—were cleared to proceed within 30 working days. Of the 847 notifications reviewed, only 4.4% were issued with a call-in notice and underwent further assessment. Five final orders were issued and 10 called in acquisitions were withdrawn before a decision was made. All notifications were screened within the Act’s statutory time limits.
This report shows that notifications, call-ins, final orders, withdrawals, and final notifications covered many different sectors and acquirers’ countries of origin.
I have included new information in this year’s report. For the first time, the report sets out how many calendar days—as well as statutory days—different stages of the process took: for example, the time it took to make a final decision following a notification or a call-in. I hope this will provide further transparency on how the Act is operating.
[HCWS82]
Water (Special Measures) Bill
(3 months, 1 week ago)
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Emma Hardy)
On 4 September, the Government introduced the Water (Special Measures) Bill to Parliament to deliver on our manifesto commitment to put water companies under special measures to clean up our water. This builds on the statement of 11 July, which set out our first steps for ending the crisis in the water sector, and paves the way for a review to shape further, transformative legislative change to fundamentally transform how our water system works and clean up our rivers, lakes and seas for good.
This Government will never look the other way while water companies pump record levels of sewage into our rivers, lakes and seas.
To deliver on the manifesto commitment to “block the payment of bonuses to executives who pollute our waterways”, the Bill will provide Ofwat with a new power to establish rules for the water industry relating to governance and remuneration.
The Bill also delivers on the manifesto commitment to “bring criminal charges against persistent law breakers” by making obstruction of the general investigatory powers of the Environment Agency, Natural Resources Wales and the Drinking Water Inspectorate punishable by imprisonment; and by opening up new routes for prosecuting executives.
To deliver on the manifesto commitment to “impose automatic and severe fines for wrongdoing”, the Bill will enable the Environment Agency and Natural Resources Wales to issue automatic fines for certain offences, ensuring water companies face rapid repercussions where it is immediately clear they have acted unlawfully.
To deliver on the manifesto commitment to “ensure independent monitoring of every outlet”, the Bill will place a requirement on water companies to publish data on discharges from emergency overflows in near real-time. This data will be independently scrutinised by the regulators.
Finally, the Bill will also modernise and strengthen the water industry special administrations regime by introducing procedural rights around winding up petitions, and providing powers to recover the costs of special administration—bringing it in line with other sectors, such as energy.
Taken together, these measures will turn around the performance of the water industry and will be a first important step in enabling long-term and transformative change across the water sector.
However, I am clear that there are other fundamental challenges facing the sector, which will not be addressed by this Bill alone. A comprehensive reset is needed to restore our rivers, lakes and seas to good health, deliver a resilient water supply in the face of a changing climate, and ultimately ensure that the water sector works for customers and the environment.
Therefore, to build on the critical first steps of the Water (Special Measures) Bill, this Government will carry out a review of the water sector regulatory system and will fundamentally transform the water sector through future legislation. The review will focus on the private regulatory model and will not change plans for much needed investment in PR24. It will ensure that the framework that underpins our water sector delivers long-term stability, with incentives aligned to clear, achievable targets that reflect the needs of customers and the environment at a catchment, regional and national scale, supporting the Government's growth mission. We will invite views from a range of experts covering areas such as the environment, public health, consumers, investors, engineering and economics, and this will include a public consultation to test the proposals and bring in a diverse range of views. Further details will be set out in the autumn.
[HCWS79]
British Indian Ocean Territory/Chagos Archipelago
(3 months, 1 week ago)
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The Secretary of State for Foreign, Commonwealth and Development Affairs (Mr David Lammy)
Following the meeting between the Prime Minister, my right hon. and learned Friend the Member for Holborn and St Pancras, and the Prime Minister of Mauritius on 23 July, the UK and Mauritius have agreed to continue the negotiations on the exercise of sovereignty over the British Indian Ocean Territory/Chagos archipelago launched under the previous Government in November 2022. An agreed resolution to this long-standing, complex and important issue is in the interest of both parties and the best way to protect the UK’s national interests. Working in close co-ordination with the United States, the UK will endeavour to expeditiously reach a negotiated agreement that protects and preserves vital security interests on Diego Garcia, respects Chagossian communities, enhances environmental co-operation and builds a long-term strategic partnership with Mauritius as a close Commonwealth partner. To enhance these efforts, Mr Jonathan Powell has been appointed as the Prime Minister’s envoy to the BIOT/Chagos sovereignty negotiation.
[HCWS80]
Immigration Rules: Statement of Changes
(3 months, 1 week ago)
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The Parliamentary Under-Secretary of State for the Home Department (Seema Malhotra)
My right hon. Friend the Home Secretary is today laying before the House a statement of changes in immigration rules.
Introduction of a visa requirement on Jordan
We are today introducing a visa requirement on all visitors from Jordan. Nationals of Jordan will also be required to obtain a direct airside transit visa if they intend to transit via the UK having booked travel to another country. The visa requirement comes into force at 15:00 BST today.
Consequential to this, nationals of Jordan will no longer be eligible to travel to the UK with an electronic travel authorisation.
There will be a four-week, visa-free transition period for those who already hold an ETA and confirmed bookings to the UK obtained on or before 15:00 BST on 10 September 2024 where arrival in the UK is no later than 15:00 BST on 8 October 2024.
Arrangements are in place so that Jordanian nationals can apply for visas. We are publicising the changes so travellers are aware and can plan accordingly.
We are taking this action due to an increase in the number of Jordanian nationals travelling to the UK for purposes other than what is permitted under visitor rules since the visa requirement was lifted in February 2024. This has included a significant and sustained increase in asylum claims, and high rates of refusals at the border due to people travelling without the intention of visiting for a permitted purpose. This increase in asylum claims and refusals has added significantly to operational pressures at the border, resulting in frontline resource being diverted from other operational priorities.
The decision to introduce a visa requirement has been taken solely for migration and border security reasons. Our relationship with Jordan remains a strong and friendly one. Any decision to change a visa status is not taken lightly and we keep the border and immigration system under regular review to ensure it continues to work in the UK national interest.
Implementation of the UK electronic travel authorisation scheme
On 25 October 2023, the UK electronic travel authorisation scheme was launched to secure our borders and make the UK safer, by enhancing our ability to screen travellers upstream. The scheme applies to those passengers visiting or transiting the UK, who do not currently need a visa for short stays and do not have a valid UK immigration status prior to travelling.
Currently, the ETA scheme applies to nationals of Qatar, Bahrain, Kuwait, Oman, United Arab Emirates and Saudi Arabia. The Government will complete the implementation of the scheme, in a phased manner, to all remaining non-visa nationalities. In November 2024, the ETA scheme will open to all nationals travelling to the UK who do not currently need a visa, except Europeans, and it will be a travel requirement from 8 January 2025. In March 2025, the scheme will then be extended to European nationals and will be a requirement for travel from 2 April 2025, completing the roll-out of the ETA scheme. The complete list of ETA nationalities is detailed in the accompanying statement of changes at “Appendix ETA National List” at ETANL 1.1.
Once fully rolled out, the ETA scheme will close the current gap in advance permissions and mean that for the first time, we will have a comprehensive understanding of those travelling to the UK.
End diplomatic visa waivers and introduce a “diplomatic visa arrangement” visitor visa
The UK’s border is being transformed to include digital pre-travel checks. As part of this, diplomatic visa waivers are being phased out. “Diplomatic visa arrangement” visitor visas are being introduced to replace DVWs. DVAs will ensure diplomatic passport holders from countries that have benefited from DVW, who are nominated by their Governments through a note verbale, will continue to benefit from smooth and efficient access to the UK. DVAs will provide a bespoke visitor visa for eligible diplomatic passport holders. Applications will be made through a light-touch application form, but application fees and the requirement to submit fingerprints will be waived. The route aims to support and better facilitate diplomatic travel to the UK and will also enable DVA visitors to undertake a range of standard visitor activities. These changes will not impact accredited diplomats who are free, or “exempt” from immigration control.
Introduction of the VIP delegate visa
We are launching the VIP delegate visa, a bespoke visa product targeted at delegations accompanying foreign Heads of State and serving Government Ministers on official visits to the UK. This product is a global offer, balancing the UK’s bilateral considerations and aligning more closely with the approach of international partners. This product will be capped at an upper limit of 20 issues for Government official delegates accompanying Heads of State, and 10 for Government official delegates accompanying serving Government Ministers. Those applying for this product will have their application assessed under the immigration rules, supported by a note verbale process, but application fees and the requirement to submit fingerprints will be waived.
Changes to “Appendix Bereaved Partner” and “Appendix Gurkha and Hong Kong military unit veteran discharged before 1 July 1997”
Currently, a bereaved partner who has no other route to stay must leave the UK if they cannot afford the fee for settlement. So, we are changing the relevant rules to allow bereaved partners and their dependants to benefit from a fee waiver if they are destitute. Equivalent changes are being made to the Immigration and Nationality (Fees) Regulations 2018, which are also being laid in Parliament today. The provision of a fee waiver to those who are destitute will allow them to settle in the UK at the time they are most vulnerable.
Changes to the EU settlement scheme
We are making some changes to the immigration rules in “Appendix EU” for the EUSS, which, in accordance with the citizens’ rights agreements, enables EU, other European economic area and Swiss citizens living in the UK before the end of the transition period on 31 December 2020, and their family members, to obtain the UK immigration status they need to continue living in the UK. The changes include referring to the scope to automatically convert pre-settled status under the EUSS to settled status where the person qualifies for this and without the need for them to make a further valid application, and to require a joining family member to apply to the EUSS within three months of their first (not latest) arrival in the UK since the end of the transition period (or later where there are reasonable grounds for their delay).
These changes to the immigration rules are being laid on 10 September 2024. For the changes regarding Jordan, due to safeguarding the operation of the UK’s immigration system, those changes will come into effect at 15:00 BST on 10 September 2024. The changes regarding “Appendix Bereaved Partner” and “Appendix Gurkha and Hong Kong military unit veteran discharged before 1 July 1997” will come into effect on 9 October 2024, changes regarding the VIP delegate visa will come into effect on 10 October 2024, changes to introduce a “diplomatic visa arrangement” visitor visa will come into effect on 18 February 2025 and associated changes to end diplomatic visa waivers will come into effect on 11 March 2025.
All other changes will come into effect on 8 October 2024.
[HCWS81]
Development Consent Decision Extension
(3 months, 1 week ago)
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The Secretary of State for Transport (Louise Haigh)
This statement confirms that it is necessary to extend the deadline for a decision on the application by Tritax Symmetry (Hinckley) Ltd under the Planning Act 2008 for the Hinckley national rail freight interchange development consent order (“the application”).
Under section 107(1) of the Planning Act 2008, a decision on an application must be made within three months of receipt of the examining authority’s report unless the power under section 107(3) is exercised to extend the deadline and a written ministerial statement is made to the Parliament announcing the new deadline.
The Secretary of State received the examining authority’s report on 10 June 2024. The current deadline for a decision on the application is, therefore, 10 September 2024.
The deadline for the decision is extended to 10 March 2025. The Department will however endeavour to issue the decision ahead of the extended deadline of 10 March 2025 where possible.
The reason for the extension to the decision deadline is that while the Secretary of State is minded to agree with the examining authority’s recommendation that she should withhold consent, she wishes to gather further information on certain matters and to allow for the analysis of that further information before taking her final decision. She is therefore publishing a letter today which explains why, having weighed the benefits and adverse effects of the proposed development, she is minded to refuse consent and sets out those matters on which she requires further information.
The decision to set a new deadline is without prejudice to the Secretary of State’s decision on whether to grant the application development consent.
[HCWS78]
Grand Committee
(3 months, 1 week ago)
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Arrangement of Business
(3 months, 1 week ago)
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The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)
My Lords, I start with the usual warning that, if there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells ring and resume after 10 minutes.
Bank Resolution (Recapitalisation) Bill [HL]
Tuesday 10th September 2024
(3 months, 1 week ago)
Grand CommitteeRead Full debate Bank Resolution (Recapitalisation) Bill [HL] 2024-26 View all Bank Resolution (Recapitalisation) Bill [HL] 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 2-II Second marshalled list for Grand Committee - (6 Sep 2024)
“(6) Use of the Financial Services Compensation Scheme for bank recapitalisation and associated costs must not reduce bank depositors’ entitlement to the full amount of Deposit Guarantee Insurance.”
Baroness Bowles of Berkhamsted (LD)
My Lords, it falls to me to open proceedings again. This is very much a “what it says on the tin” amendment. If it were phrased as the question “Will the deposit guarantee always be honoured?”, I would expect the answer to be yes.
Last week, we discussed that there may be more than one recapitalisation dip. For a moment, let us imagine a worst-case scenario where there is more than one but things are worse than expected due to market circumstances—maybe contagion or other unforeseen circumstances—and the insolvency route has to be taken. Can we be certain that there would be no change to bank depositors’ entitlement—I do not think that is intended in any way, but I would like to hear the Minister say it—and that the system would have the capacity for whatever is thrown at it, if not cash capacity then some form of underwriting in addition to whatever borrowing is available? Does the overall capacity extend beyond the borrowing that is already set up or is it fundamentally underwritten by the Government? As they will get it back, I do not object to that; I am just inquiring as to what the mechanism is, although maybe one does not want to think about that until we get there, if we do.
Are the state of the Financial Services Compensation Scheme and the affordability of the levy, if there had already been recent large calls, for example, a factor in the analysis of whether to mount a recapitalisation rather than allowing the insolvency? There could be public interest factors that relate not merely to the bank under consideration per se. Does the public interest consideration also extend to the state of the compensation scheme? I beg to move.
Baroness Vere of Norbiton (Con)
My Lords, I rise to make a few comments about this, many of which have already been made by the noble Baroness, Lady Bowles. I am determined to make my comments none the less, so I shall use different words in a different order. The amendment does what it says on the tin—that is absolutely right—and I am confident that the Minister will state that there will be no diminution in the benefit of the deposit guarantee scheme, but is that in and of itself sufficient comfort? The framing of this Bill and the Minister’s exposition of it are shaped by a mindset that there will be a single resolution event; it will be an isolated occurrence; it will clearly be in the public interest, and it will be a single financial institution following specific issues relating only to that bank. That seems to be the vibe that I get when I read the information, particularly that which accompanies the Bill, and I remain concerned that there are insufficient checks and balances in place to enable Treasury input when the measures are used as envisaged, but also where there are multiple failures during a wider systemic event—a reasonable worst-case scenario.
A reasonable worst-case scenario can develop quickly, or it may become apparent only over time. In a slow burn and developing situation, decisions relating to banks facing challenges early on in a prolonged event will be made in a very different context from those whose challenges perhaps developed over a longer period. In essence, decisions will be made, but in very different environments, given what might have happened in the intervening period. It may well be that there is significantly less money left with which to play, so to speak, to ensure financial sustainability.
Whether a reasonable worst-case scenario is a one-off event or a slow burn, FSCS resources are going to come under significant pressure should two or more banks face insolvency or resolution, and choices will surely have to be made. Who makes those choices and based on what guidance? Will the FSCS prioritise DGI entitlements over the resolution of a bank or banks? What would happen in circumstances where the public interest test is at best marginal? There will be many circumstances when it is very clear, black and white, but there will be some when it is not quite so clear. On one hand, one might have a bank which needs to go through the insolvency procedure and therefore one set of obligations fall on the FSCS and, on another, a bank could go through resolution and it is a bit marginal whether the public interest test has been met. How are all those decisions going to be worked through, given the lack of direct oversight from the Treasury?
We have been told that the FSCS will be unfettered when it comes to decisions relating to the allocation of existing resources and borrowing from sources other than the Treasury for DGI or recapitalisation. Therefore, it seems that until the FSCS needs to go cap in hand to the Treasury to get more money over and above what it can already borrow, there is an obligation on the FSCS only to consult the Treasury and others and the decision-making essentially remains beyond the reach of Ministers. I will be interested in the Minister’s response.
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
My Lords, I hope I can address the concerns of the noble Baronesses, Lady Bowles and Lady Vere, and provide them with reassurances about the protections in place for depositors as a result of the mechanism under this Bill. I can assure the noble Baroness, Lady Bowles, that in the event that the mechanism under the Bill is used, it would not reduce a covered depositor’s entitlement to a payout in the event of a subsequent bank insolvency. In this situation, eligible depositors would continue to be paid out up to the coverage limit set by the Prudential Regulation Authority, which is currently £85,000. That protection is enshrined in the rules set by the Prudential Regulation Authority. If the mechanism under the Bill is used and a bank subsequently enters insolvency, the Financial Services Compensation Scheme will continue to have access to the same resources as it does now. This means that it would first seek to use any existing funds or its commercial borrowing facility to meet its costs. If that is not sufficient, the Financial Services Compensation Scheme is able to turn to the Treasury and request a loan under the National Loans Fund. Any borrowing under the National Loans Fund would then be repaid by future levies. That is an important backstop that means that the Financial Services Compensation Scheme can continue to access the funding it needs.
The noble Baroness, Lady Bowles, asked a specific question about affordability being taken into account when deciding to recapitalise using the payout in insolvency. The answer to that is yes. The bank would consult the PRA when deciding to use its powers to consider affordability in levies. I hope this provides the reassurance that the noble Baroness is seeking that covered depositors will not face a reduction in what they are entitled to in insolvency if the new mechanism is used. On that basis, I hope she will be able to withdraw her amendment.
Baroness Noakes (Con)
Can I just clarify what happens when the FSCS has gone to the Treasury, because there does not appear to be a limit on the amount of money that it could draw down to meet its obligations to protected depositors? As the noble Lord, Lord Eatwell, pointed out on our first Committee day, there might be several financial institutions—my noble friend also raised this—in play at one time. It cannot be the case that an infinite amount of money can be funnelled through the FSCS and ultimately funded by loans from the National Loan Fund with the expectation that that will always then be met by subsequent years’ levies on the institution. Is there is there no break in the system which says, “No, this is too much for the FSCS to deal with”, especially as it is now potentially being loaded with a different kind of expense to process through its mechanisms?
Lord Livermore (Lab)
As the noble Baroness said, we touched on this briefly in the first day of Committee. If it is okay with her, I will write to set out the precise way in which the mechanism would work in that instance.
Baroness Bowles of Berkhamsted (LD)
I thank the noble Lord for his reply, which was broadly as I expected. We can draw from it that, in a situation in which the scheme will be used for recapitalisation, it will not set any precedents, because we do not know how much money will be in the pot if there have been other events. It will be considered case by case.
On the one hand, that has to be so, otherwise you might fall into the sort of trap perceived by the noble Baroness, Lady Noakes: that it is a perpetual pot, which the banks will have to fill, no matter what. That is not satisfactory but, at the same time, it is nice to have as much clarity as possible about the expected outcomes. We come back to the same point about what goes into the code of practice or other versions of it, whatever they may be.
My final point—I do not need to labour points that we have been around before—is that, in his answer about eligible depositors, the Minister said that this is enshrined in PRA rules. I just wish that it was enshrined in primary legislation, as it used to be. I had not absorbed how that was in the rules and was therefore changeable by the PRA. I thought that it would be fixed in primary legislation, but that is something else to think about. With those comments, I beg leave to withdraw my amendment.
Baroness Noakes
“214F Engagement with Parliamentary Committees(1) If the Bank of England exercises the power under section 214E it must, as soon as reasonably practicable, notify in writing the chair of each relevant Parliamentary Committee that the power has been exercised.(2) Relevant Parliamentary Committees are—(a) the Treasury Committee in the House of Commons, and(b) the Financial Services Regulation Committee in the House of Lords.(3) References to the committees referred to in subsection (2)—(a) if the name of the Committee is changed, are references to that Committee by its new name, and(b) if the functions of that Committee (or substantially corresponding functions) become functions of a different Committee of the House of Commons or the House of Lords, are to be treated as references to the Committee by which the functions are exercisable.(4) Any question arising under subsection (3) is to be determined by the Speaker of the House of Commons in relation to committees of the House of Commons and by the Senior Deputy Speaker of the House of Lords in relation to committees of the House of Lords.”Member's explanatory statement
This amendment provides that the Bank of England must notify the Treasury Committee of the House of Commons and the Financial Services Regulation Committee in the House of Lords if the recapitalisation power is used.
Baroness Noakes (Con)
My Lords, Amendment 15 would add a new section to FSMA. This would create a requirement for the Bank of England to notify the Treasury Select Committee in the other place and the Financial Services Regulation Committee of your Lordships’ House of the use of the recapitalisation power.
On our last Committee day, I tried to add a requirement for Treasury consent when the recapitalisation payment power was used in order to improve parliamentary accountability around the use of the power. That would, in effect, have tied Ministers into the decision, thus allowing Parliament—in particular, the other place—to hold Ministers to account. As I have said many times, the accountability of the Bank of England is weak. Unsurprisingly, because Ministers have never been known to be in love with ministerial responsibility or accountability, the Minister turned this down.
However, in response to my amendment, the Minister said, as if it was a self-evident truth, that:
“It is important to maintain the position that the Bank of England can take decisions on the appropriate resolution action independently”.—[Official Report, 5/9/24; col. GC 33.]
I am not sure that that is correct. The independence of the Bank of England certainly exists in relation to monetary policy, but it does not extend to the totality of its functions.
I invite the Minister to look at Section 4 of the Bank of England Act 1946, which was when the Bank of England was nationalised. Section 4 allows the Treasury to issue directions to the Bank of England—it has in fact never issued a direction, but the power exists. There are carve-outs from that power of direction to cover monetary policy, the activities and functions of the PRA, and something to do with central counterparties. It does not carve out the Bank as a resolution authority, so a power exists for the Treasury to direct the Bank on resolution functions. We should not therefore get hung up on the so-called independence of the Bank in considering amendments to this Bill, though we may well return to the topic on Report.
Lord Vaux of Harrowden (CB)
My Lords, very briefly, I support the noble Baroness’s amendments. Perhaps I would say that as a member of the Financial Services Regulation Committee—as one of the majority of us in this Room, I should say, who are members of that committee.
I see this as working closely alongside the reporting amendments that we discussed on Thursday. When we were talking about the reporting requirements the noble Baroness, Lady Vere, mentioned that it is all very well issuing reports, but not if there is no one to read them. This gives us somebody to read them. It is a fairly light-touch requirement: it is an obligation to notify but does not give any obligation on anybody to do anything with it, unless they feel they need to and that it is important. I hope that this simple measure, alongside the reporting discussions we had last week, will be something that the Minister is minded to accept.
Lord Eatwell (Lab)
My Lords, perhaps I might suggest that it would be wise of the Minister, if I may be so bold, to look warmly on the amendment. Discussions around the accountability issue were a persistent theme in the debates on what is now the Financial Services and Markets Act 2023, and led as the noble Baroness, Lady Noakes, pointed out, to the creation of the Financial Services Regulation Committee of your Lordships’ House, charged with the responsibility for maintaining parliamentary accountability of financial services regulators. I can assure him that if the Treasury does not accept this amendment, he will become weary of the number of times that it will come back again and again—the reason being simply that the committee feels strongly that its role is now a crucial part of the regulatory framework in the UK and that the reports to the committee effectively establish the groundwork of its role in pursuing the accountability agenda.
Baroness Bowles of Berkhamsted (LD)
Not surprisingly, I too support this amendment. I congratulate the noble Baroness, Lady Noakes, on her exposition of the genesis of the terms of Section 38 of the 2023 Act. Of course, I am a member of the committee that came as a consequence of that. In her presentation, although not in the amendment—wisely so—she suggested that maybe there would be some hearings and questions, and the possibility that they would be in camera.
I urge the Minister, the Treasury and, indeed, the Bank not to shy away from such suggestions, because it would not be the first time that I have heard mutterings about things being confidential and not wanting to talk about them to parliamentary committees. In Germany, its parliamentary committees can look into the books of the banks and get all kinds of confidential information and—do you know?—it does not leak out. It is quite possible for committees of this House to behave just as well. I put that in as some impetus for how you can get better accountability, oversight and, I suggest, help from the committees, where everybody, ultimately, is pulling in the same direction.
Baroness Vere of Norbiton (Con)
My Lords, there is not an awful lot more to say. This is a very elegant amendment from my noble friend Lady Noakes, and it was very elegantly explained. I am the sole member of this Committee today who is not a member of the Financial Services Regulation Committee—no, neither is the Minister—and I am sorry about that. All noble Lords involved in getting the committee set up have an enormous amount of experience in the field of financial services regulation and, looking at the inquiries that it is already doing, I think it will be a very valuable part of our regulatory infrastructure. I look on this amendment with warmth and favourability and I should imagine that the Minister will do so, too.
Lord Livermore (Lab)
My Lords, the amendment tabled by the noble Baroness, Lady Noakes, focuses on the important theme of how the Bank of England is accountable to Parliament. As I have said in response to other amendments, the Government agree that it is right that the Bank of England is held to account for the actions it takes in resolution. That includes being accountable, as appropriate, to Parliament, so I do look warmly, in the words of my noble friend Lord Eatwell, at the intent of this amendment. I also stress that it is right that the Bank of England can act quickly and decisively when exercising its powers. That is particularly important in a crisis situation.
That said, the Government expect that the Bank of England would engage with Parliament after taking resolution action, including when the mechanism under the Bill is used. Specifically, under the existing provisions of the Banking Act, when the Bank of England exercises its resolution powers it must provide a copy of the relevant legal instrument to the Treasury. The Treasury must then lay that instrument in Parliament and the Bank of England must also publish it. This will continue to apply under the new mechanism and ensure that Parliament is notified when resolution action is undertaken. I shall give one specific example. In the case of SVB, the Bank sent to the Treasury the copy of the legal instrument the same morning as it exercised its power. The Treasury then laid the relevant document in Parliament on the very same day.
I also reiterate points I have made elsewhere about the Government’s commitment to require the Bank of England to produce reports in the event that the mechanism is used. The Government strongly expect such reports to be made public and laid in Parliament unless there are clear public interest grounds for not doing so, such as issues of commercial confidentiality. I hope this provides some comfort to the noble Baroness and, on that basis, I respectfully ask her to withdraw her amendment.
Baroness Noakes (Con)
Just to clarify something with the Minister, I understand that the resolution instruments are notified to the Treasury and laid before Parliament but they, of course, do not refer to the use of the mechanism in the Bill. That is what I was focusing on, rather than the resolution action itself. They may be separated, so it is not quite satisfactory to say that the law already provides for the resolution instruments to be relaid, unless that bit of the legislation, from the 2009 Act, were amended to cover the use of the Bank’s payment capitalisation power. I was trying to fill in a gap that I thought existed.
Lord Livermore (Lab)
I do not know whether this goes far enough for the noble Baroness but we absolutely intend, and would be clear, that we expect the same exact procedure to apply for this new mechanism.
Baroness Noakes (Con)
I am very glad that the Minister has said that.
First, I thank my fellow members of the Financial Services Regulation Committee for their support on this amendment—I was never in any doubt that I would get it—and I thank my noble friend, the shadow Minister, for her support.
I think this will come down to whether the Treasury’s expectations should be backed up somewhere in the legislation or whether we can allow it to exist on the basis that Treasury expectations will always somehow work out in practice. I favour the former: we need to be clear in the legislation about the trail of information that needs to go and when it needs to go.
Lord Vaux of Harrowden
“(aa) on a winding up of the institution, any recapitalisation payment is to be treated as a debt of the institution and paid out of the institution’s assets in preference to all other claims except any prescribed fees or expenses of the official receiver;”Member’s explanatory statement
Because the recapitalisation payment is not paid by the FSCS to the institution, but is paid to the Bank of England, it is not clear how it would be treated on a winding up of the institution. This probing amendment aims to ensure that it is treated as a debt of the institution and to ensure that recapitalisation payments are recovered first in any insolvency process, in preference to other creditors or shareholders, other than the expenses of the receiver.
Lord Vaux of Harrowden (CB)
My Lords, this amendment is simply intended to try to obtain some clarification on how a recapitalisation payment that has been made by the FSCS to the Bank of England will be treated if the failing bank eventually gets into insolvency. This could occur if the bank is transferred to a bridge bank, the buyer is not found and the bank’s financial situation does not improve. There is a two-year deadline for the bridge bank although that can be extended in certain circumstances but, eventually, the process can end up with the bank being wound up.
If that happens, the recapitalisation payments should be treated as a debt of the bank and should rank ahead of all other liabilities, debts or other claims other than the fees of the official receiver when it comes to distributing any value that might be left in an insolvency situation. This is related to other discussions that we have already had and partially to Amendment 23, tabled by the noble Baroness, Lady Bowles, which we will debate later.
The principle should be that the shareholders, lenders and other creditors should not be put in a better position as a result of the recapitalisation. To put it another way, the industry-funded compensation scheme should not, in effect, be bailing out the losses of shareholders and creditors other than the depositors who will be compensated under the scheme should their deposits be lost in the insolvency. However, that is not clear in the proposed Bill, although it is entirely possible that I have missed something in the interplay between the various Acts that apply here. I would therefore be most grateful if the Minister could explain exactly how the amount provided by the FSCS would be treated in such a situation. It might most easily and clearly be dealt with by including it in the worked example that the Minister agreed to consider providing during our discussions on Amendment 1 on Thursday.
I should say that I suspect that my amendment as it is currently drafted probably does not work, and that it may require some changes to be made to insolvency legislation to work properly if there is an issue. Rather than worrying about the specifics of the amendment, I hope that the noble Lord will concentrate on the principle and explain how the recapitalisation payment would be treated in an insolvency process, as it stands, in particular in making sure that it does not advantage shareholders and lenders, and ideally point me to the relevant clauses of the relevant legislation. If I am right that the situation is unclear, we can sort the details out on Report. I beg to move.
Baroness Noakes (Con)
I support the amendment that the noble Lord, Lord Vaux, has put forward, and in particular the request for worked examples, preferably with numbers in, because the noble Lord, Lord Vaux, and I are accountants and we like looking at numbers rather than words. Having read the proceedings of the first Committee day in Hansard, I realised that I did not know how some of these things work in practice, so I think that it is important to have those worked examples.
Baroness Bowles of Berkhamsted (LD)
I support this amendment as well, or something like it, and I would be very pleased if the Minister was prepared to try to work out something that might go in the Bill, because we need to have some clarity around these issues. We come back, as has been suggested, to our shareholders being advantaged at the end of the day. I find who is getting what in insolvency remarkably difficult to follow anyway; I certainly defer to the noble Lord, Lord Vaux, who is an accountant and a lot better at it than I am. I suggest that, if the noble Lords present cannot get their heads around it or are wondering, it needs laying out somewhere for clarity, ideally in legislation.
Lord Livermore (Lab)
My Lords, I am about to write to the noble Lord, Lord Vaux, on the matter that he raises in his Amendment 17, following a commitment that I gave on the first day in Committee. I will also happily reflect any points raised in this debate in that letter, if helpful. In the meantime, I will set out some of the content of that letter, while providing some additional clarity on the points he raises. Again, I hear the request for worked examples that we discussed on day one.
The Bill extends the role of the Financial Services Compensation Scheme to include providing funds at the Bank of England’s request, which the Bank of England could then use to recapitalise the firm in question. As I have set out previously, the intention would be to achieve that recapitalisation by injecting equity into the failed firm, helping to restore it to viability. In the event that the Bank of England places the failed firm into a bridge bank, the Bank of England would become the sole shareholder for that bridge bank.
It is therefore possible that the Bank of England would receive recoveries in a subsequent winding-up of the bridge bank if all other claims were met, reflecting its position in the creditor hierarchy as a shareholder. The Bill provides for any such recoveries to be returned to the Financial Services Compensation Scheme. The Government consider this to be an appropriate method for dealing with funds used in a resolution and in keeping with the existing principles of the creditor hierarchy. I note four further important points.
First, by ensuring an injection of equity, it achieves the core purpose of the new mechanism, which is to restore the firm to solvency. By contrast, if such a payment were classified as debt—even if that had a more favourable ranking in the creditor hierarchy— there is a risk that it would not restore the firm to the necessary level of balance-sheet health.
Secondly, I note that the primary intention in deploying resolution tools using the new mechanism would be to sell the firm. It is therefore the Government’s expectation that a sale should be the outcome in the majority of cases, rather than placing the firm into insolvency and winding it up from a bridge bank.
Thirdly, I point out that, if the firm entered insolvency from a bridge bank and there were still eligible depositors, the Financial Services Compensation Scheme would pay compensation to those depositors and take on their position in the creditor hierarchy, as it usually does. That of course is the right approach, ensuring depositors maintain their super-preferred status in an insolvency. It is important to note that changes to the creditor hierarchy must be considered carefully to ensure there is clarity for investors and market participants as to how they would be treated in a failure scenario. Treating the funds provided by the Financial Services Compensation Scheme as a debt only at the point of winding up the firm, and not prior to that, might create uncertainty as to its interaction with insolvency law more broadly.
Finally, I note that the super-preferred status in the creditor hierarchy that the Financial Services Compensation Scheme currently enjoys in insolvency reflects a different set of objectives. In those circumstances, the Financial Services Compensation Scheme is standing in the shoes of depositors and that preferred status is seeking to protect depositors’ interests. That is different to the intent of the mechanism delivered by the Bill, which is to provide a source of resolution funding to recapitalise a failing firm.
I appreciate the Committee’s interest in what is a technical but important matter. I hope that I have been able to clarify the intent of the Bill and that the noble Lord is able to withdraw his amendment as a result.
Lord Vaux of Harrowden (CB)
I understand what the Minister says about the equity of the original shareholders being effectively written down to zero, but what happens with, for example, lenders who are transferred into the bridge bank? It cannot be right that they probably lose everything in the event of an insolvency situation, but if the FSCS, via the Bank of England, has injected a load of money into the failing bank and it then goes into insolvency, there is more money there and therefore those lenders will receive a share of their cash, if there is enough, which they would have lost in an insolvency situation. However, the FSCS gets nothing back because there is nothing to recoup as it has gone to the lenders. In effect, in certain circumstances the lenders to the failing bank may be bailed out by the FSCS through the Bank of England. That does not seem right to me. Those lenders took a risk in the first instance that was not predicated on being bailed out. I think there is something here that needs to be followed up. Have I got that right?
Lord Livermore (Lab)
In the letter I will write, we will set out exactly what would happen in the example that the noble Lord gives.
Lord Vaux of Harrowden (CB)
I thank the Minister for that explanation and look forward to receiving the letter with the details and, I hope, a detailed worked example. However, an issue remains. The principle must be that a recapitalisation of the bank by the FSCS will not, in effect, bail out the existing shareholders—which it seems it does not do—or existing creditors, with the exception of the depositors, who are protected separately. There is something that needs looking at quite carefully here. I think we will come back to this on Report, but for the moment I beg leave to withdraw the amendment.
Baroness Noakes
“(2A) In section 4 (special resolution objectives), at the end of subsection (9) insert— “(9A) Objective 8, which applies in any case in which the Bank of England uses the power in section 214E of the Financial Services and Markets Act (recapitalisation payments), is to ensure that the costs which are born through the Financial Services Compensation Scheme do not exceed those which would have been born if the bank insolvency procedure had been used.””Member’s explanatory statement
This amendment adds to the special resolution objectives so that the Bank of England has to consider the net costs recouped via the FSCS if it uses the recapitalisation power with the counterfactual of the use of the bank insolvency procedure.
Baroness Noakes (Con)
My Lords, this amendment would insert a new special resolution objective into Section 4 of the Banking Act 2009. That objective is to ensure that the costs of using the recapitalisation payment power, thus loading costs on to the banking sector and in due course on to its customers, are not more than if the bank insolvency procedure had been used.
The special resolution objectives in Section 4 are not absolute requirements. The Bank has to have regard to them when using the resolution and related powers under the 2009 Act. There are seven existing objectives, and I am simply adding one more “have regard” for use only when the bank recapitalisation payment power is used. Section 4(10) states:
“The order in which the objectives are listed in this section is not significant; they are to be balanced as appropriate in each case”.
Thus, I am not trying to impose a requirement which trumps everything else in the special resolution regime. I regard this amendment as quite modest.
Two strands of analysis underlie my tabling of this amendment. The first is that the code of practice is clear that the bank insolvency procedure is the default option, unless there are public interest considerations that outweigh the important market discipline of failure. I am not sure we have seen in practice the use of the default option, but it ought to remain the core option for smaller banks in particular, which the Government insist are the main target of this new power.
The second concern was expressed during the consultation on this Bill—that there ought to be something akin to the “no creditor worse off” provisions of the Banking Act 2009. These provisions ensure that creditors are not disadvantaged by the use of one of the resolution tools compared with the option of insolvency. I am trying to ensure that the banking sector, which is footing the bill via the recapitalisation payment, should not be worse off than if the failed bank had been put through the insolvency process, resulting in the banking sector picking up the costs of reimbursing protected depositors.
I completely accept that there are difficulties in making this an absolute rule, because the Bank of England may well prioritise other matters, such as the continuity of banking services for critical functions. That is why I have drafted this amendment as an additional objective rather than an absolute rule. However, its inclusion in the 2009 Act would ensure that the Bank was especially mindful of the costs that would fall on the banking sector when using the bank recapitalisation power. I beg to move.
Baroness Bowles of Berkhamsted (LD)
I have mixed feelings about this amendment. I am grateful for the comments of the noble Baroness on why it was an objective; I understand that. Very definitely, the costs should not be disproportionately larger, but, if it was a relatively small amount larger than an insolvency and there was a good public interest case, I would not want to bar it. I am not quite sure whether the words used and having it as an objective necessarily convey that; if we were to proceed further with it, we could somehow make it a little more explicit in that regard. It needs to be in the same order of magnitude, not hugely more. With that caveat, I am probably in the same position as the noble Baroness, Lady Noakes.
Lord Vaux of Harrowden (CB)
I was not going to speak on this amendment, but I am also slightly in two minds. One hesitation is that it is very hard to know on the day you do the recapitalisation payment what the cost of an insolvency situation would be. However, I understand where the noble Baroness is heading with this, and there is a lot of sense in the sentiment behind it. This gives more ammunition to the question around reporting—we need the Bank of England to give a very clear explanation as to why it has chosen recapitalisation over insolvency. That might be my preferred way of going about it, but I understand absolutely what the noble Baroness said and support the sentiment behind it.
Baroness Vere of Norbiton (Con)
I also support the sentiment in the amendment from my noble friend Lady Noakes. I think all noble Lords here, including the Minister, would agree that this has the right intention but, as the noble Baroness, Lady Bowles, mentioned, there will be edge cases which we cannot foresee at this time. The question is: should such a statement of intent be in the special resolution objectives and, if not, where should it go? I do not know—perhaps in a code of practice, or perhaps not. I am interested to hear what the Minister has to say.
Lord Livermore (Lab)
My Lords, the amendment tabled by the noble Baroness, Lady Noakes, seeks to introduce a new objective into the special resolution regime. The new objective would state that the costs in using the new mechanism should not exceed those that would be incurred in the counterfactual of placing the firm into insolvency. This amendment therefore touches on an important point raised both in consultation and during Second Reading, which is whether there should be a formal test or objective that seeks to prevent the use of the new mechanism, or make its use significantly more challenging, where the cost is higher than insolvency.
I also note that the noble Lord, Lord Vaux, raised similar points on the first day of Committee, which he alluded to today, making the case that the Bank of England should be required to present an assessment of costs in reports to the Treasury and to Parliament.
The Government carefully considered the case for inclusion of various forms of such a safeguard, sometimes referred to as a least-cost test, in response to feedback received during the consultation. In considering this matter, it is important to strike the right balance between ensuring that the Bank of England can respond quickly and flexibly to a firm failure and ensuring that costs to industry are properly considered. Having considered this, the Government concluded that the existing public interest test and special resolution regime objectives remained the appropriate framework for deciding whether the mechanism in this Bill could be used.
Adding a specific objective for the Bank of England to ensure that the costs to industry from using the new mechanism do not exceed insolvency could prevent it taking the most appropriate action to advance its broader resolution objectives. Those objectives include protecting financial stability, certain depositors and public funds. It is right that these aims are prioritised at a time of significant risk, which is part of the reason why the Government have not proposed changes to the broader resolution framework.
There is also the potential for such a change to impose important practical challenges. Resolution would likely take place in an uncertain and fast-paced context. Estimating the costs of different approaches during this period will be highly challenging and could change over time. There is therefore a risk that such an objective could create legal uncertainty around any resolution action, which in turn may undermine the usability and effectiveness of the new mechanism in situations where it is justified. This could have significant and undesirable consequences, including crystallising a set of indirect costs for the financial services sector and the wider economy. Further, it should be borne in mind that the alternative if the new mechanism is not available may be to use public funds.
However, I appreciate the intent behind the noble Baroness’s amendment and hope that I can provide some reassurance by reiterating previous points on the subject of the scrutiny and transparency of the Bank of England’s actions. As I have noted, the Bank of England is required under the Banking Act 2009 to report to the Treasury when exercising some of its stabilisation powers and, as was set out in response to the consultation, it is the Government’s clear intention to use these existing reporting mechanisms to ensure that the Bank of England is subject to appropriate scrutiny when using the mechanism provided by the Bill. However, I take the point that the noble Baroness made in response to my earlier point.
The Government have committed to updating the code of practice to provide further details on how these reporting requirements will apply when the mechanism is used. I reaffirm that the Government intend to include confirmation in the code that, after the new mechanism has been used, the Bank of England would be required to disclose the estimated costs to industry of the options considered, including the comparison with insolvency. The Government consider that using the code of practice in this way, rather than putting these requirements in the Bill, is the best approach to hold the Bank of England to account for its actions.
The Bank of England is legally required to have regard to the code and the Government are required to consult the Banking Liaison Panel, made up of regulatory and industry stakeholders, when updating it. Using the code will therefore ensure that a full and thorough consultation is taken on the approach. Given the complex and potentially fast-moving nature of bank failures, this will also ensure that any approach is sufficiently nuanced to account for the range of possible outcomes under insolvency or through the use of other resolution tools.
As I have previously said, the Government will share drafts of the updates to the code of practice as soon as practicable and provide sufficient opportunity for industry stakeholders to be consulted on them. The noble Baroness also made the case that insolvency should be a preferred strategy for small banks and I stress that this is the case. I hope that I have provided some helpful explanation to her of the Government’s position on this matter and respectfully ask that she withdraws her amendment.
Baroness Noakes (Con)
My Lords, I thank noble Lords for supporting the principle behind my amendment, even if they did not fully align with the mechanism that I have chosen. We have had a useful debate on the issues involved. The Minister’s response was clearly helpful and I want to consider it carefully.
The Minister talked about things being very fast-paced, which I completely accept. Nevertheless, the Bank has to make a decision on the best information that it has. I am trying to build only on what it should be doing anyway, even though that is difficult to do when things are moving very fast.
Let me reflect on what the Minister said. It may come back to the issues which I am going to discuss in the next amendment, which are about the code of practice and needing to see what is likely to be said in that. I will shut up at this point and save my powder until the next group. I beg leave to withdraw the amendment.
Baroness Noakes
“(2A) In section 5 (code of practice), at the end of subsection (1) insert “and—(iv) the bank recapitalisation power under section 214E of the Financial Services and Markets Act 2000.””Member’s explanatory statement
This amendment requires the Treasury to include the use of the recapitalisation power created in this Bill in the Code of Practice issued in respect of the special resolution regime.
Baroness Noakes (Con)
Amendment 21 would amend the Banking Act 2009 so that the code of practice, which has to be issued for various aspects of the special resolution regime, must cover the use of the bank recapitalisation payment power being created by the Bill.
My reading of Section 5 of the 2009 Act is that it would not require the Treasury to cover the use of the recapitalisation payment power in the code of practice. Although I am aware that the Treasury says that it intends to update the code of practice—the Minister repeated that again, a few minutes ago—it should be put beyond doubt in the Bill that it is one aspect of the resolution regime, as a result of the Bill, that should be covered in the code of practice. It should not be optional now or at any point in the future.
We debated the code of practice a little in our first Committee day, and we do not yet have any idea of when the revision to the code will appear. Can the Minister assure the Committee that it will be reissued before the Bill comes into force? The Treasury has control of that because it has control of the regulations bringing the Bill into force, and it clearly is important that there is a revised code of practice covering the use of the recapitalisation of payments available at the same time.
The Minister would not give any specific timing for the updated code or the consultation on it when he responded last week. He repeated that a few minutes ago. Last week, I specifically asked him whether the draft updates, which he had said to my noble friend Lady Penn would be provided, would be available ahead of Report. On checking Hansard, I found that he had sidestepped that question. I hope that he will answer it today because, if he cannot commit to sharing draft updates before Report, it puts the House in a difficult position when it comes to that stage of the Bill.
Turning from timing to topics, can the Minister outline which topics are likely to be addressed in any updates?
In our first Committee day, when we debated the first group of amendments which sought in various ways to constrain the scope of the bank recapitalisation payment power to small banks or those on the glide path into the MREL regime, the Minister said:
“I appreciate noble Lords’ concerns about this issue and am happy to commit to exploring how to provide further reassurance on the Government’s intent via the code of practice”.—[Official Report, 5/9/24; col. GC 11.]
I found that rather alarming, as it implied that it was not the Government’s current intention to include something about the key target of the bank recapitalisation payment power being small banks. However, that is exactly how the power in the Bill has been marketed—a power to deal with the insolvency of small banks or the failure of small banks. I would have expected the code to set out where the Government expect the new power to be used, especially as the power has been drawn so very broadly.
Our second group of amendments on the first Committee day concerned the extremely wide definition of costs which can be covered under the bank recapitalisation power. The Minister said that it was important that the Bill was “not overly prescriptive”; that might have been an opportunity for him to say that the issues would be covered in a code of practice, but he did not do so. Does that mean that the code of practice will be silent on the important issues surrounding this very wide ability to charge practically any cost under the recapitalisation heading? That may be important to those of us who think that the current formulation of the Bill goes too far.
When we discussed double dipping into the FSCS last week, I asked the Minister whether the code of practice would cover the use of the power more than once for the same institution. This would also cover the need to reconsider the resolution strategy of not using the banking insolvency procedure before using the power a second or subsequent time. When I asked the Minister if that would be covered in the code of practice, he said:
“We can certainly take that away and look”.—[Official Report, 5/9/24; col. GC 25.]
at it. In other words that, too, was not in the plans for updating the code of practice. The only definitive reference to the content of the updated code of practice that the Minister made last week—he made it again in the previous group today—was in relation to the reporting requirements, where he said that the bank
“would be required to disclose the estimated costs”.—[Official Report, 5/9/24; col. GC 47.]
involved in using the power.
Lord Vaux of Harrowden (CB)
My Lords, on this amendment I agree with every word that the noble Baroness has just said. Like most noble Lords, I have an inherent preference that things should appear in a Bill, rather than relying on slightly woolly statements of Ministers that this is what they intend to do. There are circumstances when that is appropriate but in a case like this, where the code will be so important, there should be an obligation that the code is updated to take account of the recapitalisation process.
To repeat what I said on Thursday, and what the noble Baroness has said, it is deeply unsatisfactory that the Minister seems to be relying on the existence of the code and its updating to avoid detailed amendments being put down on Report and pushed through. If that is the case, it is surely important that we get a chance to look at the revised code before then, or at least a draft of it—or, at the very least, clear details of what Ministers are expecting to include in it. I urge the noble Lord to see what we can do to achieve that. Otherwise, he will face detailed amendments to deal with the issues that we have discussed, because we have nothing else on which to base our position.
Baroness Bowles of Berkhamsted (LD)
I agree with what both previous noble Lords have said. We cannot rely just on the fact that something is going to be revised. It is the same old problem that we have with primary legislation a lot of the time: it lays out something that could be good or bad, but it says, “Trust me, we will get it right when we come to secondary legislation or something else down the track”. That is not satisfactory and, in the absence of some more detail, we have to see something about the code of practice or similar—whatever one calls it—in the Bill, just to make sure that there is an understanding of the direction of travel for the sort of detail that we are asking about.
Lord Eatwell (Lab)
I should like to pick up on the request for detail put forward by the noble Baroness, Lady Noakes. I am concerned that the powers that the Bank of England has to act in an emergency, which this would presumably be, should not be constrained to any degree other than that which is absolutely necessary. In other words, we should not load up the code with detail, the reason being that the next crisis will be one that none of us has anticipated. It will be completely different.
If we look at the financial crises that have occurred, the major one in 2007-09 and some minor ones since, they have appeared in completely unexpected directions. The Bank must then have the freedom to adapt its procedures to whatever new challenge arises. I quite understand that we do not want just to say it can do anything it likes, but I feel strongly that we must be very careful about loading the code, and indeed the legislation, with excessive detail.
Baroness Vere of Norbiton (Con)
My Lords, I added my name to the amendment in the name of my noble friend Lady Noakes about the code of practice because it is important that we have this debate. I recognise what the noble Lord, Lord Eatwell, says, but it slightly struck fear into my heart because it is about those circumstances where there is not sufficient guidance or a code of practice. Essentially, this is not necessarily just for the Bank of England; it is for all those stakeholders who will be involved in the other side of a resolution. A lot of people will read the code of practice and internalise it. When it is needed, it will therefore already be in their hearts because they will have read it, so I am not as concerned as the noble Lord is about putting in too much detail. The simple fact is that we have not seen anything, so we do not really know what we are dealing with.
It struck me that in the slight rush to bring forward some legislation to keep Parliament occupied, perhaps, the Government are not providing all the information that the House needs to consider this Bill fully. It is complex, and as noble Lords go through it, it is clear that we are all picking up new nuances that we consider might be of concern in the future. The code of practice makes up an important component of the regime and the Committee is slightly flying blind, having not seen a draft of the changes—not only a draft of what would happen as a result of the Bill, but also potentially to fill gaps that we know are not going to be part of the Bill. We know that the code is potentially the only protection between anybody who uses banks—essentially, the taxpayer—and the Bank being able to perform maximum adaptation to a situation. There has to be something in the middle that stops that happening.
I am warming to my noble friend Lady Noakes’s suggestion that the Bill should not come into force until the code of practice is finalised, but I sense that that might be a little churlish. The amendment itself is a little anodyne. I think all noble Lords agree that the Government will, of course, make changes to the code of practice, but I would appreciate hearing more information from the Minister about what changes are anticipated—specifically, what will be left out—and the timing for any code of practice because while it remains outstanding, even in draft form, there is a significant lack of clarity.
At Second Reading, the Minister stated that the update will happen in due course. How many times have I used that phrase? I know exactly what it means. It means “when we are sort of ready”. We need to be a bit more ambitious than that. Can the Minister give any further guidance on timing? If he cannot, would it be helpful if I tabled an amendment on Report that required the code of practice to be updated within, say, three months and subject to approval by both Houses? I am happy to do that if it is helpful.
As my noble friend Lady Noakes and the noble Lord, Lord Vaux, pointed out, the Minister has referred to these things being addressed in the code of practice. Many of the elements in the reporting are also supposed to be in that code. My concern is that six weeks have now passed since the Minister said “in due course” and the House rises at the end of the week for Conference Recess. I presume that the Treasury is still working, so that would be a further window during which progress on a draft code of practice could be made. Therefore, I very much hope that the Minister can commit to having a draft document available for review before Report stage is scheduled. I look forward to hearing from the Minister.
Lord Livermore (Lab)
My Lords, I should state at the outset that the Government have no objections to the principle under discussion. Indeed, the Government have already stated publicly in our response to the consultation on these proposals that we intend to update the code of practice to reflect the measures in the Bill. I have already committed to share a draft of the proposed updates at the earliest opportunity, and I am happy to reaffirm that commitment today. I am aware that this is not the answer that the Committee is looking for, but I am afraid that I cannot commit to providing that before Report. However, I expect it to be available before the Bill comes into force.
As set out in the Government’s consultation response, the updates to the code will do three things: first, they will ensure that the code appropriately reflects the existence of the new mechanism; secondly, they will set out that the Bank is expected to set out estimates of the costs of the options considered and, as noted elsewhere, this is expected to include the case of insolvency; and thirdly, they will set out the expectation that any use of the mechanism is subject to the ex post scrutiny arrangements that I have described elsewhere.
The noble Baroness, Lady Noakes, perfectly fairly asked for a series of clarifications of what the code will include. She asked about two points specifically. The first was whether the code will confirm the mechanisms intended for small banks and the expenses covered? Yes, it is the intention that it will. She also asked whether the code will cover multiple uses of the mechanism. Yes, the code will cover that. I will answer other specific questions in writing.
In preparing these updates, the Government are mindful to ensure that they are done efficiently and carefully to ensure that they achieve the intended effect within the wider resolution framework, for instance, ensuring that the right set of costs is considered on the appropriate basis.
The Government will ensure sufficient opportunity for industry stakeholders to be consulted on these proposed updates to the code of practice. In particular, the final wording of any proposed updates would be subject to review by a cross-section of representatives from the authorities and the industry on the statutory Banking Liaison Panel, which advises the Treasury on the resolution regime. As noted, the Government will aim to progress these updates and make the proposed changes available for consultation with industry as soon as practicable.
Finally, I note that the Banking Act 2009 already imposes an implicit requirement on HM Treasury to update the code of practice, even without this amendment. Addressing the operation of the new mechanism would therefore already fall within the scope of this requirement.
I know that this explanation may not be sufficient, but I respectfully ask the noble Baroness to withdraw her amendment.
Baroness Noakes (Con)
The Minister just referred to an “implicit requirement” in the Act. Does he believe that Section 5 can be interpreted only as requiring the code of practice to include matters relating to the bank recapitalisation power? That would be extraordinary because nobody knew about the bank recapitalisation power when the 2009 Act was drafted, so under the principles of ordinary interpretation, it would not be included.
Baroness Noakes (Con)
I thank noble Lords for taking part in this short debate. There were three parts. First, Section 5 of the 2009 Act needs to mention the bank recapitalisation power, which is what the amendment does. The Minister is going to write on that.
We moved on to issues with the content and timing of the code. I say to the noble Lord, Lord Eatwell, that we all understand that the Bank needs powers to act as quickly as possible. Nobody is trying seriously to harm that. Taking what the noble Lord said to its logical conclusion, the statute would say just that the Bank of England can do whatever necessary when it comes to situations of bank failure—full stop. We would not have the many pages of the 2009 Act and all the complicated, mind-blowing arrangements that exist, holding companies and everything like that. We would not need that because we could just say that it could do everything. It is overstating the case to say that trying to write codes of practice would hold the Bank up in doing its duty when things go wrong.
What the Minister said on content is a helpful move forward from where we were. We may want to explore that a bit further on Report. However, timing is a concern, as we will not have further clarity by the time we reach Report. The only useful thing he has said is that they expect to reissue the code of practice prior to this Bill coming into force. I suggest that it would be pretty negligent not to update it before bringing the Bill into force.
Member’s explanatory statement
This amendment seeks to ensure that the FSCS should only be used for recapitalisation not for bailing out shareholders.
Baroness Bowles of Berkhamsted (LD)
I am afraid that I will have to spend a little time on this, although we will still close well before time. We are in a slightly new world. The noble Lord, Lord Eatwell, referred to how—although he did not say it like this—once upon a time, when there were problems, you left it to the Bank of England to do the right thing. By and large it did, within the state of knowledge of that time.
However, banking and the way that we deal with resolutions have moved on a long way since then. We are moving further with this small but significant Bill, using the funds of other banks to give to a bank that has failed. Beyond the public interest of depositor guarantees, which in their day were a new thing, we are using private money for what would in the past have been done with public money. That is a different place. Just as with insolvency, you put in the right safeguards about priority orders and so on, we need to put in priority orders for how that money is properly used.
Turning to my amendment, I will have to delve into realms where words have taken on different meanings over time. “Recapitalisation” now seems to incorporate bits of resolution; it does not just mean “putting capital in”. I used that sense of it in my amendment but I will carry the Committee through it as best I can.
The purpose of this amendment is to probe further whether the language used in the Bill, which ends up meaning “reducing the shortfall”, is too broad and therefore allows the FSCS funds to be used not only as new capital for the ongoing bank but to reduce the write-down of other capital instruments and correspondingly increase the amount that would otherwise have been taken from the Financial Services Compensation Scheme above the level that would have been needed if those other capital instruments were fully written down, as is the present presumption under the Banking Act 2009 and everything that feeds into it.
When I wrote the amendment, I was thinking of the ordinary meaning of recapitalisation—replacing capital—and not covering write-down manoeuvrings. So, please think about it as if I had said that and at the end it said: “and without reducing write-down of loss-absorbing capital instruments or shareholdings”, or some such wording. That was the intention of the amendment; if I go around the loop again, I will have a better shot at it.
Overall, I now come to the thought that my previous Amendment 22, which just deleted this, was probably a better option and a good thing for a variety of reasons. We need to avoid capture by the dubious “shortfall” wording from the Banking Act 2009 and the EU BRRD. The things that feed into shortfall are now synonymous with the things that are called MREL but they are looking at it from different ends. If we are going to tie back to the BRRD, I remind noble Lords that the shortfall is the sum of write-down of eligible liabilities to zero—that is what it says under Article 47.3(b)—plus the recapitalisation amount under Article 47.3(c). In essence, I am saying that the FSCS should be used only for amounts under Article 47.3(c)—that is the recapitalisation, which is what I am trying to capture—and that it cannot be used ahead of the writing down to zero of what is in Article 47.3(b). However, the trouble is that we are dealing in this world now where different things have been put in a pot, this time called the shortfall, linked by “and”, and we have no idea which bit we are allowing to be changed.
If we look at the broader picture of trying to cover banks with MREL, that is where it starts to get messy. It was quite simple if we just did it for the smaller banks, and we did not have to worry about things that were supposed to be written down to zero not being written down to zero again. It seems that that is exactly what the Explanatory Notes are telling us—I will quote from my copy to keep myself on track. They say that Clause 4(3)
“amends section 12AA”,
which goes back to the things I have just talked about,
“to allow the Bank to take into account the funds provided by the FSCS when they are calculating the contribution of shareholders”—
that is what it says at paragraph 26—
“and creditors required when exercising the bail-in write-down tool. This is to ensure that the Bank is not required to write-down more capital than necessary”.
However, as I read the law when it came from BRRD in the Banking Act 2009, you have to write down to zero unless you have so much that you get there before you have written it down to zero, and then you should not be going fishing in any other ponds anyway. So, there is some inconsistency or there is a hidden agenda.
There are some things in the insolvency stack that are worthy of rescue, as was the Silicon Valley Bank reasoning—such as uninsured deposits—but not things in that loss-absorption stack, especially not shareholders, because they are right at the top. Otherwise, what is the point of all the expense and effort that we go to to provide MREL, which is further on down, if we are then not going to use it? I really cannot understand what is meant to be going on by adding in this reference to the shortfall. I tried to amend it to say that it should not do bad things, in effect, but I think that we are a lot better off without it.
I then went back and looked at the response the Minister gave me when I raised this on the first day in Committee. He said:
“The noble Baroness, Lady Bowles, asked whether the Bank of England should reduce MREL requirements in the knowledge that it could instead use FSCS funds. The Bank of England sets MREL requirements independently of government but within a framework set out in legislation … The Bank of England will consider, in the light of this Bill and wider developments, whether any changes to its approach to MREL would be appropriate”.—[Official Report, 5/9/24; col. GC 11.]
The Minister was answering a question that I did not ask, but it is an interesting response, which the larger banks should get quite excited about. Is a quid pro quo for chipping in through the FSCS that you end up having less MREL? What an interesting suggestion. I can read what was said that way. According to that interpretation, reading through what is in the Bill, it is perfectly open that you could then not write down to zero things that appear under article 47.3(b) of the BRRD.
I can skip a lot of the other things that I was going to say but, to summarise, if the Explanatory Notes are correct, the intention is to use the FSCS to reduce the amount of write-down for shareholders or other loss-absorbing capital instruments. That is almost going backwards to the days that the noble Lord, Lord Eatwell, was perhaps recollecting of the Bank basically choosing who it should favour in the capital and liability stack. That seems to be the power we are giving it. If we are returning to something like that, it should be done in the context of a proper review of the Banking Act 2009, not in a kiss-me-quick Bill like this one, which was sold to us as being rather more about saving uninsured deposits, not saving sophisticated investors who have enjoyed good returns from bail-inable bonds or who are at the top of the stack and are the shareholders in the failing bank.
The FSCS cannot just be a pot for general usage; it has to be targeted. I tried to amend it with this amendment, but I am now coming to the conclusion that linking back to shortfall has no place in this Bill because it introduces too many ambiguities. I beg to move.
Baroness Noakes (Con)
My Lords, I will be brief. The noble Baroness raises some important issues in her amendment. I think the Minister confirmed earlier that shareholders would disappear because the Bank of England would take over their share capital, so they could not benefit from the use of the recapitalisation, but if there is any suggestion that the recapitalisation amount will excuse the bail in of some of the bail-inable liabilities, that would be pretty unacceptable. I hope that the worked examples that I hope the Treasury will enjoy working on while we are on Recess can illuminate how all this is going to work.
Lord Vaux of Harrowden (CB)
My Lords, I find my head spinning a little about some of this. It comes back to the confusion about how the various flows here work, so that worked example is becoming more and more crucial. I come back to the principle that I raised before: recapitalisation by the industry should not bail out those who should be at risk in the case of a failure. MREL capital et cetera must surely be used up first before we take recourse to the industry. It is similar to, but slightly different from, the point we made in Amendment 17 that, again, people who are creditors of the failing bank should not be bailed out by the recapitalisation in the event that it all goes wrong. It seems rather confused, so I look forward to the worked example, and I wish the Minister good luck with getting something that covers all the aspects.
Lord Eatwell (Lab)
My Lords, I was rather enjoying being characterised as an old-fashioned central banker, until the noble Baroness, Lady Bowles, attributed to me to me the idea that selecting from whichever pot would be entirely at will, so to speak. I add my support to what the noble Lord, Lord Vaux, just said: in a recapitalisation, shareholders and MREL must clearly be used first, and FSCS money used simply when those pots have been exhausted.
Baroness Vere of Norbiton (Con)
My Lords, I simply make the same point. The noble Lord, Lord Vaux, was absolutely right to summarise the principle which I think all noble Lords on the Committee feel is the purpose of the Bill. There cannot be any circumstances by which there is MREL or whatever it might be left, yet money is going in from FSCS to ensure the resolution of the bank. I cannot see any circumstance in which that would happen—perhaps Treasury officials would be able to think of one—but I think all noble Lords are agreed on the need for some clarity on what would happen.
I appreciated the comments from the noble Baroness, Lady Bowles. I got about 60% of them, so I was really proud of myself; the other 40% went way over my head. I am going to try to understand her points. We are in quite a difficult situation, but the way that she has been so forensic about it has allowed the noble Lord, Lord Vaux, to state what the principle is. It is about combining those two things—the forensic attitude to “This is what the Bill could say if read in a certain way” versus “Just tell us whether the Bill abides by the very simple principle that basically FSCS money should be a last resort, not there for anybody else, but just to prop up a bank to make sure it gets through to the other side of resolution, for the public interest and no more”.
Lord Livermore (Lab)
My Lords, in response to the amendment tabled by the noble Baroness, Lady Bowles, I reassure her that the Bill does not seek to introduce measures to bail out shareholders. I note that she raised concerns about this point on the first day in Committee, about which I am about to write to her. I hope my response will provide the clarification she is seeking pending that letter and the worked examples that we have discussed.
The amendment relates to a subsection of the Bill that would amend Section 12AA of the Banking Act 2009. This sets out the definition of the shortfall amount, which is a figure calculated by the Bank of England when using the bail-in resolution tool. The shortfall amount determines how much of a firm’s resources need to be bailed in to restore its capital ratio to the extent necessary to sustain sufficient market confidence and enable it to continue to meet the conditions for authorisation for at least one year and to continue to carry out its authorised activities. The methodology for determining the shortfall amount is not changed by the Bill, and it remains the case that when using the bail-in tool a firm’s own resources and eligible liabilities—its shareholders and creditors—would bear losses.
The relevant provision is not intended as a means of reducing the amount of MREL that should be used when bailing in a firm. Instead, it is intended to ensure that, in the event the mechanism is used alongside the bail-in tool, funds from the Financial Services Compensation Scheme are taken into account and used rather than the Bank of England having to bail in other creditors further up the creditor hierarchy. As an example, without this provision, if a firm had insufficient MREL to meet its shortfall amount without being able to take into account Financial Services Compensation Scheme funds, it may need to bail in creditors, such as uncovered depositors. Retaining this provision therefore ensures that the Bank of England may exercise some discretion in not bailing in other liabilities beyond a firm’s MREL, such as uncovered deposits, where to do so might risk further destabilising the business of the firm, other participants in the banking sector or other sectors, or reducing wider confidence in the financial system. Therefore, the Government consider it important to maintain flexibility to respond to the relevant circumstances.
In this context, I also note that funds provided by the Financial Services Compensation Scheme under the new mechanism can be used to cover the costs of recapitalising the failed firm, the operating costs of a bridge bank, and Bank of England and HM Treasury costs in relation to the resolution.
It is important to note that Sections 6A, 6B and 12AA of the Banking Act 2009 require the Bank of England to ensure that shareholders and creditors bear losses when a banking institution fails. This is an important principle that will continue to apply where the new mechanism is used.
I can reassure the noble Baroness, Lady Bowles, that the regime provides an extensive and proportionate set of powers to the Bank of England to impose consequences on the shareholders of a failed firm in resolution. The bail-in tool specifically enables the Bank of England to impose losses on shareholders and to write down certain unsecured creditors. This is an important principle that ensures the firm’s owners and investors must bear losses in the case of failure.
This is of course a highly technical area, and I understand the noble Baroness’s concerns. To that end, I am happy to explore whether there is further material that the Government can make available, such as worked examples, to help illustrate how this approach may work in practice. I hope these points can reassure the noble Baroness and I respectfully ask her to withdraw this amendment.
Lord Vaux of Harrowden (CB)
The noble Lord has just confirmed the point that we talked about in Amendment 17, that there are situations where the use of the recapitalisation payment can, in effect, bail out some types of creditors. Indeed, he referred to unprotected deposits as being one area that might make sense. This is quite complex and I suspect that when we have seen the worked examples and so on, there is going to be more to discuss. Would he be prepared to meet with officials and Members of the Committee to go through these things prior to Report, so that we can make sure that we all really understand in what circumstances that that could happen and in what circumstances it cannot?
Lord Livermore (Lab)
Yes, absolutely; I will very happily meet. I will write a letter setting this out in greater detail, provide the worked examples, and then perhaps we can meet on that basis.
Baroness Bowles of Berkhamsted (LD)
I thank the Minister for his replies but I am still not satisfied, in part because of what is in the Explanatory Notes. They should be amended because they cannot stand alongside everything else that is said. I know that they have no legislative power but if we are looking for ways to interpret, they are there. The problem comes from, as I said, “shortfall”, which is defined in a way that has ambiguities. I know full well that “shortfall” was an unusual word; it did not need to be in the BRRD and was put in by the counsel—I think I know who did so because I was told to guard it with my life—for various operations that may still be needed. Now is the time to make it clear. The linkage back to it is not good.
Alongside worked examples, it would probably be quite useful to have a list of the instruments that we think are covered and those that are outside. MREL, which is loss absorption amount plus recapitalisation amount, covers common equity tier 1, other equity instruments, subordinated senior non-preferred instruments and ordinary unsecured senior instruments. It does not include repayable deposits and non-returnable deposits.
How have we ended up talking about bailing in unsecured depositors when we are talking about MREL, because they should not be there in the first place, as far as I understood things? If we cannot understand that, that is not right to put before the public. Can we have a list of the instruments that we think can be bailed in, where they are bailed in, and then the point at which in that stack the FSCS compensation can come in? Once we have worked out where that is and can see it clearly, I should be much better pleased if we could define that ab initio in the Bill rather than reference back to language that is flawed and risks either leading us up the garden path or not being able to understand it, even though I declare that I have confidence that the Bank of England will probably get it right.
It is splitting hairs, but I cannot make that wording work; I am sorry. Therefore, in hoping that I will get some more explanations, for the present, I shall withdraw the amendment, but it may well be that either this or my Amendment 22 in some form might need to reappear on Report. I beg leave to withdraw the amendment.
House of Lords
Introduction: Baroness Batters
Introduction: Baroness Harman
Royal Assent
Tuesday 10th September 2024
(3 months, 1 week ago)
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Construction Sector: Cash Retentions
(3 months, 1 week ago)
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Lord Aberdare
To ask His Majesty’s Government what plans they have to end the practice of cash retentions in the construction sector.
The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Baroness Jones of Whitchurch) (Lab)
My Lords, I pay tribute to the work of the noble Lord in championing this issue so successfully over the years. The Government are committed to amending the Reporting on Payment Practices and Performance Regulations 2017 to require firms to report on their policies and provide key metrics in relation to retentions. We intend to introduce legislation for this in 2024. We will consider whether further action on retentions is needed to deliver our manifesto commitment to tackle late payment.
Lord Aberdare (CB)
My Lords, I am grateful to the Minister for that response. Cash retentions—withholding payments due to subcontractors for work done, often for an unreasonable period of time, or indeed for ever—have a highly damaging impact on the ability of small construction firms to invest, expand or even survive, and create pressure to cut corners on quality and safety. The Grenfell report is a shocking reminder of where that can lead.
There is a long-standing goal of ending retentions by 2025—I welcome what the Minister has said about the implementation of the reporting requirement—and widespread industry recognition that legislation is needed to achieve this. What plans do the Government have to introduce such legislation, thereby freeing thousands of construction SMEs to play their full part in delivering the Government’s housebuilding goals?
Baroness Jones of Whitchurch (Lab)
My Lords, we are prioritising bringing forward the statutory instrument to amend the Reporting on Payment Practices and Performance Regulations this year, with the aim of it coming into force in 2025. This will require large firms to report twice per financial year on their policies in relation to retentions, including standard terms for holding retentions and metrics in relation to payment performance for retentions. We believe that this information will be most useful to small firms in the supply chain, and this legislation was developed in conjunction with firms in the industry and their representative organisations.
Baroness Thornhill (LD)
My Lords, this pernicious issue, interestingly, is not covered in the Government’s construction playbook, which sets out exactly how public works projects are to be assessed, procured and delivered. Indeed, a number of government departments and arm’s-length bodies continue to use retentions themselves. So would it be a good first step for this new Government to put their own house in order as soon as possible?
Baroness Jones of Whitchurch (Lab)
The noble Baroness makes an important point about public procurement. There are steps that we can take to progress on this issue; it is a manifesto commitment that we will do so. Obviously, we will consult before we introduce any further legislation, but we are committed to reviewing our policies on this issue, to enable more smaller firms to be able to access public contracts.
Lord Johnson of Lainston (Con)
My Lords, late payments in the construction sector hold developments back significantly, which hinders progress on the delivery of new homes. The previous Government took strong action on this and published a payment and cash flow review in November 2023. What assessment have the Government made of the impact of cash retention on housing delivery, and will the Minister commit to continuing the excellent work of the previous Government to tackle this issue?
Baroness Jones of Whitchurch (Lab)
As the noble Lord has said, there have already been some changes made to this and we are following that up to introduce further changes. We will be addressing the value of payments and the level of invoices not paid because of disputes, but there is more work to be done on this and enforcement is obviously part of that. DBT has already written to 416 large companies not complying with the payment performance reporting requirements and 45% of firms written to have come into compliance. We have further follow-up action to make sure that those further transgressions are being addressed.
Baroness Donaghy (Lab)
My Lords, I often think of Lord O’Neill of Clackmannan, who was a great champion of this issue, and I pay tribute to the noble Lord, Lord Aberdare, for following in his footsteps. Does the Minister agree with me that the present proposals do not get rid of the plain abuse of power that happens in subcontracting and contracting in construction? Late payment leads to bankruptcies in small and middle-sized firms and is part of the difficulty across the whole of the construction industry that leads to cutting corners in safety—and we have seen the results of that over many years. Does she agree that Lord O’Neill and the noble Lord, Lord Aberdare, who have been fighting for this for years, have been looking for something a bit more concrete?
Baroness Jones of Whitchurch (Lab)
My Lords, as I have said, it is important that we seek the views of industry on any reforms. We will take further action and obviously we will welcome the views of Members of this House, as well as the construction industry, as part of that process. The noble Baroness and other noble Lords have talked about safety and we are acutely aware of the situation with the Grenfell Tower final report, which highlights the systemic failure of institutions and individuals to ensure building safety and the safety of construction products and materials. My honourable friend the Parliamentary Under-Secretary of State for Building Safety and Homelessness tabled a Written Statement on 2 September that commits the Government to a system-wide reform of the construction products regulatory regime. Those reforms will take account of the recommendations of the Grenfell Tower inquiry.
Baroness Lawlor (Con)
My Lords, I thank the Minister for her replies so far. On her last answer, what proportion of businesses and organisations will be small or will represent small contractors and businesses in this trade? It is they who suffer most, which, as noble Lords have said, can lead to bankruptcies. If you are stuck with payments to make yourself for materials and supplies and you have not been paid by the overall contractor, you may go out of business. It is very important to bear in mind that we should give higher emphasis to the smaller contractors and businesses.
Baroness Jones of Whitchurch (Lab)
The noble Baroness is right that the smaller businesses are getting squeezed at the end of the supply chain, but we are already making progress with the steps that have been taken, which will continue with the new regulations that we will introduce. There have already been improvements in payment performance since 2018: for example, the average time to pay invoices has come down from 45 to 32 days. We are doing this on a step-by-step basis and we are working with industry—the construction sector—to make sure that this is what people want and truly effective.
Lord Aberdare (CB)
My Lords, the Minister mentioned taking the views of industry. The Government have been taking the views of industry since the completion of their consultation in 2020. The reason that they have not come to a conclusion is that there is no consensus with the industry. I greatly miss the contributions of Lord Stunell, who described seeking a consensus on this issue as being like asking lions and lambs to sit down together and agree on a menu for tea. There is no consensus between the larger and smaller firms, which is why the only solution seems to many in the industry to be legislation. Reporting is all very well, but it will not solve the problem on its own.
Baroness Jones of Whitchurch (Lab)
My Lords, we have been working to resolve the problems associated with cash retentions through the Construction Leadership Council. As the noble Lord said, there are a wide range of views across the sector about the use and problems associated with retentions and how they might be addressed. Many in the industry are in favour of reform and are now calling for a legislative ban, in the way that the noble Lord described, but any policy solution must be sustainable and work for the whole of industry and its clients, addressing both the surety and fair payment issues that are thrown up.
Lord Pannick (CB)
Does the Minister acknowledge that the vice of late payments is not confined to the building industry? Do the Government have any plans to address this mischief more broadly?
Baroness Jones of Whitchurch (Lab)
Yes, my understanding is that the changes that will be introduced are not to affect only the construction industry. Certainly the late payments legislation that we are working on will be across the board and not specific to the construction sector.
Whitehall: Prioritising Performance
(3 months, 1 week ago)
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Lord Farmer
To ask His Majesty’s Government what assessment they have made of the report, Making the grade: Prioritising performance in Whitehall, published by Reform on 1 May; and what steps they are taking in response.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
His Majesty’s Government remain committed to attracting and retaining the most talented people to build a highly skilled and capable Civil Service. The recommendations contained within the Reform report are detailed and wide-ranging. Time is being taken to consider carefully all the recommendations. A number of activities are under way to continuously improve how talent recruitment and performance are managed.
Lord Farmer (Con)
My Lords, I thank the Minister for that encouraging reply. Reform emphasises the need for greater cognitive diversity in the Civil Service and a clear route for public service-minded and exceptionally talented applicants without a specific role to apply for. Will the Government set up a mid-career fast stream to bring in high-flyers experienced in other ways of working to help break the groupthink? Similarly, using “behaviours” in success profiles favours internal candidates, so will the Government scrap this and assess instead on skills and experience?
Baroness Twycross (Lab)
Success profiles provide a common framework for recruiters to assess the key attributes for roles, including skills and experience. Behaviours are not compulsory. The Government People Group is due to review the content and application of, and support for, success profiles in 2025 as part of continuing work to improve the quality and openness of recruitment. The Government are reviewing the options for a mid-career scheme as workforce demands in the next spending review are established. Many roles are open to external recruitment at all grades, with talent schemes such as the Future Leaders Scheme available to support rapid progression through to more senior levels. Regarding diversity of thinking, currently around 10% of those on the Future Leaders Scheme declare as neurodiverse.
Lord Butler of Brockwell (CB)
My Lords, having discovered that, in this context, Reform is a think tank rather than a political party, I warmly welcome the recommendations in the report for the identification and development of talent in the Civil Service. Does the Minister agree that the Civil Service is more likely to respond to positive and constructive leadership than to the scapegoating and bad-mouthing from which it too frequently suffered under the last Government?
Baroness Twycross (Lab)
I thank the noble Lord for his clarification that this is the think tank, which might have been a useful clarification as a first point. The report looks at brand issues, and there is a quote within the report that the Civil Service brand is “battered”. One of the things that the report makes very clear is that, as a Government, we need the best people to get the best results for the country. In Keir Starmer’s message to the Civil Service on his succession to the role of Prime Minister, he made it clear that he knew how much civil servants believe in what they are doing for the country, and he said that they had taught him a great deal about what public service really means.
Baroness Foster of Aghadrumsee (Non-Afl)
My Lords, one of the recommendations in the report is on the need for better succession planning for key roles and the need to keep an updated list ready for recruitment exercises. I urge the Minister to give due regard to this recommendation. This comes from my own experience with the Northern Ireland Civil Service. When you have a key person in a role performing an excellent job and he or she leaves, it can leave a huge gap, so this recommendation really is something to take on board.
Baroness Twycross (Lab)
All of us have probably come across points at which people are treated as almost indispensable. Part of the value of people stepping back and having a report of this kind is that we can focus on what those critical single points of failure are. I will feed back the noble Baroness’s comments to the relevant Minister.
Lord Wallace of Saltaire (LD)
My Lords, the Minister mentioned that retention of the exceptionally talented is a problem. I have been distressed in the last five years to discover that some of the most talented civil servants I worked with in the coalition have given up and left the Civil Service, partly because of the rapid turnover of Ministers, partly because of the way in which some Ministers treated their officials, and also because a number of Ministers always seemed to prefer advice from consultants to that from civil servants. In that context, can the Minister explain why the Government have just given—perhaps she inherited the idea from her predecessor—a £200 million contract to KPMG to train civil servants? To my knowledge, KPMG is not particularly expert in training governmental officials, and it would be much cheaper and more effective to ask the university sector to train civil servants instead. I declare an interest as I used, as a university academic, to train civil servants.
Baroness Twycross (Lab)
This is not an issue that I have got specific details on. I will go back and ask about it, but I assume that this would have been subject to a pretty rigorous procurement process.
Baroness Neville-Rolfe (Con)
My Lords, the Reform report feels HR led. While I agree with some of the recommendations, for example on the induction of outsiders, I know from my experience in business, as well as in Whitehall, that this is not the route to success. In a sense, the fewer HR directors there are, the better the policy and outcomes. What the report does not bring out is that public sector performance has been very disappointing in certain areas, particularly following Covid. Important services like probate, driving tests, property registration and tax collection are all lamentably slow. This is in stark contrast to the private sector, where you go bust if you do not serve the customer and manage well; you will not be sustained. In that context, does the Minister agree that rewarding the public sector with a huge pay rise and bigger pensions, without any link to productivity improvement, has been a real missed opportunity? This is the chance we have to help the public services, which I very much support, to improve themselves.
Baroness Twycross (Lab)
I previously quoted the report as saying that the Civil Service brand is “battered”, and part of our reset as a new incoming Government must be to reset the relationship between the politicians and civil servants. All of us fortunate enough to come on to the Front Bench have been incredibly well supported over recent weeks and months by the Civil Service. I also do not think we should get into a battle about private sector good or private sector bad, or public sector good or public sector bad—that does not serve any of us well.
Lord Maude of Horsham (Con)
My Lords, the Minister will be aware that concerns about a lack of rigorous performance management in the Civil Service, which is not unique to the British Civil Service, have been around for decades. While valiant attempts have been made by Ministers on both sides and by officials to remedy this, where there has been success, it has not been sustained. Will she accept, from one of those who has tried, that this will never be achieved on a sustainable basis until there is a dedicated full-time head of the Civil Service who has a proven track record of system leadership and a real mandate from the Prime Minister, with his statutory power to manage the Civil Service, and who is held accountable to an independent body, which could be a strengthened Civil Service Commission that reports to Parliament? Until then, we will continue to be in a position where the only organisation that looks at the internal workings of the Civil Service is the Civil Service itself.
Baroness Twycross (Lab)
As a relatively new Minister, I need to reflect on the noble Lord’s experience; he makes some very interesting points. I will look into the points he raised and get back to him if that is acceptable?
Baroness Symons of Vernham Dean (Lab)
My Lords, can my noble friend expand a bit further on what the role of KPMG is in this as regards the senior service? I declare my interest as a former graduate in the Civil Service and as a former general secretary of the First Division Association. It would be very helpful if the Minister could be more specific about the role that KPMG is undertaking.
Baroness Twycross (Lab)
I will look into the role of KPMG further and I will revert to my noble friend on that point.
Autism Employment: Buckland Review
(3 months, 1 week ago)
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Lord Touhig
To ask His Majesty’s Government whether they intend to continue the work programme set out in the Buckland Review of Autism Employment.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Sherlock) (Lab)
My Lords, we believe everyone should have an equal opportunity to work. In Labour’s Plan to Make Work Pay, we committed to raising awareness of neurodiversity in the workplace. The Buckland review was independently led and explored the specific barriers that people with autism face when seeking employment and remaining in work, and it made some helpful recommendations to remove those barriers. We are exploring how to expand this to meet our commitment to provide the right support for all neurodiverse people to enter, remain in or return to employment.
Lord Touhig (Lab)
My Lords, just three in 10 autistic people are in employment. A report for Autistica found that doubling the employment rate of autistic people could boost the economy by £1.5 billion. I am sure that my right honourable friend the Prime Minister, whose key mission is to kick-start economic growth, would welcome that. The Buckland report showed us a way forward, but recruitment of the task force to put forward the recommendations of the report was put on hold when the general election was called. Can the Government confirm that they will now go ahead and commence the recruitment?
Baroness Sherlock (Lab)
My Lords, my noble friend is absolutely right about the shockingly low level of employment of autistic people. It is shocking to find that only about 35% of autistic employees feel able to be really open in work about being autistic—how can they develop, and how can the employers learn? We very much welcome the report from Sir Robert Buckland. The process had begun, in the sense that informal expressions of interest had been made about the task force, but the process was stopped by the general election. Ministers are meeting with Sir Robert Buckland next month to discuss the report’s recommendations and to look at expanding the scope to cover neurodiversity in general and not just autism. Recruitment for the task force is paused for the moment, but my department is working with colleagues across government to look at each of the recommendations under the five themes and to find ways in which we can apply that learning to neurodiversity in general.
Lord Wigley (PC)
My Lords, I pay tribute to the work that Sir Robert Buckland has undertaken in this sphere over many years. Can the Minister give any indication of how long the Government are likely to take to come to some positive conclusions regarding the report?
Baroness Sherlock (Lab)
My Lords, obviously, having only just come into government, we have only just begun to look at this, but there are things in the report that the department was already doing that we can therefore develop. For example, the review pointed to the need to develop a digital service we have that is aimed at employers and supports employee health and disability. We are looking at other ways to make that more visible and easier to reach, because employers often want to engage people but need help in understanding the barriers so they can work out how to get better at this. We can start learning from that already, but we will move on to this as fast as we can.
Lord Addington (LD)
My Lords, what are the Government doing about passporting when those identified in the education sector and training go into employment? If you have to reapply for support and help at any point, that puts on a further brake and, as this is not generally handled easily and quickly, it means the employer has extra costs. What are the Government doing in practical terms to address this? I remind the House of my declared interests.
Baroness Sherlock (Lab)
My Lords, I confess that I have learned a lot about this in the last week. There is a huge range of schemes and support out there. For example, DWP has specialist coaches—people who can support our work coaches and work with people with autism who want to move into jobs or develop them. We have schemes of all kinds, such as internship schemes for young people with autism and other disabilities. We have ways of working directly with people and supporting them. We have schemes with employers, and there is Access to Work, through which people can apply for support directly. DWP is trying to make all the work we do as tailored as possible to individuals, so that we can give people the support they need to get them into a job, keep it, progress in it and stay there.
Viscount Younger of Leckie (Con)
My Lords, the previous Government saw it as a vital priority, on the back of the key recommendation from the Buckland review, to work with employers to encourage more employment of autistic people, which has been mentioned. How will the Government’s recent decision to change the PIP and WCA assessments under the new Health Assessment Advisory Service affect such progress, particularly as the Minister’s letter of 6 September states that there will be “an impact on service levels”?
Baroness Sherlock (Lab)
My Lords, as I took over as Minister from the noble Viscount, I am sure that he is quite aware of the contracting issues that led to the decisions that were made in the department.
Probably the single most important thing when dealing with somebody with autism or another disability coming forward is that the person who assesses the health condition is properly trained and has the resources needed to make an appropriate assessment. As of yesterday, we have brought the educational material for all our healthcare assessors in-house, so that we can control the quality, make sure we train people well and support them well, so that when they are making these important decisions about whether someone is entitled to support or not, they are able to understand what they are hearing, and the person can come forward and get the best possible support at the next stage. We are committed to supporting disabled people of all kinds into work, and we will make that a reality.
Baroness Bull (CB)
My Lords, I appreciate that I may be expanding the Question into the remit of her noble friend sat alongside her. Work experience is a vital window into the world of work for people with learning disabilities and autism, yet I am not sure we can be convinced that young people with such disabilities have the same experience of work through work experience programmes. What will this Government do to help employers provide work experience placements and to encourage them to offer this opportunity to all children, regardless of neurodiverse conditions?
Baroness Sherlock (Lab)
My Lords, I confess that I do not have the details about what is being done about work experience, but we are developing the availability of supported employment, including for autistic people and those with other neurodivergent conditions, and across other disabilities. We are trying to tackle the problem of hidden worklessness. The idea is that we will start progressing towards the goal of a more collaborative, locally led approach to help people into work. Once it is fully rolled out, the aim is to support up to 100,000 disabled people, including people with health conditions and quite complex barriers. Eligible and suitable participants will get one-to-one support for up to 12 months, which will help them identify what they want to do, find a job that might be suitable, and get wraparound support. If we can get this right first time, we can support people to stay in work for a long time. That is a real benefit to the individual, and to the employer. I am hopeful that we can improve in this area over the months ahead.
Lord Sterling of Plaistow (Con)
My Lords, over many years I and many others have said that when people are being trained to teach, we also need them to be trained to know what a meltdown is about and how to handle it. There are still not enough people who truly understand SEND and what really happens. I am more than interested in this because I have a grandson who is autistic, and I have followed this through many times. We need at least 2,000 educational psychologists to identify people at an early enough stage that they have an opportunity to put something back into society. The whole thing must be sped up. I know many people who are disabled—through Motability, which I co-founded many years ago—who would be delighted to be able to put something back into society after having been helped for so many years.
Baroness Sherlock (Lab)
I thank the noble Lord for that question, and I pay tribute to his many years of work with Motability, a scheme which has helped many people. He makes an important point. I sometimes think that our system has had trouble, in that what looks like bad behaviour is in fact something quite different. One of the challenges for public sector professionals in all areas is to get the kind of training to understand what they see in front of them. If we do not have the experience or understanding, it is not unreasonable to misinterpret a pattern of behaviour we see. That is why DWP has put so much effort into trying to improve and develop the training. In any organisation, if we take the time to ask, we will find that many of our staff have relevant experience to bring and to share with their colleagues. I have no doubt that similar work is being done elsewhere. I know that my colleagues at the Department for Education are looking carefully at how the Government can better support SEND and children who are in that position.
I thank the noble Lord for that question—it is an important opportunity to highlight something about which there is too much misunderstanding. Many of the conditions we have talked about today are highly stigmatised. It is hard enough for people to deal with the consequences of a complex condition, without a total failure of the society around them to understand it.
Lord Laming (CB)
My Lords, does the Minister agree that the transition from school to employment is critical in the lives of many of these young people; that there are some outstanding examples of how that transition is being managed, but, unfortunately, they are few in number; and that the real challenge is to make sure that what is exceptional becomes general across the whole country?
Baroness Sherlock (Lab)
My Lords, it is typical of the extent of the noble Lord’s strategic experience that he puts his finger on the question: how do we take best practice and turn it into something the entire system can learn from? We have some really good practice out there. For example, I know that autistic young people on their transition to employment can benefit specifically from supported internships, which are aimed at young people with a learning disability or autism who have an education, health and care plan. One of the things we could do is look at what works from that and how we can learn from it, and transfer it not just to other young people with autism but to a broader category of disabled young people trying to make those transitions. I thank the noble Lord for that very wise suggestion.
Pharmacies: Rural Areas
(3 months, 1 week ago)
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The Lord Bishop of St Albans
To ask His Majesty’s Government what plans they have to ensure that pharmacies are accessible to those living in rural areas.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Baroness Merron) (Lab)
My Lords, pharmacies are key to our plans to make healthcare fit for the future, as we shift healthcare out of hospitals and into the community. We will expand the role of pharmacies, including the introduction of prescribing services. People’s experiences of accessing pharmacies differ across the country; we will look closely at this. There are dispensing doctors in areas where pharmacies are not viable, and online pharmacies delivering medicines free of charge to patients.
The Lord Bishop of St Albans
I thank the noble Baroness for her response. However, analysis by the Independent Pharmacies Association has identified a £1.2 billion funding gap in this sector, which is leaving, in particular, pharmacies in rural and deprived areas very vulnerable indeed, at the very point when, as she said, we are looking for them to deliver more services. Given that 90% of their income comes from the NHS contracts and that most are unable to fill the funding gap through a retail outlet, what else can His Majesty’s Government do to ensure that we have adequate coverage in rural areas?
Baroness Merron (Lab)
I take on board the point that the right reverend Prelate makes. The analysis to which he refers shines a light on the fact that funding for community pharmacies was either cut or held flat over the last eight years, which amounted to a funding cut in real terms of some 28%. We are seeing the result of that. It is also worth saying that the consultation with Community Pharmacy England on the national funding and contractual framework arrangements for 2024-25 was not concluded by the previous Government, so I can say to your Lordships’ House that we are looking at this as a matter of urgency. We look forward, through my colleague Minister Kinnock, to how community pharmacy can be best set to deliver on the ambitions that I have already outlined.
Baroness McIntosh of Pickering (Con)
My Lords, I refer to my role with the Dispensing Doctors’ Association; I am grateful to the Minister for paying tribute to it. The right reverend Prelate identified the problem of having equal funding in urban and rural areas, where the dispensing doctors she identified fulfil such a crucial role. Can she give the House a commitment that sufficient funds will be made available in the negotiation of the GP contract so that all the services that are available in urban areas will also be available in rural areas?
Baroness Merron (Lab)
I know that the noble Baroness understands that there are some services which cannot be provided—for example, online services do an excellent job, as do dispensing doctors, but although I regard the online option as a very creative one that I would like to see expanded further, there are some things that require in-person attention and that will not be possible. We of course take account of situations across the country, in all the discussions, and that includes rural areas.
The Earl of Devon (CB)
My Lords, I am chair of the Plunkett Foundation’s inquiry into the state of rural retail, in particular the loss of wholesale supply chains essential to the survival of rural communities. Will the Government please undertake to review this highly discriminatory circumstance, which hits the rural poor the hardest?
Baroness Merron (Lab)
I will be very happy to look at the work that the noble Earl refers to. If he would like to meet me to discuss it, I am sure that would be of great assistance as we look to the future.
Lord Scriven (LD)
My Lords, there is a crisis in community pharmacies, as the Minister will know. Two weeks ago, the industry brought out a report that predicted that one in six community pharmacies could close within the next year. What urgent action will the Government take to ensure that that does not happen?
Baroness Merron (Lab)
On the point that the noble Lord correctly raises, it is worth reflecting that there has already been a reduction in the number of pharmacies since 2017. There are now some 1,200 fewer pharmacies than we had in 2017 and 600 fewer than there were two years ago. This is a trajectory that we would rather was not the case. Support is available—for example, through the Pharmacy Access Scheme, which provides financial support to pharmacies in areas where there are fewer pharmacies. I can say that we are monitoring access to pharmacies. While it is the case that four in five people live within a 20-minute walk from a community pharmacy, we absolutely recognise that the experiences of patients differ. If we are to see pharmacies as key to future plans for the health services, we will have to address that.
Lord Kamall (Con)
My Lords, we recognise that the current access to healthcare is based on an outdated model, where far too many patients are unable to book GP appointments online or by telephone in advance. They have to join the 8 am lottery to try to get an appointment by phone, only to be referred later to a pharmacist or hospital. The Pharmacy First reforms introduced by the last Government attempt to unblock the GP surgery bottleneck by allowing patients to access treatment for common health conditions without the need for a GP appointment. To ensure that patients in rural communities equally benefit from the Pharmacy First initiative, is the Minister able to give the House a firm commitment that the Government will continue the Pharmacy First approach and look at how this could be accessed by more patients in rural areas?
Baroness Merron (Lab)
I am pleased to say that, as I am sure the noble Lord is aware, prescribing pilots are going on in NHS England. These will look at what more pharmacies could do in this regard, in particular asking whether more minor illnesses could be dealt with, and whether the long-term management of conditions could be better managed through pharmacies. We will be very interested in what those pilots come up with. They are across the entire country, so will of course include rural areas. This is something that we will want to ensure is available in rural and urban environments.
Baroness Blackwood of North Oxford (Con)
My Lords, the Commons Health and Social Care Select Committee pharmacy inquiry found that, while most medicines are in good supply, medicines shortages have doubled since 2021. This means that pharmacists spend time dealing with medicines shortages every day—some as much as four and a half hours. The committee recommended an independent review into how to improve resilience of the medicines supply chain, including looking at pharmacists’ prescribing. Will the Minister commit to this, and if not, what will she do to improve the situation?
Baroness Merron (Lab)
The noble Baroness makes a good point about the shortage of medicines; this has been raised many times in your Lordships’ House. I will ensure that my colleague Ministers are aware of the points raised today, to build these into our consideration of how we support pharmacists and pharmacies to continue to do a good job and, indeed, expand their remit.
Lord Foulkes of Cumnock (Lab Co-op)
Does the Minister agree that part of the problem around access to rural pharmacies is the massive deterioration of bus services under the previous Government? Since our Government are going to give powers to local councils to run bus services more efficiently and effectively, will that not improve access to local rural pharmacies? Can the Minister ensure that that is done as quickly as possible?
Baroness Merron (Lab)
I welcome the announcement by the Secretary of State for Transport about ensuring that bus services can be more readily available, which will assist access to pharmacies. However, there are other options that we need to continue to look at. For example, there are 400 distance-selling pharmacies that deliver medicines which they dispense free of charge to patients, and provide other pharmaceutical services remotely, and, as we know, GP practices can dispense medicines to their patients. I mention those as examples of more creative ways in which we can support people in rural areas.
Lord Swire (Con)
Another creative way is to locate some of these pharmacies where we still have community or cottage hospitals up and down the country, which has been done successfully. Will the Minister therefore undertake to look at where this is common practice to see if it can be expanded?
Baroness Merron (Lab)
All these creative approaches will be considered as we look at what we will be doing to ensure that pharmacies are key to delivering on improved healthcare across the entire country.
Crown Estate (Wales) Bill [HL]
Tuesday 10th September 2024
(3 months, 1 week ago)
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Universal Credit (Standard Allowance Entitlement of Care Leavers) Bill [HL]
Tuesday 10th September 2024
(3 months, 1 week ago)
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Royal Albert Hall Bill [HL]
(3 months, 1 week ago)
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The Senior Deputy Speaker
To resolve that the promoters of the Royal Albert Hall Bill [HL], which was originally introduced in this House in Session 2022-23 on 23 January 2023, should have leave to proceed with the Bill in the current Session according to the provisions of Private Business Standing Order 150B (Revival of bills).
Baroness Hayter of Kentish Town (Lab)
I want to say a few words before we move to accept the Motion, which I fully support. It is right that the House knows a bit of the background. This appears as an unopposed Bill, but in fact objections were submitted to it so an Opposed Bill Committee was set up, on which I had the privilege to serve for the first time under the chairmanship of the noble and learned Baroness, Lady Hale. However, when we met, the Bill’s promoter, the Royal Albert Hall, contested the bona fides of the objectors to have any say, as they did not meet the very narrow definition in our rules of who has the right to be heard on a private Bill. The surprise—to me, at least—was to discover that the general public had no right to be heard.
To some extent that is mitigated by the Attorney-General’s duty to put his or her view to the Opposed Bill Committee. In this case, the then Attorney-General expressed considerable disquiet about elements of the governance of the Albert Hall, as had the Charity Commission on a number of occasions, but she found no compelling reason to object to the Bill subject to the removal of the most contentious clause, which would have increased the number of privately owned seats whose owners would then be entitled to vote at general meetings and to elect members of the charity’s council.
On the issue of procedure, rather than the merits of the Bill, our Opposed Bill Committee was forced to conclude that the objectors did not meet the somewhat strict criteria as to who could have their voices heard. Thus the objectors effectively disappeared, and with them the rationale for our committee, which was promptly dissolved as the Bill became an unopposed Bill and went straight to an Unopposed Bill Committee, which comprised the Senior Deputy Speaker sitting with counsel.
On 22 May he heard from representatives of the Albert Hall and agreed the Bill as amended by the removal of the contentious clause, which would have increased the number of privately owned seats that the owners can sell on the open market for performances. On that very day, but before the Bill had the chance to return to your Lordships’ House for Third Reading, the election was called. The Motion before the House today is to permit the Bill to continue on its passage rather than start de novo. If agreed—and I hope it will be—there will be a Third Reading on a date yet to be set.
However, in the light of the debate in the then Opposed Bill Committee, led by the noble and learned Baroness, Lady Hale, its membership decided to draw the wider matter to the attention of your Lordships’ House by way of a special report published on 25 April. This allowed us to put before the House the part of the Attorney-General’s letter that expressed her
“disappointment that the Bill is not more ambitious”
and does not deal with the potential conflict between the private interests of seat-holding trustees and the hall’s charitable objectives, an issue of concern to the Charity Commission. The Attorney-General had earlier urged the hall to resolve these conflicts, hence her regret that the Bill did not do so.
However, the Attorney-General cannot insist on changes to the Albert Hall’s governance, and it is refusing to make the changes desired by the Charity Commission and others—an “impasse”, as our committee noted. Today is the only opportunity for the committee to have these voices heard, which is why I am standing today. We concluded that
“these matters should be drawn to the attention of the House and of the Government”,
including at further stages of the Bill,
“so that a way forward can … be found to address the concerns raised”
by the then AG.
As we said:
“The Royal Albert Hall plays an iconic part in the life of the nation and there is a strong public interest in ensuring that its governance”
is
“consistent with its charitable status”.
That matter is not one for debate today, and I hope the Motion will be passed for the Third Reading of the Bill to take place. I have been advised that there is no Report stage—the amended Bill is, in fact, the report—and the Bill will come to your Lordships’ House for Third Reading on a date to be agreed.
I thought it right to bring the matters raised by that committee to the attention of the House today, but I hope noble Lords will support the Motion.
Lord Hodgson of Astley Abbotts (Con)
My Lords, I had the pleasure of sitting and watching the noble Baroness’s committee in action over a lengthy period, and perhaps I may take up the story. I was not a member of the committee, but I have had a long-standing interest in the affairs of the Royal Albert Hall. I, along with other Members of your Lordships’ House, am very concerned about the central problem of the governance of the Royal Albert Hall—not the operation of the hall, which is a great cultural institution, as the noble Baroness said, but the way it operates.
The group of which I am one is a cross-party group. There is no party-political angle on this; all parties agree that it needs careful further examination, as the noble Baroness said. No less significantly, we are supported in our endeavours by the Charity Commission, the sector regulator, which has been trying for some years to get the Royal Albert Hall to consider, reflect on and address this problem, so far without success.
The Royal Albert Hall has been a charity since 1967. A central tenet of charity law is that you should not benefit personally from the decisions you take as a trustee of a charity. The hall has a governing body of 25, 19 of whom—three-quarters—are seat-holders. It is they who decide which concerts the seats are to be retained for. They may then either use the seats personally or sell them externally for whatever price the market will bear. It has become an exceptionally profitable activity. For example, Members of your Lordships’ House might like to attend this Saturday’s Last Night of the Proms, for which they will pay up to £1,000 for a £100 ticket. If your enthusiasm takes you to want to buy a seat, which will have another 700 years to run on the lease, they are currently selling for about £300,000 each. This is a charity.
The Bill before us, which we will discuss in detail later, will not address any of these issues. In fact, some argue it will make them worse. So, the group of which I am a member will be tabling some amendments for discussion, to address the issues, as far as we can, within the provisions of the Long Title of the Bill, at Third Reading.
To conclude, I am astonished that the promoters of the Bill have decided to bring it back. It received an exceptionally rough ride at Second Reading on 19 October last year. The then Attorney-General in her report on the Bill expressed disappointment that more had not be done to resolve the conflict issue in this new Bill. As the noble Baroness said, our own in-house committee reported extremely unfavourably on the way the proceedings were handled. Those arguments are for another day, but in nodding the Bill through, I would like the House to be aware that a significant number of your Lordships are very concerned about what lies behind it.
The Senior Deputy Speaker (Lord Gardiner of Kimble)
My Lords, I am most grateful to the noble Baroness for her contribution and for informing me beforehand, and to the noble Lord, Lord Hodgson of Astley Abbotts, for doing so also. For private Bills, a revival Motion is a standard practice at the beginning of a Session where a carry-over Motion could not be passed at the end of the last, as set out in Private Business Standing Order 150B. The Bill passed a number of stages in the last session. The remaining stage in this House is Third Reading. Should Members wish to debate or object to the Bill, the appropriate time to do is, as has been advised, at Third Reading and on the Motion that the Bill do now pass and, as I think has been accepted, not on this Motion.
To assist noble Lords ahead of Third Reading, paragraphs 9.53 and 9.54 of the Companion state that any amendments proposed to be moved at Third Reading must be submitted at least two days in advance of the stage to my office or the Private Bill Office, and that it is a courtesy that any noble Lord who wishes to speak without proposing amendments notifies my office of their intention to do so. Such remarks should be made on the Motion that the Bill do now pass, not on the Motion for Third Reading. With those housekeeping matters for future stages, I beg to move.
Government Policy on Health
(3 months, 1 week ago)
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Lord Kamall (Con)
My Lords, the Minister will know that there have been concerns over Labour’s appointment of donors and party apparatchiks with little or no experience to senior Civil Service positions, which have led the Civil Service regulator to launch a review into Labour appointments.
I accept that this case is different. We understand that the Secretary of State is new to the role and inexperienced. We also know that Alan Milburn brings a huge wealth of experience in healthcare both in government and from personal consultancy, advising one of the largest providers of residential care for older people. I have also seen reports that he is a senior adviser on health for a major consultancy firm. I want to be clear, this is valuable experience and I applaud the Government for seeking such experience in the same way that noble Lords welcomed the appointment of the noble Lord, Lord Robertson, to review defence capabilities.
However, I am sure the Minister will also recognise the issue of real or perceived conflicts of interest—something that Labour Peers rightly questioned Ministers on when we were in government. So, in that spirit, I will ask the Minister a few questions about how the Government can look at potential perceived conflicts of interest and how they will be managed. Given Mr Milburn’s consultancy interests, can the Minister tell us what his formal role is? Is it a paid role and, if so, how much does he earn? Which meetings does he attend? Does he attend meetings without Ministers being present? Are notes taken for these meetings? How do the department and the Government ensure that he does not have access to commercially sensitive documents that could be of interest to his clients?
If the Minister cannot answer all these questions, I ask her to write to me and other noble Lords with answers and place a copy in the Library. Let me be clear, I completely understand why the Secretary of State appointed Mr Milburn—due to his experience in government and the private sector. It is valuable experience, from which a new Government could learn. I hope the Minister will accept my questions in the spirit of ensuring that the conflicts of interest are managed and there is real accountability, so that the Government can get the best out of Mr Milburn in his new role.
Lord Kennedy of Southwark (Lab Co-op)
Before the Minister responds, I make it clear that these should be questions, not speeches.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Baroness Merron) (Lab)
My Lords, to set out some key points in respect of the right honourable Alan Milburn, he has no formal role in the department. Therefore, the conflicts of interest the noble Lord referred to do not even arise. The main thing I would like to set out is that it is very important to make a distinction between the areas of business and meetings in the department about generating ideas and policy discussion—it is those in which Mr Milburn has been involved, at the request of the Secretary of State—and the very different meetings about taking government decisions. If I might summarise it for your Lordships’ House: Ministers decide, advisers advise.
Lord Wallace of Saltaire (LD)
My Lords, I declare a certain puzzlement at this Question. I recall, when the Conservatives were in office, reading regularly on the front page of the Times that donors had been talking to the Prime Minister or various Cabinet Ministers about government policy and expressing strong views on which direction they should take in various areas. As an academic, I am also well aware of the extent to which expertise comes into government through informal channels.
On one now famous occasion, which was not reported at the time, a number of experts on the Soviet Union whom I knew well were invited by Margaret Thatcher to an informal seminar in No. 10 to advise on whether the Foreign Office or Margaret Thatcher’s advisers were correct in their attitude to the Soviet Union. A number of the academics suggested that the Third Secretary of the Communist Party, then a man called Gorbachev, was a good person to get to know. Mrs Thatcher took their advice rather than that of her advisers and it had a remarkably positive impact on British foreign policy. Do the Government accept that all informal contact with outside experts is desirable and that it is a good thing, where possible, that it should be reported?
Baroness Merron (Lab)
It is right that people from outside government come into departments to lend their expertise and share their views and that Ministers make decisions without those people involved. That was the line I was trying to draw. The Secretary of State for Health is very fortunate to be able to turn to every living former Labour Health Secretary, from the right honourable Alan Milburn through to my noble friend Lord Reid, Andy Burnham and many others, because all of them have offered to roll their sleeves up and assist us. Perhaps I could remind your Lordships’ House that, between them, they delivered the shortest waiting times and highest patient satisfaction in the history of the National Health Service. I hope that we will be able to do justice to their experience.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, does the Minister agree that this is very different, because the Minister is taking advice from people with huge experience, and it is open and above board? This is unlike when Boris Johnson was Prime Minister, and his wife Carrie Johnson apparently made a number of decisions, including the appointment of Ministers. Was that not something we ought to be worried about, rather than this open and sensible arrangement we have now?
Baroness Merron (Lab)
My noble friend makes an important distinction, and I would certainly share that view. It is worth reminding your Lordships’ House that ministerial meetings that are attended by third parties are declared in a quarterly transparency publication in the established way. Of course, this will be done. I can tell your Lordships’ House that I had a meeting with the right honourable Alan Milburn, and it was very useful.
Baroness Finlay of Llandaff (CB)
My Lords, I should declare an interest because I was on the Times Health Commission. We took evidence from a wide range of people, including the person mentioned. Can the Minister provide assurances that, whenever people are consulted, they are routinely asked to declare their interests; that any declaration of interest is repeated not only at the first meeting but whenever other people are present so that it is well known; that the consultation goes widely; and that there is no overreliance on a small number of people? We at the Times Health Commission found that, by consulting widely, we were able to hear very conflicting views, which was helpful and formative.
Baroness Merron (Lab)
I thank the noble Baroness for sharing her experience of consulting widely. It is certainly entirely legitimate for government departments to do just that. However, those who do not have a formal role are not required to declare interests; it is different for those who have a formal role. Requiring them to do so would mean, for example, us sending forms in advance to Cancer Research UK before it comes in to talk to us about cancer and to assist us. Would we want that? We would not. Of course, where there is a formal role, we absolutely do that.
It is probably worth saying that a particularly high-profile invitation went from the Secretary of State to the noble Lord, Lord Darzi. He will report shortly on the true state of the National Health Service. He does not have a specific role in the department but he has been invited by the Secretary of State to assist; I believe that he will assist both your Lordships’ House and the other place.
Baroness Bennett of Manor Castle (GP)
My Lords, when the Green Party consults on health policy, among the organisations it consults are the Socialist Health Association, Keep Our NHS Public and 999 Call for the NHS—all organisations that are greatly concerned about the continuing privatisation of the NHS. Can the Minister tell me whether the Secretary of State or she herself have had meetings with any of those three organisations since coming into government?
Baroness Merron (Lab)
I cannot answer that, I am afraid. I would be very happy to look at it for the noble Baroness.
Lord Markham (Con)
Although I understand completely the role of advisers—obviously Alan Milburn is a very reputable adviser—where is the line? My concern is that, when an adviser has a pass, has been in meetings without Ministers present and has perhaps directed civil servants in those meetings, a line has perhaps been crossed. I would welcome assurances from the Minister that this has not occurred and that there have not been any meetings where Alan Milburn has been there without Ministers—in effect, directing policy with no formal role.
Baroness Merron (Lab)
The right honourable Alan Milburn has not been directing policy; he also has no pass. I hope that is helpful to the noble Lord.
Post Office Horizon: Redress
(3 months, 1 week ago)
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Lord Johnson of Lainston (Con)
My Lords, I thank the Secretary of State for yesterday’s Statement. It does not need to be repeated today but our team appreciated seeing a copy of it in advance. We share the view of this whole House that compensation must be delivered promptly and with minimum friction. We all, I think, welcome the new appeals process for those who have historically settled their claim under the Horizon short- fall scheme set out in this Statement. Clearly, we also welcome the implementation of the Horizon Compensation Advisory Board’s work. However, we have a few questions coming from this Statement; I am sure that some have them have been covered in the intervening period but I would be grateful if the Minister could enlighten the House.
The new appeals process will, as we understand it, be open to claimants who have settled their claims but who have new information to present. However, all of us in this House know that these processes are cumbersome and complex. The question is whether the process can be open to all claimants and not just those with so-called new information—and of course the categorisation of new information is in itself complex. To clarify, if people choose the £75,000 top-up, can they still appeal? When will the appeals process be up and running, and can the Minister confirm that those individuals will be entitled to legal representation and general support? I appreciate that we may need to be written to in response to some of those questions.
On compensation payments, can the Minister comment on the fact that, as I understand it, only six claims have been offered through the Horizon convictions redress scheme? As I understand it, no full and final settlements have been reached, which is a bit extraordinary, and we should look very closely at this. I hope that the Minister does not mind the pressure that this House will bring to bear on her to answer that question.
I also understand that only 130 letters of around 700 quashing convictions have been sent. Can the Minister comment on this? Again, that seems an extremely low number, given that we were debating this issue three months ago and the Government then were very committed to sending the letters out as quickly as possible. I am sure that we fully understand that there are some people who may be hard to contact, or there may be specific issues around communication, but this is really the wrong way around. The last Government were working with Sir Gary Hickinbottom to be appointed across all schemes to expedite claims. I am not sure whether that has been confirmed; it may have been, but if the Minister could confirm that, it would be extremely helpful.
Finally, I am afraid that it is understood via my colleagues, and the extraordinarily strong work previously done by Kevin Hollinrake in the other place in communication with the victims of this situation, that the process is being slowed—as has historically been the case but really should not be the case now—by lawyers arguing with lawyers. Are we really moving fast enough, and do we have a proper culture among the public servants of the department, and in the Post Office and the various different organisations helping to expedite this process, to ensure that we are doing the right thing as rapidly as possible?
For all Members of this House, how we deal as a nation with this disgraceful scandal will be the mark to which we will be judged. No one party, Minister or official can carry the specific blame; it really was an entire system at fault—a statist culture of bureaucratic indifference of the worst sort. I hope that the Government will continue to look into the culture that allowed these sorts of situations to arise, and particularly into the role of various government departments, civil servants and the public prosecutor’s office. Who at the top of the tree should bear responsibility for these actions, and what are we going to do, very importantly, to change the culture and the lines of the reporting?
I very much commit this side of the House—the Opposition—to work closely with the Government to make sure that we are as supportive and collaborative as possible, supporting the Minister in making sure that we get redress for the victims of this terrible tragedy.
Baroness Brinton (LD)
My Lords, I echo the comments of the noble Lord, Lord Johnson, about the Government’s Statement being very welcome and the attempt to try to unscramble some of the complexities of the scheme, but from these Benches too we are concerned about the low level of conclusion of cases, despite the process. I echo his questions about how this is being managed. Mindful that there are other inquiry redress processes that have hit problems and have had to repeatedly be redesigned, my first question to the Minister is to ask whether she is absolutely convinced that she has addressed all of them. I shall come on to a couple of specific points.
Chris Head, a former sub-postmaster who lost everything when he was wrongly accused of theft, has spoken up since the publication of the statements with some concerns, saying:
“The remit of the appeal process cannot be restricted to only those that produce new evidence. Many people have been materially disadvantaged by not having access to legal advice and interim payments that were only introduced in November 2022. This appeals mechanism must be available to everyone that has settled claims since the scheme launched in 2020 to ensure they are properly compensated back to a position they would have been in had the scandal not happened”.
Members of your Lordships’ House, including the Minister, I think, have repeatedly raised concerns about the difference between these various schemes for different sub-postmasters and staff. While it is good that the Government want to have an independent appeals process for the HSS, I remind her that the complex redress schemes arising out of other tragic scandals have had to be adapted. It took the work done on the Victims and Prisoners Act to create the infected blood compensation scheme earlier this year—with an enormous amount of energy—to untangle all the different parts of that redress scheme. Does the Minister recognise that Mr Head and others have valid concerns about inconsistencies between the schemes, and that trying to sort all this out now, at pace, as was done with the infected blood scheme, must be a priority?
I want to raise two other issues briefly. First, on the predecessor package to Horizon, known as Capture, I raised the issue of the postmasters and staff who lost their jobs because of Capture, some of whom were also prosecuted but many of whom were sacked. The Independent newspaper and ITN have given voice to these victims. When will the Government’s own investigation into Capture be published and when will they update your Lordships’ House on its findings? Should redress be due, will it be incorporated into the existing postmasters’ scheme, or will there have to be a brand-new one?
Finally, in July, my noble friend Lord Fox raised again the issue of those not included in the overturning of convictions because they had appealed their cases and lost in the Appeal Court. Both he and I had helpful discussions with the previous Minister. The concern was expressed that the judiciary, in particular, had felt it was wrong for this group of victims to have their cases overturned under the legislation in the summer, because there was some merit to other parts of the cases brought against them. Yet, that question was not asked of any other case whatever, only those that went to appeal. Are the Government prepared to reconsider that? What now exists in the redress scheme is a small group of people who have to have an exceptionally high bar of going to the Criminal Cases Review Commission, hoping that it will refer their cases back to the Court of Appeal. This seems unfair and particularly long term, which means these victims will not get resolution for a long time to come.
The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Baroness Jones of Whitchurch) (Lab)
My Lords, first, I thank the noble Lords for raising these points on what is clearly a very important issue. I have to say that it upsets me greatly to hear of the harrowing experiences postmasters faced over so many years. I understand and have the utmost respect for their wish for full, fair, speedy redress, for answers from the inquiry about what went wrong and for people to be properly held to account for what has happened. This scandal represents one of the biggest miscarriages of justice of our time, and it is crucial that we get redress for those affected as quickly as possible. This is what we are focusing on as a Government—fair and timely redress for postmasters—and we will continue to work with and support the Post Office Horizon inquiry as it carries out its vital work in establishing the facts about what went wrong in this scandal.
Before I turn to the specific questions raised, I pay tribute to the tireless campaigning of the Justice for Subpostmasters Alliance, to all the many postmasters who have championed this cause and to Sir Alan Bates and Lady Suzanne, whom I congratulate on their recent wedding. I also thank members of the advisory board, including the noble Lords, Lord Beamish and Lord Arbuthnot, who are members of the Horizon advisory board. I thank them for their advocacy for postmasters affected by the scandal over many years and for their hard work in helping the Government improve the delivery of redress. We shall continue to listen to their advice.
Turning to the subject in hand and the questions the noble Lord and the noble Baroness asked, we will look to establish the new Horizon shortfall scheme appeal process announced yesterday as quickly as possible. Postmasters’ stories are harrowing, but their resilience and steadfastness in seeking justice are inspiring. The Government’s priority is ensuring that the victims of the scandal receive the redress they deserve. We want to help bring some closure to postmasters as soon as we can. I cannot give an exact timeline today, but it is likely that it will be launched in the new year. We will keep postmasters updated on its development.
I can reassure noble Lords that legal advice will be available from the outset for those who enter the appeals process. We want the appeals process to be available to all those who are not satisfied that they received the correct amount of compensation. As in the case of the broader design of the process, we will engage with postmasters and the advisory board on the detailed approach before agreeing and setting out in due course details on eligibility criteria.
The appeals process is intended to support, in particular, those who have settled their claim but feel that they were unable to set it out in full in their initial application. There are a variety of reasons why postmasters may have been unable to do so, and these will be considered when designing the process and its eligibility criteria. It will also be open to more recent applicants who have not yet settled and are unhappy with the offer they have received from the Post Office. However, on the specific question from the noble Lord, those who have accepted £75,000 are not eligible for an appeal. They were told this at the outset, when they accepted the payment.
The Government are committed to ensuring that we support postmasters affected by the Horizon scandal to get the redress they deserve. We plan to continue to work in a cross-party way on this important national priority, which of course was highlighted so well by the ITV drama “Mr Bates vs. The Post Office” earlier this year, and in last night’s follow-up documentary.
The noble Baroness asked about the investigation into the Capture software. We expect to receive this report shortly, and the conclusion of this exercise will support the Government in determining whether postmasters faced detriment due to the Capture system and what steps should be taken based on the conclusions of the investigation.
The noble Lord asked how many payments have been made for the Horizon convictions redress scheme. As of 30 August, we have made six interim payments totalling £1.2 million. As of 6 September, 178 letters have been issued by the MoJ. On the issue of the MoJ letters, as the Secretary of the State said yesterday, the state of the records has, sadly, delayed the process. This is a real frustration, but I hope that noble Lords will understand that, after everything people have been through, we should not take the risk of sending out a letter incorrectly. The Government are grateful for the support of the HSS appeals mechanism.
To all those who think that this is not moving fast enough, I can reassure them that we are moving at speed on this issue. There are a huge number of technical and legal issues that we are still ironing out, but we understand the need to move and resolve these issues at speed.
In response to the noble Lord’s point about cultural issues, I agree they are important, and I hope they will come out in the final phase of Sir Wyn Williams’s inquiry. Hopefully, we can follow it up and act on it.
Baroness Berridge (Con)
My Lords, I served on the Select Committee on the Inquiries Act, and, as outlined by the noble Baroness, Lady Brinton, it is clear that there are a number of schemes set up in a number of ways. Although, as in court cases, the compensation arises from very different circumstances, there could be standard tariffs or set amounts in certain instances. Can the Minister assure us that there are meetings between the departments running these schemes, and that we are not going to see headlines about the care of someone in a home, saying they got this amount from one scheme and that amount from another? We need to make sure that every avenue is sealed off, so that the compensation is fair.
Baroness Jones of Whitchurch (Lab)
The noble Baroness makes a very fair point. We do have a number of schemes with different eligibility criteria. We are doing everything we can to standardise them and to make sure that people are treated fairly. Of course, people are at different stages in the process. Some have already started their applications, while others have yet to do so. We are doing everything we can to make sure that everyone is treated fairly and in the way they should be, following this terrible scandal.
Baroness Ritchie of Downpatrick (Lab)
My Lords, I thank my noble friend the Minister for her very detailed Statement in relation to this egregious issue that goes back so many years. So many sub-postmasters were wrongly convicted and wrongly maligned.
Will sub-postmasters in Northern Ireland be eligible to apply to this appeals system? They were similarly affected and some of them were similarly prosecuted. Also, some sub-postmasters have said to me that the original compensation scheme has been too slow in reaching them. So I would like assurances that the appeals system, where it applies, is acted on expeditiously.
Baroness Jones of Whitchurch (Lab)
Again, my noble friend makes a very important point about speed. I think I have reiterated that we absolutely get and understand that message. I hope that, when people come to look back on the actions we have taken, further delays will not be one of the criticisms that come to mind, because I really feel that we are acting at the absolute top rate that we possibly can.
With regard to where there are specific arrangements in Northern Ireland, I apologise that I do not know the answer to that. I will write to the noble Baroness.
Lord Bellingham (Con)
My Lords, in my capacity as an MP in the other place, I came across a number of cases of sub-postmasters and sub-postmistresses who were investigated and subject to the most enormous amount of stress and financial hardship, but then simply handed in their lease because they had had enough. They have since been completely vindicated. Many of this particular cohort appear to be falling by the wayside in terms of compensation. What do HMG plan to do about them?
Baroness Jones of Whitchurch (Lab)
My Lords, I hope that the individuals to which the noble Lord refers will be picked up by one of the number of schemes we now have. We now have what I hope is a comprehensive set of schemes that apply to all circumstances, so my understanding is that people who left because they were suffering hardship while not necessarily having a conviction should be covered by the scheme.
Lord Leong (Lab)
I beg to move that the House be adjourned for a period of five minutes.
Lords Spiritual (Women) Act 2015 (Extension) Bill [HL]
Tuesday 10th September 2024
(3 months, 1 week ago)
Lords ChamberRead Full debate Lords Spiritual (Women) Act 2015 (Extension) Bill [HL] View all Lords Spiritual (Women) Act 2015 (Extension) Bill [HL] Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Baroness Smith of Basildon
That the Bill be now read a second time.
The Lord Privy Seal (Baroness Smith of Basildon) (Lab)
My Lords, this is a rather straightforward Bill that does not seek to make any fundamental changes or reforms to the composition of your Lordships’ House. Its only effect is to extend by five years the arrangements in place for the appointment of Lords spiritual contained in the Lords Spiritual (Women) Act 2015. Like the 2015 Act, the Bill has been introduced at the request of the Church of England and I look forward to hearing today from the Convenor of the Lords spiritual, the right reverend Prelate the Bishop of St Albans, and the right reverend Prelate the Bishop of Derby. I think all noble Lords will agree that we are grateful to the right reverend Prelate the Bishop of St Albans for the letter about the Bill that he sent to all Peers who are speaking today.
As your Lordships are probably well aware, the 26 bishops in your Lordships’ House are determined under a process set out in the Bishoprics Act 1878. Five seats are automatically allocated to the most reverend Primates the Archbishops of Canterbury and York and the right reverend Prelates the Bishops of London, Durham and Winchester. The remaining 21 seats are filled on the basis of seniority—that is, the length of tenure in post. As your Lordships also know, changes to allow women to become bishops were made in 2014. Because of the rules of seniority, we would have had to wait many years before these women would have been eligible to receive their Writs of Summons, become Lords spiritual and be welcomed into your Lordships’ House. As the most reverend Primate the Archbishop of Canterbury pointed out in 2015, this would have created a situation whereby women were prominently involved in the Church leadership but unrepresented in your Lordships’ House.
While the pre-2015 rules of seniority would have eventually enabled female bishops to receive their summons to our seats, the process would have taken an unacceptably long time. To address this, and at the Church’s request, the House passed legislation in 2015 to fast-track female bishops to these Benches. Since its passage, the 2015 Act has helped to deliver, in a timelier fashion, the greater balance of voices that these Benches need. This has complemented the Church’s own efforts to diversify its leadership over the years, particularly since it agreed to the consecration of female bishops in 2014.
As Ministers, the noble Baroness, Lady Garden of Frognal, and the noble Lord, Lord Faulks, spoke eloquently on the merits of the 2015 Act when the House debated it almost 10 years ago under the coalition Government. Since it was enacted, its value has been demonstrated. We have seen the benefits of the 2015 Act materialise by way of the six female bishops who have sat in your Lordships’ House earlier than they otherwise would have done. Within six months of the commencement of the 2015 Act, the House had the pleasure of welcoming the right reverend Prelate the Bishop of Gloucester. She broke new ground in two important respects—by becoming the first female diocesan bishop and first female Lord spiritual. I welcome her presence and that of the other female bishops who have since joined this House. I am sure that your Lordships will agree that they have all made valuable contributions to the role of this House.
While significant progress has been made through legislation, there remain only six female bishops on the Lords spiritual Benches today. The 2015 Act is due to expire in 2025, so the five-year extension provided for in today’s Bill allows more time for the original legislation passed in 2015 to operate. The Bill means that if any of the 21 Lords spiritual seats allocated on the basis of seniority become vacant between now and 2030, they will be filled by the most senior eligible female bishop if any are available at that point. Without the Bill, the provisions of the 2015 Act would expire in May 2025.
Five years represents an appropriate length of time to allow the positive effects of the 2015 legislation to continue. It will enable a longer period in which to accelerate the appointments of female Lords spiritual, while recognising the progress that has been made by the Church so far. This will help to ensure that we continue to address an historic disadvantage: the barriers faced by women with respect to the Church and, by extension, membership of this House.
At Second Reading of the 2015 Act, the most reverend Primate the Archbishop of Canterbury said that the 2010 Parliament would be
“the last Parliament where any Bench of either House is occupied solely by men”.”.—[Official Report, 12/2/15; col. 1366.]
I am glad to say that his prediction was correct. I look forward to today’s debate and I beg to move.
Baroness Neville-Rolfe (Con)
My Lords, I thank the Leader of the House for her clear introduction, which I will not attempt to repeat. Like her, I also thank the Church of England for making the request. I look forward to hearing from the right reverend Prelate the Bishop of St Albans, Convenor of the Lords Spiritual, and the right reverend Prelate the Bishop of Derby.
I say straightaway that we support the Bill on this side of the House. It rightly rolls forward the arrangements debated and agreed without a Committee stage in 2015. This is an even shorter Bill—it simply extends the sunset clause that was agreed then and provides that female bishops will join the Lords spiritual slightly sooner than they would otherwise have done.
Of course, the presence of the Lords spiritual reflects the enduring constitutional arrangement of an established Church of England, with our monarch and Head of State as its supreme governor. Since the last debate, we have a new monarch, following the sad death of our much-loved Queen Elizabeth II and the accession of King Charles just two years ago. I was delighted at church on Sunday to hear our vicar thank the Government for making a fine portrait of our new King available for free to his and other churches across the country. I pass on these thanks to the Minister and to those in the Cabinet Office, who I know have been working so hard on this appropriate memento of the new Carolean era.
We also thank all those women bishops who have served in our House since 2015, including the now retired Bishop of Newcastle, who became a friend. We are appreciative of all they have done, leading us in prayer as well as bringing a new perspective to debates.
Looking back at the debate on the last Bill on 12 February 2015, I see there was some discussion about whether it was right to leave untouched the five ex officio sees—those led from the historic cities of Canterbury, York, London, Durham and Winchester. I think it is right that these sees should remain open to a wider pool of experience and I note with approval that, since the last debate, these have come to include both a female Bishop of London and a former Archbishop of York.
There was also concern about fairness in the debate, particularly in relation to those senior clerics, such as the then Bishop of Lincoln, whose elevation to Parliament might be delayed. But there was agreement that there was a generosity of spirit from him and others that meant this would not be a problem in the event. I am so sorry that my noble friend Lord Cormack, who was taken from us so suddenly, is not here to contribute and bear witness to the success of the changes that he was very concerned about. On a wider note, he loved Lincoln Cathedral and helped to get it to the top of a national poll of favourite cathedrals. My own favourite, Salisbury Cathedral, also did well. One of my greatest pleasures as a DCMS Minister was to visit the many cathedrals for which the last Government provided funding under the First World War centenary cathedral repairs fund and to hear some of our wonderful cathedral choirs.
Other absent friends who spoke included Baroness O’Cathain, Baroness Perry and Baroness Trumpington. I mention them because all three charted an important path as female flag-bearers and mentors. They understood the vital role women priests have played in keeping the Church of England afloat in challenging times, making the position of women bishops in the House of Lords particularly important.
It was agreed at the time that the 10-year span of the previous Bill was sufficient to provide the space needed to look at how well this legislation was working and what would happen thereafter. In the event, this was insufficient, and the result is today’s Bill, which I fully support; hopefully, this is the last such request. With six women bishops now in our House, fewer I suspect than expected, my only gentle question to the noble Baroness the Lord Privy Seal, and to those speaking for the Church, is why a five-year extension has been chosen rather than 10. Does this presage work taking place on some alternative pattern of reform and, if so, what is envisaged? I feel we should be told. Certainly, it would be wrong to find ourselves being asked for another extension in just five years’ time.
Baroness Brinton (LD)
My Lords, I remember with real excitement Petertide in 1994, because my school friend Angela Berners-Wilson was ordained and, because of the timing of the ordination service and the fact that her name began with B, she was the first woman ordained that day and is deemed to be the first woman ordained in the Church of England.
I was equally excited the day that the right reverend Prelate the Bishop of Gloucester joined your Lordships’ House as the first woman diocesan bishop. Rachel Treweek started a new part of history for women in our country. However, it would be more correct to say that women spiritual returned to your Lordships’ House because, even before Magna Carta and the King’s Council, it was noted by Gurdon, in his antiquities of Parliament, that
“ladies of birth and quality sat in council with the Saxon Witas”.
In Wighfred’s great council at Becconfeld in AD 694, abbesses sat and deliberated. Five of them signed decrees of the council, along with the king, bishops and nobles.
More significantly, during the reigns of Henry III and Edward I, four abbesses were summoned to Parliament. They were from Shaftesbury, Barking, Winchester, and Wilton. Noble Lords may wonder why I go back so far in history. I grew up near Shaftesbury and my mother was involved in the archaeology at Shaftesbury Abbey around that time and we, as a family, were brought up on the story of the Abbess of Shaftesbury.
It is important to note the contribution of our women Bishops. I believe they strengthen the Spiritual Benches and your Lordships’ House through a combination of wisdom and bringing their own worldly experience to the House.
It is such a shame that the Church of England has to revisit this issue, as it was hoped back in 2015 that 10 years would be long enough to ensure that there were enough women diocesan bishops that the Lords spiritual would have some semblance of a gender balance. As somebody who had to organise gender balance among parliamentary candidates in my party, I realise that it is never an exact science. While there is welcome progress, the Lords spiritual still have the lowest proportion of females in the main groupings, at 24%.
It is a most unusual situation and arrangement to have places in a nation’s legislature determined by a process within a Church and by an external organisation, albeit one whose rules pass in this Parliament. Gender balance of the composition of the legislature is reliant on that process working, so unusual is perhaps a bit of an understatement.
My concern is that one has to reflect on whether extending the law will work or could in fact be a perverse incentive not to appoint women as diocesan bishops. Is this one of the reasons that only two of the last 11 appointments have been women? Without the extension, only men on the Lords spiritual waiting list would join the House, but even with the Bill we could end up with only men. In the next five years there are 14 retirements due, and the replacements—bar the Bishop of Peterborough, who will replace the right reverend Prelate the Bishop of Worcester—would be men. Surely that would be unfortunate, to say the least. Two of the last three vacancies have failed to appoint.
Surely this is also avoiding the well-overdue question of how many bishops, if any, should be in Parliament—a matter last considered in 1878, which is recent history for your Lordships’ House. One cannot also ignore that there are 31 Church of England bishops if one includes the retired archbishops and bishops on the Cross Benches: one of Oxford, one of London, two of Canterbury and one of York. A possible solution might be to celebrate the 150th anniversary of the 1878 Act with either a sunset clause of this Bill in 2028 or a review, which would give the Church time to sort out the process. It has 10 years under its belt; another five might help.
Also, frankly, given the aims of the current Government, it is a good point to review the composition of the Lords more generally. If His Majesty’s Government achieve their aim, the hereditary Peers will no longer be here and perhaps it will be time to move on to the next stage of reforms for your Lordships’ House.
The Lord Bishop of St Albans
My Lords, I am grateful to the Minister for her opening remarks. I put on record my personal thanks and those of the Church to His Majesty’s Government for securing time to bring this Bill forward, and to the Opposition for giving their support to the proposal. I hope that this will be a relatively simple and straightforward piece of business and that we may not need to detain the House for too long.
The Bill, if passed, will extend the Lords Spiritual (Women) Act 2015, due to come to an end in 2025, for a further five years to 2030. In our view, this is a reasonable extension to a successful piece of legislation. Prior to the 2015 Act, the 26 bishops who sat in this House were determined by the Bishoprics Act 1878: the most reverend Primates the Archbishops of Canterbury and York, the right reverend Prelates the Bishops of London, Durham and Winchester, followed by the 21 longest-serving diocesan bishops in the Church of England.
The 2015 Act altered the operation of the 1878 Act, providing that, for the next 10 years, any time a vacancy arose among the 21 Lords spiritual whose places are determined by seniority, the vacancy would be filled by the most senior female diocesan bishop available, effectively allowing women to jump the queue ahead of men.
The General Synod approved legislation allowing women to become bishops only at the end of 2014. If the usual operation of the 1878 Act had continued, it would have been a considerable number of years before any female diocesan bishops—having had to wait a long time before they were able to take up these senior roles—had been able to enter this House. That was the rationale behind the introduction of the original 2015 Act, which we are now seeking, with the support of the Government, to extend for a further five years.
As a result of the original legislation passed in 2015, we now have six female diocesan bishops sitting as Lords spiritual in this House. Apart from the right reverend Prelate the Bishop of London, they have all come in under the existing Act. We have been able to benefit from the exceptional insights and wisdom of the likes of my right reverend friends the Bishops of Gloucester, Bristol, Chelmsford, Derby and, most recently, Newcastle. My right reverend friend the Bishop of Newcastle’s predecessor, Christine Hardman, whom I am sure many noble Lords will remember, became a bishop quite late in life. Had she had to wait in the queue, as per usual rules, she would never have come here at all. We are now awaiting the arrival of another woman, Debbie Sellin, Bishop of Peterborough, within the next few weeks.
To come to the point, which is the five-year extension of the Act, I think it prudent to confess that we in the Church have made slower progress than we had hoped when it came to ensuring that our senior clergy are representative of the diverse congregations we serve. This is true both of women and of ethnic and racial minorities. We do not yet have proportionate representation of female bishops on these Benches, or in our diocesan bishops. Were the provision in the Act to come to an end next year, as was the original plan, I fear we would not have achieved our goal of corrective action when it comes to the long delays to women’s ministry and appointments to senior positions within the Church of England.
At the time of the 2015 Act, the most reverend Primate the Archbishop of Canterbury commented that the duration of the Act’s provisions was a matter of judgment and that we could not entirely predict or foresee the pattern of appointments over the coming years. Unfortunately, that pattern has not consisted of as many female bishops as we had hoped, and we humbly ask this House to grant us a little longer to ensure that our excellent and qualified women bishops have enough time to overcome this barrier.
However, the pipeline is crucial. If you look at the statistics, the number of women incumbents in our parishes has been steadily increasing. The numbers of women archdeacons, cathedral deans and suffragan bishops are increasing. Like many professions, we have the problem of getting the pipeline right when making these changes. If the pipeline was going in a different direction, I would be very concerned. It is, at the moment, going in the right direction.
The view of the Church is that we intend this to be a one-off and do not anticipate needing a further extension to the Act, although of course we are at the service of this House. Personally, I strongly hope to see in five years a proportionate number of our female colleagues in post as diocesan bishops and in the pipeline for vacancies in this House, and the usual rules of the 1878 Act to resume.
Lord Birt (CB)
My Lords, no one will stand in the way of promoting greater gender equality in any grouping in this House, but I would like to express my disappointment that a new, and so far decisive, Government are not preparing a comprehensive, holistic and long-overdue approach to the overall reform of this House, including the representation of the established Church—a process hinted at by the noble Baroness, Lady Brinton.
I support the plan to end the birthright of hereditary Peers to sit in this House—it is a feudal anachronism. That said, many individual hereditaries reach here on personal merit, as we all know, and I hope that a way can be found to retain those who make a most distinguished contribution to our proceedings.
The guaranteed representation of the Church of England in this House is a second feudal legacy, embedded centuries before the notion of democracy gathered pace. Its representation produces many peculiarities. For instance, it is essentially the Government who appoint bishops. I used to work at No. 10 alongside a most delightful and extraordinarily able civil servant, one of whose jobs, when a bishopric fell vacant, was to take soundings in the diocese—and more widely—and recommend who should be appointed as its bishop. Accordingly, No. 10, not the most reverend Primate the Archbishop of Canterbury, announces the appointment of a new bishop. Church and state are very definitely not separate.
As this proposed legislation underlines, Bishops take their turn to sit in this House—except in the case of what I think is a bizarre anomaly. We heard the example earlier: if you are appointed the Bishop of Winchester, you are automatically and immediately entitled to a seat in this House. That is extraordinary.
Moreover, the Anglican Church may be represented in this House but it denies its clergy the right under law passed in this House and enjoyed by the rest of the citizenry to enter a gay marriage. Thus, that charming and witty national treasure, the Reverend Richard Coles, was denied the right to marry the man he loved. That is a shocking, unholy, indefensible anomaly.
There are other and very fundamental reasons why embedding representatives of a single church in this House is no longer appropriate. In the 2021 census, almost everyone—56 million people—answered the question about their religion. Less than half of the UK’s population declared themselves even to be Christian, and 22 million people declared themselves to be of no religion. In other surveys, more people say that they do not believe in God than believe in one. Of those who identify as Christian, only 21% are Anglican. More claim to be Catholic than Anglican.
The reality is that we are now an incredibly diverse society—a society comprising people embracing many faiths and none. We should not embark on a long-overdue radical reform of this House without recognising that fact, and that embedding the Church of England in our legislature is an indefensible, undemocratic anomaly.
That said, the greatest strength of this House is its diversity—its range of expertise, perspectives and experience. I have the greatest possible respect for the individual qualities and inherent goodness of the many leaders from many faiths whom I have met in my time. I think, for instance, of the outstanding and sensitive work of Bishop James Jones in leading the inquiry into the Hillsborough tragedy. I hope and expect to see faith leaders of every kind represented in a reformed House, but appointed on individual merit, not as exercising a right existing in one form or another for half a millennium.
Finally, I say to the new Leader of the House, another person whom I greatly respect, that piecemeal reform in any domain does not produce effective and enduring solutions. May we please consider the many ways in which this House needs reform, and consider them all together and in the round?
Lord Scriven (LD)
My Lords, I wish to bring a secular voice to the debate on this Bill. If 26 of the established Church’s Bishops continue to get automatic rights to sit in the UK Parliament then, as a matter of principle, equality for women to sit here has to be central to that to deal with the institutional misogyny that has created a lack of equality and opportunity for women in the Church of England, and to which new Bishops are appointed to this House. But what a fascinating and interesting position the country finds itself in that the Parliament of the UK must give legislative time to deal with the established Church’s centuries of discrimination against women taking senior roles and the slow progress it has made in ensuring that women Bishops have equal rights in this House.
We need to look a bit further at why the established Church has been so slow to deal with this discrimination, to see whether it is really committed to equality for women within its structures and to ensure that it is really committed to dealing with the misogyny and believes in the true equality of women within its structures, which is the basis the Bill is established on.
I ask noble Lords to imagine if a colleague of theirs, due to his deeply held beliefs, refused to follow this manager’s instructions simply because that manager was a woman. What would happen? In almost all cases, this would be unacceptable. Places of work would not tolerate it, and would probably find themselves on the wrong side of the law if they did. Although both sex and religion or belief are protected characteristics under the Equality Act 2010, the law is clear that individuals cannot discriminate against their colleagues just because their religion says they should.
However, that discrimination still exists within the established Church, with a whole system that allows this to happen. The language used to describe and hide it is almost poetic. The CofE calls it “mutual flourishing”. Does that not conjure up a warm and sunlit world, one of equal relationships where all sides are equal and can flourish and reach their full potential based on mutual respect regardless of their sex or who they are?
In practice, it is far from that. There has been a total abdication of responsibility by the leaders of the established Church since 2014, when women bishops were agreed to by the General Synod. A system has been set up to appease the misogyny—a system that is more about keeping the Church of England together rather than one built on mutual respect and equality for all. It is a system that the present leadership of the Church of England encourages and supports. It is not mutual flourishing but a system of institutionalised misogyny.
In practice, what “mutual flourishing” means is that individual churches can refuse to accept women as priests or vicars. The CofE also permits churches to reject the authority of a female bishop. So the state Church affirms women as equal while at the same saying that it is alright for some churches not to accept them. In fact, nearly 600 churches reject the authority of women and flock under the frocks of what are referred to as “flying bishops”. Individual churches are permitted to refuse female vicars and are given the right to be overseen by flying bishops who also oppose women’s ordination, instead of their local bishop, male or female, who ordains women.
In fact, the right reverend Prelate the Bishop of London, who has been in her position since 2018, was on occasions required to delegate her authority to the Bishop of Fulham, a more junior bishop. Women in London, as well as elsewhere in the country, have pointed out that churches will not accept their applications for the post of vicar, and it is almost impossible for women to be appointed vicar at some large churches in the capital of this country.
How can it be in 2024 that the state Church is still discriminating against women, who represent about two-thirds of its congregation and half the population of this country? Does the Leader of the House feel it is correct that, ultimately, the Church of England should end its exemption under the Equality Act and stop legitimising the theology that some of its churches use to limit women’s ministry and equality when this Parliament is giving time to ensure that women Bishops can sit in this House more equally as a matter of principle? The Church of England loves to give the impression that the battle over women’s ministry is all sorted now but let us be clear: there is a long way to go.
From a secular point of view, this raises the wider question of why in 2024, as alluded to by the noble Lord, Lord Birt, some 26 seats in this Parliament are in the automatic gift of the state Church. As the Reverend Canon Ian Gomersall said in an illuminating letter in the Times yesterday:
“The anomaly of having Church of England bishops in the House of Lords is compounded by the fact that the clerics in the Lords are from only one church of only one of the four nations of the United Kingdom. On top of this, the Church of England is not the largest worshipping community in the UK”.
In fact, less than 1% of the adult population attends a CofE service on a regular basis.
As the Reverend Canon Gomersall went on to say, removing the Bishops from the House of Lords
“would be not only an act of fairness and justice but also a step towards developing democracy in parliament. Their removal from the Lords would also give the bishops more time to focus on their diocesan duties at this time when the Church of England is in significant decline”.
Any serious proposals to reform the House of Lords must address the unjustified privilege of the state Church Bishops’ Bench. Indeed, 62% of the population, when asked, say that no religious clerics should have an automatic right to seats in the House of Lords. That would not stop the contribution of Bishops to this House, if they were appointed on their own merit as life Peers, but, after a century of decline in religious attendance in Britain, the claim that Bishops or any other religious representatives speak for any significant constituency is unwarranted and does not stand up to scrutiny.
Bishops do not have any special insight. The idea that Bishops or any other religious leaders have a monopoly on issues of morality is offensive to many non-religious citizens. Those of us who profess no religion are no less capable of making moral and ethical judgments. Furthermore, tell the victims of child abuse in the state Church—whose most senior leaders turned away from them, refused to believe them, told them to move on and systematically did not deal with the perpetrators of such abuse—that senior Bishops in the state Church have a superior moral compass.
In a democracy, no religion or its leaders should have a privileged role in the legislature. If the Government are serious about reforms to this House, then the Bench that dare not speak its name in such reform—the Bishops’ Bench—has to be part of that reform. I ask the noble Baroness the Leader of the House whether the Bishops’ automatic right to sit in this House will be part of the consultation that the Government are going to undertake on Lords reform.
Lord Murphy of Torfaen (Lab)
My Lords, about 12 years ago, when I was a Member of the House of Commons, I spoke on the Bill that brought in women bishops for the Church of England. In fact, I went to the Library earlier today to ensure that what I said 12 years ago would chime with what I shall say today and that I had not changed my mind in that decade—and I have not.
It was unusual for me to take part in that debate at that time for two reasons, one of which still is the case. The first is that I am a Roman Catholic—my mother’s family were Anglican, but I am a practising Catholic—so what business is it of mine to take part in a debate about whether the Church of England should do this or that? The other reason was that I was an MP representing a Welsh constituency, and the Church in Wales has been disestablished for over 100 years. There are no Welsh bishops represented in the House of Lords. As a Catholic Welsh MP, I decided over a period of nearly 25 years not to take part in debates on these issues because of those two reasons.
However, I decided 12 years ago that I should do so, not necessarily because I agreed with women bishops, although I think I agree with women priests. It will take an awfully long time for my church to get to that position; it needs to get married priests before it gets women priests. I once talked to an eminent Catholic archbishop who said to me, “Well, if you have women priests then the logic says you will have women bishops after that”, and I agreed with that. So, when that Bill came before the House of Commons, I supported it, as I support this one and as I support the right of the 26 Bishops to be Members of this House.
I could not agree less with what the noble Lords, Lord Scriven and Lord Birt, said. I respect their views, but I do not agree with them, for a number of reasons. In the first instance, the contributions made to our House by our Bishops are first-class. No, they do not have a monopoly on morality—no one has that—but they talk on issues that are important and they bring a perspective that is different. Women Bishops in particular give a certain perspective that we ought to listen to. Our debates on whole areas, including international affairs and national affairs, are excellent when it comes to the contributions made by our colleague Bishops.
I believe that the Anglican Church is a force for good in our country and in the world. I recall when I was the Secretary of State for Northern Ireland, and before that when I was helping to chair the peace process in Northern Ireland, that the churches—which had over the years a lot to answer for for what happened in that part of our country—were making a particularly important contribution to the peace process. I pay tribute in this place particularly to the noble and right reverend Lord, Lord Eames, who was then the Archbishop of Armagh, and whose contribution to peace in Northern Ireland is second to none. So I do not agree that the contributions are not good; they are good and benefit the people of our country and benefit this House as well.
I also believe it is right to bring a Christian perspective to this House. I suppose when I entered the House of Commons in 1987 more people classified themselves as Christians than they do today, but nearly half of our population still does. I also think that, in the same way that non-Christian people from other faiths attend Church of England and Catholic schools because they believe that there is a moral education that they can get from those schools, so it is that the religious point of view can be expressed through the 26 Bishops on these Benches just below me.
I classify myself as a Christian Socialist—both designations can be unfashionable these days, but they do go together. It was Morgan Phillips, a great Welshman and secretary of the Labour Party, who said that the Labour Party owes more to Methodism than it does to Marx, and I believe he was right. When I joined the Labour Party just 60 years ago next month, there were Labour Party branches in south Wales which opened with a hymn. I am not going to pretend to sing “Cwm Rhondda” in the House of Lords before we conclude this debate, but what I will do is wish this Bill well, wish our Bishops well and wish them continuing membership of this House in the years to come.
The Earl of Devon (CB)
My Lords, it is an honour to speak on this short Bill, which seeks to extend by five years the period in which vacancies among our Lords spiritual are filled predominantly by female Bishops. I support the effort to increase the gender diversity of Lords spiritual and agree that we should seek to increase the diversity of this House more generally so that it better reflects the nation and allows a breadth of opinion to be brought to our legislative efforts.
I should note my own interests. I was a one-time Cambridge theologian, I am patron of a number of Anglican parishes in Devon, I am an irregular churchgoer and I am a member of a family with long clerical connections. We count many churchmen—and indeed, I can tell the noble Baroness, Lady Brinton, that my research suggests a couple of churchwomen, including Adelicia, the foundress of Forde Abbey—in the family tree: there are Bishops of Norwich, London, Exeter and Winchester, and even an Archbishop of Canterbury, whose coat of arms as Richard II’s Chancellor appear just to the left of the Throne.
I thank the Convenor of the Lords Spiritual, the right reverend Prelate the Bishop of St Albans, for his letter, which was received last night; the detail and background were instructive. Along with him, I wish to put on record my appreciation for the contributions of those female Lords spiritual who have made it into the House as a result of the provisions of the Lords Spiritual (Women) Act 2015, which we are extending with this Bill. The right reverend Prelate’s letter also provided helpful statistics, including the fact that 33% of ordained ministers were female in 2020—a number that I hope has increased since. I wonder whether the right reverend Prelate the Bishop of Derby could confirm that.
I also agree with the right reverend Prelate’s sentiments when it comes to the number of female bishops as a whole. He states:
“it is my view that the overall number of women appointed as diocesan bishops since 2014 remains too low, and there is continuing work to do to rectify the longstanding historic imbalance”.
In considering this Bill, we should be provided with a better understanding of why the Church has not done more to promote female bishops since 2014. For example, it is notable that, of the five episcopal sees with automatic seats in this House—namely, Canterbury, York, London, Durham and Winchester—only one is currently held by a woman. It would be helpful to know what particular efforts the Church of England is making to ensure gender equality amongst its own leadership and what the barriers that the right reverend Prelate the Bishop of St Albans references actually are.
I would be pleased if the right reverend Prelate the Bishop of Derby could provide us with an update on that issue when she speaks. It should not be for Parliament to spare the Church of England’s blushes if it is not able to promote female leadership within its own ranks and of its own accord.
Secondly, while I support the efforts to increase gender equality within the Lords spiritual, this Bill does nothing necessarily to increase the diversity of thought or belief within our House. All bishops, be they male or female, as we have heard, will still be Anglican bishops and the voices of other religious faiths will be no louder as a result of this Bill. Do the Government, given their passion for Lords reform, have any plans to broaden the creed of those sitting in the spiritual seats of your Lordships’ House, or do they otherwise intend to increase the presence of non-Anglican Church leaders upon our red Benches?
On equality and diversity through Lords reform, it is obviously appropriate to increase female presence amongst the Lords spiritual. At the same time, the Government are undertaking other elements of reform that will result in better gender parity in this House. I refer to the Government’s ambition to abolish the remaining 92 hereditary Peers, all of whom, since the retirement of the great and noble Countess of Mar, are now male. Therefore, there is a hereditary Bench occupied only by men, which is unfortunate. This is a valid and very real criticism of the hereditary peerage, but it is the fault not of the hereditary Peers themselves but of the arcane rules of succession to which we are subject. Here I note my interests as an Earl of Devon.
For a number of years, I, along with honourable Members in the other place, have been seeking to introduce by way of a Private Member’s Bill a Bill to permit female succession to hereditary peerages, but we have been unsuccessful in our efforts to date. I am the youngest of four children, as was my father before me, and my grandfather was the only boy among six siblings. The law of succession to the Crown was changed without incident over a decade ago and, as we have heard, female bishops have been allowed since 2014. So at least two of the three feudal mainstays of our constitution, the Crown and the Church, have been permitted to embrace gender equality. It is therefore shocking that, in 2024, the heirs to hereditary titles remain subject to such explicit gender discrimination, both the eldest daughters, who might wish to inherit a title, and younger sons, who might have had something better to do with their lives.
It would appear to be grossly discriminatory of Parliament not to act upon this, leaving us to wallow unwillingly in patriarchy. Noble Lords may suggest that such a move would be a waste of time, given hereditary Peers’ impending abolition, but I am mindful that hereditary titles will retain some presence and status within Britain even after we are no longer active legislators, particularly in those parts of the country, often rural, which have retained a traditional social fabric—our much-loved rural parishes, for example, where the local baronet retains social and economic significance. I expect also that hereditary titles will long remain a fascination for popular culture, as a focus of fashion and social magazines, popular film and literature. If the Government can find legislative time to promote gender equality among the Lords spiritual, could it not also find time to change the rules for hereditary succession so that within a generation, half those titles would be held by females in their own right? It would be a lasting legacy upon which to depart your Lordships’ House.
I end by reiterating the importance of diversity to this Chamber and to our work, and regret that the abolition of a hereditary presence in Parliament will remove some notable diversity that is not found amongst Lords spiritual, nor among many of the appointed life Peers, who tend to be people of excellence either in politics or society more widely.
Recent hereditary additions to the Cross Benches have included a veterinary practice manager, an inner-city state schoolteacher, a nuclear engineer and even a modest American IP litigator, none of whom are necessarily leaders in their fields nor the most ambitious. They are here to serve, in the way their forebears have done for centuries, with neither fear nor favour. The irony of removing the purportedly elitist hereditary peerage is that we will lose some of the more normal and perhaps modest Members of your Lordships’ House. I hope the Government will reflect upon that.
The Lord Bishop of Derby
My Lords, I feel I should declare an interest as the only speaker in this debate who has benefited from the provisions of the Lords Spiritual (Women) Act 2015; thank you.
I know something of the challenges of being a woman in senior ministry, not least as I hold the distinction of being the first woman to be appointed and consecrated as a bishop in the Church of England, as Bishop of Stockport. I subsequently entered the House under the terms of the 2015 Act when I became Bishop of Derby, the fifth woman to sit on these Benches.
On balance, I support the Bill to extend this provision, and I add my thanks to those of my right reverend friend the Bishop of St Albans to the Leader of the House and to the Government for making time for it. I trust that this short and time-limited Bill to enable the existing Act to continue for a further five years will receive the same cross-party support that enabled the original Bill to progress through both Houses swiftly and without amendment in early 2015.
It has been a privilege to contribute to the work of your Lordships’ House for five years. I was introduced in 2019 and made my maiden speech during Covid lockdown, being beamed into the Chamber from my diocesan office by the magic of Zoom. That speech was, and much of my work in the House since has been, informed by my role as vice-chair of trustees for the Children’s Society, a charity doing significant work for children and young people at risk and on the margins. I remain a trustee.
Coming into your Lordships’ House as you take on responsibility as a diocesan bishop is not for the faint hearted. The Act has required it of the women who have come here under its terms, and it has meant getting to grips simultaneously with the demands of diocesan episcopal leadership and learning the wonderful ways of Westminster. As we have heard, that is not unique to us. The five senior Lords spiritual, the archbishops and the Bishops of London, Durham and Winchester, also take on membership of the House at the same time as they become bishops of those sees. It can be done, and as many of my colleagues have shown, be done very well.
This House has benefited greatly from the wisdom and service of those women who have been Lords spiritual under the term of the Act. There have been six in total so far, with my right reverend colleague the Bishop of Peterborough very soon to become the seventh. My right reverend friends have sought to speak for a wide range of people and causes. I note my right reverend friend the Bishop of Gloucester’s work on prison reform and the treatment of women in the criminal system, my right reverend friend the Bishop of Bristol’s work on the victims of modern slavery, and my right reverend friend the Bishop of Chelmsford’s work on refugees and good housing.
Had the original Act not gone through, I would have only just joined and still be finding my feet. As we have heard, the contribution of Christine Hardman, the former Bishop of Newcastle, would not have been available at all. Without that provision, most of the women serving from these Benches now would not yet be among us or, like me, would have only just been introduced. Instead of this, since the Act was passed the total number of years of service offered to this House by women on these Benches has exceeded two decades-worth. This is a cause for celebration. I look forward to what a further five years might bring.
I am really glad that this debate has provided an opportunity for us to hear from colleagues across the House about wider issues, including the role of the Lords spiritual and the place of women in public ordained ministry. Although they are not within the scope of this narrowly drawn Bill, they are none the less important.
I am not going to respond in detail to the arguments about the continuing place of the Lords spiritual; that may come in future debates when we consider the questions of membership of the House and future reform. We see ourselves primarily as servants of this House, in an extension of our vocation as bishops in the established Church: to serve the nation and all its communities. It is for Parliament to decide whether and in what capacity we continue to serve here. For my part, I recognise the privilege it is to occupy this space; I will continue to do so to the best of my ability, in and beyond this Chamber, as long as I am summoned.
There are mixed views on the Lords Spiritual (Women) Act among my colleagues, the women and men on these Benches, and across the wider College of Bishops. That is partly for the practical reasons I have named and partly because of the concern, which I share—it has already been touched on in this debate—about the wider landscape for the appointment of bishops in the Church of England. In the decade since the General Synod and Parliament passing the legislation to enable women to become bishops, many remarkable women have followed in my footsteps, but the overall number remains too low. At the beginning of November, there will have been a total of 36 women appointed as bishops, with five retired. I was asked about percentages— I am sorry, but I cannot do the maths in my head that quickly, though somebody else may be able to work it out.
Attention is being given to how the Crown Nominations Commission deliberates and selects candidates to senior posts, given the rate of appointment of women to such roles and our intent on greater diversity overall. My right reverend friend spoke of the pipelines we now have of gifted, experienced women in ministry; there are real questions about why they are not being appointed to diocesan roles more quickly. Although these matters concern me, and clearly others in your Lordships’ House, they are separate from the matter before us today.
I conclude that this Bill to extend the Lords Spiritual (Women) Act for a limited period is welcome for the effect it will have of continuing to improve gender diversity on these Benches, which will be to the wider benefit of this House and a small correction to a long-standing inequality. It will also bring greater prominence to the excellent contribution made to our shared national life by women in senior roles in the Church of England through this particular public ministry. I dare to hope it might mean that the time comes more quickly when women sometimes are in the majority on these Benches. I therefore commend it.
Lord Wallace of Saltaire (LD)
My Lords, the Church of England moves slowly, but not as slowly as the reform of the House of Lords.
I grew up in the heart of the Church of England, as a chorister at Westminster Abbey, when it was very much a male Church. I then found myself taking my children to a local church with a very traditional vicar who did not believe that women should be allowed in the chancel during a service—something that shook my daughter to the point where she has not gone to church since. Happily, we have slowly moved forward. We have also moved forward on the Church working with other Churches and other faiths.
When I sang in the Coronation as a small boy, the cardinal archbishop who had been invited to attend the service in the abbey refused to give his recognition to what was going on in this Protestant ceremony by coming inside the building and sat in a gallery outside. At the 50th anniversary service, his successor for cardinal archbishop read the first lesson, with representatives of other churches sitting behind him in the chancel and representatives of Britain’s other faiths sitting in the lantern. I have attended services in the abbey in which there have been readings from the Koran by an imam, and another in which the choir for a Sunday evening service was provided by the Belsize Square Synagogue.
We have managed to move forward in a number of ways. One of the most difficult things for the abbey, which I have been involved in through conversations over many years, has now at last been resolved, and we have a girls’ choir, the St Margaret’s Choristers. One of the young women who sings in it is the daughter of a senior member of the Lords staff. I have heard them once and look forward to hearing them again.
I am an antidisestablishmentarian, unusually for my Benches. I believe, as Tom Holland’s recent book suggests, that a Christian culture and our national identity are deeply intertwined, and that the Church of England, in all its messy uncertainty, represents the sort of consensus that we need. The noble Lord, Lord Murphy, called himself a Christian socialist. I call myself a liberal Christian. Doubting Thomas is my patron saint, and the Church of England in that sense represents doubting Thomas’s view of Christianity —that we should not be too sure that we know what is right and what is wrong, and that we should always be questioning everything. That is a liberal faith.
I have happily watched the progress of women in the Church of England. The quality of the women priests we now have is remarkably good. It has strengthened the Church, which continues to do very valuable local work—I see it in Yorkshire, as well as in London—and to hold the community together.
When radical reform finally reaches this House—perhaps when my grandson is middle-aged—I have no doubt that we shall have to reconsider the role of the Bishops. I note that we already have some representation of other Churches and faiths in the House. I remind the House that my very distant cousin, the noble and learned Lord, Lord Wallace of Tankerness, was Moderator of the Church of Scotland last year. We had the Chief Rabbi on our Cross Benches, and we have had those who speak for the Sikh faith as well. That is also, perhaps, in a reformed House, part of what would then be the appointed element, in what I would hope will be a predominantly elected House. I hope that we eventually move that far, but I fear that we will move towards reform only by a series of shuffles, rather than by radical reform. Having said that, I welcome this small shuffle and hope that the Bill will pass easily.
The Lord Privy Seal (Baroness Smith of Basildon) (Lab)
My Lords, I thank all noble Lords for their contributions to this debate. I loved the phrase about the shuffle to reform; we have become aware of that in many areas of life.
I take on board the comments that noble Lords across the House have made about the diversity of your Lordships’ House. I think we all welcome increased diversity, but diversity comes in a number of forms: it is about age, about gender, about class, about skills, about ethnicity, about background, about experience and about those of faith and those not of faith, who we welcome to bring different views to our debates.
I was interested in what was said about members of the Church of England speaking for certain faiths. I thought the right reverend Prelate the Bishop of Derby made a particularly powerful speech, and I am grateful to her for that. She was clear that she does not speak in this House for the Church of England and that, as a representative of the Church of England, she is speaking with her experience for the nation, and she looks to represent a particular constituency. I have listened to the words from the Bishops’ Benches on many occasions, and I think we should be proud of the contribution they make.
This is a very narrowly focused Bill. The debate has stretched more widely than the content of the Bill, but that is not unusual in your Lordships’ House when we are discussing anything internal to the House of Lords; there is a tendency to have a wider debate. I thank the noble Baroness, Lady Neville-Rolfe, for her support for the Bill. She has heard quite significantly from the bishops themselves about why it is five years, and about the work they are undertaking. The Bill was brought forward at the request of the Church of England, and the point she makes is valid: show us the progress you are making. Other noble Lords made similar comments, and we heard their determination and commitment about wanting to see progress and why five years seems to be an appropriate time.
I thank the noble Baroness, Lady Brinton, for the historical context. She spoke about her friend Angela Berners-Wilson, who was the first woman Church of England priest to be ordained in 1994. I understand her pride. She will understand the pride on these Benches when the noble Baroness, Lady Sherlock, was ordained into the Church of England in 2019. It is important that we recognise, within your Lordships’ House, that we all have different faiths and values. I have to say that I take issue with the noble Lord, Lord Scriven: I do not think anyone is suggesting that those who have a religious faith have a monopoly on values, commitment or morality. I do not think that our bishops or those of other faiths in the House would suggest that. We all bring our values and our concept of morality to the debates we have, and I think it is right that we do so.
As the noble Baroness, Lady Brinton, said, the onus of responsibility to make this work is on the Church of England, which is the established Church. We all welcome those who come into your Lordships’ House who are of a religious faith, or not of a religious faith, and the values they bring. To comment on other points that were made during the debate, I thought it was interesting that the noble Lord, Lord Birt, in talking about the diversity of society, used the phrase “undemocratic anomaly”. One thing we did not touch on was the retirement age of your Lordships’ House. In fact, the only Bench that has a retirement age for its members is the Bishops’ Bench, which has a retirement age of 70. We are getting ourselves into a tizz over 80—or 86 at the end of a Parliament—yet the Bishops’ Benches have quite smoothly moved towards that retirement age. I am sure that when that debate comes, and when we are consulting on that issue in this House, their Benches will have something to say on it. The noble Lord, Lord Murphy, made an interesting comment, as a Welsh Catholic, about how much he supports the Bill and values the contribution of those Benches.
The noble Earl, Lord Devon, raised the issue of diversity more generally. He has raised the issue of succession with me previously, in other meetings, and I have some sympathy. I have had an initial look, and it is quite complex. It is not just about membership of your Lordships’ House; it is a complex issue and not at all something we can deal with in the Bill, but I hear what he has to say and I know he spoke about it some time ago. I have to say to him that I do not think this House is comfortable with the fact that at the moment there are no women on the hereditary Peers register to come forward. We greatly miss the Countess of Mar, who made an enormous contribution, including making sure that new Members did not transgress the rules of the House. Those who did, as I found to my expense— I received a sharp tap on the back on one occasion—were reminded of exactly what the rules of debate are.
All noble Lords—perhaps with some exceptions—have been supportive of this piece of legislation. I note the two noble Lords who have more concerns. It is right that we respect the debate we have had and recognise that the Bill is a small step forward that allows the Church of England to continue its progress towards more women bishops. The right reverend Prelate the Bishop of Derby should take back to her colleagues how much support she has from Benches across the House who want to see more women bishops.
Those of us in political parties should not get too complacent about this. We have all had challenges about women’s representation in Parliament, in councils and, indeed, in your Lordships’ House. We should be proud that, since 2000, seven of the Leaders of this House from across the parties have been women and only four have been men. Sometimes progress happens without being noticed, but it is good that it happens.
I am grateful for noble Lords’ contributions. I think there are a number of comments that the right reverend Prelates will take on board. I hope the House will want the Bill to go forward—I get the sense that it will. It has been a privilege to be engaged in this debate. A number of issues around Lords reform have been on the agenda since I have been Leader, and I welcome hearing from noble Lords on a range of those issues. I am grateful to those who have already engaged with me in a very constructive way. This debate has been a privilege, and it is with pleasure that I beg to move.
Foreign Direct Investment to the UK
(3 months, 1 week ago)
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Lord Harrington of Watford
To ask His Majesty’s Government what measures they intend to implement to attract more foreign direct investment to the United Kingdom.
Lord Harrington of Watford (Non-Afl)
My Lords, I requested this debate on a subject on which I spent most of last year and produced what is somewhat modestly called the Harrington Review of Foreign Direct Investment—it is probably the only volume that will ever bear my name, so it means a lot to me.
I was asked to do this review by the former Chancellor of the Exchequer, Jeremy Hunt, but it certainly became very much a cross-party matter. I made sure, as it was my job to do, that the then Opposition, now the Government, were plugged in to it during the course of the review, because I did not want it to become a political matter. I am pleased to say that in the Autumn Statement last year, the Chancellor accepted the recommendations. The then shadow Business Secretary, now the Business Secretary, at a separate event at PwC, also accepted it. I really did not want this debate to become a list of criticisms of the last Government for not implementing it, or criticisms of the current Government for the same, because I have had a lot of good will from both.
However, I feel that this House should really know a little about what the recommendations were, because we still have a fundamental problem with foreign direct investment. On the surface of it, the numbers are reasonably good. We do better in terms of volume than many other comparable countries. But when the numbers are analysed deeply, as I do in the report, the situation is not as rosy as it seems. This is shown when we strip out renewables—noble though they are, it is just that the taxpayer is subsidising foreign manufacturers to come in and supply energy, which, while all very good, is not investment in the other way—and if we strip out what I call share swaps, which are basically US private equity and others legitimately taking stakes in companies, which does not really mean new investment.
The cause célèbre that led to me being asked to do this was the AstraZeneca deal, when AstraZeneca took the decision, after 14 months, to move not to Macclesfield, Cheshire, but to Dublin, Ireland. It is easy for people with my personal political views to say it is because of Brexit, and it is easy for other noble Lords who maybe think a little differently on the political spectrum to say it is because of corporation tax. Actually, when we took evidence from about 200 companies, sovereign wealth funds, pension funds and others, the situation was far more complex than that.
AstraZeneca lent us its management team and we went through the whole process in great detail. We found that patterns emerged across the spectrum, which I will briefly outline. I have only 10 minutes so I cannot do it too deeply, although copies of the review are available if anyone would like to read it. It showed that signals we send to investors, particularly about consistent changes of policy, were a big one, and I quote several examples in the review. For example, the big ones are HS2 and the road to net zero. Originally it was 2050 for no further production of internal combustion engines, then it was changed to 2030, then to 2035. There are lots of such examples across the whole spectrum of government which investors look at and get worried, because they do not know where the next policy is going to come from.
The second was the availability of money. This is not just a question of the Government not having enough money to help investors. There is quite a bit of money, but it is in so many different pots, challenges, funds and departments that it is so complicated to access, and this puts a lot of companies off. That is before we get to the main hurdles to business investment: the clichéd—but true—planning and getting sites through planning permission; connection to the grid, which can take up to 20 years; skills provision; visas; and a whole list of obstacles to investment. I am sure all noble Lords will know of these.
We have to compare our performance with that of other countries, and other countries have changed and got very well-organised investment operations. For example, AstraZeneca—and many others—go to other countries and are given a written offer by those Governments, in the same way a bank would. The offers say, “Here’s the deal, here’s the money, here’s the site with planning permission, here’s how you get your visas, here are the skills that we are planning to provide”. It is then much easier to decide whether to make the investment, subject obviously to a lot of due diligence.
We really do mess such companies about. We have government departments with policy objectives which are often not compatible with other ones. This leads to people who do a very good job at their own job—which might be reducing the number of visas, because that is their policy—going directly against what another department wants, because it is trying to encourage investment.
Lots of recommendations came out to try to deal with this, some of which I will very briefly mention before I ask the Minister about them. He has been most helpful. We had a cup of tea yesterday to discuss this matter, and I hope he will be able to answer the questions that I gave him. I recommended that a government investment committee be set up to lay out a business strategy for prospective investors, like a bank or financial institution would. It would not say that we can do everything, because we do not have the money nor the resources, but it would identify which areas we are going to use to attract more people. These could be missions, to use the current Government’s statement, or the five areas identified by Jeremy Hunt in the Conservative Government equivalent.
I will give a brief example—I will just pick one out of the hat. In this country, we are very good at aircraft wing manufacturing. The question then is: how do we attract more aircraft wing manufacturers, and, above all, how do we make it possible for them to have their suppliers in the supply chain cluster around them? There is a government investment strategy—if you like, that is the equivalent of the board of a financial institution—which lays out the strategy. Beneath that, we have someone who—again, if it were a financial institution—is akin to a chief executive: a Cabinet-level Investment Minister. We had an extremely competent and capable Investment Minister in the previous Government, who, as it happens, is sitting on the Opposition Front Bench now. I felt that he definitely should have been promoted and made the Cabinet-level Investment Minister. I do not think that the current Government have filled the post, but I can think of someone who is very competent to do that.
The position itself is important. Why should that person attend Cabinet? First, if you look at all the big sovereign wealth funds and others, their bosses attend Cabinet, and have the regular ear of the Prime Minister, President or whomever it might be—that is very important. Secondly, in our own Government, that person has to have overriding powers over other departments. That is very important, because when a prospective investment is signed off, real clout is needed over other departments to get all these things done.
Beneath that, my recommendation was to use the existing Office for Investment and to make it significantly greater. It is very good, but it has 25 people, which, in Civil Service terms, is like a corner shop compared with a whole country. It needs to expand dramatically and to be proactive by hunting out the kinds of companies that the strategy from the board above has given it and finding out what it will take to entice them to this country. It is very important.
Finally—I say “finally”, but there are 150 pages of recommendations—beneath that there needs to be a one-stop shop for prospective investors. They get tired of trooping from department to department and being told the Civil Service vernacular that this policy is “owned” by this or that department. The sort of organisation that other countries have for a one-stop shop is very important.
In the little time I have left, I note that there was progress in the previous Government, inasmuch as the Civil Service seems very tuned into this report. I received a very kind message from our trade commissioner in Singapore, whom I met only once at the beginning of the review. I then went to Singapore, where he said, “You should know that lots of your recommendations are being implemented outside the country, in the posts”.
The ministerial top-level investment committee was due to meet, I think, on the day that the election was called, but it has still not met. I ask the Minister—who is a very accomplished businessman in his own right, so I hope he has some sympathy with what I am asking—what progress has there been in implementing the report? Will the government investment committee with all the Secretaries of State sit? Will a Cabinet-level Investment Minister be appointed? Does the Office for Investment have the additional resources that I asked for? What progress has there been for a one-stop shop for prospective investors?
Baroness O’Grady of Upper Holloway (Lab)
My Lords, I congratulate the noble Lord, Lord Harrington, on his review. As a former TUC leader, I hope to add a workforce perspective to the debate.
In my view, the key objective of driving up investment, from whatever source, is simple: the Government’s goal must be to create more prosperity and to ensure that that prosperity is shared fairly, not least in the form of better-quality jobs in the parts of the country that need them most. There is a bigger picture on UK investment, of which the current concern about falling FDI is just one part. Britain languishes near the bottom of the OECD business investment league. Productivity is sluggish and well below the US, France and Germany, with too little invested in innovation, new kit and equipment.
For many years, the TUC has argued that the root cause of low investment is the British disease of short-termism and that this is facilitated by an outdated corporate governance regime which glorifies shareholder primacy while actively excluding workers’ experience and expertise from the boardroom. The former Prime Minister, Theresa May, once agreed with us. It would be interesting to hear whether the noble Minister agrees too.
More positively, I welcome the identification by the noble Lord, Lord Harrington, of the UK’s key growth industries. This is not about picking winners; it is about accelerating success. I support his view that not all wisdom resides in Whitehall. The devolved authorities —and local unions and businesses—have a vital role to play in attracting place-based investment.
But a word of warning: we must guard against the UK’s nations, regions and cities wasting time and public money competing against each other for FDI rather than co-operating for the common good. Also, we must be clear that we cannot and will not seek to attract foreign investment on the grounds that the UK offers cheaper labour and weaker workers’ rights. Those days are over.
Instead, our prospectus must be built on a determination to transform the UK’s offer on skills and talent. That means not only cherishing our universities but practical action to address the Cinderella status of further education institutions and that of their learners and staff. Investors, both foreign and domestic, will be encouraged by our Government’s commitment to planning reform and to public investment in national infrastructure, including through the launch of Great British Energy, which will help to contain energy costs, and a national wealth fund. A proper industrial strategy will boost confidence too. Crucially, we must invest more in people. Improving the health, skills and creativity of the workforce will help to make the UK a more attractive destination for foreign investment and ultimately pay dividends for us all.
Lord Leigh of Hurley (Con)
My Lords, I am delighted to take part in this debate and congratulate my noble friend Lord Harrington on his excellent review. I draw your Lordships’ attention to my register of interests, which discloses that I am a senior partner of Cavendish Corporate Finance. As such, I have had a 35-year career in attracting investors into UK businesses, mainly from overseas buyers, and thus have some experience in this area. I have very little experience on the greenfield side of FDI, as we typically act for mature businesses. I note that this report is, quite rightly, very heavily focused on greenfield.
It is worth noting that academic research suggests that just 4% of local business units in the UK are foreign-owned but that they account for nearly 40% of UK turnover. Some research by Jonathan Haskel, the son of the noble Lord, Lord Haskel, shows that foreign-owned companies which invest in the UK are about 50% more productive than domestically owned ones, not least due to the knowledge spillover, so this really is important.
Despite all the talking down by some, FDI has remained very strong in the UK post-Brexit. No less a person than Warren Buffett told the FT in 2019 that he was
“ready to buy something in the UK tomorrow”—
a marvellous endorsement. We take 17.3% of Europe’s FDI investments into the UK and are only second in Europe at so doing. To my surprise, the official figures record only 985 FDIs in the UK in 2023, which is very low. It amounts to £83 billion into our current stock of £2 trillion. Only 985 implies that not all the figures are properly recorded. It also misses a huge swathe of inward investment, which is private equity.
We should not forget that, according to a recent BVCA report, private equity and venture capital investment by UK firms in 2023 for global investment raised some £60 billion, of which £20 billion went into the UK alone. Of that £20 billion, over 80% comes from outside the UK; so that is overseas investors—largely American but not exclusively—coming in through private equity straight to UK businesses. This is, if you like, foreign indirect investment, but, none the less, it makes a massive difference to the UK economy.
The review has some excellent ideas on how we can do better. I will focus on recommendation 4.6, on a long-term approach to tax. The Government have been exceptionally helpful to UK businesses through the tax system, with R&D credits of some £6 billion a year and the expensing of capital allowances, but it would be very helpful if the Minister could pass the message to the Treasury that we need certainty on the availability of both capital expensing and R&D credits for overseas investors.
If the new Government are serious about growth, pushing the wealth creators out of the UK is not the way to do it. The lead item in Saturday’s Times shows that they are leaving in droves, frightened by the proposals on non-dom tax; the previous Chancellor’s proposals were quite modest in comparison. There is also the disastrous proposed rise in capital gains tax. Why would anyone who is footloose want to stay in the UK? These actions completely contradict the stated objective of growth. If businesspeople do not want to live in the UK, or will not live in the UK, how on earth do we expect them to invest in the UK? It would be tragic if these excellent ideas from the noble Lord, Lord Harrington, are wasted because people such as non-doms and investors are encouraged almost to leave the country by these tax proposals.
I know that the noble Baroness, Lady O’Grady, will not agree with me, but I must add that overseas investors and, in particular, US investors, who are typically the most significant, are aghast at the proposed employment changes. They have invested in the UK way ahead of European countries because they see the current flexibility in employment legislation that facilitates employing people. Can the Minister please confirm that an impact statement will be prepared, showing the likely impact of any proposed employment laws on FDI and PE investment in the UK?
Lord Londesborough (CB)
My Lords, I will, first, thank the noble Lord, Lord Harrington of Watford, both for securing this debate and for producing such a thorough and insightful review on FDI—I read all 120 pages at pace. As the report quite rightly underlines, FDI is all the more critical to the UK because of our continuing low levels of investment in both private and public sectors, which is the major factor behind our lost growth and productivity. We start from a much lower investment base than other G7 countries, however well we are ranked in terms of FDI attractiveness.
I appreciate that the big-ticket foreign investments of £100 million or more grab the headlines and drive much of our promotion and policy, as these projects typically account for about 70% of FDI inflows. But I would like to see much more focus on FDI in the £1million to £5 million and £50 million to £100 million brackets, on which there is curiously little data. That is a comment I often hear from investors themselves, and where, incidentally, the UK underperforms. On this subject, I ask the Minister, first, what data we have on FDI in SMEs, and is it broken down by size of investment and sector? Secondly, how, and to whom, is this data distributed?
I ask because, from my anecdotal experience, the impact of FDI on, particularly, medium-sized businesses, is proportionately far greater than for many of the large projects in terms of growth rates, jobs created, innovation and, indeed, return on investment. Some 52% of our private sector output comes from SMEs; and, more importantly, scale-ups, defined as enterprises growing at 20% on average per year, account for over a fifth of that turnover—that is almost £500 billion per annum—despite representing just 1% of all SME businesses. In terms of generating GDP growth, these scale-ups play a vital role both locally and nationally.
I should perhaps declare an interest, in that I founded and ran one of these scale-ups for 20 years, before we landed what is called an accidental investment from a US investor group, which made an eight-figure commitment and took a strategic stake. With foreign backing and advice, we managed to innovate, expand our overseas markets and double the size of our workforce in four years, and we saw a huge impact on productivity and growth rates. The point of this anecdote is less about the economic impact and more about the accidental aspect: the investors found us via Google. I am now an investor and adviser to start-ups and scale-ups, and continue to see the sporadic, accidental aspect of foreign investment. We need to be far more systematic.
This brings me back to the issue of data. In the sub-£100 million investment market, and especially the sub-£25 million investment market, we need to ramp up our data and research, and make this more accessible to foreign investors, if we are serious about gaining a bigger share of FDI.
Finally, we should also take heed of the FDI-SME multiyear project, which is conducted by the OECD in collaboration with the EU. It focuses on how to develop linkages between FDI and local enterprises, and on how to create more opportunities of productivity and innovation spillovers for local economic development. It would be good to have a UK equivalent.
Baroness Foster of Aghadrumsee (Non-Afl)
My Lords, I very much welcome the opportunity to speak in this debate on an issue that is so vitally important to the well-being of the United Kingdom. I congratulate the noble Lord, Lord Harrington, not only on securing this debate but on the completion of his review. There is no doubt that the UK as a whole remains a leading investment destination, but there is no room for complacency, and there is certainly space for improvement and innovation.
In my seven years as the Northern Ireland Minister for Enterprise, Trade and Investment, I was always incredibly proud of the amount of foreign investment we attracted to my talented and skilled part of the United Kingdom. We had our challenges, not least that our nearest neighbour, the Republic of Ireland, had a corporation tax rate of 12.5%—which, to be fair to it, it has relentlessly promoted to gain the eyes and ears of potential investors, especially those from the United States, looking for a base in or close to Europe for their “follow the sun” model of operation. The noble Lord, Lord Harrington, talked about consistency of policy: it has had that tax rate for 25 years.
I have long believed that lowering the CT rate across the UK, but especially in Northern Ireland, would have brought huge dividends. As an Executive in Northern Ireland, we argued the case with the Brown and Cameron Governments. We were successful with the latter, and the Corporation Tax (Northern Ireland) Act 2015 granted to the Executive the power to set a lower rate of corporation tax through the Northern Ireland Assembly. However, the rate has not been lowered, as the European Union state aid rules mean that the cost of lowering the rate would have to be taken out of the block grant to Northern Ireland from Westminster. Post-Brexit, as state aid rules from Europe still apply to Northern Ireland, this effectively means that the Northern Ireland Executive will be unable to lower the rate of corporation tax. The whole idea of lowering corporation tax was to make Northern Ireland more competitive with our nearest neighbour, but I am sad to say that European overreach has killed this idea.
I still believe that having a lower rate for the whole of the UK would benefit all parts of the country. It is a great door-opener to foreign investors, and then the different parts of the UK can add their own special parts to the pitch.
In Northern Ireland, we have a very strong education system, and our bright young people are always our starting point. Northern Ireland still has a grammar school system, and I have always had such a positive reaction to our school system from international investors. We have the best maths results in Europe and are rated sixth in the world. It is a great story for employers interested in the skills of our young people.
Vocationally too, because of our size, we can quickly adapt to the needs of the global economy and particular employers. I used to say that Northern Ireland was big enough to do the business but small and flexible enough to care about the individual companies that were coming. In conjunction with our partners in higher and further education, we were able to set up skills academies, specifically to deal with gaps identified by incoming employers. This was a win-win scenario, for the company and for our young people seeking a career.
The triangular working of government, academia and industry was a tangible success for Northern Ireland and its inward investment offering. I welcome the comments from the noble Lord, Lord Harrington, about aircraft wings production. I have no doubt that he was thinking of Belfast—Bombardier and now Spirit AeroSystems.
I want to finish with a best practice example for the Minister. I note the comments of the noble Baroness, Lady O’Grady, about devolved Administrations and metro mayors not being in competition with the Westminster Government, and I think that is right. When I was Enterprise Minister in the devolved Administration, the now noble Lord, Lord Swire, was Minister of State in the Northern Ireland Office and I had the privilege of working with him on a number of initiatives. One was a joint trade mission that he and I made to the Middle East, where we worked together to present Northern Ireland’s offering from a UK Government point of view and a devolved Administration point of view. It worked well and is a model that should be looked at. I ask the Minister to look at it from the point of view of the devolved Administration and that of metro mayors.
Baroness Wheeler (Lab)
My Lords, I remind noble Lords that speeches are limited to four minutes.
Lord Petitgas (Con)
I will do my best.
My Lords, I commend my friend the noble Lord, Lord Harrington, for his report, and for tabling today’s debate. I know what it takes to harness FDI in the UK. During my stint at No. 10, I worked across Whitehall on several major foreign direct investments. Together with my noble friend Lord Johnson we led the 2023 Global Investment Summit, which beat every investment and attendance record.
Our country has in recent years been a magnet for both capital and talent, topping global rankings. That said, reading the press and hearing from CEOs and entrepreneurs, I fear we have a boom in gloom—investor sentiment is shifting and souring. This is a pressing topic because investor confidence and conviction underpin our national growth priority. We need more investment.
Let me share three observations. First, FDI is a competitive sport, as the noble Lord, Lord Harrington, rightly said. This country has a tremendous hand to play, but there are serious concerns and we face global competition. Investors want stability and common sense. On the former, the Government can no doubt play up their strong majority in Parliament, which is welcome. On the latter, the market is very worried that we will not stay competitive on tax and labour laws. The Government need to back up their pro-business claims with pro-business policies. Business scepticism is now rampant.
Secondly, FDI is not the only capital in town. Our domestic pensions system is woefully under-indexed in both our UK stock market and infrastructure. It needs to get into the game alongside FDI and foreigners. This will boost investment and should also help pensions returns. Moreover, given that FDI often—or always—gets a government subsidy, it will ensure that pensions, not just foreigners, benefit from government largesse.
Thirdly, FDI is about talent—people—not just capital. Let me ask noble Lords which entrepreneur, British or foreign, is going to choose the UK if rumoured levies on capital through CGT, carry and inheritance taxes become uncompetitive. We need wealth creation to pay for our welfare state. We have a mismatch, I fear, between the rhetoric about attracting investment to drive growth on the one hand and policy actions or ideology that will drive entrepreneurs and investors away. I am sorry to be alarmist.
I therefore ask the Minister three questions. First, can he provide an update on the International Investment Summit and the appointment of the Investment Minister? Secondly, can he update us on the pensions review and reform, which is tied to FDI? Thirdly, can he say whether an analysis of the impact on FDI of the likely new tax and labour laws will be made in the Budget?
Baroness Hamwee (LD)
My Lords, the introduction to the debate from the noble Lord, Lord Harrington, was very compelling. I am speaking personally—not that I think my Liberal Democrat colleagues would intervene on and disagree with me, but many of them have expertise in these issues, as, of course, do others in today’s debate, which I do not.
When I saw the title of the debate, I thought: what makes a country attractive? It must include a focus on people. Some of this is soft—similar to soft power. Does the UK give the impression of being welcoming and send out a message of welcoming individuals? Is it open-minded about who would contribute to our society, demonstrating that it is itself interested in and imaginative about contributing energetically and effectively to global society?
The language is important, the Government’s language especially, as it reflects attitudes. So is being warm and welcoming in practical terms. Almost my first thought was immigration policy, including the visa regime. Do we indicate that we are a country which characterises short-term labour needs—shortage occupations—as more important than people’s inherent value and, indeed, their values? Do we say, “Your family members can come with you, provided they are not dependants”?
I give as another example adult dependant relatives. I have heard so many examples of difficult decisions and the distress of high-flyers who have been working here for many years and are very anxious about elderly parents in their country of origin. They have the means to support them in the UK but, crudely, no visa is available unless the parent is so unfit that they are, in fact, not fit enough to travel. I have heard many examples of high-flyers leaving the UK so that they can care for their parents.
In the interregnum between the GLC and the GLA—so 30 years ago, but I do not think that people’s nature change—I chaired the London Planning Advisory Committee, and I did come to realise that planning cannot solve everything and that it can cause problems. We undertook a major piece of work on London as a world city, involving academics and, crucially, the business community. It considered London’s strengths and weaknesses alongside cities such as New York, Paris and Tokyo.
A major conclusion was the importance of London being attractive and liveable if it is to attract foreign investment. When companies consider where to locate, they consider what is important to their staff: good transport, accommodation, air quality, culture—obvious qualities when attracting and retaining staff. If you are bringing your children you need to be assured that it is a good place to bring up children, so it is about living conditions as well as working conditions—not that you can separate them entirely. When I opened the conference to launch the report, the slides—it was that long ago—stuck. They got going when I was talking about the attractions of London’s ceremonial events, and showed a refuse cart; actually, that is important too.
In summary, I am advocating a life in the UK test —not the one for citizenship, which gives too many applicants the feeling they are not wanted, but one for policymakers across the board.
Lord Birt (CB)
My Lords, investment is the lifeblood of an economy. What will attract investment into ours?
First and foremost, we need to recognise that the investor community, amassing funds of trillions, is truly global, has untrammelled freedom of choice, can invest anywhere, and will place its funds only where it is convinced that it will make good returns—and reliably—in a predictable and non-volatile political, fiscal and financial environment. In other words, a necessary if not sufficient condition for attracting investment is stability, as the noble Lords, Lord Harrington and Lord Petitgas, eloquently underlined.
Where we score highly on stability is our widely admired and trusted legal and regulatory systems, and in the City we possess a world-class financial centre, but, in the past 10 years or so we have failed badly to offer the political stability the investor community looks for. We have exposed investors to the chronic uncertainty of Brexit, religious wars in the ruling party, five Prime Ministers, and the Liz Truss moment of madness, with the Bank of England forced to ride to the rescue of the UK’s pension funds.
A new Government should strain every sinew to restore political calm, to foster a stable currency and to ensure internationally comparable interest rates. Beyond stability, we have to offer investors high returns, so a new Government must also work to remedy the enduring weaknesses that contribute to the UK’s low productivity: underinvested road and rail infrastructure, a planning system that moves at a snail’s pace, skills shortages at every level and too few people in productive work.
I neither have, nor have I ever had, a stake in a private equity fund, but I have chaired companies invested in by PE, and I have been much exposed to global investors. The UK has the greatest private equity firepower in Europe but a high proportion of those working in the sector are not UK citizens and they, and the funds they manage, are highly mobile. Personally, PE professionals can benefit handsomely if they produce high returns for their investors, but if they fail, which happens, they receive nothing, and the risk of that is recognised globally in establishing tax regimes for when they do succeed.
The UK is not an outlier but somewhere in the middle of the pack in the tax regimes applied to PE by the US and leading EU countries—less generous than some, more generous than others. But I hope the Government will be truly wary of the very real flight risk of both funds and professionals, and the consequent dangers for the economy, if our rates are materially increased, as the noble Lord, Lord Leigh, himself underlined.
It is vital that the new Government celebrate and incentivise the spirit of enterprise—a critical route to growth, to increasing individual prosperity, to expanding the tax take, and to beginning the process of re-investing in our mightily challenged, underfunded public sector.
Lord Wigley (PC)
My Lords, I am grateful to the noble Lord, Lord Harrington, for the significant work he undertook in his review of foreign direct investment. We in Wales are still in the process of moving away from an economy based on heavy industry to one in which we have to pay our way in the world by the export of sophisticated goods and services.
My industrial career was with three American-owned manufacturing corporations: Ford at Dagenham, Mars at Slough, and Hoover Ltd—where I was financial controller of its washing machine factory—employing 5,000 people at Merthyr Tydfil and which, three decades later, was tragically closed down. With all three, I worked on inward investment projects, with ultimate decisions being taken in America.
I later chaired a small company manufacturing in the biomedical sector, which we set up near Caernarfon. It was a business we started from scratch and that grew to employ 50 people, before being taken over by the Diagnostic Products Corporation of Los Angeles, whereby it grew to employ more than 200 people in a new factory, built by the Welsh Development Agency, at Llanberis. It is now part of the Siemens Healthineers division, employing 500 people there, producing test kits for medical conditions, largely for export. Recently, 100 well-paid research and development jobs were transferred from America, to be filled by people largely recruited locally.
There are three types of inward investment that I would like to highlight. The one I have mentioned bought into an existing business and, by dint of investment, access to research, worldwide networks and additional markets, improved the prospects for its own operation. The second type is those that set up in Britain from scratch, gaining market access to the UK, or—as was—to the European home market. In this regard, Wales benefited hugely from the Welsh Development Agency. I pay tribute to the excellent work of our late colleague, Lord Rowe-Beddoe. The WDA persuaded 50 Japanese companies to base their European operations in Wales; sadly, some of them have now moved on. It is a tragedy that the WDA was abolished. We need such agencies.
The other huge FDI contributor to Wales has been the United States. In 1974, the year I entered Parliament, the report Overseas Investment in Wales noted that Wales had 90 wholly owned American companies employing some 44,000 people. At its peak, it is estimated that there were over 200 American companies and operations in Wales.
The third category is of one investing in and possibly taking over a business that already exists in the UK—perhaps helping it to expand, as was our experience. However, there is always a danger of a takeover in its original country of origin, leading to jobs being moved away from these islands, as happened with Hoover, and at worst leading to asset stripping and a loss of control of intellectual property.
Overseas investment in Britain, properly harnessed to work in partnership, still has a huge role to play in our economic recovery. However, we need agencies such as the WDA to make sure that the right things are happening in the right places on the ground. I hope that the new Government will find ways to eliminate artificial tariff or technical barriers between ourselves and our continent, create economic stability at home and bring a new approach to foreign direct investment. I hope they will co-operate with the devolved Governments to harness our resources, work in harmony and give our universities and our young people the chance to play their part in these matters.
I hope this report presents a starting point from which we can move forward.
Lord Bilimoria (CB)
My Lords, in November 2023 the Harrington Review of Foreign Direct Investment made recommendations about how the UK could attract more cross-border investment. Thankfully, the new Labour Government have set tackling barriers to investment as a priority. I thank my friend the noble Lord, Lord Harrington, for initiating this debate and for his excellent review, which made several recommendations. The City of London has said clearly:
“Overall, by far the largest FDI share comes from financial services, with £588bn attributable to that industry”.
According to it:
“The USA is the largest FDI investor followed by Holland, Belgium, Luxembourg, Germany … Japan, Switzerland, France, Spain and Canada”.
Noble Lords might have noted that most of those countries are EU countries. There is no question about it: Brexit has harmed Britain’s attractiveness as an inward investment destination. Before Brexit we were a magnet for inward investment; we were one of the highest in the world and were seen as a gateway to Europe. Can the Minister confirm that we are going to get closer and closer to the European Union? I would go so far as to say: let us join the single market as soon as possible. That will power FDI ahead.
I am a member of the GREAT campaign’s private sector council. I am delighted to hear that the Minister of State without Portfolio and Labour Party chair Ellie Reeves MP has been appointed the Minister for GREAT within the Cabinet Office. As an example of the impact of GREAT, £900 million-plus of foreign direct investment came from 32 investment projects setting up operations in the UK during 2023-24.
What better example of the power of inward investment could there be than by looking at India? Grant Thornton, the firm of accountants, has an annual India Meets Britain Tracker report. The 2024 report says that almost 1,000 Indian-owned companies are based here in the UK. For example, Tata owns Tata Steel and Jaguar Land Rover, which turn over a combined £68 billion, employ almost 120,000 people, and pay taxes of £1.17 billion.
To be attractive to inward investment, we need a flexible labour market. Britain has always had the strength of a flexible labour market, unlike France, which is hampered by not having one. Can the Minister assure us that we will not do anything to remove the flexibility that we have?
On immigration, there is no question that the previous Government portrayed a hostile approach to immigration. We have labour shortages in almost every sector. Can the Minister confirm that we will have business-friendly immigration?
What better example of foreign direct investment could there be than international students? I have just finished my 10-year tenure as chancellor of the University of Birmingham and continue to be co-chair of the All-Party Parliamentary Group on International Students. International students bring £42 billion a year into this country, yet the previous Government—including, I am sorry to say, my friend Rishi Sunak, the former Prime Minister—had a hostile approach to international students and wanted to remove the two-year post- graduation work visa. I am delighted that Bridget Phillipson, the Secretary of State for Education, with whom I shared a platform at King’s College recently, has said that we are going to retain the two-year postgraduation work visa and that we welcome international students.
To be attractive to inward investment, we must have an attractive tax environment. Once again, I said to Rishi Sunak when he was Chancellor and I was president of the CBI, “Don’t raise taxes”. What did he do? He put up corporation tax from 19% to 25%. That is not good for foreign investment. He also put up taxes to the highest level in 70 years and now we are scared that the Labour Government in the Budget next month are going to put up capital gains tax, widen inheritance tax and affect non-doms—68,000 people who pay £9 billion in taxes in this country and spend and invest in this country. Please can the Minister remove this fear that we all have; otherwise, capital will fly from this country.
I conclude that fundamentally this country has all the ingredients for fantastic foreign direct investment. We have the best combination of hard and soft power—manufacturing, financial services, universities, creative industries, our judges, our courts—let us not hamper it. Let us encourage foreign direct investment.
Lord Jones (Lab)
My Lords, I too thank the noble Lord, Lord Harrington, and it is always instructive to hear the noble Lord, Lord Bilimoria. I want to see more foreign direct investment and see it invested in Wales’s remaining steel industry. I want to see the global company, Tata, invest ever more urgently and very considerably in what remains of Britain’s steel industry, specifically in Wales, particularly at Shotton, which is a small gem in Tata’s steel crown, and now especially—strategically, substantially and very urgently —in the still-mighty Port Talbot works, which is still just perhaps a fully integrated steel plant. I welcome the green steel fund and the Government’s timely emergency funding. However, I am a long-standing parliamentary witness to the contracting and dying agonies of the steel plants in Wales—Ebbw Vale, Cardiff’s East Moors, Newport’s Llanwern, north-east Wales’s Shotton, Brymbo in Wrexham, and Trostre and Velindre in the south. As a youthful Minister and shadow Secretary, I visited most of them.
I declare an interest as I once was a common labourer on the furnace stage of No. 2 blast furnace when the fully integrated Shotton works was in its heyday with a workforce of 14,000. My tools were a crowbar, a pickaxe, a shovel, a six-foot ladle for sampling the blinding-orange, hot running metal, and a wheelbarrow for my hundredweight of moulding sand. I operated from the roaring mouth of the furnace across the stage, along the runner to the drop to the receptacle that received the metal below. There was no Health and Safety at Work etc. Act—Michael Foot’s historic legislation was a generation away—but I had a helmet and salt tablets.
I took my breaks in an echoing, greasy, cramped cabin and my workmates were men of no fixed abode, probationers, ex-prisoners and no-hopers. We were all equals and the furnace keeper was a hugely experienced, brave, careful man. He wore clogs and had his sweat towel at his brass-buckled belt. I say that the steelworker always works in a challenging environment, seeking to avoid injuries and deafness. I would like to see the Welsh steel industry, especially in beleaguered Port Talbot, have its generous, urgent direct foreign investment from Tata Steel.
I note that that clock says I have spoken for two minutes 24 seconds, but I think it had a breakdown and I must honour the four-minute limit.
Lord Gadhia (Non-Afl)
My Lords, I commend the noble Lord, Lord Harrington, on securing this short debate. It is especially timely ahead of the International Investment Summit and the Budget scheduled for next month. The Harrington review was a thorough and comprehensive report grounded in evidence from a wide range of stakeholders. Its six headline recommendations provide a thoughtful and practical road map for improving the UK’s attractiveness as an investment destination. Indeed, I referenced the review during the King’s Speech debate, describing its proposals as necessary hygiene measures to revive investment, alongside the reinstatement of the Industrial Strategy Council.
Although the previous Government commissioned the report and made warm noises about its conclusions, they ultimately ran out of time to make meaningful progress. I hope the new Government will fully embrace this agenda. Global investors do not care much for domestic political tribalism. In fact, if anything, they are looking for the opposite: predictability, certainty and consistency—the three most coveted words for investor confidence. So, if the new Administration are serious about sending a positive signal to prospective investors, which I believe they are, then they would do well to show some continuity in this area.
However, we do have to face up to three broader issues regarding FDI. First, we are no longer the gateway into the EU, which was a previous tail-wind underpinning inward investment flows. The data speaks for itself: since 2016-17, we have seen a 30% drop in the number of FDI projects. The picture would be much worse if it were not for greenfield investments in renewables, notably offshore wind.
Secondly, taxation matters—not just corporate taxes but those levied on investors themselves. Even though headline corporation tax rates have increased, full expensing of capital expenditure, now permanent, should produce positive results over time. In contrast, on personal taxation, I believe we have miscalculated the impact of the latest changes to the so-called non-dom tax regime, which is often intertwined with FDI decisions made by high net worth individuals. The Treasury modelling will have made assumptions about the number of people expected to leave the UK. There is now substantial evidence that the assumed leaver rate has been far exceeded. We will, therefore, face the double whammy of losing Exchequer revenue and adversely impacting FDI. I ask the noble Lord, Lord Leong, whether the Treasury is monitoring this situation and whether the Treasury and the OBR are still confident that the measures announced in the March 2024 Budget will still raise £2.7 billion a year by 2028-29. I also fear that we are about to make matters worse through changes to the capital gains tax regime in the forthcoming Budget. The politics of envy is seductive but economically destructive. I hope that rationality will prevail. This is certainly the reputation of the current Chancellor, and the October Budget will be a big test of her judgment and instincts.
This leads neatly to the third factor influencing FDI: namely, general investor sentiment towards the UK. This is the ultimate intangible and not easy to pin down but arguably one of the most important ingredients determining the flow of FDI. Sentiment can be influenced by the smallest of issues, which is why the noble Lord, Lord Harrington, was right to call for the streamlining of cumbersome processes, removing obstacles such as planning delays and grid connections. Another issue that frequently comes up from inward investors is their poor experience at Heathrow Airport. It is literally the UK’s shop window, and we should be far more imaginative in making passport control a pleasant experience for incoming visitors, especially those bringing their cheque-books.
In conclusion, I am convinced that the UK can lead the world in attracting capital, but to do so we must regain our self-belief, natural pragmatism and fall in love again with wealth creation.
Lord Mountevans (CB)
My Lords, I add my congratulations to the noble Lord, Lord Harrington, on his splendid review. Noble Lords may know the City is close to my heart. I spent my career in global shipping markets. But my ship really came in, as it were, when I was elected as Lord Mayor. In that role, I represented UK plc around the world, promoting UK exports, particularly financial and professional services, and highlighted the attractiveness of the UK as a place for international investment. It is with that background that I turn to the subject at hand.
Following the views of the then Chancellor, the review focused on five key growth sectors in the UK: green industries; advanced manufacturing; life sciences; digital technology; and creative industries. The list does not include financial and professional services, arguably Britain’s most important and successful sector. I urge the new Government not to overlook it. I wonder if sometimes Governments have felt that FPS can look after itself. It must be high among Government’s promotional priorities; a dynamic FPS is fundamental to successful business.
At the forefront of our minds must be the UK’s competitors, from Ireland to Singapore and those in the Middle East—each with powerful investment agencies focused on attracting FPS. By contrast, here in the UK, there are a wide range of organisations promoting FPS and other FDI. A change in targeting support could give these organisations far stronger impact. We know that improving FDI helps growth. For example, in 2023 the UK attracted FDI in 222 FPS sector initiatives involving 177 foreign companies valued at £1.1 billion. FDI in 2022 alone created nearly 15,000 jobs. Over half of the jobs created in 2021—the last year for which I could find figures—were outside London.
City of London Corporation research indicates that improving support for financial and professional services within FDI could significantly increase growth, adding an additional £0.7 billion to the economy by 2030. The UK has a great potential in FPS. We have our skills and expertise; we are a great place to connect to global talent and markets; we have strength in sustainable investment and green finance; and we have our pioneering fintech sector. This means that the UK has a strong offer across the FPS piece.
I offer four ideas for how we can expand and strengthen the position. First, there is the FCA’s innovation of a sandbox, where companies can experiment with new ways of doing business while under close, agreed regulatory oversight. The UK has led the way in creating new opportunities for services firms to innovate. This helps to attract growing and vibrant business to the UK. The UK can be a world leader again by establishing multijurisdictional sandboxes, which would help develop regulatory approaches across jurisdictions in response to emerging technologies. This would act as a catalyst for increased foreign investment in the UK.
Secondly, we should be embracing emerging parts of the services industry, such as carbon markets. These markets have the potential to position the UK as a global centre for carbon market activities. With this comes the opportunity to attract foreign investment in UK professional services, capital markets and trading activities. The City of London Corporation’s UK carbon markets forum seeks to highlight the importance of this sector.
Thirdly—perhaps the Minister will be attracted by this proposition—we should create as a pilot an FPS investment hub as the first step to creating a stand-alone cross-sector national investment agency. This should be established as a joint venture or public-private collaboration. It should be arm’s length from the Government. This would create focus for foreign investors wanting to direct investment to the UK.
Fourthly, the much-applauded review of FDI from the noble Lord, Lord Harrington, shines a light on how the UK might strengthen and deepen its attractiveness to FDI, but perhaps we could go further. The establishment of a financial and professional services strategy would help UK and overseas businesses to see a road map of how the Government may offer help and support. By having a single codified strategy, foreign investors might be galvanised into directing their investments to the UK.
Lord Livingston of Parkhead (Non-Afl)
My Lords, I share my thanks to my noble friend Lord Harrington for his outstanding report; it is an excellent read.
I will give a view on the UK’s position in respect of FDI. I speak not just as someone who was previously Minister for Trade and Investment, but also as either a CEO or director of companies that have invested around the world. The UK’s position is not bad. We have suffered because of Brexit, which has had an impact. We have also suffered from instability. Businesses cannot put a number on instability. It increases risk and they do less investment when it exists. They want to see long- term stability if they are making long-term investments.
We have so much in the UK that we can build upon, as mentioned in the report: English, GMT zero, the rule of law, financial centres, et cetera. If I could add to the report, I would add universities. We have four of the best universities in the world within 100 miles of here. They are important, not just for skills and research, but also many future business investors will have gone to university in the UK and have become pro-UK. Investment in universities and foreign students is a win-win, and we really need to encourage it.
People also want to live here. Encouraging employees to come and work and live here is an important part of the investment decision, as is labour flexibility. We are talking here about good companies which train well, invest well, recruit people and promote them. They want to see labour flexibility. I know that there are a number of countries in the EU that people will not invest in because it is so difficult to change their position after they have done it.
The noble Lord, Lord Harrington, raised a number of issues; I will pick up on just a few of them. I find one of them deeply depressing because it was an issue when I was a Minister, so obviously I did not solve it: opening bank accounts. It is remarkable that it still has not been solved. It seems to be easier to open a bank account if you are a fraudster than if you want to come to the UK and give out jobs or if you are a Peer. It is a Catch-22 situation: you cannot open a bank account because you are not here, and you cannot be here because you cannot open a bank account. Although the noble Lord, Lord Harrington, made some points on this, I challenge the Minister to go further. Why do the Bank of England, the Treasury or the PRA not give some cover to the banks—do a bit of research and say, “Okay, you can give open accounts for the next 12 months while you do the work”—and try to clear people up front? Banks will be risk averse because of the nature of the regulations.
On visas, we are usually going to grant visas to people who want to create lots of jobs. Let us make it easy, do it up front and be proactive. As an example, when I was a Minister a car plant was opened here; one of the key reasons was that we presented a visa from the Home Secretary saying, “We want you to be here, and here’s a number for your top people to contact when you want to come and visit the factories”. The important part is that people want to feel wanted.
One of the other important things is consistency. We have had so many changes. Everyone in government, including the Treasury, has to understand that these things do not turn around in a year. You cannot keep on changing funding for support mechanisms or programmes; these things are built up over many years. The people we are speaking about today may be making investments in five or 10 years, not five or 10 months.
Finally, although this report is about FDI, it makes so many great suggestions that also apply to domestic investment. FDI is not instead of domestic investment but as well as it. We should apply the same rigour to making great investment decisions, whether from abroad or from companies in the UK.
Lord Johnson of Lainston (Con)
I congratulate the noble Lord on his appointment and welcome him to his place. He is a credit to the seldom seen, pragmatic approach that Labour should take if it wants to genuinely grow this economy.
I also pay homage to my friend and mentor, the noble Lord, Lord Harrington. His review is unquestionably first class. He is a genuine leader in his field, and I was incredibly grateful to him for the enormous amount of work he did in compiling his evidence. The Government commissioned his report and we endorsed his findings, as he said. His list of actions—all of them—will help this country win more foreign investment.
We need this money. As the noble Lord, Lord Petitgas —another of the true national heroes in this area—said, without FDI we cannot achieve any of our goals for net zero, AI, advanced manufacturing, housing or infrastructure. This is not a “nice to have” but the very essence of the survival and progress of our nation. If the goal of a Government is to give their citizens a longer, happier life, improving our investment environment is the only way, frankly.
When the Conservatives were in government, the landscape looked different—optimistic and powerful. I always believed that, if you took a hot-air balloon up into the sky on a clear day, you would look down and see herds of tech unicorns galloping across our green fields, the sunlight glinting off their golden horns and hooves. Now I worry that, under Labour, we would see only a few lonely unicorns, their ribs showing through and their coats shabby. You might even text them some money, since I am afraid that Labour, for all it says, does not really understand what it takes to create an attractive environment for investment. We live in a competitive world where capital, like water, flows where it likes. You cannot force it. You cannot fake it. The opportunities have to be real and the economic framework has to be conducive to generating the right level of return, as we have heard.
The Government, I am afraid, are talking down our nation, our abilities and our people. I find it quite bizarre, and I would like to ask the Minister to comment on whether his colleagues will actually start saying nice things about this country and positive things about the economy. Under the Conservatives, in our long tenure, contrary to what you read in the papers, we achieved record amounts of FDI, putting us, as we heard, in the top three destinations for FDI in the world for overall stock, second only to the US. In greenfield ESG-related investments, I think we were first in the world. The week of the global investment summit last year, to which the noble Lord, Lord Petitgas, referred, saw pledges to invest £50 billion in just one week, and the Northern Ireland investment summit to which the noble Baroness, Lady Foster, referred was also an enormous success. I should like to hear a little more on the Government’s plans for their own summit, if I may. What are the targets for this event, in terms of pledges? How much is it costing, and when will we know who is coming?
One cornerstone feature of our economy is the flexibility of our workforce, which is now under threat from a set of proposals designed to enhance the power of the unions over business. What sort of message does that send? This is an issue and it has been raised before: many of the investors I dealt with told me how they preferred the UK to France precisely because the restrictive labour practices there made it so hard to manage a business.
This Government are also mulling significant tax rises on capital, which means, effectively, tax on investment returns. I repeat the request for the impact assessments of these changes when it comes to assessing inward investment into the country. I also want to press the case for further or better regulation to remove barriers to investment. We talked about the growth mandate in a debate yesterday, and I was not sure whether the Minister had really committed to adhering to it and trying to drive regulators to behave accordingly.
I turn to the point about financial services, which was raised successfully and succinctly just now. The FCA, CMA and PRA all think they are doing a great job, but yesterday Michel Barnier published a fabulous report that pointed out the important need to restructure some of those bodies to adapt to the modern need for huge capital pools, if we are to survive as a society.
In conclusion, can the Minister please tell us how committed his colleagues really are to garnering foreign investment? When will he commit to publicly endorsing the Harrington review with improved resourcing for the Office for Investment and a Chancellor-led Cabinet committee? When will he and his colleagues start talking up, rather than down, the amazing opportunities of this country and its regions? When, if I may ask, will he find someone brave enough, generous enough and, frankly, kind enough to stand in as their Minister for Investment?
Lord Leong (Lab)
My Lords, I am pleased to respond to this Question for short debate on behalf of the Government. I take this opportunity to thank all noble Lords who have spoken, and I start by paying tribute to the noble Lord, Lord Harrington. He has done valuable work in this space to help make the UK more attractive for inward investment, and I thank him for his kind words. Before coming to this House, I had always been an entrepreneur; I have set up businesses and been on beauty parades to seek investments. Since then, I have sold my businesses and become an investor, so I am well versed on what is required to bring in investment, and on the situation we have to portray to attract inward investment.
The noble Lord’s recent review has generated much discussion about how we can facilitate more investment through more channels, both here in Whitehall and in the private sector; indeed, some of his recommendations have since been implemented. I also pay tribute to the noble Lord, Lord Johnson, for his recent tenure as Minister for Investment. He was an energetic and vocal champion for UK PLC, and I have no doubt that his personal efforts helped to facilitate more inward investment into the United Kingdom.
Several noble Lords asked when we are going to have a Minister for Investment. All I can say is that the Government will make that announcement in due course. We want to find the right individual, who can drive our investment agenda right across government—that is the individual we are looking for. I shall endeavour to answer as many of the questions asked as possible within the time limit of 12 minutes, and if I do not answer them all, I shall go through Hansard and write to noble Lords.
The Prime Minister, the Chancellor and the Business Secretary have all emphasised the importance of inward investment to this new Government: it is a key driver of productivity growth, which enables innovation and efficiency in the wider economy. This in turn creates jobs, opens up opportunities for communities and spurs economic growth. Investment drives growth, productivity, employment and a higher standard of living. We know that investment is one of the principal drivers of growth, as the noble Baroness, Lady O’Grady, mentioned, yet for quite some time the UK has suffered the lowest investment share as a percentage of GDP in the G7. We ranked 27th out of 30 in the OECD league table last year. With five Prime Ministers, seven growth strategies and 10 Business Secretaries under the previous Government, stability was sorely lacking. Businesses have not had the confidence to invest, as mentioned by various noble Lords, to adopt new technology, to upskill their employees or to plough money into research and development. We are determined to change that.
One of our principal ambitions is to boost those sectors in which the UK is a world leader and which therefore have the greatest potential for generating the growth that we need. They include our green industries, advanced manufacturing, life sciences, digital technology and, let us not forget, our world-beating creative industries, our financial and professional services and aviation, as mentioned by various noble Lords and the noble Baronesses, Lady Foster and Lady O’Grady. While these sectors have been attracting much investment, they are at risk of stagnating because of the policies and action, or lack thereof, of the last Government. If we do not work hard to attract this investment and capital, we know that our European partners in France, in Germany and even in our nearest neighbour, Dublin, will attract them. As for Singapore, Bahrain and the UAE, we have to compete with them. Attracting foreign direct investment is a global, competitive business. We have to be out there, seeking out those companies and sovereign funds to make the UK the investment destination—we have to bring them here.
To hit the ground running, the Prime Minister has already announced plans for a new international investment summit in October, as mentioned by some noble Lords, to bring together businesses and big-hitting investors. We want to drive home the benefits of our plans for a new industrial strategy and, of course, our national wealth fund, both of which we will lay out in more detail over the coming months. Launched shortly after we took office, the national wealth fund will explore the possibility of aligning key financing institutions, such as the UK Infrastructure Bank and the British Business Bank, to offer a compelling proposition for investors, including to scale up or invest in SMEs. It will mobilise billions more in private investment and generate a significant return for taxpayers. Over £7 billion has already been allocated in additional funding so that investments can start being made immediately, focusing on further priority sectors and catalysing private investment at a greater scale.
As part of our bold plan for growth in the places where it is needed most, our industrial strategy will drive investment into crucial sectors across all parts of the United Kingdom, including working with the devolved Administrations and combined authority mayors. It will build a resilient economy that can stand on its own two feet, increase opportunities for all and make Britain a clean energy superpower.
It will also be through planning reform. I hear this time and again from investors: we need to unshackle the things that prevent planning and building factories. To get Britain building again we need planning reform and to end the ban on offshore wind, prioritise brownfield land for development and renew green-belt boundaries. This will attract more much-needed investment into construction, engineering and clean tech.
These increased investment opportunities will be vital for putting capital into skills and education, as has been mentioned by many noble Lords. Indeed, our new body, Skills England, was launched in July, alongside our commitment to transform further education into technical excellence colleges. Working with local businesses, this will accelerate the upskilling of the workforce and act as a vital skills bridge between industry, small businesses, trade unions, schools, training providers and our universities.
We will bring in the expert voices needed to form a fully independent Industrial Strategy Council, placing it on a statutory footing to send a clear message to businesses and international investors that we are a pro-growth Government of certainty, consistency and stability.
The Business Secretary has already spoken to hundreds of businesses and he has assured private sector leaders of our commitment to accessibility and a pro-enterprise approach. Both the Department for Business and Trade and the Treasury are working closely to provide cross-Whitehall governance on investment. This is taking shape through our growth mission boards—the first of which met in July—the Industrial Strategy Council and the national wealth fund, ensuring joint accountability in securing new investment and removing structural barriers to priority areas. I know this was a recommendation from the noble Lord, Lord Harrington, in his review last year, so no doubt he is pleased to see it taking shape.
We also know how critical the pensions industry is to investment, as mentioned by several noble Lords. They are intrinsically linked, but we know that there is much more that we can harness. That is why we are undertaking a pensions investment review, with the ambition of unlocking the potential of the £360 billion in local government pensions schemes.
We will continue to utilise the expertise of the Office for Investment, as mentioned by several noble Lords, and its dedicated concierge services provided to the world’s most strategically important investors, complementing the wider work of the Department for Business and Trade. The OfI has a strong track record of securing highly transformative investments into key sectors in the UK, and we will continue to leverage its knowledge and relationships to land-critical investments.
I mentioned earlier that FDI is a global competitive business. We have got to compete with the likes of Singapore, with its Economic Development Board, and likewise with Bahrain and the USA. We will seek investment from Africa to Australia, and from the USA to the UAE. We have to be at the beauty parade to promote the UK as the destination for investment. For higher-value investments, we offer bespoke assistance, including project and account management, and guidance to help navigate the UK landscape and develop innovative solutions to help overcome barriers such as planning and access to the grid.
My time is up, so I am going to conclude, but I will write to noble Lords after I have read Hansard.
Lord Leigh of Hurley (Con)
My Lords, will the Minister confirm that he will write to noble Lords, four or five of whom have specifically asked for impact assessments on employment laws and on potential changes to taxation? Will he confirm that he will specifically address those issues?
Lord Leong (Lab)
I assure the noble Lord that I will definitely write. For those issues relating to the Treasury, it is a bit above my pay grade but I will definitely speak to my colleagues to get some information to noble Lords.
To conclude, we need to see more of such investments in the United Kingdom, and we need to really turn this stalling performance into sustained growth—growth that translates into more jobs, better pay, a happier workforce and more innovation. It is only through investment from this new Government, British businesses and international investors that we can make those things possible and make the UK one of the best places in the world to live, work and innovate.