Westminster Hall

Wednesday 23rd October 2024 Westminster Hall

Wednesday 23 October 2024

[Sir Christopher Chope in the Chair]

Rough Sleeping

Wednesday 23rd October 2024 Westminster Hall

09:30

[Deirdre Costigan (Ealing Southall) (Lab)]

I beg to move,

That this House has considered the matter of tackling rough sleeping.

It is a pleasure to speak under your chairship today, Sir Christopher.

Night after night in Ealing Southall, people bed down in front of the Quality Foods shop, where a canopy offers some shelter from the rain, although it does not offer much protection from the biting cold. They sleep there all night, wrapped up in cardboard and ragged sleeping bags. Up the road in West Ealing, it is the same story. Indeed, data show that on any night in England in 2023 almost 4,000 people slept rough—a 27% increase on the previous year. It is a daily tragedy for homeless people, and of course it is also intimidating for people passing by and it cannot help but make our town centres less attractive for shoppers and businesses.

I recently visited Southall community college, which is trying to offer its students a good learning environment, but it says that it is hard to do so when there are people sleeping under the college awnings every night who are still there in the morning. The college has decent people who want to help, but they do not know where to start.

Hope for Southall Street Homeless is a fantastic local charity that helps homeless people and those sleeping rough—I recently visited and saw the range of services it offers, from a hot meal to eye tests to a Bollywood movie on a big screen—but voluntary services are straining under the sheer weight of people now sleeping rough. There was a brief respite during covid when the Everyone In programme moved almost all rough sleepers into accommodation, but when the covid crisis was over, the previous Government squandered that opportunity. They refused to learn the lessons and now the numbers are swiftly moving back to the pre-covid record levels of rough sleeping.

Some people might think that rough sleeping is something we just cannot fix—a problem that will always be there—but the last Labour Government reduced rough sleeping by more than two thirds in their first term by taking a cross-departmental approach. I really welcome the new Government’s commitment to doing similar. I hope that the Minister will be able to outline the timeline for a strategy on rough sleeping and clarify which Departments are involved in the new interministerial group.

Rough sleeping has a number of causes, including a chronic lack of affordable housing. That is not surprising given that the previous Government presided over a net loss of 210,000 affordable homes over the last 10 years. I am delighted that the new Government are investing in 1.5 million new homes, creating a new generation of social homes in particular. Our low-wage economy also reduces the affordability of housing. Up till now, renters could be kicked out without a reason. I very much welcome the new Government’s plan to make work pay, which will ban precarious zero-hours contracts and fire and rehire, and our Renters’ Rights Bill, which will ban section 21 evictions, giving renters more rights.

Many of those sleeping rough have mental health problems or substance misuse issues—many have both. They need intensive support, but we know that the NHS is in crisis. The Secretary of State has taken decisive action with a new 10-year plan, but I hope the Minister will ensure that the needs of rough sleepers are taken into account when designing community mental health and addiction services that will help to reduce rough sleeping.

Although we are taking steps to reduce rough sleeping by building new housing, improving renters’ rights, making work pay and rebuilding our NHS, it is all being undermined by the previous Government’s broken immigration and asylum system, which literally creates rough sleepers. In Ealing Southall, many of our rough sleepers are single men in their 60s, although they look even older from their time on the streets. They often come from India originally and do not speak much English, despite having lived here for many years. They might have worked in construction or catering and rented a home, but something went wrong in their lives and when they went to look for help to avoid becoming homeless, they discovered that they did not have the correct visa. They get told they have no recourse to public funds—NRPF—and cannot access housing or welfare support. With no housing benefit or universal credit, some of them end up with no option but to sleep on the street. In some ways, their experience is similar to that of those affected by the Windrush scandal; they get asked for piles of evidence that they did not keep, because they never knew there was a problem with their papers.

Some 3.3 million people in this country have been told that they have no recourse to public funds. That is a massive increase in the number of people being denied access to basic services. Many have the right to services—they just need help to track down paperwork and to make their case—but in a Catch-22 situation, they are not allowed to access help to prove their status. Rightly, this Government have taken on the staff to start assessing claims to ensure that those without a right to remain in this country are removed, but I hope the Minister will consider what can be done to offer advice and support to those people who have a right to live in this country, so that they do not end up homeless.

Many of those with no recourse to public funds status who are sleeping rough have significant health issues, including heart disease and stroke, but they often cannot access the care they need. Local authorities are not aware of their duties under the Care Act 2014, and they worry about spending money illegally. Added to that, of course, local authorities saw their funding decimated under the previous Government, so there is not a lot of money to go around. I hope that the new Government will consider clarifying local authority responsibilities in that regard.

Another growing problem is people coming out of the asylum system and ending up on the streets. The new Government have finally got the system working again after the costly and ineffective gimmicks of the previous Government. Ironically, however, people who are assessed as refugees with the right to asylum in this country are being given no chance to make a life here. Under the previous Government, people granted refugee status were getting as little as seven days’ notice to leave asylum accommodation—eventually changed to 28—but that is still far too short a time, especially as the local housing duty does not kick in for 56 days. I hope that the Government will give consideration to whether it would be sensible to align those timeframes better, whether local authorities can be notified in advance, and whether improved support can be put in place, so that we end the frankly ludicrous situation in which we agree that people are refugees and have a right to be here but turn them out on to the streets.

In Ealing Southall, we also have a significant number of EU nationals sleeping on the streets. For reasons that can include chaotic lives or mental health issues, they may not have submitted their settled status paperwork on time; and now they are stuck in limbo. It is easy to say that they could go home but, as an immigrant myself, I understand how hard it might be to admit that the streets of London were not paved with gold—that they failed to make it. I hope that the Minister will look at simplifying the EU settlement system, offering more advice and support, and a better assisted voluntary return system for those who would consider going home.

A further issue to bring to the Minister’s attention is the chilling impact of the previous Government’s right-to-rent legislation, which has meant landlords wrongly think they need to see a passport before they can rent to someone. Many people born and bred in this country do not have a passport, and the policy is only legitimising discrimination, so I hope that the Minister will consider the impact it is having on homelessness. I am afraid it is not just the asylum and immigration system that is adding to the numbers of those sleeping on our streets; 15% of prisoners were released into homelessness in 2023, and 4,100 people were released from hospital on to the streets.

Money always helps, and I look forward to the Government making provision for tackling rough sleeping in next week’s Budget, but we can make a huge difference to rough sleeping just by stopping policies that create homelessness in the first place. We all want to end rough sleeping, and the new Government’s focus on building affordable homes, making work pay, rebuilding the NHS and strengthening renters’ rights will have an impact, but we will never solve the problem if the previous Government’s immigration and asylum system continues to be allowed to cause homelessness and rough sleeping. The system we inherited is creating destitution by its very design. Not only is that morally wrong; it is a false economy. It just creates a bigger problem that costs us more to fix through acute services, and it is impacting on our town centres.

The new Government have made rough sleeping a priority and committed to a cross-departmental approach. I hope that the Minister will work with her colleagues in the Home Office, and in the Ministry of Housing, Communities and Local Government, the Department of Health and Social Care, the Ministry of Justice and the Department for Work and Pensions to ensure that those making up their bed on the street tonight will not have to wait much longer for help to rebuild their lives.

09:39

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to serve under your chairship, Sir Christopher. Well done to the hon. Member for Ealing Southall (Deirdre Costigan); homelessness has been one of the key issues that she has raised since arriving in this place. It is a pleasure to be here, as I said I would be—others are here for the same purpose—to support her quest for betterment for those who are homeless. I also welcome the Minister to her place. It is a pleasure to see her, and we look forward to her contribution. I also welcome the shadow Minister, who is a well-seasoned campaigner and will be able to pick over the issues as well as all of us.

The hon. Member for Ealing Southall set the scene well. It is always with great sadness that I hear the comments of hon. Members regarding rough sleeping across the UK. The hon. Lady set out—I am trying to pick the right words—the desperate scene for people who are homeless and explained what they go through. This is a UK-wide issue, facing all constituencies. I always like to give a Northern Ireland perspective. Rough sleeping may not be as massive an issue in Northern Ireland as it is in other parts of the United Kingdom, including the hon. Lady’s constituency, but it is something we have to raise awareness of, and this debate gives us that opportunity.

I will give some examples of the issue in my constituency, and talk about those who respond. There is a collective responsibility on us all, including Government bodies and all the people who look after individuals who are homeless and rough sleeping to be better prepared to help and support them.

There is almost a stigma around rough sleeping—the idea that those who have no other choice in life have made incorrect decisions to find themselves in those circumstances. I say that respectfully. In some cases, those people might look for solace in things that do not provide it but give them more heartache and pain. I think of substance abuse, which makes it difficult for people to get their lives back on track; the whole thing is a real journey, like being on a train and not being able to get off. That is the reality for some people who rough sleep, although it is certainly not the case for all. Rough sleeping could be due to relationship breakdown, financial circumstances, the availability of housing and so on.

In 2023, the Northern Ireland Housing Executive released figures on rough sleeping. By their nature, these figures are not astronomical from a mathematical point of view, but they tell a story of 45 people who were rough sleeping—a 36.4% increase on 2022, when the number was 33. Although that might not seem like many, that is 45 people who are homeless—rough sleeping—and have nowhere to go, and in many cases, they have no hope.

I want to respond in a small but, I hope, effective way by speaking of those who step up. Of those 45 individuals who required support and asked us to do better, 32 were in Belfast, which is about 15 to 20 miles from my constituency, and a further seven were in Newry. Sometimes the figures might not reflect what is really happening. Why? Well, I mentioned church groups to the hon. Lady before the debate; church groups, individuals and volunteers, including the street pastors in towns in my constituency, are all well aware of what is going on. I thank them for what they do, as they respond directly by meeting and having direct contact with people. They play an important role, which the Minister might mention when she sums up.

We cannot do it all ourselves, but we can do it with others. That is the point I want to make. I ask the Minister how we can work better with street pastors and church groups. By coming through the street pastors, church groups respond to those people who are homeless and rough sleeping. Those people are looked after by the churches directly. They find them accommodation and somewhere to sleep overnight. They give them a meal. They try to get them back into the benefits system where they need to be, because they may even have gone completely off the radar.

The next group that I want to refer to is veterans. One veteran in my town of Newtownards did an overnight sleep-out. He wanted to highlight the issue. I was glad that I was not sleeping out overnight as well, because I think if I got down into that wee tent, I could probably only with difficulty get back out again, but he did it overnight. What was he doing? He was highlighting the issue for veterans. There are so many veterans who are under the radar and perhaps not able to get the help that they need, so this veteran highlighted that.

I say to the Minister that when it comes to veterans as people who sleep rough, we need to remember the horrors of what they experienced in uniform, whether that was in Iraq or in Northern Ireland—it would be in our case, but there are other parts of the world where they fought in uniform, and nightmares of what they went through have affected them. This veteran slept out overnight. I stayed along with him for the photograph and to speak to him and to tell the press what the object of the exercise was—so what are we doing for veterans, Minister? Again, it is a very specific question.

I acknowledge that, compared with other constituencies, we are fortunate that rough sleeping does not seem to have as great an impact, but it is still there. Northern Ireland does have a clear issue with homelessness, though. I have lost count of the people and families who have come to my office looking for help because, for many reasons, they have no home. This information is backed up by Simon Community. I just want to take us from the issue of rough sleeping to the next stage of where we are.

[Carla Lockhart (Upper Bann) (DUP)]

My hon. Friend is making a very eloquent speech on this matter regarding the importance of churches and street pastors and of veterans. Does he agree with me that many are sleeping rough as a result of mental ill health, and that it is important that we get to the crux of that problem in Northern Ireland and right across this United Kingdom, and ensure that our health service is providing the mental health services required, so that people feel that there are other options?

[Jim Shannon]

I thank my hon. Friend for that point, which is absolutely critical. The hon. Member for Ealing Southall referred to it in her contribution at the beginning; although this Minister is not directly responsible for the issue of mental health, there is a need for Departments to work better together, so perhaps in her reply the Minister can give us some information about that.

Simon Community has revealed that, in Northern Ireland, 25,000 people are experiencing—to quote its word—“hidden” homelessness. To give an example, there was a young man in my office just a few months back. He had recently broken up with his wife and was asked to leave the family home. Relationships do break up. It is always sad when they do, but that is a reality of life. This young man continued to pay part of the mortgage, as his two children were living at the home. He could not afford a private rental and was severely struggling to get rehomed on the Northern Ireland Housing Executive list, quite simply because he was single and fit and healthy. Therefore, the points system did not enable him to qualify for homelessness points or the points needed to get a property. What did he have to do? He had no choice but to sleep in the back of his work van, and that is what he did up until a few months later, when eventually it was sorted. There are so many single men and women out there who are likely to be on the waiting list for years before they get an opportunity to be rehomed.

The official homelessness statistic for Northern Ireland currently stands at 55,500 people, including 4,500 children. There are so many reasons, but one prevalent issue is that the cost of private rentals is astronomical. People are being asked to pay some £700 or £800 a month, which is just not affordable with the wage bracket and median wage that they have in Northern Ireland. If we do not do more to tackle the homelessness crisis, including the rough sleeping crisis, we will ultimately have more people who have no choice but to sleep rough—that is where they are going. The mental health issues, the issues for veterans, including post-traumatic stress disorder, and the breakdown of family relationships have a direct and collective impact.

This will be my last comment. I still recall times when I was walking through the centre of Belfast and seeing the sleeping bags alongside St Anne’s cathedral. It was always very poignant for me to see that, because here we were in a town that was bustling and busy because of its nightlife, and there were people on the footpath who had nothing. There is more we must do to support people, and that must start by addressing the housing crisis in the United Kingdom and improving the availability and affordability of homes. We must put more emphasis on building sustainable homes and apartments for those who are struggling. We are grateful to all those charities that do so much without ever asking for anything back.

09:50

[Chris Vince (Harlow) (Lab/Co-op)]

Thank you for allowing me to speak in this important debate, Sir Christopher. I thank my hon. Friend the Member for Ealing Southall (Deirdre Costigan) for securing it, and the hon. Member for Strangford (Jim Shannon) for his contribution.

As I have said in this place before, I spent two years working for a homeless charity in my constituency called Streets 2 Homes. My role was to locate people who had been reported as rough sleeping and help them to find long-term, secure tenancies. This issue is therefore close to my heart, and I hopefully have relevant experience in it.

I will start by talking about some of the issues I have experienced, and then I will suggest a few solutions. I am pleased that the Labour Government have introduced two important Bills: the Renters’ Rights Bill, which will ban no-fault evictions, and the Employment Rights Bill, which will give greater security in work. They will address at least some of the causes of rough sleeping, but there is still much more to do.

First, we need to look at the causes of homelessness. Many of the people I supported suffered from alcohol and drug addictions. All, to some extent, suffered mental health issues, which were either responsible for or caused by their homelessness. In Harlow, we had the added complication that other councils, of all political colours, housed their most vulnerable people in our borough. That meant that, if they were evicted from their accommodation, there was a limit to the amount of support that the local authority could give them. National issues such as the cost of living crisis and the covid pandemic also had an impact on homelessness.

Although I recognise that the previous Government did some work on this issue, including providing Rough Sleeping Initiative funding—I have to declare an interest, because that partly funded my previous role—they put the onus on local authorities, which are already stretched to capacity. That funding is due to run out in spring 2025.

I know the Labour Government will take rough sleeping seriously, and I thank the Minister for attending the debate. We need cross-departmental work to tackle this issue. The National Housing Federation has repeatedly called for more housing, but part of the issue in Harlow is that accommodation that is categorised as supported does not provide sufficient support for the most vulnerable people who need it, which leads to issues with their tenancy, and sometimes results in their eviction.

It is important that the official homeless count does not miss anyone out: women are often missing from the rough sleeper count, and it must also include the hidden homeless. The hon. Member for Strangford made a really good point about them—we used to refer to them as sofa surfers, since they had a sofa to stay on and were not officially rough sleeping, but they were actually homeless and needed additional support.

My hon. Friend the Member for Ealing Southall is right that we should be proud of the previous Labour Government’s record in tackling this issue, and it falls upon the new Labour Government to tackle the increasing number of rough sleepers in the UK. I believe that the only way to truly tackle many of the issues we face is to be proactive and tackle the root causes of homelessness and rough sleeping.

09:54

[Andrew Cooper (Mid Cheshire) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Christopher. I congratulate my hon. Friend the Member for Ealing Southall (Deirdre Costigan) on securing and ably leading this important debate on rough sleeping.

Rough sleeping blights our communities and ruins lives. Being forced to sleep on the streets has a devastating impact on every aspect of an individual’s life. It is a frightening and isolating experience that no one should ever have to go through, but it affects thousands of individuals every night who find themselves without a safe place to call home, facing the harsh realities of life on the streets. It is sometimes too easy to talk about this issue and reduce the problems that real people are facing to cold facts and statistics, but that overlooks the real human tragedy that this problem causes. I will not do that, and I believe it is vital that we understand not only the problems associated with rough sleeping, but the underlying causes that perpetuate this crisis.

[David Smith (North Northumberland) (Lab)]

This is such an important debate and I thank my hon. Friend the Member for Ealing Southall (Deirdre Costigan) for securing it. We have had a massive increase in rough sleeping, and it is so important to get to the root cause. I declare an interest in that, until July, I was the chief executive of a homelessness charity in the north-east, where we have seen homelessness, and specifically rough sleeping, spike over the last 14 years especially. Our research found that 94% of people who are rough sleeping have experienced serious trauma. Would my hon. Friend the Member for Mid Cheshire (Andrew Cooper) agree that we have to get to the absolute root cause of rough sleeping, especially mental health issues, and that very often it is trauma? Also, in her remarks later, could the Minister respond to the need therefore to have a trauma-informed approach when we address rough sleeping?

[Andrew Cooper]

I agree with that; a trauma-informed approach would benefit a lot of areas of public life, and I bow to my hon. Friend’s greater experience in this area. Rough sleeping is an intractable issue with many diverse and overlapping root causes, including a lack of affordable housing, unemployment, financial instability and family breakdown. Many individuals who find themselves sleeping on the streets are battling complex challenges such as untreated mental health issues, substance abuse and social isolation. Those challenges are often exacerbated by life on the streets, creating a vicious cycle that makes it extraordinarily difficult for individuals to transition back to stable living conditions. To tackle the problem of rough sleeping effectively, we must address those issues.

First, we need to see the construction of more social housing. Secure, affordable and accessible housing is the foundation of a dignified life. It provides not only shelter, but the stability necessary to seek employment, access healthcare and rebuild social connections. That is why I was proud to stand on a manifesto that promised to build 1.5 million more homes over the next five years, including social housing, to ensure that everybody has a safe place to live.

However, building more secure and affordable housing is only part of the solution. It is not enough simply to provide shelter. Simply placing people with complex needs in housing and then leaving them to it is setting many of them up to fail. We must also look to introduce properly funded wraparound support services, which address the needs of those experiencing rough sleeping holistically. That includes providing personalised assistance for individuals struggling with drug and alcohol addiction and mental health issues. By investing in such comprehensive support services, we empower individuals not only to secure a tenancy, but to maintain it, helping them to break the cycle of homelessness, rebuild their lives and foster greater independence and resilience.

We urgently need to see action on this issue, and that is why I welcome the Government’s plan to introduce a new cross-Government strategy to tackle the difficult problem of homelessness. I really hope that strategy will take a comprehensive approach to tackling the root causes of rough sleeping and get us back on track to ending homelessness, so we create a society where everyone has a safe and stable place to call home, coupled with the support they need to thrive.

09:58

[Helen Maguire (Epsom and Ewell) (LD)]

I congratulate the hon. Member for Ealing Southall (Deirdre Costigan) on securing this very welcome debate. Epsom and Ewell has proportionately one of the highest numbers of homeless households living in temporary accommodation in England, and it is in the top seven boroughs outside London. That accommodation cost the local council £1.6 million last year. I wonder if she would agree that the lack of social and affordable housing is contributing to the rise in rough sleeping, and that this issue should be a priority for councils in their local plans. I also concur with the many comments made about veterans. As defence spokesperson for the Liberal Democrats, I agree that veterans are massively affected by homelessness, and we must support them better; I hope she would agree with that as well.

09:59

[Amanda Martin (Portsmouth North) (Lab)]

Thank you for your chairing the debate, Sir Christopher, and I thank my hon. Friend the Member for Ealing Southall (Deirdre Costigan) for securing it.

Homelessness is at a record high—we have heard the tragic stories from Members about people across their constituencies who are sleeping rough every night—and it is up 74% since 2010, which is a shameful legacy of the Tories. Like much of the south-east, my constituency is fighting a losing battle, with capped housing allowance rates, ever-rising rents and a shortage of supported housing and single-person affordable housing.

I recently met with Two Saints, a brilliant homeless charity in my constituency that does valuable work on temporary and supported accommodation for adults, young people and people with mental health problems. That visit showed me some ideas for action we could take to meaningfully reduce rough sleeping. Long-term funding is needed urgently to stem the reduction in public funds to address homelessness. For example, extending the rough sleeping initiative funding beyond the spring would provide more money for local authorities to make further strategic plans and tailor rough sleeping services. That would prevent the number of rough sleepers from spiralling out of control.

We also need to tackle the divergence in policy by area caused by the devolution of housing policy; for example, Hampshire county council intends to remove non-statutory homeless support by March 2026, which will leave other councils picking up those services. That will mean roughly £2 million a year being removed from homeless services, and if others do not have the capacity to fill the funding gap, over a thousand people across Hampshire will lose valuable support and be back on the streets. That is just a snapshot of the chaotic postcode lottery in support caused by the confusing mix of levels of government in Britain. We must address that by joining the dots on the national level with a long-term, strategic, cross-departmental approach to tackling rough sleeping and homelessness. We could create a single, ringfenced homelessness support fund, designed to adapt flexibly to local and individual needs.

I really am pleased to be in a Government committed to housing veterans, children leaving care and those fleeing domestic violence. Like my hon. Friend the Member for Harlow (Chris Vince), I am pleased with the Government’s Renters’ Rights Bill and Employment Rights Bill, and I am also pleased that this Government are focusing on building more houses of all types and more social housing. But as part of that, we must have a proper focus on supported housing and single-person housing. Some 30% of households in Britain are now single person, but our home building currently does not reflect that. That allows for a rise in family homes being made into houses in multiple occupation. We must build the right types of accommodation in the right places. Alongside that, we can unlock access to the private rental sector by immediately unfreezing and restoring local housing allowance to cover the 30th percentile of market rents.

Ending homelessness makes sense morally and financially, but we must be bold and take this opportunity to provide safe and suitable housing alongside diverse support services that wrap around the most vulnerable constituents.

10:02

[Tom Hayes (Bournemouth East) (Lab)]

I thank my hon. Friend the Member for Ealing Southall (Deirdre Costigan) for calling this debate. People sleeping rough often have important things in common. They often have several support needs, such as mental ill health, substance misuse, an offending history, physical disability, self-harm, learning disabilities, experience of domestic abuse, sex work, abuse, neglect and modern slavery—pretty much some of the worst things a person can go through. But they also often do not get the entirety of the services and support they need, when they need them, in the ways they need them.

Frankly, that is the fault of nobody—certainly not the person sleeping rough—except the last Conservative Government. I say that with the immediate and direct experiences of having run a mental health and domestic abuse charity for the five years before I was elected, of setting up and sitting on a homelessness alliance, of chairing a mental health partnership, of being a councillor for 10 years and of serving as deputy council leader in that time. I can tell the House that over the 14 years of Conservative government, this problem got worse and worse.

I want to commend those leading and working in our services, because they are the most amazing, caring, understanding, dedicated people. We have heard from some of those people who are now in Parliament. In my constituency of Bournemouth East, I want to commend Bournemouth Churches Housing Association; St Paul’s Hostel, which is run by BCHA; HealthBus; YMCA Bournemouth; Healthwatch Dorset, which has just produced a fantastic report on homelessness and health; Homewards, represented by the Prince of Wales; WithYou; We Are Humans; the citizens advice bureaux across Bournemouth, Christchurch and Poole; and Shelter.

That goes to show the array of services available in my local area, but the services they lead and the systems they contribute are being held back by forces beyond their control. Underfunding has forced services to narrow and narrow their focus, year after year. As a result, they are meeting a smaller set of needs. Services cannot wrap support around as many needs as they would have done in the past; instead, somebody sleeping rough must engage with a larger set of services. No charity has wanted to narrow its focus, but, left out of pocket, and often subsidising contracts, they just could not carry on delivering services without enough funding.

The result is twofold. First, our third sector’s ability to support clients and contribute to healthcare has been eroded year after year, and secondly, the people needing support who no longer fit the referral criteria for a service will end up being bounced from pillar to post, and people with a combination of issues will always be the exception to somebody’s rule. People who are willing to engage may become distrustful of agencies and refuse services, and that is a particular problem when people who are sleeping rough may, because of their needs, have difficulties keeping appointments.

When people are flying through revolving doors, increasingly distrustful of people and services, and feeling let down, they may experience crises. Without the support they need, that will only set back their health and increase the cost not only to their own health but to services that could wrap around them. Prevention is always cheaper and better than having to treat somebody’s health.

The people in Bournemouth East working in these sectors know exactly what is going wrong, they know exactly what needs to happen, and they know exactly how things could be so much better. They tell me what needs to happen. They are clear that we need sufficient funding to run the services to meet the needs of rough sleepers.

What will that buy? First, it will mean that we have enough caseworkers with the time to care, because a flexible approach is needed to engage people with multiple support needs who may slip through the net of services. People sleeping rough typically benefit from longer-term interactions, and we need to understand that the funding should be available for those longer-term interactions rather than for short interventions.

Secondly, we need funding models that appreciate that work can go at a slower pace to achieve useful outcomes. That means having a system with the clarity, and the time to achieve that clarity, for the people working within it but also for the people accessing support.

Thirdly—and this cannot go ignored—caseworkers who are supporting people sleeping rough need to be at their posts in their organisations for a long period of time, uninterrupted, to develop relationships with the people they support and build trust. If they have to get out of bed worrying about whether they can pay their bills, or worrying about their own mental health, they are not going to be able to provide support to the people who need it the most. That requires taking away the reasons caseworkers may leave the service: not getting paid enough to survive; not being able to develop professionally with the training and new skills that they need; or having their resilience beaten down because they support too many people, their caseloads are too high and the needs they are meeting are so many, so varied and so complex.

I recently visited the Poole campus of Bournemouth and Poole college. I talked to the head, Phil Sayles, and he told me about a chap who had been sleeping rough on the park grass beside the college campus. Every morning, he had packed up his tent to come into the college and learn. His relationship had broken down and he was unable to see his child; his life had fallen apart. But with the kindness and support of the college and the services around him, he was able to start to get his life back on track, and he is now flying. That is one person on one campus of one college, in one town in one part of our United Kingdom; there will be countless people across our country in similar situations.

I commend the Government for moving forward with the endeavour for a cross-departmental long-term strategy. We have ended rough sleeping before, during the pandemic; we can end it again. We just need the necessary political will, and the people who know what the solutions are to be listened to.

10:08

[Mr Gideon Amos (Taunton and Wellington) (LD)]

It is a pleasure to serve under your chairmanship, Sir Christopher. I congratulate the hon. Member for Ealing Southall (Deirdre Costigan) on bringing this very important debate to the Chamber. I also congratulate the hon. Members on both sides who have raised important examples of homelessness and the real individual tragedies that people are facing.

As Liberals—both as the Liberal party and as the Liberal Democrats—we have always prized freedom from poverty as our constitutional objective, so it is not surprising that the first piece of homelessness legislation, the Housing (Homeless Persons) Act 1977, was pioneered by a Liberal MP, Stephen Ross. Before that, great Liberal legislation introduced the concept of council housing, which led to half a million council houses being built in the ensuing years. Today, though, that duty to homeless people has been weakened and watered down time and again, and we see the heartbreaking results on our streets all too often.

The Conservative Government promised to end street homelessness by 2024, yet we see rising numbers of people sleeping rough. Over 16,000 single households were assessed as sleeping rough in 2023-24, which is almost a 15% increase over the previous year. The crisis is not just about rough sleeping; there are now over 117,000 households in temporary accommodation, including 74,000 families with children. That is shocking and unacceptable in a civilised society. The figures reveal a failure to provide safe, permanent homes for those who need them.

Rough sleeping is driven by several factors, including relationship breakdown; benefit changes, which all too often push people into unaffordable housing; and poor mental or physical health, including substance dependence. Without proper housing those problems worsen, leading to more people on our streets and more strain on public services. Organisations such as Arc in Taunton do great work, particularly with veterans, whom we have heard about from several Members today. However, the Government need to provide the necessary funding for those services to continue. Under current plans, Government funding for the rough sleeping initiative is due to end in March next year, leaving many homelessness services facing a financial cliff edge of their own.

I therefore urge the Minister to ensure that funding is extended in the upcoming Budget to prevent the shocking numbers of rough sleepers that we have seen. I also urge the Government to recognise the general financial strain that local authorities are under, and act to ensure that they have sufficient resources to deliver the requirements of the Homelessness Reduction Act 2017 and to provide accommodation for survivors of domestic abuse.

Ultimately, we need long-term solutions not temporary measures, which is exactly what we set out in our manifesto. We would exempt homeless people from the punitive shared accommodation rate, which means they simply cannot afford to get the housing that they need, and give local authorities the funding that they need to meet the requirements of the Homelessness Reduction Act. We would introduce a new “somewhere safe to stay” legal duty, giving people emergency accommodation and an assessment of needs as of right if they are homeless and need it, and ban section 21 evictions, which we are delighted to see the Government moving forward on.

Because we cannot have Housing First without having the houses first, we want to see the Government build 150,000 new social and council rent homes per year. Homelessness and rough sleeping is not inevitable. It is time we built the homes and provided the services to bring it to an end.

10:12

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

It is a pleasure to serve under your chairmanship again, Sir Christopher, so soon after we were engaged on local government matters yesterday. I congratulate the hon. Member for Ealing Southall (Deirdre Costigan) on bringing forward this debate—I know her constituency well as mine is nearby—and I congratulate Members on their contributions, which have illuminated not just some of the policy and political angles, but the genuine complexity of the rough sleeping issue.

The measurement of rough sleeping across the United Kingdom commenced in 2010. The last Conservative Government felt that it was a high priority and, consequently, we moved from a situation under the previous Labour Government in which less than a quarter of local authorities measured the number of people rough sleeping in their area at all, to one where all local authorities were required to use a standard methodology to count the number of rough sleepers and indicate the composition of that population.

That measure fed into a number of policy initiatives over those years. We saw a growth in the number of people recorded as rough sleeping on the streets from 2010 to 2017, and then some ups and downs. We saw a reduction from the 2017 peak to the number we see today, with a particularly low figure recorded during the covid pandemic, when the Everyone In policy was rigorously pursued by local authorities across the country.

It is clear that this matter is not simply one of political will. We note that, despite the high priority that Labour placed on it in opposition, the highest increases in the number of rough sleepers on the streets were in Labour-led local authorities, and the most effective authorities at reducing the number were Conservative-led. I see some shaking of heads, but Westminster, Camden and Bristol consistently top the list of authorities with the highest numbers of rough sleepers on the streets.

We also need to note that around 46% of all the people sleeping rough are in London and the south-east. The hon. Member for Ealing Southall provided a graphic description of what she has seen—one reflected on the streets of our capital, in particular. As other hon. Members have acknowledged, it also reflects a complex set of issues that lead to people sleeping rough.

The issue of veterans was a high priority for the previous Government. I have to note the work of the former Member for Plymouth Moor View, Johnny Mercer, in driving forward the so-called Operation FORTITUDE, which set up a direct and guaranteed route out of rough sleeping for any veteran who required it.

[Tom Hayes]

Will the hon. Member acknowledge that many of the Labour local authorities he was just referencing are in densely urban areas, which, according to research into homelessness, tend to have larger numbers of homeless people? Will he recognise that those authorities, like Conservative authorities, have been significantly starved of funding in recent years, to the point that council leaders, both Conservative and Labour, have been crying out for relief from Government? Will he also acknowledge that, with the starvation of many of our public services, people who are sleeping rough could otherwise often have received support earlier, but because they did not they now have to sleep rough—and that that is the fault of the Conservative Government?

[David Simmonds]

It is not an excuse. It is clear when we look at the performance of local authorities in that respect, and in particular in respect of the effectiveness of the many measures introduced following the Homelessness Reduction Act sponsored by my hon. Friend the Member for Harrow East (Bob Blackman), that the authorities that were good at everything demonstrated that they were also good at reducing the number of people who were sleeping rough. Those of a more questionable performance standard, however, did not demonstrate that they could step up to the plate, despite being provided with additional resources.

Seeking to make a political point rather glosses over the complexity of the matter, as highlighted by many hon. Members. I will finish my point around veterans. We know, according to the current snapshot, that around 3% of those sleeping rough are thought to be veterans of our armed forces. Providing a specific guarantee, with a freephone number and an online portal, so that accommodation that met their requirements could immediately be found for anybody in that situation, was an important example of how that particular group can be addressed.

It is also interesting to reflect that the snapshot data consistently shows that those sleeping rough tend to be older adults aged over 26; that they are overwhelmingly male, although I acknowledge that female rough sleeping is sometimes hidden; and that the numbers recorded are very small—in some years, zero—for people under the age of 18. That goes to the complexity of the issues highlighted by a number of hon. Members. It is not simply a matter of a lack of supply.

We know about the complexities around addiction, domestic violence, patterns of previous accommodation by local authorities that have ended with difficulties with landlords, issues of settled status—or lack of it—and immigration circumstances. All those factors contribute to the complex set of reasons that affect an individual who should be able to access help from a local authority. Like many other hon. Members, I have sat through homelessness interviews with constituents who seek that help and accessing it can be incredibly difficult when a number of those complicating factors come together.

How is the issue to be tackled? From 2010 to the most recent election, a number of measures were introduced. I refer to the Homelessness Reduction Act, which sought to give both additional duties and powers to local authorities to work with those at serious risk of becoming homeless—not just to prevent rough sleeping but to stop people from being placed in substandard temporary accommodation that did not fully meet the needs of their household.

More recently, we saw the introduction of “Ending rough sleeping for good” in 2022, which was a £2.4 billion multi-year programme aimed at bringing to an end, as far as possible, rough sleeping on the streets of our country. Although that was clearly not a matter of law, it was a significant and important Government programme. Many hon. Members participated actively in the debates on that and brought their views to bear on shaping a programme that included the rough sleeping accommodation programme, with an additional 6,000 units of accommodation aimed at bringing people in off the streets.

As I move to a conclusion, I will share some reflections on my time in local government. The snapshot is beginning to be taken in a consistent way, so we have a reasonably good idea of at least the trends, if not the detail, of the numbers that may be sleeping rough. One of the challenges, however, is that the snapshot always takes place around the same period in autumn. We know that the numbers of people sleeping rough in our country tend to be higher in the summer when the weather is better and that the numbers decrease as winter comes on.

One major factor that the rough sleeping snapshot is not readily able to capture is the availability of temporary accommodation in night shelters and short-term shelters set up, for example, by churches and other charities and voluntary organisations. We know that they are incredibly important for those who have not found assistance for whatever reason in the statutory sector.

My local authorities have contracts with local charities that open up those shelters when the weather begins to turn cold; they staff them and provide beds, heating, food and showers. In the spring, those services are unwound, and that means that some of those people are either back on the streets or, if the service is performed as we would hope, they have been found a pathway into a job and into more permanent housing.

The consequence of that patchwork provision still means that we do not always have a clear idea of the number of people in that situation because they genuinely have nowhere to go on that occasion; many who may have been booked accommodation by a local authority instead choose, typically because of addiction, to be on the streets with others who share their addiction rather than to use that accommodation. That is frequently cited as a major issue with the operation of the Homelessness Reduction Act. This is a complex issue. The numbers overall in our country are small, and they are declining.

[Tom Hayes]

The hon. Gentleman made valid points about using a street count to determine the number of people sleeping rough. Does he therefore agree that the numbers of those recorded as sleeping rough over the past 14 years are the tip of the iceberg and that the vulnerability, often in urban areas, is far higher?

[David Simmonds]

That reinforces my point. We have gone from a situation under the previous Labour Government in which there was no counting at all. There was no serious effort to understand the numbers of people sleeping rough on our streets. As a councillor, I was responsible for some of that period for housing and social care; rough sleeping was one of those major challenges that was simply put in the too-hard-to-deal- with box.

[Lee Pitcher (Doncaster East and the Isle of Axholme) (Lab)]

Although I accept the hon. Gentleman’s point—data may not have been gathered before—there has been a 134% increase in homelessness in Yorkshire and the Humber since 2010. Does he not agree that the strategies put in place by the previous Government have not worked? There is now a need to review them and for the new Government to introduce the things we have talked about: homes for veterans and places where people can go as soon as they are in trouble. That would provide the support they require for their addictions and mental health.

[David Simmonds]

It is also striking that the biggest reduction in homelessness in Yorkshire and the Humber has been achieved by North Yorkshire’s Conservative-led unitary authority. Local authorities have been able—through the Homelessness Reduction Act, the use of their various powers and the resources brought to bear on this issue, including the homelessness prevention grant—to deploy those resources efficiently and effectively. I would not wish for this issue to become purely a matter of politics. The matter is over. The fact is that rough sleeping has been an issue over decades; it has been recorded over centuries, not merely the past 14 years.

[David Smith]

I repeat my declaration of interest: I have been chief executive of a homelessness charity for the past eight years. Does the hon. Gentleman not agree that, although homelessness has always been with us, it has increased in the past 14 years—by more than 140% between 2010 and 2018 and by an aggregate of more than 120% between 2010 and 2024? Does he also agree that, apart from Everyone In, which brought about a dramatic reduction, there was an ongoing and consistent increase in rough sleeping under the last Government? Does the hon. Gentleman not also agree that Everyone In—I was part of that response—was evidence of what Government can do if they treat rough sleeping as a public health concern? Does he agree that the lessons were not learned from the initiative and that, since it finished, there has been another spike in the past few years?

[David Simmonds]

Given the time constraints, that is the last intervention I will take. I agree with some of the hon. Gentleman’s points. The evidence around Everyone In was positive. The way in which it was carried out by individual local authorities varied enormously because they tend to know their population and situation much better than anybody in Whitehall ever would. The flexibility introduced by the Everyone In policy was carried forward in the rough sleeping action programme and is intended to address the issue much more effectively.

Although I do not deny that the statistics show that following the success of Everyone In there has been an increase, and more recently a decrease, in the numbers of people recorded in that rough sleeping snapshot, I would not agree that there has been no attempt to learn lessons. In fact, when we reflect on the debates in which we all participate in Parliament and on non-legislative issues such as the “Ending rough sleeping for good” programme, which was specifically designed to implement the lessons of the Everyone In programme in a more long-term and sustained way, we see no suggestion at all that there was a lack of attention or effort. The question is whether the outcomes fully reflect that.

Let us consider what the Opposition’s asks or challenges might be as the Government reflect on the policy going forward. No recourse to public funds was introduced by the last Labour Government following the expansion of the European Union. They decided, ahead of other countries, to increase the numbers of countries from which people could come to the UK under free movement. The decision was taken because that Labour Government had a concern about the public’s perception of people coming to the UK to access benefits. We know that that was not the case. That is simply not a factor, but that was the reason why that last Labour Government introduced that policy.

The former Member for West Ham, Lyn Brown, did a huge amount of work on this matter in opposition and the Department for Work and Pensions is now looking at it, partly to consider whether those no recourse to public funds measures, introduced in the 1990s, are still the best fit for the situation today, and also to reflect on the fact that there has been a very large increase in the population of our country during that period. A significant number of people came to our country with no recourse to public funds as part of, for example, working visa conditions.

The last Government debated a question that the new Government will now have to consider: whether no recourse to public funds is applied to the extent that it should be and how it should interact effectively with our immigration system. As I have experienced myself, the issue clearly manifests at a local level with people who, for example, have come to the UK to work in an important public sector job or to fulfil vital services. For whatever reason, they have fallen out of that job and are then, because of the no recourse to public funds condition, not able to access benefits. They find themselves in great difficulty. Although from Whitehall’s perspective that should act as a powerful disincentive to staying in the UK, the fact that legislation going back to the National Assistance Act 1948 compels local authorities to provide varying packages of support and, particularly if there are children in the household, to house people, despite the fact that they have a no recourse to public funds condition, creates significant local cost and significant complexity in working through those cases.

My asks to the Government are about the continuation of Operation Fortitude and the 3% of rough sleepers calculated to be veterans who have benefited enormously from having access to it. Operation Fortitude is designed specifically for those from a military background who might have found it for whatever reason difficult to access statutory support; it guarantees the provision of accommodation immediately through access to a freephone number or a website, allowing for people’s different circumstances. That important programme was implemented by the previous Member for Plymouth Moor View, Johnny Mercer. If the Government are to continue with it, that is welcome. If they are not, an effective, appropriate and equivalent alternative should be provided.

On the rough sleeping initiative, I ask the Government to continue to commit to the funding. The programme is under way and funded until spring next year. It has done a huge amount to support local authorities to bring about the reduction in rough sleeping from the 2017 peak. My ask to the Government is that they either commit to continue the policy of the previous Government or announce an equivalent programme that will bring about the same outcome: bearing down on rough sleeping.

Finally, I ask the Government to acknowledge that the rough sleeping snapshot shows an incredibly diverse and variable issue. The Bournemouth, Christchurch and Poole local authority has also reported a significant increase in the number of rough sleepers. Members representing coastal towns, for example, have started to describe that issue, which was previously seen as more of an inner city, urban matter. We need to ensure that we have a good handle on what is happening.

When the Minister updates the snapshot and looks at the guidance provided to local authorities about how that snapshot is counted, she should ensure that we build on the effectiveness of the work since 2010 to understand for the first time what is happening with rough sleeping in our country, and try to make it more sophisticated. We need to better capture, for example, rough sleeping households that might include children and are often reluctant to make themselves visible at all to statutory authorities.

We need to ensure that women in particular, who may fall outside the snapshot, are captured more effectively in it, and that those under the age of 18 not travelling with adults in a family, but on their own, are better captured. That group are frequently sofa-surfing rather than sleeping rough, but they still have nowhere permanent and safe to go. They are currently not captured by the data because the system is simply not designed to do that. With those asks, I close for the Opposition.

10:30

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rushanara Ali)]

It is a pleasure to serve under your chairmanship, Sir Christopher.

I thank my hon. Friend the Member for Ealing Southall (Deirdre Costigan) for securing this important debate on tackling rough sleeping and all colleagues for their excellent contributions, their insight, their expertise and the examples they gave of the great work in their constituencies up and down the country. This is a challenge that we have to tackle collectively.

Homelessness and rough sleeping have skyrocketed in recent years. In England, as we have heard, homelessness is now at record levels. In March, more than 117,000 households, including more than 150,000 children, were living in temporary accommodation. What is more, last year the number of people sleeping rough in England increased for the second year in a row and was 27% higher than in the previous year. Nearly half of all people sleeping rough on a single night in autumn are in London and the south-east. In places such as the London Borough of Ealing, part of my hon. Friend’s constituency, the number of people sleeping rough on a single night increased by a staggering 121% between autumn 2022 and autumn 2023.

Those are not just numbers—behind them, as we have heard from hon. Members, are the stories of people devastated by homelessness and rough sleeping, of people in need who were not given the right mental health support, of vulnerable women sleeping rough on our streets, many of whom are survivors of domestic violence and abuse, and of families having to raise their children many miles from their schools and support networks. The scale of the challenge is huge. That, sadly, is what we have inherited from the previous Government. The scale of the response will need to be cross-departmental, which is not easy, but this Government are absolutely committed to and determined about addressing the high levels of homelessness and rough sleeping. We need to develop and deliver a set of long-term solutions, otherwise the danger is that we take a sticking-plaster approach, as we have seen in the past.

As my hon. Friend the Member for Ealing Southall pointed out, we must ensure that all parts of Government and the public sector work together with organisations in our local communities. We made it clear in our manifesto that we will develop a new cross-government strategy, working with Mayors and councils across the country to get us back on track to ending homelessness once and for all. The Deputy Prime Minister will chair a dedicated interministerial group, bringing together Ministers from across Government to develop the long-term strategy. I am passionate about tackling this terrible injustice and I want to work with colleagues throughout the House to do so, so I am delighted to see the level of interest and the expertise shared with me today and in other discussions. Working with Ministers in different Departments is vital to tackling the challenge. The Deputy Prime Minister and I are already engaging with ministerial colleagues across Government.

It is an absolute scandal that so many people live without a roof over their heads, and that families with children are living without a permanent place to call home. I see in my own constituency and on my visits to homelessness services the devastation that homelessness causes to families and individuals. It is unacceptable that the people affected do not have a safe and decent place to call home, which is why we have to take action to address the immediate challenges as we approach winter. The Government are providing support to local authorities, and I am grateful to the agencies and tiers of Government that are doing work on this issue.

Hon. Members have highlighted the consequences of homelessness and rough sleeping, including the scarring effects of the physical and mental health challenges that people face, and the long-term consequences for families, children and young people. Homelessness can happen not only to those who are materially disadvantaged, but to people from well-off backgrounds, who may be escaping abuse or leaving home as a result of family breakdown and much else. We all know stories of the impact on people who end up becoming rough sleepers. We have heard powerful stories of adversity caused by life events and shocks, which those who end up sleeping rough do not have control over.

There is an impact on children, who are often placed far from their communities in temporary accommodation. That disrupts their schooling and their life chances and opportunities. Too many children spend years in temporary accommodation at a point in their lives when they need space to play and develop, and nutritious food to eat; they need to thrive and access education. Mothers are living in hotel rooms with their children, often sharing a bed with their older children, and do not have access to cooking facilities. The knock-on effect on their health and wider needs is horrific.

The all-party parliamentary group on households in temporary accommodation reported the case of a mother who was placed in temporary accommodation with both her children, who have physical disabilities. She said:

“some places were filthy, with blood-stained walls...where the welcome pack stipulated ‘no weapons allowed’.”

That is completely unacceptable.

To turn that around, we have to tackle the root causes of homelessness and rough sleeping, not just the symptoms. We must put in place lasting solutions. That is why we are bringing together Ministers from across Government to develop the cross-departmental strategy. We are working in lockstep with councils, Mayors and the charity, community and voluntary sectors.

On the support that is being provided while we develop our strategy, the £547 million Rough Sleeping Initiative, which began in April 2022 and runs until March 2025, will continue to support up to 300 local authorities across England. That programme funds a range of vital services, from accommodation and Housing First and outreach staff, to specialist services, including support to tackle physical and mental health challenges, and for those who have left the prison system. The programme also includes training to widen employment opportunities, and provides immigration advice.

The rough sleeping drug and alcohol treatment grant funds targeted services to improve drug and alcohol treatment and provide support to people who sleep rough, or who are at risk of doing so and have substance misuse needs. We are working closely with local authorities to understand the local pressures, and will continue to support them.

[Lee Pitcher]

In Doncaster East and the Isle of Axholme, we have amazing community groups that support, through relationships and connectivity, those who live with or are recovering from addiction to alcohol or drugs. As part of our futures strategy, is there an opportunity to learn from things like the Recovery Games, which happens every year in Hatfield? Tens of thousands of people come along who have formerly lived with drug and alcohol abuse, in the knowledge that there is a community out there who can support them and give them the determination and resilience to thrive.

[Rushanara Ali]

As I was saying earlier, I am keen to work with colleagues. I have already indicated to officials that as part of our work across Government, we should make sure that Members of Parliament have the opportunities to meet me and feed in their perspectives, insights and powerful examples of what works. Unless we draw on that expertise and the direct experience of those who have faced rough sleeping and homelessness, as well as the organisations working closely with them, we will not address the deep-rooted challenges. I look forward to work with colleagues.

Beyond rough sleeping, hon. Members will have seen from our manifesto our overall commitment to tackling homelessness, crime and domestic abuse, and improving mental health. Those issues can cause rough sleepers and others to experience multiple disadvantage, and are systemic. We must look at them to ensure we deal with the root causes. We need to ensure that services are co-ordinated and able to help people to address their overlapping and interconnected problems. Despite some people coming repeatedly into contact with service providers, and resources being invested, if the work is not joined up, it can often mean that an individual’s multiple needs are not addressed.

The changing futures programme was designed to support people experiencing multiple disadvantage, and it tested better ways of working by considering people’s experiences and obstacles as a whole. In Northumbria, our programme supported a man called Brian. His life spiralled into crisis after two traumatic events and, between 2008 and 2022, his needs escalated. Over those 14 years, he had 3,300 interactions with public services, but now, with the right help, he is turning his life around. That example goes to show that a lot of interventions and work can go in, but it can take a long time and be very challenging. We must look at how we streamline services, ensure that the interventions are effective and get value for money for the individual.

In September, I had the opportunity to visit one of the changing futures hubs in Greater Manchester. It was evident that a strong relationship is vital to ensuring that people receive the right support in the right time. The beneficiaries I spoke to emphasised how important trusted relationships with staff are to their recovery.

[David Smith]

I again declare an interest: until recently, the church I led had a changing futures hub based in it. It is a simple point, but would the Minister agree that Government services, excellent though they can be, must orientate not towards treating people as issues, but towards having the genuinely joined-up approach across Government, as we have declared will be our strategy? Ultimately, we need to see people as people, who sometimes have multiple and complex needs.

[Rushanara Ali]

My hon. Friend makes an excellent point and I absolutely agree with him. That is the spirit in which we want to work and learn from the models that have been effective. Let us not forget that when we look at the journeys of people who have ended up as rough sleepers or facing homelessness, they have been part of our communities. They have often worked in public services. I met a nurse who, after a series of shocks in her life, ended up sleeping rough. People can experience family breakdowns that lead to them ending up sleeping rough. We must ensure that services are focused on the individual needing that support and work around that. I know there are many great examples, including, of course, from the previous Labour Government, as was mentioned earlier, with the work that was done and the ambitious target that was set and achieved. We also need to learn from the work that was done during the pandemic and build on what worked. I am very pragmatic about how we approach this agenda because we are determined to take action, support people and tackle this challenge.

The example of the changing futures programme was striking because of exactly those points about multi-agency working, joining up, and focusing on the individual to give them confidence and give them that back-up by having people assigned to provide mentoring, support, coaching and the rest of it. I know that there are many great examples, including, of course, in our own respective constituencies, and I see, week in and week out, the heroic work that they are doing. It is vital that we continue to help and support them.

More widely, we are taking action to tackle the root causes of homelessness. We are delivering the biggest increase in social and affordable house building in a generation—recognising that the supply of housing is critical—with our commitment to building 1.5 million homes over the next five years. As has already been mentioned, which I am grateful for, we are also committed to abolishing section 21 no-fault evictions, preventing private renters from being exploited and discriminated against, and empowering people to challenge unreasonable increases.

On funding, £450 million of third-round funding has been made available for local authority housing funds to create 2,000 affordable homes for some of the most vulnerable families in society. That will support local authorities to obtain better quality temporary accommodation for homeless families, and will provide safe and suitable housing for those on the Afghan citizens resettlement scheme who have fled persecution.

I also wanted to point to a temporary accommodation project that I visited called the Peony Project, which is run by Depaul UK, a charity that works with adult women who are homeless. It was really impressive and inspiring to see the work that it is doing with vulnerable women. I know that there are many other powerful examples; I see that with the work that is being done by organisations in London and other parts of the country to support women. Projects such as those are critical in supporting vulnerable women, who face particular challenges as rough sleepers.

[Amanda Martin]

I speak as a former teacher: will the Minister ensure that, during those discussions and consultations, youth provision and the housing of youth is also taken into account?

[Rushanara Ali]

Absolutely. I hope very much that, as part of the strategy that we develop, we can bring in the different perspectives. And, of course, I mentioned from the outset the consequences on children and young people, children in care and accommodation for care leavers. This is a big agenda and we need to make sure that these elements are built in. I am delighted to see the level of enthusiasm among colleagues, with officials, as well as Government Ministers, including in the Department for Education, wanting to really focus on this agenda as part of the strategy.

A number of other points were made by colleagues in their powerful speeches, and I want to focus on those. I have already mentioned some of the interventions already announced by the Government on 11 September, through the Renters’ Rights Bill. As I mentioned, we will deliver on our commitment to ensuring that we transform the experience of private renters and provide them with better support and protection. The Government are clear that we also need to bring homes to a decent standard, and have extended Awaab’s law to achieve that. We know of many examples of people in poor quality accommodation, and there needs to be a step change in improving the quality of housing. The Government are also clear that discriminatory treatment on the part of anyone carrying out right-to-rent checks is unlawful. The Home Office has published codes of practice on what landlords are expected to do and how to avoid discrimination.

My hon. Friend the Member for Ealing Southall raised important issues related to the asylum system. We have inherited a total failure across the asylum system from the previous Government. As the Home Secretary told the House on Monday, that included £700 million spent on a scheme that sent only four people to Rwanda voluntarily. We are determined to restore order to the asylum system, so that it operates swiftly, firmly and fairly.

We recognise the potential challenges that individuals granted asylum may face when they need to transfer to accommodation in mainstream wider society. We have to act to ensure that there is a smooth transition. I am grateful for the points my hon. Friend and others have made. I know local authorities and others in the sector have raised the notice period as a challenge in supporting people to move, once their status has been determined, to avoid homelessness.

Those are the points we need to take into account, working across government, to look at how best to address them, ensuring we do all we can to avoid people leaving the asylum system into homelessness. I have already started discussions with colleagues in the Home Office and will continue to do that.

[Tom Hayes]

Will the Minister give way?

[Rushanara Ali]

I am running out of time, so please make it brief.

[Tom Hayes]

Integrated care boards are expected to have a dedicated focus on reducing inequalities in access to and outcomes from health care in the populations they serve. Clearly, rough-sleeping people are among the health inclusion populations that integrated care boards are supposed to have a dedicated focus on. Will the Minister talk a little about the importance of integrated care boards in supporting the access of people sleeping rough to GPs and dentists?

[Rushanara Ali]

My hon. Friend makes an important point. That is why the involvement of the Department of Health and Social Care and other relevant Departments is key. Not least, because there are also issues around step-down care, when people leave the healthcare system, whether a hospital or other services.

To respond to the point on public funds, we are keen to ensure we work across government with the Home Office on those issues. My hon. Friend the Member for Ealing Southall will be aware that women form the majority of those being exploited in modern slavery, and they can end up sleeping rough. That is an important agenda. The Home Office has committed to hiring 200 additional staff to process cases. Thousands of vulnerable people will receive faster decisions on their cases, so that they can move forward, while making the process more efficient. Those new employees are being recruited and will be in post in early 2025. Modern slavery is a huge issue. I have seen that through my own work and visits to organisations that do inspirational work to protect those being exploited in that way.

On veterans, no one should leave the armed forces and have to sleep rough. I am grateful to hon. Members for raising that important issue. They will be aware that the Prime Minister made announcements at the Labour conference on our commitment to making changes, to provide the crucial support to ensure that veterans do not sleep rough.

The point has been made about domestic abuse, particularly in relation to women. We recognise that there are particular issues with violence against women who are sleeping rough and their experience is very different; and £9.2 million of funding is available for women-specific rough sleeping services. We will take action, as part of the cross-departmental strategy, to make sure that we continue to provide the appropriate support for women who have been sleeping rough.

To go back to the issue of veterans, more than £8.5 million is being spent on the reducing veteran homelessness programme that has been established. That is part of the agenda to provide support to veterans.

Supported housing is a big issue, as my hon. Friend the Member for Portsmouth North (Amanda Martin) mentioned. We are taking action, building on the work done in the previous Parliament to improve the quality of supported housing through the Supported Housing (Regulatory Oversight) Act 2023, which was supported by Members across the parties, including Conservatives. There is more to say and do on that; it is a critical area. Hon. Members will be aware that, according to the National Housing Federation, we will need to have a further 170,000 supported housing units to deal with the need by 2040. With an ageing population and the existing need, that is a huge agenda.

Hon. Members raised the important role that charities and community organisations play, and I commend them for the work they do. The hon. Member for Strangford (Jim Shannon) talked about the challenges in Northern Ireland and some of the great examples of work. We are keen to learn from the good practices in Scotland, Northern Ireland and Wales, along with city regions in England, about how we tackle this issue.

On trauma, local authorities have made great strides to provide trauma-informed services, and we will look at what more we can do to support them.

In conclusion, this is a really important agenda. It requires comprehensive work across Government. It also requires the expertise and input of colleagues across the House and organisations on the frontline, who have done extraordinary work to protect and support people. I very much look forward to working with colleagues, as well as organisations out there, to tackle the deeply damaging problem of rough sleeping and homelessness.

10:58

[Deirdre Costigan]

Thank you, Sir Christopher, for your excellent chairing of this debate. I also thank the many hon. Members for their contributions.

I regret that the Opposition spokesperson, the hon. Member for Ruislip, Northwood and Pinner (David Simmonds), completely failed to take responsibility for the more than doubling of rough sleeping under the previous Government. He seemed to think it was more important to count rough sleepers than to do anything about them, and he failed to say anything at all about the almost a quarter of a million social homes that were lost under that Government. However, I appreciate his support on looking again at the no recourse to public funds designation and the massive expansion of that, under the previous Government, to 3.3 million people.

I thank the Minister very much for her response. I am delighted that the new Government are focusing on social housing, renters’ rights, making work pay, and rebuilding the NHS. I very much appreciate the cross-departmental focus that this Minister is bringing to this issue, and particularly the leadership from the Deputy Prime Minister, who I think will bring the priority we need to rough sleeping.

Question put and agreed to.

Resolved,

That this House has considered the matter of tackling rough sleeping.

Holiday and Second Homes Regulation: Cornwall and Isles of Scilly

Wednesday 23rd October 2024 Westminster Hall

11:00

[Andrew George (St Ives) (LD)]

I beg to move,

That this House has considered the regulation of holiday and second homes in Cornwall and the Isles of Scilly.

I am delighted to have secured the opportunity to debate this motion. It is worth emphasising that this is about not the politics of envy, but the politics of social and housing justice. Many people are concerned about the proper provision, allocation and use of property, particularly residential properties, in those areas with a significant preponderance of holiday and second homes. The tourism industry in such areas is vital, but it is important to get the balance right in the usage of properties and how, and which, properties are used in the industry. In such areas there is often a big mismatch between earnings levels and house prices, given the large amount of wealth that wishes to invest in those properties, so we need to ensure a proper balance.

It is also important to understand the distinction between second and holiday homes. Often, in discussions and media commentary, the two are confused. They are two sides of a coin, but in regulatory terms they are significantly different. Some properties flip from one form of regulation to the other, from being second homes operating under the council tax regime to the holiday lettings sector, which operates in the business rates system.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Gentleman for securing this debate. In previous Parliaments, he has proven himself to be an advocate for those who have such issues. Does he not agree that we need to make the most of tourist potential—as we seek to do in the incomparable Ards peninsula, which I represent—but a fundamental need is to have housing stock available for people to live and raise their children in, without being outpriced by the demand for second homes?

[Andrew George]

Indeed I do agree, and I am grateful for that intervention emphasising the points that I and many of those present wish to make. Although we are talking about Cornwall and the Isles of Scilly specifically, the subject clearly has wider impact across the country as a whole.

The context is important in Cornwall and the Isles of Scilly. Over the past decade, more than half a billion— £500 million—of taxpayers’ money has been handed out to holiday home owners in Cornwall alone under a variety of different and variable tax incentives available to the holiday lettings sector, such as the small business rate relief system for furnished holiday lets. Perhaps most scandalously, because those properties were entitled to such relief, they were entitled to covid aid as well—£20,000 to each one of them, for no very good reason.

The latest figures in Cornwall show nearly 14,000 second homes and more than 11,000 properties registered as short-term lets, as far as businesses are concerned. The most recent trawl through the larger of the holiday letting websites showed nearly 22,000 active listings. That figure was recorded on an initial trawl, but it does not represent the full scale of holiday lets available.

[Perran Moon (Camborne and Redruth) (Lab)]

In the hon. Member’s discussions with the public, private and voluntary sectors, is there any higher imperative across the whole of Cornwall than dealing with the issue of holiday and second homes? In my experience, there is no higher priority than grasping the challenges we are facing, which impact not just coastal areas, but towns in the middle of Cornwall, because people move from the coast to inland towns.

[Andrew George]

The hon. Member is absolutely right. On the one hand, we are trying to address the desperate housing needs of local families. We have in excess of 20,000 families on the local housing register, and we know that is merely the tip of the iceberg—the need is a great deal more. On the other, a lot of local families are being evicted from their private rented accommodation to make way for yet more holiday lets. If we do not recognise that, we are failing to grasp the full picture, so he makes a strong point.

I acknowledge that this is an important part of the Cornish economy, but it is worth noting that when one looks for accommodation in places such as Cornwall and the Isles of Scilly, the hotel and guesthouse sector is just as—if not more—important, in the sense that it competes with the holiday letting sector without many of the incentives and benefits that the self-catering sector enjoys. For example, many operate above the VAT threshold, whereas those in the holiday letting sector, if they take it down to a single property, do not. Of course, they face many other regulations as well.

[Marie Goldman (Chelmsford) (LD)]

Does my hon. Friend agree that second and holiday homes have a big impact on the hospitality sector, because businesses find it difficult to find accommodation for their staff, especially in places like Cornwall and the Isles of Scilly where there is limited accommodation, which then makes it difficult for them to run their businesses?

[Andrew George]

That is absolutely the case. As a visitor to the Isles of Scilly, my hon. Friend knows that that is a significant problem, because people cannot commute to the Isles of Scilly to work. It is difficult to commute to work for businesses providing those kinds of jobs in many of the coastal areas around Cornwall, and many people find themselves living in very informal settings, including caravans, because nothing else is available to them.

I will rapidly run through some of the regulations concerned: council tax; small business rate relief; the furnished holiday lettings scheme; holiday business registration, which the last Government proposed, and the planning use class changes. First, on council tax, going back to the pre-history where this all originated, when the Conservatives originally introduced the council tax system—what they called the community charge—they introduced a 50% council tax discount for second homes, because they said second home owners were not using all the services and therefore should not have to pay for them. That was the justification back in the 1990s.

[Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)]

The hon. Member mentioned some of the solutions. Would it not be a good idea to consider giving a suite of powers to a local authority so they could pick and choose which of those would suit that local authority and those particular circumstances?

[Andrew George]

I am grateful to the hon. Member for that intervention. Indeed, she anticipates something that I will come on to in a moment.

Going back to that pre-history, we managed to make that change under the previous Labour Government. Indeed, I remember well a debate in this Chamber on 9 February 2000 when I raised these issues almost a quarter of a century ago. Chris Mullin was the Under-Secretary of State responding to that debate. I had raised the issue of the unfairness of the 50% council tax system. I had been campaigning pretty much on my own for some time until that point. I made the point to the Under-Secretary that the responses I had received from Government had been complacent. I hope the Minister, who I am pleased to see in his place today, will consider the precedent set by Chris Mullin when, towards the end of his response, he said:

“The hon. Gentleman said that he had received a rather complacent response from the Government, and, indeed, I have here a rather complacent response, which I will not read out. I merely say that the issue was reviewed about a year ago, and at the time there were no sufficiently cogent reasons for a change. I am, however, willing to follow up the point in my Department. Perhaps we can discuss it later.”—[Official Report, 9 February 2000; Vol. 344, c. 112WH.]

Chris Mullin and I did discuss it later, and the policy was changed.

One of the lessons from that is that we can effect change through these debates if Ministers are receptive to the arguments we put forward. I hope the Minister will consider that. The last Conservative Government responded to pressure. A lot of us were arguing very strongly against the way second holiday homes were being treated, although I was outside Parliament during my nine-year sabbatical. They could not withstand that political pressure; they had to respond to it. Indeed, they announced the intention to increase the premium on second homes by up to 100%, to be imposed by local authorities.

Have the new Government carried out any kind of impact assessment on the change in council tax arrangements for second homes? Have they considered whether it would have a counterproductive impact, if it was not married with a suite of other regulatory changes? People might switch from council tax to business rates and use the small business rate system, for example, and pay nothing at all. They may take other options rather than paying council tax.

[Steff Aquarone (North Norfolk) (LD)]

My hon. Friend is making an excellent speech. To build on the point made by the hon. Member for Truro and Falmouth (Jayne Kirkham), does he agree that we need local councils in Cornwall, the Isles of Scilly and elsewhere to be given greater powers to ensure that second home owners pay properly towards mitigating the overall impact of those homes on local communities? This is not about banded council tax or business rates; it is about the wider implications, for which we need to perhaps consider changes.

[Andrew George]

My hon. Friend makes an important point. It is not just the housing impacts; it is the wider societal and community impacts property investors have on local communities. I hope that when the council tax increase comes in, the Government will be clear on what local authorities can do. Will the council tax increase provide additional income that local authorities can use to address housing need, or will it result in a reduction in the central Government support grant to local authorities? Cornwall is staring down the barrel of a £100 million deficit, so that issue is very significant. A number of us are making the argument that council tax could go up by 200% or 300%, rather than 100%, in some areas because of the impact second homes are having, in order to adjust things as we believe they should be adjusted.

I have already referred to the impact small business rate relief has had. It has clearly been a major incentive for property investors to invest in holiday lets in areas such as Cornwall and the Isles of Scilly. Although the small business rate relief system is due to expire next year, could the Minister be clear about the Government’s plans for the future? There are no doubt pressures from that sector to reintroduce a similar rate relief. Although I do not think that is justified, for very obvious reasons, there are parts of the sector, particularly those holiday lets under an occupancy restriction, that could perhaps be included. We have had a campaign success, in that the last Conservative Government insisted on a 70-day use to justify the rate relief, but that needs to be reviewed.

I hope that the Government will be clear about how the registration scheme will be introduced, and I know that Cornwall council has offered to assist the Government in that. The council has expertise and is keen to introduce the registration system, but it needs to know how the scheme will work, what level of verification and inspection will be required by the council and what income can be raised. It will be an expensive process and Cornwall is offering to be a pilot area, if the Government wish.

Let me turn to the proposed planning use class change, which the Liberal Democrats have long argued should apply to all non-permanent occupancy residences. In other words, second homes and holiday lets should all be within one category, because we believe that the impact is the same on local communities, and therefore the change should apply not only to holiday lets but to second homes.

I hope that the new C5 use class for short-term rentals, which was announced by the previous Government, will be looked at with care, particularly the fact that it appears to fall under permitted development rights. In other words, local authorities specifically have to apply an article 4 direction to avoid a situation where someone converting a property to a holiday let simply announces it to the local authority and does not need to seek permission. I hope that the Minister will look at that issue. In the Liberal Democrats’ view, we also need to look at a sunset clause on those permissions; otherwise, there will be a perverse incentive for all of us to seek planning permission for that use class change in order to get a market advantage or an inflated price within the market. There should be a sunset clause, relating to the end of that usage, ownership or change within the Land Registry.

In conclusion, I will simply say that this is a very important issue in areas such as Cornwall and the Isles of Scilly, and—as we can see from today’s debate—in many other parts of the country. A suite of policies and changes need to be addressed by the Government, and many of us across all parties would be keen to work with them to ensure that the balance is absolutely right, and that local housing need is given the highest priority of all.

11:18

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Alex Norris)]

It is a pleasure to serve under your chairship, Sir Christopher, and it is a pleasure to respond to such an excellent speech by the hon. Member for St Ives (Andrew George). This is our first opportunity to work together because I was elected after his sabbatical commenced, and I am very much looking forward to working with him in the spirit with which he ended his speech. I know that there is a lot of interest in this area; I have spoken to my hon. Friends the Members for Camborne and Redruth (Perran Moon) and for Truro and Falmouth (Jayne Kirkham) a lot over the years about this, and I know that there is cross-party interest. I always think working in the spirit of Chris Mullin is a very wise idea, and I think we will work in that spirit. The hon. Member for St Ives certainly will not see any complacency from me and my colleagues. I thank other Members who have contributed to the debate, and I will try to cover the points raised as I go.

From what the hon. Member for St Ives said, as well as the previous debate raised by my hon. Friend the Member for Cities of London and Westminster (Rachel Blake), it is clear that having a high concentration of second homes and/or short-term lets brings significant challenges to those communities—indeed, they may be the biggest challenge, as my hon. Friend the Member for Camborne and Redruth said. Therefore, they are passionately advocating for effective regulation. I hope this is seen as a virtue, not least because we are a new Government, but those who follow the debates on this issue will know that we are actively considering the best course of action to help local authorities. I will talk about some of the things we are doing now, in the spirit of wanting to ensure that we go further.

I have not read the debate from 24 years ago. I confess to colleagues that as well as watching TV on a Saturday night, I will read old debates; I love the old transcripts. It is amazing to see how some debates evolve, and there is also always excellent content that perhaps one could pass off as their own, certainly if they went back far enough to not be detected—not that I would ever do that, of course, Sir Christopher.

This issue bumps up against a housing crisis with years of low house building, and rising interest rates that have made home ownership unattainable for many people. It is a core mission of this Government to address that challenge. The issue is more acute in places such as Cornwall and the Isles of Scilly and other coastal, rural and urban communities, where it is exacerbated by the proliferation of second homes and short-term lets. Cornwall and the Isles of Scilly are undoubtedly some of the most beautiful areas not just in the country but in the world, and are therefore popular choices for tourists. However, that has real consequences for local residents—whether it is high prices relative to earnings, people being pushed out of the choice of home ownership or having to leave their community, a stretched private rented sector with significant pressure on local economies, families and communities, or steadily growing housing waiting lists.

The hon. Member for Chelmsford (Marie Goldman) talked about the self-defeating cycle. During the passage of the Levelling-up and Regeneration Act 2023, her colleague, the hon. Member for Westmorland and Lonsdale (Tim Farron), spoke thoughtfully and passionately about the challenge of people going to a beautiful community for a week or weekend, and then going to the pub and not being able to get food because the chef has nowhere to live. These things will eventually impact the quality of the offering and therefore perhaps its attractiveness.

[Steff Aquarone]

This issue is a problem in many places, but even within places like North Norfolk, there is not even distribution. We have an overall figure of one in 10 homes being second homes, but some villages suffer up to 50%, which has an impact on temporary accommodation for the homeless. Does the Minister accept not just the circumstances but the urgency of the need for these measures?

[Alex Norris]

Yes, that is right, not least because once we get to that tipping point, the consequences can be profound and rapid. Of course we need action today, and I will speak about that.

One of the many important things that the hon. Member for St Ives said was that this is not about envy; he made a good point about balance. What his community and colleagues’ communities are asking for is a recognition of balance. They want to have a thriving tourist sector, but they need to be a place where people can live and where the consequences of those who make significant profits are shared fairly. It is about finding that balance and we have not got there yet, which relates to his point.

I want to talk about some of the issues and housing demand itself.

[Andrew George]

I just want to re-emphasise that many people who own second homes in Cornwall make a significant contribution to the local community, and indeed a financial contribution, because they recognise the impact of their privilege. As I say, this is not about envy, and a lot of those who own second and holiday homes are conscious of the impact.

[Alex Norris]

That is an excellently made point. I always wonder which of these debates attract people watching online; I suspect this might be one of them, and I hope that people have heard that message. We are talking about finding that fair balance, but I am sure we all agree that we have not found it yet.

[Noah Law (St Austell and Newquay) (Lab)]

Although we can all agree that the politics of envy need not play into this discussion, and that we need a proper licensing regime for holiday lets as the furnished holiday lets tax regime ends, does the Minister also agree that we ought to ensure that the homes coming out of that regime do not end up flying under the radar, and in some cases operating unsafely? We need also to look at mitigation or transitional arrangements for that industry to ensure that bona fide holiday businesses in the sector can continue to operate and we do not produce the opposite effect from what is intended with these reforms.

[Alex Norris]

That is a thoughtful, well-made point. We must make sure that we have thought things through so that there are not unintended consequences, which could cause significant harm.

I will come to the furnished holiday lettings regime, but I want first to talk about the register, because the hon. Member for St Ives made his kind offer of help from Cornwall. I will certainly raise that with colleagues. The lack of data and the limitations on what the data can tell us can create challenges. We need that registration scheme. The Department for Culture, Media and Sport is leading on that, but we are working with it on the process. The Department is working at pace to operationalise the scheme as soon as possible, but it is important first to ensure that it works. To update colleagues, it is currently in the initial phase of digital development, and that is enabling us to test and refine possible options for design and delivery. We know there is eagerness and we will update the House again as soon as possible, but that kind offer has been heard by me and officials.

It is sad to make a debate about beautiful parts of the world about tax, but I am afraid that tax is an important part of this. We have committed to end the furnished holiday lettings tax regime from April next year, which I think will be welcomed. Doing so will take away certain advantages that incentivise short-term, rather than long-term, letting; that is the right thing to do. As the hon. Member for St Ives said, the premium of up to 100% on second homes will come in from next April. It is a discretionary power, but I think local authorities will be keen to use it. The hon. Gentleman talked about going further; he might have to let us have a go with the scheme as it is first before we do that, but we are mindful that the premium is up to 300% in Wales, so we will consider the impact of that. That money can be spent on local services, to address the hon. Gentleman’s point.

We are conscious that colleagues in this place and beyond still think we could go further, and we are looking at the tax treatment and keeping it under review. We will consider the additional powers that local authorities may need, but given that we have novel powers in this space, it is handy to for them to be used.

[Perran Moon]

Will the Minister give way?

[Alex Norris]

Briefly, because we are running out of time.

[Perran Moon]

Does the Minister agree that the issue of second homes and holiday homes in Cornwall and the Isles of Scilly is not uniformly faced across the entire south-west, and that the role of the local authority in dealing with this issue, if they have the powers to do so, is absolutely key?

[Alex Norris]

Yes, that is very much my world view. Colleagues will see from my time in the Department that my emphasis is on getting the right powers and resources to communities to use in the way in which they know will work best, because colleagues in this room are experts on Cornwall in a way that I am not. I see my responsibility as giving them the tools.

On the concern regarding attempts to game the heightened council tax payment, the system includes criteria on the number of days that the property has been let out for holidays, and we will monitor, and are mindful of, the functioning of those criteria.

The hon. Member for St Ives also asked about small business rate relief. He would not, in the spirit of our new working relationship, want the Chancellor to smite me just seven days before a fiscal event, so I am afraid he will have to wait. He also mentioned people being removed from their homes so that the property can be let out. That is why I am sure we will get significant cross-party support for the Renters’ Rights Bill, particularly for ending section 21, or no-fault, evictions. Finding that balance and giving renters that protection is important everywhere and clearly in his community.

We must also increase supply. The Government have made significant commitments by which we will be measured: on the building of new homes, on unblocking stalled housing, and on building new towns in the fullness of time. We want this country to be a place where people can own their home if they wish and where they do not have to leave their community to do so. I appeal for colleagues to work with their local authority, as I am sure they will, on their local plans to ensure that those plans are thoughtful, sensitive and written with an understanding of the community.

This is an exceptionally important issue, which is changing the character of, and creating challenges in, some of the most beautiful parts of our country and indeed the world. The Government want to work with those communities to find the right balance—that has been the theme of this debate. I have mentioned some of the things we are doing already, and we are committed to working with the hon. Member for St Ives and colleagues across this House.

[Sir Christopher Chope (in the Chair)]

I did not wish to take time out of this short debate, but I remind Members of paragraph 30 of “Rules of behaviour and courtesies in the House of Commons”, which was issued by Mr Speaker:

“Men are expected to wear a tie”.

Motion lapsed (Standing Order No. 10(6)).

11:30

Sitting suspended.

Water Companies: Regulation and Financial Stability

Wednesday 23rd October 2024 Westminster Hall

[Mark Pritchard in the Chair]

14:30

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

I beg to move,

That this House has considered the regulation and financial stability of water companies.

It is an absolute pleasure to serve under your guidance this afternoon, Mr Pritchard. It is a real honour and privilege to have secured this debate on a matter of enormous importance to my constituents in Westmorland and Lonsdale and, quite clearly, to many around the room and beyond.

I wonder whether, in the aftermath of the 2019 general election, many pundits or politicians would have predicted that by the 2024 election water quality would be one of the top three doorstep issues, and a subject of discussion here and in the main Chamber within an hour or two of each other, and indeed within the same week as in the other place. That is exactly what has happened, and there are a number of reasons why.

First, leaving the EU meant that we needed to introduce our own legislation to replace what went before. In doing so, people, including MPs, looked under the bonnet, so to speak, for the first time and were horrified to see what was there: the sewage outflows into our rivers, lakes and coastal areas that had been long permitted.

Secondly, the last Government failed to take effective action to limit those outflows, allowing excessive dividends and bonuses on the one hand and inadequate infrastructure investment on the other.

Thirdly, the situation is objectively getting worse. Climate change, higher rainfall, inadequate regulation and failure to invest in infrastructure renewal means that 2023 saw a 54% increase in sewage spills compared to the year before.

Fourthly, and just as importantly, this issue has emerged because community campaigners across the country have resolved that they will not accept this appalling situation and have led the way in holding water companies, regulators and the Government to account. Organisations in our Westmorland communities, such as the Clean River Kent Campaign, Save Windermere and the Eden Rivers Trust—and many more, both in my communities and around the whole UK—have engaged in citizen science, heightened awareness and galvanised public opinion.

The Liberal Democrats have made this issue a priority, too. Water is so important to us that my right hon. Friend the Member for Kingston and Surbiton (Ed Davey) spent most of the general election campaigning about it—and, indeed, spent quite a lot of time in it! Having led my party through a previous general election, I know exactly how it feels to spend one’s campaign in deep water, and even, on occasions, up to one’s neck in poop.

I have the immense privilege of serving Westmorland and Lonsdale and being MP for, among others, Windermere, Ullswater, Coniston Water, Haweswater, Rydal Water, Grasmere, Brothers Water, the River Kent, the River Eden, the River Lune, many other rivers, and much of Morecambe bay. For us, water is deeply personal; it is precious to our biodiversity, our heritage and our tourism economy.

Failure to tackle the issue rightly raises passions, but the fault lies in the system. We have an industry financing model and a regulatory framework that are simply not fit for purpose. However, I do not want to demonise the people who work for water companies. Good, competent and decent people work for United Utilities in my community and for other companies across the rest of the country, on the ground and indeed underground. The same applies for those who work for the Environment Agency and Ofwat. They are good, hard-working and professional people working within a system that is badly broken, and that broken system has an appalling impact on communities in the lakes and dales of Westmorland.

I have a few figures to demonstrate the situation, courtesy of the Rivers Trust. Last year in Appleby, combined sewer outflows into the River Eden saw 46 spills. At Kirkby Stephen on the River Eden, there were 135 spills. At Staveley on the River Kent, there were 283 spills. At Tebay on the River Lune, there were 124 spills.

[Sarah Dyke (Glastonbury and Somerton) (LD)]

Will my hon. Friend give way?

[Tim Farron]

In one second. At Greystoke on the River North Petteril, there were 146 spills. I could go on, but I will give way to my hon. Friend.

[Sarah Dyke]

I congratulate my hon. Friend on his excellent speech. Data from Thames Water shows that Glastonbury and Somerton was the 16th worst constituency in England and Wales for sewage overflows. Does my hon. Friend agree that the commission should consider establishing pollution baselines and reduction targets?

[Tim Farron]

I absolutely agree. That reminds us that, of the over 464,000-plus spills that took place in 2023, most were legal and permitted—and most of them should not have been. We juxtapose this failure with the reality of money leaking out of the sector in the form of dividends and bonuses. Since privatisation, £78 billion has been paid out in dividends and, in the last four years, we saw £62 million paid out to company executives in bonuses.

[Helena Dollimore (Hastings and Rye) (Lab/Co-op)]

I thank the right hon. Member for giving way. He has a very beautiful constituency in the Lake district and has campaigned strongly on this issue. Would he therefore welcome this Government’s commitment to cleaning up the water industry and that they called in the water bosses within the first week of the Labour Government to say that investment must be ringfenced for infrastructure and not spent on bonuses, and will he be supporting the Water (Special Measures) Bill?

[Tim Farron]

First of all, I am merely, and happily, an honourable Member, although it is very kind of the hon. Lady to call me “right honourable”. Secondly, we welcome many proposals in the Bill. We have already tabled many amendments in the House of Lords because although we think that the Bill is a step in the right direction, a lot more could be done. I will make more of that in a moment.

It is worth saying, as we are talking about bonuses, that although there was a 54% increase in spills between 2022 and 2023, it did not rain 54% more in 2023 than in 2022; there was no justification for that increase— and yet, the bonuses happen. I have never worked in an industry where bonuses were the norm, but my understanding is that they are paid for success, not as a commiseration for statistically proven and repeated failures.

It is easy to be angry about all this—I am, and maybe it is essential to be so—but it is just as important to be constructive and seek solutions. The depth, seriousness and complexity of this crisis means that the only answers that will work need to be radical and ambitious. Today’s announcement of a water commission, which will consider these things, is welcome, but also a little frustrating. Do we really need to spend the best part of a year stroking our chins and pondering, when what is needed is radical action now? With respect, most of us pretty much predicted the likelihood of a Labour Government two years ago. Did the victory strike them as a surprise? Why were they not ready with a plan to deliver much sooner than this?

I have a similar view, as I have just suggested, about the Water (Special Measures) Bill. It contains many positives, including criminal liability for CEOs responsible for severe environmental failure, but it does not amount to the radical structural transformation that is so obviously needed. The British people rightly believe that they voted for a far more ambitious plan to be urgently delivered. Indeed, those who voted Liberal Democrat absolutely did vote for that, so we are determined to keep our word and fight for that action.

It seems obvious how regulation could be made better. Water industry regulation is fragmented, with environmental regulation done by the Environment Agency and business regulation done by Ofwat. That just does not work.

[Edward Morello (West Dorset) (LD)]

To my hon. Friend’s point about the need for a regulator with teeth, West Dorset saw 45,000 hours of sewage released into our rivers and beaches last year. The River Lim last year was declared “ecologically dead”. Does my hon. Friend have a view on whether the regulator should be able to impose fines on the water companies that reflect the damage they are doing to our natural environment?

[Tim Farron]

I completely agree, and I will answer that point more fully in a moment.

[Alison Griffiths (Bognor Regis and Littlehampton) (Con)]

Does the hon. Gentleman agree that the conflicting regulatory directives, which sit across all the different agencies that he has just referred to, are part of the problem and should be urgently addressed, without necessarily waiting for the long-awaited review?

[Tim Farron]

I thank hon. Members for both interventions. First, I agree with my hon. Friend the Member for West Dorset (Edward Morello). One problem is that Ofwat has fined three—or maybe four—water companies in the last year or so to the tune of about £170 million, and has collected precisely zero pounds and zero pence of those fines.

Secondly, to answer the point made by the hon. Member for Bognor Regis and Littlehampton (Alison Griffiths): absolutely—having regulators with conflicting responsibilities and rules is part of the problem. We have two inadequately resourced regulators with inadequate powers being played off against each other by a water industry that is far better resourced and able to run rings around very good people—but very harassed people—with the job of holding them to account.

The Liberal Democrats propose a unified and much more powerful regulator that we would call the clean water authority. That new authority would end the practice of monitoring being done by the water companies themselves—in other words, setting and marking their own homework. Let us put that right. Water companies should be charged the full cost of monitoring, but the monitoring itself should be carried out by an independent regulator so we can be sure that we are seeing the whole picture. Successive Conservative Ministers committed to changing that, but none actually did, so will the Minister commit the new Government to making that necessary change?

[Calum Miller (Bicester and Woodstock) (LD)]

It is a pleasure to serve under your chairship, Mr Pritchard. My constituents in Bicester and Woodstock are deeply concerned that Thames Water wants to hike its prices by more than 50% over the next five years. Just a month ago, I stood in the front rooms of constituents whose homes had been flooded with sewage because of the backing up of foul water drainage. Does my hon. Friend agree that the regulator he proposes, and which the Liberal Democrats support, should insist on and compel water companies to put performance before profit in their operations?

[Tim Farron]

Absolutely. That would be exactly the case at the heart of our community benefit model, which would be governed by a clean water authority. Profit would not be the overriding motive, and having the right people on board, including environmental campaigners in each area we are talking about, would keep the water companies honest and prevent the outrageous things mentioned by my hon. Friend.

The issue with the lack of reliability of data is key. It leaves us suspicious that the scandal could be even worse than we think. Just last week the BBC reporter that between 2021 and 2023, United Utilities illegally dumped sewage into Windermere for 165 hours, of which 118 hours were not reported to the Environment Agency. According to Environment Agency figures, United Utilities was the best-performing water authority in England in 2022 and, as a reward, it was allowed to raise £5.1 million extra by increasing bills, but—as we saw have now seen from last week’s revelations—United Utilities did not report hours and hours of illegal spill decisions made on the basis of inaccurate information.

When water companies mark their own homework, there are consequences; indeed, there are deep consequences for my communities in Westmorland. Some 7 million people visit Windermere every year, alongside the other 20 million who go to the lakes as a whole. I will state for the record that I happily swim in Windermere and have confidence in its safety in most places and at most times, but on behalf of our local community and especially our local hospitality and tourism businesses, I am deeply angry that the failure of the water company and its regulators to identify and solve these problems is not only beginning to damage our environment, but doing damage to the precious brand of the Lake district. That is why we need urgent, comprehensive, tangible and ambitious action, and why I am very grateful to my noble Friend Baroness Bakewell, who has tabled a Liberal Democrat amendment to the Water (Special Measures) Bill in the Lords to create a special status, with special protections, for Windermere.

[Monica Harding (Esher and Walton) (LD)]

Esher and Walton is a river community. The Thames borders our constituency, and the River Mole, which is a chalk stream, runs through it. The River Mole is one of the most polluted rivers in the country, and a quarter of the sewage poured into is from my constituency. This amounts to a failure that impacts on our health, our environment and our democracy. Why our democracy? Because it means the public believe that our Government turn a blind eye to this outrage and the ransacking of our public utility, therefore neither representing them nor serving their interests. Does my hon. Friend agree that this must not be allowed to happen again, and that we—and the new Government in particular—must deliver clean rivers and get this right?

[Tim Farron]

I very much agree. Regulation is the key. Welsh Water is not for profit and Scottish Water is publicly owned, yet they both still face major problems with sewage discharges. As my hon. Friend is getting at, there is evidence that although ownership and finances matter, effective regulation is the key, and we simply do not have that at present.

[Sir Julian Smith (Skipton and Ripon) (Con)]

I thank my constituency neighbour for giving way. Does he agree that as well as regulation, commissions and the initiative proposed by his party, there is a massive breakdown of trust within the industry? I spoke to one of the major investors in Thames Water and asked them to tell me the last time that the regulator, the Government and the company’s investors were in a room together, and that had never happened. Among all these initiatives, does the hon. Gentleman agree that getting people together to talk about their different equities and priorities, and how they deliver for the consumer, is also key?

[Tim Farron]

I agree. Although I also think an urgency is needed that many people who own water companies do not demonstrate, and that is why the Government need to lead—but I do think it is right that we get people together to make things significantly better.

Over the past 33 years, for every pound that water companies have spent on infrastructure and doing their job, 80p has drained away to finance debt and pay dividends. That is an appalling waste of billpayers’ money and water company assets. The separation of operating companies from parent companies, where the regulated operating company racks up huge debts to allow the unregulated parent company to pay huge dividends, has been a disgraceful scam. I am sure that my hon. Friend the Member for Witney (Charlie Maynard) will say more about how that model has done such damage to the customers of Thames Water; suffice it for me to say that that model of ownership must cease. For the regulator to have stood idly by while that has happened is unacceptable, and for it not to step in as similar asset-stripping begins in other water companies is an abysmal dereliction of duty by it and the Government.

What is to be done? I just want our waterways to work and to be clean and safe. I am not convinced that renationalisation would be a good use of public money. It could mean putting taxpayers’ money into the pockets of those who have already made so much money out of them without a single extra penny going to improving infrastructure. We propose a radical move away from the current model: water companies should be community benefit corporations, ensuring that all revenue goes into keeping environmental standards higher and solving the long-term problems of our network. Given that 45% of all water company expenditure has gone on debt financing and dividends, that kind of ownership and governance reform should mean that there is more money available for infrastructure renewal.

[Mr Gideon Amos (Taunton and Wellington) (LD)]

Will my hon. Friend give way?

[Tim Farron]

I will give way one final time, because I am running out of time.

[Mr Amos]

Will my hon. Friend congratulate the Friends of French Weir Park in Taunton for helping to get bathing water status for the River Tone? Is it not a scandal that after £4.25 billion was paid by Wessex Water in dividends, the situation may arise whereby that status is removed because the Environment Agency and the water company will not have enough money to invest in improving river quality over the next few years?

[Tim Farron]

I absolutely endorse the work of the campaigners in my hon. Friend’s community. Those on the banks of Coniston Water have done the same in our area, raising the bar and the standards under the current regulatory framework, inadequate though that is.

It is clear that Thames Water has more than met the threshold to be taken into special administration, and I suspect that we will hear more about that later. As for the other water companies, the current regulatory framework seems to leave them immune, despite their repeated failure to meet basic obligations to prevent sewage from being dumped in our lakes, rivers and coastal areas, and even on the streets of many of the villages in my communities.

Under the current rules, to remove the licences to operate of the other companies, the regulator would need to serve a 25-year notice. I am grateful to my noble Friend the Earl Russell for proposing a Liberal Democrat amendment in the Lords that would take that ludicrous notice period down to just six months for an environmental failure. I hope the Government will accept that amendment; if they do not, I will table it in the Commons. Our vision is that the new, more powerful clean water authority would have the power to strip all water companies of their licence to operate within six months and then migrate them to the community benefit model. We believe that it is time for the British people to get a clean water system under which they get what they paid for, their hard-earned money is not siphoned off by overseas merchant banks, and their precious waterways are not infected, outrageously, with untreated sewage.

I represent what I would argue is the most beautiful part of England. One of the reasons it is beautiful is that it is also the wettest bit of England. The failure of Governments of different kinds, and the regulators and water companies, to tackle storm overflows was always going to hit hardest in the places with the most storms. That is why we are frustrated that the Conservative Government, who denied that the problem existed, seem to have been replaced by a Government who have acknowledged the problem but have announced that they are going to ponder it very hard for a bit. It seems to me that the problem is very obvious, and therefore so are the solutions. I call on the Government to act ambitiously and comprehensively, and to do so now, without delay.

[Several hon. Members rose—]

[Mark Pritchard (in the Chair)]

Order. Let me make a few housekeeping points. We will have an informal three-minute limit, but if colleagues intervene a lot and we are running out of time, I may have to make a formal ruling from the Chair, which will mean that any interventions add a minute to the time of the Member who is speaking.

Can I just say that when colleagues attend debates in this Chamber, or any other debate, they really should wait for the end of at least the first speech, having intervened, before leaving? The person who left the Chamber is not here to hear that ruling, but I offer it as a gentle reminder for other colleagues. Also, when Members make a speech, they should remain in the Chamber until they have heard two other speakers before leaving.

My final observation from this debate is that if colleagues come in—[Interruption.] Order. Forgive me, but the hon. Member for Taunton and Wellington (Mr Amos) might want to hear this. If an hon. Member comes in halfway through the opening speech, they should not expect to intervene, having not heard at least the introduction and some of the preamble to the substantive points.

I hope that is helpful. I share it from a point of weakness, having myself made all of those mistakes and many more over many years. We will have an informal limit of three minutes to start. I call Grahame Morris.

14:50

[Grahame Morris (Easington) (Lab)]

Thank you for calling me, Mr Pritchard. It is always a pleasure to serve under your chairmanship.

I congratulate the hon. Member for Westmorland and Lonsdale (Tim Farron) on securing this important debate. There is no doubt about it: his constituency is blessed with some of the most stunning natural beauty in the world, never mind the country, from the fells and woodlands to the Lake district, a UNESCO world heritage site. The illegal sewage dumping at Windermere by United Utilities does not just shame our nation; it should be considered an ecological crime, and those responsible must be held accountable and face the full force of the law.

Although the Lake district is world renowned, I am equally proud to represent a hidden gem: the Durham heritage coast—or, to be precise, the east Durham heritage coast. Our magnificent magnesian limestone cliffs offer spectacular views of the North sea and in the summer the coastal grasslands are alive with rare wildflowers, creating a habitat for the Durham brown argus butterfly and other wildlife. That coastline, once scarred by industrial waste from coal, has been reclaimed by nature, yet now it faces a new threat: sewage.

Sewage overflows, far from being a rare event, have become routine in the water industry. In 2023, Northumbrian Water discharged raw sewage for over 280,000 hours in 46,492 incidents, including into the bathing waters off Seaham and Crimdon in my constituency. The environmental disaster is compounded by the economic abuse by water companies. Since privatisation in 1989, companies such as Northumbrian Water have neglected infrastructure while accumulating staggering debts to pay out dividends.

[Richard Burgon (Leeds East) (Ind)]

My hon. Friend mentions his local water company. People in Leeds and Yorkshire feel ripped off, and it is no wonder, as Yorkshire Water has just announced its intention to increase prices by 35% by 2030. Does he agree that that is a compelling reason why the water companies should be brought into public ownership, so that they can put public service, the public good and environmental good ahead of the accumulation of profits for shareholders?

[Grahame Morris]

I thank my hon. Friend for that intervention. Indeed, Northumbrian Water is not alone. Across the industry, financial mismanagement has gone hand in hand with environmental failure. Northumbrian Water alone has built up £3.5 billion in debt while paying out £4.1 billion in dividends to shareholders. That means that 19% of consumers’ bills in my region go towards servicing debt.

I welcome the Government’s Water (Special Measures) Bill. Its provisions to block bonus payments for executives, require annual pollution reduction plans, and improve transparency on sewage discharges are crucial. The tougher penalties, including the threat of imprisonment for those impeding investigations, are a necessary step. But while we are moving in the right direction, I fear that will not be enough to address the scale of the problem. Yes, the Bill strengthens regulation, and it is certainly more robust than anything proposed by the Opposition now or when they were in government, but will it solve the underlying issues? I suspect that the answer to that one is no.

We cannot ignore the fact that the public are already paying the price for this industry’s failure. We pay through higher bills, polluted waters and an industry debt that now exceeds £60 billion. When the sector finally collapses under the weight of its own excesses, it will be the taxpayer who is left to pick up the pieces. I support the public ownership proposals. I think the costs are vastly exaggerated in the context of the scale of the challenge and the liability.

We must take steps now to fix the debt, pollution and infrastructure crises in the water industry, so we need to go further than is being proposed. Blocking executive bonuses is not enough. Without determined measures, the consequences will be higher bills for consumers, more money lost to debt repayment, and an industry that continues to prioritise profit over public good.

14:55

[Jeremy Corbyn (Islington North) (Ind)]

It is a pleasure to serve under your chairpersonship, Mr Pritchard.

Water is fundamentally a human right; everyone needs to use water at some point. The water companies, all now in private ownership, are responsible not just for the supply of water but, jointly with the Environment Agency, for river basin management, flooding and many other things. The private ownership of water since 1989 has resulted in £78 billion paid in dividends, mostly to foreign-owned companies, many of which do not pay tax in this country. It has resulted in a £60 billion debt collectively and £9.1 million has been paid to chief executives in utterly excessive salaries.

The argument for privatisation was that there would be more investment, and the water would be cheaper and the service more efficient. Well, that has worked out well, hasn’t it? We have massive levels of sewage discharged into rivers and the sea, lower-quality water all over, and less and less investment in many areas.

[Rosie Duffield (Canterbury) (Ind)]

Does the right hon. Gentleman agree that the 285,000 people who signed the petition about renationalisation that I helped to present to Downing Street a couple of years ago, particularly those in the beautiful coastal town of Whitstable, have been badly let down by Southern Water on a daily basis?

[Jeremy Corbyn]

I thank the hon. Member for that intervention. She put forward an excellent initiative at that time, calling for public ownership of the water industry. I will conclude my short remarks in a couple of minutes by addressing the question of public ownership.

I now want to refer to Thames Water, which covers my constituency and much of London and the south-east. It is one of the biggest water companies, the most indebted and the most inefficient, and it would be interesting to know how it survives. Two years ago, when even the Financial Times called for public ownership of the water industry and said that it was the norm around the world, I am sure it was Thames Water it had in mind.

Thames Water on its own has racked up £14 billion of debt. In 1989, on privatisation, its debt was zero. It has paid out £2.7 billion in dividends and £37 million in what it euphemistically calls internal dividends to its parent companies. The company could require as much as £10 billion to get its infrastructure up to regulatory standards. That would be compounded by the interest payments on its massive debt pile. My constituents suffer flooding and endless traffic disruption because of the lack of maintenance over many years. There have to be endless replacements of short sections of pipework, because there has been no proper planned investment programme.

My call is simply this. I am sure that the Government’s proposed regulatory regime would be better than what we have at present, and it is good that the Secretary of State acknowledges the issues facing the water companies and all of us as consumers around the country. However, I simply say that once more we are into a debate between a regulator and the water companies, who this morning claimed they could not invest because of the regulatory framework.

I think we should go back to the issue of public ownership. I have no idea where the figures given by the Secretary of State today came from; perhaps he can explain that. The reality is that under public ownership Parliament would decide the share value and the amount of compensation paid, which would have to take into account the inefficiency and waste of the companies, and people would be compensated with Government bonds at a fixed rate of interest. That would give us public ownership and control. I do not want an old-style nationalisation; I want community nationalisation.

I will finish by saying that were local authorities, the workers in the industry, local communities and the Environment Agency jointly involved in how the water companies are run, their performance would be a lot better than it is with distant shareholders raking in massive profits from our water supply.

15:00

[Mr Luke Charters (York Outer) (Lab)]

It is a pleasure to speak under your chairship today, Mr Pritchard.

I genuinely thank the hon. Member for Westmorland and Lonsdale (Tim Farron) for securing this debate. The previous Conservative Government weakened water regulation, let our rivers fill with toxic pollution and allowed companies to pay themselves with huge bonuses while household bills soared, which was shameful.

Many constituents in York Outer are disgusted by that situation. We have the beautiful Rivers Foss and Ouse flowing through our constituency. To watch both of those rivers being degraded is not only unforgivable but bewildering. The mismanagement and lack of regulation by the previous Conservative Government have created a plethora of issues.

I have had constituents writing to me since I was elected about the stench of sewage seeping into Rawcliffe, water pump failures near Haxby and concerns about flood alleviation in Fulford. Although the Tories are no longer in power, those issues are not water under a bridge; they still need to be fixed.

That is why today’s statement by the Secretary of State on the independent water commission is a great first step, and I am also delighted that my hon. Friend the Minister is tackling these issues at pace. At this early stage, my main suggestion is that we must take lessons from other regulated industries and regulatory failures within them when designing the future water regulation system.

When I was at the Bank of England, Sir Jon Cunliffe was highly regarded, so I warmly encourage him to look at the areas where there has been disjoin in the financial services regulator, and we should move to a centralised, smart regulator. For me, that involves looking at scrapping and replacing Ofwat. Perhaps Sir Jon could publish an interim view on that suggestion.

Although it is great to see so many people engaged in today’s debate, it is still frustrating to see that we are here. It is clear to me that the Government are turning the tide against chronic underinvestment in our water industries. Water companies must be regulated properly and the regulators must have the power to regulate the sector adequately, which must be the goal. If we can make that happen after 14 years of Tory failure, we will soon be sailing in smooth waters.

15:03

[Jess Brown-Fuller (Chichester) (LD)]

It is a pleasure to serve under your chairmanship, Mr Pritchard.

I thank my hon. Friend the Member for Westmorland and Lonsdale (Tim Farron) for securing today’s timely debate, on a day when the Secretary of State has made a statement in the House to announce an independent water commission. As I said during his statement earlier, the promise to fundamentally transform our water industry and clean up our waterways for good is welcomed and celebrated across the House. Our lakes and rivers are national treasures, yet water company executives have been degrading these resources to protect their own profits and shareholders, even while the companies themselves are drowning in debt.

The water system in England is at breaking point and water companies are not being held accountable for one of the worst environmental crises in the UK—the dumping of sewage into our rivers and lakes, and along our coastline. My hon. Friend said in his opening remarks that Ofwat has fined four or five water companies billions of pounds, but currently it has not collected a penny.

The damage done by these water companies is nowhere more apparent than in Chichester harbour, which is a site of special scientific interest and a national landscape but it is in unfavourable and declining condition, and desperately needs ambition to protect it.

The British public pay those companies not only to provide us with clean water but to ensure that there are safe and clean processes for waste water and sewage, while protecting our environment. Storm overflows are supposed to be exceptional, not the norm. During my election campaign, on the doorsteps I saw a real passion among constituents for addressing the problem of water pollution and sewage dumping. It has been a pleasure to meet passionate environmental campaigners across the constituency, such as Friends of the Ems and the group carrying out citizen science on the River Lavant. The Ems and the Lavant are both precious chalk streams. The UK is lagging far behind other European countries in water quality and the safety of our waterways, and our polluted rivers and lakes are becoming an anomaly.

At the time of privatisation, water companies were debt-free. However, over the past 35 years, as inflation and interest rates have risen, the debt burden on UK water companies, including Southern Water which serves my constituency, has grown significantly, in particular because much of that debt is linked to the retail price index. Borrowings across the sector now total about £68 billion and yet, during the same period, water companies have paid at least £78 billion in dividends to shareholders.

Earlier this month, an investor presentation posted on Southern Water’s website revealed that the company is seeking to borrow up to £4 billion from investors to offset £3.8 billion in debt over the next five years. In addition, the company has proposed a staggering 73% increase in household bills over the same period. To mitigate its debt, Southern Water is planning large-scale investment in the Havant Thicket reservoir, which would introduce recycled waste water into a spring-fed drinking water supply through a process called reverse osmosis. The process has never been used for drinking water in the UK before, and is typically found in severely water-stressed landlocked countries. Although the south-east has been designated officially as water-stressed, and we need to see reform to reduce abstraction on rivers such as the Ems, smaller and more environmentally sustainable solutions are available, but they are not being explored, because they cannot be offset against the company’s debt.

[Dr Danny Chambers (Winchester) (LD)]

On the water-stress levels in Southern Water—our constituencies share the same water provider—it is worth acknowledging that a fifth of water is lost to leaks. We have just heard that Southern Water is in discussions with a company in Norway potentially to provide water to be tanked over here from Norwegian fjords to deal with future droughts and water shortages. Over a long period, that is an absolute failure to plan, to invest in infrastructure and to provide reservoirs such as the one we are speaking about. It is clearly a failure of regulation as well.

[Jess Brown-Fuller]

I absolutely agree with my hon. Friend that we should invest in fixing our existing infrastructure, rather than shipping over large quantities of water, which I am sure is not financially stable.

A company outside the water industry operating in that manner would not be able to get away with it, so why can Southern Water and other water companies? The development of the Havant Thicket would affect not only my constituency, but 18 constituencies across the south of England. Furthermore, it will create a national blueprint for all water companies. The project will cost a staggering £1.2 billion, without any comparable investment in waste-water management, which is sorely needed.

To be clear, I am not opposed to new reservoirs. Portsmouth Water is bringing forward the first reservoir that this country has delivered in 30 years. While public confidence in water companies and the methodology of investment is at an all-time low, however, it is hard to have faith that that company will deliver the project without an impact on residents’ water bills in future. Southern Water’s plan to invest in a huge experimental project as a way to offset its debt is not a sustainable financial model.

Few scandals illustrate the failure of the previous Government as clearly as the state of our rivers and seas. With 3.6 million hours of sewage dumping recorded last year, the system is rigged. It is time to transform this irresponsible industry into an accountable service that truly delivers for the public and the environment.

15:09

[Dr Danny Chambers (Winchester) (LD)]

We have talked about how disgusting, and what a public health issue it is to have sewage and other pollution pouring into our rivers, but I want to touch on the ecological damage. In Winchester, a chalk stream, the River Itchen, goes right through the heart of the city. Chalk streams are very rare, with fewer than 210 of them in the entire world, and 85% of them are in southern England. Many of them are designated sites of special scientific interest because their ecosystems and biodiversity are unique. I found out recently that the type of Atlantic salmon found in southern chalk streams are genetically distinct from Atlantic salmon in the rest of the world. Chalk streams have taken millions of years to form, and they can be destroyed in just a few decades by companies that are either breaking the law or working within the law but, because there is such a lack of regulation, causing great environmental damage. That is bad for public health, consumers, prices and the environment.

In my constituency, it is frustratingly clear that Southern Water, which is 82% owned by an Australian investment firm, has been prioritising profit over pollution prevention. It is that simple.

[Jeremy Corbyn]

Is the hon. Gentleman aware that the problem is exacerbated by over-abstraction upstream, particularly in chalk streams, which to survive environmentally need water flowing through them throughout the year? Many chalk streams are completely dry for some summer months, and that destroys all fish and all ecological sustainability.

[Dr Chambers]

The right hon. Gentleman makes a very important point: it is not simply pollution, but the over-extraction of those environments that is horrendously damaging to chalk streams.

The Liberal Democrats have long been calling for reform to water companies so that they have environmental experts on their boards to ensure they meet their minimum environmental standards before they are allowed to make profits. Putting social and environmental good at the heart of what they do is absolutely necessary to ensure that we are not still talking about how we are struggling with pollution, leaks and a lack of investment in 30 years’ time.

Thank you for calling me to speak in this debate, Mr Pritchard. Protecting our natural environment is one of the top priorities for probably all our constituents.

15:12

[Clive Jones (Wokingham) (LD)]

It is a pleasure to serve under your chairmanship, Mr Pritchard. I congratulate my hon. Friend the Member for Westmorland and Lonsdale (Tim Farron) on securing this debate.

My constituency of Wokingham contains the Thames, the Loddon, the Emm brook and the Ashridge stream—rivers of varying size but equal beauty. The basic role of a Government is to keep their citizens safe and healthy, and protect the environment for future generations, yet the previous Government’s deference to corporate greed ahead of our waterways will remain a stain on their legacy for a long time.

The Rivers Trust put it clearly in its research:

“No single stretch of river”

in Wokingham

“is in good overall health.”

That is a real scandal.

The Conservatives utterly failed: they were unable to get a grip of this issue and allowed the scandal to persist. They provided no accountability or scrutiny to Ofwat—a regulator that has simply not held the worst polluters to account. Meanwhile, as my hon. Friend said, the water companies have paid out dividends of £78 billion, and yet our rivers are in the worst state they have been in for many years.

I welcome the announcement earlier today of a review of water companies, but I remind the Minister that voters in Wokingham and across the country voted for change on 4 July. The review must reflect that; it cannot be business as usual for water companies. My constituents and many others across the country will not accept massively increased bills to bail out water companies that are paying massive dividends to their shareholders.

15:14

[Sarah Green (Chesham and Amersham) (LD)]

It is a pleasure to serve under your chairmanship, Mr Pritchard. I begin by thanking my hon. Friend the Member for Westmorland and Lonsdale (Tim Farron) for securing this debate on something I know matters to a great many of my own constituents in Chesham and Amersham. The appalling examples of sewage-filled floodwater blighting lives in my constituency are part of a much bigger picture: a water industry that is not held to account by a regulatory system that is not fit for purpose. I therefore welcome today’s announcement of the independent water commission.

As a report published last year by Surfers Against Sewage states, part of the problem is the “severe budget cuts” that regulators have experienced, which have meant that even reported pollution events go uninvestigated and unpunished. Indeed, in 2022, the Environment Agency instructed its staff to ignore reports of low-impact pollution events as it did not have sufficient resources to investigate them. To the extent that that is the case, we get the environment we pay for—but that is only part of the problem. A report published by the previous Government in May this year makes clear that regulators must avoid drifting into unnecessary risk aversion. Internal culture should challenge excessive risk aversion, not promote it. One former employee of the Environment Agency described to me how some of those the agency regulates see it as a toothless tiger.

I suggest to the Minister that fixing the regulatory framework is not the only area worth looking at. There is also a need to make sure we are not creating more problems with our sewage system in the future. At present, our water companies are not statutory consultees on planning applications. Instead of asking whether the existing sewage infrastructure can support new developments, the right to connect means that water companies are required to make it work after the fact. That is surely nonsensical and something the Government can address as part of the work they are currently doing on the national planning policy framework.

I will close by thanking the many campaigners in Chesham and Amersham, including the River Chess Association, the Chiltern Society, Misbourne River Action and others, that have worked tirelessly on this issue. I pay particular tribute to local parish councillors who have found themselves at the forefront of these issues, becoming citizen scientists and experts in a way they never expected. I have been so impressed by their diligence and their dedication to doing their best to help their residents. However, they are volunteers committed to their environment and their communities; they should not be responsible for holding the water industry to account. That is what our regulators are for.

15:17

[Olly Glover (Didcot and Wantage) (LD)]

It is a pleasure to serve under your chairmanship, Mr Pritchard. I congratulate my hon. Friend the Member for Westmorland and Lonsdale (Tim Farron) on securing this critically important debate. In my Oxfordshire constituency of Didcot and Wantage, over 90% of water infrastructure is managed by Thames Water—a de facto monopoly. The constituency impacts of the current arrangements are stark. In south Oxfordshire, sewage from storm overflows into water bodies exceeded 11,000 hours in 2023 during 810 spills. Recently, in East Hanney and Didcot, overwhelmed sewage pumps have led to flooding, including with contaminated water.

Thames Water was the worst performer in the country for leaks, leaking 570.4 megalitres a day last year, or more than 200 billion litres in total, equivalent to just under a quarter of its entire water supply. Analysts estimate that Thames Water’s current debt amounts to about 80% of the value of its business, making it the most heavily indebted of the water companies in England and Wales. At the same time, Thames Water has said that its bills need to rise by 59% between 2025 and 2030 or it will not be able to recover from its financial crisis.

It is in that context that proposals for a reservoir in my constituency are causing concern to local residents. Even putting to one side the fact that many are sceptical of the case for the reservoir, there is concern about whether Thames Water can be trusted to competently programme, manage and deliver what would be the second largest reservoir in the country and one of the largest civil engineering projects in the land.

[Mr Charters]

Since 2020, £41 million in executive bonuses has been paid out by companies such as Thames Water. That is a disgrace that the Conservatives allowed to happen. Does the hon. Gentleman agree that change is needed to stop companies such as Thames Water paying such ridiculous bonuses when their house is clearly not in order?

[Olly Glover]

The hon. Member has anticipated the next line of my remarks: that it is time for change on bonuses and many other aspects of the current workings of the water industry.

I am pleased to see the Government initiating today an independent review of the water sector, including the question of regulation, but I hope that they will also consider some bold Liberal Democrat ideas, such as setting legally binding targets to prevent sewage dumping in bathing waters and highly sensitive nature sites by 2030, giving local environmental groups a place on water company boards, and introducing a single social tariff for water bills to help to eliminate water poverty in the course of this and future Parliaments.

Thank you, Mr Pritchard, for the opportunity to speak. I look forward to hearing the Minister’s response.

15:20

[Dr Roz Savage (South Cotswolds) (LD)]

It is a pleasure to serve under your chairmanship, Mr Pritchard. Clean water is a fundamental human right, so the exploitation by our water companies at the expense of the British taxpayer is deeply offensive to me and to my South Cotswolds constituents. It adds insult to injury that the same companies now expect taxpayers to foot the bill for improvements they should have prioritised over CEO bonuses and shareholder dividends. Since privatisation, shareholders have extracted a staggering £85 billion from the water and sewerage system in England and Wales. In my constituency, where the River Thames rises, Thames Water pumped sewage into the River Coln in Fairford for 3,391 hours—the equivalent of four and a half months—in 2022. Incidents that are meant to be exceptional happen on average more than three times a week. Dog walkers no longer feel comfortable walking their dogs along the riverbanks after one dog jumped into the water, got sick and died two days later. Across the constituency, sewage is flooding into houses and gardens and schools. That is simply unacceptable.

We need an ambitious, long-term, financially and environmentally responsible vision for our water industry as an essential—literally vital—public good, and that vision must be orientated towards good, clean water. Back in 2013, I was campaigning for the London super-sewer, paddling around under Putney bridge and looking appalled at the tampons and other solid waste coming out of an overflow under the bridge. It has taken more than 11 years to open even the first section of the London super-sewer. The best time to fix this crisis would have been 30 years ago, but the second-best time is now.

I am not letting water companies off the hook for a moment, but I would like to say that the vision must embody a holistic approach to water management. Housing developers can capture rainwater to reduce run-off. Farmers have a key role to play in keeping agricultural contaminants out of our rivers. We need action to stop forever chemicals from plastics and pharmaceuticals getting into our rivers and streams.

In short, we need to stop the incessant pollution of our natural world. Water connects everything. Clean water nourishes all life, while dirty water pollutes everything it touches—from otters, kingfishers and crayfish to our pets and ourselves. We need to put nature back at the heart of our decision making, as called for in my Climate and Nature Bill. The Liberal Democrats propose transforming water companies into public benefit companies—no more excessive bonuses and no more prioritising shareholders over customers. We would also like to see local environmental groups given a voice on water company boards. Some countries have even granted legal personhood to rivers, including the Whanganui river in New Zealand, the Atrato river in Colombia and the Magpie river in Canada. Potentially, we could have a person representing the river itself sitting on a corporate board.

The time is now to take bold steps to improve water company governance, invest in our infrastructure and protect our precious water resources for generations to come.

15:24

[Jim Shannon (Strangford) (DUP)]

It is a real pleasure to serve under your chairship, Mr Pritchard. First, I thank my friend the hon. Member for Westmorland and Lonsdale (Tim Farron) for tabling this debate. I think it is fair to start my contribution by also welcoming the Labour Government’s statement today in the House. It is certainly a step in the right direction, and we should welcome it and the objectives behind it. The Minister will be glad to know that I am going to give a Northern Ireland perspective. She has no responsibility for Northern Ireland, so I require no response from her, but I make the point anyway, because what has happened in Northern Ireland is very similar to what is happening to the hon. Member for Westmorland and Lonsdale, and I want to make that comment for Hansard.

In Northern Ireland, we have a very different system. Northern Ireland Water is actually a Government-owned company. Though we have a different system, we have the same issues. The Government-owned company says it does not have enough funding and needs a massive uplift to function. Measuring the funding needed to bring things up to scratch feels like turning a tap on—it just seems to run forever and we are never sure we can get to the end of it.

Where are we with this issue in Northern Ireland, and why is it important that we in Northern Ireland unfortunately share the problems that have been identified in this debate? The water and sewerage network in Northern Ireland needs some £1.2 billion in capital investment; that cannot be achieved in the short term. We have approached the Government—though that is a debate for a different day—on Barnett consequentials to ensure that we get the same funding equation as they do in Wales, for example, which would give us extra money to identify the issues. The Department for Infrastructure has indicated that some half a billion pounds has to be found for 2024-25. That is a big target.

The hon. Member for Westmorland and Lonsdale underlined the issues. Northern Ireland Water reported a £185 million shortfall in funding. Some 19,000 new properties, or nearly 50% of all applications, have not been connected to the main sewer system, which means that development companies and housing associations have to find the money to do that themselves.

What really annoys me is the large bonuses and the dividends for shareholders. I believe them to be obscene and immoral. The failures of water companies to deliver a reasonable service must be highlighted in this debate. It is important that we understand the nature of this debate and how it affects devolved matters, for different reasons and with different accountability.

The news that United Utilities repeatedly dumped millions of litres of raw sewage into Lake Windermere illegally is shocking, yet we are not really surprised. Only 31% of surface waters in Northern Ireland are classed as having good ecological status. That may be better than in some parts of England, but it is still not good enough.

We must tighten controls, but we must also try to ensure better value for money, as it is clear that the way things are in our water services throughout this great nation cannot continue much longer. When the Minister responds, I ask her for cognisance of the need for a UK-wide solution that includes the devolved nations. When there is crisis and that crisis is developing, it is important to find a solution. We take our clean water for granted in the UK, but we may not be able to do so for much longer unless we give this issue the priority it deserves. That must start today, in this House.

[Mark Pritchard (in the Chair)]

As the Opposition Front Benchers will know, the Liberal Democrat spokesperson and shadow Minister will get five minutes each and the Minister will get 10 minutes. The debate is due to finish at 4 pm; we were going to put a time limit on speeches, but some Members have left this debate early and some did not speak as long as expected. If Members who have not spoken want to make a brief intervention, you can do so over the next few minutes, but I ask you to please be brief. I think that is fair, given that I hinted at a voluntary time limit and that the debate has been well attended.

15:29

[Charlie Maynard (Witney) (LD)]

I am honoured to serve under your chairmanship, Mr Pritchard. I thank my hon. Friend the Member for Westmorland and Lonsdale (Tim Farron) for letting me wrap up this debate, and I thank all the speakers who spoke so well and eloquently about the places they represent and love.

I am the Liberal Democrat MP for Witney and a West Oxfordshire district councillor. Our area is a ground zero for pollution. The Windrush flows through Witney, the Evenlode flows through to the north, and Shill brook flows to the south. All flow into the Thames. All are repeatedly and heavily polluted. I work closely with Windrush Against Sewage Pollution, one of the best advocacy groups in the country, to get to grips with this problem. I have learned a lot from that group and from many of the other parish councils and community groups that work so hard locally, and I am grateful for everything they have taught me.

I will focus on financial stability, or the lack thereof, and on Thames Water, as it is the largest and the most unstable of the water companies. First, I will give some context. Thames Water has six holding companies stacked one on top of the other. Some of them are offshore; some are onshore. The top holding company, Kemble, has £1.2 billion of operating cash flows—that is, money coming in—and £18 billion of debt. Roughly £13 billion of the £18 billion is held by class-A bondholders, and Members will hear a bit more about them. This debt is expensive, and more than a third of all our customers’ bills are being spent on servicing the debt.

In July, S&P and Moody’s cut the credit ratings of the class-A bonds to junk and two notches below that. That action put the company in breach of its operating licence. Ofwat waved some limp celery at Thames Water and did very little. That opens up moral hazard because it means that other water companies and other companies in regulated sectors can do the same. On 5 August, the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Kingston upon Hull West and Haltemprice (Emma Hardy), stated in reply to my written question that Thames Water’s financial position “remains stable”.

In early September, it became public that various funds, including the notorious Elliott Management, which pillaged Argentina and Peru, had bought large amounts of class-A debt at very discounted prices. On 13 September, the Under-Secretary of State replied to me again, saying that Thames Water “remains stable”. She noted that special administration was an option if any of three conditions were met, with one of the conditions being if

“the company is or is likely to be unable to pay its debts”

—pretty simple. On 26 September, both S&P and Moody’s slashed Thames Water’s class-A debt again. It was already two notches below junk; this time it went down a further five and six notches respectively. The words “death spiral” spring to mind.

A week ago, it was reported that Ofwat is meeting a creditor group representing the class-A shareholders to discuss restructuring the company’s debt. The condition that

“the company is or is likely to be unable to pay its debts”

has most definitely been met. The company’s cash burn is faster than previously forecast, and the company as is will likely run out of cash by December. Its class-A bondholders are desperate to avoid special administration as that would crystallise their loss and result in much of their debt being written off. However, the creditors are now negotiating with Ofwat to inject a relatively small amount of new capital in, cram down the other debt classes, resulting in perhaps a 20% to 30% debt write-down, flip some of their debt into equity, and then sell the company on to another buyer within 12 months, making a huge profit.

If the Government allow such a restructuring, they are effectively rescuing a group of lenders, including vulture funds, not the company. Instead of the bondholders having to write off billions of pounds of worthless debts, the Government will be giving ownership of the company to the vulture funds, which will then flip it at a profit. Such a route is neither sensible nor equitable for the company, the Government or our country. It is a lazy, short-term fix from which the Government can repent at leisure over the course of the parliamentary term. No one will be fooled by the Government claiming that in the short-term the market has fixed it, and no one should be panicked by bankers claiming Armageddon but, in reality, just driving their own agenda.

The special administration regime was set up for exactly this scenario. The Government should make use of it and place Thames Water into special administration, allowing for an orderly restructuring and reorganisation resulting in the sale of a clean company on the open market; whether that is nationally, mutually or privately is, of course, up to the Government, but that will allow a clean company to be in place. To be investable again as a sector, we need a clear regulatory framework that is transparent and enforceable against, where companies that make bad decisions know they will have to take the consequences. That will allow investors to fund water companies’ balance sheets so they can handle the very substantial investment spend that will be required over the next 10 years.

15:34

[Robbie Moore (Keighley and Ilkley) (Con)]

It is a pleasure to serve under your chairmanship, Mr Pritchard. I congratulate the hon. Member for Westmorland and Lonsdale (Tim Farron) on securing this important debate.

As has been acknowledged by all hon. Members, the UK’s waterways are the country’s lifeblood. When they are in a good condition, it is beneficial not only for the environment, but for public health. It is also crucial for biodiversity and local communities that rely on the waterways—not only for recreational purposes, but for tourism.

The last Government were determined to take a positive stance on improving water quality. To do that, however, we needed to understand the situation that water companies were in. That is why we specifically focused on increasing the monitoring of outfalls from the start, taking a monitoring rate for storm overflows from 7% in 2010 under the last Labour Administration to 100% at the end of 2023. In March 2024, we fast-tracked £180 million of investment that had to be allocated within the last financial year by water companies, with an expected reduction of 8,000 sewage spills in English waterways. We also linked shareholder dividends to environmental performance, quadrupled water company inspections and launched a whistleblowing portal for water company workers to report breaches.

[Joe Morris (Hexham) (Lab)]

Does the shadow Minister not feel embarrassed that it was his Government who beggared the Environment Agency and weakened regulators to the point where we had sewage flowing into rivers such as the Tyne and the Coquet in Northumberland? Does he not feel a little bit of guilt about trumpeting his Government’s apparently positive record?

[Robbie Moore]

I thank the hon. Gentleman for joining the debate; I see that he came in right at the last minute just to make that contribution.

My answer is no. When we were in Government, we absolutely wanted to embolden the regulators with as much power as they required, which is why we specifically linked dividends to environmental performance so that Ofwat had more power to hold water companies to account. Not only that: we increased the amount of funding allocated to the Environment Agency and empowered the whistleblowing portal so that employees within water companies, or indeed within the EA or any of the other regulators, could make their concerns known. In that way, we as the Government—and now the incoming Government—could make proper progress and ensure that proper, positive change was implemented to improve water quality.

The financial stability of the water companies is, of course, a serious issue, and that affects our constituents through not only potential price increases, but performance-related issues. Sensibly, Ofwat expects water companies to maintain a level of financial headroom to manage short-term volatility and shocks to their financial structures, and to meet their obligations and commitments, which are set both by Government and internally by the regulator. Above all else, however, consumers must be protected so I welcome the fact that Ofwat strengthened its powers to improve financial resilience. That includes stopping water companies from paying dividends when financial resilience is also at risk.

The new Government have said that cleaning up England’s rivers, lakes and seas is a priority and to achieve that the Water (Special Measures) Bill has been introduced through the House of Lords into Parliament. Perhaps I should not have been so surprised that that is effectively a reworked version of the policies introduced under the last Government. In the Bill, the Government pledge to introduce new powers to block bonuses for executives of water companies that pollute our waterways —something announced by the last Conservative Government. However, the powers are not quite the promises constantly regurgitated by the Labour party when they were out on the doorstep— they were telling many of their voters that water company bosses would end up “in the dock” if their water company had been falling foul of environmental permitting obligations. The Water (Special Measures) Bill simply does not achieve that. By introducing the Bill, the new Government have frustrated not only campaigners but investors who want to invest in the sector.

Opposition Members spent many a day out on the doorstep also promising that they would take swift and bold action, but as we have seen from today’s announcement of a new commission, a new review and a new taskforce, the Government are just throwing the hard decisions into the long grass and simply kicking the can down the road.

[Mr Charters]

Does the hon. Member not welcome the Government’s appointment of former deputy governor of the Bank of England Jon Cunliffe? He had that expertise as deputy governor in financial stability. Does the hon. Gentleman not think that we need to look again at the whole system when it comes to the financial instability of water companies that he and his colleagues left behind?

[Robbie Moore]

I thank the hon. Gentleman for his intervention. I absolutely welcome anything that will improve the water sector. When I was a Minister in the Department, many issues needed to be addressed. I noticed that the hon. Gentleman commented in his speech that the Minister was working at pace, but the review will take at least a year to implement. I want to ask the Minister, as I did the Secretary of State in the House earlier: when will the positive recommendations from the review be implemented? We know that we are entering price review 2024, which exists from 2025 to 2030, but when is the industry likely to see any positive implications of the results of the commission that has been instigated today?

The Government have also confirmed that they will work with farmers to reduce agricultural pollution. I understand that Ministers have said that that will be through a series of

“proportionate and effective regulations, advice and incentives to deliver improvements”.

Can the Minister clarify how that will roll out? What new regulations does the Department anticipate bringing in? The farming budget is rumoured to be slashed by at least £100 million, so how will the Government incentivise farmers through public money to do the right thing in reducing run-off from fields and from their agricultural activities?

Will the Minister also outline whether any regulatory easement will be applied to water companies going forward? Many Members have raised concerns to do with Thames Water and the like, but I would like to specifically understand whether the Minister, her colleagues or the Secretary of State are looking at implementing a regulatory easement, as the Opposition would not want to see lower standards, the relaxation of environmental permits or a reduction in agreed levels of investment by any water company, irrespective of their financial circumstances.

Sound management of water companies is vital if customers are to receive the high level of service that they expect, and better environmental performance must be driven forward.

[Mark Pritchard (in the Chair)]

Order. Before I call the Minister, I should say that I allowed the Front Benchers to speak a little longer given that we have some time. If the Minister wishes to take interventions, she can, although she does not have to. I remind her that if she so chooses she can give time at the end—just a couple of minutes—to the mover of the motion Tim Farron.

Before I call the Minister, I hope that the hon. Member for Hexham will forgive my mentioning that it is a procedure of the House—a courtesy—to be in the whole debate and not come in after 65 minutes of a 90-minute debate and then make an intervention. It is not really the way to add to a debate or get the most out of it. I am sure he will take note of that. I call the Minister.

15:43

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Emma Hardy)]

It is a pleasure to serve under your chairmanship, Mr Pritchard. I thank the hon. Member for Westmorland and Lonsdale (Tim Farron) for securing this debate. I will make sure he has time to sum up at the end.

In response to the shadow Minister, I think the Government’s record speaks for itself. Although he might wish to rewrite history, he cannot actually change history. If people want to see what his Government achieved, they just need to look at a storm overflow pipe or perhaps the level of pollution in every river, lake and sea. The public outrage and outcry over this issue is felt by everybody. It is certainly felt by this Government.

The level of pollution in our iconic lakes such as Windermere and in our beautiful chalk streams—we have had debates on this before—is outrageous. It is right that that has become more of an issue as time has gone on. That is a positive thing. We need to value our nature to a far higher level than we ever did before, and change is needed. Indeed, we were elected on a mandate to bring about that change. I am pleased that climate change was mentioned in the debate as well. Our problems will only increase because of our changing climate. Everywhere will perhaps not be quite as wet as the constituency of the hon. Member for Westmorland and Lonsdale, but places will certainly be getting to those kinds of levels.

I pay tribute to all the campaign groups and organisations that have come to meet me since I became the Minister with this responsibility. Those people are incredibly passionate and dedicated, often citizen scientists giving their spare time to work on this issue, because they passionately believe in it.

I must mention the wonderful speech of my hon. Friend the Member for Easington (Grahame Morris), the quietly spoken radical. I welcome his support for the Water (Special Measures) Bill. Never let his quiet ways lead to underestimating the secret radicalness within him. I hope that he will contribute to the water review and the consultation. We will welcome his expertise.

I pay tribute to a fantastic new Member, my hon. Friend the Member for York Outer (Mr Charters), who is a brilliant local champion. I value his contribution and I share his outrage at the levels of sewage he has seen in his constituency. I agree with the very good point he made: when we look at the consultation, we should look at other regulatory systems to see what works well and at what lessons can be learned, so that we create a system that is effective for the future. I hope that that is something that he, too, feeds into the consultation.

The Water (Special Measures) Bill has been mentioned a number of times. Before it comes to this House, I will organise drop-in sessions for Members of Parliament, who are welcome to talk to me about possible amendments and things that they would like to see in the Bill. I am happy to discuss that. I will of course make time for all the Front-Bench spokespeople to talk to me about it, too.

I have to say, however, that I was rather surprised to hear criticism by Members of Parliament of the idea of inclusion, of consultation with our commission. This Government believe in doing things with people and not to people. I will go so far as to say that the Government are not arrogant enough to believe themselves to have all the answers and expertise, especially with so many experts out there. The Government want to reset our water industry for decades to come and—this is in my DNA and is stated on the back of my Labour party membership card—we believe

“that by the strength of our common endeavour we achieve more than we achieve alone”.

This is my philosophy of working with other people—looking at systems of co-production, at how we can create consensus, and at bringing together different ideas and expertise. I was therefore a bit surprised to hear that the idea of consultation and including others should be ignored. In fact, the previous Government had many examples of being arrogant enough to presume that they knew all the answers. Indeed, that Government created systems and policies that have been found to be utterly failing, because they did not listen to what the general public or campaigners were saying.

There is little point to different Members of Parliament talking about how they value the contribution of campaigners and organisations—how welcome those are and how well they have worked with them—when they also say that the ideas and expertise of those campaigners and other people should not contribute to Government policy. Deeds, not words—if we value people’s expertise and contribution, we must let them work with us to shape legislation for the future.

This commission will work with those experts, will value their contributions and listen to them, and will shape something that is fit for the future. It will conclude in June and, after a couple of months of looking at the consultation and Government response, further legislation will be brought forward. Some things will need primary legislation to change, as the shadow Minister, the hon. Member for Keighley and Ilkley (Robbie Moore), understands, but some things can be done more quickly. That very much depends on the recommendations. If primary legislation is required, obviously such things will take longer.

An important point to make is that the Government want to do things in a different and inclusive way. I reach out to each and every one of the people in this Chamber to say: “We want to do this with you.” Yes, there will be different points of view across the Chamber and there will be different ideas about what the right answer is, but let us act collectively on this, not just as Members of Parliament across the House, but as campaigners, organisations and members of all groups, even my mum’s wild swimming group—I am sure they have many an opinion on what the right policy should be. Let us come together to create something meaningful that will command cross-party support and make a difference. That is what we want from this consultation. I will be honest: I am a bit disappointed that people think consulting and working with others is a bad idea.

While I am having a slight moan about things that are slightly disappointing, there seems to be a confused message coming from the Chamber. Members have highlighted that some of the drought plans for water companies are rather, shall we say, extreme, as they involve shipping water over from other countries to deal with droughts, but they also criticised building reservoirs. They cannot do both. If we are going to plan for droughts, we need to talk about building reservoirs and ensure we have the infrastructure we need for the future.

What have the Government been doing? In week one, we got all the CEOs together in a room and talked to them about how we fix the industry. From that meeting, we secured a change to the articles of association, ringfenced funding for vital infrastructure, and new customer panels, and strengthened the protection and compensation for householders. In the week after the summer recess, we introduced the Water (Special Measures) Bill, so in our first 100 days we have hardly been resting on our laurels.

A lot has been said about the independent commission. It is really important that it is independent, and I am pleased that my hon. Friend the Member for York Outer paid tribute to Sir Jon Cunliffe, whose expertise and financial record are second to none, so is somebody we can work with collectively to produce something really effective.

[Robbie Moore]

On the commission, would the Minister be kind enough to outline to the House the timings? The PR24 process, which Ofwat is looking at, comes into effect next year and will be in place until 2029-30. Will any positive recommendations from the commission take effect within that price review period?

[Emma Hardy]

The shadow Minister is pointing out the way we plan and look at our five-year cycle. Whether that is the best way of doing things is a whole other question. The answer is the one I gave earlier: it very much depends on whether things need primary legislation. Some things that change the regulator will not affect the price review framework. The price review framework is based on the amount of money that people will invest in infrastructure, and changes needed for the next five years. That does not mean that things relating to regulation and the rules cannot be changed. I am sure he understands that.

I reiterate the Government’s commitment to driving meaningful, long-term improvements in the performance and culture of the water industry. We want to deliver on our ambition to clean up our rivers, lakes and seas, and the actions I have outlined today are only the beginning. I am passionate about this issue, and am very pleased to be leading on it. In fact, I asked to become the Minister for it, and we do not always get what we ask for in politics. I reiterate my invitation to work with each and every Member here. I think consultation and collaboration are good things, and I hope all hon. Members will embrace that. I look forward to working with them to achieve the goal that we all share: cleaner rivers, lakes and seas.

15:53

[Tim Farron]

I see I have seven minutes—I will do my best not to use them all.

I first want to reiterate something I said at the very beginning of my opening remarks: I genuinely pay tribute to the people who work on the ground for the water companies—it is United Utilities in my neck of the woods—Ofwat and the EA. I think these debates can sometimes sound quite toxic to them. They work hard doing an important job, and they are victims of a system that it is vital we change. I am delighted that others have said the same thing today. I just want to put that on the record—particularly in relation to my local community.

I thank colleagues from all sides for their excellent contributions. They are people who are passionate about their own communities, the waterways in their communities and the voluntary groups working within their communities that are helping to highlight these issues.

I also thank the Front-Bench speakers—the Minister and the Conservative spokesman, the hon. Member for Keighley and Ilkley (Robbie Moore), but especially my hon. Friend the Member for Witney (Charlie Maynard), who made an absolutely fantastic contribution. His expertise is something we very much value; the people of Witney are lucky to have him and we are lucky to have him, too.

I will just reflect briefly on the Minister’s comments. I count her as a friend and respect her very much indeed. What she said about collaboration is absolutely right. However, I will make the observation—a relatively neutral observation—that the Labour manifesto was pretty thin across the board. I understand why that was. Maybe for the last two or three years they felt it was their election to lose and therefore the more information they put out there, the more chance they had of maybe throwing it all away. I do understand the politics. However, that does not really justify waiting several months to begin the process of taking action. So, a Government can be collaborative and consult, and take radical action early on. Nevertheless, I took her point and she defended the Government’s position and process on this issue very well.

Our view is simply that we will be and should be a constructive Opposition; we will challenge and we will seek to be constructive as we do so. But I will also say that we are encouraged—at least cautiously—by what we have heard today from both the Secretary of State for Environment, Food and Rural Affairs and the Minister herself.

Since I have time left, I will ask one extra thing. It is important that we tackle this issue from a national perspective, but there is also an issue in my local area that I think we can fix. Windermere receives an awful lot of coverage and rightly so. A fifth of the pollution in Windermere comes from septic tanks, including 89 package treatment works around the lakes, all of which could be relatively easily connected to the mains. I wonder whether the Minister would agree to meet me, United Utilities and representatives of the tourism and hospitality industry to see whether we could make that migration, up the standards and do something genuinely useful at the bottom level to improve the water quality of Windermere.

[Emma Hardy]

rose—

[Tim Farron]

If the Minister wants to say, “Yes”, she will meet me, I will be delighted to give way to her.

[Emma Hardy]

In the spirit of collaboration, which I have just spoken so much about, of course I will meet the hon. Member.

[Tim Farron]

Mr Pritchard, she’s a good ‘un. I thank the Minister very much indeed; I appreciate that.

Finally, I thank everyone who has contributed to the debate, but I also thank you, Mr Pritchard. That might sound a bit smarmy, but you and I go back a long way. I wish that when I first started here I had a Chair of Westminster Hall debates who talked us through the process as well as you have today. I am very grateful to you, and indeed to everybody else who has been here for this debate.

[Mark Pritchard (in the Chair)]

You will definitely be called first in the next debate, that’s for sure. [Laughter.] You have been here a long time; you know how to work the system. So, there we are. No—there is no system to work; we are neutral in the Chair. But thank you for your kind comments.

Question put and agreed to.

Resolved,

That this House has considered the regulation and financial stability of water companies.

15:56

Sitting suspended.

Fusion Energy

Wednesday 23rd October 2024 Westminster Hall

15:59

[Jo White (Bassetlaw) (Lab)]

I beg to move,

That this House has considered the future of fusion energy.

I want to begin by thanking the Under-Secretary of State for Energy Security and Net Zero, my hon. Friend the Member for Bristol East (Kerry McCarthy), for meeting me last week to discuss this priority issue.

When I stood to be Member of Parliament for Bassetlaw, my commitment to my constituents was to work with others to raise aspirations and generate new opportunities for our young people, so that they no longer have to move away to get a highly skilled job or one that gives them a strong financial future. The STEP—spherical tokamak for energy production—programme provides such an opportunity, and it is my responsibility to do whatever it takes to support the process and ensure a strong economic future for an area that is now consistently described as post-industrial.

Bassetlaw first made international history when the Mayflower pilgrims set foot on the Plymouth Rock and signed what became the American constitution. Four hundred years on, Bassetlaw will make headlines again, after the UK Atomic Energy Authority determined that West Burton, a coal-burning power station currently being decommissioned, will be the site of the first fusion energy prototype plant. This historic decision very much aligns with Bassetlaw’s coalmining heritage. We had seven pits producing coal, taken by local train drivers to power stations including Cottam, West Burton and High Marnham, built alongside the River Trent. We had a workforce proudly geared towards powering the country.

A heritage that was in decline is now providing new opportunities for green energy production. We have good local infrastructure, with railway lines holding the potential to be the preferred route on to the site for goods, construction traffic and workers. Existing licences for water extraction on the River Trent and, most significantly, the connection to the national grid were core factors in the decision-making process for the preferred site.

Even more important was the local public support for a fusion plant. At consultation events run by the local ward councillor, my hon. Friend the Member for Rushcliffe (James Naish), we were told in the no-nonsense way of north Nottinghamshire that it is common sense to retain an energy generation site for future green energy production. The public went further, calling for the other decommissioned power plants to be reused in similar ways. Those positive factors all contributed to the UKAEA’s decision making, and in December 2020 West Burton was selected as the future home of the spherical tokamak for energy production.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Lady for bringing this debate forward. In the spirit of positivity and looking forward, is she aware that there are currently no power plants in Northern Ireland and that the Republic of Ireland banned all nuclear power generation in 1999? However, the UK and the US have announced a partnership to accelerate fusion energy, which she referred to. Does she agree that more consideration must be given to extending nuclear facilities and capabilities to the rest of the United Kingdom to ensure that we can all accelerate the fusion energy that she is promoting so well?

[Jo White]

The focus has to be getting fusion working at West Burton. Should it be successful, it has to be rolled out over the whole of the UK, and Northern Ireland must be a key element of that.

STEP is a Government-funded industry partnership to develop the most advanced tokamak fusion reactor in the world. The outline business case for the STEP programme was approved in 2023, with a full business case to be submitted next year. In November, we will see the launch of the procurement process for whole-plant partners—the major engineering and construction partners that will get the project moving. The intention is to get formal approval for the next four-year phase of development in March, when the proposal passes on to the major projects review group and then the Chief Secretary.

Fusion has been defined as “last energy”—the recreation of the energy generated by the sun and all other stars, in which atomic nuclei collide and release energy. The goal is to produce an inexhaustible source of low-carbon energy and heat, with the objective of supplying electricity into the national grid by the 2040s. We as a Government need to be thinking already about our 2030 ambitions, with fusion taking us into the next and crucial phase of carbon-neutral energy production. That is not just my view: industry experts say that fusion is the solution to meeting the growing long-term global demand for clean energy and holds the potential to be the baseload energy source. The key is that it will be developed by UK industries and then distributed across the world.

I welcome our mission to rebuild wealth through investing in Great British Energy, which is being kicked off across the country—that is game changing, rebuilding our economy and creating wealth through investment in carbon-neutral energy production—but we also need to think about where these ambitions need to take us. The development of fusion power plants will see the creation of new technologies and an energy capacity that will go further than energy generation, including the production of superconducting magnets, hydrogen and a new generation of medical advances for cancer treatment. We are the world leaders in the development of fusion, but the race is on, with the US and China rapidly developing competing technologies and key supply chain industries.

Can the Minister confirm that it is the Government’s intention to ensure that the UK and British industry lead the world on fusion? For the sake of our industrial prospects, job creation and wealth generation, we cannot afford to take our eye off the ball and come in second, third or fourth. Our fusion ambitions cannot be put on the back burner for an undetermined future Government agenda. Fusion power offers the prospect of an almost inexhaustible source of energy for future generations, and we have a responsibility to pursue that agenda today, not tomorrow. It is no use being today’s world leader on fusion if the skills gap widens over the next decade and the best and brightest young minds head to other countries to develop fusion, or if we as a Government dither and prevaricate about making the investment now.

We need to encourage our pupils, students and those already in work to choose a career in fusion and to do so in the UK. We need the Government, the fusion sector, its supply chain and academia to work together to understand the skills and disciplines needed in fusion and to communicate the opportunities. I want to see laboratory technicians and researchers, the best brains from across the country and the world, in our UK labs, and I want the Government to make fusion a No. 1 priority to attract the best global talent.

[James Naish (Rushcliffe) (Lab)]

My hon. Friend knows what I think about this topic as the chair of the all-party parliamentary group on fusion energy. I want to highlight the fusion cluster of 200 businesses at Culham, which she has visited. Does she agree that that is a fantastic site and that Ministers should join us on a visit?

[Jo White]

I very much agree. I know that my hon. Friend the Member for Bristol East has already been, and I would love for the Under-Secretary of State for Energy Security and Net Zero, my hon. Friend the Member for Rutherglen (Michael Shanks), to go too. I want to see what we have at Culham reproduced at West Burton. It is the first step, and it gives us the vision for what could come next.

When we founded the first industrial revolution, it was our red wall areas that led the way, and history is now repeating itself. Do we have the confidence to lead the world on fusion? Do we have the laser focus to make it happen now? Will we have the vision to create the silicon valley of green energy in Nottinghamshire? Although I know the Minister cannot prejudice the outcome of the spending review, will we get the finance from Government to make this whole thing viable? Leaders lead from the front. We have the opportunity—we have the lead. Do we have what it takes to win the gold medal?

We need a coherent training programme and strategy for fusion skills, and a strategic foundation established for UK sector leadership in the decades to come. As the new MP for Bassetlaw, I already have a legacy plan for my constituency. I want to see my young people find routes into fusion, through the supply chains, through the development of new technologies, or through leading the world at the West Burton plant itself. I want to use this unique opportunity to change life outcomes for future generations in Bassetlaw. I want them to be enabled to take all of the advantages through fusion becoming part of the school curriculum and go on to be able to enter the field via vocational or academic training. I want my local businesses to have the opportunities to change their production techniques and provision. They must become key elements of the supply chain. In terms of immediate infrastructure asks, we need commitments for a railway station on site and local road improvements so that we can begin to unlock the full potential of West Burton.

My ambitions are shared by our county council and our new Mayor of the East Midlands, Claire Ward, who sees the potential for the future. We have a shared vision to create a Trent clean energy supercluster, with the West Burton site aligning with three other decommissioned coal-fired power station sites to become the heart of carbon-neutral energy production on a regional scale, with hydrogen, small modular reactors, solar and wind, with 6,000 new construction jobs, 15,500 operational jobs, and a net gross value added gain of £930 million.

The opportunities are cross-regional, stretching into Lincolnshire, Yorkshire and nationwide. I look forward to the continued support and commitment of the Government, and to our stepping up to become the international leaders for fusion and ensuring that fusion is integral to our Great British Energy ambitions. I invite the Minister to visit Bassetlaw to see the groundbreaking opportunities, and to cut the ribbon at our new fusion café, built by the UKAEA with the precise intent to inform and attract our young and inquisitive minds for the big challenges ahead.

I am working in partnership with my community, my council, our elected mayor, the UKAEA, my neighbouring MPs, local businesses, the fusion industry, international partners and the Government to deliver STEP, to ensure that we are the clean energy superpower of the future. We will lead the world in the development of fusion.

16:12

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)]

It is a pleasure to serve in this debate with you in the Chair, Mr Pritchard. I thank my hon. Friend the Member for Bassetlaw (Jo White), for securing today’s important debate, and for the passionate way in which she spoke about both this issue and her constituency. It was genuinely inspiring—particularly what she said not just about the future of her community but about its heritage. I confess that I did not know the role my hon. Friend’s constituency played in the creation of the United States, but, as I used to say to my school pupils, every day is a school day, so I thank her for that.

It would have been quite a striking debate if my hon. Friend the Member for Rushcliffe (James Naish), the chair of the APPG on fusion energy, had spoken about anything other than his support for fusion, but I welcome his invitation to join his group’s visit. I would say to my hon. Friend the Member for Bassetlaw that I think there are other Ministers in the Department who might be slightly frustrated if I cut the ribbon rather than them, but I am happy to do so all the same.

I share my hon. Friends’ genuine excitement for this technology, and it is worth taking a moment to think about what we are talking about. The idea that we could produce an almost inexhaustible supply of low-carbon baseload sounds almost too good to be true—particularly as an Energy Minister trying to get us to where we are going to by 2030. It sounds like a fantastic proposition, but after many, many years of a lot of hard work, it is in fact within our grasp.

Fusion creates nearly 4 million times more energy for every kilogram of fuel than burning coal, oil or gas—some of the statistics are staggering, and worth taking a moment to reflect on. It has a huge potential to bolster our energy security and to create thousands of good jobs at the same time, putting it at the heart of not just one of the Prime Minister’s key missions in Government but two: kick-starting economic growth and making Britain a clean energy superpower. What is even more exciting is that this country genuinely has an opportunity to lead the world on this and to become the global home of fusion energy, with all the considerable short and long-term economic gains that come with it.

I thank hon. Members for being here and for their support for this new technology. It is difficult at times, with technologies that are perhaps not so well understood and are at that nascent stage, to keep the debate on them. It is important to have more contributions and speeches like the one we heard about the importance of this technology.

The UK has been at the forefront of fusion energy research and development for more than 40 years, going back to June 1983—I will not tell hon. Members my age, but at that time I was not quite born—in a quiet corner of Oxfordshire, with the world’s largest operational fusion reactor. The Joint European Torus went on to break records and then break them again, with thousands of experts from across Europe playing their part in those experiments. JET closed its doors last year and we are now focused on building a whole new generation of fusion facilities in the UK.

Domestically, the economic opportunities of fusion are huge. The sector already supports thousands of jobs, and our ambitions will see it deliver many more highly skilled roles in future. As my hon. Friend the Member for Bassetlaw outlined, it can also lead to breakthroughs in other areas, particularly in medicine, supercomputing and other green technologies. That is why it is important to attract private sector investment to this project. Some $7 billion has already been raised by global private fusion companies and that figure grows year on year.

It is clear that the UK’s pro-innovation, proportionate approach to fusion regulation is attracting global interest but we want to go further, developing a national policy statement for fusion facilities that provides even greater certainty, encouraging billions more in private investment, driving further growth and supporting thousands more jobs. We are also investing in unique fusion research facilities at UKAEA sites across the country that UK-based firms can access, making it the natural home for fusion development.

Internationally, fusion energy could be transformational, both as a long-term solution to energy security and, in this most decisive of decades, in tackling the climate crisis. This is a low-carbon, safe and abundant source of energy, which does not require huge amounts of land or natural resources for its production. That makes it the perfect power source for nations have relied on imported fossil fuels, or that do not have the capacity to deploy renewables at the scale many will need. Those are the same countries that are most likely to be affected by climate change. In other words, as global energy demand grows—and we know that it will considerably in the decades ahead—fusion energy could be critical to keeping net zero within reach, as well as ensuring that citizens everywhere have access to power.

Other major economies, including the US and China, have realised that there are huge prizes on offer to be the first to commercialise this technology, including economic growth and global environmental leadership. Estimates of that fusion energy market between 2050 and 2100 put it between £3 trillion and £12 trillion. Without the spending power of the US or China, we must be targeted in how we maintain our leadership in this ever-closer international competition. As my hon. Friend the Member for Bassetlaw outlined, that is where the STEP programme comes in.

Last month, I was privileged to be at Ratcliffe-on-Soar. It might seem odd for a Minister to be privileged to be at the closure of something, but the closure of our last coal-fired power station was a real moment in our energy story—a moment for us to recognise that the transition is well under way. We are now bringing a whole new industry to that part of the world with the creation of the world’s first civil fusion power plant. The aim is for the prototype plant to reach completion by 2040, and that will demonstrate that fusion can be a viable part of our energy mix in the near future. As my hon. Friend the Member for Bassetlaw is aware, it is a hugely exciting opportunity for local people in her constituency, for the wider region and for the whole UK, delivering thousands of jobs directly and in the supply chain.

My hon. Friend rightly referenced the importance of skills development in fusion energy. There is a real opportunity to develop the skills of a next generation of young people working in the energy of the future. STEP will partner with private industry early on in its journey, working closely with engineering and construction companies. The work of identifying those partners is under way at the moment, with an announcement of the shortlisted bidders due in the following weeks. This is about not only maximising our chances of success, but utilising the local skills already in my hon. Friend’s community to breathe new life into an industrial heartland.

At the same time, we will establish a strong fusion skills base and domestic supply chain to support STEP and enable it to compete globally. We are also running an outreach programme to schools in the area to encourage the uptake of fusion-related education, and developing relationships and grants with universities. We want fusion to be a sector that excites and inspires young people, and now is an important moment to unlock that potential.

STEP is a first-of-a-kind programme, and there will, of course, be challenges. My hon. Friend the Member for Bassetlaw mentioned a number of the logistical challenges in the local area—we will work through those things together with the local community, and I know that she was involved in the local council for many years as well—but we have a huge advantage: four decades of research, a thriving financial landscape and a world-leading plan, which means that even before a commercially viable plan is delivered, the programme will have already supported thousands of jobs, skilled development and cutting-edge research. Ultimately, whether STEP or a different design is the precise one used to commercialise fusion technology, its development will already ensure that the UK has a supply chain to provide jobs and the recognition that we are in the lead in this technology.

The Government are unashamedly pro-growth, pro-business and pro-innovation, and fusion is a great example of all three. It is such an important part of our plans because it covers all those points, and is a real opportunity for us to make progress and become the global lead in a genuinely transformative technology. That could ensure our energy security, drive huge growth and combat climate change here and far beyond our shores. STEP could, in short, be the UK’s Apollo moment, and I cannot wait to see where the fusion journey takes us.

My hon. Friend the Member for Bassetlaw is a passionate and enthusiastic representative of the community driving forward this technology, and it is in safe hands. I pay tribute to her commitment both to championing this technology and to her wider community. Together, we can make this one of the most exciting moments in our energy story.

Question put and agreed to.

16:23

Sitting suspended.

Paternity Leave and Pay

Wednesday 23rd October 2024 Westminster Hall

16:30

[Shaun Davies (Telford) (Lab)]

I beg to move,

That this House has considered paternity leave and pay.

It is a pleasure to serve under your chairmanship, Mr Pritchard. My first Westminster Hall debate is being chaired by a neighbouring Member of Parliament. It is a delight to be here.

I know that families come in all shapes and sizes and that paternity leave is not just about fathers. I will refer primarily to dads in my speech, but the points that I will be making relate and apply to all families, of all shapes and sizes. I stand here as a dad, a parent, and an MP who believes that parenthood matters to children, families, employers, the economy and our country.

The UK currently has the worst paternity pay and leave in Europe and among the worst in the OECD. Fathers, if they are eligible—about 20% of them are not—can take a maximum of two weeks’ paid leave, at a maximum rate of £184 a week, which is less than half the national living wage. In 2023, 605,000 babies were born in the UK, yet only 195,000 dads received statutory paternity pay. That is less than one father for every three children. If we contrast that with the 52 weeks of maternity leave and 39 weeks of maternity pay, it is clear that our system needs to be updated for the 21st century.

As a father myself, I do have a vested interest in this issue, but better paternity rights are not just good for fathers; they are good for mums and, more importantly, for children. Last week I was able to speak to a number of parents at an event in Parliament with the Dad Shift campaign, and I heard from several dads about the difference that paternity leave—or the lack of it—had made to their relationships with their young children. I want to live in a society in which children can see both parents as caregivers, but for that to happen, it needs to be possible for both parents to be present during the vital early years. Evidence shows that the physical and social bonds that are set so early are critical for babies as they grow up and for the fathers’ connection to the children in later life. One dad I heard from at the event in Parliament, Simon, suffered from undiagnosed depression after the birth of his child. That was made worse by not having the time with his child to establish and develop that bond.

This is not the 1950s. We can all agree that most men do want to have relationships with their children, especially during the early years, but the law does not reflect that. Another dad I spoke to, George, had a generous employer who gave him more than the statutory pay and leave, and he spoke glowingly about the difference that that had made to his mental health and wellbeing, but also, of course, the balance in the household and his relationship with his child. It was great to hear that a number of employers were going above and beyond the statutory minimum, but as of 2022, 49% of employers provided the minimum statutory paternity leave.

This matter is simply too important to leave to the whim of individual employers. Change needs to start within Government and the public sector. I recently tabled a number of written questions to Departments, asking how much paternity leave their staff took on average. The only Department whose staff took more than the 14 days was the Department for Education. If we look at other Departments, the figure was 9.6 days in the Department for Transport and 7.25 days in the Department for Work and Pensions. The Cabinet Office ranked worst, with 5.7 days. The Government and the public sector should be exemplary employers, but instead they are lagging behind some private sector employers. We need as the first step a signal from the Government and from the public sector as a whole that this is something that needs to be improved.

At the Dad Shift event, I heard from mums and dads about the toll that the segregated system had taken on their careers. Making it easier for dads to look after the kids also makes it easier for mums to continue in their workplace—a point that my hon. Friend the Member for Walthamstow (Ms Creasy) has made so passionately in the Chamber only this week.

It is morally wrong to pressure women into sacrificing their career for their family, and it is also a massive productivity drain. This Government want to restore growth, create jobs and create wealth. The Centre for Progressive Policy estimates that closing the gender employment gap in all UK local authorities could increase economic output by a staggering £23 billion, and the OECD estimates that three quarters of the gender wage gap in northern and western Europe is down to the motherhood penalty.

How many talented women are we losing from the workforce because they cannot get back into work after lengthy maternity leave? How much better off could we be if both parents could take leave that was short enough not to harm their careers but long enough to support their children? Technically, that is already an option after the changes that took place in 2015 with shared parental rights. However, the Government’s own analysis found that only 1% of eligible mothers and only 5% of eligible fathers took shared parental leave. I heard from one father, Alex, who told me that the system and process of shared parental leave were so complicated to navigate that he paid a third party £50 to complete the forms for him.

Things are about to get better. I am delighted that the Employment Rights Bill had its Second Reading earlier this week; it will mark a massive step forward on paternity leave and pay, expanding eligibility by introducing day one rights to paternity and parental leave, allowing fathers to take paternity leave after they have taken shared parental leave, and facilitating a full review of all parental leave rights. The Government clearly recognise the importance of the issue and that further steps need to be taken to address it.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

My hon. Friend is making an excellent speech on an issue that is clearly important to so many of us. Does he agree that even if the birth of a child has been straightforward and simple, two weeks, and the paternity pay that goes with it, passes very quickly? If there is a complication in the birth—if the mother becomes ill, for example, or if there are other complications for the child—the two weeks disappear in the blink of an eye. Then parents, especially fathers, go back to work, and fathers feel guilty about not being able to be at home to support that type of need.

[Shaun Davies]

My hon. Friend makes a powerful contribution. My own brother was born three months premature and my father’s ability to be there was curtailed by the fact that the paternity leave then was simply not generous enough.

The Employment Rights Bill, which I welcome, goes some way towards addressing the eligibility problem, but there is more that we can do. Research by the Centre for Progressive Policy, Women in Data and Pregnant Then Screwed found that countries with longer paternity leave have lower gender wage gaps and lower gender workforce participation gaps than countries such as our own.

Such leave not only needs to be longer; it also needs to be better paid. In line with statutory paternity pay, there should be 90% of earnings for the following six weeks. It needs to be “use it or lose it” leave—in other words, non-transferrable—to encourage take-up. Fundamentally, the root problem is the assumption that there must always be one primary parent. That scenario will suit some families, but it benefits no one to force that choice on everyone. The campaign for fair parental leave and pay is a campaign to normalise co-parenting.

I am making a number of asks of the Minister. I acknowledge his work on the updating of employment rights across the country; he should be congratulated for that. However, we are able to go further and we must not let the good be the enemy of the great. We must applaud the progress that has been made and affirm that we can go further. I ask him to ask his Department to review the rights around parental leave, so that we can have a conversation about it.

This is the moment for our generation of MPs to drag working practices into the 21st century, for the benefit of dads, mums, society and our country, but most of all for the benefit of our children as they grow up. Let us give British children their dads back. Let us be pro-growth, pro-worker, pro-business, pro-children and—importantly—pro-family.

16:39

[Freddie van Mierlo (Henley and Thame) (LD)]

Like the hon. Member for Telford (Shaun Davies), I recognise that my experience of fatherhood is heteronormative and I appreciate that there are many other forms of families. I will probably end up repeating some of the excellent points put forward by the hon. Member, but since they are very good ones I will not hesitate to repeat them.

My first point is that the paternity system is classist: white-collar workers generally get much better provision from their employers. Some workers get up to six months, if they work in high-demand industries. Contrast that with the provision in precarious industries and the gig economy and for traditional blue-collar workers. They tend to get very little indeed: two weeks’ statutory pay or naught if they are self-employed.

Paternity leave is essential to avoid the woman becoming the default primary care giver. Inequality in the length of parental leave further entrenches inequalities. On maternal health, I highlight that receiving only two weeks of paternity pay is extremely challenging if one’s partner or birthing partner has experienced a traumatic birth, whether that is a C-section or otherwise. My wife went through a 40-hour labour and also a really difficult pregnancy with hyperemesis, and that had impacts on both her physical and mental health. Many other women experienced the same, and the support of their partner is essential at that time. As so many people move around the country these days for work, many people live far away from their families, so having the father or the partner there is essential.

The evidence from other countries is clear: the longer the paternity pay, the better we are at closing gender pay gaps and the less the impact on the career prospects of the person giving birth. I end on a riposte to the previous Government for their shameful response to a petition in the last Parliament on this topic. Rather than extending paternity leave, the Government responded to it by simply exalting the benefits of being able to split the two weeks up and take them at different times. How generous that is! How useful that is cannot be underestimated—I am obviously being facetious. The Employment Rights Bill clearly does not go far enough, but I welcome this debate and the noises from those on the Government Benches that indicate they will consider this issue in the future.

[Several hon. Members rose—]

[Mark Pritchard (in the Chair)]

Order. Before I call Alistair Strathern, I have to impose a two-minute time limit because of the interest in this debate. It may be adjusted later.

16:42

[Alistair Strathern (Hitchin) (Lab)]

I thank my hon. Friend the Member for Telford (Shaun Davies) for securing this important debate. For many, parenthood is one of the most exciting journeys of their lives, and one of the most rewarding, too, but speak to any parent and you will be under no illusions that it is also bloody hard work. For too many, it is also work that is split in an unequal and gendered way. We should not shy away from acknowledging the gendered way in which the cost of that imbalance is doled out across society. We should also acknowledge that every child, every parent, every family and every member of society loses out as a result.

In some cases, biological realities drive imbalances that are inevitable. As my partner Megan regularly points out to me, if we do ever have a child together, it will not be me that is likely doing the bulk of the having. But there are others that are entirely in our gift. This debate highlights a really important one: paternity pay.

I have spoken to far too many families, fathers and co-parents across my constituency who have had to make heartbreaking choices over the last few years as a result of the current inequity in parental pay and parental leave—fathers who have had to make the difficult choice about whether to squander their savings, which they could barely afford, to stick around for those crucial early months of their child’s upbringing; or parents who have had to make the difficult choice of taking unpaid leave, which sometimes can be deeply contested with their employer, or depriving the mother of the support they need after a C-section while also going through all the burdens of early parenthood. These are not choices that anyone should have to make, and we must put that right.

I welcome the action that the Government have taken already, particularly their introducing day one rights to paternity leave and pay, but it is clear we need to do more. I look forward to working with colleagues across this House and with the Minister to ensure that, over the course of this Government, we can deliver that change.

16:44

[James MacCleary (Lewes) (LD)]

I am the father of two young children, and I would not have missed their first months for anything in the whole world. I am proud to have been recently appointed chair of the all-party parliamentary group for childcare and early education, so I have a big interest in this issue and am keen to work with all parties on it.

I thank the hon. Member for Telford (Shaun Davies) for bringing forward this important issue. I hope the lack of turnout of Opposition Members is not a reflection of their lack of interest in this very interesting subject.

When I speak to other parents at the school gates and elsewhere, I am often told of their difficulties accessing paternity leave and therefore sharing parenting equally. With nursery costs spiralling and the wider cost of living crisis, it is time for better paternity pay, and it should be increased to 90% of a father’s salary as soon as possible, so fathers and parents have options.

Development in early years is irreplaceable for children. They say it takes a village to raise a child, but in this country, we do not even seem to support two people raising one. Let us increase paternity pay, introduce a dad’s month and widen eligibility for paternity pay. I hope the Government will work on a cross-party basis—I think they have already outlined that they will—to take action.

[Luke Taylor (Sutton and Cheam) (LD)]

Does my hon. Friend agree that the omission of the self-employed from eligibility for paternity pay, which rules out a large number of our constituents, is a major issue that needs to be addressed? Hopefully, we can encourage the Government to come forward with schemes to fill that gap.

[James MacCleary]

I thank my hon. Friend for raising that critical point for the self-employed, who often find themselves excluded. A lot of parents, including very good friends of mine, run their own businesses and have found it very hard to access paternity pay.

This is a critical equality and fairness issue, and I am really pleased that we are talking about it because it is very important to me. I am happy to work collaboratively with Members from across the House to improve paternity pay.

16:47

[Mrs Sarah Russell (Congleton) (Lab)]

I have spent the last 13 years advising women, in particular, in employment tribunals, and I have advised a lot of women who have suffered maternity discrimination. That was an absolute mainstay of my practice. My comments will be completely heteronormative; that is not to disparage any other family structures.

During the pandemic, for the first time large numbers of women and men were able to work from home. I say that because prior to the pandemic I spent a lot of time advising women on flexible working requests. If they asked to work from home for one or perhaps two days a week, that was habitually turned down. They were told that it was completely impossible; employers would not hear of it. Once men did it, it became absolutely acceptable, and it is now absolutely fine in most organisations for parents of either gender to work from home for one or two days a week.

If women continue to take the overwhelming majority of parental leave, they will continue to take the entire career burden and will be systematically discriminated against for it. This is a widespread issue: 54,000 women a year lose their jobs when they are pregnant or on maternity leave.

[Ms Stella Creasy (Walthamstow) (Lab/Co-op)]

We also have to think about all the women who do not have children but are discriminated against anyway because employers expect them to. Does my hon. Friend agree that to get paternity leave right, we have to ensure that everyone in their 30s and 40s is equally discriminated against because they might go off and have children?

[Mrs Russell]

I completely recognise what my hon. Friend says. The risk zone for women’s careers starts when they are approximately 25 and carries on until they are at least 45. I have been advised not to wear my wedding ring to interviews because I was likely to be viewed as a pregnancy risk. Until we deal with that—until men take significant amounts of leave and are paid properly to do it—we will continue to face this issue, and women will be systematically discriminated against, as she says, whether they have children or not.

Approximately 12% of employers disclosed in a YouGov poll that they were reluctant to hire a woman simply because she might become pregnant. This is a widespread issue, whether women have children or not. We need non-transferable, “use it or lose it” parental leave for the second parent and we must ensure that that is paid at a rate such that people are actually able to take the leave. Once we have that and it becomes the default minimum—some fathers will choose to take significantly longer—everyone will be a risk, and everyone will be able to have career development. That will change the entire attitude towards maternity leave in our society. As I said, 54,000 women a year lose their jobs when pregnant or on maternity leave. All the women I advised thought they were just individually unlucky but given the volume of them I can say that they were not unlucky—it was systematic.

16:50

[Olly Glover (Didcot and Wantage) (LD)]

It is an honour to serve under your chairmanship, Mr Pritchard. I congratulate the hon. Member for Telford (Shaun Davies) on securing this important debate.

It was a pleasure to welcome to Parliament parents, children and teachers from Europa school in my constituency last week. They were all campaigning with the Dad Shift, which the hon. Member has already mentioned, for paternity leave reform. The Dad Shift is calling for dads to be given substantial time that is affordable, so that everyone can afford to take it, enabling both parents to have equality of access to such leave.

The moral and economic case for equal parental leave is clear. In countries that offer at least six weeks of paternity leave, the gender pay gap is 4% smaller and the workforce participation gap is reduced by 3.7%. That shows that supporting parental leave not only strengthens British families, but helps to grow the economy. We Liberal Democrats believe that parents should have greater flexibility and choice over how to manage work with parenting in the first months of their child’s life. Greater equality in parenting will also lead to greater equality in the workplace, as the hon. Member for Walthamstow (Ms Creasy) said.

With the forthcoming Budget, I very much hope that the Minister has sought opportunities to influence proceedings and to look for opportunities to improve parental leave. In the longer term, when the public finances allow, our ambition in the Liberal Democrats is to give all families six weeks of “use it or lose it” leave for each parent, paid at 90% of earnings, and 46 weeks of parental leave to share between them as they choose, paid at double the existing statutory rate. I look forward to hearing the Minister’s comments.

16:52

[Blair McDougall (East Renfrewshire) (Lab)]

Thank you, Mr Pritchard, for calling me to speak in this debate.

I want to talk about the vision for the role of fathers in society, which other hon. Members have spoken about, and about how achieving that takes not only personal choice by fathers, but cultural and economic change. I feel that point about personal choice very acutely: at a very young age, my father chose not to be part of my life, and I am determined that that should not be repeated in my own family’s upbringing. I am not unusual: for example, nine out of 10 dads will now go to antenatal scans and the birth. Fathers want to be part of their children’s life and they want to be better fathers, but the culture and the economics make that difficult.

On the cultural point, when I was established in my own business, I made the choice to be a stay-at-home father for a period. However, such fathers are excluded from the coffee with the mothers after nursery pick-up and are not part of the “mum bus” WhatsApp chat. That culture continues, however, because of the economics behind it.

The gap between average pay and statutory paternity leave is about £1,000, which is something that parents cannot afford. There is a class element as well, with nine out of 10 households earning more than £60,000 a year able to take their paternity leave, while only two thirds of those earning under £25,000 a year can do so. If we want the cultural change, and that personal choice, to be taken advantage of, we need to deal with the economics and create more generous arrangements for paternity pay.

In particular, I agree with the suggestion of the hon. Member for Stoke-on-Trent Central (Gareth Snell) that, as well as looking at paternity leave, we also have to give people the ability to take crisis leave. This does not end with those first couple of weeks of changing nappies and going to the pharmacy; we need to have that ability as fathers throughout childhood.

16:54

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Member for Telford (Shaun Davies) for setting the scene so well. He is already making a reputation for himself in this House—well done—and I look forward to more debates in Westminster Hall.

Paternity leave in Northern Ireland allows for one to two weeks of leave to be taken. Statutory paternity pay can be paid if someone’s average weekly earnings are £123. People can also get a wee bit more in relation to that, but it is an expensive time for a family and not much support is available. If we were living in Japan, we would not have to worry about it because there they have a year’s paternity leave, but we are not. We are in the United Kingdom of Great Britain and Northern Ireland, so it is very different.

Two weeks’ semi-paid leave is very little when we look at what a woman goes through in the delivery process. Now that we have an increased pension age and more parents are working into their 60s, gone are the days of grandmothers coming to help with the housework and other jobs in the first month of a child’s life. That simply is not a choice available to working grandparents and the pressure on mum is massive.

Another two weeks of paternity leave can make all the difference, especially when we consider that ladies who have had a difficult birth, an infection post-birth or a c-section, as my wife did, are unable to do any heavy lifting and need their husband more than ever. It is all about looking out for the family as a whole. I do not think we have it right when a dad has to go on the sick to ensure that his wife, who is two weeks out from major surgery, is not left alone and almost helpless with their new and totally dependent baby. When my youngest son and his wife had their last son, she ended up with a bad back afterwards, as a result of the pregnancy. That happens, and paternity care would have been great for her.

We need to offer a lot more support at what can be a vulnerable time in the life of the family. I look to the Minister to recognise the lessening wider family support and the need for the little family to navigate the period together, without taking sick leave or feeling guilty for not being in work. It is the most precious time in a family’s life and we in this House have it in our power to do more to take away stress and give little ones the best possible start in life. I know that is what everyone in this House is committed to.

16:56

[Ms Stella Creasy (Walthamstow) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Pritchard. I congratulate my hon. Friend the Member for Telford (Shaun Davies) on securing this long-overdue debate. Previous debates have had a minimal turnout, so it is fantastic to see so many people here. I also pay tribute to the Dad Shift and the original campaigners Pregnant Then Screwed and Joeli Brearley.

Joeli Brearley came up with the pancake test: if we consistently put mums and dads in two different boxes, with mums looking after babies and dads having to go back to work after those first two weeks, when you have just realised that the meconium will eventually stop, it is mums who learn how to feed the child pancakes and dads who do not. It is mums who will get why some days the child wants pancakes rolled up, some days they want them flat and some days they want them with cream. That everyday caring for children is at the heart of being able to look after them, and slowly but surely it ends up being easier for the mum to take the child and to deal with the toddler, and dads get further and further away.

That is why, in the minute I have left, I want to argue in front of the Minister for PaPa—protected and paid leave—which we need for mums and dads in every single relationship. There is a risk that the Employment Rights Bill and the brilliant changes it introduces could entrench the challenges we are discussing, rather than helping us to resolve them. What do I mean by that? I mean that, if we entrench the idea that shared parental leave is the answer to the challenge, we are entrenching one of the biggest crimes against relationships. As the data shows us time and again, it is mums who end up having to look after children and mums who end up having to take that link. That is why in this country there is a motherhood penalty, which means that mums are seen as less committed, less capable, less competent and less worthy of promotion.

[Mrs Russell]

Does my hon. Friend agree that the idea that “part-timer” is a term of abuse is a shocking concept, and that what we are discussing today could help with that?

[Ms Creasy]

I completely agree. I was also shocked to hear Conservative Members, who obviously are not in this Chamber today, talking about flexible working as somehow lesser working. When people work flexibly, they do not work less—that is why they end up sending emails in the evening, because they are prioritising their time to do bedtime. They make it work for their family.

This debate is about making things work for families and tackling the inequalities in the workplace. Those inequalities are why we have a gender pay gap in this country—though in fact it is not a gender pay gap, but a motherhood pay gap. There is also a fatherhood premium, but we are showing in this debate that it is not a premium at all, because asking dads to work harder and longer and to be away from their children is not what modern dads want. That is why so many fathers look at flexibility in the workplace when they take on jobs, and that is why this debate matters.

If we want to support every family, it cannot just be the wealthiest who can set the terms on when they get to see their kids and make those pancakes. I therefore urge the Minister to consider an amendment that many of us will be tabling relating to PaPa for dads in their own right, because that will help every member of the family. I said it in the main Chamber, and I will say it again here: having PaPa is good for us, because our economic competitors are doing it, and we have some of the worst rates of paternity leave. It is also good because we can prevent another generation of dads reaching the stage of having teenagers who they have no relationship with, because they have not been there—not just to make pancakes, but to be the best dad they want to be.

16:59

[Gregor Poynton (Livingston) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Pritchard, and to speak as a father of two small boys. In fact, I was lucky enough with both my children to receive paid paternity leave, but frankly that was because I was in a white-collar job that allowed it. With my second child, I would not have qualified for the paid paternity policy, but the good will of my employer allowed me to have that time with my family, which is so important. However, it should not be about the good will of employers.

In this country, we have only 52 weeks of maternity leave and two paid weeks of paternity leave. Ours is the most gendered leave system in the whole world, and the country’s statutory pay offer is the least generous in Europe. Eligible UK fathers can take a maximum of two weeks’ paid paternity leave at a rate of £184 a week. That is simply not enough for families to live on. Fathers are often not even eligible for that, for reasons of not being deemed employees, being self-employed, or not having worked long enough for their current employer. Shared parental leave is a welcome innovation, but too few families feel that they can take it—1% of mothers and 5% of fathers. There are huge barriers of eligibility and affordability, as well as the need for mothers to surrender their time at home so that fathers can take it.

A 2023 TUC study that looked into shared parental leave found that 35% of fathers in a household with an income of under £25,000 did not take it. That shows the huge class element: fathers on lower salaries are not able to take that time. Some 53% of families that do take up the leave struggle financially. We see that self-employed fathers cannot take the time, with about 70% not doing so.

I am pleased that the Employment Rights Bill will give day one rights at work to fathers so that we can give stronger support to our working families in my Livingston constituency and right across the whole country.

[Several hon. Members rose—]

[Mark Pritchard (in the Chair)]

Order. I am afraid that I will have to restrict speeches to one minute because we have a lot of speakers and are running out of time. I remind colleagues that if they intervene on someone, that person gets an extra minute, which eats into the time available. If Members need or want to intervene, and the intervention is accepted, so be it, but just be aware of that.

17:02

[Daniel Francis (Bexleyheath and Crayford) (Lab)]

I thank my hon. Friend the Member for Telford (Shaun Davies) for bringing forward the debate.

Very quickly, I will speak from a personal perspective. Eleven years ago, our twins were born nine weeks early, when I had been with my then employer for five months. In the six weeks they were in hospital, I was given three and a half days of leave. One of those was on the day after my wife had a seizure and I had spent the whole night with her in the hospital. In fact, when my wife was told, when our children were 12 days old, that one of them had cerebral palsy, I was at work because the doctors had to tell her during working hours. That shows the complexity of the issue. When my children came home at six weeks, my two weeks’ paternity leave was actually my holiday, because I was not entitled to a penny. I welcome what the Government are bringing forward for leave, but we have to look at the pay aspect and try to get it right, because we cannot repeat some of the mistakes that too many fathers like myself have experienced in the past.

17:03

[Peter Lamb (Crawley) (Lab)]

I congratulate my hon. Friend the Member for Telford (Shaun Davies) on bringing forward the debate. I similarly have an appalling personal experience. My employer was down-sizing, so I was forced to change jobs during my wife’s pregnancy and, despite being open with my employer about the situation, I was completely ineligible for any statutory leave. They were a good employer—they actually happen to campaign on this specific issue—but the reality is that the overwhelming majority of people do not have that opportunity. Most people in this day and age do not stay with employers for an indefinite period of time, either through their choice or that of the employer. They cannot be cut out of the system, particularly when 92% of the cost of paternity pay is being paid out of their taxes by central Government in the first place. No father will be operating at peak levels of efficiency under those circumstances. Frankly, we have an appalling birth rate in this country that is dropping, and this is one of the reasons why that is happening.

17:04

[Alex McIntyre (Gloucester) (Lab)]

I congratulate my hon. Friend the Member for Telford (Shaun Davies) on securing the debate. I will try to explain my experience in one minute.

A year ago this week, I had my two weeks of paternity leave. Quite frankly, there is an awful lot more that we need to do. I welcome the changes in the Employment Rights Bill, but it cannot be right that a father goes back to work two weeks after a birth if, for example, a mother who has had a caesarean section is still in recovery from that medical procedure and needs support at home. It is not a case of them being able to get up and do whatever they like at that point, so we should change that as quickly as we can.

On shared parental leave, my wife lost a month of her maternity leave so that I could have a month with my baby boy, and that stops parents wanting to take it. It made me think twice about taking it, rather than thinking, “What an amazing privilege it is to spend a month with my baby boy.” Finally, we must ensure that all fathers can afford to take paternity leave. It is a financial penalty to many, and we really need to encourage all parents to be able to take time with their children.

17:05

[Jon Pearce (High Peak) (Lab)]

I thank my hon. Friend the Member for Telford (Shaun Davies) for bringing forward the debate. I have a declaration of interest: next Tuesday, I will become a father for the third time. Will I take two weeks of paternity leave? No, I will take three, and I still do not think that that is enough. My wife will have a caesarean, as has been mentioned, and the advice to her is clear that she should not drive for six weeks. We live in a rural village where if we do not drive, we do not take the other children to school. It is vital that families have the ability to take a longer time when the health of the woman and the wellbeing of the children is at stake.

17:06

[Jonathan Davies (Mid Derbyshire) (Lab)]

The introduction of paternity leave by the last Labour Government in 2003 was one of those bold, progressive changes that was opposed by some at the time, like the minimum wage that, years down the line, has become a much-valued right. The policy’s opponents said that it would harm business, but actually it supports new dads to manage change and support their child, which means that employers benefit from staff who are ultimately more engaged with their jobs and able to do their work. Although we must not be complacent—I note that one of the Tory leadership contenders commented that maternity pay has gone too far—I hope that paternity leave remains a right that is never taken away. That is why I am pleased that the Government’s Employment Rights Bill ensures that all new fathers can take paternity leave. An extra 30,000 fathers or partners across the country will benefit from that, with rights from day one. It is not just good for new mums and dads, and the children who they support, but essential in helping those children to have the best start in life.

Becoming a parent, especially for the first time, is a daunting prospect, with many new parents reporting poor mental health or even post-natal depression in the period shortly after. Not only is that bad for the adults concerned, but it has an impact on their children. Depression or anxiety is often exacerbated by the fact—

[Mark Pritchard (in the Chair)]

Order.

17:07

[Mrs Sureena Brackenridge (Wolverhampton North East) (Lab)]

This new Government’s Employment Rights Bill will help to overhaul workers’ rights, including by helping 30,000 new fathers to qualify for paternity leave. This will be much welcomed by many families as the statistics show that as many as two thirds of new fathers and partners who qualified for statutory paternity leave did not take it last year. The issue impacts particularly on lower income families or households where the father is the primary earner. Statutory paternity leave in the UK currently allows for only two weeks off, often at low pay that is significantly less than the national minimum wage, which is why the Employment Rights Bill is so vital. It offers greater flexibility for fathers in how and when they will take their leave, which reflects a broader societal shift, and we must support that.

17:08

[Josh Simons (Makerfield) (Lab)]

Time and again, my constituents in Makerfield have told me that having a child in this country is too expensive and exhausting. Mums have said that they have been forced out of their job through long maternity leave, and dads have told me that employers have made it impossible for them to spend time with their kids and support their partners. As other Members have said, only when dads take parental leave will we make maternity discrimination a thing of the past, but we also need a deeper cultural shift. As ever, the Tory party is lagging behind our society, as we have seen this week, because thankfully we no longer live in a world where women make the home and men make the money. Men want to be parents. They want to be dads, and to cook and do the washing. They want to hug their kids when they have had a tough day at school, to tear up when they watch a Disney movie, or to laugh with their kids at my best-known constituent, Hacker the dog. In an age when so many young men suffer from mental health problems and feel that they lack purpose in our society, we must talk about what it means to be a man in a way that is in step with the age.

[Sarah Smith (Hyndburn) (Lab)]

Does my hon. Friend agree that this is about not just all the things he mentions, but the impact on the mental health of the mother?

[Josh Simons]

I absolutely agree. The support that men can give to their partners is an absolutely vital part of the argument for paternity leave, which is why we need to talk about what it means to be a man in the society that we live in that is in step with the age that we live in. Strength and resilience are qualities that my wife has just as much as me. Care and love are qualities that I have just as much as her. Being a dad is about care, protection and love as well as strength and courage. As men, we must take pride in both.

I very much hope that the Government’s review of parental leave will include paternity as well as maternity leave, and that it will cover pay and duration of leave for employees of firms of all sizes. Every week working parents I represent open the door exhausted and broke, despite loving their kids with all their heart. Better paternity leave is vital to show that we value parenting, kids and family in this country.

[Several hon. Members rose—]

[Mark Pritchard (in the Chair)]

Order. I am sorry, but there are two or three speakers whom I cannot get in because of the time. I call the Liberal Democrat spokesperson for five minutes, followed by the shadow Minister for five minutes, and then the Minister for eight or nine minutes.

17:10

[Munira Wilson (Twickenham) (LD)]

It is a pleasure to serve under your chairmanship, Mr Pritchard.

I congratulate the hon. Member for Telford (Shaun Davies) on securing this incredibly important debate. It is important to parents, children, our whole society and our economy. May I just say that it is wonderful to see so many men here, particularly fathers who have shared their experiences so personally and passionately? It is important that men are at the forefront of this debate, alongside women, to achieve the cultural change that needs to take place.

Parental leave, and paternity leave in particular, is a subject that rarely receives the attention it deserves. As the parent of two primary-aged children in a family where my husband has been the primary carer ever since I returned to work full time following maternity leave, I am passionate about ensuring that every family can have genuine choice in their caring arrangements in the early months and years. When we talk about the early years, the debate often focuses on childcare, because of how difficult it is for families to access affordable and flexible childcare, but that is only part of the picture. The Liberal Democrats believe that parents should have greater flexibility and choice over how to juggle work with parenting in those early few months.

It is important to be clear that, as the hon. Member for Hitchin (Alistair Strathern) said, mothers unarguably have a unique and vital role, and that must never be undervalued. No matter what certain right hon. and hon. Members may think—not those present today, I am sure—maternity pay is far from excessive. It is too low and needs to be increased, but that is a debate for another day, because we are talking about paid paternity leave. As we have heard, paternity leave gives dads a bit more time to form the crucial bond with their children. We know that it is beneficial for boys and girls when they have strong bonds with their dad.

Greater equality in parenting will lead to greater equality in the workplace. At the moment, the imbalance in parenting is a major driver of the gender pay gap. On average, a woman’s earnings take roughly a 40% hit when she has her first child and they do not recover. A man’s earnings, by contrast, barely take a hit. That was why I was proud that it was the Liberal Democrats in government who introduced shared parental leave in 2015. That major step forward gave parents choice over how to share up to 50 weeks of leave and 37 weeks of pay between them, but it was just a first step. As we have heard, there is much more to do.

Take-up of shared parental leave and paternity leave remains far too low, and we know that affordability is a key reason why. A poll last year found that 62% of fathers would take more leave if statutory paternity pay were increased. We need a major overhaul to give parents a genuine choice. First, the rates need to rise. At less than half of full-time pay at minimum wage, today’s statutory rates simply are not enough to give parents a real choice. The Liberal Democrats proposed in our recent manifesto that paternity pay be boosted to 90% of pay, with a cap for high earnings. We also called for statutory parental pay to be doubled.

The second issue is eligibility. Unlike maternity leave, paternity leave is not a day one right. I am glad that the Employment Rights Bill will address that but, as we heard from my hon. Friend the Member for Sutton and Cheam (Luke Taylor), that is not the only barrier. We need to extend rights to self-employed parents, too.

Thirdly, two weeks is simply not enough, as many Members have set out so eloquently. It is well below the average of 12 weeks that we see across advanced economies, and evidence from places such as Quebec shows the importance of a longer period of leave reserved for fathers in boosting the take-up of parental leave by men. That is why the Liberal Democrats have also proposed that one month of paid parental leave should be a “use it or lose it” month for fathers and partners.

The previous Conservative Government made grand promises on this issue. In their 2019 manifesto, they pledged to make it easier for fathers to take paternity leave. In the end, all that amounted to, as my hon. Friend the Member for Henley and Thame (Freddie van Mierlo) said, was allowing fathers to take their two weeks in two separate one-week blocks instead of having to take it all at once. That was a welcome change, I am sure, but it is hardly the overhaul that our system needs. I hope that the new Government will be much bolder and take up the plans that we Liberal Democrats set out in our manifesto to create a system that gives all families a real choice over how they want to care for their children in those precious months.

17:15

[Gareth Bacon (Orpington) (Con)]

It is a pleasure to serve under your chairmanship, Mr Pritchard. I congratulate the hon. Member for Telford (Shaun Davies) on securing the debate. I also thank the numerous Members who contributed to the debate. I would run through them all—I have written them down—but there are 17 and I am conscious of time, so I will move forward.

I welcome the fact that so many Members have come here to talk about this important subject. Opposition Members want to ensure that employees do not have to choose between a rewarding career and a fulfilling life. Due to reforms that were introduced by the previous Government, Britain now has a vastly improved paternity leave package.

In July 2019, the previous Government consulted on whether the existing arrangements for parental leave and pay were adequate, and whether more could be done to better balance the gender division of parental leave and pay between parents. The consultation sought views on the costs and benefits of reforming parental entitlements and any trade-offs that might need to accompany such reform. The Government response, published in June 2023, set out detailed reforms to paternity leave and pay, fulfilling a previous manifesto commitment to make it easier for fathers and partners to take paternity leave. The reforms included: giving employed fathers and partners more choice and flexibility around how and when they take their paternity leave, as we have just heard, allowing them to take two separate blocks of one week of leave; giving employed fathers and partners the ability to take their leave at any time in the first year after the child’s due date or birth, rather than just in the first eight weeks after birth or placement for adoption; and changing the requirements for paternity leave to make them more proportionate to the amount of time the father or parent plans to take off work, cutting the amount of notice of dates from 15 weeks before the expected week of childbirth to 28 days before the leave will be taken.

Moreover, the previous Government supported the passage of what was then called the Shared Parental Leave and Pay (Bereavement) Bill—a private Member’s Bill introduced by the hon. Member for Bridgend (Chris Elmore), who was at that time the hon. Member for Ogmore—to remove the qualifying employment condition for shared parental leave when the birth mother or adopting parent had died. I pay tribute to the hon. Member for Bridgend for steering the Bill through Parliament. It provided an important extension of support and protection for parents facing one of the most challenging situations in their lives.

I am conscious of time, so I shall wind up. His Majesty’s Opposition have taken note of the measures proposed in the Employment Rights Bill concerning paternity leave and pay. The Conservative party has always been the party of business, but we have also been pro-worker; getting the balance right is vital. We will therefore closely review the Bill’s provisions as it progresses through the House and will assess them on their individual merits.

17:18

[The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)]

It is a pleasure to see you in the Chair this afternoon, Mr Pritchard. I congratulate my hon. Friend the Member for Telford (Shaun Davies) on securing today’s debate, which has been very well attended. I did not think that we would see such unanimity, but there is clearly a fresh view in the House. We would not have had this sort of turnout or this kind of debate in previous Parliaments, but there is clearly a mood among newly elected Members—and of course among older, more experienced Members—for change.

I would reference all the contributions, but we will not have time for that. As always, I am grateful to the hon. Member for Strangford (Jim Shannon) and my hon. Friends the Members for Walthamstow (Ms Creasy), for Livingston (Gregor Poynton), for Bexleyheath and Crayford (Daniel Francis), for Crawley (Peter Lamb), for Makerfield (Josh Simons), for East Renfrewshire (Blair McDougall), for Hitchin (Alistair Strathern), for Congleton (Mrs Russell), for Wolverhampton North East (Mrs Brackenridge), for Gloucester (Alex McIntyre), for Mid Derbyshire (Jonathan Davies), for High Peak (Jon Pearce), and the hon. Members for Didcot and Wantage (Olly Glover) and for Lewes (James MacCleary) for their contributions. I think that shows that across the nation there is great interest and appetite for reform. Apologies if I did not catch everyone’s contribution.

I will make a couple of points. The hon. Member for Henley and Thame (Freddie van Mierlo), and I think a couple of other Members, talked about the fact that those working in the gig economy and those who are self-employed do not qualify for any paternity leave. Clearly, we have set out in our “Next Steps” document on employment law reform a review of the worker status and self-employed issues. My hon. Friend the Member for Congleton raised, as I would expect her to, the very important points about maternity discrimination. She will know that there are measures in the Employment Rights Bill to strengthen protections against dismissal for those on maternity leave. I cannot continue without mentioning and congratulating in advance my hon. Friend the Member for High Peak on his impending fatherhood for the third time.

My hon. Friend the Member for Telford was absolutely right that this issue is about not just the father’s role, but the wider role in society and the bond between father and child. He talked about his research into how Government Departments had handled the matter. It is fair to say that, as a newly elected Government, we want to see Government being an exemplar of best practice as an employer. He expanded our often-used phrase of being “pro-worker, pro-business” to add “pro-family”. I have no difficulty with that in this context.

The Government are committed to ensuring that employed parents receive the best possible support for their work and home lives. Our plan to make work pay will ensure that there is more flexibility and security for working families. Workers must be supported to work, while balancing the essential ingredients of their wider family life, whether that is raising children, improving their own wellbeing or looking after a loved one with a long-term health condition.

[Mr Connor Rand (Altrincham and Sale West) (Lab)]

Will the Minister give way?

[Justin Madders]

I am sorry but I do not have time to take interventions.

We recognise that parental leave and pay entitlement, such as paternity leave and pay, play a key role in that balance. It is an important of the lives of parents and children for the parent to be able to take time away from work when their child is born—or first placed, as we recognise this debate covers other arrangements—so that partners can provide support and families can be together for the first time. We know the parental system needs improvement. Hon. Members can look back on previous debates, where it is clearly on the record that Labour in opposition felt that the parental system was in need of reform. I will set out some of the changes we plan to make in relation to the Employment Rights Bill.

As has been said, there have been some modest improvements in arrangements in the last 12 months. On 6 April, changes were introduced that allow parents to take leave and pay in two non-consecutive weeks, at any point in the first year after the birth or adoption of their child, and to give shorter notice for leave periods. That was a move forward but we want to go further. The Employment Rights Bill will make paternity leave a day one right. Currently, parents are eligible for leave only if they have been employed in their job for 26 weeks, by 15 weeks before the baby is due.

We will remove the requirement for a continuity of service condition for paternity leave. That will allow eligible employees to give notice of their intention to take that entitlement, from day one in the job. It will make paternity leave accessible to all employees, including those who may have low job security and low continuity of service, not only those who are able to reach the current set qualifying periods. We believe this measure will bring tens of thousands more parents into scope for the entitlement, meaning that many more families will benefit from protected time off.

We will make other changes to paternity leave to make it more flexible for parents. We will remove the restriction requiring paternity leave and pay to be taken before shared parental leave and pay. Currently, when shared parental leave and pay is taken, fathers lose their right to take any paternity leave and pay that they have not already taken. We think that is creating unintended consequences, and we will remove that restriction in order to provide the flexibility for employees to take advantage of the different types of leave available to them at the moment to care for their child in whatever order works for them and their family. That will also remove the risk that parents will lose their entitlement to take paternity leave and pay by misunderstanding the restrictions. As several hon. Members said, it is a complicated process; I had not realised that there was a cottage industry in completing forms for shared parental leave. That is clearly something we need to consider in due course.

We are making other commitments to improve parental leave. We are going to make unpaid parental leave a day one right. The provision gives an employed parent the right to take up to four weeks of leave per year for their child, unless the employer agrees to more. The maximum leave per child is 18 weeks in total. Currently, an employee must have worked in their job for a year to qualify for that entitlement. The Employment Rights Bill will remove that continuity of service requirement, and regulations will then enable parents to give notice of their intention to take that leave on the first day in a new job. We are very keen on having day one rights for employees in a whole range of areas. That, alongside the changes to paternity leave and pay, will increase flexibility and solidify and enhance economic activity for employed parents. Evidence shows that people who move jobs get wage increases. The current system of employees waiting up to a year for parental leave entitlements when they change employer means that parents are put off seeking new jobs that could have boosted their family income at a time when they need it more than ever.

We also know that the whole parental leave system does not support working families. As Members have said, we have committed to a review of the parental leave system. Inevitably, we will not be able to do that without looking at the questions raised today about how paternity leave and pay work. It is clearly part of a larger interconnected web. The review will be undertaken separately to the Employment Rights Bill, but work on planning for its delivery is already under way.

I want to give my hon. Friend the Member for Telford an opportunity to respond, so I will bring my speech to a close. We are listening carefully to the many representations we have heard. Our plan to make work pay is a core part of our Government’s mission to grow the economy, raise living standards across the country and create opportunities for all. It will help more people stay in work, improve job security and boost living standards. The whole approach we are taking will benefit families across the board. It will benefit workers and businesses beyond the important specific interventions we have talked about today. We have a very important package of measures that I am proud to be a part of delivering in this new Government.

17:26

[Shaun Davies]

It has been a fascinating debate, as the Minister says. Most parts of the United Kingdom were covered, and I could say that there is cross-party progressive alliance on the issue. I hope that the Minister has noted that there is a significant amount of support for paternity leave and pay. There is an appetite from people like myself and my hon. Friend the Member for Makerfield (Josh Simons) to use the Employment Rights Bill as the vehicle for this progressive change, but if that does not happen, engaging with the review of the parental leave system would be most helpful. The statutory minimum is the statutory minimum, and the Government and the public sector should see it as an opportunity lead the country in what fathers should expect in a workplace. I hope that colleagues from the Cabinet Office will take note.

[Graeme Downie (Dunfermline and Dollar) (Lab)]

I thank my hon. Friend for giving way. I will be very brief. I am a former small business owner—does my hon. Friend agree that as part of that review, we should also be looking at and promoting to small businesses the benefits of adequate family leave and flexible working at the same time to help grow the economy?

[Shaun Davies]

I absolutely agree with my hon. Friend’s point on small businesses. It is interesting that since this debate was secured, a number of employers have come forward to talk about the steps they are taking and their appetite for taking further steps—they see it as an opportunity to address recruitment and retention issues, too.

I look forward to working with the Minister and thank him for his contribution. I know that there will be further such conversations over the course of this Parliament.

[Mark Pritchard (in the Chair)]

I thank all right hon. and hon. Members for being very helpful. It was very difficult for you to speak for just one minute, and pretty much everybody did. I congratulate you, and I congratulate the hon. Member for Dunfermline and Dollar (Graeme Downie), who I sadly was not able to call, but who seized his opportunity to speak by intervening on the mover of the motion in the last minute. I also congratulate my friend and neighbour, the hon. Member for Telford (Shaun Davies), on his first Westminster Hall debate, which I am sure will be the first of many over the coming years.

Question put and agreed to.

Resolved,

That this House has considered paternity leave and pay.

17:27

Sitting adjourned.