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Abtisam Mohamed (Sheffield Central) (Lab)
Sojan Joseph (Ashford) (Lab)
David Pinto-Duschinsky (Hendon) (Lab)
The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
Revitalising our high streets is a priority for this Government, and I and the Secretary of State have spoken to colleagues across Whitehall to ensure that we are working together to create better conditions over the long term for high street businesses to thrive. That means addressing antisocial behaviour and crime, rolling out banking hubs, stamping out late payments, empowering communities to make the most of vacant properties, strengthening the post office network, reforming the apprenticeship levy and, as the Chancellor confirmed yesterday, reforming business rates.
Abtisam Mohamed
There are just short of 5,500 businesses in Sheffield Central, and more than 80% of them are micro-businesses employing fewer than 10 employees. These are the engines of local economic growth in our area, and they provide vital services in our community. Many businesses in my constituency welcome yesterday’s announcement of permanently lower business rates for hospitality, retail and leisure properties from 2026-27. Will the Minister outline what further steps he is taking with the Chancellor to create a fairer business rates system, so we can ensure that our high streets thrive permanently?
Gareth Thomas
I am grateful to my hon. Friend for her question, and I think this is the first time I have had the chance to congratulate her on her election to this House. She is absolutely right that if we are to see our high streets thrive, we need to ensure there is a genuinely level playing field for businesses online and those on the high street. As the Chancellor announced yesterday, to deliver that pledge we intend to introduce permanently lower tax rates for retail, hospitality and leisure properties from 2026-27. To fund that, we intend to introduce a large business multiplier from 2026-27, which will apply a higher rate on the most valuable properties. That will capture the majority of large distribution warehouses, including those used by the online giants. However, we want to go further, so the Chancellor published a discussion paper yesterday asking businesses for further ideas on the reform of business rates.
Sojan Joseph
Small and independent shops are the lifeblood of our high streets, and they make the communities in my Ashford constituency special. Far too many high street businesses have been feeling the squeeze over recent years, which has led to empty units being an all too familiar sight. I welcome the measures announced in yesterday’s Budget, particularly the reform of business rates. Will my hon. Friend update the House on what the Government are doing to empower local communities to acquire empty units?
Gareth Thomas
Again, I congratulate my hon. Friend on his election to this House. Colleagues across Whitehall are bringing forward plans to introduce high street rental auctions, which will bring vacant units back into use. That should make town centres more accessible and affordable for tenants. We will also take steps to crack down on antisocial behaviour. We saw a huge increase in antisocial behaviour and crime in our high streets under the Conservative party, and we are determined to take steps to crack down on that.
David Pinto-Duschinsky
I thank my hon. Friend for his previous answers. We are blessed with some fantastic high streets in Hendon, such as Mill Hill Broadway, Station Road and the High Street in Edgware, Watling Avenue in Burnt Oak, Brent Street in Hendon and Vivian Avenue in West Hendon. However, when I talk to business owners, they all too often tell me that they are struggling to find and retain the staff they need to grow successfully. What steps is the Department taking to make sure small businesses can get the skilled staff they need not just to survive, but to thrive?
Gareth Thomas
I welcome my hon. Friend’s question, and I know the high streets in his constituency that he mentioned, as they are very close to Britain’s greatest constituency. He will be aware that we have already taken steps to help businesses recruit more skilled staff. It is one of the reasons why we have established Skills England. We have also taken steps to reform the apprenticeship levy, and earlier this week the Prime Minister brought forward plans to help people get back to work.
Mims Davies (East Grinstead and Uckfield) (Con)
The anti-growth coalition on Mid Sussex district council, led by the Lib Dems, Labour, independents and Greens, is bringing in Sunday, bank holiday and evening town centre parking charges on top of a 30% rise, and there is the sword of Damocles of possible village car parking charges. Will the Minister reiterate to councils that are determined to derail his growth mission that such draconian measures on our high streets will do exactly the opposite of what he and his Budget are apparently looking to achieve, and will he perhaps meet them?
Gareth Thomas
I gently suggest to the hon. Lady that those making up the anti-growth coalition are sat on her side of the House, and I gently point out to her that the highest number of businesses to go bust for 30 years was under the Conservative party last year. I would also happily ask her to use her influence with the Conservative-led council in my constituency, which is bringing in parking charges that will certainly damage the night-time economy.
Jim Shannon (Strangford) (DUP)
I welcome some things that the Minister has referred to regarding high street businesses, and I thank him for that, but there are many other matters. For example, in Newtownards family businesses make up a great many of the attractive high street businesses, such as Wardens, Knotts Bakery and the family butcher, and they are important, as they are in Ballynahinch. Has the Minister had the opportunity to talk to the chamber of trade in Newtownards, which is working well? Other chambers of trade in my constituency can also contribute, so has there been an opportunity to speak to them to get their ideas about the way forward?
Gareth Thomas
The hon. Gentleman is an assiduous champion for his constituency in this House. If he wants to bring his chamber of commerce to meet me to discuss issues in his constituency in more detail, I will happily make time to meet him and them.
Mr Speaker
We are 10 minutes gone and still on Question 1. We need to speed up a little bit. If the Minister could look at me, that would be helpful, so that we are going through the third person. I know that Mr Shannon is popular, but even so, it should go through me. I call the Liberal Democrat spokesperson.
Clive Jones (Wokingham) (LD)
In my constituency, the number of people shopping on our high streets has not returned to pre-covid levels, and we have lost anchor stores such as Marks & Spencer, and several banks. The Government urgently need to save our high streets, but the reduction in retail, hospitality and leisure business rates relief from 75% to 40% will come as bad news for thousands of businesses. When will the Government deliver a fundamental reform of business rates to save our high streets and end the penalising of productive investment?
Gareth Thomas
I am grateful for your guidance, Mr Speaker. While the hon. Member for Strangford (Jim Shannon) is popular, you are much more important.
I gently point out to the hon. Member for Wokingham (Clive Jones) that we have started the process of reforming business rates. We are introducing permanently lower rates for retail, hospitality and leisure from 2026-27. We have listened to businesses and kept business rates relief, and we are opening up opportunities for businesses to come forward with ideas for future reform of business rates.
Ian Lavery (Blyth and Ashington) (Lab)
The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)
The Government are committed to strengthening the collective voices of workers and restoring the principle that work should always pay. That is why we introduced the Employment Rights Bill, which will restore the school support staff negotiating body and introduce a framework for a fair pay agreement in adult social care. Combined with other measures in the Bill, that will empower workers, unions and employers to come together to negotiate fair pay, terms and conditions.
Ian Lavery
I thank the Minister for that answer. It was fantastic of the Labour Government to bring in the Employment Rights Bill within their first 100 days—an absolutely brilliant achievement. Experts say that sectoral bargaining is a force to be reckoned with for both employees and employers, so what plans might the Government have to extend sectoral collective bargaining in other sectors of the economy?
Justin Madders
My hon. Friend is right to say that there is plenty of evidence worldwide that collective bargaining improves terms and conditions and the overall vitality of the economy, but we must start somewhere. About 5% of the entire working population are employed in adult social care, and with a 25% turnover rate and rampant abuse of zero-hours contracts and the minimum wage laws, we felt that that sector needed the most attention first. We must make a concerted effort to drive up working conditions, because those who work in that area have been undervalued and underappreciated for far too long, and that has to change. We must focus on getting it right in adult social care, and we will see where that takes us.
John Cooper (Dumfries and Galloway) (Con)
Undoubtedly, Government legislation is empowering the unions—we saw that this week when the Secretary of State for Scotland was unable to meet CBI Scotland, an important body, because he could not enter his own building because of a picket line. We read in the papers this morning that ASLEF, a rail union, insists on using fax machines and will not allow its members to use email. How is that helping collective bargaining?
Justin Madders
I have to educate the hon. Member on what trade unions do. ASLEF is not a union in the adult social care sector, which is what we are talking about here. We want to work on a tripartite basis—business and workers, together with the Government—to get terms and conditions right. Given that we had the lowest increase in living standards on record under the Conservative Government, I would have thought that he would want to support that too.
Gareth Bacon (Orpington) (Con)
The Government’s impact assessment for the adult social care sector confirmed that collective bargaining will be very costly for business. If pay awards match those of junior doctors, the cost of the increased wage bill will be £5.8 billion, driving up business rates, reducing employment or hours, and imposing further costs on business. Can the Minister confirm when further collective bargaining will be rolled out, to which sectors, and by how much those businesses can expect to be clobbered?
Justin Madders
If the shadow Minister is complaining about the state of the adult social care sector, he should look to his own party and how the sector was left to rot for 14 years. The impact assessment says that the overall cost to employers will be 0.4% overall and, as the economic analysis says, the make work pay package will help to raise living standards across the country and create opportunities for all. I think 0.4% is a fantastic achievement to get such a deal. If he does not want to support improved working conditions for people, an end to fire and rehire and better maternity protections, he should continue to vote against the Employment Rights Bill, but I do not think his constituents will thank him for that.
Joe Morris (Hexham) (Lab)
The Minister for Industry (Sarah Jones)
We have made significant progress in developing a new industrial strategy and I am delighted to report to the House that we published a Green Paper on 14 October, setting out our plans for a modern industrial strategy. We have set our sights higher than the previous Government, we have thrown off their ideological shackles and we have worked in partnership with business and our colleagues across the nations and regions to set us on a path to a credible 10-year plan, delivering the certainty, drive and ambition that businesses need to invest in the UK.
Joe Morris
For 14 years, businesses in rural communities such as my constituency were ignored and neglected by the Conservatives in government. Will the Minister elaborate on how the industrial strategy will allow rural communities to share in the proceeds of growth?
Sarah Jones
The difference between a Labour Government and a Conservative Government is that we believe that growth needs to be felt in our communities, not just measured on a spreadsheet. I know that my hon. Friend is working hard in his constituency and is already campaigning on issues such as banking services, which are so important for our rural communities. He is right: the industrial strategy needs to be designed and implemented in lockstep with local leaders, mayors and devolved leaders across the country, alongside our wider plans for housing and skills, which of course will be part of the picture. I look forward to working with him on identifying the barriers to growth in rural communities so that we can break them down.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
The development of marine renewable energy is getting close to commercial deployment. If we are able to get it across the line, it will bring with it a supply chain that we can build and hold in this country, with a view to exports across the world. That would surely be a great result for any industrial strategy. What will the Government do to ensure that their industrial strategy helps marine renewables reach full commercial deployment?
Sarah Jones
The right hon. Gentleman makes a really good point, and I would be happy to have a proper conversation with him about it. Marine renewables are a huge opportunity for us. We can build the supply chains across the country and, of course, Scotland is uniquely placed to take advantage of that. I would love to have a conversation about it.
Greg Smith (Mid Buckinghamshire) (Con)
When it comes to an industrial strategy, in the Labour Government’s first few months they have effectively shut down UK virgin steelmaking capacity, with no commitments to primary steel in yesterday’s Budget of broken promises. Unlike the United States and the European Union, the Government have failed to protect our car manufacturers against Chinese state aid. They have massively increased the costs to the very drivers of industry—real businesses—of employing people. Should the Government not call it their deindustrialisation strategy?
Sarah Jones
The challenge we have is that we have inherited the worst living standards growth during a Parliament in modern history. We have inherited huge challenges that we have to overcome, but we are looking to the long-term with our industrial strategy—[Interruption.]
Sarah Jones
I do not know whether the hon. Member for Mid Buckinghamshire (Greg Smith) has been paying attention, but we are developing a steel strategy, which the previous Government failed to do, with £2.5 billion of funding. We put a boost of £2 billion into our car industry only yesterday in the Budget, alongside £1 billion for the automotive sector and money for life sciences. We are developing an industrial strategy for the long term for the first time and we will not follow the Conservative party, which let our industries suffer and get to the crisis point that we are now having to deal with.
Greg Smith
The Minister mentions the car industry. Yesterday, after the Budget of broken promises, talking about the industrial strategy, Mike Hawes of the Society of Motor Manufacturers and Traders said:
“Delivering that strategy depends on the UK being globally competitive. Additional National Insurance Contributions will put massive pressure on the automotive supply chain which is predominantly SMEs.”
He described the lack of substantive measures to support the new car market as “hugely disappointing”, concluding that,
“the cost will soon be felt in reduced UK investment, economic growth and jobs.”
With such dire warnings so early on, is this not more evidence that Labour just does not get business and that its industrial strategy is in tatters before it has even begun?
Sarah Jones
For a Government who do not get business, it is surprising, is it not, that we got £63 billion of investment through the international investment summit—twice what the previous Government managed after two years of planning it? The Government are working very closely with the automotive industry. We know that the global situation is very difficult and I talk to Mike Hawes very often, which is why we put £2 billion of funding into the Budget yesterday. It is also why we are working very closely with the sector to create the conditions we need to transition to electric vehicles and to protect our industry in a way that the previous Government, frankly, failed to do.
James Asser (West Ham and Beckton) (Lab)
The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)
The Office for Product Safety and Standards within my Department has been working across Government and industry to protect consumers and understand the causes of any safety issues. That has included giving consumers clear information that enables them to purchase, use and charge products safely; assessing the compliance of manufacturers and importers to ensure that products are safe when placed on the market; and a programme of work to address the sale of non-compliant products available through online marketplaces, including e-bikes and their batteries. Last week, I visited the OPSS’s Teddington laboratories, where we launched the Department’s new “Buy Safe, Be Safe” consumer campaign.
James Asser
Two weeks ago, there was a fire in a 10th floor flat in Plaistow in my constituency. Thankfully, the quick reaction of the residents and neighbours and the good work of the London Fire Brigade meant that they were all able to be evacuated quickly and there were no serious injuries. Clearly, this could have been worse. Does the Minister agree that it is a perfect example of why we need to continue to work to make these batteries safer and run awareness campaigns, so that residents understand the safety issues and how they can be mitigated, and how the batteries can be disposed of if they need to get rid of them?
Justin Madders
My hon. Friend is absolutely right. Manufacturers must already ensure that products are safe and provide instructions for safe use, including safe charging. I pay tribute to the London Fire Brigade for the work it is doing on this issue. Unfortunately, as we have heard, there are far too many fires. That is why we launched our awareness campaign last week. We are hoping, through the Product Regulation and Metrology Bill, to make sure we have powers to keep up with technological developments and ensure that e-bikes can be sold safely to consumers in the UK.
Matt Turmaine (Watford) (Lab)
The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)
As the Chancellor announced yesterday, the national living wage will rise to £12.21 an hour, meaning that a full-time worker can earn an extra £1,400 a year. We have also announced the stopping of the use of minimum service levels and tackled late payments for the self-employed. Of course, we have now introduced the Employment Rights Bill, which will raise living standards across the country and provide better support for businesses engaged in good practice. It also makes good on our promise to the British people that we will now make work pay.
Matt Turmaine
I thank the Minister for his answer. In my constituency of Watford, many people are employed in the hospitality, retail and construction sectors and, with a big hospital, in the health and social sector. Will the Minister confirm that the Government’s Make Work Pay plan will bring long-lasting benefits to them and to other workers?
Justin Madders
Absolutely. We are determined to ensure that the particular sectors that my hon. Friend mentioned, where low pay and insecurity are rife, will benefit. We are working closely with businesses and employers across the spectrum to ensure that we get the proposals right because, for too long, insecurity and low pay have been rife in the UK economy. That has to change.
Jerome Mayhew (Broadland and Fakenham) (Con)
After receiving millions from the trade union paymasters for its election, Labour is rewarding them with a package of 1970s, French-style workplace regulations, which will increase the cost of doing business in the UK to the tune of £5 billion a year, disproportionately falling on SMEs. That is before the £25 billion body blow to business delivered by the Chancellor yesterday in her anti-business Budget of broken promises. Does the Minister agree with the Office for Budget Responsibility that this Government’s decisions will make workers poorer, not richer, as increased employment taxes are passed on in lower wages, and that business investment will fall, not rise, as a direct result of this Government?
Justin Madders
I find it incredible that the Opposition quote French-style labour laws, because when they introduced the minimum services legislation, they always held up France as the example of where that works already. I wish they would make their minds up. The implication behind the question about trade union funding says rather more about their attitude to how legislation is made in this country than ours. We do things because we believe in them. If he looks carefully at what the OBR is saying, £1,400 into people’s pockets as a result of the national living wage increase is a fantastic achievement that we should all be proud of.
Tony Vaughan (Folkestone and Hythe) (Lab)
Anna Dixon (Shipley) (Lab)
The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
Our plan for small businesses will help them to scale up and increase productivity and growth. We are doing that by creating opportunities for businesses to compete and access the finance they need to scale, export and break into new markets. Furthermore, at yesterday’s Budget, we announced a small business Command Paper next year, which will set out more detail on how we will support small businesses.
Tony Vaughan
I welcome the Minister’s answer. One way that we can support small businesses to scale up is through infrastructure investment, so that businesses can get their goods to market more quickly. Will the Department support my campaign to shift more freight from trucks to trains, starting with the channel tunnel in my constituency, where only 10% of its freight capacity is being used at present?
Gareth Thomas
Let me take the opportunity to congratulate my hon. Friend on his election to this House. I remember well, as I am sure he does, the problems that the people and businesses of Kent had to endure when the M20 became a lorry park, thanks to a combination of poor planning by the last Government and the poor-quality trade deal they negotiated with Brussels. We certainly support the expansion of rail freight, not least as it helps to build the resilience of supply chains. I would be happy to meet him or facilitate a meeting for him with Transport Ministers, to hear more about his campaign.
Anna Dixon
Small businesses such as the Greek Corner in Shipley have benefited from Bradford council’s business growth programme, funded by the towns fund, which provides capital assistance for businesses to create new jobs. The support measures announced yesterday in the Chancellor’s Budget for local authorities and small businesses will be vital to revitalising our high streets. Does the Minister agree that local authorities working with local communities are best placed to direct investment, to help SMEs grow?
Gareth Thomas
Let me take this opportunity to congratulate my hon. Friend on her election, too. I agree that local authorities working with local communities are fundamental to supporting SMEs in local economies. That is one reason why, as well as backing local authorities in yesterday’s Budget, we are backing Tracy Brabin, the excellent Mayor of West Yorkshire, with funding to support the priorities of local communities in constituencies such as that of my hon. Friend. It is also why we are introducing measures such as high street rental auctions and a powerful community right to buy, so that local communities can start the process of reviving their high streets.
Kit Malthouse (North West Hampshire) (Con)
I draw the attention of the House to my entry in the Register of Members’ Financial Interests. The Minister mentioned that access to finance is vital for small business, but I hope he knows that the past few days have seen chaos in the motor finance market, with a number of major lenders suspending lending entirely in response to a judgment in the appeal court. This has caused consternation across the entire business lending sector. Can the Minister reassure us that the Government are fully engaged with the industry and the Financial Conduct Authority in sorting out an issue that could have a very, very significant impact on the entire sector and its supply chain?
Gareth Thomas
We are certainly looking at the issues that have arisen for the industry from the judgment. More generally on access to finance, I am sure the right hon. Gentleman will welcome our launch, at the investment summit referenced by the Under-Secretary of State for Business and Trade, my hon. Friend the Member for Ellesmere Port and Bromborough (Justin Madders), of the British Growth Partnership, which is aimed at unlocking investment in businesses that want to scale up.
Richard Foord (Honiton and Sidmouth) (LD)
Economic growth happens when micro-sized businesses become small businesses. We learned yesterday that micro-businesses that employ up to four full-time workers on the national living wage will be exempt from employers’ national insurance. Yet small businesses that employ five workers or more will be subject to employers’ national insurance. How will that measure help small businesses in the south-west to scale up and bring economic growth to the region?
Gareth Thomas
I am glad that the hon. Gentleman welcomes, I think, the measures we took in the Budget to raise employment allowance to help the very smallest firms. The Federation of Small Businesses said yesterday that it will be a very big help for small firms. On his wider point about the Budget, I gently say to him, as I am sure he knows only too well, that the economic inheritance the Government face has led to our having to make some very tough decisions. If he does not support the measures we have set out in the Budget, he needs to say how he would finance the extra investment in the NHS and in industry that we have set out.
Clive Jones (Wokingham) (LD)
Wokingham has one of the highest rates of business survival when compared with the averages for the south-east and Berkshire, but yesterday’s announcement that the Government will raise employers’ national insurance throws that into doubt. The hike is, plain and simple, a tax on jobs that will deal a hammer blow to our small businesses. What will the Government do to mitigate the impact on small businesses in my constituency and across the country?
Gareth Thomas
I say very gently to the hon. Gentleman that if he and his party are determined to oppose the measures we took in the Budget, including on employers’ national insurance contributions, they need to set out how they would fund the extra investment in the NHS, the investment in the automotive and aerospace sectors, and the measures to protect and raise living standards.
Bill Esterson (Sefton Central) (Lab)
The Minister for Industry (Sarah Jones)
We held, as we have said, an international investment summit on 14 October, 100 days after we formed the new Government. We secured £63 billion of investment, which is twice the level of the previous Government’s investment summit. The investment will create high-quality, high-skilled, well-paid jobs across the country, and represents a huge vote of confidence in this new Government.
Bill Esterson
As my hon. Friend quite rightly said, the Labour party is now the party of business without any question. Does she agree that the measures committed to in yesterday’s Budget on clean energy, carbon capture and storage and hydrogen—which were backed up, by the way, with a commitment from a Canadian investor of another £1.8 billion in offshore wind—show how much this Government are in tune with the business community? We are attracting investment and building on the investment summit, and we will deliver jobs for our constituents and our communities up and down the country.
Sarah Jones
I agree wholeheartedly with my hon. Friend. I also agree with the former Chancellor, Kwasi Kwarteng, in his article yesterday. I quote:
“Conservatives, like myself, should be honest”
and
“Reeves is cleaning up our mess”.
Mr Paul Kohler (Wimbledon) (LD) [R]
The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
We recognise the important role that night-time economy businesses play in supporting local economies and communities. Healthy night-time economy businesses not only support our creative industries, including musicians, DJs and performance artists, but bolster tourism and day-economy businesses. We are focused on our five-point plan to breathe life back into Britain’s high streets. That work will ensure that our high streets are great places for our businesses, supporting economic growth across the UK, including in the night-time economy.
Mr Kohler
I refer the House to my entry in the Register of Members’ Financial Interests. The hospitality industry is a crucial aspect of the night-time economy. It already faces an existential crisis, with post-Brexit labour shortages, covid debt and wage and commodity inflation. What advice would the Minister give to the hospitality industry and businesses that now face a hike in national insurance costs and, despite the headlines, a more than doubling in last year’s business rates?
Gareth Thomas
I would gently point businesses in the night-time economy to a series of measures that we took in yesterday’s Budget, including to reform business rates for the long term, from 2026-27. We listened to businesses, including those in the night-time economy, and did not abolish the business rates relief. Under the measures that we have taken, for example, the average pub with a rateable value of almost £17,000 will save over £3,300 next year.
Rachael Maskell (York Central) (Lab/Co-op)
Last Saturday night I had the opportunity to go out in York with the police. It was incredibly interesting and I am so grateful for the work that they do, and it gave me an opportunity to speak to employers. We know that, as employers, our traditional pubs are really struggling because the pubs code is not working properly. Will the Minister meet me and the Campaign for Pubs to discuss how we can improve things for those businesses?
Gareth Thomas
I will be very happy to meet my hon. Friend. I know from talking to pubs that they are also very worried about the rise in antisocial behaviour and crime in our high streets and town centres. She and the pubs and other members of the night-time economy that she works with will, I hope, be reassured by some of the measures that we have taken in the Budget to begin the process of cracking down on antisocial behaviour.
Sam Rushworth (Bishop Auckland) (Lab)
The Minister for Trade Policy and Economic Security (Mr Douglas Alexander)
I can assure my hon. Friend that the United Kingdom is committed to advancing both free and fair trade around the world that is inclusive, sustainable and seeks to reduce poverty. The UK’s aid-for-trade programmes, including the new Trade Centre of Expertise announced by the Prime Minister on 24 October, build the capacity of producers, businesses and Governments in developing countries to participate in, and prosper from, global trade. I can assure my hon. Friend that the UK is committed to making the world a safe and more prosperous place through strengthening our international development work, as set out in our recent manifesto.
Sam Rushworth
Children from Timothy Hackworth primary school in Shildon wrote to ask me to raise fair trade with the Minister as part of their fair trade week. They included Ashton, who reminded me of the privilege that we have to serve in this place. They would also like to know whether the Minister has met representatives of the Fair Trade Foundation since his appointment, and whether he considers that Britain’s leadership on fair trade policies can make a meaningful contribution to reducing poverty in sub-Saharan Africa.
Mr Alexander
First, let me commend my hon. Friend for his work with the local primary school. I know how assiduous he is in advancing the interests of his constituents. I can assure him that we fully understand the importance of fair trade. I have met a representative of the Fair Trade Foundation in recent weeks, and I pay particular tribute to the work that Fairtrade is doing with the Co-op. Thousands of farmers producing goods such as tea, coffee, sugar and flowers are helped by Co-ops in our high streets across the country. It is now the UK’s largest seller of fair trade products, and it deserves our commendation too.
John Grady (Glasgow East) (Lab)
The Minister for Trade Policy and Economic Security (Mr Douglas Alexander)
The international investment summit, about which we just heard, secured more than £63 billion, including for two significant projects in Scotland. Scottish Power, owned by Iberdrola, committed £24 billion to upgrade the UK’s energy infrastructure over the next five years. Floating offshore wind developer Green Volt has selected Aberdeen for its headquarters and plans to invest £2.5 billion. That, of course, comes on top of this Government’s establishment of GB Energy.
John Grady
I thank my right hon. Friend for his answer. Yesterday saw the largest Budget settlement for the Scottish Government in devolution’s history. The Labour party’s commitment to Scotland runs through this Government. Last week, the highly respected Strathclyde University’s Fraser of Allander institute reported that only 9% of Scottish businesses agree that the Scottish Government understand the business environment in Scotland. Does my right hon. Friend agree that Government understanding of business is crucial in driving investment and growth in Scotland, and that it is critical that the Scottish Government improve their understanding of the business environment?
Mr Alexander
Frankly, businesses in Scotland have been let down by two failed Governments. We have had a decade of division and decay in Scotland, and I am glad to see that we now have political stability, with Labour having a majority in Scotland, Wales and England. At the same time, we are committed to genuine partnership and working with the Scottish Government. I know that my hon. Friend has particular expertise in energy policy, given his past professional work. Tomorrow I will be in Torness, in my constituency, to meet EDF Energy—just one example of a business that, frankly, is being held back by the policy and approach of the present Scottish Government.
Chris Law (Dundee Central) (SNP)
I am not surprised in the slightest to hear the disparaging comments from those on the Government Benches about business in Scotland, so I will bring the House up to speed. For the ninth consecutive year, Scotland, under the SNP Scottish Government, is the UK’s top-performing area outside London for foreign direct investment, yet Brexit has reduced the attractiveness of the UK as a base for exporting to EU markets, resulting in its being overtaken by France as the leading destination for foreign direct investment in Europe. Does the Minister recognise that reversing what he seems to be married to at the moment—the Tories’ hard Brexit—is the most significant step that this Government could take to increase inward investment and boost growth in Scotland?
Mr Alexander
As I was saying, let me deal with both the failed Governments who have been letting Scotland down in the last decade. Frankly, if the hon. Gentleman wants to advance the case that there has been a decade of prosperity in Scotland, good luck to him. The reality is that it is very hard to think of a single aspect of Scottish public life that has improved over the last 10 years. Take the case of ferries. Take the case of hospitals. Take the case of our schools or, indeed, the broader business environment.
On Brexit, I recognise that there is a need for a fundamental reset with the European Union, and in recent days I have been taking forward that work. I welcome the work that the Prime Minister has been undertaking, but that is the task of a Labour Government. As so often on so many issues, the SNP talks and Labour delivers.
Bell Ribeiro-Addy (Clapham and Brixton Hill) (Lab)
The Minister for Industry (Sarah Jones)
In little more than 100 days in government, this Department and its Secretary of State, who is flying to Doha today, have set about delivering on the promises made in our manifesto. We have turned up the dial on growth and published our Green Paper on the modern industrial strategy, which will channel support to key sectors, work across our nations and regions with the private sector, and deliver the conditions for investment and good jobs. We have delivered a huge vote of confidence in the UK by securing £63 billion of investment at our international investment summit, boosted by investment ploughing into our aerospace, automotive and life sciences sectors, as announced in yesterday’s Budget. We have also kept our promises by publishing the Employment Rights Bill, which represents the biggest upgrade in workers’ rights in a generation. We are a pro-innovation, pro-worker and pro-wealth creation Government, and are investing all our time in growing the economy for the long term and turning round 14 years of failure.
Bell Ribeiro-Addy
A four-day week with no loss of pay has proven to have benefits for employers and employees alike, and a recent report by the Autonomy Institute and Alda suggests that it can have a hugely positive impact on the economy. The report concludes that Iceland’s economy has outperformed most of Europe since adopting a shorter working week, and now has one of the lowest unemployment rates. With even more UK businesses beginning a four-day week trial on Monday as part of the 4 Day Week Campaign’s autumn pilot, what assessment has the Department made of the Icelandic report and of the potential impact that a four-day week could have on UK businesses and our economy?
Sarah Jones
The Government have no plans to undertake any trials on a four-day week for five days of pay. It is for employers and employees to reach agreements that fit their specific circumstances, but we want to get the balance right and make sure that we work with employers and employees. That is why the Employment Rights Bill will support both parties to reach agreements, where they are feasible.
Kevin Hollinrake (Thirsk and Malton) (Con)
If Labour Members going back to their seat this weekend were thinking of going to a local pub for a pint and a chat with local farmers, I would think again. A publican with a mid-sized pub contacted me last night to say that because of yesterday’s changes, he would be £120,000 a year worse off, moving him from profit to loss. Labour said that its plans were fully costed and fully funded. Yesterday was a massive broken promise, was it not?
Sarah Jones
The hon. Gentleman oversaw the worst Parliament for living standards in modern history. We did not choose that inheritance, and we have made choices. Would he rather we did not compensate for the infected blood scandal? Would he rather we did not compensate the Horizon victims, for whom there was no money in the Budget, on his watch? Would he rather we did not invest in the health service? Would he rather we did not increase the minimum wage? Would he rather we did not support carers? Would he rather we made the choices that he made, such as cutting national insurance for workers when there was no budget for that? This Government are fixing the foundations, so that we can have a bright future for all our country.
Kevin Hollinrake
The Government’s choice was to hit businesses, and that is because there is not an ounce of business experience among them. Labour’s death taxes will hit farms and businesses. Families with a typical farm will have to find hundreds of thousands of pounds or see their farms broken up and sold. The Environment Secretary said 10 months ago that he had no intentions of putting death taxes on businesses. That was a broken promise, was it not?
Sarah Jones
I will not take any lectures from the Opposition, who said “eff business”. Conservative Members have some cheek to come at us when we are clearing up the £22 billion black hole that we inherited, and setting in train stability. I spent quite a lot of yesterday, as the hon. Gentleman would expect, talking to and having meetings with businesses about the Budget and its implications. We talked about the potential for growth, long-term stability, and changes that this Labour Government are making.
Steve Witherden (Montgomeryshire and Glyndŵr) (Lab)
The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)
My hon. Friend is absolutely right that we need to get more people back into work, and need to support them to return. In the Employment Rights Bill, we are looking to increase the scope of sick pay to include people below the lower earnings limit, and to introduce payments from day one. We have no plans to increase the rate of statutory sick pay, but when we get the reforms through, we will no doubt look at how we can reform it for the better. My Department for Work and Pensions colleagues will consider that in due course.
Dr Luke Evans (Hinckley and Bosworth) (Con)
The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
No. I gently point out to the hon. Gentleman the difficult economic inheritance that his party left this Government to sort out. We are determined to walk towards all the tough decisions his party refused to face up to in government. If he is against the increase in employers’ national insurance contributions, he needs to say how he will fund the investment we announced yesterday in the aerospace and automotive sectors, and how he would fund the extra investment that we will make in the NHS and other public services.
John Slinger (Rugby) (Lab)
Mr Speaker
Order. These are topical questions, and they are meant to be short and punchy, not speeches. I am sure we can find time for an Adjournment debate for the hon. Gentleman.
Gareth Thomas
Given that almost 9,500 bank branches closed over the past 14 years, on the Conservative party’s watch, it has increasingly been left to the Post Office to provide vital banking services on the high street. I am sure the banking industry recognises its responsibility to work with us to ensure that sub-postmasters, whose pay has not increased for a decade, and the Post Office have what they need to help meet the critical cash and banking needs of all our constituents.
Martin Vickers (Brigg and Immingham) (Con)
Although yesterday’s announcements may dampen businesses’ expansion plans, many businesses in my constituency and elsewhere find it difficult to expand because of national grid connections. What are Ministers doing to engage with the Department for Energy Security and Net Zero and National Grid to ensure that connections are available?
Sarah Jones
I am glad that the hon. Gentleman asks what we are doing to engage with the Department for Energy Security and Net Zero, because I sit across that Department and the Department for Business and Trade. The entire point of my role is to make sure that we join up the two Departments, so that we can crack some of these problems. The grid is No. 1 on our list.
Ian Lavery (Blyth and Ashington) (Lab)
Sarah Jones
I agree with my hon. Friend. It is essential that local communities see the benefits of landmark investments. I am pleased that Blackstone is investing £110 million in a fund to support local skills training and transport infrastructure. I am happy to have a conversation with my hon. Friend about what more can be done.
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
Farming and agricultural businesses employ thousands of people in my constituency, and they make a huge contribution to the local economy. Can the Minister set out exactly how yesterday’s Budget will help them to develop and grow?
The Minister for Trade Policy and Economic Security (Mr Douglas Alexander)
Farmers, like any other business people, need the stability that will be delivered as a consequence of our fixing the foundations, as we set out yesterday. I too represent a constituency with a number of farmers, and I am aware of the concerns that have been raised about inheritance tax, but, frankly, difficult choices had to be made yesterday because of choices that were not made by the Government in which the right hon. Gentleman served.
Becky Gittins (Clwyd East) (Lab)
Sarah Jones
Yes, I will work with my hon. Friend. We are delighted with the £1 billion investment secured to transform the Shotton mill site. I think that a Labour Government in Westminster and a Labour Government in Wales can work together to deliver great things.
Josh Babarinde (Eastbourne) (LD)
Some 29% of jobs in Eastbourne, the sunniest town in the UK, are connected to the hospitality sector, but many businesses in that sector have expressed concerns about yesterday’s Budget, which UK Hospitality has described as the “latest blow for hospitality”. Will the Minister meet me and local hospitality businesses to discuss those concerns? I declare an interest as the patron of the Eastbourne Hospitality Association.
Gareth Thomas
I would be very happy to meet the hon. Gentleman and the Eastbourne Hospitality Association to discuss the concerns that he has articulated. I gently say to him, as other Ministers have pointed out, that we faced a tough economic inheritance, and had to make very difficult decisions in the Budget yesterday.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
Gareth Thomas
When we were in opposition, we set out a five-point plan to help with the revival of high streets. We are working to bring forward that plan. My hon. Friend will see more detail in the small business strategy Command Paper that we are committed to publishing next year.
Lincoln Jopp (Spelthorne) (Con)
We have an anomalous situation in Spelthorne whereby people can use an oyster card to pay for six different red buses, but not the train. That is crippling small businesses and people going into London. Will Ministers in the Department use their combined might to lobby on my behalf and get me a meeting with the Minister for Rail, so that we can get Spelthorne into the correct zone?
Sarah Jones
I admire the hon. Gentleman’s ability to shoehorn in a question on a subject that is not in the Department for Business and Trade’s remit, but we are of course happy to help with his endeavours to talk to Ministers in the Department for Transport.
Marsha De Cordova (Battersea) (Lab)
Justin Madders
I would be delighted to meet my hon. Friend. Under the “Get Britain Working” plan, more disabled people and people with health conditions will be supported to enter and stay in work, and I am happy to discuss with her how we can achieve that aim.
Alison Griffiths (Bognor Regis and Littlehampton) (Con)
The Government’s own impact assessment suggests that measures in the Employment Rights Bill could cost businesses up to £4.5 billion annually and increase the number of strikes by 54%. Does the Minister expect that legislation to enhance or undermine investor confidence?
Justin Madders
I gently point out to the hon. Lady that that represents a 0.4% increase on businesses’ total costs—a small price to pay for what the impact assessment says
“will strengthen working conditions for the lowest-paid and most vulnerable in the labour market, increasing fairness and equality across Britain. It will have significant positive impacts on workers who are trapped in insecure work, face discrimination, or suffer from unscrupulous employer behaviour like ‘fire and refire’ practices”.
If the hon. Lady does not support that, I am sure that she can talk to her constituents about why.
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
On Tuesday, we will hear from Sir Alan Bates and other victims of the Horizon scandal, which continues to deepen. In September, we learned that there will be 100 more convictions quashed than we originally thought, and yesterday the bill for redress went up by half a billion pounds. Have all the victims now come forward, and are there any gaps left in the schemes for redress?
Gareth Thomas
I welcome the decision by my right hon. Friend’s Select Committee to take a further look at the issue. It is a priority for the Department to speed up the compensation process. Victims are still coming forward, and we are actively looking at whether all those who come forward are covered by the compensation schemes. We have asked the Post Office to write to all those sub-postmasters who have not yet come forward to see if they are eligible for compensation.
Kit Malthouse (North West Hampshire) (Con)
We should all welcome the work of both Governments that resulted in the announcement of £63 billion of inward investment into the UK. However, since then, as a number of Members have pointed out, we have had significant new regulation in the labour market and massive new taxes on businesses. If any of those investors now change their minds, will the Secretary of State come to the House and inform us, please?
Sarah Jones
We will of course keep the House updated on the results of the investment summit, but the £63 billion, as I said earlier, was a massive show of confidence in this new Government.
Torcuil Crichton (Na h-Eileanan an Iar) (Lab)
I am grateful to the Minister and the Secretary of State for the work that they have put in to secure a future for the Harland & Wolff yard at Arnish in my constituency, and indeed at Methil, Appledore and Belfast. I understand that talks are commercially sensitive, but, as workers are anxious about their future, can the Minister update us on how the talks are going?
Sarah Jones
I thank my hon. Friend for his question and for the work that he is doing to represent his community. We are working extensively with all parties to find an outcome for Harland & Wolff that delivers shipbuilding and manufacturing in Belfast, Scotland and Appledore in Devon. I cannot comment further, as he says, due to commercial sensitivities, but we are working extensively with everyone to get the right deal.
Chris Law (Dundee Central) (SNP)
The International Court of Justice judgment from 19 July this year ruled that it is the duty of third-party states not to aid or assist Israel’s “unlawful occupation” of Palestinian territory. In the light of this, will the Minister tell us whether the Department for Business and Trade has obtained legal advice, or whether it is in the process of doing so, on the legality of the UK’s existing trade relations with Israel, and if it has, will he share it with the House, please?
Mr Douglas Alexander
I can assure the hon. Gentleman that we work closely with our colleagues in the Foreign, Commonwealth and Development Office who are responsible for the international humanitarian law assessment. My good and right hon. Friend the Foreign Secretary has updated the House on the changed advice received by the Government, and I think that I should leave it there.
Melanie Onn (Great Grimsby and Cleethorpes) (Lab)
Will the Minister meet me to discuss how the Government could further develop an industrial strategy to bring up to 10,000 jobs in the offshore wind supply chain over the next 10 years?
Sarah Jones
I would be delighted to meet my hon. Friend often and regularly, as we do, to talk about these matters. Of course, the offshore wind supply chain is incredibly important. We have two big announcements to that end, which she mentioned, in relation to Orsted and Greenvolt, and there is much more that we can do through the industrial strategy to keep that area growing.
Jim Shannon (Strangford) (DUP)
What discussions have there been with Invest NI in relation to supporting small Northern Ireland businesses in the digital evolution, to help them adapt and make improvements with digital technology to ensure the smooth running of their businesses?
Gareth Thomas
We have held discussions with a range of organisations on exactly that issue. I promised the hon. Gentleman earlier that I would meet him. If he wants to add that to the list of subjects that we talk about, I am happy for him to do so.
Sally Jameson (Doncaster Central) (Lab/Co-op)
In Doncaster, we have an innovative chamber of commerce and a fantastic set of local businesses. As well as the much-needed upgrade to workers’ rights, can the Minister update the House on what we are doing to kickstart a skills revolution for businesses in Doncaster and across the country? Can he also update the House on what he is doing to work across Departments to ensure that happens?
Gareth Thomas
As others across Whitehall have already set out, we have established Skills England and begun the process of reforming the apprenticeship levy to help businesses get better access to the skills they need.
Perran Moon (Camborne and Redruth) (Lab)
I have more than 30 years of business experience, so the Conservative party’s claims that there is no business experience on the Government Benches carries about as much weight as their industrial strategy. Can the Minister confirm that prior to the election there were extensive consultations with business experts, which I bet the Conservative party wished they had done over the past 14 years.
Sarah Jones
Yes, indeed. I can reassure my hon. Friend that, on this Front Bench, there are Members, including me, who do have private sector experience, and who have run businesses. Of course we have had very strong relationships with businesses, both in the run-up to the election and now, and we will continue to build on those strong relationships for the benefit of all the people across our country.
Business of the House
(4 days, 17 hours ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Speaker
Before we come to business questions, I am sure that the House will want to send our best wishes to Robin James, who retires today after 40 years, during which he clerked the Home Affairs Committee, the Foreign Affairs Committee, the Defence Committee, the Committees on Standards and the Committee of Privileges. Robin was a Clerk of the Committee that approved the building of Portcullis House, and as a Clerk to many Committees since, he has produced many thorough reports. I wish him a long, happy and fulfilling retirement.
Chris Philp (Croydon South) (Con)
Will the Leader of the House provide us with the forthcoming business?
The Leader of the House of Commons (Lucy Powell)
The business for the week commencing 4 November includes:
Monday 4 November—Continuation of the Budget debate.
Tuesday 5 November—Continuation of the Budget debate.
Wednesday 6 November—Conclusion of the Budget debate.
The House will rise for the November recess at the conclusion of business on Wednesday 6 November and return on Monday 11 November.
The provisional business for the week commencing 11 November will include:
Monday 11 November—General debate on flood preparedness.
Tuesday 12 November—Remaining stages of the House of Lords (Hereditary Peers) Bill.
Wednesday 13 November—Debate on a motion to approve the draft Voter Identification (Amendment of List of Specified Documents) Regulations 2024, followed by a debate on a motion to approve the draft Environmental Protection (Single-use Vapes) (England) Regulations 2024, followed by a debate on motions to approve the draft Export and Investment Guarantees (Limit on Exports and Insurance Commitments) Order 2024, the draft Export and Investment Guarantees (Limit on Exports and Insurance Commitments) (No. 2) Order 2024, and the draft Export and Investment Guarantees (Limit on Exports and Insurance Commitments) (No. 3) Order 2024.
Thursday 14 November—Second Reading of the Lords Spiritual (Women) Act 2015 (Extension) Bill [Lords].
Friday 15 November—The House will not be sitting.
Chris Philp
Mr Speaker, I echo your thanks and congratulations to Robin James, who retires today after 40 years of service. In this House, we all rely on the service of the Clerks, and I know that we are all extremely grateful to Robin for the work that he has done over four decades. I am sure that the whole House will also want to send our thoughts, prayers and best wishes to those affected by the terrible floods currently happening in Spain. Some British citizens are affected as well.
It is good that we will have such ample time to debate the Budget, because it raises some extremely serious issues. On 29 July, the Chancellor of the Exchequer stood at the Dispatch Box and told us that there was a £22 billion black hole. That claim has been repeated by Labour Ministers subsequently as a pretext for the tax rises that they planned all along. The Chancellor asked the Office for Budget Responsibility to produce a report into this matter, which was published yesterday. It is called the “Review of the March 2024 forecast for departmental expenditure limits”—a snappy title. I have read that report, as I am sure others have, and nowhere does it mention £22 billion. That number is not there at all. In fact, the only reference to a number is found on page 2 and in table 1. Even the Treasury, straining every sinew, could only find numbers that added up to £9.5 billion, and even there the OBR says that
“it is not possible to judge how much of the £9.5 billion”
might actually have been realised. When the Chancellor said that there was a £22 billion black hole, yesterday’s OBR report now proves that that was simply untrue. Will she come here and apologise for providing that number to the House, given that the OBR report shows that it was simply not true, and certainly does not justify £40 billion-worth of tax rises—the largest tax rises in any Budget in history?
Let me turn to election promises and trust in politics, because when we make promises to the public, it is important that we keep them. [Laughter.] I do not know why you are laughing, because these are your promises. The Labour party said that its plans did not require any extra tax rises. Yesterday, the Government announced £40 billion-worth of extra tax rises. They said that there would be no increase in national insurance, but yesterday they announced a £25 billion increase in national insurance.
Let me turn now to their final fig leaf: working people. Apparently, working people would not be affected. In the last couple of hours the Chancellor herself, on the BBC, has admitted what we all knew all along: that working people would be affected, as a result of lower wages. In fact, we can quantify that, thanks to the OBR’s analysis—I am now quite a fan of the OBR. It published yesterday its “Economic and fiscal outlook”. It is 205 pages long, so some Labour Members might not have had a chance to read it all, but I have. On page 54, in paragraph 3.11, it tells us exactly how much of that £25 billion national insurance increase will fall on the shoulders of working people. The OBR says that
“76 per cent of the total”
will result in “lower real wages” for working people. So 76% of that £25 billion increase will fall on the shoulders of working people. That is £19 billion a year lower wages as a result of yesterday’s Budget. That is not me; that is the OBR. So perhaps the Leader of the House would like to apologise to those working people for the £19 billion pay cut she has just handed them.
During the election campaign, Conservative Members warned that Labour’s plans would result in a £2,094 tax increase per working household, and Labour called us liars. I remember being on the radio and the TV, and Labour shadow Ministers at the time—including the Leader of the House, I think—called us liars. We now know the truth: £40 billion a year. That is £2,173 per working household, so about £100 more than we warned. Perhaps she can apologise for that as well.
We also warned that the tax burden would increase to 37.4% of GDP. The OBR says that it will be 38% of GDP—higher even than we warned when Labour called us liars. That is the highest tax burden ever in our country’s history. So the Government were elected on a false prospectus. The OBR has now told us that will result in lower growth by the end of the forecast period and higher inflation. The truth has finally come out: the Government are going to tax more, they are going to borrow more, and they are going to spend more, and now we know who will pay: working people, to the tune of £19 billion a year.
Mr Speaker
Can I just say to the shadow Leader of the House that he said “you”? I am definitely not responsible for this Budget—I want to make that very clear.
Lucy Powell
Thank you, Mr Speaker. May I, too, join you in paying tribute to Robin James, who has been a Clerk here for over 40 years, most recently on the Committees on Standards and of Privileges, which has certainly put him in the spotlight in recent years. I know he wishes to retire to Wales, with the twin ambitions of learning Welsh and finally learning to drive. I am sure we wish him well with both those endeavours. I also congratulate my hon. Friend the Member for High Peak (Jon Pearce) on the birth of his newborn daughter Connie this week.
Finally, I think, the Conservative leadership contest will finish this weekend, and it could be all change on the Opposition Benches. This could be my last exchange with the right hon. Member for Croydon South (Chris Philp). He is well known for his ambition, and perhaps today was another audition for higher office. I am sure he would welcome a promotion, from the detailed discussions we have on restoration and renewal and House procedure, and I am that sure he will be looking forward to that. I thank him for the work that we have done together. If this is our last exchange, I will really miss his—how shall I put it?—boundless enthusiasm, because God loves a trier; let us hope the next Conservative leader does too.
As the right hon. Gentleman rightly said, yesterday we saw history made, with the first ever Budget delivered by a female Chancellor. I am so proud of my friend for smashing that glass ceiling. The country voted for change and our Budget lives up to that promise. We have made clear choices. We have chosen responsibility over recklessness, reliable public services over endless crises, putting working people first, investment over decline, a Budget that is now backed by the International Monetary Fund—an unprecedented endorsement of a Budget. In many ways, it is not a Budget that we expected or wanted to make, but we have had to fix the mess left by the Conservative party—[Interruption.] I know that Conservative Members do not like to hear it, but they were not straight with people before the election.
The Office for Budget Responsibility, which the right hon. Gentleman quoted, has made it clear that, had it known the true state of the public finances in March, its forecast for the previous Government’s plans would have been “materially different.” I do not usually agree with the former Chancellor, Kwasi Kwarteng, but perhaps the right hon. Gentleman should heed his advice today. He said that the situation Labour inherited was “structurally difficult.” In other words, we are clearing up the Conservatives’ mess.
I am a little confused, Mr Speaker. Does the right hon. Gentleman now accept that there was a black hole, but disagrees on the amount, or is he still in denial that there was even a black hole at all? It is ironic that the Conservatives spent all week undermining the OBR, but are now trying to hide behind the OBR’s figures. I am not sure—which is it? He will know that there was a huge black hole, even before the pay awards that the Conservatives left sitting on their desk, and for which they set aside no money even though they knew that someone would have to pay for it.
We make no apology for the Budget, which is about long-term investment and a decade of national renewal. That is why it is right that we consider the benefits of investment and not just the cost. This country has suffered years of decline and under-investment—we were ranked second lowest for investment in the OECD. We have chosen investment, not further decline under the Tories. We have had to be honest about the difficult choices that we have made in the Budget given what we were left with. I must ask the right hon. Gentleman and other Conservative Members: how would they fix the finances left by their Government? How would they give the NHS the money that it needs? How would they get the long-term investment that the country is crying out for?
We have absolutely put working people first, and I am proud of the pay rise that the Budget gives the poorest workers next April. There are many more things to welcome in the Budget, and I am sure that the House, and maybe the right hon. Gentleman, welcomes them. They include one of the biggest ever increases in NHS spending to deal with the record waiting lists that the Conservatives left behind, much-needed funding for special educational needs and disabilities education, a boost for carers for the first time since the 1970s, fixing the schools that the Conservatives left to crumble, more affordable social housing, money to tackle the cladding crisis, ushering in a decade of national renewal, and investing in the jobs of the future in clean energy, tech, aerospace, automotive, transport, life sciences and much more.
In particular, and I must say this because it needs underlining, this Government have finally put aside money to pay compensation to the victims of historical injustices, including infected blood and the Post Office Horizon scandal, and to deliver fairness for the mine- workers’ pension scheme. Honestly, the most shameful part of the Conservatives’ recklessness with the country is that they promised many times that victims of those injustices would receive compensation, but they put aside not a single penny—not a single budget line to pay for it—in any of their costings.
We cannot in one Budget undo the 14 sorry years of Conservative under-investment, stagnant growth, falling living standards and crumbling public services, but this Budget makes a very good first step forward.
Jon Trickett (Normanton and Hemsworth) (Lab)
Yesterday, a large number of women lobbied Parliament. They represent a generation of women—just women, not men, which is perhaps not too odd given the values of the Conservative party—who suffered a great injustice in the Pensions Act 2011. They call themselves the Women Against State Pension Age Inequality Campaign, or WASPI. Government inevitably takes time—estimates must be made and legal advice taken—but I would be grateful to the Leader of the House if she indicated when we might hear a statement on the WASPI situation, or have the opportunity to debate it, so that we can give some hope to thousands of women, including 4,500 in my constituency.
Lucy Powell
My hon. Friend has long campaigned on these issues, and has asked about them before. He rightly raises the campaigners’ points; he will be aware that the report is detailed and substantial, requiring the Government to give proper time to considering all its findings. I assure my hon. Friend that as soon as that proper consideration has been given, Ministers will come to Parliament to report on it.
Marie Goldman (Chelmsford) (LD)
I also express my sympathies with the people of eastern Spain on the tragic scenes we are seeing there. I understand that a 71-year-old Briton may also be among the dead, and we expect the numbers to go up. It is perhaps timely that a general debate on flooding is coming up. I welcome that debate, and look forward to hearing what is discussed.
There is much in yesterday’s Budget that the Liberal Democrats welcome. In particular, we welcome the additional funds for the day-to-day NHS spending. We have long been campaigning for that, and we very much welcome it. However, there are patients in hospital who are well enough to leave, but cannot do so unless they get the care they need. Unfortunately, the £600 million that was announced for social care will not touch the sides of what is needed to make that system work properly and alleviate the pressures on the NHS. Will the Leader of the House set aside Government time for a general debate on how best to reform social care?
Lucy Powell
I join the hon. Lady and the shadow Leader of the House—I meant to do so earlier—in expressing the Government’s condolences to, and support for, those in Spain who have either died or lost all their belongings and their homes in the recent Spanish floods. As she says, we have a general debate in two weeks’ time on flood preparedness, partly in response to so many questions coming forward on that topic during this Session.
I thank the hon. Lady for her words about the Budget. There is a lot of good news in the Budget that her party should welcome, given how much campaigning they have done on many of these issues. They should be grateful for some of the measures, particularly the biggest ever cash increase in the earnings thresholds for carer’s allowance, for which her party has campaigned. As the hon. Lady says, we have announced a huge funding boost for the NHS and an extra £600 million for social care. She is absolutely right, though, that these issues will take time to work through, and will need further reform and investment to deal with going forward. The ageing population and the crisis in social care are inextricably linked to the future of our health service.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I have many tower blocks in my constituency, and too many constituents find that their lifts are regularly broken and are not getting fixed. This is not just down to individual landlords—it cuts across the piece. Is it not time for a debate in Government time about how the four main lift companies organise their structures and maintenance contracts? This is stopping people from living their lives, and very often leaving them trapped in or outside their flats.
Lucy Powell
As an MP who also represents a number of people who live in tall buildings, I completely hear what my hon. Friend is saying. This is a very important matter, and I am sure that if she were to apply for a debate, it would get a lot of attention.
Bob Blackman (Harrow East) (Con)
The good news is that the Backbench Business Committee will be meeting on Tuesday. We are open for business, and a steady series of applications has started, particularly from one of our long-term season ticket holders. We are going to be open for requests for 90-minute or half-day debates; it would be very exceptional for us to grant a full day’s debate. We are also going to keep a very close eye on whether those people who make or support applications actually turn up and speak in the debates that are allocated. We had a very good meeting with the Leader of the House earlier this week, and I am looking forward to her announcing time for the Backbench Business Committee to allocate debates.
Mr Speaker, you have very graciously granted us the use of Speaker’s House for the Diwali reception on Monday, for which we thank you. To Hindus, Sikhs and Jains, I wish Shubh Deepavali for today, and Nutan Varshabhinandan for Saturday.
Lucy Powell
I, too, welcome the formation of the Backbench Business Committee, and I welcome the conversations we have begun to ensure that we work together on the allocation of time for Backbench Business debates and others that may be granted by the Government. On the application from the hon. Member for Strangford (Jim Shannon), I am sure he will definitely be in attendance for that debate, should the Committee grant it. There is no question about that, and I expect it will be on the freedom of religion or belief, which is a common theme of his questions in these sessions.
I join the hon. Member for Harrow East (Bob Blackman) in wishing everybody a happy Diwali.
Noah Law (St Austell and Newquay) (Lab)
I am delighted that the Chancellor’s Budget included a significant real-terms funding increase for local authorities, giving them more to invest in vital community services and infrastructure.
I, too, express my condolences to the victims of flooding in Spain. One of my constituents has experienced significant flooding issues after the road outside her property was resurfaced in a way that directs water directly into her home, instead of towards the river. After raising this with Cornwall council, she was told that nothing could be done. Does the Leader of the House agree with me that it is incumbent on local authorities to ensure that every penny of taxpayers’ money is spent as effectively as possible to address serious issues such as the flooding experienced by my constituent?
Lucy Powell
I thank my hon. Friend for raising important matters relating to his constituency, which is absolutely what he should be doing. He is right to say that the Conservative party starved local government of funds over recent years, which has left communities paying the price. That is why I am really proud that, in yesterday’s Budget, we saw a significant real-terms increase for local government spending power over the coming years, and they will be having multi-year funding settlements.
My hon. Friend raises a good point about flood resilience. He will know that we have set up the floods taskforce. There is a debate during the week after next on these issues, and he may wish to raise that point then.
David Davis (Goole and Pocklington) (Con)
Thank you, Mr Speaker. Indeed, this question may be of interest to you. The Leader of the House has ministerial responsibilities, but she is also the nearest thing this House has to a shop steward in the Cabinet, and it is in that context I ask her this question.
A month ago, I wrote to the Chancellor about her cancellation of the investment opportunity fund, a decision that has put at risk an investment of hundreds of millions of pounds in a new factory in Goole in my constituency, and with it hundreds of jobs. Two weeks ago, I chased up that letter and was told I was going to get a reply; I was even given a reference number. Yesterday, at 1 o’clock on the dot, I got a timed email telling me that the Treasury was not going to answer my question and was handing it off to somebody else. This was a dishonest piece of obfuscation to avoid accountability before the Budget debate. I hope it is not a harbinger of things to come, but will the Leader of the House remind her colleagues in Cabinet of their direct responsibility to us, for our constituencies, to answer such a question and treat it properly in future?
Lucy Powell
I join in congratulating the right hon. Member. He raises a really important matter, and he can be assured that I take a dim view when my colleagues do not respond to parliamentary written questions or correspondence in both a timely and a thorough manner. I constantly remind—and have very recently reminded—all my Cabinet colleagues and Ministers of their duties to do so. If Members have any instances of when that has not been the case, I will take those up directly, as I will if he wants to share that one with me.
Mr Speaker
In fairness, as the right hon. Gentleman has brought me into this discussion, I am also concerned. I expect Ministers to reply to hon. Members of this House, whatever side they are on. Worse than that, to transfer such a question to someone else at the last minute is totally unacceptable. Ministers are accountable to this House. I fully support the Leader of the House, and I will work with her to make sure that all Members get such letters on time. Let us get that message back to Ministers—I am sure those on the Treasury Bench are listening—and I hope that a reply is being sent as we speak.
Liz Twist (Blaydon and Consett) (Lab)
I recently had the privilege of visiting the newly created Ryton heritage garden, which includes a memorial to Her late Majesty Queen Elizabeth II, and of cutting the ribbon. Brighten Ryton is an amazing organisation that does much to help our local community, and I particularly thank Terry Docherty who led the project. May we have a debate in Government time on the importance of local community organisations in supporting our areas?
Lucy Powell
I join my hon. Friend in congratulating all those who work at the heritage garden in her constituency, and particularly Terry Docherty—it sounds as if he has does an immense job for her constituents. This topic is raised regularly, and now that the Backbench Business Committee is established, I am sure it would consider an application for a debate on the involvement of local community activists and the importance of volunteering to our communities.
Sir Geoffrey Clifton-Brown (North Cotswolds) (Con)
I know that you, Mr Speaker, take a close interest in the enormous restoration and renewal project in this House, which is estimated to cost at least £10 billion of anybody’s money—[Interruption.] At least. We are currently spending £2 million a week on maintenance in this place, a large chunk of which is taken up by the costs of preparing for restoration and renewal. I put it to the Leader of the House that we need to get on and make some decisions on this matter, because otherwise we face some catastrophic failure in one of our services in this House—a flood, a fire, or something. We have been talking about this since 2014, and it sets a bad example to the rest of Government if we cannot even manage our own affairs.
Lucy Powell
I thank the hon. Gentleman for raising that issue. Mr Speaker and I discuss this matter regularly, and we share the concern about it, as do many others across the House. The hon. Gentleman is right to say that this building is in desperate need of investment and of restoration and renewal. He will be aware that three options for how we take the project forward will come to the House early next year, and I will play my full part in ensuring that we restore and renew this fantastic building.
Alice Macdonald (Norwich North) (Lab/Co-op)
My constituent Claire’s son Elliot was diagnosed with diplegic cerebral palsy at the age of four and needed a wheelchair immediately. Elliot is now eight, and his chair desperately needs adjusting. However, due to the waiting list for reablement services, Claire and Elliot have had to wait over six months. May we have a debate in Government time on the provision of reablement services?
Lucy Powell
My hon. Friend raises an important matter about reablement care and services, and it is another shocking symptom of the state of care and the NHS in our country. That is why the Budget yesterday was so important for renewing our national health service. The Budget debate next Tuesday will be on fixing the NHS and reforming our public services, and that might be a good moment for her to raise the matter.
Ben Maguire (North Cornwall) (LD)
Given long-standing community concerns in my constituency about road safety, the extremely high rate of fatalities on the A30 at the Plusha junction, and the need for a graded junction at that location, may we have a debate in Government time on how National Highways and the Government can better work together to deliver critical infrastructure projects to reduce accidents and fatalities on our busy A roads?
Lucy Powell
I thank the hon. Member for that question. As he will be aware, yesterday we announced additional funds for road and other infrastructure, which will play an important role. We will deliver an updated strategic framework for road safety shortly, and I will ensure that Ministers come to the House regularly to report on that.
Ms Polly Billington (East Thanet) (Lab)
My right hon. Friend will be aware of how much coastal communities such as mine depend on bus services, not least to get to vital healthcare, and I am grateful to the Chancellor for finding the money to retain a cap on bus fares. In east Kent, however, our orthopaedic centre is in Canterbury, yet there is now no direct bus service from Ramsgate or Broadstairs, making access harder for the very people with mobility issues who need such services. Will the Leader of the House find Government time to debate access to healthcare via sustainable, reliable, safe and affordable transport?
Lucy Powell
That is an excellent question, and I am glad that my hon. Friend has raised the issue of the bus cap. She will be aware that the Conservatives budgeted for the cap to last only until December, and it is this Government that have extended it, albeit at £3, beyond that date. We will bring forward further bus regulation to ensure that local areas such as hers, and neighbouring authorities, can once again take control of bus routes, fares and timetabling to meet the needs of their communities.
Alicia Kearns (Rutland and Stamford) (Con)
My heart goes out to the family of the British national killed in the flooding in Spain in the last few days.
The National Farmers Union described yesterday’s Budget as “disastrous”, the Country Land and Business Association described it as “a betrayal” and farmers across Rutland and Stamford are in distress, as my inbox shows. Whether on agricultural property relief or charging full road tax on double cab pick-up trucks, which was hidden in the Budget, the NFU says that the Secretary of State for Environment, Food and Rural Affairs does not care. Will the Leader of the House advise me on when the next chance to raise this breach of previous promises will be, or will she secure a meeting with the Minister for my local farmers?
Lucy Powell
I am sorry to hear of the reaction of the hon. Member’s local community, but we did have to make some difficult choices in the Budget. We recognise the important role that farmers play in supporting their local communities, providing food security and the many other contributions they make to our country. It is worth noting, for her and her constituents, that three quarters of farmers who are currently entitled to receive the full relief on inheritance tax will still get it after the Budget. It is the top 25% that will not. I am sorry to say it, but she will remember that her party lost the support of farmers, and that is why my party now has more than 100 new Members representing rural constituencies.
Dave Robertson (Lichfield) (Lab)
Since 2011, Staffordshire Fire and Rescue Service has lost 437 full-time equivalent firefighters. More than that, the number of on-call and retained firefighters has dropped by more than 60% from 483 to just 189. That is a significant drop in the amount of fire cover, and the cuts have been 1.5 times deeper than in any comparable rural fire service. Does the Leader of the House agree that it is a pressing issue, and will she consider a debate on the adequacy of fire cover across the country?
Lucy Powell
I know from my own constituency that such matters are raised all the time. Fire cover, and having adequate fire officers, is very important to local communities. Budgets have been cut in recent years and I know that Home Affairs Ministers take that very seriously. Home Office questions are coming up shortly, and I am sure that my hon. Friend would get a good response.
Sir John Hayes (South Holland and The Deepings) (Con)
Debates in this place are increasingly punctuated and populated by references to outside bodies, from the Environment Agency to Network Rail, and from the Migration Advisory Committee to the much mentioned Office for Budget Responsibility. None are elected or accountable to the people we serve—we do not really know who they are. May we have a debate on the increasing blob activism that threatens the separation of powers? We know about judicial activism, but this activism is just as dangerous. Those bodies wield immense power, and Ministers elected to govern should not be stymied, hampered, cowed or chastised by people with no democratic legitimacy.
Lucy Powell
The right hon. Gentleman is well known as a blob activist himself—[Hon. Members: “Oh!”] I do not mean it that way. I mean against the blob: I am sorry to be misinterpreted. If he is referring to the important financial—[Interruption.] This will start me off laughing now—
Sir John Hayes
On a point of order, Mr Speaker. I think the Leader of the House needs a few moments to calm down.
Lucy Powell
I thank the right hon. Gentleman for that. Perhaps that joke should have referred to one of the prospective leaders of the—no, I will not go any further.
The right hon. Gentleman refers to some very important independent financial institutions that offer this country the financial stability for which is renowned around the world. When we ignore those institutions, as the former Prime Minister Liz Truss did, we see who pays the greatest price for that. Those institutions play an important role, but he is right to say that they should be accountable to Parliament, and it is my expectation that those bodies appear regularly before Select Committees.
Rachel Hopkins (Luton South and South Bedfordshire) (Lab)
Five-year-olds in the most deprived areas of Luton are two and a half times more likely to have experienced dental decay. I pay tribute to organisations such as the Dental Wellness Trust, which does great work on children’s oral health in Luton and beyond. I welcome our Labour Government’s plan to fix dentistry, including the provision of a supervised tooth brushing programme for three to five-year-olds. Will the Leader of the House provide Government time for a debate on the positive impact these measures will have across the country?
Lucy Powell
My hon. Friend is right to highlight the dire state that NHS dentistry fell into under the previous Government, and the really high levels of poor oral health that many of our children face. Poor child oral health remains one of the main reasons for admission into A&E and other services, and that is why this Government are committed to tackling it. Further work was announced in yesterday’s Budget. My hon. Friend will know that there is a debate next week on fixing the NHS, and I am sure she will want to raise these issues there.
Ellie Chowns (North Herefordshire) (Green)
This week, the international community is meeting in Colombia to discuss and drive forward nature protection. Here in the UK, we know that nature is under pressure and declining, and I believe it is a point of agreement across the entire House that agriculture has a crucial role to play in protecting nature. Yet yesterday’s Budget set out a 2% real-terms decrease in the Department for Environment, Food and Rural Affairs budget over the next two years. May we have a debate in Government time on the vital role of nature-friendly farming and the importance of Government support for it?
Lucy Powell
I share the hon. Lady’s concerns about nature and the wellness of our nature in this country, and we are committed to those issues. That is why we have brought forward many plans in recent weeks and will continue to do so in future weeks. There were many things in yesterday’s Budget that will work towards that aim. I would have thought she would welcome our drive to being the clean energy superpower that we want to be, and all the benefits that that will bring in the future.
Chris Bloore (Redditch) (Lab)
The Leader of the House will remember from her visit to Redditch the real anger on the doorstep from my constituents about waiting times in Redditch and in Worcestershire as a whole. Yesterday’s announcement by the Chancellor will make a real difference to the people my right hon. Friend spoke to, who have been waiting too long for the treatment that they deserve. Will the Leader of the House give us some time to talk about how the changes announced yesterday will make a real difference to those people’s lives?
Lucy Powell
I know from my visit to Redditch with my hon. Friend that he campaigned brilliantly in the general election and before that on bringing change to the NHS in this country and on reducing waiting times and waiting lists. Yesterday, thanks to his campaigning and that of many others, he saw the single biggest boost to our NHS funding since 2010, outside of covid. That will begin the process of rebuilding our NHS, as his constituents want.
Steff Aquarone (North Norfolk) (LD)
Residents in North Norfolk are worried about the impact of flooding as we enter the winter months, and I welcome the general debate planned for 11 November. Tomorrow, I am holding a meeting of key agencies with responsibility for water management and almost 200 of my constituents. The Broadland Futures Initiative is likely to report later this Parliament on the future scenarios facing the area, which I know deeply concern both me and the hon. Member for Broadland and Fakenham (Jerome Mayhew). Once it is published, will the Leader of the House allow us a debate in Government time on this important report to ensure that we have a safe and secure future for this treasured national park and low-lying Norfolk more broadly?
Lucy Powell
I thank the hon. Gentleman for the work he does locally on flood resilience and for raising this matter. We wanted to have the debate next week in part because it is raised during business questions so often. I will, of course, make sure that the relevant Minister comes to this House or gives a statement to it when the report is published.
Abtisam Mohamed (Sheffield Central) (Lab)
Reforming the leasehold system is a priority for me in Parliament, because I have many leaseholders in Sheffield Central living in unaffordable homes and struggling to extend their lease or pay their monthly bills due to high, inconsistent and unfair charges. As an example, one of my leaseholders had a service charge of £1,800, which was increased to £6,000 as a result of building safety issues that were certainly not their fault, rendering their property unsellable. Will the Leader of the House share when the Government will bring forward secondary legislation to implement provisions of the Leasehold and Freehold Reform Act 2024, to give leaseholders greater powers, rights and protections over their homes?
Lucy Powell
My hon. Friend is absolutely right to raise what I know will be a big issue in her constituency, as it is in my own. The plight of leaseholders over recent years—soaring service charges and many living in unsellable, unsafe homes—is shocking and unacceptable. That is why this Government will enact the previous Government’s Act at pace and finally bring an end to the feudal leasehold system with our forthcoming Bill.
Dr Luke Evans (Hinckley and Bosworth) (Con)
Farmers woke up today broken and devastated after yesterday’s announcement by the Government. We only have to look across social media to see farmers speaking about the impact of the hike in tax on generational farming. Farmers are among those who suffer most from mental health problems, given the problems of a tough harvest. This concoction has come together under this Government. Will the Leader of the House ask the Environment Secretary to make a statement on Monday? Will she write to the Health Secretary to ensure a ringfenced fund for all those farmers who will suffer and will be unable to pass on their family farm to the next generation? The impact on food security will be severe and shocking.
Lucy Powell
As I said, this Government are incredibly committed to our farming and rural communities, to ensure food security. We have had to make some difficult decisions in this Budget, but I gently say to the hon. Gentleman that he should be careful in scaremongering about the reality of what is happening. As I said, three quarters of those currently entitled to the full relief will still be entitled to it following the measures in the Budget. He might reflect on one reason why so many rural constituencies chose Labour MPs at the last election: the president of the National Farmers’ Union described decisions by the previous Conservative Government as “morally bankrupt”.
Lucy Rigby (Northampton North) (Lab)
Next year, England will proudly host the women’s rugby world cup. Franklin’s Gardens, home to our mighty premiership champions Northampton Saints, is set to stage several matches, including a Red Roses game. There is huge excitement in our town and beyond about the opportunities that England hosting the games will provide, including the opportunity to grow grassroots participation in the women’s game. Might the Leader of the House consider scheduling a debate in Government time on how we can capitalise fully on this opportunity, and expand support for and participation in the women’s game?
Lucy Powell
My hon. Friend is right to raise this issue. Those kinds of events inspire participation and interest in the women’s game and more broadly. That is why this Government are committed to a curriculum review, putting physical education and sport back at the heart of our curriculum. Initiatives such as Sport England’s This Girl Can campaign continue to inspire many young women and girls to get active and get involved. I am sure that they will look closely at what she said.
Claire Young (Thornbury and Yate) (LD)
Small community pharmacies have been pushed to the brink in recent years. On a visit to Abbotswood pharmacy in my constituency, I heard how the current funding formula has led to a real-terms cut of 30% since 2015, and how it punishes rather than rewards pharmacies for providing extra services. Will the Leader of the House grant a debate in Government time on the role of pharmacies and how we can better support them to do their vital work?
Lucy Powell
Community pharmacies, as the hon. Lady rightly says, play a very important part in ensuring that health services are in the community and provide preventive support for local communities. That is why the Government are rebuilding our NHS. Community pharmacies will play a very important part in that. There is a debate next week on fixing the NHS, where I am sure the Health Secretary will be keen to hear her thoughts about community pharmacies.
Rachael Maskell (York Central) (Lab/Co-op)
In Sudan, 25.6 million people are facing acute hunger, 10.7 million people have been displaced since last year, and the World Food Programme is saying that it is a race against time to stop the famine from escalating. It is a very grave situation, so can we have a debate in Government time to put a spotlight on what is happening in Sudan and the UK’s response?
Lucy Powell
My hon. Friend raises a really important matter and I think that is why Mr Speaker granted an urgent question on it earlier this week. There is a lot of interest in this House and it was raised with the Prime Minister yesterday at Prime Minister’s question time. We continue to monitor the situation very closely. I will ensure, as I always do, that the Foreign, Commonwealth and Development Office Minister and Secretary of State do come to the House regularly to update us on these matters.
Martin Vickers (Brigg and Immingham) (Con)
Last Friday, along with the hon. Member for Great Grimsby and Cleethorpes (Melanie Onn) and council leaders, I met National Highways specifically to raise the issue of the A180, but also access to the major ports of Immingham and Grimsby. Irrespective of the amount of National Highways’ resources, surely the input from local representatives is important. Can we have a debate about how National Highways prioritises its various spending programmes?
Lucy Powell
The hon. Gentleman raises a good point about the A180 in his constituency. He will be aware that in yesterday’s Budget a significant increase in investment in our roads was announced. There are also significant growth deals and devolution plans to ensure that local people are delivering the local transport needs of their area. I am sure he can raise these issues at Transport questions or in the forthcoming Budget debates.
Chris Vince (Harlow) (Lab/Co-op)
Thank you, Mr Speaker, for letting me speak. [Interruption.] Genuinely, thank you very much. It is your job, but I appreciate it.
Two weeks ago, at my surgery, I met medically retired chief fire officer Rod Wainwright. Rod was one of the first attenders at the terrible tragedy of Grenfell seven years ago. Subsequently, he has been medically retired because of post-traumatic stress disorder. He did not get the support he asked for from the fire service and the in-house counselling was not enough, and he has subsequently had issues with his pension. Rod blames himself for not being able to save more people on that terrible evening. Does the Leader of the House agree that it is people like us, in this room, with suits on, who are to blame for the terrible tragedy of Grenfell, not heroes like Rod Wainwright? Does she agree that further debate needs to be had to support heroes like Rod?
Lucy Powell
I thank my hon. Friend for that very powerful question and contribution. I am really sorry to hear about the suffering that his constituent Rod Wainwright continues to suffer, having been in attendance at the Grenfell tower tragedy. The Prime Minister has made it clear that he still feels that survivors and the bereaved have been let down badly before, during and after, and that includes those who attended as fire officers and others. There will be another debate on the Grenfell inquiry report in due course and I will make sure he is aware of that when it happens.
Tessa Munt (Wells and Mendip Hills) (LD)
In August, the Ministry of Justice informed Bristol Crown court that it would have to close courtrooms and save over 400 sitting days before March 2025. Last week, the difficult decision was made to remove 40 trials listed between now and the end of March. All the witnesses and defence had been told that their trials would take place. Most have been waiting over a year—two years, in some cases. Many of the 40 cases are rape and serious sexual offences cases where the accused is on bail. The cases will not be relisted until at least October 2025. May we have a debate, so that the victims of rape and sexual abuse can understand why justice is so dreadfully delayed, and how the Government will tackle the court backlog?
Lucy Powell
The hon. Lady raises a really important point. She will know that this Government are committed to ensuring that there is justice for women and girls who are subject to rape and violence. It is a scar on our society that that still takes so long. She will know that the court backlog that she describes is another part of the legacy that this Government are trying to deal with, along with the prisons crisis and others in our criminal justice sector. We will have Justice questions next week, and I am sure that the Secretary of State will be pleased to answer her questions then.
Lee Pitcher (Doncaster East and the Isle of Axholme) (Lab)
Last weekend, I had the privilege of attending the Pride of Rossington awards, where I met many talented and amazing constituents who, every day, give back to their community by the bucketload. I was thrilled to learn that five remarkable athletes from Andy Crittenden’s martial arts centre in Rossington—Heidi, Joe, Millie, Ella and Millie-Leigh—will be competing in the WKC world championships this week. Will the Leader of the House join me in congratulating all the entrants and winners of the Pride of Rossington awards, and in wishing our athletes from Doncaster East and the Isle of Axholme the very best of luck in the world championships?
Lucy Powell
I join my hon. Friend in congratulating those remarkable athletes and all those who took part in the Pride of Rossington awards ceremony in his constituency. I am delighted to wish the very best to his five constituents who are taking part in the WKC world championships.
Mims Davies (East Grinstead and Uckfield) (Con)
We have heard concerns about family businesses, and other Members have spoken this morning about working farming businesses. Could the Leader of the House use her good offices to put forward the priorities of family businesses? The assault of the Budget of broken promises has left many of my constituents with family businesses very concerned. They are working people too, and they are worried about their rights and their future. Given the Government’s interest in granting general debates, will she consider giving time for a discussion of the wide- ranging needs of family businesses?
Lucy Powell
The hon. Lady will be aware that the debate on the Budget will continue today and next week. If she is asking about farming businesses and the inheritance tax changes—I think she is, tangentially— I will just repeat what I said to her colleagues earlier: this Government are committed to food security and our rural and farming communities, and that is why three quarters of those who currently receive the full relief will still get it after the changes. We are bringing about many other things that will help the farming community, including a settlement that will provide £5 billion over two years for farming and land management, which will help restore stability in the sector.
Chris Webb (Blackpool South) (Lab)
May I start by wishing my wife and all those celebrating today a happy Diwali?
In Blackpool, we were promised a £300 million regeneration project—the biggest regeneration scheme in over a century—but unfortunately we have heard over the last few days and weeks that that is not going to happen. It is vital that such schemes happen in Blackpool, and many businesses and individuals have come to me since asking for a state-of-the-art stadium-arena, similar to the Co-op arena in my right hon. Friend’s Manchester Central constituency. Will she allow a debate in Government time on how the Government can support local seaside towns like mine, with private business, to get the infra- structure they desperately need?
Lucy Powell
I am sorry to hear of the decision in my hon. Friend’s constituency, but he will know that, unfortunately, many of the commitments made by the previous Government to support projects like the one he mentioned were commitments of fiction, because there was no money whatsoever allocated to them. This Government take supporting our communities incredibly seriously. That is why we have boosted local government funding, and why we are continuing our drive to devolution.
Jim Allister (North Antrim) (TUV)
The Windsor Framework (Retail Movement Scheme: Plant and Animal Health) (Amendment etc.) Regulations 2024 have been laid before the House. They impose EU obligations on not just Northern Ireland but the whole United Kingdom. Could we have a debate in Government time on the back-door creep of EU regulations? The unelected House has already debated this matter; should not the elected House?
Lucy Powell
We have debated these matters at length over many years. I will look into the statutory instrument to which the hon. and learned Gentleman refers, but as he knows, we are keen to ensure that controversial statutory instruments are considered on the Floor of the House, for greater scrutiny.
Irene Campbell (North Ayrshire and Arran) (Lab)
Will the Leader of the House give us time to debate the awful situation of the SNP ferry fiasco, which impacts on the towns of Ardrossan and Brodick, and my constituency of North Ayrshire and Arran more widely? The Ardrossan to Brodick ferry route has been in place for around 190 years. Owing to SNP mismanagement and a lack of robust negotiation, this vital route is now in jeopardy. Will the Leader of the House join me in congratulating members of the Save Ardrossan Harbour group, who are fighting hard to save this crucial local service? The ferry situation in Scotland is extremely serious, and it is about time it was brought to the House.
Lucy Powell
I certainly congratulate my hon. Friend’s constituents on the work they are doing to save this local service. She is absolutely right to say that the Scottish National party Government of Scotland have overseen huge mismanagement when it comes to the long-awaited ferry services. They are late and over budget, and they just add to the £5 billion of taxpayers’ money that the Scottish Government have wasted on pet projects.
Greg Smith (Mid Buckinghamshire) (Con)
Further to the questions from my hon. Friends the Members for Rutland and Stamford (Alicia Kearns), and for Hinckley and Bosworth (Dr Evans), yesterday’s Budget was a full-frontal financial attack on our farmers. The Leader of the House has declined to ensure a statement on the subject, but we have four more days of debate on the Budget. That means that there are eight opportunities for the Environment Secretary or the Minister with responsibility for farming to open or close debate on one of those days, so that MPs on both sides of the House can fully hold the Government to account on their plans for farming. Will the Leader of the House ensure that the Environment Secretary or Minister for farming opens or closes debate on one of those days?
Lucy Powell
As the hon. Gentleman knows, he can raise any matter relating to the Budget in any of those debates, and a Cabinet Minister will respond. Just as I took issue with his colleagues, I take issue with him for his characterisation of the issue. We are committed to supporting farming, and farming communities. We have a settlement that provides £5 billion over two years for farming, and we are prioritising the farm recovery fund. I am afraid that this stands in stark contrast to what the Conservatives did for farmers with their botched Brexit deal, the phasing out of farming payments and so on. It is no wonder that Labour won so many rural constituencies at the last election, and we will continue to support those constituencies going forward.
James Naish (Rushcliffe) (Lab)
I have visited Cotgrave community garden in my constituency several times, and it is doing a fantastic job of addressing food insecurity, promoting nutrition education and enhancing mental wellbeing in our community. Does the Leader of the House agree that it is important that this House considers how such organisations are put on a secure financial footing, so that we can support the long-term sustainability of community-led initiatives?
Lucy Powell
I join my hon. Friend in congratulating the Cotgrave community garden in his constituency. As has been mentioned in business questions many times, including today, the role that community volunteers play in making our communities great places in which to live, work and raise a family is absolutely vital. The Chair of the Backbench Business Committee is still in his place; as I said earlier, this type of issue would make for a very good Backbench Business debate.
John Cooper (Dumfries and Galloway) (Con)
I am aghast to hear that it is scaremongering to talk about the damage being done to agriculture. I can tell the House that the howls of concern in Dumfries and Galloway are real. We really need to discuss this issue, because Britain cannot live by air-freighted mangetout alone. The Budget imperils food security in this country, and we must have action on that. It is incredible that the Environment Secretary seems so uncaring. As my hon. Friend the Member for Mid Buckinghamshire (Greg Smith) asked, can we please have the Secretary of State in the House for the Budget debate?
Lucy Powell
The Environment Secretary will be here for questions in a couple of weeks’ time, and he comes to the House regularly. I have to say, I find that some of the questions this morning are scaremongering. We have made it clear that three quarters of the farming businesses that are entitled to the full relief will still get it after this Budget. We are talking about the top 25%, and there is not a cliff edge in any case. We are fully committed to farmers, the farming community and food security in this country—I certainly do not buy imported mangetout, as the hon. Gentleman may occasionally—and that is why the settlement announced yesterday provides £5 billion over two years for farming and land management, and why we have prioritised the farming recovery fund.
Kirsteen Sullivan (Bathgate and Linlithgow) (Lab/Co-op)
Recently, we welcomed Restart a Heart Day to raise awareness of lifesaving skills. That same week, five boys from my constituency, including two from Blackburn United community sports club, discovered someone in an emergency situation, put them in the recovery position, called an ambulance and retrieved a defibrillator. Will the Leader of the House join me in congratulating the boys on their swift action and clear thinking, and will she allocate Government time to debate vital first aid training in local communities?
Lucy Powell
I also pay tribute to those boys, who rushed towards danger, rather than turning away from the moment they faced. My hon. Friend raises an important point about first aid training and the now extensive use of defibrillators, which really are lifesaving.
John Milne (Horsham) (LD)
I draw the House’s attention to the neglected issue of water neutrality, which is often confused with nutrient neutrality, but which requires different solutions. For the last two years, the local planning authority in my constituency has faced the impossible task of obeying two entirely contradictory laws. One says that we have to build more than 900 houses a year, and the other says that we cannot build anything because of water neutrality considerations. The bizarre legal stand-off causes enormous difficulties. Will the Leader of the House find time to debate the issue of water neutrality, so that we can find a fair and rational solution for my community?
Lucy Powell
The hon. Member raises an important point, and I am sure that the House will debate these issues in the coming weeks. We are considering such matters in our forthcoming planning and infrastructure Bill, and as he knows, there are forthcoming pieces of water regulation, and he may want to raise that point during debate on those.
Markus Campbell-Savours (Penrith and Solway) (Lab)
In 2019, the Keswick Flood Action Group set out how Thirlmere reservoir could be managed to greatly reduce the impact of major flooding, like that seen in the town during Storm Desmond. Will the Leader of the House make time to debate how water companies’ infrastructure could be better used to prevent flooding in Penrith and Solway, and many other constituencies?
Lucy Powell
My hon. Friend raises a matter that is important for his constituency. That is one reason why today we were pleased to announce next week’s flood preparedness debate, in which I am sure he will want to discuss these issues. It is also why the Secretary of State for Environment, Food and Rural Affairs has been taking swift action on water reform to ensure that our water companies play their part.
Clive Jones (Wokingham) (LD)
The Conservative party undercut farmers when they signed the UK-Australia trade deal, which allows for imports that use practices banned in the UK. The Environment Secretary promised that he would prevent farmers and the UK’s environmental and welfare standards from being sold out. Will the Leader of the House bring her colleagues together to set out how they intend to review the Australia free trade agreement, and can there be a debate in Government time on this matter?
Lucy Powell
It seems that a number of issues for the Environment Secretary are being raised this morning; I will make sure that he is aware of them all, including the important point from the hon. Member for Wokingham (Clive Jones). He rightly points out that the farming community and farmers in this country were really let down by the previous Government as a result of the botched Brexit deal and other matters. This Government are working at pace to ensure that we put food security and the future of our farmers back on the front foot.
Mr Mark Sewards (Leeds South West and Morley) (Lab)
I recently met business leaders at the excellent White Rose business park in my constituency. They told me that one of their key priorities as they expand is recruiting well trained, well skilled and well educated staff. We welcome their expansion. Will my right hon. Friend make Government time for a debate on the need to work with councils, mayors and, crucially, businesses to deliver a stronger, upskilled workforce?
Lucy Powell
I congratulate White Rose business park, in my hon. Friend’s constituency, on its excellent work. This Government will ensure that we have a skilled workforce for the future. We are pursuing a range of measures, such as setting up Skills England, as announced in yesterday’s Budget. There is more money for further education, which is vital, and we are reforming the apprenticeship levy. As he describes, devolving these areas to local councils and mayors will ensure that local skills provision is available for all.
Jim Shannon (Strangford) (DUP)
Father Marcelo Pérez, a priest and prominent figure in Mexico’s Chiapas state, was killed while travelling to his parish. Father Marcelo was deeply respected for his lifelong dedication to advocating for peace, justice and indigenous rights in a region heavily impacted by organised crime and violence. His loss has deeply shaken his community and underscores the dangers faced by those who challenge violence and defend human dignity in Mexico. Will the Leader of the House join me in condemning such violations of the freedom of religion or belief, and will she ask the Foreign, Commonwealth and Development Office to raise this issue with its counterparts in Mexico?
Lucy Powell
The hon. Gentleman raises another important issue, as he does every single week, this time concerning the freedom of religion or belief in Mexico. I will miss him next week, when we are not here for business questions. He is a doughty campaigner on these matters, and I look forward to him being a regular attender, and raising many similar issues, in the forthcoming Backbench Business debates.
Andy MacNae (Rossendale and Darwen) (Lab)
Businesses and commuters in Rossendale and Darwen are hampered daily by seemingly never-ending disruptive roadworks. This is not just an annoyance; it is actively holding back growth in the constituency, with major employers considering relocation. Yesterday, I attended an excellent Westminster Hall debate on this subject and was pleased to see strong cross-party consensus on the need for action. Does my right hon. Friend agree that now is the time to properly address poorly planned and overrunning roadworks? Will she provide time for further debate, if needed?
Lucy Powell
As ever, my hon. Friend raises a topical matter, and I know that it frustrates many constituents and Members alike when roadworks are seemingly endless and not co-ordinated. In yesterday’s Budget, the Government provided a huge boost to road maintenance budgets, which I hope will help. Additionally, we are consulting on proposals to increase penalties, and even apply charges, when works overrun.
John Slinger (Rugby) (Lab)
Will the Leader of the House join me in congratulating Councillor Ish Mistry and everyone involved in the wonderful Diwali celebration on the streets of Rugby on Sunday? Our diverse community is strengthened by the council’s community warden service, which does much enforcement and referral work in partnership with our police and our Rugby First business improvement district rangers. Will the Leader of the House consider a debate in Government time on the role of this vital ecosystem, which sits beneath policing and criminal justice in the public’s consciousness?
Lucy Powell
I join my hon. Friend in congratulating all those involved in Rugby’s recent Diwali celebrations. He is right to talk about the vital role of neighbourhood policing. We are taking forward our neighbourhood policing guarantee, because it is vital that people feel safe in their local community.
Jake Richards (Rother Valley) (Lab)
Last week, I had the privilege of visiting Wales primary school in my constituency and meeting its year 6 class, who are making sure that their school is an eco-school. They are taking part in a number of initiatives in their community, such as litter picking and recycling, and they even told me off for not recycling sufficiently—I have taken steps to make up for that. Will the Leader of the House join me in praising the year 6 students at Wales primary school? Will there be time in the House to debate how we can encourage sustainability across our education sector?
Lucy Powell
As Members of Parliament, we can all agree that there is no better occasion than a good telling off by a year 6 class. He is right that COP29 starts in Baku very soon; the Secretary of State for Energy Security and Net Zero will update the House on the progress of COP29 as soon as he can.
Sam Rushworth (Bishop Auckland) (Lab)
International Men’s Day, on Tuesday 19 November, celebrates the contributions made by men, and raises issues affecting men’s health and wellbeing, and gender equality, which are important to men and boys in my constituency. Will the Leader of the House make Government time available to debate issues affecting boys and men?
Lucy Powell
International Men’s Day is an important opportunity for us all to celebrate the contribution men make to our society. It might not be quite as much as the contribution of women—no, I am joking. Men make a very important contribution, and, as my hon. Friend says, the day highlights mental health issues. Suicide is still the biggest killer of men in this country, and we should all be very conscious of that. International Men’s Day would make an excellent subject for a Backbench Business debate—the Chair of the Backbench Business Committee and I were discussing such debates only yesterday—so I encourage my hon. Friend to make an application to the Committee.
Paul Davies (Colne Valley) (Lab)
This week, I had the pleasure of receiving a letter from Sycamore class of Slaithwaite Church of England junior and infant school. Inspired by Marcus Sedgwick’s novel “Floodland”, the students expressed their concerns about climate change with remarkable insight and passion. The children’s genuine concern and thoughtful suggestions highlighted the urgency of addressing climate change. It was inspiring to see young minds so engaged and determined to make a difference. Will the Leader of the House join me in congratulating the students of Slaithwaite Church of England junior and infant school on their excellent work? Will she encourage schools across the country to educate pupils about climate change and the actions needed to address it?
Lucy Powell
It sounds as if my hon. Friend also got a good going over by some pupils in his constituency— a good education for him, I am sure. I join him in congratulating the students of Slaithwaite Church of England junior and infant school on their work. Climate change education and action inspires the next generation, and we will continue to support it.
Madam Deputy Speaker (Ms Nusrat Ghani)
The Chamber is filling up nicely for the last contribution. I call Lee Barron.
Lee Barron (Corby and East Northamptonshire) (Lab)
I am proud to be the last man standing, Madam Deputy Speaker.
On 3 June 2024, the Environment Agency granted a permit for the Corby incineration plant, despite there having been no public consultation since its original permit was modified. We now know that incinerators are widely regarded as the dirtiest form of waste disposal. Does the Leader of the House agree that it is time for a debate to review the conditions under which such licences are issued and amended, especially in residential areas?
Lucy Powell
Concerns about local incinerators often come up at business questions, so a debate would be well attended, were my hon. Friend to apply for one. He is right to point out that operators of incinerators must use the best available technology to minimise emissions and meet strict emissions limits. Where that is not happening, he absolutely should be raising it with the Government.
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Jeremy Hunt (Godalming and Ash) (Con)
It is a pleasure to open this day of the Budget debate with you in the Chair, Madam Deputy Speaker, for what will be my last contribution as shadow Chancellor. I am aware that may be a relief to Members on the Government Benches, and possibly to those on the Opposition Benches as well.
Yesterday’s Budget was the biggest tax-raising Budget in British history. It was a huge tax on business and takes our tax burden up to German levels for the first time. After the pandemic, the previous Government also put up taxes, but we started to bring them down, because higher tax leads to lower growth. Indeed, the Office for Budget Responsibility said that yesterday’s £40 billion of tax rises would lead to lower pay, lower living standards, higher prices and more expensive mortgages. Without remorse and without hesitation, a triumphalist Government have ripped up the pre-election promises that they made in the biggest ever assault on our economic competitiveness since the 1970s.
Let us look at the promises cast aside so casually. The Chancellor said that she would not change the debt target, because she was “not going to fiddle the figures or make something different to get better results”. Yesterday, she did exactly that. In May she said that Labour policy
“will be fully costed and fully funded. No ifs, no ands, no buts”—
and no additional tax rises. A total of 30 times this year, she promised not to do exactly what she did yesterday. She even said that she wanted to bring the burden of tax down. Ordinary families, small businesses and working people believed her. Yesterday, they were betrayed.
It went further. When we said in the election that taxes would go up by £2,000 per household over four years, the Leader of the Opposition at the time accused the then Prime Minister of a deliberate lie. Three months on, they will go up not by £2,000 over four years, but by £2,000 every year. Paul Johnson called it a
“straightforward breach of a manifesto commitment”.
The Institute for Fiscal Studies has today said:
“The continued pretence that these changes will not affect working people risks further undermining trust.”
The OBR said that 76% of the impact of the national insurance rise would pass through to lower wages.
And because the Government planned this all along, we now know why they rushed so fast to concoct the fiction of a black hole—something that was not corroborated by the OBR yesterday. It was cover not just to raise national insurance, but to impose countless other tax rises on working people: capital gains tax up; energy taxes up; stamp duty up; and taxes on family farms up—something we will oppose, for the sake of farmers up and down the country.
Working people whose wages the Chancellor promised to protect will see them go down; businesses whose profits fund new investment will see them raided; markets to which she promised stability are absorbing the biggest tax-and-spend Budget in a generation; and all of us on the outside are left wondering which is worse, the damage to the economy or the damage to trust.
Jim Shannon (Strangford) (DUP)
There is not one person on the Opposition Benches who is not concerned about the inheritance tax changes. If I am honest, I do not think there is one Member on the Government Benches who represents a farming community and is not also worried. The measure has been universally condemned by all the farmers I have spoken to, and I live in a farming community. The National Farmers Union, the Ulster Farmers Union and others are up in arms about this inheritance tax. The sum of £1 million draws everybody into that scheme, and because of that, we must vote against it. I say to those on the Government Benches: guys, you have got it wrong, and this time you will be condemned. When it comes to election time, the people who you have hurt will remember.
Madam Deputy Speaker (Ms Nusrat Ghani)
Please stop using “you”, Mr Shannon.
Jeremy Hunt
I thank my hon. Friend—I say “my hon. Friend” because he is a great friend to us—for what he has said and I could not agree with him more. When we talk about stability, anybody who has run a business knows that the most stable businesses in the country are family businesses that are passed from generation to generation. This is not just about farms, but about any small businesses that are passed down through the generations. This is a hammer blow to their plans to invest for the future.
I wish to move on, because the main argument that the Government make—I am sure that we will hear this from the Chancellor of the Duchy of Lancaster—is that all this is necessary to improve public services. We on the Conservative Benches want to say, right up front, that it is absolutely right to prioritise public services. As Health Secretary, I negotiated an increase in the NHS budget of £20 billion a year, and, in this year’s Budget, I increased it by a further £6 billion. Many times I said as Chancellor that I wanted to avoid austerity cuts to public services. We would have done so this time, not by using tax rises that harm working families and businesses, but by taking difficult decisions on welfare reform and productivity—decisions that were ducked yesterday.
Sir Geoffrey Clifton-Brown (North Cotswolds) (Con)
May I suggest that the difference between my right hon. Friend’s Budget and this one is that, although he gave considerable extra increases to the national health service, he coupled them with a need to increase productivity? There was no word in yesterday’s Budget about increasing productivity in the health service.
Jeremy Hunt
I thank my hon. Friend for his intervention, but there was an even more basic difference between our Budget earlier this year and this one: as a result of measures in our Budget, the growth rate went up, whereas as a result of measures in Labour’s Budget, the growth rate went down.
Reducing the number of working-age people claiming health-related benefits back to pre-pandemic levels would save £34 billion a year. It would bring more people into the workforce and improve the wellbeing of the individuals concerned, but welfare reform was dropped from the King’s Speech, and yesterday’s Budget saw the welfare bill rise by an average of £13 billion a year. According to the OBR, increasing public sector productivity—another area that we did not hear much about—to pre-pandemic levels would raise £20 billion a year. We heard some warm words about that, but delivering it requires difficult negotiations with the unions.
That was too difficult for the Government, who cancelled plans to reduce the civil service to pre-pandemic levels, increased the salaries of train drivers by £10,000, and gave junior doctors a 22% pay rise—all without asking for a single productivity improvement in return. It was no strings for the unions, but no help for 2.5 million pensioners in poverty. The Government should be ashamed. Picking the pockets of businesses, which do not vote, is the easy path, but when it damages economic growth, the result is less money for the NHS, less money for schools and less money for the armed forces, which is why, in the end, Labour Governments always run out of money.
Graeme Downie (Dunfermline and Dollar) (Lab)
The right hon. Member was keen to quote the IFS earlier. Does he also agree with the IFS that
“it was not credible for Jeremy Hunt to claim that planned departmental spending limits would hold”
and there was
“no world in which 2 per cent rises would have happened and been sustained”?
Jeremy Hunt
I always listen to the IFS, and indeed to the Resolution Foundation, very carefully. I think that the IFS was right—[Interruption.] Let me answer the point, if I may. The IFS was right to say that it would be very challenging to hold to 1% spending assumptions, but in the Budget earlier this year I explained exactly how we would do that. I asked the NHS, “How are we going to improve efficiency so that we can live within tight spending limits?” The NHS said, “We need to overhaul the IT systems.” We gave the NHS £3.5 billion to do so, and in return it was able to deliver 2% productivity savings.
Jeremy Hunt
The hon. Member shakes his head, but yesterday the Chancellor said that she was going to roll that out to the whole of the public sector. I think that it is possible to do so; my concern is that doing so involves difficult decisions, and the track record of this Government is that when those decisions involve a conversation with the unions, they run a mile.
The final spurious claim from the Chancellor was that yesterday’s draconian measures were necessary because she had received the worst economic inheritance since world war two. Not a single independent economist supports that claim, and it is not hard to see why. Inflation is at 1.7%, around half what it was in 2010. Unemployment is at 4%, nearly half the 2010 level. If the public finances were in the same state today that they were in back in 2010, the deficit would now be £160 billion higher, which is the entire budget of the NHS. Instead, we left behind a deficit that had been halved, and was lower than that of France, Germany, Italy, Japan and the United States.
Luke Murphy (Basingstoke) (Lab)
If the last Government’s attempts at levering investment into the economy were so successful, why in 2022 was the UK 28th out of 31 OECD countries for business investment? The truth is that the last Government failed to reform the economy to lever in that investment to pay for the growth in our public services.
Jeremy Hunt
Let me tell the hon. Gentleman exactly what happened to business investment under the last Government. Since 2010, we attracted more foreign greenfield direct investment than not just anywhere in Europe, but anywhere in the world apart from the United States and China. That was foreigners voting with their dollars as to where they wanted to invest in the world, and they said, “Outside the United States and China, there is nowhere that we want to invest more than the United Kingdom.” Compare that with what the OBR said about yesterday’s Budget: business investment will not just fall, but fall by even more than the amount of the extra investment caused by public investment going up.
Luke Murphy
Does the right hon. Gentleman deny that business investment was the lowest in the G7 under his Government? If the Government were so successful, does he also deny that in that respect the UK was 28th out of the 31 OECD countries?
Jeremy Hunt
The hon. Gentleman is absolutely right that for decades we have had lower business investment in the UK economy than our peers. That was why, in the autumn statement a year ago, I introduced full expensing, which was the big business tax request, to make it more attractive to invest in new factories, capital, machinery, here than anywhere else in the OECD, and that was widely welcomed.
The other part of our legacy—the so-called worst inheritance since the second world war—was the fastest-growing economy in the G7, and one that the IMF said would grow faster than Italy, France, Germany or Japan over the next five years. The Government probably thought it was a clever political trick to rubbish their inheritance, but trash-talking the British economy has real- world consequences. We see the sharpest decline in consumer confidence since the beginning of the pandemic. Lloyds bank, KPMG and the Institute of Directors all saying that business confidence has plummeted. The former chief economist of the Bank of England says that the Chancellor has generated “fear and foreboding” and uncertainty among consumers, among business, and among investors in UK plc. And we see higher bond yields, leading to higher debt interest payments. Careless talk costs jobs and money, and this Government have been careless.
What every economist does, however, agree is that if we are to increase our living standards to German or American levels we need higher productivity, and that means more investment. But according to the OBR, yesterday’s measures will mean lower investment overall. Higher public investment is more than offset by lower business investment because of huge tax increases. Lloyds bank said that the increase in employers’ national insurance is a “handbrake” on investment. UKHospitality said it is a “tax on jobs” and
“makes it harder to employ people and to take a risk on recruitment and expansion.”
The Federation of Small Businesses says it will shrink small business employment, and the Institute of Directors has likened it to the poll tax.
Max Wilkinson (Cheltenham) (LD)
The shadow Chancellor mentioned hospitality. Overnight I had discussions with the local hospitality industry in Cheltenham. They had two pieces of feedback. The first was that they were very worried about some of yesterday’s announcements on reliefs and national insurance, and the second was that the Budget was not as bad as the Liz Truss Budget. I wonder whether he preferred yesterday’s Budget or the Liz Truss one.
Jeremy Hunt
I actually liked neither. I was the person who reversed the decisions made in the mini-Budget, but I will say this: at least Liz Truss wanted to grow the economy and said so explicitly. What we had yesterday is a Budget where the Government’s official forecaster said the impact would be lower growth, fewer jobs and lower investment.
We were promised the most pro-growth Government in history, but in just 17 weeks we have ended up with German taxes and French labour laws, higher taxes, higher mortgages, less investment, lower wages, lower living standards and lower growth, less money for public services on which we all depend, and less money in the pockets of working people—same old Labour, same old spin. It didn’t end well before and it won’t end well this time, either.
The Chancellor of the Duchy of Lancaster (Pat McFadden)
The right hon. Member for Godalming and Ash (Jeremy Hunt) has confirmed that this is his last appearance at the Dispatch Box, at least in his current guise, so I begin by thanking him for his service to government and to the country. He and I have something in common: we both inherited an awful mess from our predecessors. He was appointed Chancellor of the Exchequer as the repair man—the adult in the room—and was meant to sort things out after the disaster left by his predecessor. He was supposed to be the antidote to Liz Truss, but in recent days, he has become an ally of Liz Truss, united with her in attacking the OBR. He was brought in to praise the economic institutions, but he has ended up condemning them. However, he cannot hide from the verdict: the OBR has confirmed that the previous Government hid billions of pounds of pressures that they knew about, and the Treasury has given us a full picture of precisely what those pressures added up to.
Alicia Kearns (Rutland and Stamford) (Con)
The right hon. Gentleman states that a full breakdown was provided by the Treasury yesterday, but that is just not true. In fact, the chair of the OBR said on “Sky News” last night:
“Nothing in our review was a legitimisation of that £22 billion”
claim. That was him making it very clear that the OBR does not support and has not endorsed the claim in the Treasury report. Will the right hon. Gentleman now confirm, with a simple yes or no, that the OBR does not legitimise that claim?
Pat McFadden
Let me read what the OBR has said:
“The Treasury did not share information with the OBR about the large pressures on RDEL, about the unusual extent of commitments against the reserve… had this information been made available, a materially different judgement…would have been reached.”
Jeremy Hunt
Perhaps the right hon. Gentleman ought to read the next paragraph, in which the OBR says that it is “not possible to judge” how much those pressures would have been offset by savings elsewhere, which demonstrates that they were within the range of the normal cost reductions that a Chief Secretary to the Treasury would make ahead of any Budget.
Pat McFadden
The right hon. Gentleman suggests that things got better after February. They did not; they got worse, and that is how we got to £22 billion. This is not just a verdict about what happened but an indictment of the Conservative party’s final period in office. The truth is that, under his watch, the Treasury had stopped doing the basic job of controlling expenditure.
Announcements were made with no money set aside, the asylum and hotel bill was funded by emptying the country’s reserves within the first few months of the financial year, hospital building programmes were announced without the necessary funds set aside to pay for them, a pay award sat on a Secretary of State’s desk while they looked the other way, and compensation schemes were announced without the full funds being set aside to pay for them. That was an irresponsible dereliction of duty that has led to us picking up the pieces and to the right hon. Gentleman attacking the independent watchdog that was set up by his own party. Even his predecessor, the former Member for Spelthorne, admitted this morning that Labour is clearing up the Tory mess. If Conservative Members are more out of touch with reality than the former Member for Spelthorne, let me tell them that that is not a good place to be.
The right hon. Gentleman referred to the IFS, which said this morning that the Chancellor
“is not wrong to stress that she got a hospital pass on the public finances.”
Pat McFadden
No, I am not giving way.
The Conservatives talk about their golden legacy, and we heard the former Chancellor read out some of his greatest hits. Who are they kidding? The last Parliament was the worst on record for living standards, with British families worse off than their French and German counterparts. His Government had the second lowest growth in the G7 since the pandemic and the highest inflation in the G7 since the pandemic. They left a prison system overflowing and just days away from collapse, and rather than take responsibility for it, they cut and ran and called an early election.
I have to give the previous Government credit: some things did grow on their watch, such as hospital waiting lists, housing waiting lists, shoplifting, insecure work and the decline of our high streets. That is their record, and it falls to us to fix it and start to rebuild Britain, so there is no point in coming to this Chamber and pretending that people are making it all up.
The former Chancellor talks about business. His party stuffed business—his colleague, the former Prime Minister, said “eff business”, and then the Conservatives carried out the policy. Under them, we had the lowest business investment in the G7. Why? Because of constant chaos in their Governments, meaning that business did not know who would be leading them from one year to the next; because they caved in to their Back Benchers and blocked anything substantial from being built; and because businesses could not hire the workers they needed with so many people on the sick.
This could have been a Budget where we just muddled through—patched up some mistakes made by the Conservative party and hoped something would turn up—but that is not good enough. We have had that time and again. In fact, we have had 14 years of it—long enough to show that that approach is not going to work. The country voted for change, and this was a Budget to deliver change. It is not a time for more of the same; it is a time to choose. We did not duck the challenge or look the other way; we confronted the challenge, because that is what the country needs. This is the moment when the country turns a corner and sets out a proper plan for the years to come.
We did make tax changes in this Budget, which is never an easy thing to do. That was because the first thing we had to do was fix the foundations and put the public finances on a sound footing. With this Budget, we say how we will pay for what we will do. The first fiscal rule announced by the Chancellor is to fund day-to-day spending from the revenue that we raise, a rule that the OBR judges will be met two years early.
The IMF, to which the right hon. Member for Godalming and Ash referred, has today welcomed
“the Budget’s focus on boosting growth through a needed increase in public investment while addressing urgent pressures on public services”,
so let me turn to those public services. Secondly, there will be more NHS appointments to get waiting lists and times down; more technology to improve productivity; more prevention to stop people falling ill in the first place; new surgical hubs and diagnostic centres; a hospital-building programme brought from fiction to reality, this time founded on more than hot air; new schools to help children learn; more teachers to bring out the best in every child; and more investment in further education to give people the skills they need. It is investment and reform together—not just more money into the same system, but changing the system for a new age, with productivity targets alongside the extra money.
The right hon. Gentleman also talked about welfare spending, but the Conservatives had plenty of time to sort out welfare spending. Their legacy is almost 3 million people out of work because of long-term sickness. The truth is that they did not have a plan, but they do have a record, and again, it falls to us to sort that record out. We will take tough action on welfare fraud, and we will not give up on those who can work and make a contribution, because we understand that when the sick can get treated and when every child of every background has the best chance to learn, that is not just good for them and their families but for the economy as a whole.
Thirdly, this Budget put in place help with the cost of living for millions: a rising minimum wage with extra help for young workers, fuel duty frozen, carers allowed to earn more, the triple lock protected, the household support fund extended to help the poorest, and lower deductions from universal credit. Those are the choices that we made—real help for millions of people.
Finally, we reject the path of decline for investment that the Conservatives were planning. They wanted to cut public investment by a third. That was the right hon. Gentleman’s plan—to once again cut back on the house building, schools, hospitals and transport projects that the country needs. That is a path of decline that has been chosen too often in the past. The Tories do not yet have a leader, and the only policy to come out of their leadership contest so far is to cut maternity pay, but on the question of investment, they do have a position. Budgets are about choices, and yesterday they chose: the former Prime Minister, the right hon. Member for Richmond and Northallerton (Rishi Sunak) railed against our new investment rule, and more Conservative Members have spoken out since. What does that mean their position is? New money for housing—opposed. New money for schools—opposed. New money for potholes—opposed. New money for research—opposed. Investment in the future itself—opposed by the Conservative party. I understand the perils of opposition. We have had long enough experience of it, but if the Conservatives really want to run around the country opposing every new investment over the coming four or five years, be our guests.
Yes, this Budget was a big choice, and in opposing the investments within it, the Conservatives have made a big choice too. We will remind them of it, project after project, year after year. They wanted to lock us into the world that voters rejected just four short months ago.
Jake Richards (Rother Valley) (Lab)
My right hon. Friend has mentioned the policies, or lack thereof, that have come out of the Tory leadership contest. Unfortunately, I spent an evening watching the GB News debate between the Tory leadership contenders, and the one policy that one of the contenders said she would put in place on day one as Prime Minister was a tax cut for private schools. That is the priority of the modern Conservative party: opposing the investment in this Budget while offering tax cuts for the very richest.
Pat McFadden
I thank my hon. Friend for his intervention, although I have to say that his television viewing choices are a little bit different from mine. With regard to education, we have always said that we support aspiration for all children in every type of school.
Our growth plans are about far more than this Budget. They are about planning reform to get Britain building, a challenge that was ducked by the Conservative party year after year. They are about more clean energy for energy security. They are about private investment, with £63 billion of investment announced at our investment summit just a few weeks ago—investors are finally appreciating the stability that has come to the country after the chaos wrought by the Conservative party—and they are about reform of business rates to support our neglected high streets.
This is a big moment for the country. In July, the public did not vote to carry on as we are—they did not vote to continue with the plans of the Conservative party. They voted for change, and this is a Budget for change: not just change in policy, but facing up to the reality of what the Conservative party left behind. It is a Budget to stabilise the public finances, to help people with the cost of living, to begin to turn our public services around, and to start to rebuild Britain. It is a choice between investment and decline—a turning of the page after 14 years. It is a Budget that launches a new chapter for Britain, and we will be proud to vote for it in the Lobby next week.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Liberal Democrat spokesperson.
Sarah Olney (Richmond Park) (LD)
It is a pleasure to speak in this debate in response to the first ever Budget delivered by a female Chancellor. This Government have inherited a mess, and we know that the cause of that mess is the legacy of reckless economic mismanagement left behind by the previous Government.
The Liberal Democrats are glad that the Chancellor has listened to our calls for investment and support for the NHS to start repairing all the damage done to local health services by the Conservatives. We will continue to stand up for our constituents, and press the Government to act with urgency and to provide the support to public services that is so desperately needed. The NHS has been stretched to its limits after years of Conservative neglect, and the Liberal Democrats have been tirelessly campaigning for an emergency health and social care budget to get it back on its feet. We therefore welcome yesterday’s announcements. However, we need to see outcomes, including people being able to see a GP within 7 days, cancer treatment targets being met and people having a dentist appointment when they need one. We will hold the Government to account for delivering on these issues.
Millions of people have a long-term health condition that makes them too ill to work and millions more are stuck on NHS waiting lists. Many others cannot leave hospital because there is no care provision. The Liberal Democrats have always understood that we cannot have a thriving economy and strong public finances until we fix the crisis in health and social care, so we welcome some of the steps that the Government announced in this direction yesterday. The Liberal Democrats have campaigned on improving support for carers. While I am glad that the Government’s review will look again at getting rid of the cliff edge for carer’s allowance and the earnings limit, I hope that the Chancellor and her colleagues will consider a broader review to give family carers the support they deserve. We will hold them to account for ensuring that this new funding is delivered for patients and carers, including through extra GP and hospital appointments.
I also welcome the promise made by the Chancellor yesterday of full compensation for the victims of both the contaminated blood scandal and the Horizon scandal, and I hope that that can be delivered quickly to bring the victims closer to the justice they deserve. The previous Conservative Government yet again showed themselves to be totally shameless with the revelation that, while they promised to compensate the victims of the hideous infected blood scandal, they entirely neglected to set aside the funds to actually pay for them. It is essential that there is transparency in Government spending, and we are glad that the Government are strengthening the powers of independent bodies, such as the OBR, to ensure that taxpayers receive value for money.
We were glad that, during the Chancellor’s Budget, she committed to investing to modernise the systems of His Majesty’s Revenue and Customs using the very best technology, and we are glad that she has committed to recruiting additional HMRC compliance and debt staff. Investing in HMRC reduces the risk to businesses and individuals in navigating the bureaucratic and often complex processes associated with this service. I have heard from businesses in my constituency of the risks they face by not being able to directly speak to someone at HMRC. Strengthening these services with greater resources should benefit not only businesses, but all those required to complete self-assessment. Greater resources will protect citizens from unfair charges, including the loan charge, and allow people to access clear advice and support, making our tax system more efficient.
While I am pleased to support many of the announcements made by the Chancellor yesterday, I am concerned by her decision to raise employer’s national insurance contributions. I fear that this will be deeply damaging to many already struggling small businesses and care providers, so we urge the Government to at least consider exempting social care from the employer’s national insurance tax rise. The Chancellor has provided extra funding for the NHS and other public sector organisations to cover the cost of the tax rise. However, the vast majority of care providers are in the private sector, so will not benefit from this help.
Small businesses are the beating heart of our local economies. For years under the last Conservative Administration, these businesses have struggled, having to carry the burden of rising energy prices, interest rates and the red tape of the Conservative’s Brexit deal. I urge the Government to go further than the announcements made yesterday on business rates by fundamentally overhauling the broken business rates system, which is destroying our high streets and town centres.
The Liberal Democrats believe that there are much fairer ways of raising revenue. Our manifesto set out our calls for a fairer tax system, including raising money by reversing the Conservatives’ tax cuts for the big banks, or by asking the social media giants to pay a bit more. We do not believe that it is right or fair for the Government to instead increase the burden on small and medium-sized businesses, which are the engines of our economy and which are already struggling under the unfair tax system set out by the last Conservative Government.
We welcome yesterday’s news of increased funding for schools. Supporting children and young people must be central to any Government policy. After schools were left to crumble by the last Government, we are glad to see an increased investment in education. However, the Liberal Democrats oppose ending the VAT exemption for independent schools. We do not support taxing education, and we believe parents should have a choice about how they educate their children.
We were disappointed that at no point in the Chancellor’s Budget was there a mention of Europe. The Government cannot indefinitely ignore the damage that the Conservative’s shambolic Brexit deal continues to have on our economy.
Chris Vince (Harlow) (Lab/Co-op)
Do you not think the fact that you are supporting all the spending commitments but none of the tax rises is the reason that the Lib Dems will never be in government—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Sit down, please. The hon. Gentleman said “you” twice.
Madam Deputy Speaker
I am not going to allow the hon. Gentleman to continue.
Sarah Olney
I am glad the hon. Gentleman has raised that point. I refer him to our general election manifesto in which, as I have already said, we set out a range of tax-raising measures, including reversing the Conservatives’ tax cuts on big banks and taxing the social media giants. There are plenty of ways that the Government could have raised taxes more fairly than by placing additional burden on small businesses, which will be the engine of economic growth.
Brexit is another reason why our economy is not growing in the way it should. I urge the Government to acknowledge the seriousness of yesterday’s report from the OBR outlining the continual damage that Brexit red tape causes UK businesses, and the OBR finding that weak growth of trading, exacerbated by Brexit, will reduce the overall trade intensity of the UK economy by 15% in the long term. We understand that rebuilding our relationship with Europe is a gradual process. However, we are disappointed that the Government have ruled out joining the single market in the future, even when relationships improve. We urge them to consider the breadth of benefits that a strengthened trading relationship with Europe would bring. The Liberal Democrats want to forge a new partnership with our European neighbours —built on co-operation, not confrontation—and to move to a new comprehensive agreement.
Wendy Chamberlain (North East Fife) (LD)
Does my hon. Friend agree that, although the new Government say they want to reset their relationship with Europe, if the No. 1 thing on the European Union’s mind is a youth mobility scheme that the Government are ruling out, they are not going to get very far?
Sarah Olney
I am grateful to my hon. Friend for making that point, and she is absolutely right. The first thing we should be doing is negotiating a youth mobility scheme. We owe it to our young people, who are struggling more than most in the current economic environment.
The mismanagement of our economy by the outgoing Conservative Government has left deep challenges, and we understand that undoing that damage will not be easy. Nevertheless, it is not right for the consequences of these decisions and for this burden to be carried by some of the most vulnerable in our society. In July, I urged the Chancellor to remove the two-child limit on social security payments in her first Budget, and we are disappointed that this did not happen. No child should grow up without adequate food, a warm home or security for their future. Currently, 1.6 million children are affected by the two-child benefit cap. Parents subject to these limitations have less available income for childcare costs, and therefore experience barriers to employment. The Liberal Democrats believe that removing this cap is the most cost-effective way of immediately lifting children out of poverty and getting more parents back into the workforce.
I and my Liberal Democrat colleagues have also listened to our constituents and heard from countless pensioners who are worried about how they will afford their energy bills this winter. Since the cut to the winter fuel payments was announced, I have been inundated with expressions of local people’s disappointment at this decision. We will continue to urge the Government to give their full support to measures to boost the uptake of pension credit, and to ensure that all those eligible for pension credit claim both the benefit itself and the winter fuel payments.
For years, the previous Government failed to keep our communities safe from crime. It is vital that the new Government urgently restore the proper community policing that local people deserve. I ask the Government to clarify how and when the Chancellor will fund the thousands of new neighbourhood officers that her Government have promised. The Metropolitan Police Service has drawn on its financial reserves, slashed spending and sold off assets. During the election, our constituencies were promised more community police officers, but the Met has already made cuts and savings of over £1 billion, and next year it is facing a funding gap of over £450 million.
The Liberal Democrats are pleased to see the Chancellor’s goody bag of infrastructure projects, yet I personally was disappointed that this did not extend to funding for Hammersmith bridge. Some 22,000 vehicles a day used to cross the bridge, and those cars are now causing gridlocked traffic throughout my constituency in Mortlake, East Sheen and Barnes. It will cost £250 million to fix Hammersmith bridge, a sum no local authority can afford to pay, so I hope the Government will consider what more they can do to assist with the bridge’s reopening.
We all agree that we need economic growth and a stable economy after the chaos caused by the last Government. We know that this dire economic situation requires tough decisions. I welcome many of the steps that the Chancellor announced yesterday, but the Government must ensure that this does not come at the expense of the most vulnerable. I ask the Government to set out a timeline for the delivery of their proposals for investment, and I urge them to act with the urgency required to ensure that people can access the services they need when they need them. The cost of living crisis will not be solved by hitting families, pensioners, family farms and struggling small businesses, and our economy will not grow strongly again unless we repair our broken relationship with Europe.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Tom Collins to make his maiden speech.
Tom Collins (Worcester) (Lab)
As a boy, I remember walking to the shops with my mum and passing our nearest pub. Its name, the Lord Protector, confused me at the time, and I later learned that I share a home town with one Oliver Cromwell, so perhaps I should feel at home in this place. Having said that, I confess that the nearest pub to my first family home was The Cavalier. That is because I represent, and am proud to call my home, the faithful city of Worcester. Famous among historians as the site of both the first and final armed conflicts of the English civil war, Worcester is seen by many as the birthplace of modern parliamentary democracy, and that is fitting for our city.
Nestled on the great River Severn and in the shelter of the ancient Malvern hills, Worcester is one of England’s best kept secrets. Rooted in the beauty of nature, and richly decorated by a long and varied history, Worcester is a city deeply informed by the past, and with a record of deeply informing the future. Throughout its history, it has continuously expressed creativity, enterprise and innovation, and through the stirring music of Elgar, the creation of the world’s first combined hydroelectric power station, and even the establishment of the British Medical Association, the people of Worcester have been shaping the future of the world for millennia. We are home to Berrow’s Worcester Journal, the oldest newspaper still in print, and of course we manufacture Lea & Perrins’s famous Worcestershire sauce.
Having given a flavour of our city, I pay tribute to my immediate predecessor in this place, Robin Walker. Wherever I go, be it in this place or in my constituency, people consistently speak well of Robin, who won the affection of many with whom he worked. He worked with passion and dedication to improve education, and for that I offer my sincere thanks, and that of many others.
Worcester is home to many small and independent businesses that contribute hugely to our distinctive culture. During the election, I visited Spin the Black Circle and Script Haven, to give just two examples, as well as larger companies that are also expressing our nation’s creativity and shaping its future. I have been privileged to work with teams of talented people at Worcester Bosch, inventing the technologies of the future to grow and decarbonise our economy. If any Member would appreciate an in-depth discussion on heat pumps or hydrogen, I am always happy to indulge, being an enthusiastic engineer by background.
It is my belief that releasing innovation by investing in the talent, passion and skills of our emerging leaders, creators and problem solvers is key—key to our mission for growth, which is the guiding light of this Budget, and key to decarbonising our economy through industrial renewal, rebuilding our NHS, and putting people at the heart of all we do. Today, we are doing the vital work of fixing the foundations, because this kind of history-writing ambition is exactly what this place is for.
Worcester, and its incredible community of dedicated and talented people, is ready to deliver an exciting vision for the future, with our schools, colleges, and the Hive—one of the largest children’s libraries in the UK—ready to grow the next generation. The Budget’s commitment to taking the first steps towards the renewal of our schools, and especially its provision for children with special educational needs and disabilities, will be very welcome in Worcestershire.
With the University of Worcester continuing our heritage through teacher training, Worcester Business School and Three Counties Medical School, where prospective Prime Ministers can reliably capture a good selfie, as well as a wealth of innovative businesses and creatives in the digital space, including the Kiln, now hosting BetaDen, our community has the vision for people and nature to flourish. It is led by local people such as Worcester Environmental Group, our cathedral’s eco-group, and projects such as Bramblewood. It is a hub of culture, with arts at the Swan theatre, the Scala project and the Arches, and has a growing track record in disability sports, historic world-class cricket at New Road, our fantastic city football clubs, and hopefully soon the return of professional rugby with the Warriors. We are also very good in a tug of war!
Informed by the past and informing the future, Worcester has taught me that the key is to put people first, dream big, and unleash the creativity of diverse teams to shape the future. I came to politics with a passion to tackle climate change, see an end to modern slavery, and put leadership and vision back at the heart of politics. Let us remember that throughout the long history of this place, we, like Worcester, have never lingered on the past. As the Budget empowers us to do, let us continue always to fix our gaze with ambition, clarity, and focus on the creation of a bright and prosperous future.
Madam Deputy Speaker (Ms Nusrat Ghani)
Well done. Your family will be very proud indeed.
Sir Geoffrey Clifton-Brown (North Cotswolds) (Con)
May I start by paying a huge tribute to the hon. Member for Worcester (Tom Collins) for his maiden speech? It was clear, and he paid a sincere tribute to his predecessor, for whom we all have a great deal of affection. I am sure that the hon. Gentleman will have a great future in this place, and I look forward to hearing more speeches from him.
I agree with the final remark made by the Chancellor of the Duchy of Lancaster: this Budget marks a new chapter in the economic performance of this country, it is true, but I suspect that his predictions and mine, which I will make clear in my speech, are rather different. Starting on the plus side, there are measures in the Budget that we should welcome. My constituents who live in rural areas will be particularly pleased that fuel duty is to be frozen for another year, because often they have very little choice in how to get to work; they must do so by car. As I said in an intervention yesterday, I welcome certain Government contingencies, such as on the infected blood and Horizon scandals, that have now been funded. The onus is very much on the new Government to ensure that the people affected are paid as quickly as possible, even if only with an interim payment, so that they can start, at long last, to rebuild their life. Spending on special educational needs in Gloucestershire is a particular problem, so increased funding will be welcomed by parents whose children need help in that area.
The Public Accounts Committee held several sessions in the last Parliament on rebuilding schools and hospitals, particularly those affected by asbestos and reinforced autoclaved aerated concrete, commonly known as RAAC. We also looked at the huge project of restoration and renewal in this House. If the Government gets those investment projects under way, I will welcome it, but the PAC will scrutinise them to see how we can get value for money.
Contrary to what was said in leaks to the press before the Budget, the pensions industry appears to have been largely untouched in the Budget—perhaps Ministers will confirm that when they wind up the debate—and the trick now is to encourage large pension funds to invest in UK infrastructure. We did not hear anything about that in the Budget yesterday, but I know that the Government are thinking about it.
As predicted, we have a higher fiscal burden in this country under this Labour Government than ever in our history. The Office for Budget Responsibility could not find the fabled £22 billion black hole; instead, it found £9.5 billion associated with deteriorating circumstances, and that will happen to any Government in any fiscal year; £9.5 billion is equivalent to some of the public sector pay increases that we have seen, particular to highly paid train drivers.
The Chancellor has increased taxes and borrowing by a staggering £40 billion each—the largest increase in any Budget for 30 years. The Conservatives left office with low inflation, high employment, particularly for younger people, and the fastest growing economy in the G7. In stark contrast, in this Budget the Chancellor has put up national insurance, and we have inheritance tax up, capital gains tax up, mortgages up, stamp duty up, employment costs up, and business confidence down. The OBR has downgraded our GDP growth, based on the Budget, in every year of the next five-year forecast. That will affect everybody in this country; they will continue to see their living standards fall as a result.
There are lots of topics that I would like to cover, but I have chosen to cover those that will affect my constituents most adversely. First is national debt. UK national debt is £2.5 trillion, which is not far off 100% of GDP, and it is growing at a staggering rate of almost £16 million an hour, or £400 million a day. The interest for servicing the debt has now reached more than £100 billion, which is equivalent to the budget of the fifth largest Department, and it is completely dead money. As a result of the Budget, the debt will rise even further, by £50 billion, involving even higher servicing costs, which will result in higher taxes to pay for it in future years.
On a really important point, the OBR has forecast that national debt will triple over the next 50 years. That is completely unsustainable and should be a real wake-up call to the fact that we have to correct that dire structural problem. But the Budget has made the problem far worse. We cannot just change the rules to make the results sound better. Interest rates, including mortgages, will be higher for longer, and our children and grandchildren will now be saddled with the debt, which they will have to repay, for longer.
Alex Ballinger (Halesowen) (Lab)
I congratulate the hon. Gentleman on his recent appointment as Chair of the Public Accounts Committee. Would he like to apologise for the £22 billion black hole that the previous Government left behind, and the contribution that made to the awful debt situation that the Government inherited?
Sir Geoffrey Clifton-Brown
I thank the hon. Gentleman for his comments about my election, and the PAC looks forward to scrutinising all Government expenditure carefully. He has fallen into the same trap as everybody else. Unfortunately, the OBR said yesterday that it could not find the £22 billion black hole. I do not have the exact quote, but the Government were advised, “When in a black hole, stop digging.” I suggest gently to Labour Members that they stop digging, because it could not be found.
The Chancellor announced that she expects national insurance contributions to rise by a staggering £25 billion, although she promised in the election that they would not. During the election, she said that the measures would not be a tax on working people; clearly she believes that entrepreneurs, who spend their time, energy and talent forming new business, are different. They will be heavily taxed, and changing the employment rules will make it more difficult to employ extra people. A 15% national insurance tax and a savage cut to the threshold, down from £9,100 to £5,000, will harm any business in my constituency employing more than four people. It could be the difference between a business growing and providing more jobs and a business not surviving.
We must all remember that the private sector, and individuals who work hard and put their livelihoods on the line, take financial risks to boost productivity and provide the growth the country needs, and they must be nurtured if they are to succeed. Small businesses account for more than 90% of all businesses.
Graeme Downie (Dunfermline and Dollar) (Lab)
Will the hon. Gentleman give way?
Graeme Downie
I ran a small business for at least 10 years. Does the hon. Gentleman welcome the increase in the Budget to the allowance on national insurance from £5,000 to £10,500, which will protect small businesses and help them grow?
Sir Geoffrey Clifton-Brown
I have run a business for a much longer time than that. There are many measures in the Budget that will be very deleterious, especially for the smallest businesses, and we will have to wait and see how they turn out.
The Budget will have serious implications for farmers and rural communities in my constituency. I refer to my entry in the Register of Members’ Financial Interests, as a farmer. I am incredibly disappointed that from 2026, agricultural property relief and business property relief will apply only to the first £1 million of assets. That will worry many in my farming community and those in many other constituencies. It will result in fewer farms to rent.
Equally damaging will be the cap on the amount that can be transferred to spouses for inheritance tax purposes. The purpose of that tax relief was to ensure that working farms that provide our food will not have to be split up after the death of a family member. Very few farms are valued under £1 million—basically only those of less than 100 acres are—and the rest will face a 20% tax. That will lead to the loss of jobs and livelihoods in the North Cotswolds and elsewhere. It will change the fabric of our countryside permanently. The structure and productivity of agriculture will change as more and more farms are split up and sold off as a result of this measure.
Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)
I accept that the hon. Gentleman has great experience in farming, but did he read the analysis by Professor Andy Summers of the London School of Economics, which shows that the £1 million relief is on top of the £1 million couples allowance? The benchmark is really £200 million farms, and the average estate value is lower, so only about 200 estates will be affected a year. In this case, only a small number of UK farmers will be affected, and it is not the armageddon for farms that the Conservatives are claiming.
Sir Geoffrey Clifton-Brown
I suggest gently to the hon. Gentleman that, whatever the number, if the change causes damage to the farming sector and the productivity of food production, it is not helpful, and nor does it raise much money. What we surely want is measures in the Budget and elsewhere to boost the productivity of our agricultural sector so that we can produce more of the food we eat ourselves, rather than importing it from the rest of the world. I encourage the Chancellor to release any impact assessment she has done on this measure. I hope that she will reconsider this proposal, although I doubt she will.
I now turn to a topic that I have mentioned many times, and one that I will continue to raise with the Treasury. The Chancellor has talked about the difficult decisions that she has had to make on tax and spending to promote growth. May I suggest one specific policy area, tax-free shopping, which has the potential to increase growth considerably? Since we left the EU, British people have been able to shop tax-free in European states. However, we have not given the same advantage to wealthy visitors visiting the UK to spend their money here and benefit our economy. That disincentive to visit the UK will be worse if visa costs are increased. I have talked to some of the bigger businesses involved in this area, and they are seeing that instead of visiting the UK people are going to Paris, Madrid or Milan to do their duty-free shopping. We are losing out as a result.
That whole new market, unique to the UK, is worth an estimated £10 billion annually in foreign spending and would generate more than £3 billion for the Exchequer, based on an Oxford economist’s report that said that for every £1 spent by visitors, 37p was generated for the Exchequer. The only thing stopping Ministers in the last Government looking again at this issue was the Treasury’s 2020 forecasts, which unjustifiably—in my opinion—predicted little or no impact on EU visitor numbers or spending levels. That led to the wrong conclusion that there would be costs to the Exchequer, even without all the other added benefits I have mentioned for hospitality, airports and luxury goods manufacturers, which would help the economy. All the data on actual spending supplied by real businesses proves the opposite.
My only ask of the Chancellor today is that she takes the cost-free decision to review the 2020 impact forecasts in the light of overwhelming real data and this time, unlike the last, ask the OBR to scrutinise the Treasury’s forecast impact of extending the scheme to EU visitors. I would welcome the opportunity to discuss this with Ministers, and I could bring experts with me to help the discussion.
As the new Chairman of the Public Accounts Committee, I remind Treasury Ministers of the report produced in the last Parliament called “Lessons learned: a planning and spending framework that enables long-term value for money”, about how the Treasury should focus on getting the best value for every £1 of taxpayers’ money spent. The PAC will scrutinise the whole of the Government’s expenditure and help them to get better value for money.
Madam Deputy Speaker (Ms Nusrat Ghani)
We have another maiden speech, from Margaret Mullane.
Margaret Mullane (Dagenham and Rainham) (Lab)
Thank you, Madam Deputy Speaker, for allowing me to contribute to this debate with my maiden speech. It is the honour of my life to be standing here, in this historic place, at the heart of democracy, representing the communities of Dagenham and Rainham, the place where I was born and raised.
I was well and truly made in Dagenham, and I am also the first woman to represent the seat since the boundaries were redrawn in 2010, when the old seat of Dagenham inherited the communities of Rainham, South Hornchurch, Elm Park and now Beam Park. I am proud to join the long list of political women from Dagenham, such as the Ford machinists whose battle paved the way for the Equal Pay Act in the ’70s, and now our very own Holly Ridley, Labour’s new general secretary.
I must take this opportunity to pay tribute to the inexhaustible work of my predecessor, Jon Cruddas, who always put the needs of local people first and was, I know, a very well-respected Member of this House for his very thoughtful contributions. His presence will be missed by honourable colleagues in Westminster and by the people of Dagenham and Rainham, not least for his community-led approach to parliamentary politics. He always brought people with him, displaying integrity and compassion, and I have committed to continuing in that vein.
When people think of Dagenham and Rainham, they think of industry and the era of great British manufacturing —the Ford factory, Sanofi-Aventis and May & Baker, which created one of the first antibiotics, saving many thousands of lives during world war two, including that of Sir Winston Churchill when he suffered with pneumonia. People also think of council housing. The Becontree estate, one of the most ambitious social housing projects in the world, built during the interwar period, marked its 100th anniversary in 2021 and is still a source of great pride. People also think of working-class solidarity: the communities that were forged on the factory floor, in the clubs and at the docks; and the indomitable spirit of the women machinists whose famous fight paved the way for the Equal Pay Act 1970 and for a strong trade union voice in our area.
Dagenham and Rainham has a rich past, and it is now my job to ensure that it has a bright future, full of opportunity and promise, built on the back of a new deal for working people. It has not always been politics for me; I have worked in insurance and in a call centre, and was a barmaid at the Dagenham Trades Hall.
I know how precarious work can be in areas such as Dagenham and Rainham, and it was the miners’ strike that drew me into politics. Seeing secure jobs stolen away, the injustice of Orgreave and the heart being ripped out of working-class communities by decisions made in Westminster, I knew then that I wanted to be a voice for working-class people. That is why I welcome the Government’s commitment to making the Hillsborough law a reality, creating a level playing field for people in places such as Dagenham and Rainham when tragedies sadly happen—like in 2015, when four young men were murdered by a serial killer. The Independent Office for Police Conduct found that mistakes were made during the investigation, and nearly a decade later I continue to work with the family of Jack Taylor, seeking the justice they deserve.
It is not only justice that working-class communities such as Dagenham and Rainham seek; they want more police on our streets to tackle the scourge of knife crime, particularly around transport hubs such as Dagenham Heathway, Elm Park and Rainham. We want thriving town centres, an NHS fit for the future—one where you can get a GP appointment—jobs you can raise a family on, council housing, infrastructure, good public services we can all rely on and representatives who serve with integrity.
The devastating fire at the Spectrum building in my constituency in the early hours of Monday 26 August will not have escaped the attention of the House. That has yet again brought to the fore the safety of residents in high-rise blocks across the country. Thankfully, a combination of brave residents and the rapid response from the London Fire Brigade meant that there was no loss of life on this occasion. I want to take a moment to thank our emergency services for their amazing work and our community in Dagenham for their overwhelming response to this tragedy. Local businesses and residents rallied around to help families who had lost literally everything. That is who we are in Dagenham and Rainham, and I could not be prouder as their representative in this House.
There is a long way to go before we have a level playing field, but in the meantime I will dedicate every moment I spend in this House to raising living standards and attracting opportunities for my constituents. The work has already begun. In a matter of months London’s biggest film studio will be complete, bringing skilled work in the creative industries to a new generation of young people, making hope possible. That has only been made possible under the local stewardship of Labour, guided by Jon Cruddas, who brokered the agreement when Sanofi-Aventis vacated the site, and Barking and Dagenham council, which secured the deal with Hackman Capital Partners to develop it.
As with all things, there is good news and bad news, and there are still a lot of battles that need to be fought. There is a patch of empty land at Marsh Way where c2c trains should be taking customers from their new neighbourhood on the Beam Park estate to Fenchurch Street in 20 minutes, as promised by developers. I am determined to make sure that promise is made good. Since discovering that this crucial infrastructure has been derailed, it is Labour representatives who have been fighting for a green light to get it delivered.
I have always been a champion of council housing at traditional social rents, and I will continue to do that in Parliament. That is why I welcome the Government’s commitment to build a new generation of social and affordable homes. I also welcome the commitment to put in the essential services that communities desperately need. I will always beat the drum of infrastructure. As we build—there is a lot of development planned for Dagenham and Rainham—we must ensure not only that the homes are affordable, but that there are schools, GPs and dentists, transport options, leisure facilities, green spaces and the amenities needed to thrive.
There are many new challenges in Dagenham and Rainham, but there are also historical challenges that need resolution. The ongoing fires at the illegal landfill on Launders Lane in Rainham are not only a scandal but a public health risk, and I will be fighting tooth and nail to extinguish them once and for all. The health of my constituents is paramount. That is why I am in regular contact with the chief executive of the Barking, Havering and Redbridge university hospitals NHS trust, offering my support to get our local NHS back on its feet. Our local NHS has ambitious plans to expand the emergency department at Queen’s hospital, and I will be doing everything in my power to make that a reality.
At the election, I promised that I would help local communities to shape the future of Dagenham and Rainham. From the Daggers boxing club to local faith groups, businesses, working men’s clubs, and amazing local charities such as Dagenham United and the Ship in Rainham, everyone plays a part in building a future for Dagenham and Rainham. That includes Barking and Dagenham and Havering councils, which is why I will be a constant voice asking for a revised funding formula for local authorities, so that they have the resources they need to transform lives.
I will finish as I started. It is the honour of my life to stand here representing my community and to be given the opportunity to serve. I am fiercely proud of Dagenham and Rainham and, building on the legacy of those who stood here before me, I will always be on hand to fight for the communities who call my constituency home. Thank you.
Madam Deputy Speaker (Ms Nusrat Ghani)
I do not doubt that the hon. Lady will be a strong advocate for her constituency.
Sir John Whittingdale (Maldon) (Con)
It is a pleasure to follow the hon. Member for Dagenham and Rainham (Margaret Mullane), who made an excellent speech. She spoke with knowledge and passion about her constituency and about the challenges that face the residents of Dagenham and Rainham. Hers is a constituency I know well, since I drive back to my own on the A13 every week. Sometimes, when it is closed, as happened last week, I find myself exploring even more of Dagenham and Rainham. I also congratulate the hon. Member for Worcester (Tom Collins), who also made a very good contribution. We look forward to hearing from both of them in the future.
I want to start by putting on record the thanks that I think are due to my right hon. Friend the Member for Godalming and Ash (Jeremy Hunt), the shadow Chancellor, and my right hon. Friend the Member for Richmond and Northallerton (Rishi Sunak), the former Prime Minister. One of the extraordinary things I have found in the Budget speech that we are debating is the complete failure to mention the two extraordinary challenges that the Government had to face: covid and the economic consequences of Putin’s invasion of Ukraine.
Those two events combined potentially threatened the survival of every business in this country and could have led to a catastrophic increase in the cost of living for ordinary people. It was only through the intervention of the then Government in providing support that we managed to keep the economy going and that those businesses and the jobs associated with them survived. I find the Chancellor’s failure even to mention that challenge when talking about the economic legacy extraordinary. It has left us with a legacy, but despite the level of borrowing that was necessary, the Government were bringing it down and had restored the economy. I think that when the history books are written, a lot of credit will be given to my right hon. Friends the shadow Chancellor and the former Prime Minister.
Mrs Sarah Russell (Congleton) (Lab)
Does the right hon. Member accept that the Conservative Government’s decisions to reduce gas storage and to fail to invest in the NHS over long periods made dealing with those crises considerably worse?
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Before the right hon. Member responds, interventions are a healthy part of debate, but the hon. Lady should draw the attention of the Member by speaking loudly in asking for an intervention.
Sir John Whittingdale
Every country in the world faced enormous challenges. The record of the Conservative Government in tackling those challenges bears comparison with any other country. That cannot be diminished. I will say a little bit more about the NHS in particular as I move forward with my remarks.
I saw that Alastair Campbell tweeted in defence of this particular Budget. He said:
“It was a very Labour Budget”.
I would certainly agree with that. It put up spending massively, borrowing massively and tax massively—to that extent, it was a very Labour Budget. In the first 30 minutes of the Chancellor’s speech yesterday she did not actually make any announcements; she simply tried to justify some of the measures she was going to introduce by talking about the fictitious black hole. The shadow Chancellor, my right hon. Friend the Member for Godalming and Ash, has already adequately exposed why that is a fiction, and the Office for Budget Responsibility was unable to find any evidence for the figures that she quoted.
Let us be clear: tax and spend is a matter of choice. It was the choice of this Government to break all the promises that they made at the last election. It was their choice to break their manifesto commitments not to increase national insurance contributions. They said that they would not increase tax on working people, but in many areas the measures that they have introduced will have a significant impact on working people.
The denial that there was a tax bombshell to come is extraordinary, given that they subsequently announced a £40 billion one, which will result in the tax burden in this country rising steadily to what will be the highest ever on record. Yet this is a Government who took office saying that their priority would be to fuel growth. I can say to the Minister that he cannot fuel growth by punishing the businesses that will be responsible for creating the jobs and wealth of the future. The Office for Budget Responsibility’s forecast following the Budget shows that growth is forecast to fall steadily.
I want to speak about one or two of the tax choices that have been made—they, too, are a matter of choice. It was up to the Chancellor to decide how to raise the extra revenue. Even before the Budget, we already heard of one extremely damaging, painful decision—the withdrawal of the winter fuel allowance—to save money by taking it away from pensioners across the country. I have received many emails expressing great disappointment that the Chancellor pressed ahead with that measure and did nothing yesterday to reduce its impact.
It is primarily businesses that will pay the price in this Budget. The increase in employers’ national insurance contributions is estimated to cost them £25 billion, which represents £615 more for every single employee of a business over the threshold. What is the result? If the cost of employing people increases, that can have only two consequences: lower wages and fewer jobs. Each of those will hit working people. On top of that, businesses will face an increase in the national minimum wage. That will hit the businesses that are already finding it hardest to survive. It will impact on the care sector and the hospitality sector—already under enormous pressure. The decision to increase the national minimum wage for young adults by 16% will make it even harder for those people to find jobs.
Just 10 days ago the Government heralded the investment summit, which was supposed to persuade international investors that this was a country they should want to invest in. Yet a week later, we have higher capital gains tax and higher stamp duty, and a war declared on non-doms. Instead of investment coming into this country, already we are seeing the flight of people living here—the entrepreneurs on whom our future success depends are leaving in droves.
Graeme Downie
The right hon. Member mentioned people fleeing the country. Could he point to at least three examples of anyone at the investment summit now saying that they will withdraw that money?
Sir John Whittingdale
The investment summit announced a lot of investment for which the Conservative Government were actually responsible. Let us wait and see. The Budget was yesterday. Businesses will have to look very carefully at their plans, but I do not expect them to do so in a mere few hours. I am happy to have this debate with the hon. Gentleman again in a few weeks’ time once we have seen the impact of the measures that have been announced.
There are two specific measures that I want to touch on because they have a particular impact on my constituents. One of them, which has been mentioned a number of times in this debate, is the removal of agricultural property relief. The Country Land and Business Association estimates that that will affect 70,000 businesses. Family farms in particular will feel the impact worse. It is hardly surprising that the president of the National Farmers’ Union has said:
“This Budget not only threatens family farms but will also make producing food more expensive… The shameless breaking of those promises on Agricultural Property Relief will snatch away much of the next generation’s ability to carry on producing British food, plan for the future and shepherd the environment.”
This is a measure that the Labour party said it would not introduce, but it has broken that promise and is now proposing to introduce it, with enormous damage not just to farmers but to food security and our environment.
The second measure that I would like to touch on—[Interruption.] Madam Deputy Speaker, I see you have acquired Speaker’s cough. I will heed your warning, but I want to mention VAT on private schools. In my constituency I have three small independent schools: Heathcote school in Danbury, Elm Green in Littleborough and Malden Court school. The parents who send their children there are not rich; they make huge sacrifices. In Essex we are very fortunate to have really good grammar schools. Those parents make that sacrifice to help their children hopefully get into the grammars, but they will not be able to continue if there is 20% increase in fees as a result of the imposition of VAT. They will withdraw their children and those schools will be threatened with closure. The consequence is that the children will need to be placed in state schools, which are already under huge pressure. My constituency is growing rapidly, and there is enormous pressure on schools. This will simply make it worse. This policy is simply vindictive and will do enormous damage.
Very quickly, I note that the Minister for Secondary Care, the hon. Member for Bristol South (Karin Smyth) has come back into the Chamber, and she would be disappointed if I did not say that I welcome the hospital building programme in the Budget and the announcement of new money. However, once again I reiterate that a hospital in my constituency is threatened with closure. We have been promised a new one for 30 years or more, under both my Government and the Government before that. She was good enough to see my right hon. Friend the Member for Witham (Priti Patel) and me the other day, so that we could make the case. If she does hold this money, I hope that she might be able to direct some of it to my constituency.
This Budget is one of the worst I have heard in all my time in this place. It will do enormous damage. I am grateful for this opportunity to put that on the record.
Jon Trickett (Normanton and Hemsworth) (Lab)
Thank you, Madam Deputy Speaker. I will try to be reasonably quick.
I pay tribute to the maiden speeches we have heard today, which were exceptional. In particular, I associate myself with the views of my hon. Friend the Member for Dagenham and Rainham (Margaret Mullane) when she said that she stands for working class life and communities, and will do everything she can for them. That is how I have seen my 28 years in this place, too.
I think I am probably the only person on the Labour Benches today who was here in 1997, so I want to say something to the Government and to all our Back Benchers. I was there when Labour came into office—I was elected in 1996, so I was here in ’97—and the same lack of humility shown then by the Conservative party, which had been thrashed by the electorate, is being shown today. There is the same short-term memory of the failures their Government had committed under John Major and the other Prime Minister before that, and the same lack of remorse. There is a lack of remorse for what we have now: food bank Britain, with millions of people in poverty. Not a word from those on the Conservative Benches. There are millions of people on NHS waiting lists. No remorse from the party opposite for that. There is no remorse for the fact that our economy has not been properly invested in throughout their whole period in office. This country was the lowest investor in the whole of the G7. There is no remorse for all the other failures either, and no sense of humility when the public told them that they had made a series of mistakes.
Jon Trickett
No, I am going to try to be quick. I am not going to take any interventions.
All those matters, and others too, require us to make a change in the direction of our economy. That is what this Budget has begun to do; we are turning the page.
One final reflection on ’97. When Labour introduced the minimum wage, one of the great reforms of the century, the Tories kept us in the Lobby night after night after night. We were proud to do it. The arguments they made then have a parallel with the arguments they are making about our Budget today—that there will be job losses, an impact on profitability, small firms will be in trouble and so on. Let me say this. Eventually, they accepted the minimum wage because it was the right thing to do. There were no job losses and there was no impact on profitability. So, I say to those on the Government Front Bench: continue in the direction you are travelling, but move faster and be even more radical. I recommend that they have a look at Spain, where a socialist Government are in place. They have—I think I am right in saying—the highest rate of growth in the G7. They introduced a 0.5% wealth tax on estates worth more than €3 million a year and they are getting high growth. That shows that a determined Government restructuring the economy, as we need to do, can deliver change and not damage a country’s economic success.
I represent 23 villages, all former mining communities that were treated brutally by the Tory party 40 years ago. It is a distant memory for many, but I remember every single moment of the strike. They destroyed the mining industry and have done nothing to replace it in the last 40 years, so we have widespread poverty, as there is in all post-industrial communities throughout our country. They perpetrated a hoax on those communities by saying that they would level up. The levelling-up fund was not directed to where poverty was. In any event, it was a competition in deprivation between one area and another. My communities got nothing, yet we are struggling desperately to achieve growth. Levelling up was a great slogan, but it was used as a trick to persuade people to vote Conservative in 2019. What happened? People have learnt their lesson.
Let me come on to one point that I am worried about and then on to a general point. On transport, the differences in the distribution of funding for transport are extraordinary. The previous Government—that lot—spent £418 per head on transport in Yorkshire. In London, it was £1,200. That is three times as much per head per year spent on transport in London than in Yorkshire, and that leaves us with problems. I represent 23 villages—rural communities in many ways, deprived communities, post-mining communities. To get from one community to another, bearing in mind over 20,000 people in our area do not have a car and the trains do not work very well—the train service has left us without adequate public transport by train—the only option is the bus. Buses often do not start until 8 o’clock, but people begin work at 7, or leave home at 7. I have met women walking from one village to another in the dark on unlit streets because the bus service has not yet started. That is a problem the Conservatives created.
I regret this Government’s decision to raise bus fares from £2 to £3. I do not suppose there is anybody in this whole Parliament who does not have access to a car, but there are many people across the country who do not have a car because wages are so low. People are walking in the dark at 7 o’clock in the morning to get to work from one village to another. And for those of us who do have a bus service, it is going up by 50%. It will be roughly £6 a day to get to and from work. That is £30 a week and £1,500 a year in bus fares to get to work and back. Clearly, that gives us a problem. In my constituency, there are villages that are only seven miles apart, yet the bus takes one hour and 19 minutes to get from the one you live in to the one where you work. That is completely unsatisfactory. If we are going to raise bus fares—that is the decision that has been made, which I regret—we need to reform the way buses operate so that they are accessible to communities. The Government have made some announcements in relation to that already, which is welcome.
My final point is on the lack of investment the Conservative party presided over for years. I heard the shadow Chancellor, the right hon. Member for Godalming and Ash (Jeremy Hunt) saying today, “Okay, there might have been a black hole in the public finances, but we were going to cover it with cuts.” That is effectively what he said. The cuts were always taking place to investment and they were going to cut more investment. If we measure my constituency by GDP per head—a controversial measure, but the one we are familiar with—that lack of investment means the average worker produces £29,000 per year of GDP. Wages are pegged to productivity, as we all know, so we have low wages—less than £30,000 a year. But listen to this. In Camden—we know it is a different economy in Camden—GDP per head is £174,000. The regional differences between output, capacity and productivity are all the result of that failure to invest.
The Budget sets out to invest, and to invest big and go for growth, but I will be pressing, for all the held-back, post-industrial communities up and down our country— not only the coalfields but in the midlands and elsewhere —for the investment we achieve and the growth we deliver to be more equitable than it has been under the Conservatives.
With those few thoughts, and an encouragement to be more radical and even more bold for the future—let us bear in mind ’97—I wish the Budget well.
Wendy Chamberlain (North East Fife) (LD)
One thing that we always feel after a Budget is a sense of relief, because we at least know that we are going to get some answers. It feels that when we are talking, campaigning and raising issues, we are always told to wait for the Budget. I was additionally relieved yesterday because my son managed to pass his driving test theory. [Hon. Members: “Hear, hear.”] Thank you.
I do not think the Government need any help in talking about the economic legacy left by the previous Government, but we do have to acknowledge that the funding structures put in place by the previous Government have created a legacy, as well as expectations. I want to talk about those that most directly impact North East Fife, starting with infrastructure funding.
I was pleased to hear the city deal announcement in relation to Argyll and Bute, given that I have an Argyllshire father, but I want to highlight the opportunities within existing city deals to add value and to make up some of the increased costs we have seen in recent years. The town of Newburgh in North East Fife has been cut off from the railway for almost 70 years. It has a line running through it that transports 38 trains a day and for the last 13 years there has been a campaign to rebuild a train station and reconnect it to the line. That makes sense from a number of perspectives: a train station takes cars off the road; it allows investment into the town; it can bring tourists to places such as the Lindores Abbey distillery; and it shortens journey times for those travelling beyond for NHS or other treatments. However, the only mention of railway infrastructure is in relation to the city region sustainable transport settlements, which are for England only. I acknowledge that transport is devolved, but there are ways in which the UK Government could look to work with the Scottish Government in order to help those communities where additional funding could make a difference.
The other element of transport infrastructure is Access for All, which is a UK scheme although the Scottish Government play a part in determining which stations receive support. I want to make an additional call for funding for Leuchars station, which serves St Andrews—although it is one of the best-known parts of my constituency, it does not have a station. It sometimes feels that we have fallen into the cracks between Westminster and Holyrood on that. On disability and on Access for All, we need to do more at all levels to ensure that we deliver the funding.
Returning to the impact of the different funds and schemes that were put in place post following our departure from the EU, and the need to replace EU structural funding, I want to touch on the community ownership fund and the shared prosperity fund. I and other Fife MPs—I see two of them in their places—recently met Fife council to talk about the future of the shared prosperity fund, which is due to end in March 2025. I am pleased by the commitment to continue it for another year, although we need to move away from year-to-year funding. I am sure we all meet third-sector organisations and others who talk about the uncertainty that short-term funding brings to the services that they provide. We also have to acknowledge that the Budget— the relevant passage is very short—will mean that Fife council, for example, will see a cut of about a third in shared prosperity funding, which has delivered programmes such as Kingdom Works, an employability service that has supported over 8,000 people. The Government said in the Budget that they want to reform funding, and I urge them to do so quickly so that we get certainty.
The Liberal Democrats have talked a lot about health and social care. Others have spoken about the fact that we need to focus on social care, because without fixing it, we will not fix the NHS. Again, the NHS is devolved in Scotland. I welcome the significant increase in funding for Scotland; it is now over to the SNP-led Scottish Government to deliver on that. I am pleased, too, that we will see support for public sector organisations in relation to the national insurance increase. However, there is no doubt that the NHS in Scotland is in a dire state. In Fife, there is no NHS dentist currently taking patients, and in my constituency we are seeing further cuts and closures in dental services.
The other thing that I want to say about what I think the Scottish Government should be doing relates to the business rates changes that the UK Government have brought forward. Let me quote one of my constituents, who was reported in today’s Courier newspaper saying about rates relief:
“We don’t have the cliff edge in Scotland. We’ve been paying full rates ever since last summer.”
I accept that that potentially is not covered by the block grant, but given that the whole UK is a tourism destination, the Scottish Government need to look at how they best support hospitality and tourism, because there is a real difference between what is happening in other parts of the UK and what is happening in Scotland.
I should declare an interest at this point: I am chair of the all-party parliamentary group for Scotch whisky and worked for Diageo for four years before my election. At the start of the debate, the Chancellor of the Duchy of Lancaster talked about choices. For me, the other aspect of choices is managing expectations. That is where the real issues that I have with the Budget come to the fore.
Mark Kent, the chief executive of the Scotch Whisky Association, said in The Scotsman today that the decision to increase rates on Scotch whisky
“not only flies in the face of the commitment to back the industry as a core element of the government’s ‘Brand Scotland’ concept, it also serves no economic purpose.”
The Conservatives’ 10.1% increase in alcohol duty was deeply damaging to the whisky industry. In the 12 months since it came into force, revenues from the tax have actually fallen by £298 million, so it is clearly not delivering increased revenue to the Treasury. What we saw from the Government yesterday will continue to hurt the industry, which is so important for Scotland. The Chancellor offered support to breweries through the cut in duty on draught products, but that will do nothing to support responsible drinking. Taxing based on strength of alcohol is not the right way to go about it; it is about alcohol being alcohol and how it is consumed. I might not represent the most whisky distilleries in Scotland by number, but I probably do by volume, with the Diageo distillery and bottling plant in Leven.
Returning to the point about promises and expectations, we come to farming and the issue of the inheritance tax changes. The National Farmers Union Scotland said on its blog today that it is pleased to see the roll-over of the agricultural funding, although that has gone into the Scottish Government’s block grant, so, again, it is over to the Scottish Government to ensure that they deliver for farmers. We need farmers for our food production and security, for our climate and nature recovery, which is more vital than ever, and for rural growth and support.
Dr Roz Savage (South Cotswolds) (LD)
The Budget is subtitled “Fixing the foundations” but I was saddened that it contained no mention of the most important foundation of everything in Britain: our natural world. Does she agree that more resources need to be dedicated to the restoration of nature and to supporting our farmers, both of which are crucial to food security?
Wendy Chamberlain
I absolutely agree. Whenever I have that discussion with farmers, they want to support climate and nature—they want to do the right thing—but they need support to do so.
As I say, the overall funding envelope for farmers is for the Scottish Government to deliver, and I am confident that my Scottish Liberal Democrat colleagues in Holyrood will be making the case for them to do so. In his intervention on the Chair of the Public Accounts Committee, the hon. Member for Leeds Central and Headingley (Alex Sobel) talked about how the number of farms affected will be small, but the issue is that the Government promised last year not to do anything in relation to agricultural property relief, yet that is what is happening. I am already being contacted by local farmers who fear that this will be the death of their and other families’ farms. It is important that we remember that it is not just about those farmers; it is also about the infrastructure and the wider communities that they support, such as vets and other facilities.
We should not forget tenant farmers, either, because they are some of our most vulnerable. I know that because I worked with some of them prior to the election in relation to the roll-out of universal credit. That system is not fit for purpose for farmers. The Work and Pensions Secretary is no longer in her place, but I will be coming back to her on that issue. We need to ensure that we provide that support.
Until very recently, I wore multiple hats, because I had far fewer colleagues. Now that I have more of them, I have given up my Department for Work and Pensions hat, but I welcome the changes to carer’s allowance. I would like some clarity about the carer support payment in Scotland, which is a devolved benefit that is currently being rolled out. I have not seen it in the notes that I have looked at so far, but perhaps it will become clear in the coming days whether that is included in the block grant that is coming to Scotland, or whether there will be additional consequentials.
To conclude, there are things in this Budget that I absolutely welcome, but, as always, there are unintended consequences, on which I hope the Government will listen to us.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Gregor Poynton to make his maiden speech.
Gregor Poynton (Livingston) (Lab)
Thank you, Madam Deputy Speaker, for giving me the opportunity to speak in today’s debate. First, I pay tribute to my hon. Friends the Members for Worcester (Tom Collins), and for Dagenham and Rainham (Margaret Mullane), who have proudly shown the best of their constituencies in their maiden speeches today. I pay tribute to my predecessor, Hannah Bardell. Hannah has diligently supported our constituents over the past nine years, whether by addressing the Broxburn floods, assisting homeowners affected by RAAC, advocating for those affected by the infected blood scandal, and championing LGBTQ+ rights. On election night, she was incredibly gracious—a spirit that has continued, as Hannah and her team have gone above and beyond in passing on cases and helping my team to get settled. She said to me on the night, “It’s all about the constituents,” and she has been true to her word. Hannah said in her speech on polling night that she intends to be back in some form. Of that I have no doubt. I just hope it is not too soon.
My constituency is called Livingston, which is understandable, as that is the biggest town in the constituency and the county, but the constituency is so much more than that; it includes towns and villages such as Breich, Dechmont, Ecclesmachan, Uphall, Longridge, Broxburn, Bents, Stoneyburn, Addiewell, Kirknewton, Wilkieston, East Calder, Mid Calder, West Calder and Fauldhouse, each rich with history and a distinct community spirit. The area’s economy and population was initially boosted by mining, of coal in the west, and oil shale in the east. The landscape still bears witness to this history, with the bings that remain. That is why it was important to me that the Chancellor announced in yesterday’s Budget that we are delivering on our manifesto commitment to return the investment reserve to miners. We are handing back £1.2 billion to former miners and their families. In fact, 144 former miners in the Livingston constituency will receive an average increase of £29 per week in their pension. For those who would like a further insight into Scottish oil and the shale oil industry, there is the Almond Valley visitor centre, which brings to life the first truly commercial oil works in the world, and celebrates the West Lothian chemist James “Paraffin” Young’s work and discoveries.
However, the biggest growth in the area was in the 1960s, with the creation of the new town of Livingston. Many from Glasgow and the west of Scotland ventured east because of the promise of improved housing and job opportunities. That entrepreneurial spirit is still alive in Livingston, which is the home of high-end manufacturers like Wyman-Gordon, biotech companies like Valneva, Glenmorangie’s bottling plant, Paterson’s shortbread factory, Mitsubishi Electric, a designer outlet village, Sky, and numerous small and medium-sized enterprises, which are the lifeblood of our local economy. Now that I have highlighted Pateron’s shortbread and Glenmorangie, I am expecting a visit from my right hon. Friend the Secretary of State for Scotland—all in the name of promoting Brand Scotland, of course.
As I prepared to give this speech, I sought inspiration from the maiden speeches of two previous MPs for Livingston: Robin Cook and Tam Dalyell, who knew a thing or two about speaking in this place. Even in their maiden speeches, they set themselves apart with their wit, intellect and fire for social justice. Tam Dalyell used his experience as a school teacher to outline practical reforms that could be made to the education system, and Robin Cook, a former chair of housing on Edinburgh City council, made a plea for more and better housing. I took from them that you should talk about what you know, and if I can maintain that for my whole parliamentary career, I think I will be doing rather well. Tam Dalyell and Robin Cook are two giants of Scottish Labour politics, who, in their different ways, made a mark in this place. We new Scottish Labour MPs must now make ours.
There is a Scottish Labour thread of history in this place, from Hardie, Maxton, Lee and Dewar to Cook, Brown and Darling. Living up to that is an impossible task, but try we must, because in that trying and effort is the opportunity to make a change. The idea of being a Scottish MP in the Parliament of the United Kingdom is important to me. I am Scottish, and I am British. I do not see these identities as contradictory, but they are different. Given that all four nations are part of the United Kingdom, and have been, in some cases, for hundreds of years, it would seem logical that the UK identity would subsume all, but that is not so.
The idea of Scotland is powerful. It has stood the test of time, and it means different things to different people in the Borders, the highlands, the island communities, the east, the west, the central belt, urban areas and rural areas, but there is a common fabric of what it means to be Scottish, and it binds us together, whether we were born into being Scottish or chose to make our home in Scotland. This is part of who we are, and having Scotland as one of the four nations makes our country greater than the sum of its parts.
The theme of today’s debate is “fixing the foundations”, because over the last 14 years our country has not been on secure foundations. The chaos of the last 14 years across the UK—and particularly the last 10 years in Scotland, where there has been a focus on the constitution, not the day job—has made our country feel less secure and life feel too precarious for far too many. Families are one mistake, a piece of bad luck or a decision that is no fault of their own away from disaster. That is no way to live. That is why this Budget—which ensures a pay rise for over 200,000 of the lowest-paid Scots, letting more families keep more of their hard-earned cash—is important for families right across the Livingston constituency.
I wanted to come to this place to make sure that everyone, no matter their background, can thrive. That is what drives me and my politics. Having grown up in a working-class family in a working-class town in central Scotland in the ’80s and ’90s, I have seen what happens when people have opportunities and security, and what happens when they do not. My father worked in a plastics plant in Grangemouth for over 35 years, providing our family with stability and dignity through unionised work. Without it, I would not be here today.
There is hope for the future. Yesterday’s Budget marks the end of the era of austerity, and raises much-needed cash for our public services. This Labour Budget delivers the largest budget settlement for the Scottish Government in the history of devolution. It means there is an additional £1.5 billion for the Scottish Government to spend in this financial year, and an additional £3.4 billion next year. This is a significant increase in investment to ensure that we have the funding available for Scotland’s NHS, schools and public services. It is now for the SNP, which has lost its way in recent years, to get a grip and spend the money wisely.
I recently visited the Larder, a social enterprise providing solutions to poverty through learning opportunities and access to high-quality, affordable food. It supports young people for whom traditional academic settings have often not worked, helping them to build skills and confidence. The Larder has had huge success in turning lives around, so it can be done. We have the people and drive to build stronger communities. We have a Government who are on the side of working people, and we should not rest until everyone in this country has the opportunities that they need to build a more secure life for themselves and their families. That is what I resolve to spend my time in this place doing, on behalf of people in the Livingston constituency.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call my constituency neighbour, Mims Davies.
Mims Davies (East Grinstead and Uckfield) (Con)
I congratulate all hon. Members who have made their maiden speeches. May I wish the hon. Member for Livingston (Gregor Poynton) well in his time in this place?
I agree with my right hon. Friend the Member for Maldon (Sir John Whittingdale) that the failure of the Budget, and its long preamble, mentioning covid and the war on our continent, was very stark. However, I would like to start on a positive note. I am the 380th woman elected to Parliament, and it was truly a historic moment to see the first female Chancellor at the Dispatch Box. She said that it would give hope to other women who were watching, and I absolutely agree. I just hope that our businesses, and sectors such as hospitality, feel that hope.
It was very pleasing to hear the announcement of the compensation schemes for infected blood victims— my constituent Robert, in East Grinstead, has been campaigning very hard on that—and for victims of the Post Office scandal, which will be welcomed by many of my constituents. It is also pleasing that fuel duty has been frozen, and I thank all my hon. Friends and campaigners who made sure that there was support in this area of the family finances. I am pleased about that, and, indeed about the cladding interventions. There is a welcome boost for funding for special educational needs and disabilities, and something for the dreaded potholes, although we have yet to find out how far that funding will stretch.
However, 10 independent schools are in peril in my constituency, and their food providers, staff and many others are very worried about where they will go if they are displaced. There is no funding in this Budget to deal with such displacements. I would have welcomed more support for the Sussex wine sector; I am sure that you would agree with me on that, Madam Deputy Speaker.
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. That point was not about the consumption of wine; I have many vineyards in my constituency, as the hon. Member does.
Mims Davies
It is very important to support people working in the wine sector. Viticulture is alive and well in Sussex, Essex and across the country. If the train drivers’ needs have truly been satisfied, the services from East Grinstead to the capital simply must improve. That is my plea to the Southern rail service.
Despite the leaks and the pre-Budget announcements, it came as something of a shock to hear the full announcements in the Budget yesterday. There can be no mistake: the cost to the country is very dear. According to the OBR, the direct and indirect costs amount to £52 billion. The new Labour Government cannot escape the fact that, in their first Budget in 14 years—as they keep reminding us—they are set to raise taxes by a staggering £40 billion. Taxes will be at their highest level since 1993, and that builds on the winter fuel payment debacle. Despite Labour Members’ glee and their waving of Order Papers, when they go back to their constituencies or open their emails, they will see a very different story. Their constituents, like mine, will face the largest tax burden in our history, and working people will pay the price, as the Chancellor has now agreed.
Let me turn to younger voters and those keen to get on the housing ladder. Stamp duty is back for first-time buyers. One of my Conservative councillors in Copthorne and Worth highlighted this morning that the purchase of two rental properties has fallen through because the margins were already very tight. Yesterday’s decisions mean that two couples will now not be homeowners.
In Handcross and Pease Pottage, one of my councillors, Mr Prescott, mentioned the Budget of broken promises. His organisation will face a cost of £70,000, it will lose two people, and the delivery of programmes will be stopped. That is the reality of these decisions. Small businesses—often those that are women-led, such as salons—will see the impact of the national insurance rise. I will be interested to see the effect across all sectors, particularly as the measures are a clear breach of the Labour manifesto. Despite Labour’s retrospective revisionism, the effect will be felt right across the land. On every radio station that I listened to on my way in this morning, the dismay across sectors, affecting real people’s lives, was everywhere.
The national insurance rise affects charities and organisations, such as our hospices and air ambulances. As the shadow Chancellor said in the media this morning and again here today, picking the pockets of business, charities and organisations is not cost-free. The Institute for Fiscal Studies confirmed that the rise will hit the lowest-paid workers through lower pay, and the OBR has said that it will hit employment. So much for not raising taxes on working people. Two manifesto commitments have been broken.
Yuan Yang (Earley and Woodley) (Lab)
My constituents told me on the doorstep that their No. 1 priority was to improve the NHS. If the Conservative party were still in government, it would be overseeing steep cuts across the NHS and our public services. Would the hon. Lady be happy to be part of such a programme?
Mims Davies
Nobody here wants any negatives for their constituencies from the Budget, least of all for health services. However, I have family in Wales who have been living under a Labour Government, and they know the reality of what is coming down the line.
Let me build on the questions I have had from constituents this morning. Family businesses are directly affected. A local funeral directors group with national reach said that it believes that the Treasury has its figures wrong on the impact of the changes to agricultural property relief and business property relief. The cap and the 20% rate must surely be a simple mistake, the group writes. To meet the inheritance tax bill and pay their liability, firms will have to extract capital, incurring a 38% dividend tax rate, which is above the proposed 20% rate of reduced IHT. Given that capital gains tax is at 24%, it makes no sense for family businesses to pass on their shares to family. They will simply have to sell them or their business. I have been implored to ask those on the Treasury Bench to ensure that the Government consult and listen to family businesses, at the very least.
The Chancellor of the Duchy of Lancaster talked about Conservative Members opposing the Budget. We are opposing it. It is anti-choice, anti-growth, anti-business—particularly anti-family businesses—and anti-aspirational. It is focused on more borrowing. Disgracefully, as has been said, it pits the public sector against the private sector. Happy Hallowe’en, because everybody here knows that this is the ghost of a Labour Government of the past. They are back and haunting every single constituency.
I represent a rural constituency, and it is clear that local farmers will be hit by the changes to inheritance tax—we just need to read the messages from the NFU today. I am afraid that the subterfuge and the hoodwinking of the farming community will be felt not just by Opposition Members, but across everybody’s communities.
I recently read out in Westminster Hall the words of a local farmer, whose concerns were purely about business confidence at that point. The same farmer wrote to me again this week—I remind the House that farmers are working people, and they work 365 days and 52 weeks a year—to say:
“My family’s farm and estate are currently economically viable but there is no chance that they would ever produce sufficient cash flow to make it possible for us to cover any significant amounts of inheritance tax. If we are struck by excessive taxation we will no longer be able to produce 7,000,000 litres of milk per annum or timber for the nation. The heritage of 200 years could be gone.”
Farmers across my constituency are stunned. This is a hammer blow for family businesses, as the shadow Chancellor said, and we will oppose the Budget. It does not fix the foundations; it is a set of dangerous ground works.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Maya Ellis to make her maiden speech.
Maya Ellis (Ribble Valley) (Lab)
Thank you, Madam Deputy Speaker. My journey here comes via almost 10 years in local government, as an officer working on economic development and regeneration. I grew up among passionate socialists, but I also saw the investment that small businesses all around me put into their local areas, so I am delighted to be making my maiden speech, as the first Labour MP for Ribble Valley, in this debate on a Budget that truly harnesses the best of both social policy and great British enterprise. We need both, and we need them to work together.
For a young woman, full of dreams and wanting to change the world, sometimes our day-to-day can feel a pretty restrictive place to be. Anyone who has felt held back in their ambition will know that it can take just one or two people to believe in you, to make all the difference to whether you carry on or give up. I cannot possibly name all the people who helped me get here, but you know who you are, and it made all the difference that you never questioned for a second that I could do this.
It is so easy to quickly take for granted that we are speaking in a debate on a Budget presented by the first ever woman Chancellor of the Exchequer. She will know as well as I do that as fairytale as our journeys may seem at their high points right now, the prejudices and obstacles that we faced, and that women face every day, are still far too high. I have said it to many women, and I will say it to any listening now: you are as smart and as capable as you think you are; do not let anyone convince you otherwise. We need your fire.
I have been in Westminster a few months now, and one thing I hear people say frequently about my predecessor, the right hon. Nigel Evans, was how much he loves and cares for this place that we stand in today. Mr Evans worked incredibly hard and diligently as Deputy Speaker and on the restoration and renewal programme board. We are very lucky to have this well-managed centre of debate and challenge in the UK, and I am grateful to Mr Evans, and to all those who work here, for upholding our exceptional standards of democracy.
I promised Mr Evans on the night of the election that I would take care of the Ribble Valley constituency that I know we both love. I can already safely say that I will likewise show this incredible institution of Westminster and our strong democracy the respect and protection that I know we both value so highly.
I am one of those exceptionally lucky MPs who have lived in their constituency most of our life. It means that I know it like the back of my hand. For better or worse, it also means that I encounter situations like I did the other day, when one of my old Brownie leaders called me over while doing the school run to raise an issue about local social housing—I am on it, Jan, I promise.
My constituency of Ribble Valley is a patchwork of our country’s history and its future. We remember the battle of Bamber Bridge, when locals stood up against white GIs to welcome black US soldiers into their pubs—a brilliant example of the inclusion and multi- culturalism that makes this country great. In Samlesbury, we have produced planes to protect the country since world war two, and I am delighted that progress on establishing the National Cyber Force in my constituency is well under way. It will lead our country’s research, develop our future security and build our skills in cyber.
People are often surprised by the size of the Ribble Valley constituency. Its boundaries have changed over the years, but it currently reaches from the Lancashire-Yorkshire border, with picture-perfect villages such as Tosside, Rimington, Waddington, West Bradford and Chipping, through to the lively suburbs of Preston, taking in Fulwood, Bamber Bridge and Walton-le- Dale, and almost reaching the Ribble estuary at the Irish sea.
I see the breadth of my constituency as its depth. We have wonderful places to live, though much could be done to keep them safer and kinder. We have great transport links, with the M6 running through, and it is only two hours to London on the train from Preston. We also have utterly stunning countryside, including a large part of the trough of Bowland, where the late Queen said that she would have loved to retire.
Strong communities are so important to me, and both the rural and urban areas of my constituency are made up of villages that come together to create celebrations such as the Lostock Hall carnival and the Broughton scarecrow festival just last week.
Right in the heart of my constituency is my home village of Ribchester, where my family have lived since 1961 and where I am now raising my family. I must pay a quick tribute to the people of that village. From the amateur dramatic society and the church to the Brownie unit and the parish council, the village showed me the best of what it means to be British. I look forward to this Government easing the burden on families, so that they can spend more time contributing to the amazing communities that we all need to thrive.
The only person I know who loved Ribble Valley more than I do was my dad. He travelled the world, living in big cities and in communes, dreaming of new ways to live our lives, but I recently found a letter that he wrote to himself at age 21, in which he spoke of the strange pull back to our beautiful little corner of the world, where he chose to raise his family and, without knowing it, raised the Labour MP he dreamed of it having.
It is my deepest sadness that my dad did not live to see me standing here, but I know that he relished every heated debate we had at the dinner table and, along with my mum—one of the most intelligent women I know—I think my dad had an eye to what he was preparing me for. He was the biggest feminist I have ever known, and, in me, I think he raised the second biggest.
A lot of my career has involved working on innovation policy, which has collided over time with my passion for social justice. I think we all need a vision to look towards, and I want us to be ambitious that our rapid advances in technology and automation should translate into greater rewards for workers. I would like to think that it is not too utopian to hope that we will move to a standard four-day working week in my lifetime.
So much of what our society needs does not necessarily cost money, but it does cost time—time to give our children focused play; time to truly rest our bodies so that they do not crumble far too early; and time to live slowly and to grow our own food, to reduce the huge demands on this Earth. Technology can give us time, if that is where we choose to channel the benefits.
Before I finish, I will touch on my utmost priority as a Member of Parliament: working families. We need to make life much more tenable, more affordable and, dare I say, more joyful for parents, who want to contribute to our country while also raising good humans. It is also critical to me that we make sure the children have the lives, support and love they deserve.
We have a vision for an innovative and high-growth economy, but we do not get innovation without diversity of thought. This Parliament is the most diverse in history, and I, as one of those new diverse Members, am able to be here with my mental health just about intact only because my husband took three months of paternity leave with both our children. This meant that, when an election was called two days after I was selected as the Labour candidate, I did not have to spend a single second handing childcare over to him; he already knew how to change a nappy, what to pack in a bag and the books my children want to read at bedtime. I fully believe I would not be standing here now if he had not taken paternity leave. That opportunity should not be rare.
Forgive me for speaking in a hetero-normative context, but that is my personal experience. We know that few dads take up paternity or parental leave, which means that many women cannot dream of putting themselves forward for political office, as I did. Knowing that my husband can confidently care for my children gives me time to think, to organise and to dream. Too many women are still unable to do this because their mental load fills every bit of additional brain space they have.
We need the ideas and dreams of mothers and parents to propel our businesses, our public services and our society. I was delighted to join the campaigning organisations Pregnant Then Screwed and The Dad Shift earlier this month to try to shift the dial on parenting equality. I hope to see some truly ambitious step changes as our Government review paternity leave over this coming year, not only to create a new vision of fatherhood in this country, but to unlock the dreams and plans of mothers, which we have been so desperately lacking but which are so desperately important. I send a huge thank you to my incredible husband for holding the fort at home, and for being the foundation of my standing here today.
Finally, I want to acknowledge that it takes a lot of bravery to be a girl or a young woman today; it always has. It is relentless, scary and exhausting, especially for those with caring responsibilities or facing additional prejudices. There are a million reasons to give up, and a million times I almost did, but please do not give up. I can promise you this: brave girls grow up, and one day you might stand here and be the one in charge.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I congratulate the hon. Member for Ribble Valley (Maya Ellis) on her spirited maiden speech. Her speech, along with the other maiden speeches, underlines how new Members come here with good will in their hearts, full of good intentions and full of ideals. It is heartening to see that in new colleagues on both sides of the House.
I do not think the new Labour Government have any lack of good intentions, but this Budget is happening in something of a political bubble. Much of the Chancellor’s discourse seems to reflect a continuation of the general election campaign, which we now know could have been fought more honestly, openly and transparently by the Labour party.
That said, I am sure the Chancellor believes she has produced the best Budget for this country. The biggest cheer from the Labour Benches yesterday seemed to be for the 1p cut in draught beer duty, but I have since spoken to people in the hospitality industry, and they have described this as a shattering Budget. The money that publicans and restaurateurs will now have to pay their staff, and pay for their staff, massively dwarfs any benefit they could possibly pass on to their customers from the 1p beer duty cut. In fact, most of the increased beer prices that we will see as a result of this Budget are a direct consequence of the tax increases inflicted on businesses. I am afraid that those cheers demonstrate a complete lack of reality about the world we live in.
The character of this Budget reflects a reversion to the failed Labour policies of the 1960s and 1970s. It is naive to believe that taxing wealth creators, wealth creation and capital formation will not drive entrepreneurs and business leaders out of our country, which is happening. It is also deceiving, because the Budget reflects that Labour’s plans were not fully costed, and it is destructive of wealth, wealth creators and pensions. The Budget massively reduces people’s incentive to save into their pension pot, as they will now be taxed on what is left over at the end of their life to pass on to their children.
Of course, there is also a streak of vindictiveness towards wealth creators. I heard a Labour Member shout “Good!” when the shadow Chancellor said that we are climbing the league table of countries with higher tax rates across the economy, moving beyond Germany. The attitude that taxation is somehow an inherent good has limits, and we are going beyond those limits.
Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)
On that point, will the hon. Gentleman give way?
Sir Bernard Jenkin
I certainly will if it was the hon. Gentleman that said that—
Alex Sobel
What is wrong with the German economy? The German economy has consistently performed well over the past 30 years, in excess of our economy, and has a strong industrial strategy. This Government are going to produce an industrial strategy so that we can have just as strong an economy as Germany, and a similar tax base.
Sir Bernard Jenkin
When Margaret Thatcher was elected in 1979, we were the sick man of Europe. What she, Lord Howe and Lord Lawson did to the British economy in that period put us on a faster growth track than the German economy. Since that time, we have been falling behind again. This Budget will help us fall behind again.
Elements of this Budget are a defiance of reality, because behind the cheer for the 1p cut on draught beer is the real world outside. I have been watching the gilt rate—the 10-year bond rate—on my telephone. It closed yesterday at 4.362% after going up substantially in the last hours of trading, and now stands at over 4.5%. That means the Budget has spooked the markets into increasing the cost of borrowing, which the Government will have to pay. The idea that these measures are pain free, and that getting more tax revenue in and borrowing more is going to bail out the economy, is very flawed.
I do not suggest there is going to be a bond crisis tomorrow, but we are enmeshed in a debt trap in this country, as are so many other mature democracies, after the energy crisis and covid, so there is likely to be another liquidity crisis of some kind over the next few years. How well prepared will this Government be, if they have already put up taxes and borrowing to spend on more consumption, rather than for our long-term economic benefit?
This is not a Budget for growth. Apart from the initial impact of the extra spending in the forthcoming year, the throttling back of expenditure, then the decline in borrowing and the burden of the extra taxes, suppresses economic growth, which the Office for Budget Responsibility is perfectly clear about. It was an empty promise for the Prime Minister to say, “We are going to prioritise economic growth.” This Budget simply does not prioritise economic growth. We have forgotten all the lessons of our economic history, learned from the disastrous policies of the 1960s and 1970s.
If socialism worked, everyone would do it. Socialism does not work. This is a more socialist Government than we have seen since the 1970s. They have forgotten what Tony Blair and Gordon Brown did. It was Gordon Brown who cut the capital gains tax rate. As Chancellor, Gordon Brown was the successor to Margaret Thatcher and continued with many of the same policies. Gordon Brown did not set up a ludicrous vanity project like Great British Energy. He did not believe that taking control of investment in a sector like energy would increase the wealth of the country. All the equivalent state-owned enterprises around Europe lose money—the Government will not make a return in that sector.
Yuan Yang
The hon. Gentleman mentions Gordon Brown. Yesterday’s Budget starts to restore the level of Government spending as a share of the economy to levels that are similar to those under Gordon Brown and the last Labour Government. It starts to restore the foundations of our public services. Does the hon. Gentleman welcome that restoration and investment?
Sir Bernard Jenkin
I wish we could all have everything that we wanted. Gordon Brown inherited a golden economic legacy from the Conservatives in 1997—[Interruption.] Yes, he did. Debt was falling and growth was outstripping our competitors. By the time of the financial crash in 2008, he had already increased borrowing and spending. The consequence of the financial crash is that he achieved what every Labour Government always achieve: they leave office with higher debt, higher unemployment and higher inflation. That is what Labour Governments always do, and that is what this Labour Government are set to do again.
Sir Bernard Jenkin
I am not going to give way any more. We need only look around the world to see that the idea that an ever-larger state makes the people richer is confounded by economic experience, otherwise the richest countries in the world would be those with the biggest state. It is businesses and free enterprise that generate the wealth that pays for the public services we need.
We can all recall Milton Friedman’s four ways to spend money. There is people’s own money that they spend on themselves: they think about it, spend it very carefully and make sure they get the maximum value for money. There is money that people spend on other people, such as when they buy a present: they may want to keep the cost down and may not be sensitive about whether the person really wants a particular gift or not. There is somebody else’s money that people spend on themselves: when people use expense accounts, they go on the most expensive aeroplane or get the biggest car their company will pay for. Finally, there is somebody else’s money that is spent on other people: that is what Governments do. It is a reality that Governments are the worst allocators of resource for ensuring future wealth creation. That is just a fact.
The record will always confirm that if we want to create more wealth, the smaller the state can be, the faster economic growth will be and the more we can afford to then spend on public services. This Government are profoundly un-strategic—just look at what the OBR says about investment:
“Tax rises in this Budget weigh on real incomes, so private consumption falls as a share of GDP”—
that means people are going to be getting poorer. It continues:
“Corporate profits are expected to continue falling as a share of GDP in the near term”.
It adds that
“business investment falls as a share of GDP as profit margins are squeezed, and the net impact of Budget policies lowers business investment.”
Is that good for the British economy? I submit not.
What about debt? If someone has too much debt, the one thing they should do is not borrow more money, if they want to get out of a debt trap—[Interruption.] Members on the Government Benches have surgeries attended by people who are in debt. The one thing hon. Members will tell them not to do is to stack up more debt, but that is what the Government have chosen to do. That is not a long-term policy.
Finally, what about GDP? I take no pride in saying that growth in GDP has been struggling for a decade or more—
Sir Bernard Jenkin
Yes, I do not think we did enough to dynamise the British economy. We did not do enough, but I was very grateful for the support of the Liberal Democrats for the first five years of the Conservative Government. That helped us to keep public expenditure under better control so we could begin that process.
GDP per head has really been flatlining. We are falling significantly further behind the United States, but what are the trends? On these trends, we will be overtaken by Poland by 2030 in terms of GDP per head. What are this Government doing to address the real long-term trends? Let us look to 2050. What is the shape of public expenditure going to look like in 2050? This Budget does not begin to address that. What will be our national debt on a long-term basis? What is happening to our demographic, including the ageing population and the ratio of people in work and out of work? What are this Government doing to address that trend and to address the immigration trend, because that is adding to the cost of our economy?
How will we be able to increase defence spending? The Chief of the General Staff has recently said that this country could well be directly involved in a war within the lifetime of this Parliament. We will have to spend more on defence, as well as controlling the rest of the public sector. It is many decades since health, education and welfare started swamping out every other kind of expenditure in the Government. If we are to survive as a country, we will have to address these very damaging long-term trends.
Sir Bernard Jenkin
If the hon. Gentleman will forgive me, I am just drawing to a close.
What is the true cost of decarbonisation? That is something that the Government are hopelessly naive about. It is as though investing in decarbonisation is somehow a get-out-of-jail-free card, and everybody’s bills will start to come down, but anyone involved in the industry will say that that is not the case. The need to dynamise our zombie economy is still there and being made worse by the burdens that this Government have inflicted on us. How will we re-industrialise our economy when deglobalisation has taken away the opportunity to import all the cheap things that we used to make, but no longer do? Those are the real strategic challenges, and the Budget does not begin to address them.
Richard Baker (Glenrothes and Mid Fife) (Lab)
Thank you, Madam Deputy Speaker, for giving me the opportunity to speak about how this Budget is fixing the foundations of our economy, which could not be more important for my constituents. I listened with interest to the remarks of the hon. Member for Harwich and North Essex (Sir Bernard Jenkin) about the last Labour Government. Let us remember that the last Labour Government lifted 900,000 children out of poverty. What costs to our economy are caused by poverty, rather than getting people into work and securing for them the quality of life and living standards that they deserve?
Richard Baker
Of course, because I have just mentioned the hon. Gentleman in my speech.
Sir Bernard Jenkin
One hon. Member complained about food banks. Actually, food banks started under Tony Blair. I think that we need to share these problems and concerns. We need to understand each other’s different approaches to economic policy if we are eventually to have a solid approach to reviving the economy of this country, but I am afraid that this Budget does not do that. There will be more poor people as a result of this Budget.
Richard Baker
I thank the hon. Member for his intervention. In Scotland we say, “Facts are cheils that winna ding.” The fact of the matter is that 900,000 additional children were lifted out of poverty by the previous Labour Government, and the rise and use of food banks under this Administration has been exponential —to the extent that, now we as a Government are dealing with food banks running out of food because of the level of poverty that we have inherited. This Budget will fix the foundations of our economy. It will redistribute wealth, tackle poverty and invest in growth. That is why we can look forward to what will be achieved by this Government, thanks to the decisions taken by my right hon. Friend the Chancellor of the Exchequer.
Anybody looking at events in Scotland will see that my constituents have suffered from two Governments failing to deliver on investment and failing to deliver on growth. Their mismanagement of the public finances stands in sharp contrast to the measures that have been bought forward by my right hon. Friend the Chancellor of the Exchequer, who has taken some challenging decisions on taxation, to ensure that there is no return to austerity and that we can invest in growth.
The Budget gives us the chance to move on from the reckless incompetence of the Tories here in Westminster and of the SNP in Holyrood. It is a chance to move on from the catastrophic mini-Budget of Liz Truss—a mini- Budget that caused so much damage to my constituents. The hon. Member for East Grinstead and Uckfield (Mims Davies) conjured up images of Halloween in her speech, but the economic nightmare was caused by the Conservative party, and our constituents paid the price in their living standards.
Those of us in Scotland cannot underestimate the impact of the shambolic stewardship of Scotland’s finances by the SNP. It is one thing for the SNP to crash the finances of its own party, but quite another to crash the finances of our country. The SNP Government have completely mishandled contracts for much-needed new ferries. Other public sector projects have been overspent by millions, while others have been delayed or cancelled. They have also failed to spend hundreds of millions of pounds which had been allocated to them in structural funds. Funding for our local authorities has been slashed. The housing budget has been cut, and the Institute of Fiscal Studies assessed that the Scottish health budget faced a real-terms cut under the SNP in this financial year.
While we know that this Budget is fixing the foundations, so that we can deal with the reckless approach of the previous Government here, the SNP cannot simply blame everyone else for its own mistakes, as, yet again, it has attempted to do over the past 24 hours.
Mims Davies
The hon. Gentleman is making an excellent speech, not least because he has mentioned both me and my constituency, so I am grateful to him for that. On that point about the SNP blaming everyone else, he has just blamed the SNP and then blamed us. While he is looking at all this guilt, he should consider the merry-go-round operating under Labour with its jobs for the boys. Perhaps he might like to address that issue.
Richard Baker
I think the guilt should be felt by those on the Conservative Benches. The fact is that we have inherited a £22 billion black hole in the country’s finances, and that has been assessed independently by the OBR. That is how blame should be apportioned.
I was talking about matters in Scotland, which I am sure will be of interest to the hon. Lady and her constituents. The Scottish Fiscal Commission stated that much of the pressure in Scotland comes from the Scottish Government’s own decisions on cuts in its last Budget. I very much welcome the additional £3.4 billion that will come to Scotland and our public services through this Budget. It is vital that the SNP learns from its mistakes, and undoes the damage that it has caused. I do not know where the SNP Members are today. Perhaps they are travelling back to Scotland in their own party campervan.
My constituents cannot put up any longer with lengthening waits for hospital treatment, with finding it so difficult to register for an NHS dentist, and with a housing crisis where so many people do not have the homes they need or cannot get a foot on the housing ladder. In my constituency, there can also now be no excuse for further delays by the Scottish Government in constructing a new health centre for Lochgelly. The SNP has promised to deliver this for over a decade, but has failed to do so.
In contrast, this Budget sets out a different vision for our public services. This Government will invest in homes and in our schools. Having worked with the disability charity, Enable, prior to taking my seat in this place, I am delighted with the announcements on social care and special educational needs. It is astonishing to hear some Members talk about our plans for wages in the social care sector. They seem to imply that our hard-working social care staff, who play such a huge role in our communities, should not get fair pay for that vital role that they carry out for us and for our loved ones.
The pension triple lock is protected. Representing a constituency where there are so many former miners— 849 members of the mineworkers’ pension scheme are living in Glenrothes and Mid Fife—I am delighted that this Government are ensuring that more than £1 billion owed to them will be returned, which will be an average of £29 a week more for each member, as my hon. Friend the Member for Livingston (Gregor Poynton) highlighted in his excellent maiden speech—one of so many excellent maiden speeches from Labour Members.
As many of my constituents benefit from this Government’s ending an injustice of the past, more can look to investment in the future. The Budget is redistributive, but it is a Budget for growth, too, boosting public investment by £100 billion over the next five years. A total of £125 million is immediately being invested in GB Energy, headquartered in Aberdeen. It was extraordinary, Madam Deputy Speaker, that when it came to the vote this week, SNP Members failed to back the establishment of GB Energy. Far from standing up for Scotland, the ones who were actually here were sitting on their hands.
Renewables is a key and growing part not only of the Scottish economy, but of our local economy in Glenrothes and Mid Fife. Along with GB Energy focused on establishing Scotland and the UK as a green energy powerhouse, the National Wealth Fund opens up the potential for us to invest in our renewables infrastructure. As we seek to secure a long-term future for the Methil fabrication yard in my constituency, investment in the facilities of that yard would ensure that the 200-strong skilled workforce can play a vital role in taking forward our ambitions for our renewables sector.
The election of Anas Sarwar as Scotland’s First Minister will be required for my constituency to reap all the rewards that the Budget has set the foundations for, but with £3.4 billion extra for Scotland in it, as the Scottish Trades Union Congress has said:
“The task now falls to the Scottish Government to take the decisions needed to invest, through progressive taxation, into our communities and public services. The Westminster blame game is finished.”
This is a Budget for our public services, and a Budget to boost investment. This is a Budget for Scotland.
Dr Neil Hudson (Epping Forest) (Con)
May I join you, Madam Deputy Speaker, and colleagues across the House in congratulating the hon. Members for Ribble Valley (Maya Ellis), for Livingston (Gregor Poynton), for Dagenham and Rainham (Margaret Mullane) and for Worcester (Tom Collins) on their fantastic maiden speeches?
We have heard that the Budget was about fixing the foundations of our economy, as both the Prime Minister and the Chancellor have claimed. If that is the case, many of my constituents in Epping Forest will be asking what exactly will be built on those foundations, and they may rightly be concerned that some of that building may well be on top of our precious greenbelt. At its heart, when fixing the foundations is promised but there is no coherent or evidence-based vision to underpin it, a misguided Budget like this one is what we end up with.
Before I go into further details, I must acknowledge some of the announcements in the Budget that I welcome. The freeze on fuel duty, maintained for years by our Conservative Government, is very welcome for my constituents, who no doubt have faced real worries about paying extra at the pump. I very much welcome the increase in SEND funding, which is so important to support our young people with special educational needs. A penny off a pint is welcome, but it is small beer for landlords, who will struggle to pass it on when they are hit by the national insurance rises for employers and the reductions in business rates relief. Reinforced autoclaved aerated concrete has unfortunately blighted a number of schools across my constituency, so the Labour Government honouring the previous Conservative Government’s commitment to funding rebuilding is most welcome, and I hope that we see action soon.
Chris Vince
I welcome his welcoming—I am sorry to repeat the word—of investment in schools that have RAAC. Does he agree that the time for the Government to spend money on repairing those schools was when Essex county council recognised the issue of RAAC in our schools in 2012? Had the Conservative Government done so, we would not be in the situation that we are in now.
Dr Hudson
The situation with RAAC has built up over many years, under Governments of all colours. It is important that we stand together to sort out the problem as soon as possible so that the educational experience of our young people, and the staff who teach them, is improved. I welcome the fact that we will make progress on that, and I hope that we see action soon in schools such as Buckhurst Hill community primary and Roding Valley high, which I visited just a couple of weeks ago. I discussed these very issues with staff and students.
Unfortunately, however, there are a number of areas in the Budget where putative short-term gain has been prioritised for little to nothing in the long term. With the NHS facing pressures, it is one thing to provide day-to-day funding, but it would be very short-sighted to suspend or withdraw funding for key infrastructure projects that would tackle the long-term issues facing the NHS. The rebuilds of Whipps Cross hospital in Leytonstone and the Princess Alexandra hospital in Harlow, promised by the previous Conservative Government and now put on hold by Labour, are so important for my constituents’ healthcare needs—not just today or tomorrow but in the long term. While I am pleased that the Government have listened to me by honouring the Conservative commitment on the new community diagnostic centre coming to St Margaret’s hospital in Epping, I urge the Government to fulfil those much-needed hospital rebuilds to address the healthcare needs of my constituents and of neighbouring constituents, including the constituents of the Health Secretary.
Chris Vince
I thank the hon. Member for giving way on two occasions. I would not normally intervene on a speech twice, but he referred to a hospital in my constituency: the Princess Alexandra. Although he and I may have political differences, I welcome the opportunity to talk about the Princess Alexandra hospital as often as possible. Does he recognise that part of the delay has been caused by the funding not being there for the new Princess Alexandra hospital, and does he recognise the work that I have done in lobbying the Secretary of State for Health and Social Care, who has committed to a new hospital but recognises the challenges, because the funding was just not provided for by the previous Government?
Dr Hudson
I thank the hon. Member, who is my neighbour, for his intervention. We have to get on with rebuilding the Princess Alexandra and Whipps Cross, and we need to do it quickly.
I also urge the Government to listen to my constituents’ concerns about the introduction of VAT on independent school fees. This tax on education impacts not only 2,000 pupils in my constituency at independent schools but our excellent local state schools. Some families will unfortunately have to move their children midway through the school year, or in the next year, to some of these fantastic schools, some of which are already oversubscribed, impacting class sizes. Independent schools provide a social good in my constituency and right across the country, providing access to high-quality facilities, and providing access bursaries. For many parents, independent schools are a choice borne out of hard work and sacrifice. For some, they are the best way their children with special educational needs can be supported, amid the difficulties and delays found in the process of receiving and delivering an education, health and care plan. Once again, the supposed short-term gain comes at the long-term expense of our children’s future, and the Government must look again at reversing that punitive measure.
Unfortunately, harming aspiration flows not just through that education tax but in the measures that affect the everyday lives of the working people the Labour Government claim to speak for—if they have finally worked out who “working people” are. If someone strives to own their own business, they will be forced to pay increased employer national insurance contributions for having that aspiration. Business owners will have their business rates relief cut. People who rely on the bus to get to work or appointments will be penalised by the bus fare cap increase from £2 to £3. We Conservatives introduced the £2 bus fare cap, which helps people in urban and rural communities alike, and we promised to deliver it for the whole of this Parliament. The Labour Government have callously ripped up that lifeline bus ticket.
Dr Hudson
No, I am going to carry on. For pensioners aspiring to live in dignity in their retirement, this Labour Government have taken away their winter fuel payment. That is just immoral.
Let me say a couple of words about national security. It is deeply disappointing that the Government are not heeding calls to commit to spending 2.5% of GDP on defence now, when we really need to show our allies, and indeed our adversaries, where we stand. Nationally, it seems that another area of the Government’s lack of vision is food security and biosecurity. Food security is national security, and biosecurity is national security. Over the last five years, agriculture and biosecurity have faced a seismic shift as we have navigated our departure from the EU. This was an opportunity that our previous Government seized, with environmental land management schemes to ensure that farmers are rewarded for feeding us, while protecting our precious environment, and the border target operating model to keep our food industry safe from the biosecurity risks that pose a threat to both animal and human health.
The last thing that the sector needed was to learn that it will not get the stability and support of investment that is so desperately needed. To state in the Budget document that farm schemes and flood defence funding will be reviewed is no way to treat our farmers and rural communities. We have heard a lot today about agricultural property relief, the changes to which could devastate our farming sector, risking the decimation of the sector that we rely on to feed us and support our environment. The impact of the policy on family farms, the tenanted sector and our food security will be untold. Families have had their succession planning turned on its head, and that inheritance tax pressure will have profound impacts on people’s mental health. Farming communities face huge challenges from shock events such as floods and animal disease outbreaks, and chronic pressures of finance and rural isolation. These are people who we know are at higher risk of mental health issues, and tragically suicide as well. I say that as a veterinary surgeon—a profession with similar risk factors. Gallingly, this policy decision has broken the promises that Labour made to our farming communities.
The opportunity has likewise been lost in the Budget to invest in the frontline of our defence against biosecurity risks—the Animal and Plant Health Agency, the A-team of our national biosecurity. Its headquarters in Weybridge, Surrey needs an urgent and full redevelopment, as outlined by the National Audit Office report a couple of years ago. With biosecurity threats such as African swine fever afflicting livestock in Europe, avian influenza not gone away, and bluetongue virus bubbling away in this country, a full funding of the headquarters in Weybridge is now more urgent than ever. We cannot afford the devastation that biosecurity threats such as foot and mouth disease or African swine fever could wreak on our economy, our farmers, our food industry and rural mental health if we are not firing on all cylinders against these threats.
This Budget’s claim to fix the foundations falls short in meeting the everyday needs of the people of Epping Forest and of people throughout the United Kingdom. This short-termist Budget with a lack of evidence-based decision making will harm our country in the long term. An urgent rethink and reversal is needed from those on the Treasury Bench. I and my Conservative colleagues will stand up for our constituents, who will suffer from this anti-aspirational and promise-breaking Labour Budget.
Frank McNally (Coatbridge and Bellshill) (Lab)
I start by commending Labour Members for such wonderful maiden speeches this afternoon.
I am proud to support this historic Budget. Our new Labour Government are working tirelessly to deliver the change that my constituents in Coatbridge and Bellshill need, and this Budget represents an important change—an important step towards fixing the foundations and repairing the damage caused by 14 years of economic mismanagement and fiscal vandalism by the previous Government.
The scale of that challenge is immense—public services have been pushed to breaking point, wages have been stagnant for far too long, child poverty is on the rise and too many people in my constituency are forced to work multiple jobs just to make ends meet.
In Scotland we have had the double whammy of two bad Governments. Just like the Tories, the SNP has decimated our public services, pushed our NHS to the brink and forced Scots to pay more to get less, as my hon. Friend the Member for Glenrothes and Mid Fife (Richard Baker) highlighted in his excellent speech. The Budget offers significant support to my constituents and provides record funding for Scotland. On top of the £47 billion block grant, the level of investment in public spending outlined by my right hon. Friend the Chancellor will generate an extra £3.4 billion in Barnett consequentials, resulting in the strongest settlement yet for Scotland in the devolution era. Sadly, the SNP Government have not yet worked out whether to love or loathe this Budget, and as my hon. Friends pointed out earlier, SNP Members are not here to tell us. As the Scottish Trades Union Congress highlighted yesterday, however, the blame game is now over—the SNP Government have the money and they must act to address the challenges impacting Scots.
The Budget has also addressed a number of fundamental injustices, from the infected blood scandal to Horizon and—critical for me—the mineworkers pension scheme. Representing mining communities and as a member of the coalfields parliamentary group, I wholly welcome the ending of this injustice and the delivery of Labour’s manifesto commitment of more than £1 billion to ex-miners. For the retired miners in the scheme in my community, that will mean an increase of £29 a week in their pension. Ending that scandalous injustice has not been a short or easy undertaking, and I commend my predecessors and all hon. and right hon. Members who have fought on this for many years before my time in this place.
I also commend the Government for their commitment to ensuring that £20 million will come to Coatbridge in my constituency through the towns fund. The previous Government announced that plan, but their fiscal irresponsibility put it in doubt. I am grateful to Ministers for taking the time to meet me to discuss these matters and delighted that the £20 million for Coatbridge is now costed and will be delivered by this Labour Government. That will allow our town board to help develop and deliver a long-term local plan, support business and secure investment.
I am also delighted that the Budget delivers a pay rise for 200,000 Scots. Increasing the national minimum wage by 6.7% and, critically, starting the journey to end age discrimination banding for 18 to 20 year-olds by increasing their wages by 16.3%, are key steps, as is the 18% increase for under-18s and apprentices. Young people are not immune to the challenges linked to the cost of living crisis and often struggle just to make ends meet. It is unfair that, for so many of them, their work —their labour—is valued less than that of their peers, simply because of their age. It has to end, and this Labour Budget has set us on a course to eradicating it.
This is the first Budget of this new Labour Government, and it lays the foundations to deliver the change our constituents voted for. Serving in Government is a privilege: it is an incredible honour that no party should take for granted. It is clear from the Conservatives’ actions that their party failed to live up to that solemn duty; they drove our country, our constituents, down a dirt path of decline until they ran out of road. They tried to mask their failings with fantasy economics and imaginary money pots, and it now falls to this Government to clean up their mess.
It is not the only mess that Labour will have to clean up. The SNP Government are equally hapless, and we are counting down the days to 2026 to deliver the change we need in Scotland too.
After 14 years of failure, our Labour Government have set a new course—to restore public finances, transform public services, tackle poverty and raise living standards. This is an honest Budget, which does not cynically shrink from the challenges, but seeks to tackle them head on—a Budget that will deliver the change that Scotland needs, that Coatbridge and Bellshill needs, and it should be welcomed across the House.
Bobby Dean (Carshalton and Wallington) (LD)
The first Budget of a new Government is always significant, but one can rarely have been set in such tricky circumstances. This one comes following a series of major shocks—some of them external and unpredictable, as Opposition Members have said, such as the covid pandemic and the energy crisis, but some of them down to policy decisions, such as the Brexit deal and the mini-Budget. It also sits in the long shadow of the financial crisis and over a decade’s worth of cuts to public services. Growth has been stubbornly sluggish, the cost of living has eroded people’s wages, and as tax as a proportion of our national income has ticked up, the capability of many to contribute more has diminished. The result of all of this is that our public services are under strain, our public finances are under strain and the British public are under strain. It is in that context that I try offer a constructive opposition to the Budget today—pointing out what I agree with, what I do not and where I think it can be better.
Healthcare is the biggest issue for my constituents, so I will start there. At first glance it looks like we have a big injection of cash into the NHS. That is a relief. I have previously warned about the counterproductive nature of further austerity, and I am cautiously optimistic that we might escape it in this area. But the rate at which the cash is being injected, alongside the speed at which it drops off, presents questions about how well it can be spent and what the hangover from this sugar rush might be. That requires further scrutiny.
On capital expenditure more broadly, I am glad that we are waking up to the real calculation that needs to be made by seeking to borrow to invest in vital infrastructure. I made my maiden speech on Second Reading of the Budget Responsibility Bill, and I took that opportunity to encourage a change to the fiscal rules. That is exactly the kind of geekery that you will get from me, Madam Deputy Speaker, now that I sit on the Treasury Committee. Next week, I will go into more detail on “persnuffles”—PSNFL, or public sector net financial liabilities—and so on, but I will spare the House of that today. Overall, I am pleased to see a move in that direction.
I say “overall” because in my maiden speech, I used the example of rebuilding my local hospital as the perfect no-brainer project that could be unlocked by greater willingness to borrow to invest—St Helier hospital is older than the NHS itself, and some parts of the estate are literally crumbling and desperately need investment in major works and a new building—so I was disappointed that we did not even receive greater assurances about the progression of that project. I hope that the Health Secretary will soon return to the Chamber with further announcements.
The other big gap in the Chancellor’s Budget was on social care. As my right hon. Friend the Member for Kingston and Surbiton (Ed Davey) said yesterday, it is still undeniably
“the elephant in the…waiting room.”
Without addressing social care, any investment in the NHS will be fundamentally flawed. Billions of pounds will pour in, but it will be undermined by the failure to get people who would be better treated at home out of hospitals. Of course, that has a knock-on impact on local authorities. I fear that the £600 million put forward yesterday to support councils on social care will be spread too thinly, especially when factoring in the impact of the national minimum wage and employer NICs, so I ask the Government to consider extending the public sector exemption to the care sector. The Budget means that councils that are already on the brink are going to have to make some pretty unpalatable cutbacks just to survive. It means that the mismatch between what taxpayers pay and the local services they receive will get worse. I hope that we get much greater clarity next year on local government funding.
My final point on the NHS relates to its potential to get our economy going again. Far too many people are economically inactive because of ill health. That places a huge strain on our welfare budget, and if we are honest, we do not really have enough data on what is driving it. I am worried that the Labour Government think that it is because we have suddenly become a nation of shirkers. There was tough talk yesterday of carrying over the Tory plan to get more punitive on work capability assessments. Chasing down benefit cheats might go down well with some newspapers, but that kind of demonisation of the sick is both shameful and ineffective.
Let me point to just one example. My dad, a proud scaffolder for most of his life, has worked his socks off from Monday to Saturday every week, but he is now in his late 50s, and that kind of work is not easy. He started having trouble walking and has had to stop work, and it took months to get a diagnosis. When he finally found out that he had a hip problem, the NHS basically told him to come back in a year, because it could not treat him until then. He asked what he was supposed to do about work, and was told that he would have to sign off sick. Do Members think that my dad enjoys doing that? He hates it; he is a proud working man being denied the opportunity to work. If the NHS could fix him today, he would be back in work tomorrow. Here is my big bet: there are far more people like my dad than there are the benefit cheats that Labour focused on yesterday. So let us have some compassion and focus on what will really get people back into work.
Before I bring my remarks to a close, I will touch on two big elements that I plan to take up further on the Treasury Committee. The first is tax. I want the country to start a more honest conversation about tax. I know what some Labour Members will be thinking, but the Liberal Democrats set out in our manifesto £27 billion-worth of tax and spend proposals, because we knew that public services desperately needed the cash injection. The Labour manifesto proposed only £5 billion in tax rises, but yesterday we were presented with an increase of £40 billion. I am willing to accept that a black hole was left behind, but those numbers do not add up. The Conservatives proposed tax cuts in their manifesto, and at the previous Budget, but it turns out that they were not based on realistic figures either. Tax is always something to be “hit by” in politics—always deemed a punishment instead of a contribution. It leaves in tatters the debate about what a fair distribution of tax is, and trust in politics plummets as a result. We all need to do much better.
My other point is about growth. We have had months of hearing this Budget being pitched as one of growth, yet the OBR thinks that its effect will be broadly flat—at least over the forecast period. The conversation around how to achieve growth must get much more serious. Growth in GDP—a very specific measure—should not be the sole way in which we evaluate the country’s success, and someone who believes that it should must at least recognise that growth has not only a rate, but a direction, and it up to us, in this place, to set that direction.
Finally, I was advised recently that the key way to critique the Budget is to look out for the big numbers in the Red Book that the Chancellor did not mention. Well, I will save that, but I will highlight a small number that the Chancellor did not mention: £40 million to trial a kinship care allowance. I moved into the care of my grandparents as a teenager, and they would have been immensely grateful for that support, so I welcome the trial and hope that it is a roaring success.
Mrs Sarah Russell (Congleton) (Lab)
I thank the hon. Member for Carshalton and Wallington (Bobby Dean) for his comments about kinship allowance, which I will address in due course, because it is helpful when we have constructive opposition. However, he talks about the difficulty of obtaining NHS treatment, and I remind him of the five years that the Liberal Democrats spent working alongside the Conservatives to bring about cuts to our NHS, the police and many other vital services. I will leave it at that.
I congratulate my right hon. Friend the Chancellor on the Budget, which is clearly the start of a new chapter towards making Britain better off. I can see clearly how it links into our Labour target of securing the highest sustained growth in the G7, as well as into our other missions of having an NHS fit for the future and breaking down barriers to opportunity. It is clear that there is a strategy for achieving aspiration and providing people with support. Those two things can truly combine to make our country greater.
One measure that will affect my Congleton constituency is the work that will now continue at pace for hospitals affected by the RAAC—reinforced autoclaved aerated concrete—crisis, including Leighton hospital in Crewe, which serves many of my constituents. The hospital still has paper notes; it does not have an electronic records system. The major reason for that is that it has spent over £100 million in the past few years just on propping up its walls. That kind of failure spend to sustain the hospital’s most basic physical infrastructure means that the investment to make the NHS fit for the future cannot be made. I look forward to being part of a Government who enable us do the sort of forward-thinking work in which we stop making short-term decisions that simply prevent people from having access to the care that they need—we must work in a rational manner. People in the NHS, including doctors and nurses in my constituency, will be grateful that we are moving in that direction.
The NHS has been broken, but the Budget will begin to fix it. Our social care system has also faced significant challenges in recent years. Again, this Budget begins to fix that. Alongside the £600 million in grant support for local authorities, I am so pleased to hear about the £86 million increase in the disability facilities grant, which will enable us to support 7,800 more home adaptations. As I think we all know, people want to stay in their homes for as long as possible, and it is our duty as a Government to facilitate that.
Similarly, I am pleased to see the 4.1% uplift in the state pension through the triple lock, which will enable more than £475 per year to be given to many pensioners across the country. We are also going to see the biggest ever cash increase in the earnings threshold for carer’s allowance, meaning that many more thousands of carers in my constituency can increase their income—which is so important for people’s dignity—and many more people will be able to access carer’s allowance for the first time. I also want to say an enormous thank you to the kinship carers in my constituency: those grandparents, older siblings, aunts and uncles, extended family members and family friends who are looking after children. They will welcome the announcement of £44 million to support kinship and foster carers, including through the new kinship allowance trial.
Speaking of children, I turn now to schools. Schools across the country are crumbling. RAAC schools specifically have hit the headlines, but there are many other fundamental structural problems in many of our schools—schools that were decimated overnight by the previous Government’s scrapping of the Building Schools for the Future programme. This Budget will begin to fix those problems, with £1.4 billion allocated to delivering classrooms that children can learn and thrive in, and a £2.3 billion increase in the core schools budget to support the recruitment of 6,500 new teachers. It will also enable us to properly fund pay rises for the public sector, which are so important for retaining the experienced teachers on whom we rely. I am delighted that £1 billion of that £2.3 billion increase will go towards fixing our special educational needs system and systems for disabled children within education. It is so important that we get that right: parents in my constituency and their children are desperately reliant on us for it.
Our childcare system has also been struggling, which has had huge implications for parents’ ability to go to work. This Budget will begin to fix that by allocating £1.8 billion to continue the expansion of Government-funded childcare, which will help people to stay in, and return to, work. More than a quarter of children in my constituency of Congleton live in relative poverty after housing costs. The roll-out of free breakfast clubs in primary schools is a very welcome measure to help struggling families. Moreover, the increases in the national minimum wage will have an enormous impact on families and on child poverty. Some 70% of children in this country who are growing up in poverty live in a family with at least one working parent. It is low wages that are causing those problems, and I am very pleased that we are addressing them.
Our roads have also been broken by 14 years of austerity, and again, this Budget will begin to fix them. The investment of £500 million to fix an additional 1 million potholes per year is a good start. Drivers in my constituency will welcome that investment, as well as the continued fuel duty freeze.
Of course, businesses will welcome many of the steps in the Budget as well. While we are increasing the national living wage to support workers, we are also supporting small businesses through an increase in the employment allowance, fairer business rates, start-up loans, growth hubs and the new national wealth fund. Small businesses in my constituency will also welcome the funding the Chancellor has committed to tackling shoplifting, which affects all of our shopping bills and is worth billions of pounds to the economy every year. Shopkeepers in my constituency recently told me and the Cheshire police and crime commissioner, Dan Price, that they have given up on trying to report shoplifting in many instances because it is simply not a good use of their time. I am so pleased that we will begin to address this issue.
We are beginning to get the fundamentals right. Under the last Government, there were so many counter- productive cuts that undermined our national productivity. This Budget does not stand alone as a one-off event. Rather, it is part of a coherent set of plans to ensure that our public services are reformed and that we are able to develop cross-departmental working in government and deliver what working people need to have a good quality of life, an NHS that is there when they need it and work that pays. I look forward to working with businesspeople and families in my constituency to ensure that we get the delivery of those plans right over time, but right now, this Budget looks like a solution that will begin to fix the NHS and social care; rebuild hospitals and schools; fix the SEND system; and rebuild confidence in our public services, in the economy and in our future as a country.
Andrew Rosindell (Romford) (Con)
I am pleased to follow the hon. Member for Congleton (Mrs Russell). It was enlightening for me to listen to her because she listed a huge array of things on which the Government are now going to be spending a lot more money. They are all very good causes of absolute benefit to the people of our country. The one problem I have listening to her, and to all the Labour Members, is that we do not have any money left: we have spent it all. We had to spend half a trillion pounds on the pandemic, but I notice that no one has mentioned that. We are, in effect, running on tick. We are living beyond our means, we are spending money we do not have, and all we are doing, laudable though it may be to spend the money we are discussing today, is handing huge debts to future generations.
I have to remind Labour Members that every Labour Government we have ever had in my lifetime has left this country with higher debt, more unemployment and an economy in a worse state. I would also remind them that it was in 1979, after years of failed socialist government, that we finished up having to rebuild the economy under a Prime Minister who had the determination to do what was right for our country, and those economic reforms led to years of prosperity.
Andy MacNae
It sounds as though the hon. Member is giving up on Britain. He seems to be saying that there is no point in trying to find a better future for ourselves because there is no money left, and the previous Labour Government left no money. Would he recognise that the level of debt left in this country at the end of the recent Conservative Administration is twice what was left by the Labour Government in 2010?
Andrew Rosindell
The hon. Member forgets about the pandemic and its associated costs. The reality is that we have to create the wealth before we spend it. For many years I have heard Labour Members talk about how to spend money. I very rarely hear how we actually create the wealth we need to spend on our public services, and that is where it all goes wrong.
Andrew Rosindell
No, I will not give way.
The Chancellor yesterday painted a dire picture of our country’s future. Under Labour, it is not the economy that is booming but the size of the state, with an ever-increasing burden of taxation on working people. Under this Government, it is not the businessmen in my constituency of Romford who are being supported with the future success of their enterprise but the climate alarmist, with a public energy company that will not even produce any energy. How sensible is that? It is not the young family in areas such as Collier Row or the pensioner in Rush Green—both in my constituency—who are being supported by, for example, a decrease in stamp duty or help with energy payments, but, of course, the union bosses who are able to deliver over-inflated pay rises to the public sector, and the private sector is once again paying for that.
Despite the Government’s talk of growth, this Budget is preparing us for the return of the dark days of the 1970s, with hard-working people paying the price. Indeed, the Government are so lacking in aspiration for this country that they want the Office for Budget Responsibility not only to mark their work but, it seems to me, to do their homework completely. They are even gifting the OBR more powers, as was outlined in the King’s Speech.
In my view, Britain’s potential is far greater than a high-tax, low-growth and dysfunctional big state. Far from my “giving up on Britain”, as the hon. Member for Rossendale and Darwen (Andy MacNae) said—quite the opposite—I love this country, I believe in this country, and I hate to see what socialism has done to this country over the years. Labour Governments always end up in a worse situation than when they started, and Conservative Governments always have to come in and pick up the pieces, and restore the economy back to prosperity and vibrancy again. In five years’ time, I am sure we will have to do the same.
It is now clear that, under this Labour Government, the British people face a tyranny of taxation. Not content with the record-breaking tax burden that already exists, Labour is adding to the load on the shoulders of hard-working people. Under Labour, it will be harder than ever to buy a property. The journey to work of my constituents in Romford who are lucky enough to own their own home is going to be even more expensive than it is already under the control of the Mayor of London, Mr Khan, with the rise in bus fares. Once they get to work, my constituents will have far less in their pay packet, because the increase in national insurance paid by employers will, of course, clearly be passed on to employees. It is nothing but a stealth tax by this supposedly transparent Labour Government, and it is job destroying. Businesses in my constituency have already been telling me that they will not be employing people because of this reckless increase in national insurance. My constituents, all our constituents, might even lose their jobs. [Interruption.] They will lose their jobs, as businesses struggle with the national insurance increase. The costs of that will be phenomenal, and the growth-crushing increase in capital gains tax will also have a big impact.
As if that was not enough, when someone sadly passes away, the Labour Government want to make it even harder for them to pass on what they have earned throughout their life to their loved ones, by expanding inheritance tax to pensions and so on. That is incredibly cruel. People pay tax throughout their life, and will pay more tax when they die. Is that really the kind of thing a Labour Government should be doing? It will harm a lot of families who would inherit but will not be able to because of the cash grab from this Budget.
I do not believe that the Government are pro-worker at all. They cannot even define what a worker is. Labour used to be the party of the state from cradle to grave. Now it seems to be the party of taxing my Essex constituents from cradle to grave and beyond. This has been a very Essex-weighted debate, with contributions from my hon. Friends the Members for Epping Forest (Dr Hudson) and for Harwich and North Essex (Sir Bernard Jenkin), my right hon. Friend the Member for Maldon (Sir John Whittingdale), the hon. Member for Harlow (Chris Vince) and others. People in my county of Essex are very disillusioned by all this, because they are aspirational and hard-working. They are market traders and small business people. They will be devastated by all this. I warn Labour Members that they will find that out when they next knock on doors in their constituency.
As Margaret Thatcher warned us—[Laughter.] Well, she did rescue our country’s economy; let’s be honest about it. [Interruption.] She really did, and we are still benefiting today from the reforms that she introduced. As Margaret Thatcher said, any Government who impose high taxation are taking power away from the people and giving themselves power over the people. Of course taxation at some level is always necessary. It has to be in place to support our nation’s armed forces, to support families and protect pensioners, and for investment in necessary infrastructure and public services for the future. But what are the Labour Government doing with all the hard-earned money that the working people of this country have created? I think they will be spending billions of pounds on things that will go to waste.
Chris Vince
Does the hon. Gentleman not think that there was quite a lot of waste under the previous Government? There were dodgy personal protective equipment contracts that did not result in money being spent on PPE. Is that the sort of waste our Government should claw back?
Andrew Rosindell
I have to say that I agree with the hon. Gentleman. The last Government wasted a huge amount of money—[Interruption.] No, they did. No wonder we lost the election. But this is not a political point; this is about how we run the country effectively and efficiently. My hon. Friend the Member for Harwich and North Essex made a range of serious points about how we are going to survive as a country. We cannot keep spending money like this. It does not work, and future generations will suffer because of it. The last Government failed, but this Government are going way further. This is all simply unaffordable, and I worry about the future of our country if we cannot see where this will eventually lead.
The Labour Government are spending billions of pounds on a renewable energy company that will not produce any energy—another vanity project. They are spending billions of pounds on public sector wage hikes, and are pouring even more taxpayers’ money into public services, with virtually no concrete productivity targets.
Johanna Baxter (Paisley and Renfrewshire South) (Lab)
Does the hon. Gentleman accept that those pay rises will go to hard-working people who are themselves taxpayers?
Andrew Rosindell
Look, we have to live within our means. Of course I do not object to money being spent wisely and sensibly—it is the role of any Government to ensure that the money we spend goes where it is really needed in our country. The problem I have is that all this is unaffordable. We are about 100% of our GDP in debt. That is the highest that debt has been in our entire history. We cannot go on doing this. Eventually it will all come crashing down, and every hon. Member who let it happen without speaking out, as I am doing today, will have to take responsibility when future generations have to pick up the pieces. We cannot afford the debt we are getting into.
If hard-working people are being taxed, they rightly expect the money to be put to good use, to boost infrastructure. We should focus on local services and economic growth, not ideological consumption. Again, the people of Romford and throughout the borough of Havering and the county of Essex will be rightly outraged that there is so much unfairness, especially in local government funding. The funding formula has not been addressed in the Budget, from what I can see. That is a serious issue in the London borough of Havering, where my constituency is based. Despite this being the greatest example of tax and spend that I can remember since I have been a Member of Parliament, nothing has been done to address that very serious problem.
The funding formula is unfair, outdated and discriminatory. It fails to address local demographic shifts. Local people, businesses and public services are the bedrock of our economy. They face acute financial pressures in my constituency. They deserve an ambitious programme of reform, so that the money we pay in can be spent on our local services, instead of us closing down libraries and facilities, which my council is sadly now doing—necessarily, because of a lack of funding. It is a question of priorities. My local council should not close libraries, but at the end of the day, we are not being funded fairly, and the Government need to address that. If local services are not provided, people will be angry and disillusioned, and local communities will be harmed.
I speak not only for Essex and the surrounding London boroughs, but for all hard-working people the length and breadth of this country when I say that the United Kingdom has no place being a high tax, low growth and low aspiration nation. If the Chancellor wants growth, I encourage her to look to nations whose economies are expanding much faster than ours is due to under the sluggish and rather depressing growth forecasts she outlined yesterday. The formula for some of those countries is the same, whether they are in north America, Asia or Europe: low taxes that give people back the money that is rightly theirs, policies that incentivise enterprise and growth in the economy, and a lean state with minimal regulation. Investment in infrastructure is critical, and truly local public services are vital to people. They also create a basis for private investment.
In Britain, cutting red tape and reaping the benefits of Brexit—we really should do that—will attract booming business and stimulate success. The mantra that the state should manage decline needs to be rejected. The British people deserve better than this. I encourage the Government to follow not the example of failed Labour Governments littered throughout history, but the nation-saving policies embarked on in 1979 by a Prime Minister who had a vision of a greater Britain and more prosperous United Kingdom.
We must pursue an agenda of low taxes, economic growth and an efficient state that improves the public services that look after the elderly and those truly in need. The people of this country do not want, and simply cannot afford, a return to red-blooded socialism that discriminates against hard-working people, decimates our economy, destroys jobs, curtails growth and restricts freedom. The British people need a small state that works, not a bloated state that holds our country back.
Mary Glindon (Newcastle upon Tyne East and Wallsend) (Lab)
It is an honour to follow the hon. Member for Romford (Andrew Rosindell), even though I fundamentally disagree with everything that he said. I know that he will take that in the right spirit. I congratulate all colleagues who made their maiden speeches. The speeches were fantastic and moving, and I wish them all a really wonderful time in this Parliament and, I hope, Parliaments to come.
Progressive Governments are judged on whether they deliver higher standards, and I welcome the direction of travel that our first woman Chancellor took yesterday. It is good to hear that for the first time, the cost of living will be taken into account when calculating the national minimum wage. I also welcome the step towards a single adult wage rate, with 18 to 20-year-olds receiving a 16.3% increase. I hope that those kinds of revisions will continue. Those are valuable examples of the change that a Labour Government will make to low-income households.
A key feature of this Budget is that it can safeguard existing jobs in the north-east and help to create new well-paid jobs for the people I represent. One of the biggest sectors in our north-east industrial base is the offshore energy sector—that is, oil and gas companies that work in the North sea, and the associated supply chain. We are proud to have those jobs in my constituency, and we must anchor them here in the UK and avoid their being attracted overseas. Last year, in Newcastle upon Tyne East and Wallsend, the offshore sector added £2 million in gross value added and supported thousands of jobs. That is just a snapshot from the region, where the sector contributed £416 million and more than 4,500 good jobs overall. I am pleased that my right hon. Friend the Chancellor recognises the reality: that oil and gas will be essential to our economy and for energy security for decades to come, especially given that if we misstep, we will simply have to rely on imports, which are more expensive, have a higher carbon footprint and do not deliver any tax yield.
This Government have committed to ensuring that the North sea is managed in a way that does not jeopardise jobs and continues to attract necessary investment, with the delivery of net zero and energy transition being an exciting prospect. A successful home-grown energy transition has the potential to deliver the economic growth that the country needs. I know that the oil and gas sector and its representative body, Offshore Energies UK, found yesterday’s Budget encouraging. They are grateful for the positive engagement from the Secretary of State, the Chancellor of the Exchequer and the Exchequer Secretary over the summer. They recognise that the energy profit levy served a purpose, but the commitment to looking at unwinding it, and to finding a new permanent regime, can give companies and investors the confidence that they need to invest in our UK.
I look forward to helping Ministers succeed, but I will of course also hold them to account. I will also hold the industry to account on its commitment to support workers, deliver a fair transition and provide retraining and working standards for all. The trade unions are keen and willing to play their part. Offshore Energies UK estimates that with the right investment environment, UK offshore energy companies could invest £200 billion in home-grown energy this decade alone, supporting the UK to reach 50 GW of wind and 10 GW of hydrogen, reducing reliance on oil and gas, and allowing us to scale up to at least four carbon capture and storage clusters by 2030—an exciting prospect indeed.
Moving away from the economy and on to local government, I welcome the 6% real-terms increase in spending on SEND and alternative provision. The SEND system is broken. In my constituency, children have been held back from flourishing and reaching their true potential. The £865 million to help plug deficits is a movement in the right direction. I urge the Chancellor to build on that moving into the spending review in the spring.
Today, Longbenton councillor Karen Clark has been selected as Labor’s candidate for the North Tyneside 2025 mayoral election. Karen welcomes the Chancellor’s historic Budget and looks forward to promoting its promised investment for local government during her forthcoming campaign.
On social security, the reduction in the deductions cap will help to minimise the financial impact of debt repayments, with those benefiting keeping an extra £420 a year. It is a smart, fiscally neutral way to help reduce negative household budgets and raise living standards. However, the commitment to deliver the Conservative plans to reform the work capability assessment and to deliver the inherited savings has worried many with limited capability for work and work-related activity. I hope the House will be given time to examine and debate that when the proposals are outlined in greater detail.
As the chair of the responsible vaping all-party parliamentary group, I have concerns about the announced tax on vaping liquid from 2026. There are still 6 million smokers who have yet to make the switch to vaping, and a tax on vaping will only serve to discourage those smokers to quit. The vaping tax proposed by the Chancellor is unsustainably high, at 22p per ml of vape liquid. It will make the UK’s tax one of the highest in Europe. The tax will also hurt working people throughout the north-east who rely on vaping to keep them off cigarettes. Currently, many stores sell vaping liquid for refillable devices for 99p. Under the Chancellor’s proposals, that will increase by 267% to £3.64. Access to vaping liquids is not driving youth vaping—the Government are already looking to address that through the Tobacco and Vapes Bill. I fear that the tax on vapes will hurt people who have made the decision to switch from smoking to the less harmful alternative—a decision that has already saved the NHS tens of thousands of pounds per person.
Yesterday’s Budget has renewed the hope of ordinary people that the future can be different—a Labour Budget for lower-income households, working people and children. Our public services can be rebuilt, living standards can begin to turn around, and our politics can deliver progress again.
Dr Scott Arthur (Edinburgh South West) (Lab)
It has been a real privilege to share the debate with so maiden speeches this afternoon—something I did not expect. My hon. Friend the Member for Ribble Valley (Maya Ellis) is not in her place just now, but I am sure her father would have been proud of her, as will her husband. I have a fantastic charity in my constituency called Dads Rock, which supports dads and gives them confidence. It sounds like her husband is a dad who rocks.
It has been remarkable that Margaret Thatcher has been invoked quite a few times. It is quite unusual for her name to be mentioned so many times in my presence. I grew up in Fife during the 1980s, and I am sure my hon. Friend the Member for Glenrothes and Mid Fife (Richard Baker) would agree that the impact that she had there is still felt today. People still feel the impact of the rapid deindustrialisation of proud communities. I am sure that my hon. Friend has casework still about the impact of that.
It was emotional yesterday to hear the Chancellor deliver her fantastic speech. I am still a little hoarse today from all the emotion. This is the Budget our country needs, and the IMF agrees, which is incredible. It was great news for Labour MPs to wake up to this morning—I expect colleagues from other parties were less happy. The chances of my being elected were always slim, but I promised those I met on the campaign trail that Labour would get our country back on track. Yesterday’s Budget is proof that we are serious about that. We have spent the weeks since the election clearing up the mess which was left by others, but the Budget sets down the foundation for what we want to do next. It is transformative Budget. I cannot believe we are achieving so much in our first Budget, but it is only the start of a real change for our country.
The Budget will work for both the working people who call Edinburgh South West home, but also the young and retired people who deserve well-funded public services. The measures that we set out yesterday are a re-set, establishing the tone for the remainder of this Parliament and for the coming decade, not just five years. Gone are the irresponsible commitments, without plans to follow through, that we have been dealing with since the election. It feels like the grown-ups are now running the country.
We have a Budget that provides the stability to encourage growth and investment in our nation’s infrastructure and our public services. After reading through the details of the Budget, it was clear that when my colleague Anas Sarwar said,
“Read my lips: no austerity under Labour”
he meant it. The Chancellor has delivered. The Budget will deliver for the people of Scotland, with a record-breaking £47.7 billion for the Scottish Government’s budget in 2025-26. That has the potential to be entirely life changing not just for my constituents, but for people right across Scotland. The Chancellor yesterday proved that when Labour wins, Scotland wins, with the measures announced resulting in more investment per head of population in Scotland than in the rest of the UK.
The Scotland Office is now equipped with a budget for trade missions around the world, selling brand Scotland and bringing in new investment and custom to countless Scottish businesses. Some 200,000 of the lowest-paid Scots will also feel the benefit in their payslips. We will close the age banding on the living wage, which has always been unacceptable. The Budget has protected working Scots and has laid the foundations for a new era of investment and growth in Scotland, raising money from those with the broadest shoulders.
With all that in mind, I find it rather embarrassing that SNP Members talk with a straight face about this being an austerity Budget. It is almost as if they wrote their speech before they heard the Budget. It is quite curious. I can only guess—as others have commented, none of them are here today—that they are busy rewriting their lines and thinking about how they are going to respond. But I think a lot of people in Scotland will find it unacceptable that no SNP Members are here today to engage in this debate.
Is it not time, when the UK Labour Government have given the Scottish Government their largest ever funding settlement, that the SNP begins to take responsibility for its own mismanagement of Scotland’s finances? In government, the SNP has wasted millions on pet projects rather than the services on which so many Scots rely. We have had ferries with painted windows. As I speak, a hospital in Edinburgh is being closed as an emergency action because of a lack of maintenance. This is not a small hospital. The Princess Alexandra Eye Pavilion caters for 1,400 out-patients per week and it has been closed almost overnight. It is a planned process, but one that has been forced. It is absolutely incredible and shameful.
In parallel with that, local authorities have been starved of cash and our towns and cities have found their public services decimated. On Tuesday, I met third sector groups in my constituency who were preparing to make staff redundant due the pressures of SNP cuts to social care. At 10 past 12 yesterday, just as the Chancellor was getting ready to speak, I received a WhatsApp message from a GP serving one of the most deprived parts of my constituency. She described the cuts to social care services in Edinburgh as catastrophic and devastating. At quarter past 11 last night, I received an email from a GP making exactly the same points. The SNP will blame Westminster or howl austerity, but in reality that is mince—that is a Scottish phrase, Madam Deputy Speaker. The Scottish Government’s own decisions are to blame for “much of the pressure” facing Scotland’s finances. That is not just my view, but the considered view of the official economic forecaster in Scotland.
The Budget presents the Scottish Government with a choice. They can use the record funding to own the problems that they created and get our public services back on track, including the social care services I talked about. The only alternative to that is handing over power to Anas Sarwar in Scotland, because more guddle cannot be an option but I fear that that is what we are going to get. If the SNP is not up for that challenge, Scottish Labour is ready to step in. My constituents know more than most the impact of the SNP’s cuts and mismanagement, because Edinburgh—Scotland’s capital—has the worst-funded local authority in Scotland. With this additional funding, it is high time that the Scottish Government do the right thing and stop starving our council of the resources it needs. Councillor Cammy Day, Edinburgh’s council leader, made that demand yesterday. Let us hope that the funding will be a lifeline to social care providers.
In 2026, Scottish voters will have the opportunity to elect a Scottish Labour Government that will work hand in hand with this UK Labour Government to continue to deliver for the people of Scotland. However, until then, we Scottish Labour MPs, and our colleagues at Holyrood and in council chambers, will hold the Scottish Government to account for how they choose to spend the additional funding. After all, I think we can all agree that the Scottish Government have not just needed more cash; they have needed to get better at spending it.
We saw yesterday what a Labour Chancellor can do to turn around the lives of working people, even in the face of a shocking legacy handed to us by the Conservatives. This Government have given the Scottish Government all the financial tools they need to succeed. Just imagine how truly transformative it would be if we had a Scottish Labour Finance Secretary working in partnership with a Labour Chancellor here in London. That is our goal.
Alex Ballinger (Halesowen) (Lab)
It has been a pleasure to listen to so many excellent maiden speeches this afternoon, and to hear so many colleagues saying such positive words about a Budget that I am excited to support.
Every single Member on these Labour Benches represents a mandate: a mandate we were given by the British people when they voted for change on 4 July. They did not just vote for Labour Members to sit on these Benches and continue the last Government’s failed policies of austerity and decline; on 4 July, people voted for real change. I am delighted to say that this Budget has set us on a path that will change our country for the better. It begins the process of fixing the foundations of our broken economy, it sets in motion the investment needed to deliver change, and it remains steadfast that no working person will see higher taxes in their payslips.
The country knows that the Conservative party failed us with a cost of living crisis, a shoddy Brexit deal and a dreadful mini-Budget that fractured our economy, and working families in towns like Halesowen felt its failures hardest. People across my constituency have shared countless stories of their struggles to cope, with their bills going up, their wages stagnating and no help from the Government. The last Parliament was the first in modern history to leave living standards lower at its end than they were at its start.
People have been exasperated with our public services. They have watched relatives wait months and years for NHS treatment, seen their local services close, and seen the public infrastructure crumble around them. They were tired—tired of living under a Government that did not deliver on their commitments, tired of seeing our public services get worse year after year, and tired of waiting for a Government that would bring about genuine, lasting change.
Yesterday, I was proud to listen to the Chancellor as she set out the plan to change our country. I was delighted to hear her focus on fixing the foundations of our economy, on real investment in our public services and, rightly, on putting the burden on those with the broadest shoulders. With each announcement, I began piecing together what the Budget will mean for our community in Halesowen. It delivers a real difference for those most in need of help: a 6.7% increase in the national living wage, putting £1,400 more in the pockets of retail workers, pub staff and many others; an increase of the carer’s allowance earnings limit to £196 a week—carers’ charities in my constituency, such as We Love Carers, have said that that will make a vital difference to carers by allowing people on really low incomes to earn that little bit extra to support their families—and a £25 billion investment in our NHS, meeting our promise to bring waiting times down to no longer than 18 weeks, just as they were under the last Labour Government.
However, what I am most pleased by is the funding for our town centres and local communities. It pains me to say it, but our high streets have struggled in recent years—I have seen many independent shops close, and our community centres are really struggling—so I am delighted that the Government are providing £1 billion to support our high streets and communities, and the infrastructure that will support people across Halesowen. That includes £20 million to regenerate Halesowen town centre, and an additional £20 million to redevelop Haden Hill leisure centre in Cradley Heath. Both are really important projects that were promised under the last Government, but no funding was provided, so I am delighted to see that this Government have made that available. People deserve better, and Halesowen deserves better. It is time for revitalisation, and these commitments will do just that.
This Budget sets a precedent, and this Government are laser-focused on delivering for our communities. It is a Budget for growth, a Budget for investment, a Budget for fair taxation, a Budget for workers and a Budget for stability. It is a Labour Budget, and I am proud to support it. It is a Budget that will change our country, and I am hopeful for the years ahead.
Graeme Downie (Dunfermline and Dollar) (Lab)
I congratulate all those on this side of the House who have made their maiden speeches this afternoon. It has been absolutely fantastic to hear all those stories.
It has been a long 14 years since we had a Government and a Budget that will deliver for Scotland, the UK and working people. We have had 14 years of austerity, 14 years of chaos, seven Chancellors and 19 fiscal events, but not one of them delivered a thing. Opposition MP after Opposition MP—wherever they have gone—welcomed investment and said, “I want a new hospital; I want this and that,” but not one of them had an idea about how to pay for it. Yesterday, I was proud to sit and listen to a Chancellor who was being honest with the British people about the mess that was left, what we will spend, the improvements that we will make, and how we are going to pay for them.
That is what changed yesterday as we heard the first female Chancellor deliver the first Labour Budget in 14 years, and what a Budget it was. It boosted public investment by over £100 billion and maintained the fuel duty freeze and 5% cut, which are vital for families and small businesses in Dunfermline and Dollar, and across Scotland and the rest of the United Kingdom. Alongside that, the Budget supported the take-up of electric vehicles and abolished non-dom tax loopholes, raising £12.7 billion. It increased, extended and reformed the energy profits levy, as we promised to do, and kick-started GB Energy, which is headquartered in Aberdeen, to deliver the clean energy and green jobs that we will need in the future. Despite GB Energy being described by Conservative Members as a vanity project, it will deliver the infrastructure that this country needs, which they failed to deliver in 14 years.
We have increased the employment allowance for small businesses to £10,500. As someone who used to run a small business, I know how well that will be received. We have preserved the state triple lock on pensions, which will see over 12 million pensioners gain up to £475 next year. We have provided an uplift of £2.9 million for the defence budget, while maintaining £3 billion in annual support for Ukraine for as long as it takes.
As has been mentioned by my hon. Friends, this UK Labour Government will deliver a total of £47.7 billion in Scotland—the largest settlement in the history of devolution. That includes an additional £1.5 billion for the Scottish Government this financial year, and an additional £3.4 billion next year.
Andrew Rosindell
It is a bonanza of expenditure; a lot of money is being spent. The hon. Gentleman said earlier that he would explain how it will be paid for. Just for clarification, will he please explain where all this money is coming from and how we are going to pay off the debt in the long term?
Graeme Downie
I believe the Chancellor outlined all of that absolutely perfectly yesterday. I would never seek to improve on the performance of our fantastic Chancellor, from whom we heard just yesterday.
Whereas the rest of the UK has only had to endure 14 years of the Conservatives’ incompetence, we in Scotland have suffered even more. We have had 17 years of the SNP blaming the Tories for its own economic incompetence and decisions. We have had years of two failed Governments who have been content to play political games, rather than come to the help of the people of Scotland.
Frank McNally
My hon. Friend is making an excellent speech. Following yesterday’s Budget, there will be a significant increase in investment in further education, which is critical to delivering the skills revolution that we need. In Scotland, further education has been decimated by the SNP Government. Does he agree that they need to recognise the important steps taken by the Chancellor and follow suit?
Graeme Downie
My hon. Friend makes an excellent point. As I and other Members from Fife know, we are celebrating the 125-year anniversary of Fife College. I will attend a college dinner this week and I will make exactly that point to those attending. Further education is critical in providing the skills that Scotland needs, as I said yesterday during Scotland questions in relation to the defence sector. We need to ensure that the investment being provided by this Government is best used in Scotland to develop the skills that we need.
We have had years of two failed Governments but that time is coming to an end. It will truly end only in May 2026 when the people of Scotland have the opportunity to elect a Scottish Labour Government. But before the SNP exits stage right—although SNP Members seem to have exited the Chamber during this debate—I urge it to use the record funding wisely and start delivering for the people of Scotland.
The SNP Government must abandon their austerity programme of cuts to public services and a focus on their pet projects as they have gone along. They might be on their way out the door, but the least they owe the people of Scotland is not to leave the same kind of mess as their partners in constitutional distraction, the Tories, have left for the rest of the UK. That includes projects such as the Kincardine health centre in my constituency. Like the health centre mentioned by my hon. Friend the Member for Glenrothes and Mid Fife (Richard Baker), that has been delayed by more than a decade after being promised by the SNP.
Alongside the good news, we heard the Chancellor outline the mess and legacy left after 14 years of Conservative Government, who made announcements with no funds allocated. Among the empty promises from the Conservative Members was the £500 million of cultural funding promised to the city of Dunfermline in my constituency. While it is absolutely clear that the blame for that lies with the previous Government, it is none the less disappointing for the city of Dunfermline that the Government have been forced to consult on and review the funding. Dunfermline is an old city and the historic capital of Scotland, but it was officially awarded city status only in 2022. It is a growing city, which has the potential to be the driving force for the economy of Scotland. To achieve that, however, we need the right investment and support.
As the consultation on cultural funding is under way, prior to the Budget, I also wrote to the Chancellor of the Exchequer asking for assistance and support to find a small amount of investment for the port of Rosyth in my constituency to enable a new, regular passenger and freight service between Scotland and the continent. With major local employers such as Mowi and Amazon UK in the area, a ferry service to Europe would further strengthen their position as major contributors to the Fife economy and provide the option of more environmentally friendly logistics by removing truck journeys from the road.
Both the previous UK Conservative Government and the current SNP Scottish Government have talked about supporting that project, but neither have been willing to make the necessary investment. Having being failed by the previous Government promising money that they did not have, will Ministers meet me and others behind these plans to find ways of perhaps funding that commitment?
Yesterday, we truly turned the page on 14 years of Tory austerity and have given the UK and Scotland the chance to grow and succeed again. I will be the proudest Member of Parliament to support this Budget, which fixes the foundations of our country and sets us on a path to prosperity and growth in the future.
Jim Dickson (Dartford) (Lab)
It is a privilege to rise as Dartford’s first Labour MP for 14 years to welcome the first Labour Budget for 15 years. But before I do so, I pay tribute to those who have made their maiden speeches this afternoon; they have been inspiring and personal, and Members have talked about their journeys and lovingly about their constituencies. I thank Members for those, and congratulations on them.
Dartmouth, like much of the country, is at a crossroads after more than a decade of Conservative failure, with our economy stagnating and our public services broken and unable to be the safety net that my constituents need. Labour Members were elected on a promise of change, and yesterday’s Budget delivers that with a hugely welcome focus on investment to get our economy moving, setting the foundations for growth and beginning to fix our schools, our hospitals and our broken roads.
It is astonishing to hear Conservative Member after Conservative Member say how they wish to see public services improved in their constituency, without willing any means to pay for it. The hon. Member for Romford (Andrew Rosindell), for example, seems to want European levels of public service on American levels of taxation. That is not possible, but this Government are achieving European-level public services supported by European-level taxation, borne by those with the broadest shoulders.
The Chancellor is absolutely right that we must grow our economy. Nowhere is this truer than in the Thames estuary, which has the potential to be one of the UK’s engines of growth, with 1.3 million new jobs, 1 million new homes and £190 billion-worth of additional value added by 2050.
In this Parliament, I hope to work with MPs on both sides of the House and from across the estuary region, as well as with Ministers, to make real progress. Work is already under way on establishing an all-party parliamentary group on the Thames estuary, which will work with Ministers on the fair growth agenda set out by the Government-sponsored Thames Estuary growth board.
For the small number of people who have followed my short parliamentary career to date, it will come as no surprise to learn that I believe that a key shovel-ready piece of infrastructure, the lower Thames crossing, will be crucial to our investment in the estuary. Currently, we have only one road crossing of the Thames east of London, at Dartford—a single point of failure that can not only block crucial freight movement across the country but make the lives of Dartford residents a misery due to the gridlock. This project could start very quickly, with the planning process already undertaken and a delivery team already in place. In short order, it would create jobs across the local area and help us to unlock the largest bottleneck in the UK. I look forward to working with the Chancellor and her colleagues across Government to secure the necessary finance to get this project started.
Dartford is lucky to have a district general hospital at Darent Valley, where the staff work with dedication every day to support our local population. However, after 14 years of Conservative government, waiting lists are far too high and the accident and emergency unit lacks the capacity to see people quickly. The latest figures indicate that more than 26,000 residents are awaiting treatment, with more than a third waiting longer than 18 weeks. The Chancellor’s announcement of £25 billion over two years for the NHS, to cut waiting times through extra elective appointments and additional capacity, should help to bring down these waiting lists.
The recent Darzi report on the NHS highlighted the need to be far more creative in how we keep people healthy over the long term by building prevention into the system. I hope that Ministers will recognise the opportunities for people to get involved in community activities that help them to lead more active, healthy lives, as emphasised in this Budget. There is more work to do on tackling health inequalities, as these opportunities are not evenly spread across the country.
On the subject of prevention, I particularly welcome the proposal to review the sugar tax, and to consider its extension to milk-based drinks. I would like to see this consideration extended to other products, including foods that are high in salt, fat and sugar. An obese nation cannot be a healthy nation.
I finish by touching on an area of personal importance to me. Six years ago, my mother was diagnosed with dementia after her memory began to fail. I am proud that, thanks to the NHS, she has received high-quality care and continues to lead a high quality of life. As a former local government cabinet member for health, working across NHS and council boundaries, I know that is very often not the case. We can make life better for those who, like my mother, are diagnosed with dementia by ensuring early and accurate diagnosis, so the condition can be better managed, with the right treatments, and those who have been diagnosed and their families can prepare for the care they need. I hope Ministers will use the extra investment to look at how we can make that happen within the NHS.
Dartford residents will welcome two other sets of critical measures in the Chancellor’s speech. Like colleagues from across the House, I know from my many conversations with parents of children with special educational needs how inadequate and broken the provision is, across the UK and in Kent. On top of the significant increases for schools and further education, the new £1 billion announced yesterday will add resources to the review of SEND announced by the Secretary of State for Education.
I also welcome the steps the Chancellor has taken to tackle crime and to make people feel safer on our streets. Across the country, our sense of security has been eroded, with levels of antisocial behaviour and shoplifting that are far too high. This Budget will put us on the road to delivering our manifesto pledge to boost visible neighbourhood policing, with 13,000 more neighbourhood officers and police community support officers.
As other hon. Members have said, for too long we have tolerated high levels of shoplifting in our town centres. Thanks to the effective immunity for low-value shoplifting introduced by the previous Government, retailers and staff live in fear of the individuals and organised gangs that target them. The additional funding to tackle that and provide more training to our police officers and retailers will help stop shoplifting in its tracks.
It is clear that the problems we have inherited from the previous Government are substantial, but the Budget has laid the foundations for us to begin to tackle them. Steps to boost public investment, cut NHS waiting lists and fix our schools will be warmly welcomed by Dartford residents, and show that the new Labour Government are on the path to delivering the change our country voted for.
Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)
It has been a pleasure to listen to so many excellent maiden speeches this afternoon from new colleagues on the Government Benches. I am looking forward to hearing the remainder of the maiden speeches to be made by our fabulous new intake to this Parliament.
This Budget was about fixing the foundations, and we should take a moment to think about that word “foundations”. It was not about fixing the country or the economy, but fixing the foundations, so what underpins our country is broken. In Leeds, prior to 2010, there was one food bank and no food pantries in a city of 800,000 people. In my constituency, which is one of eight constituencies in the city, our food banks and food pantries are now in double figures. That represents an economic failure that we will fix. I hope that by the end of this Parliament, we will be closing food banks and food pantries because people will no longer need them, and we will not be having to open new ones.
There is nothing more foundational to this country than the national health service. I thank the Chancellor—my neighbour—for her continued focus on the NHS, a service that means so much to everyone in this country. The £1 billion capital investment to address the backlog of repairs and upgrades to outdated NHS infrastructure is a crucial step forward. I also want to acknowledge the £1.5 billion in capital funding that will be focused on increasing capacity in our health service, through new hospitals, surgical hubs, diagnostic tests and diagnostic centres.
I am particularly grateful to hear confirmation that the Health Secretary will be providing further details of the new hospital programme in the new year. With that in mind, I would like to make a strong case for the prioritisation of the Leeds Teaching Hospitals NHS Trust’s hospitals of the future project. Leeds is home to one of the largest and busiest acute trusts in the country, treating more than 1.6 million patients each year. The trust includes one of the largest centres for children and young people in the country, which cares for over 250,000 children annually and supports the birth of more than 8,000 babies.
Despite the progress made by the trust, it faces significant operational challenges because of outdated infrastructure. Some parts of the Leeds General Infirmary in my constituency date back to the Victorian era. Maintenance of such an old estate is an enormous financial strain, with backlog maintenance costs now exceeding £630 million. The previous Government’s delays in the new hospital programme have already added an extra £300 million in costs to the trust. These challenges are not just financial; they directly impact our ability to deliver care to the people of Leeds. I have been to the Portland building and seen that three floors are shut. I know that the Secretary of State for Health and Social Care has also visited the site. What is going on is not acceptable.
The hospitals of the future project will create the Leeds innovation village, delivering £13 billion in economic benefit and creating more than 4,000 jobs—delivering part of the vision that Lord Darzi had. For every £1 invested, there will be a return of £12 in public benefit—both to the NHS and the taxpayer. That is real efficiency and real productivity in public services.
Leeds is ready to deliver. The trust has already secured outline business case approval and planning consent, and has completed significant enabling works. The new hospital will be a net zero carbon building, designed to meet the highest standards of sustainability and digital innovation. This will not only improve the quality of care, but set a national benchmark for environmentally friendly and efficient healthcare infrastructure. I urge my constituency neighbour, the Chancellor of the Exchequer, and the Health and Social Care Secretary to ensure that the Leeds hospitals of the future project is given the priority that it deserves in the upcoming review of the new hospital programme. Leeds is ready to go. We have the approval, the plans and the commitment. We just need the green light to get on with it.
My constituency is a significant cultural centre. Earlier this year, under the previous Government, Michael Gove committed £5 million to the National Poetry Centre, but, unfortunately, it was £5 million that he did not have. The centre will be sited by the University of Leeds in my constituency. Yesterday, we received the news that the £5 million of funding was under review, subject to consultation. I hope the Chancellor, or a Treasury Minister —I see that there are a couple on the Front Bench—will meet me and the poet laureate, who has made this centre his passion project, to ensure that this centre adds to our national cultural life.
The British Library in the North is situated in my neighbouring constituency of Leeds South, just a few hundred yards from my own constituency, and it received very similar news. I hope that we can meet the relevant Ministers in both the Treasury and the Department for Culture, Media and Sport to ensure that these projects do not flounder under the false promises of the previous Government.
Like many other colleagues, I am also pleased about the funding commitment for special educational needs. I meet so many parents who cannot even find a place in an appropriate school for their SEN children. Some have to travel many miles to be able to get the education that they deserve. The £1 billion funding promise yesterday, which is 6% above inflation, will hopefully provide a new school, or schools, in Leeds for SEN children, with new teachers and I will no longer have to knock on doors and meet parents saying, “My child is not going to school, because there is not an appropriate place in our city”.
Finally, let me turn to devolution. I am sure that you will agree, Madam Deputy Speaker, that devolution has been a success in West Yorkshire. We have seen our bus fares capped at £2, and I know that the mayor is committed to keeping that going. We have also had a huge increase in lifelong learning and the skills agenda. None the less, Leeds is still the largest city in Europe without mass transit. It was great to hear the Chancellor recommit to that mass transit yesterday, and that West Yorkshire will receive part of the integrated settlement to deliver that.
We have only had a mayor in West Yorkshire since 2021, but I understand from a letter that she has received that West Yorkshire will be included in the integrated settlement in 2026, two years ahead of schedule if we look at previous integrated settlements that have been announced and the length of time that those authorities have had a mayor. That shows the exemplary leadership that we have in West Yorkshire at parliamentary level, at local council level and, most of all, at mayoral level with Tracy Brabin. West Yorkshire is ready to deliver in transport, in health, in education and in all areas. I know that my colleagues on the Treasury Bench will be supporting us, and I shall be supporting this Budget.
Andy MacNae (Rossendale and Darwen) (Lab)
I congratulate all my colleagues who have made brilliant maiden speeches today. As always, I am taken aback by the range of experience and expertise in this House.
I had planned to be radical and speak very briefly about a few matters that are particular to the north-west, but before I do so, I have to pick up on some issues raised by Conservative Members. First, the right hon. Member for Maldon (Sir John Whittingdale) made a seemingly unequivocal statement that businesses facing increases in payroll have only two choices open to them: to reduce their workforce or increase prices. That is patently untrue. Businesses increase payroll all the time for perfectly good business reasons. We cannot be so simplistic in our analysis. Far more important for business is having the right infrastructure, and a skilled workforce who are able to get good healthcare and support—all things that the Budget will provide.
Another Conservative Member, who would not take an intervention, drew the tired analogy between household budgets and national budgets. They are not the same. It is that sort of rubbish that got us in this mess in the first place. Finally, there were several references to short-term growth forecasts. Conservative Members are either unaware of or wilfully ignoring the fact that there is a lag between good infrastructure investment and meaningful, sustained growth. The decisions that we are taking now are long-term decisions—the sort of decisions that previous Governments ducked. These decisions will deliver sustained growth in four, five, six or seven years, which will make a real, sustained difference to the country —not short-term, sugar-rush growth for political gain.
Let me focus now on the north-west. Like much of the country outside the home counties, the north-west was badly let down by the cuts and false promises of the previous Government, so I am particularly pleased that the Budget will reverse that trend and start the process of rebuilding our infrastructure and public services. I am particularly pleased to see the very significant commitment to northern rail infrastructure. With the commitment to fund a trans-Pennine route upgrade, our cities and towns across the north will be better connected, with more frequent and faster trains.
I also welcome the recognition of the importance of local connectivity, with the commitment of £650 million specifically to fund local transport links outside the key city regions. In that context, I look forward to continuing to make the case for a commuter rail link from Rossendale to Manchester. I am also delighted to see our Government’s commitment to properly funded local growth deals and town funds, with both Darwen and Rawtenstall set to benefit from £20 million over 10 years. I will be excited to work with local leaders to develop innovative implementation plans. I look forward to the development of ambitious regional growth and investment plans that will unlock the true potential of our area.
Another hugely important aspect of the Budget is the move towards integrated settlements for mayoral combined authorities. That will truly move decision making away from the centre, end the command-and-control mindset, and put power in the hands of local leaders and communities, who know our area so much better than officials in Whitehall. That approach has the potential to bring transformational change to our region and deliver both greater value for money and better outcomes for our residents. While Lancashire is not currently in a position to receive that sort of settlement, the Budget should be a signal to council leaders and other key stakeholders in the county of the huge opportunity for Lancashire if we can all work together to get a devolution structure in place. I look forward to continuing to work with the Government and local leaders to grasp that opportunity and put Lancashire back in the fast lane.
Finally, with the average income in Rossendale and Darwen much lower than the standard throughout the UK, and even in the rest of the north-west, I wholeheartedly welcome the rise in the national living wage that the Chancellor introduced. It will mean a £1,400 pay rise for many of my constituents—a rise that can make a truly significant difference to people’s day-to-day lives. Taken together, I am delighted to see how the measures in the Budget start the process of real and sustained change for the north-west, but I am very much aware that it is simply the start of the process. I look forward to future Budgets.
Chris Vince (Harlow) (Lab/Co-op)
It is Halloween this evening, so I thought that I would come as the scariest thing that I could think of—I am wearing a blue tie. More seriously, thank you, Madam Deputy Speaker, for the opportunity to speak in this important debate. I also thank the Chancellor and the Treasury team, including the Exchequer Secretary, who is here today, for the incredible amount of hard work they put into the Budget.
As a former councillor who served on a council that was Labour-controlled for nine of the 14 years of Conservative Government-imposed austerity, I know of the huge challenges involved in putting forward a progress budget, a forward-thinking budget and a budget that gives hope, at the same time as dealing with a gaping black hole in finances.
However, as I often paid tribute to Harlow council’s finance lead, former councillor Mike Danvers, for balancing the books as well as protecting services and staff during those difficult times—something that the Conservative administration that followed were unable to do—I congratulate the Chancellor and her team on performing a miracle, frankly, with the Budget they have presented to the House.
The Labour Government were elected on a manifesto that put economic growth and stability at its heart, recognising that anything else would continue the reckless legacy of the previous Government, and this Budget does just that. We were elected as a Government to make tough decisions and we have shown already that we will not shy away from those tough decisions. We were also elected on a manifesto that focused on fixing the foundations of our NHS, and I am pleased that we have a Budget that will allow my right hon. Friend the Secretary of State for Health and Social Care to do just that.
This Government are providing an additional £22.6 billion of resources to the NHS, delivering 40,000 elective appointments a week to make progress towards a commitment that patients should expect to wait no longer than 18 weeks from referral to consultant-led treatment a reality. The capital investment in public services includes £1.5 billion to deliver capacity for more than 30,000 NHS procedures, over 1.25 million more diagnostic tests and new beds across the NHS. And there is £1 billion to reduce the backlog of crucial NHS maintenance, repairs and upgrades. The Government are investing £1.4 billion to help rebuild our schools; £1.2 billion pounds to deliver extra prison spaces; half a billion pounds to invest in local roads and deal with the dreaded potholes, which we will all be aware of; and £1 billion in new funding for extending the household support fund.
However, Members will be unsurprised to know that, as the new chair of the all-party parliamentary group for young carers, although the carer’s allowance is not paid to young carers, I really welcome the fact that the carer’s allowance weekly earnings limit is being raised to improve financial security for carers and support them into work, or to allow them to work more hours if they choose: 16 hours a week, or £196 a week—a rise of £45. It was with real delight that I was messaged by a friend who suffers from cerebral palsy, to talk about the massive difference that will make to his family. He is going to buy me a pint, apparently, but he also pointed out that the pint will cost less.
Alex Ballinger
My hon. Friend has given a long list of the achievements of this Budget, but he has neglected to mention that the Labour party has taken one penny off a pint of beer.
Chris Vince
I have cut down on my drinking now, so it does not help me as much as it would have done in the past, but I am delighted that we have done that, and delighted with the many achievements that we announced yesterday.
However, this is just the start. We know that rebuilding our economy, our public services and our country will take time, but I know—this Budget confirms it—that under this Labour Government we have the leadership and the will to make life better for everyone in our society, not just the privileged few.
Madam Deputy Speaker (Judith Cummins)
I call the shadow Minister.
Gareth Davies (Grantham and Bourne) (Con)
If you will indulge me, Madam Deputy Speaker, I shall start by paying tribute to and thanking my right hon. Friend the shadow Chancellor for his service on our Front Bench. I had the pleasure of serving him in government, as Parliamentary Private Secretary and then as Exchequer Secretary; we worked very closely together. If I may say so, there are very few people who match his ability, but also his decency. I thank him for that.
This debate has had a number of excellent contributions. I will come to the maiden speeches in a moment. My hon. Friend the Member for North Cotswolds (Sir Geoffrey Clifton-Brown), the Chair of the Public Accounts Committee, made important points about the pension fund industry and the importance of getting it to invest in infrastructure—something that we worked on very hard in government. My right hon. Friend the Member for Maldon (Sir John Whittingdale) rightly highlighted the pandemic and the war in Ukraine, which has undoubtedly had a massive impact on our economy, but we were showing the signs of recovery, as he pointed out. My hon. Friend the Member for East Grinstead and Uckfield (Mims Davies) rightly focused on the new tax on education, and especially the impact on displaced children, which I appreciated.
My hon. Friend the Member for Harwich and North Essex (Sir Bernard Jenkin) gave a great speech, first highlighting the importance of pubs and the hospitality industry, but then the importance to our economy of enterprise more broadly. As a vet, my hon. Friend the Member for Epping Forest (Dr Hudson) made excellent points—as usual—about the importance of farming, and mentioned in particular the devastating impact of the Budget on family farms. My hon. Friend the Member for Romford (Andrew Rosindell) made excellent remarks, not least about Margaret Thatcher and, in particular, the importance of private sector investment to our economy.
Those speeches were part of a debate that has included some excellent maiden speeches. The hon. Member for Worcester (Tom Collins) will, as an engineer, bring great talent and experience to the House. He was right to highlight the importance of innovation in our economy. I personally appreciated his comments about his predecessor, who worked very hard for the people of Worcester, as I am sure will he. The hon. Member for Dagenham and Rainham (Margaret Mullane) made an excellent speech about her home. She comes to this place not just as a local MP but as a strong advocate for workers throughout her constituency, and I wish her well. The hon. Member for Livingston (Gregor Poynton) represents the home of one of my favourite drinks. Scottish whisky is one of our great exports, and I wish him well in championing that sector as well as his constituents. The hon. Member for Ribble Valley (Maya Ellis) painted a wonderful picture of her constituency. Her dad clearly made a good decision in raising his family there, and if I may say so, he would be extremely proud of what she has achieved, but I feel that she is only getting started.
Let me turn to today’s subject. The Government are calling it “Fixing the foundations,” but frankly I think the OBR would call it “Breaking the foundations,” because in just one hour Labour broke our economic fundamentals. Labour has broken trust with the British people, and the spirit of aspiration and opportunity, which it will never understand or accept is the true foundation of growth in our economy. Our country woke up this morning to a new but darker dawn, with fear and a feeling of betrayal. People woke up to a number of headlines that I am not sure the Chancellor was expecting or hoping for, including “Halloween horror show,” “£40bn tax bombshell for Britain’s strivers,” “Things can only debt better”—which I particularly liked—and even The Guardian laments the “Return of tax and spend” under Labour. It is indeed a Budget that has broken our economic fundamentals. Labour has performed its biggest U-turn yet and reversed our economic recovery.
Let us never forget that the Labour Government inherited the fastest growth in the G7, inflation at target, and a deficit that is half what we inherited from Labour. Their first act was to spook consumer and business confidence, which fell more sharply than at any time since the pandemic. Now we see those worst fears being realised. Across almost every conceivable metric, the latest figures on our economy make for grim reading, even for Halloween: the highest tax burden in history, debt up and rising as a share of GDP in every year of the forecast, and debt interest payments above £100 billion in every year of the forecast—the first time ever that that has happened.
The OBR says that inflation will be higher, interest rates will be higher for longer, mortgage rates will be revised up. Gilt rates are today soaring, real household incomes are declining, and employment will undoubtedly be down, as anybody who has run a business would tell us. And for what? Unbelievably, and perhaps most humiliatingly, growth—the No. 1 pledge and priority for this Chancellor—has been downgraded by the OBR as a result of the Budget. The Government used to talk about pulling the growth lever, but they have gone and pulled us into reverse. It is unbelievable.
The Labour Government have also broken trust with the British people. They promised that they would not raise national insurance, but the Budget increases it by £25 billion. They promised that their plans were fully funded, but the OBR calls the Budget the largest increase in borrowing as a result of policies in nearly three decades. They promised that they would not fiddle the fiscal rules, but they have done just that to fund their borrowing spree. They promised that they would crowd in private sector investment; the OBR now says that it is being crowded out by this Budget. They promised to boost business investment; the OBR says that it will now fall. They promised to cut energy bills by £300; we questioned them countless times on that, and the OBR now says that we will experience
“higher gas and electricity prices”.
To justify all of this, the Government concocted a fictitious black hole, which the OBR yesterday refused to endorse. Let me quote this to Labour Members, because it is important that we clear this up once and for all: Richard Hughes of the OBR was directly asked this question live on television. He said:
“Nothing in our review was a legitimisation of that £22 billion.”
Nobody believes it; nobody is backing it up.
Finally, Labour has broken the spirit of aspiration that, as I said, is the true foundation of growth. We on the Conservative Benches recognise that it is the British people and British businesses who drive growth and prosperity in our country, not the Government, and certainly not this Labour Government. This Budget said to Britain, “If you want to invest—to expand, to take risks, to innovate—and to build a better life for yourself and your children, Labour will not back you; it will tax you.” Far from fixing the foundations, this is a Budget of broken promises, a Budget of betrayal, and a Budget that will set us back, push us down and kill aspiration. It is a Budget that the public will never forget and will never forgive.
The Exchequer Secretary to the Treasury (James Murray)
I thank my right hon. Friend the Member for Wolverhampton South East (Pat McFadden) for opening today’s debate, and for so clearly reminding us of the state in which the Conservatives left our country.
As many Members have rightly made clear today, yesterday’s Budget made choices about the future of our country. They were not just choices to get through the next few months until the next fiscal event, as we got used to under the last Government, but choices—sometimes difficult ones—about the long-term future of the UK economy and the public finances. The Chancellor’s Budget honoured our manifesto commitments by restoring economic stability, fixing the public finances and boosting long-term, sustainable investment in our country. The first Budget of this new Government turned the page on the last 14 years of chaos and decline. This Budget is a generational event to fix the foundations, so that we can deliver the change that the people of this country voted for. It begins to address the urgent pressures that our NHS, our schools, our police and our borders are under.
However, this Budget is not just about the coming year, nor even the whole of this Parliament; it is about making the right long-term decisions to create opportunities for people throughout the country, put more money in people’s pockets and begin a decade of national renewal.
Mims Davies
I thank the Minister for giving way; he is very generous. He has mentioned choices. Could he comment on the fact that the cost of borrowing is soaring after this tax-raising Labour Budget of broken promises? Labour Members have talked about a crashed economy, but now the Government are presiding over their own low-growth, slow-growth car crash, and they are living in denial themselves.
James Murray
Although we will not comment on market movements, the Chancellor outlined yesterday two new robust fiscal rules, which are the bedrock of stability on which this Budget is built. Those rules will put the public finances on a sustainable path and prioritise investment to support long-term growth. The current budget is in surplus by £9.9 billion in 2029-30, with net financial debt falling in 2029-30 and with headroom of £15.7 billion.
When we went into the election in July, the first steps that we promised to the British people opened with these three words: “Deliver economic stability”. As the Chancellor confirmed yesterday, our first fiscal rule is the stability rule. That means we will bring the current budget into balance so that day-to-day spending is met with tax receipts. No more borrowing for day-to-day spending, no more living beyond our means, and no more papering over the cracks. Our tough new stability rule means that the British people, businesses and the markets can all see the fiscal responsibility that will underpin every decision we take in government.
The Chancellor is clear that taking the tough decisions needed to deliver stability is not always easy. The previous Government ducked the difficult decisions. They made promise after promise to the British people that they knew they could never afford. Our stability rule offers a different approach. Meeting it means we needed to raise taxes, but we have been clear that we will protect working people. That is why the Budget does not increase income tax or national insurance contributions that working people see on their payslips. Instead, we are balancing the books in a fair way.
That does not always mean decisions are easy—far from it—but it is also right that, before considering any changes to taxes, we make sure everyone pays the tax they owe by closing the tax gap. That is why, as the Chancellor set out yesterday, we will deliver the most ambitious package to close the tax gap that this country has ever seen. Alongside a series of policy changes set out in the Budget documents, by 2029-30 HMRC will have recruited 5,000 additional compliance officers and funded 1,800 additional debt management staff. Together, that will mean £6.5 billion in additional tax revenue to pay for the country’s priorities before we make a single change to a tax rate or threshold.
Beyond the crucial work to close the tax gap, the Budget confirms that we will implement our manifesto promises, including to abolish the non-dom tax loophole, which the OBR says will raise £12.7 billion over the forecast period. We will end the VAT exemption and business rates relief for private schools, which the OBR confirms will raise £1.8 billion a year by 2029-30. As of today, we have increased the stamp duty land tax surcharge on second homes to 5%, helping more than 130,000 people to buy their first home or move home over the next five years, while raising £310 million a year by 2029-30 to support public services.
I know hon. Members have raised questions about some of the other tax changes announced in the Budget, and I am glad to have the opportunity to respond. In particular, I would like to address the changes we have made to inheritance tax, specifically the reforms to agricultural property relief. I realise that people may be concerned about the impact on family farms, so I would like to make clear some of the facts about how the reforms to this relief will work. The main rate of agricultural property relief on all assets was set at 50% until 1992, at which point it was raised to 100% just before the election that year.
Let me be clear: these reforms still provide a very significant level of relief to protect family farms. The Chancellor confirmed yesterday that the first £1 million of combined business and agricultural assets will continue to receive 100% relief in most circumstances. Assets above £1 million will attract a 50% relief, equal to the pre-1992 rate, which means that inheritance tax will be paid at a rate of 20% instead of 40%. Our reforms, in a tough fiscal context, still leave the relief as being far more generous than it has been in the past.
It is important to note that agricultural and business property reliefs are in addition to the nil rate bands and other exemptions, such as the transfers between spouses and civil partners, and the rules on gifts. Indeed, the National Farmers Union director of strategy has highlighted that these other features of the tax system are important. He said just today that APR
“is not the be all and end all for passing on farms on death.”
Indeed, these exemptions mean that if someone has no other assets and is passing it on to a direct descendant, a farm or farming business worth up to £2 million can be passed on without paying any inheritance tax at all. Furthermore, those liable for a charge can in most circumstances pay any liability over 10 annual instalments.
Let me also be clear about the data on agricultural property relief. The total value of a farm should not be confused with the value being passed on at death. Multiple family members can own part of a farm. For example, if an individual jointly owns a farm worth £3 million with their partner, only £1.5 million is in their estate at death. In 2021-22, the most recent year for which data is available, the median value of assets qualifying for APR was £486,000. Three quarters of estates claimed for assets below £1 million, and such estates will continue to pay no inheritance tax at all. Just 463 claims were for agricultural assets of over £1 million, or 27% of all claims. The largest assets, those worth over £2.5 million, related to just 7% of claims for APR. That data is published openly on gov.uk for everyone to see, and I encourage people to investigate it.
Sir Bernard Jenkin
It does seem rather odd to introduce a new tax and then to defend it on the basis that very few people will pay it. Why is the Minister so confident that it will yield anything recognisable in terms of a contribution to the public finances? The few landowners who will be caught by this measure will be making other arrangements to ensure that they avoid it, particularly the very large landowners.
James Murray
I thank the hon. Gentleman for acknowledging that the impact of these changes is limited and targeted. That is an important point. He leads me on to my concluding point, which is to point out that the decision we have taken to retain APR, but to limit its generosity for the top quarter or so of assets, is the right approach to fixing the public finances while also protecting family farms.
I have set out some of the detail of how we are restoring stability and responsibility to the public finances and meeting our first fiscal rule, the stability rule. As the Chancellor set out yesterday, that rule is accompanied by the investment rule, which makes sure that debt is falling as a share of the economy. Debt is measured as net financial debt—a statistic measured by the Office for National Statistics since 2016, and forecast since then by the OBR. It recognises that Government investment can deliver returns for the taxpayer by counting not just liabilities on our balance sheet, but our financial assets too. That new approach provides space to deliver the step change in investment that our country needs, within a strong fiscal framework that puts public finances on a sustainable path.
To drive investment further still, the corporate tax road map, which we published yesterday, commits us to providing the best environment for businesses through a predictable, stable, tax system. It caps the headline rate of corporation tax at 25%—the lowest in the G7. It maintains our world-leading capital allowances system, including permanent full expensing and a £1 million annual investment allowance. It maintains our generous R&D reliefs so that the most innovative companies can invest in the long-term future of our country.
Before I conclude my remarks, let me thank all hon. Members for their contributions today. It is a pleasure still to be hearing maiden speeches so far into this Parliament. I found the speech from my hon. Friend the Member for Worcester (Tom Collins) truly uplifting as he spoke about what he drew from the past of his constituency, the promise of the future and, most importantly, the people who he represents and the inspiration they give him. I thank him for bringing some of that uplifting inspiration to the Chamber.
I thoroughly enjoyed the maiden speech by my hon. Friend the Member for Dagenham and Rainham (Margaret Mullane), and everyone in this Chamber will immediately have felt the connection that she has to her constituency and the people she represents. Having formerly been the Deputy Mayor for Housing in London, I found her emphasis on the history and future of affordable housing particularly close to my heart.
My hon. Friend the Member for Livingston (Gregor Poynton) spoke passionately about his constituency, and perfectly articulated the strength of our Union in the UK, balanced with the strength of our national identities in Scotland, England, Wales and Northern Ireland. I thought he encapsulated that perfectly in his speech, and I will be looking at Hansard to remember his phrasing.
The maiden speech from my hon. Friend the Member for Ribble Valley (Maya Ellis) touched us all as she spoke about her late father, who I am sure would be incredibly proud of what she has achieved. I thank her for sharing that close personal story with us today.
We also heard from the hon. Member for Carshalton and Wallington (Bobby Dean) whose maiden speech I believe I heard last time I was at the Dispatch Box. Was he trying to claim that the change in fiscal rules was his campaign win during his speech? I am pretty sure it was the Chancellor of the Exchequer who came up with the idea, but I thank him for his contribution none the less, and I look forward to seeing him on the Treasury Select Committee.
I also thank my hon. Friend the Member for Leeds Central and Headingley (Alex Sobel) for acknowledging the importance of working with mayors across the country, including the excellent Mayor of West Yorkshire.
Let me briefly address two points made by Opposition Members, including the hon. Member for North Cotswolds (Sir Geoffrey Clifton-Brown) who spoke about a pensions review. It is an excellent idea to have a pension review, so I am glad that the Chancellor announced in August a landmark pension review, which is looking at how to boost investment and to increase pension pots. It will set out how billions of pounds of investment could be unlocked from defined contribution pension schemes and how pension pots in such schemes could be boosted by up to £11,000. I hope that the hon. Gentleman will look at that review, and I would welcome discussing it with him in due course.
The hon. Member for North East Fife (Wendy Chamberlain) spoke about the Scotch whisky industry. I understand that it may not have welcomed everything in the Budget, to put it mildly, but I want to be clear that we feel that the overall package on alcohol balances the commercial pressures on the alcohol industry with the need to raise revenue. Of course, 90% of whisky is exported so no duty is due on that. We have also looked to support the Scotch whisky industry by reducing fees for geographical verification—specific support that I hope will help the industry in the years ahead.
Today’s debate has brought to the surface the stark difference between this side of the Chamber and the other. The Conservatives have made it clear, yet again, that they are unable to take responsibility for the state of the country as they left it. In contrast, Labour’s first Budget makes it clear that, above all else, we are taking the difficult and responsible decisions to fix the mess they made. We know there are no shortcuts. We are realistic about that, but our Budget is the one our country needs. It is a Budget to restore economic stability while protecting working people, to fix the foundations and fix the NHS, to invest in the future and to rebuild Britain. I commend it to the House.
Ordered, That the debate be now adjourned.—(Taiwo Owatemi.)
Debate to be resumed on Monday 4 November.
LGBT Veterans Independent Review
(4 days, 17 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Oliver Ryan (Burnley) (Lab/Co-op)
I greatly appreciate this opportunity to engage in a significant debate about the implementation of the LGBT veterans independent review. The review not only acknowledges the historical injustices faced by our LGBT veterans, but also brings to light the ongoing barriers, insecurities and inequalities they experience, underscoring the urgent need for reform, support and compensation.
There has been plenty of interest in the debate and I am pleased to see the Lord Commissioner of His Majesty’s Treasury, my hon. Friend the Member for Redcar (Anna Turley), and my hon. Friends the Members for West Ham and Beckton (James Asser), for Slough (Mr Dhesi), for Macclesfield (Tim Roca), for Brighton Kemptown and Peacehaven (Chris Ward) and for Wellingborough and Rushden (Gen Kitchen), and others in their places.
I start by congratulating the Minister for Veterans and People, my hon. and gallant Friend the Member for Birmingham Selly Oak (Al Carns) on his appointment to ministerial office. We are indeed fortunate to have someone of his experience and dedication leading the way in advocating for all veterans and their families. His role is pivotal, and his leadership will undoubtedly influence the lives of countless veterans for the better. I thank him.
At this time of year, we come together to honour the profound sacrifices made in times of conflict and to remember those who gave their lives so we could live ours in peace. It is right to have this debate about those veterans that Governments have let down in the past, not because, as some would assert, talking about diversity, inclusivity and lived experience makes our armed forces weaker, but because it makes them stronger.
The gay ban, which was active from 1967 to 2000, was an abhorrent period of our history. For over three decades, discriminatory practices and policies excluded LGBT individuals. Those policies created a culture of fear and discrimination, in which people were compelled to hide and deny who they were or risk losing everything. The treatment in that way of people who were actively serving our country, often putting themselves in harm’s way, is a shameful chapter in our history. It undermines the values that we hold so close of respect, honour, duty, freedom and inclusion. Especially as a gay man, to whom this period feels somewhat alien considering the freedoms we enjoy today, I find it sickening to reflect on that legacy. We must ensure that it never happens again.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
I thank my hon. Friend for securing the debate. As he has rightly mentioned, although the damage of the ban on LGBT personnel serving from 1967 to 2000 and their abhorrent treatment cannot be undone, the restorative measures contained in the independent review remain hugely important. Does he agree that it is incredibly important, to ensure justice, that steps are taken to create greater awareness of the measures, which should be implemented forthwith?
Oliver Ryan
My hon. Friend the Chair of the Select Committee—it is good to see him in his place—is completely right about the recommendations made as part of the review. I will come on to that point shortly.
I pay tribute to Fighting With Pride, an LGBT veterans charity, for the amazing work they do in advocating and supporting the health and wellbeing of LGBT veterans, service personnel and their families. I have met Craig Jones and Carl Austin-Behan, whose strength and work in this area have been invaluable to many. They make the important point, more eloquently than I, that this is about security. It is about the historic injustice of lives ruined by prison sentences, criminal records and being labelled as sex offenders, and the shame that brings. Indeed, Craig highlighted two particular cases to me. The first was of “Steven”, a man imprisoned for his sexuality during the 1980s while serving in Germany. The second is “David”, a Gulf war veteran imprisoned and registered as a sex offender in the mid ’90s, just months before I was born. This stuff is not ancient history.
Lord Etherton’s review makes stark the terrible experiences that so many LGBTQ veterans had to endure. His report bears out the painful reality of being forcibly removed from the armed forces, the harassment these people faced and the acute losses that such discrimination led to. As one veteran said, particularly poignantly,
“My ejection from the army made me homeless. My mother disowned me for ‘bringing shame to the family’ and I ended up living in a car with an unhealthy relationship with alcohol until I got myself back together. It took years.”
That summarises the deep emotional scars that have been left by a system that failed in its duty to protect those who served. My own constituent “Steven”—I would not be raising this issue without his lobbying throughout the campaign and since I became an MP—was not a gay man but was dismissed based on suspicion about his sexuality. He was left with a life in tatters, living in shame and anguish for years and his relationship with his family was broken because of the decision that was taken about him.
The review’s findings are both alarming and revealing, highlighting that even after the repeal of the ban LGBT veterans continued to face both discrimination and stigma—and many still face significant barriers in accessing the full range of benefits and services they deserve, underscoring how unwelcoming the culture can be for LGBT service members. It is unacceptable. It is not what we want for Britain and it cannot be what the armed forces are about. I know that the Minister agrees.
James Asser (West Ham and Beckton) (Lab)
It is 30 years since I began to get involved in campaigning on LGBT issues, so this is not as ancient history for me as it is for my hon. Friend as he is younger than me— I got that in before he did. I was speaking to a veteran last night. My hon. Friend has mentioned how this is still affecting people, and the world has changed significantly from when I started campaigning, when people were still being criminalised and convicted. But this is still a live issue for many people and there is concern among campaigners that many veterans are now getting older and time is running out for them to be able to resolve this.
Oliver Ryan
I thank my hon. Friend for that intervention and am grateful for his experience. It comes as a bit of a reality check that, especially as gay men, we stand on the shoulders of giants in this space. The people who have come before us have lived much more difficult lives and faced much more discrimination than we do, so the duty is on us to raise these points.
The report pointed out several aspects of the situation, pointing out in particular the mental health difficulties faced by LGBT veterans against the special nature of the experiences and traumas they were exposed to. They reported higher rates of suicide, homelessness and mental health issues that included, but were not limited to, symptoms of post-traumatic stress disorder and depression. That is why a focus on targeted services is important to adjust to their needs.
Access to healthcare and support services was an additional concern raised by the review. Many LGBT veterans report difficulties in navigating the support system, and too often felt that their identities and experiences are not understood or respected, even in the present day. For these veterans, the lack of sensitivity and awareness in the system was a significant obstacle to receiving the care and support they deserve. It is essential that our systems cultivate an environment of understanding and respect going forward—one that acknowledges the distinct experience of LGBT veterans within the wider veteran support network.
The creation of dedicated support schemes tailored to the needs of LGBT veterans is another critical recommendation. These programmes should include peer-to-peer support, mental health resources and other services that acknowledge and validate the unique experiences of LGBT veterans. Peer support in particular can be an invaluable resource, offering veterans a safe space to share their experiences, build connections and receive encouragement from others who understand their journey. Increased outreach efforts are also essential to ensure that LGBT veterans are aware of the services available to them. For too long, many of those veterans have felt marginalised and disconnected from the resources intended to support them. We have to link those people up. Targeted communication strategies are needed to engage this community effectively, ensuring that they know their rights and the resources at their disposal. By proactively reaching out to LGBT veterans, we can foster a sense of belonging to ensure that they receive the support that they need.
Financial redress stands out as a key recommendation in Lord Etherton’s review, underscoring the need to compensate those affected by these historic wrongs. Although the previous Government offered a formal apology and took meaningful steps to implement many of the review’s recommendations, the allocated £50 million compensation scheme fund falls short, inadequately compensating the estimated 4,000 LGBT veterans and those affected by discriminatory practices. This amount is insufficient to address the depth of the harm inflicted or the number of people whose lives have been trashed in many cases. We must advocate for a more substantial commitment to financial redress—one that reflects the true scale of injustice endured by these individuals, and that seeks to make amends in a meaningful way. I know the Minister is genuinely alive to this; he is listening, and he and the Defence Secretary understand the plight of this community. I thank him for his continuing work in this area to support our veterans, especially as a man of service himself.
The independent LGBT veterans review provides a comprehensive road map to address the inequalities faced by LGBT veterans. By recognising the ongoing challenges, we can take decisive steps to implement the report’s recommendations. We can work towards creating a military and veteran support system that truly honours the service of all individuals, regardless of their sexual orientation or gender identity. This commitment to inclusivity and justice is not only a moral imperative, but a testament to the values we strive to uphold as a nation—values that I know the Minister and the Government agree with.
Let us take this opportunity to ensure that the sacrifices of all our veterans are acknowledged and respected. Let us all work together to build a future in which every service member is afforded the dignity and support they deserve, free from the shadow of discrimination. This is our chance to demonstrate our commitment to justice, to extend a hand to those we have wronged—including the review of financial redress—and to create a legacy of equality and respect within our armed forces today and for the future.
Mr Gideon Amos (Taunton and Wellington) (LD)
I congratulate the hon. Member for Burnley (Oliver Ryan) on securing this debate—an excellent move. I also thank the Minister and you, Madam Deputy Speaker, for allowing me to speak, following a somewhat short-notice request.
I am confident that the House will come together today to recognise the service of many of our armed forces who were shockingly discriminated against and dismissed for nothing more than being who they are. The Liberal Democrat party constitution includes the belief that everyone should be free from poverty, ignorance and conformity. It is in that spirit that we on the Liberal Democrat Benches add our support to the recommendations of the Etherton review. I also add our support and thanks to the work of the organisations already listed that campaign for the rights of these people.
Five minutes from my house is the RAF cadet base, which I see on the way to the Army Cadet Force where I am an adult instructor. I confess that in coming into the Chamber and thanking the Minister, I am not sure whether I should be saluting or bowing—I am only a sergeant! What I want to say is that my constituent Mark Shepherd used to be a member of the RAF cadets in Taunton in my constituency and later went on to pursue the career he wanted as a technician.
Mark went on to see active service on the frontline with Tornados in the second Kuwait war and in Kosovo. But he was then questioned about his sexuality and presented with the option of either leaving immediately—immediate dismissal, from which he would have lost £6,000, a considerable sum of money for a young man at that stage in life—or the premature retirement route, which he had to take. That meant he had to stay in the service much longer in very difficult circumstances with a cloud hanging over him, when really all that should have hung over him was our nation’s gratitude for serving our country on the frontline and putting his life on the line.
I am delighted that this issue has come to the fore. I genuinely congratulate the hon. Member for Burnley on bringing it forward. I am absolutely delighted that in a few weeks in Taunton I will be presenting Mark with his RAF certificate to recognise the injustice that was done to him. It is my absolute privilege to have the opportunity to do that, and to explain and pay tribute to his service in this debate.
Chris Ward (Brighton Kemptown and Peacehaven) (Lab)
I thank my hon. Friend the Member for Burnley (Oliver Ryan) for securing this very welcome debate, and the Minister for Veterans and People, my hon. Friend the Member for Birmingham Selly Oak (Al Carns) for the collegiate and sympathetic way he has engaged with me and other colleagues across the House over recent weeks.
I represent a constituency with a significant number of LGBT veterans, some of whom I have had the huge honour of meeting in recent weeks. I have also been fortunate enough to work with Fighting With Pride, the same organisation my hon. Friend the Member for Burnley referred to earlier, and I am pleased to say that they join us in the Public Gallery today.
Let me be clear about the injustice that has been suffered here. As the Etherton review sets out, for over four decades, considerable time, resource and effort was put into hunting down people who were suspected of being gay in the armed forces. That led, among other things, to arrest, interrogation, demeaning physical inspections and medical treatments, court martial, imprisonment and being dismissed in disgrace. As we have heard, this left many LGBT veterans, often at a young age, with criminal records, and no jobs, income or family support.
In the short time I have, I just want to highlight one case, a constituent of mine who I met last week. Steve joined the RAF in 1971 at the age of 16. He worked on Vulcan Bombers at RAF Waddington, served three tours of the Falklands, and was stationed in West Germany. He had an impeccable service record. In 1985, he was investigated by the RAF over a relationship with a male officer. He made the fatal mistake of telling the truth and was sentenced to six months in jail. He lost his rank, all his financial benefits, his family and the career he loved. When he was released he was 28 years old, homeless and had nowhere to turn. As I said, I met Steve. He is a man of huge honour and courage, but these are the words he said to me:
“I felt washed in shame. My career was shattered. I had a criminal record. I had no pension and had to live hand to mouth for the rest of life surviving on benefits.”
I raise Steve’s case not because it is unique. In fact, as we have heard today, it is not even an outlier. It is sadly typical of the story of too many LGBT veterans: loss of earnings, loss of dignity and loss of purpose not over the short term, but over a lifetime. That is why I gently ask the Minister, who has been incredibly sympathetic—and while I recognise the financial situation under which the Government operate—whether capping payments at an average of around £12,500 per person can really be appropriate for the level of injustice suffered by Steve and so many other LGBT veterans?
Finally, the Defence Secretary, for whom I have enormous respect, said when the Etherton report was published:
“This is unfinished business for Labour.”—[Official Report, 13 December 2023; Vol. 742, c. 899.]
I agree, and I know that the Veterans Minister will want to complete that work and finally deliver the justice for which LGBT veterans have been waiting far too long.
Tim Roca (Macclesfield) (Lab)
I thank my hon. Friend the Member for Burnley (Oliver Ryan) for securing this debate. He is proving himself to be a powerful advocate for his constituency. May I also welcome my hon. and gallant Friend the Minister to his place, and thank him for all the work he does? He is a credit to the Government. Finally, I thank you, Madam Deputy Speaker, for your indulgence in allowing me to speak this afternoon.
The very fact that we have to hold this debate is a reminder that there was once a time when a person’s ability to serve was questioned because of the person they loved. Discrimination against any LGBT person is of course appalling, but it takes a special kind of cynicism and bigotry to punish, denigrate and demean volunteer servicemen and women—soldiers who served willingly, fought beside their peers willingly, and in some cases died or were injured in the line of duty—because of their sexuality. There was never any excuse for the laws being what they were. There was no justification on account of ability in combat, no rationale based on individual discipline, and no standards that those servicemen and women could not and did not reach. The laws existed simply because of a fear of difference, and an intolerance of LGBT people. It was inexcusable.
It is worth reflecting on the sad truth that there used to be consensus about those laws. Shamefully, in 1996—quite recently—a cross-party Select Committee rejected calls for the removal of the ban, but it is important to note that 30 years on, there is a new consensus. Before, brave individuals such as naval officer Duncan Lustig-Prean, RAF sergeant Graeme Grady, RAF nurse Jeanette Smith and Navy weapons engineer John Beckett had to stand alone, but now this place is united in condemnation of that policy and—alongside the phenomenal charities that have been referenced, such as Fighting With Pride—supports the thousands of LGBT soldiers, sailors and airmen in our armed forces.
I am pleased to say that a member of my new team here in Parliament is an Army reservist and has seen in his own military career an improvement in attitudes towards himself and other LGBT+ colleagues. It is a journey, but it is worth acknowledging that things are improving. Instead of being seen as a threat and a source of disruption, difference is seen as an advantage. Celebrating difference and diversity of thought, avoiding group-think and fostering a “thinking soldier” environment are parts of a wider conceptual component that gives our military an edge. It is not enough simply to say that we tolerate LGBT people in our military or our society. We value their unique contribution to our forces.
However, even though we are far beyond the ban of the ’90s, we need to support those whom we let down. I am worried, as other hon. Members are, that a cap was placed on the compensation scheme for the 4,000 veterans that lost their careers because of institutional bigotry by the British state. I agree with my hon. Friends: how can £12,400 be deemed sufficient compensation for someone’s own chaplain initiating an investigation and subsequent interrogation of them by the Special Investigation Branch?
The British state treated many thousands of people with contempt in exchange for their willingness to serve. It exposed them to state-sanctioned, institutionalised homophobia and to discharge, leaving them isolated from their friends and family. I am glad that we are building a new consensus, but let us go a step further and make sure that those 4,000 brave, selfless servicemen and women get the compensation and redress that they deserve. And they are only the ones we know about. How many more managed by hiding their true selves? How many more denied their true self to themselves? We must do right by these people.
Finally, as we approach Remembrance Day, I hope that we can all add to our reflections a moment for LGBT veterans specifically. I will be thinking of Edward Brittain. Edward was born in Macclesfield, my constituency. At 21, as a temporary lieutenant in the Sherwood Foresters, Edward fought in the battle of the Somme. He was injured twice, shot in the arm and then in the right thigh on 1 June 1916. His gallantry won him the Military Cross, just as the Minister’s did. Edward’s citation was precise and understated:
“For conspicuous gallantry and leadership during an attack. He was severely wounded, but continued to lead his men with great bravery and coolness until a second wound disabled him.”
On returning to the front, he was tipped off by his commanding officer that he would face a court martial when he came out of the line, as Army censors had read in his personal correspondence that he had had an intimate relationship with a man in his company.
On 15 June 1918, as Edward led his company on a counter-attack on the Asagio plateau to recapture a trench and stop an enemy advance, he was shot and killed by an enemy sniper. He was 22 years old. Whether he deliberately put himself in a position to be killed, as his sister and his CO believed, is unknowable, but what is knowable is that had Edward come out of the line alive between 15 June 1918 and 12 January 2000, he would have been court-martialled and shamed by the country he had shed blood for.
Edward had a Military Cross. He was shot twice at the Battle of the Somme, but returned to the front and led his men with bravery. However, none of that mattered—he would have been considered a disruption to the unit. Let me be the first person in this place to thank Captain Edward Brittain MC for his service. He deserved better from his country.
The Minister for Veterans and People (Al Carns)
I am grateful to my hon. Friend the Member for Burnley (Oliver Ryan) for initiating this debate. I thank the hon. Member for Taunton and Wellington (Mr Amos) for lending his support, and for his fantastic support for cadets, which is absolutely super. I thank my hon. Friend the Member for Brighton Kemptown and Peacehaven (Chris Ward) for sharing a harrowing story that is all too familiar across the system. I thank my hon. Friend the Member for Macclesfield (Tim Roca) for his moving story, which really resonates, given what we are discussing today.
Earlier this month, I had the privilege of speaking at the LGBTQ+ defence awards, where I thanked former and serving personnel for their tenacity and courage. I mentioned that anyone can dodge bullets, bombs or artillery fire, but to fight against the tide when everything is bearing down on you, and to continue the struggle and fight for justice, is commendable. A wise man once said to me that courage is a decision, not a reaction. Those fighting for pride, and others who have championed this cause for so long, are truly courageous. Indeed, they are the bravest of the brave.
The abhorrent way in which LGBT service personnel were treated between 1967 and 2000 by the Ministry of Defence was completely unacceptable. The Ministry was on the wrong side of history. Its historical policy of prohibiting homosexuality in the armed forces was simply wrong, which is why the LGBT veterans independent review, conducted by Lord Etherton, has united this Chamber since its report came out in July last year. This Government supported the review in opposition, and we are now supporting its delivery. I trust that colleagues appreciate the importance of this remaining a cross-party issue as we address the remaining recommendations.
I want to personally thank Lord Etherton for all the thoughtful work he has done to address the long- burning injustices, and I am pleased that 33 of his 49 recommendations have been implemented. I can confirm that we have already received 676 applications for non-financial restorative measures through the gov.uk website. In practice, this means that the chiefs of the Army, the Royal Navy and the Royal Air Force have sent apology letters directly to the individuals affected by these issues. Medals and berets that should never have been taken away have been reissued, and each of the services has hosted several presentation ceremonies to welcome LGBT veterans back into the service family, where they have always belonged.
Rightly, our focus is now on fully addressing the 16 outstanding recommendations, including the two that relate to financial redress for those dismissed and discharged as a result of the ban, so I very much welcome this opportunity to hear the views of hon. Members. It will help inform the Government’s work to design an appropriate financial redress scheme that enables applications to be considered on a case-by-case basis and timely payments to be made. I can reassure veterans and the whole LGBT community that the needs of potential claimants are being carefully considered at each stage, including the need for a fast lane for applicants in certain circumstances, especially those with terminal illnesses.
I am, of course, aware of speculation, and I have heard some figures in relation to the fund. I trust colleagues will understand that we continue to finalise its modalities, and it is too soon for me to comment on exact figures. However, the Government are fully committed to meeting our inherited target of opening the application window by the end of 2024, and it remaining open for two years.
Oliver Ryan
I am not sure whether it is common procedure for someone intervene in their own debate, but I appreciate the Minister’s time, and I thank him for his comments about the compensation scheme. I know that he is doing the work, and that he sincerely understands the scenario for these people. It would be remiss of me not to mention that although “Steven”, my constituent, felt that yesterday’s Budget was great in lots of ways, particularly the provisions around infected blood and the Post Office scandal, he wanted a compensation scheme to deal with this issue in the same way. I hope that the Minister will look at that, make sure that we do not wait another year, for the next Budget, to talk about what we can do financially and sustainably, and recognise the context that “Steven” references.
Al Carns
I thank my hon. Friend for that intervention. To link that to what my hon. Friend the Member for Brighton Kemptown and Peacehaven said, I am aware of recent speculation about the size of any fund and redress payments. It is not possible to have certainty about the number of applicants at the moment. It is also premature to estimate the size of the payment awards, but we are working to make sure that the broadest number of individuals receive payments. We acknowledge that along with those who were dismissed and discharged, many who were not were also impacted by the ban.
Of the 16 outstanding recommendations, six are for the Ministry of Defence and the Office for Veterans’ Affairs to implement, including the delivery of the memorial at the National Arboretum, which I had the pleasure of visiting last week. We are progressing those with the excellent staff from Fighting With Pride, who are here today. Ten of the outstanding recommendations are for the national health service, as my hon. Friend the Member for Burnley mentioned, and my team are in touch with Department of Health and Social Care colleagues to track that process.
My hon. Friend highlighted harrowing stories about the ban, which are tragically all too familiar. The Defence Secretary and I have sat down with a number of veterans affected by the ban, and I have heard about the different and profound ways that it has harmed people’s lives. That is why I am determined that the Government shall address all the outstanding recommendations.
James Asser
One of the reasons why we are in this position, having made so much progress, is that under the last Labour Government, we made a lot of legal changes, but we also worked to make societal changes, along with progressive colleagues from other parties. There is a lot of hope from the community that, with a new Government, we can pick up that baton and make progress again, so I am pleased to hear what the Minister says. Does he agree that resolving these issues quickly would send the message to the LGBT community that we are taking this seriously, and are keen to get on with making progress on equality again?
Al Carns
I absolutely agree. The quicker that we get this done and get due justice delivered, the better. That is absolutely where we want to go.
When I joined the Royal Marines in 1999, the shameful ban on homosexuality in the armed forces was still in place. Last month, the Defence Secretary and I presented Etherton ribbons to Emma Riley, Stephen Close and Carl Austin-Behan. The ribbon represents the commitment and sacrifices made in service by LGBT veterans, the suffering caused by the cruel ban, and the strength shown by those who stood against it. It is one of numerous steps that the Government are taking to ensure that the armed forces are tolerant and welcoming to all.
Our LGBT+ networks are helping us to improve the experiences of service personnel and civilian staff. I urge everyone affected by past failings to register interest in restorative measures by visiting the LGBT veterans support page on gov.uk. The Defence Secretary and I will drive hard to get this work done, until every recommendation of Lord Etherton’s review is implemented —to right the wrongs of the past and to ensure that every veteran who has helped keep Britain secure receives the respect and support they deserve.
Question put and agreed to.
Renters' Rights Bill (Fifth sitting)
Thursday 31st October 2024
(4 days, 17 hours ago)
Public Bill CommitteesRead Full debate Renters' Rights Bill 2024-26 View all Renters' Rights Bill 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 31 October 2024 - (31 Oct 2024)
The Chair
With this it will be convenient to discuss the following:
Clauses 33 to 38 stand part.
Amendment 78, in clause 39, page 47, line 3, at end insert—
“(6A) On recovering a financial penalty imposed under this section, a local housing authority shall pay 20% of the recovered penalty to the person who was the subject of the discrimination.
(6B) Where the person who was the subject of the discrimination complains to the relevant landlord redress scheme about the same discriminatory behaviour, the scheme provider shall take into account any sum paid or payable to that person under subsection (6A) in assessing any further award of compensation which the relevant person is directed to pay to that person under the scheme.”
This amendment provides a mechanism for a complainant to receive a portion of the financial penalty imposed by a local housing authority as compensation for being discriminated against.
Clauses 39 to 41 stand part.
Amendment 79, in schedule 5, page 207, line 31, leave out—
“Where” and insert “Subject to section 39(6A), where”.
See Amendment 78.
Matthew Pennycook
It is an absolute pleasure, Mr Betts, to continue our consideration of the Bill with you in the Chair, not least because you will have extensive knowledge of what we are talking about as we proceed through the clauses.
Before we proceed to the substantive matter, I draw the Committee’s attention to the letter that I sent the Chair this morning, responding to the various technical questions put to me in the previous sitting. I hope that Members find my responses useful. I look forward to continuing this co-operative approach as we debate the remaining clauses.
David Simmonds (Ruislip, Northwood and Pinner) (Con)
I put on the record my thanks to the Minister for the prompt and detailed response to the points made. We had a brief discussion this morning about a small omission involving, for example, school caretakers or NHS staff who are provided with accommodation on site as part of their employment. I am grateful that the Minister has undertaken to respond to that, too, in due course.
Matthew Pennycook
I will indeed respond to that specific point in the extensive future correspondence that I expect to have with the shadow Minister, given his form in previous sittings.
Having considered assured tenancies and tenancies that cannot be assured tenancies in our third and fourth sittings on Tuesday, we now turn to chapter 3 of part 1 of the Bill, which concerns discrimination in the rental market in England. The Government are determined to make it unlawful for landlords and agents acting on their behalf to engage in discriminatory conduct against tenants with children or those in receipt of benefits. The case for prohibiting such conduct is indisputable.
Not only should all renters be treated fairly in their search for a place to call home as a point of principle, but the changing nature of the private rented sector, and the fact that it now contains increasing numbers of families and those in receipt of housing support, make it imperative that the Government act in this area. Individuals in receipt of benefits or who have children should have the opportunity to be considered for a tenancy on their own circumstances, rather than rejected straight away under a blanket policy.
The problem that this part of the Bill attempts to resolve is that a blanket ban of the kind we are considering is already contrary to the Property Ombudsman’s code of practice, and already almost certainly unlawful by virtue of the premises provisions in the Equality Act 2010, which provide for a prohibition against discrimination in the letting, managing or dispensing of premises. However, despite a number of court rulings confirming that rejecting a tenant’s application because of benefit status or family circumstances is a breach, proving discrimination is incredibly difficult. As a result, despite a growing body of case law, it remains fairly common for landlords to refuse to allow benefit claimants or those with children to view an affordable property, or to consider them as a potential tenant, and for properties to be advertised with restrictions such as “No DSS”, “No benefits” and “No kids”.
Discriminatory conduct of this kind is constantly evolving and is therefore difficult to adapt to. For example, following landmark rulings that a “No DSS” policy is unlawful as it indirectly discriminates, explicit “No DSS” adverts morphed into more subtle forms of messaging with the same intent, such as specifying “Working professionals only”. The question is, therefore, how we best ensure that the underlying discrimination in this area does not occur in practice.
During consideration of the previous Government’s Renters (Reform) Bill, I challenged the then Minister, the former Member for Redcar, to specify through regulations behaviour that for the purposes of the Equality Act 2010 should be considered unlawful discrimination unless the contrary is shown. In other words, my suggestion to the Minister at the time was that the onus should be placed on landlords to convince a court that a ban had no discriminatory impact. In developing the Renters’ Rights Bill I considered carefully whether that approach would be the most effective way to try to bear down on the problem of discriminatory conduct against tenants with children or who receive benefits. I ultimately concluded that it would not, both because it would have entailed a complex reform of the Equality Act, and because it would require tenants themselves to bring costly civil litigation to seek redress.
Jerome Mayhew (Broadland and Fakenham) (Con)
The Minister identified other legislation that already make discrimination illegal, and went on to make the point that proving discrimination is very difficult, so my question is twofold. First, if we have already outlawed that kind of behaviour, why do we need further legislation to do exactly the same thing? Secondly, if we do require further legislation, how is the evidential burden going to be passed more easily under this clause than has been the experience under previous provisions?
Matthew Pennycook
I thank the hon. Gentleman for his two reasonable questions; I will come on to answer them both in my remarks. If he feels that I have not sufficiently explained the matter, I am more than happy to give way to him again, but I will address both those points. The first I have already touched on: despite it almost certainly being unlawful under the Equality Act, discriminatory conduct of the kind that we are trying to bear down on happens fairly routinely, so it is evident to the Government that the existing legislation does not allow us to bear down on the problem effectively in practice. We think the Bill’s provisions will allow us to do so. I will pick up the hon. Gentleman’s point about the evidential burden and how local authorities make that judgment in due course.
In contrast to the approach on which I challenged the then Minister in the previous Parliament, the advantage of the approach taken in the Bill is that, first, responsibility for enforcement lies with local authorities and not tenants, and secondly, breaches can be addressed relatively easily, in the English context, via a civil offence with a lower burden of proof than a criminal one.
Clauses 32 and 33 directly and expressly prohibit discriminatory bans and restrictions on the letting of private rented sector properties on the basis that children would live with or visit a person at the property, or to persons in receipt of benefits. They also prohibit any conduct that might otherwise effectively constitute such bans or restrictions. In other words, the provisions are intended to deal with both direct and more subtle forms of discrimination. It is important to note that landlords and agents will continue to have the final say on who they let their property to, and they will be able to continue to carry out referencing checks to make sure that tenancies are sustainable for both parties.
It is also the case, as clause 40 makes clear, that nothing in this chapter will prevent landlords from making a final decision based on an objective and fair assessment of whether the prospective tenant can afford the rent, nor will it force landlords into entering into unsustainable tenancies. The majority of landlords—those who already act fairly and conscientiously and treat applicants equally, assessing their suitability on a case-by-case basis—have absolutely nothing to fear as a result of the introduction of the new rental discrimination framework.
Jerome Mayhew
The Minister made reference to the burden of proof under the clause being the civil burden, and compared that to the Equality Act. I just had a quick look at that Act—I stand to be corrected because it was a very brief look—and the burden under that Act appears to be a civil burden and also one where the maxim res ipsa loquitur can be applied. If that is the case, what is the difference between the burden of proof in this clause and that of the Equality Act?
Matthew Pennycook
If I have understood correctly, the hon. Gentleman is challenging me on the burden of proof. I will say two things: first, who is the actor in charge of enforcement? It is for local authorities to make a judgment on whether the burden of proof has been met. That is a key difference. On the legal point, I am more than happy to come back to the hon. Gentleman in terms of how the burden applies in this case and whether it is any different from the provisions under the Equality Act, but we are talking about the provisions of the Bill and the most practical way to bear down on the problem. It is a difficult one to bear down on, as he will appreciate.
Landlords and related parties will be exempt from the prohibitions if the prohibition was necessary for the landlord to fulfil a restrictive term in an existing insurance contract that prohibits occupation by children or if a prohibition was a proportionate means of achieving a legitimate aim. The example we chose in the explanatory notes was a landlord reasonably refusing to rent a small bedroom in a house in multiple occupation to a women with two teenage children, in order to adhere to overcrowding regulations. However, in general terms the clauses will bear down on rental discrimination by ensuring that prospective tenants are considered on an individual basis rather than on the basis of whether they have children or are in receipt of benefits. To reassure Opposition Members, the provisions broadly mirror those in the previous Government’s Renters (Reform) Bill.
Clauses 34 to 37 merely nullify any discriminatory clauses relating to children and benefits in tenancy agreements, superior leases, mortgage deeds and insurance policies by rendering them unenforceable. As with clauses 32 and 33, exemptions apply for a prohibition if it is a proportionate means of achieving a legitimate aim.
It should be noted that while the mortgage and lease provisions set out in clauses 35 and 36 are retrospective, the insurance provisions set out in clause 37 are not. We have taken this approach because insurance contracts are renewed with greater frequency than mortgages and leases, so will naturally be updated to reflect the new requirements without necessitating immediate action or impacting existing insurance rates.
The provisions in this chapter of the Bill make it clear that rental discrimination against families with children or people who receive benefits has no place in a fair and modern housing market. We recognise, however, that we may need to extend the new protections to additional cohorts, if required in future. Clause 38 allows us to do so by way of regulations, subject to the affirmative procedure and following a consultation, provided that any new protections remain consistent with the existing framework.
For example, I have received representations from my hon. Friend the Member for Doncaster Central (Sally Jameson) to extend the rental discrimination provisions to care leavers. The Government feel strongly that the protections provided for by this chapter should be extended to additional cohorts only if there is sufficient evidence to suggest that is required. We do not yet have such evidence in the case of care leavers, but I intend to keep the matter closely under review. If we do need to look to extend discrimination protections to care leavers, we will. The powers in clause 38 will allow us to do so, as well as to respond promptly to any new acts of unlawful discrimination that may emerge in future.
Clause 39 gives local housing authorities the power to impose a financial penalty of £7,000 on a person if on the balance of probability—this directly addresses the question earlier from the hon. Member for Broadland and Fakenham—the local authority is satisfied that there has been a breach of a rental discrimination measure in this chapter. The penalties will be compounding for continuous or repeated breaches.
In summary, although we appreciate the inherent challenges in legislating to tackle rental discrimination, I believe that the measures in this chapter, set alongside strong communication and clear guidance, will see us make measurable progress towards ending discriminatory conduct against tenants with children or those in receipt of benefits. I commend them to the Committee.
Amendments 78 and 79, tabled in the name of the hon. Member for Bristol Central, would ensure that prospective tenants who report rental discrimination could receive a share of any financial penalty imposed on the landlord or letting agent. My assumption—the hon. Lady may well correct me—is that the intent of the amendments is to create an incentive for prospective tenants to complain to the relevant local authority where they consider they may have been a victim of such discrimination. That is an entirely worthy objective, and we do want tenants who find themselves in such circumstances to make a complaint to the relevant local council. We have placed a duty on local authorities to enforce the provisions when they have sufficient evidence to act. However, I cannot accept the amendments, for the following reasons. First, the idea of giving prospective tenants a cut of the civil penalty is wrong in principle. They are penalties imposed by a public body for breaking the law, not a mechanism for compensation.
Secondly, I worry about the potential impact on local government. Allowing a proportion of any such penalty to be allocated as compensation would undermine the principle that all civil penalty income must be ringfenced for enforcement activity in the private rented sector. Moreover, we would expect local authorities, including the hon. Lady’s, to take issue with surrendering part of a receipt that may, in practice, already not be enough to cover the costs of pursuing enforcement action. The arrangements necessary to facilitate such compensation would also add to the administrative burden on local authorities. Financial incentives might also create the risk that prospective tenants complain when it is not warranted and press local councils to propose civil penalties when the evidence is lacking.
Thirdly, there are likely to be practical difficulties in identifying who has been the subject of discrimination— for example, in instances where more than one tenant is involved. There would also be an administrative burden if the compensation were to be paid in instalments.
David Simmonds
The Opposition broadly support the clauses. I have some questions for the Minister, which are matters not of amendment but of clarification.
Clause 35 deals with tenancies where there may be restrictions on children either visiting or living in a property. There has been a significant increase in the number of retirement communities across the UK, and it is quite common for them to set out a condition— for example, that occupiers must be aged over 55. That housing supply is important, especially to encourage people who are under-occupying family homes to choose to move later in life to a retirement property that is designed and built specifically for that purpose. I seek assurance from the Government that while the clause effectively nullifies any restrictions on the ability for children to live in a property, bespoke retirement communities, constructed specifically with the needs of older people in mind, will not find it a problematic provision.
We support the Government’s position in clause 40, on taking income into account. It is clear that the purpose behind the previous voluntary codes, introduced under previous Conservative Governments, and under Labour Governments with the support of the Conservative Opposition, was to bear down on the practice of restricting benefit tenants from accessing private rented property. However, as the Minister clearly said, there is a requirement for referencing checks to be undertaken. Clause 40 specifically says that there will be no prohibition on taking income into account. There is clearly a risk of a loophole in the clause, given that the Bill does not clearly specify what is meant by referencing checks.
Landlords can use insurance to cover the risk of a loss of income where a tenant defaults on a rental payment. If the insurer says, “We consider the risk of anybody on benefits to be too high,” the landlord may say, “We do not directly discriminate, but our referencing check will always decline to provide insurance for an individual in those circumstances.” There is potentially the risk that benefit claimants will fall between two stools. Universal credit is flexible and provides a top-up on a person’s rental income, so they may eligible to receive the benefit but fall outside it for a period of time. We need to ensure that that is fully taken into account. I ask the Minister to clarify the position, perhaps in writing.
Finally, I have some points relating to the interaction of all the clauses. I previously raised the issue of people who have no recourse to public funds. They are not eligible to receive benefits but may be the beneficiary of an obligation on a local authority to provide support—for example, under the Children Act 1989 or previous housing legislation. It would be helpful to understand how the clauses will apply to that group of individuals. They are likely to be creditworthy and to apply for private rental on the basis that they have a job and an income. They are not eligible for the state benefits listed in the examples of benefits that are included. We therefore need to ensure that, so far as the Government intend, they fall within the ambit of the Bill.
There is a similar issue for care leavers, about which the Minister said he has received representations. The Children (Leaving Care) Act 2000 creates a set of obligations on local authorities to secure appropriate accommodation for care leavers as they enter adulthood. Although I understand the Government’s decision not to bring a specific category of care leavers within the scope of the legislation, those who are the beneficiaries of that obligation on behalf of somebody else will find themselves discriminated against not because of rights arising from their personal circumstances but because of the obligation to somebody else—in this case, that a statutory authority has to provide support for them.
Finally, we support the Government’s position on the amendments. Although I have complete sympathy with the point being raised, as the Minister does, there is clearly a risk that what is intended to be a matter of criminal law—discrimination against an individual, whereby a court can make an order for compensation—is mixed up with a civil penalty that is designed to ensure that landlords pay appropriately.
The Minister is correct, but he may need to provide total clarity for the sake of parliamentary proceedings that a local authority will use that civil penalty in the same way as would apply if it were dealing with an issue of fly-tipping, littering or environmental nuisance, as opposed to having to prove to a criminal standard that discrimination is taking place. As those two things are different, they need to be handled differently in the way that the legislation addresses them, as my hon. Friend the Member for Broadland and Fakenham alluded to.
Matthew Pennycook
Let me address that group of questions, which are well understood and well made. I will respond to each in turn.
I think the shadow Minister may have got the clause wrong, because clause 35 deals specifically with superior leases and ensuring they are not enforceable. However, I take his point about what is usually older people’s bespoke accommodation. I am sure that we would all welcome children visiting those sorts of accommodation. I will provide a specific written answer to confirm this position, but I would expect a provider to argue that refusing tenants living with children in such a block would be a proportionate means of achieving a legitimate aim and would therefore be appropriately accommodated within the legislation.
On clause 40, the Bill will allow landlords to check if a tenant has sufficient income to ensure that they can afford to pay for a tenancy and it is sustainable. The shadow Minister made the point again, as he did in the evidence sessions, about insurance and referencing checks. I will give him a specific answer as to whether particular referencing checks or insurance products will, as a matter of course—I think this was his point—rule out universal credit applicants as tenants who can afford to pay. I do not necessarily think that that should be the case, but if it is, I will give it due consideration.
David Simmonds
It is helpful to have this conversation with regard to insurance that covers the loss of rent and insurance that specifically requires the prohibition of a child living with tenants, as referred to by clause 35. Our concern is that although the Bill’s intention is to create a clear situation where there is no discrimination against a tenant with children who would be living with them or visiting them at the property, there is a risk of ambiguity if a landlord finds, for example, that they cannot gain any insurance or that the cost of insurance is prohibitive. They would then argue that they simply could not meet their obligations as a landlord if they were to allow tenants with children who live at or visit the property. We need to therefore bring clarity so that we do not leave a loophole through the insurance market that effectively nullifies the intended impact of the legislation.
Matthew Pennycook
I appreciate and understand that point, and the shadow Minister is right to say that we need to bring the requisite level of clarity in this area. He has asked a series of questions in Committee on insurance products more generally and I will attempt to give him a more comprehensive answer in writing so that we can draw a line under some of his concerns.
The shadow Minister asked specifically about no recourse to public funds and care leavers, which again is a specific subset of issues that he is right to raise. I will come back to him on those as well.
On civil penalties and whether they can be proved, we have taken a different approach in the Bill from Scotland and Wales where the situation is different. While they seek to enforce discriminatory provisions through a criminal offence, we have deliberately taken the civil route because of the lower burden of proof required for local authorities, and the ease with which they will therefore be able to take enforcement action against cases of discrimination where they have sufficient evidence.
Matthew Pennycook
If I have answered the shadow Minister’s point, the hon. Gentleman can come in.
Jerome Mayhew
The Minister will be aware that, although there is a civil burden of proof under English and Welsh law, the level to which the courts hold that burden of proof varies substantially, depending on the nature of the tariff or the consequence of that finding. Given that councillors will be seeking to impose what looks quite like a criminal fine under clause 39—a fine of many thousands of pounds—is it the Minister’s understanding that, although the burden of proof required is civil, it will be a high hurdle when applied by the courts?
Matthew Pennycook
I do not think I would make that particular point. To expand further, we have taken this particular approach because we think there is a benefit provided by the burden of proof that local authorities are required to meet. It is also the case that making breaches of rental discrimination provisions a single civil matter in England is in line with our wider discrimination legislation, in the way that it is not in Scotland and Wales—we will come on to discuss those points.
It is worth noting that, where there is evidence, local authorities can take enforcement action against either the landlord or the letting agent, or indeed both, if the letting agent has been party to the breach, and they can face multiple fines. They are civil fines at the £7,000 level rather than the criminal fines found elsewhere in the Bill, which have a much higher threshold of £40,000. I hope that answers the point made by the hon. Member for Broadland and Fakenham. Again, if he writes to me, I am happy to give him a more detailed answer.
I hope that I have reassured the shadow Minister as to why we have taken this approach and that we have considered its impact on different cohorts. It is important that the power provided for in clause 38 is there. We will take it forward only very specifically, as I have said, after consultation and through the affirmative procedure, but we want to have it so that the system can to adapt to any new instances of discrimination that arise. To go back to the point that my hon. Friend the Member for Doncaster Central has put to me fairly frequently, if sufficient evidence is brought to us that shows that certain cohorts, be it care leavers or anyone else, are facing the type of discrimination we want to bear down on through the Bill, we can more easily add them and cover them with that power.
Carla Denyer (Bristol Central) (Green)
I will quickly clarify the comments made about my amendment 78 by the shadow Minister, and then I will discuss my amendment and answer some of the Minister’s points. If I heard correctly, the shadow Minister said that he did not support the amendment because it mixes up compensation with criminal penalties, but my understanding of the conversation that we have just had is that the clause uses civil law rather than criminal law, so that point does not stand—or have I misunderstood something?
David Simmonds
I raised the question to bring some clarity to it. My hon. Friend the Member for Broadland and Fakenham, who has a lot more legal experience than I do, highlighted that different standards are applied to the burden of proof, and that the way in which those standards are applied also varies because of the tariff. It is important to fully understand what we are dealing with. As the Minister’s response showed, the Government’s approach is correct in that the bringer of the enforcement action would be the recipient of the penalty.
Carla Denyer
In that case, I am pleased to confirm that I have anticipated those questions and concerns, and I can answer them now. Amendments 78 and 79 provide a mechanism for the complainant—the tenant, or the prospective tenant in this case—to receive a portion of the financial penalty imposed by a local housing authority as compensation for being discriminated against.
First, let me give a little context. As the Committee has heard in oral and written evidence, discrimination is rife in our private rented sector, and the Bill has the potential to deliver real change for those who find themselves wrongly and consistently locked out of housing. A YouGov survey from last year shows that 52% of landlords harbour a preference against tenants who are in receipt of benefits, and the English housing survey 2021 to 2022 found that one in 10 private renters said they had been refused a tenancy in the past 12 months because they received benefits. That shows the scale of the problem.
Families with children also face serious discrimination. There are 1.4 million families in the private rented sector with dependent children, and we have already discussed the harmful effect that it can have on them.
Rachel Blake (Cities of London and Westminster) (Lab/Co-op)
Does the hon. Lady think that the ombudsman could play a greater role in determining outcomes? Her point on the damage that discrimination can do was well made, but the Bill may be able to address that discrimination in other ways.
Carla Denyer
I thank the hon. Lady for her question, which I will come to in a moment. I have considered the role of the ombudsman, but the point of amendment 78 is predominantly to incentivise tenants to engage with the enforcement of the local housing authority.
Given the seriousness and scale of discrimination, bold measures are required. Though I welcome the Bill’s intention to stamp out discrimination, the reforms will only be as effective as the enforcement that underpins them. Under the legislation, local authorities will remain dependent on prospective tenants reporting a breach in the first instance. Let us bear in mind that we are discussing discrimination before somebody becomes a tenant—it is discrimination in the advertising of a property—so the prospective tenant may well not have an incentive for pursuing it. Local authorities will be dependent on tenants reporting the breach in the first instance, maintaining a potentially lengthy co-operation with the local authority and assisting the inquiry all the way to its conclusion.
That is a real burden. A tenant who has been refused a tenancy will likely still be contending with the extremely pressing issue of where they are going to live—they may have just been served an eviction notice or they may have had to move out of their accommodation quickly for another reason. They are unlikely to have the time or energy to volunteer their services for free to the local authority in exchange for no benefit.
I want to address a point that the Minister made against the amendment. In the circumstances I mentioned, the chance of tenants falsely or speculatively submitting a complaint is pretty slim, because they will have pressures on their time. If the prospective tenant were to get a cut of the amount received by the local housing authority, that would be a good incentive for them to report discrimination to the local authority, and discriminatory landlords would begin to be rooted out.
Carla Denyer
Can I get to my next point? I suspect that I am about to answer the Minister’s question.
Matthew Pennycook
If the hon. Lady answers it, I apologise. I want to make two points. First, I understand her concern about tenants not having an incentive to take a complaint to the local authority. We want tenants to make legitimate complaints about rental discrimination, and I think that can be encouraged through Government messaging and guidance.
Secondly, one of the four concerns I expressed was about the impact on local authorities. Has the hon. Lady spoken to her own local authority to determine how comfortable it feels about losing £1,400 out of every £7,000 fine for a breach under this provision?
Carla Denyer
I will plough on, because I was indeed going to come to that issue.
First, however, I will address one of the Minister’s other points on the convergence of penalty and compensation principles. I understand his purpose in pointing out that these are not normally combined, but there is a precedent. Sharing the proceeds of a civil penalty between public bodies and the person on the end of the wrongdoing is a departure from the norm but, as I understand it, under section 214 of the Housing Act 2004, if a landlord has failed to comply with the tenancy deposit protection regulations, a court can award a tenant a sum of between one and three times the deposit they paid.
While there is no question in that legislation of sharing an award with the local authority, it is nevertheless an example of the convergence of penalty and compensation principles in a single move. Although deposit protection rules do not give us a blueprint for the proposal I put forward in amendments 78 and 79, they demonstrate that an acknowledgment elsewhere in housing law of the importance, proportionality and justification of restitution for tenants, which also serves as a form of deterrent and admonition for rule breaking, all in one go.
The Minister may be aware that I tabled an amendment to increase civil penalties for exactly the reason that he has highlighted: if the local authority is to share the proceeds with the tenant, the total amount should be higher to ensure that it covers the cost of the local authority taking on the enforcement. That amendment was not selected for debate, so I will not shoehorn in my comments on the subject, but since the Minister specifically asked me about it, I will make the case for increasing the total civil penalty. I proposed that it be increased to £15,000 so as to not harm the local authority’s ability to undertake enforcement activity, as well as to properly reflect the time and expertise involved in the local authority pursuing such cases. I think that addresses the concerns the Minister raised.
In conclusion, the tenant is the linchpin upon which a discrimination case such as this depends. On that basis, I believe that some form of financial compensation for the person on the end of the illegal treatment is fair and proportionate. They can pursue a case with the housing ombudsman case as well, and there is an argument for taking into account whether the tenant has received something through the housing ombudsman in determining what they receive in my proposed scheme, or vice versa, but the function of the two tools is different.
Carla Denyer
I am seconds away from finishing my point, so I will give way shortly. My amendments 78 and 79 are designed to ensure that the ambition to eradicate discrimination in the private rented sector is realised, by giving tenants incentives to take the step of reporting and aiding investigations. I ask the Minister to consider that because, to put it bluntly, I am not sure that a public information campaign from councils will incentivise tenants as he suggested.
Rachel Blake
Does the hon. Lady acknowledge that her description of some kind of arrangement between the ombudsman and her proposed scheme would be incredibly burdensome, complicated and opaque for tenants? It would not necessarily deliver the type of justice she described.
Carla Denyer
A number of the organisations that gave evidence suggested something along those lines, and they had looked into the viability of both mechanisms existing in parallel. I do not have the exact chapter and verse of what they said in my head; we can look at that in Hansard.
Sam Carling (North West Cambridgeshire) (Lab)
On the suggestion made by the hon. Member for Bristol Central, the civil penalty income is imposed by a public body as a punishment for breaking the law. There is a point of principle about whether it is right—whether there is a precedent—to give a contribution back to the tenant from that. It feels very unusual to me.
I have a brief question for the Minister; it may be that as a new Member of Parliament I am not used to this yet. Is it normal to specify the amount of the fine in primary legislation? Can that cause problems later in respect of needing to uprate it with inflation or anything like that?
Matthew Pennycook
On the point made by my hon. Friend the Member for North West Cambridgeshire, it is conventional to put the amount of the fine on the face of the Bill. There are provisions in the Bill that allow the Government to increase the fine to reflect the increase in inflation over time, so it is not a static, once-and-for-all £7,000 or £40,000 in the case of criminal offences.
On the point from the hon. Member for Bristol Central, I sympathise very much with the intent. We have to ensure that prospective tenants who face direct or more subtle forms of discrimination take a complaint to the local authority, but I have confidence that tenants will, and I have concerns about the approach she specifies. First, on a point of principle, the penalties are imposed by a public body for breaking the law. They are not a mechanism for compensation. It would be a departure from the norm, as she rightly appreciates.
My primary concern—I think the hon. Lady underestimates it even with the increased fee she proposes —is that there would be a significant impact on local authorities. They will take issue with losing 20% of the fine they can levy. I will check with her local authority after I leave the Committee as to whether they would be happy to lose that.
Matthew Pennycook
Let me develop this point; then the hon. Lady is more than welcome to come back on it. Even if the loss of 20% of the £7,000 were covered by an increased fine, there are good reasons why we do not think that the fine should be higher in the Bill. Setting that aside, we think there would be significant administrative burdens to overseeing a system that redistributes part of a fine issued and secured via the specified means through the local authority. Different arrangements would need to be put in place to facilitate that. Financial incentives might create the risk of tenants taking cases where there is not sufficient evidence to press local authorities to investigate.
We have already had extensive discussion on whether, through this Bill, local authorities will be able to effectively enforce, because of the resource pressures on them. We are committed to new burdens funding to ensure that they can. I think that putting additional administrative burdens on them in the way specified is the wrong approach. The hon. Lady did not address this point, but there are real practical difficulties in identifying who has been the subject of discrimination. In her example it is simple, with a single tenant, but in cases of multiple tenants, what is the proportion of the compensation to be paid?
I think the hon. Lady’s amendment references instalments and a subdivision of the amount compensated for. This would be an over-complication of the Bill’s provisions. I am confident that the provisions will work in the way intended and that tenants will take their cases to local authorities. There is a duty on local authorities to enforce the provisions. The approach I put to the previous Minister was to put the onus on tenants and to enforce through the Equality Act. We are taking that burden off tenants and placing it on local authorities, imposing on them a duty to investigate and take action in cases of such increases. For those reasons, I am afraid I cannot accept the hon. Lady’s amendments.
Carla Denyer
I have a few follow-up questions for the Minister based on what he just said. First, does he recognise that 20% of double the amount still leaves a significant increase for the local authority? He was talking about the local authority receiving a reduced amount, but losing 20% of double the amount still means a larger amount than previously.
Matthew Pennycook
If the hon. Lady will give way, I can address that point.
Carla Denyer
My next point relates, so the Minister can probably address them together.
Secondly, the Minister said there were good reasons why he had selected £7,000 specifically and not a few thousand above or below that. Will he expand on why £7,000 is the magic number?
Thirdly, I would like to understand the Minister’s view on how tenants will be incentivised to have the prolonged engagement with a local authority that would be necessary to see the process through to conclusion—with only a public information campaign?
Matthew Pennycook
First, what research has the hon. Lady done on the administrative burden on local authorities of subdividing the amounts of money they take in through breaches to give that 20%? It is easy to say, “Increase the amount and the 20% is covered,” but, as I have put to her, there would be significant additional administrative burdens from setting up the type of arrangements she wants to see.
Secondly, why does the hon. Lady think that under the arrangements in the Bill tenants will have to spend an inordinate amount of time co-operating with the local authority to enforce breaches? As I have said, the onus is on the local authority duty, under the legislation, to investigate. Tenants have to co-operate, but I do not see any circumstances where a huge amount of their time is spent on investigation and enforcement. That is for the local authority. Does the hon. Lady have any more insight on those two points?
Carla Denyer
I have not myself done the calculations and consultations on what that might take a local authority. However, the amendment is based on evidence provided by experts in the evidence gathering part of the Committee’s work. I am trying to get the written evidence up on my parliamentary laptop, which is not co-operating. Off the top of my head, I believe it was from Shelter—I will try to look in a moment, when I have sat down. I am sure Shelter has done the work, so I would be pleased to get back to the Minister on the details when I can lay my hands on them.
Apologies, but I have forgotten the second thing the Minister said.
Matthew Pennycook
I simply asked why the hon. Lady thinks the process set out in the Bill will require huge amounts of tenant energy and time to see the enforcement process through. As I said, there is a statutory duty on local authorities in the Bill to take the process through. We have put the onus on them, not tenants. I wonder why the hon. Lady assumes it will take lots of effort on the part of the tenants themselves to seek redress through the provisions that the Bill sets out.
Carla Denyer
Yes, I remember now that the Minister asked whether I expected the tenants to investigate. I do not expect the tenants themselves to investigate, but I expect that a level of ongoing engagement will be required, which would be onerous if they are trying to flat or house-hunt and move house at the same time. My experience as a councillor for nine years, and as an active citizen, is that it often requires several successive engagements with a local authority to get the desired outcome.
Matthew Pennycook
I will respond briefly because I have set out in some detail the Government’s view on the matter. If I can say so politely, there were a huge number of assumptions in there. There is an assumption that the tenant will have to spend inordinate amounts of time working with the local authority to enforce the provision. We do not want that to be the case. Tenants will have to engage, but the onus and duty is very much on local authorities to do the work.
The hon. Lady underestimates the amount of cost, time and resource that would fall on local authorities in terms of having to set up and administer a more complicated scheme to redistribute money. The ombudsman has powers in this area to investigate complaints. The provisions in the Bill are specifically targeted at ensuring that local authorities, through that civil offence procedure and that lower burden of proof, can take action to enforce. It is right that the fees set out in the Bill are ringfenced to local authorities to be able to enforce.
I sympathise with the objective that the hon. Lady is trying to achieve, and we want tenants to take cases to their local authorities, but her amendments are flawed. I do not think they are thought through, and they rest on a series of assumptions that I do not expect to see occur in practice. For that reason, we will resist them.
David Simmonds
Not that they need it, but the Government have our support in their stance on this issue.
The hon. Member for Bristol Central raises an important point. From my experience in local authorities, I know it is often extremely complicated when they seek to allocate or judge issues of compensation on civil penalties. For example, similar legislation applies in respect of environmental nuisance, and we know it is incredibly difficult to identify who has been a victim, how to quantify the level of harm they have suffered and then how to allocate an appropriate level of compensation.
Given the good will the Minister has shown on the issue, I hope there is scope for some further discussion to ensure that if there is a pattern of egregious behaviour by a specific landlord who is clearly discriminating against particular groups of people—we recognise that particularly in London there is often a high level of demand, and a tenant may visit a dozen or more properties to secure a tenancy—there is a means of providing some form of restitution for the waste of that person’s time as a result of that discrimination.
Matthew Pennycook
Can I make a further point, which I have made before but is clearly not registering? This is where we need to take a step back and look at which different parts of the Bill do what. The ombudsman can review each complaint on a case-by-case basis. Complaints can be about discrimination and the ombudsman has the powers to put things right, including by ordering the landlord to pay compensation or correct the behaviour in question. It is not that we do not think there is a case for the suggestion—we will come to the significantly strengthened rent repayment orders that we have included in the Bill—but that this is not the place for it. Clause 39 is a quite simple provision to allow local authorities to issue fines for breaches and to be able to keep that money to fund further enforcement activity. For that reason, we cannot support the amendments.
Question put and agreed to.
Clause 32 accordingly ordered to stand part of the Bill.
Clauses 33 to 41 ordered to stand part of the Bill.
The Chair
I should explain to the Committee why we have not considered amendment 79 for a decision at this stage. Although it was been debated as part of the group, it relates to a later part of the Bill. If it does require a vote, that will be done at a later stage. The way we do things can sometimes be a bit confusing, but that is the explanation as to why that particular amendment was not considered.
Clause 42
Discrimination relating to children or benefits status: Welsh language
Question proposed, That the clause stand part of the Bill.
Matthew Pennycook
I will be brief on this group of clauses, which simply provide for rental discrimination powers and prohibitions in Wales that mirror those in England, with minor adjustments made in order to fit them into existing housing offence enforcement procedures. The measures are broadly equivalent to chapter 3 of the Bill for England, which we have just discussed at length, with adjustments made to align with the existing Welsh enforcement framework.
As I have already mentioned, Wales is taking a criminal enforcement approach, while the same conduct is a civil breach in England. That reflects the private rented sector enforcement regime in Wales, where criminal offences are in line with other housing legislation. I commend the clauses to the Committee.
David Simmonds
As the Minister has outlined, this is a fairly straightforward translation. First, I presume the measures will require a legislative consent motion on the part of the Welsh Government, and ask the Minister to clarify that.
Secondly, in respect of the proceeds of the fines, it is clearly envisaged in England that it will be the local authority that carries out enforcement and that the revenue from the fines will finance that. If it is a criminal matter in Wales—a criminal enforcement regime—will the same rules apply? We briefly debated the issue of whether fines in a criminal matter would go into the consolidated fund, as is currently the case with criminal penalties, or directly to the local authority, in order to finance the enforcement regime; will the Minister clarify how the matter will be dealt with in Wales?
Matthew Pennycook
I thank the shadow Minister for those questions. There is a simple answer to the first: yes, it requires a legislative consent motion on the part of the Senedd to bring the measures into effect.
On the approach in Wales more broadly, as I said, it reflects the established private rented sector enforcement regime in Wales. There are a number of differences. The Welsh Government, and the Scottish Government, take the criminal offence path, rather than the civil one. What that means—this is one of the reasons why we determined to go with the civil offence approach in England—is that fines are capped at £1,000 in the Welsh and Scottish contexts, whereas under the approach in the Bill we can levy £7,000, and do so repeatedly if breaches are continuous and ongoing. That is why that is reflected.
On the consolidated fund point, as it applies to the Welsh Government, I am afraid I do not have the answer. I will more than happily get an answer to the hon. Gentleman in writing.
David Simmonds
What the Minister said in respect of the consolidated fund is very helpful. I posed the question because, under the Bill, we will create responsibilities for the local authority to be the enforcement body, which as I understand it will apply in Wales as well, but the decision to take the criminal route is a matter for the Senedd, which is not the local authority. Indeed, there is some tension in the relationship between the Senedd and local authorities. Clearly, if the income is going into a consolidated fund or to the Senedd, the risk is that the enforcement body given the duty under this legislation will not receive any of the financial income raised through enforcement action. I ask so that we are completely clear about where the legislation will stand in Wales once passed.
Matthew Pennycook
I understand that point and will get the shadow Minister a precise answer in writing. It is important for the Committee and the public to have clarity on precisely all the ways in which the enforcement is, and in some cases is not, aligned in the Welsh and English contexts. I will come back to him on that point.
Question put and agreed to.
Clause 42 accordingly ordered to stand part of the Bill.
Clauses 43 to 48 ordered to stand part of the Bill.
Clause 49
Discrimination relating to children or benefits status
Question proposed, That the clause stand part of the Bill.
Matthew Pennycook
I might pre-empt the shadow Minister by saying that in the written correspondence to which I have just committed, I will give him the same set of answers on the consolidated fund and the role of local authorities in the Scottish context.
Clauses 49 to 54 provide similar protections and prohibitions in Scotland regarding rental discrimination, albeit with different processes around the power to add protection to additional cohorts. That is different from the situation as it applies to Wales. Again, the measures are broadly equivalent to those for England in chapter 3, with adjustments made to align with the existing Scottish enforcement framework. In Scottish housing law, rental discrimination enforcement is in line with other criminal penalties, as it is in Wales. I commend the clauses to the Committee.
Question put and agreed to.
Clause 49 accordingly ordered to stand part of the Bill.
Clauses 50 to 54 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Gen Kitchen.)
Renters' Rights Bill (Sixth sitting)
Thursday 31st October 2024
(4 days, 17 hours ago)
Public Bill CommitteesRead Full debate Renters' Rights Bill 2024-26 View all Renters' Rights Bill 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 31 October 2024 - (31 Oct 2024)
The Minister for Housing and Planning (Matthew Pennycook)
It is an absolute pleasure—I genuinely mean that—to continue our proceedings with you in the Chair, Mrs Harris.
The clause will end the unfair practice of pitting renters against each other in bidding wars. Many members of the Committee will have come across that as councillors and as Members, and they do not need me to tell them about the severe impact on renters. Those of us who represent constituencies with particularly hot rental markets are all too familiar with the common story: a prospective tenant arranges a viewing and turns up in person, only to find themselves being asked to compete with other tenants on the spot. Their experience is not that of a viewing, but of a kerbside auction. The impact on renters of the practice is clear.
In other cases, the growth of social media and other platforms allows this practice to occur without prospective tenants even being in the same place. Renters who have applied for a property may find themselves being added to a WhatsApp group and asked to submit offers in front of each other. Again, the detrimental impact of that practice on renters cannot be overstated.
Rental bidding restricts tenants’ ability to make an informed choice about one of the most financially significant decisions they face. It is clearly an unfair practice, and one that, thankfully, only a minority of landlords make use of. The clause will end the practice for good. It will require landlords and letting agents to state a proposed rent in any written advertisement or offer. Landlords and letting agents will then be prohibited from asking for, encouraging or accepting bids above that price. That will improve the experience of prospective tenants across England and provide clarity to all involved in the lettings process.
I turn to clause 56, which sets the enforcement framework for breaches of the rental bidding measures set out in the previous clause. Once enacted, clause 56 will give local housing authorities the power to impose a financial penalty of up to £7,000 on persons who are in breach of the prohibitions. In addition, local authorities will be able to issue multiple civil penalties to any landlord or letting agent who repeatedly breaches the requirements set out in clause 55. In line with the new burdens doctrine, we will fully fund the cost of all additional duties on local government from enforcing the rental bidding prohibition. With that, I commend the clauses to the Committee.
David Simmonds (Ruislip, Northwood and Pinner) (Con)
I echo the Minister’s comments about it being a pleasure to serve with you in the Chair, Mrs Harris.
I will not take too long on this point. The measure has been the subject of some controversy. Clearly, there is a philosophical question about the ability of the owner of an asset to gain the best possible market return, but the Government are determined on the matter. I will, however, make some practical points.
The first is about how to address the situation where the property in question is the asset of an organisation whose directors have a fiduciary duty to maximise the return on it, as is common in the case of pension funds, investment trusts or other bodies that may invest in property. Clearly, there is an obligation in law on the directors to seek the maximum possible return, but this legislation will prohibit them from undertaking any form of bidding process.
The second is about a situation where an intermediary sits between the tenant and the owner of the property. Clauses 55 and 56 set out what is meant by a prospective landlord but, in pursuit of their fiduciary duty, the ultimate owners of an asset might seek bids from a prospective managing agent or other intermediary party. They might bid to secure the maximum possible rent on that group of properties, in turn letting them out individually to tenants at a higher level of rent. Both those situations potentially create a degree of conflict.
I agree entirely with the point about the egregious practices of some landlords. It seems to me, however, that we must consider the situations that I have highlighted so that the legislation does not inadvertently lead to trustees and directors of pension funds that invest in property being in breach of their duties, or to the establishment of a get-out by means of a managing agent who sits between the property owner and the tenant.
Matthew Pennycook
I thank the shadow Minister for those well-made questions. This is a specific problem that we are trying to target, and the majority of landlords do not engage in rental bidding. We are trying to stamp out the egregious practice of a minority of landlords who exploit the fact that, particularly in hot rental markets, there is a lack of supply vis-à-vis demand. Tenants can be pitted against each other in ways that ensure the rent of a tenancy escalates to a point beyond which many of them can afford, or which, if they can afford it, puts incredible financial strain on them.
Once these provisions are in force, we think landlords will—in much the same way as the tribunal might—determine what the market rent is in a given area and what they can expect to receive from their property, and then advertise the rent at that price. I have been asked how that would work. Will landlords not advertise a price below what they could otherwise expect? We cannot have it both ways. If a landlord can expect a certain price through a competition, that suggests that tenants can pay a slightly higher price and bid up. We expect landlords to look at the market price in a given area and advertise the property at that rent, and these provisions will ensure that they cannot encourage or invite bids over that amount.
On the specific cases that the shadow Minister raises, I would not expect organisations of the type he lists to be in breach of their fiduciary duties as a result of these provisions. I understand his point about intermediary agents, particularly in groups of property where they might look to get the best deal on any of those things. I will come back to him on that specific point in writing, because I understand the need to work through those hard edge cases, but we think that only a very small minority of landlords will be affected. This is not the usual practice across every part of the country. His points were well made, and I will come back to them.
Question put and agreed to.
Clause 55 accordingly ordered to stand part of the Bill.
Clause 56 ordered to stand part of the Bill.
Clause 57
Penalties for unlawful eviction or harassment of occupier
Carla Denyer (Bristol Central) (Green)
I beg to move amendment 44, in clause 57, page 79, line 31, after “section 1” insert—
“—
in subsection (4)(a), omit ‘the prescribed sum’ and insert ‘£60,000’;
(b)”.
This amendment increases the maximum fine for illegal evictions under the Protection from Eviction Act 1977 to £60,000.
Carla Denyer
I am sure we are all aware of the risk that the abolition of section 21 may lead to a rise in illegal evictions. The Renters’ Rights Bill needs measures to protect against that, and that is the purpose of amendment 44. Across the country, a segment of private landlords evade the courts and attempt to evict tenants themselves by taking actions that include changing locks, disposing of belongings, and even cutting off electricity and water supply and harassing tenants. Many illegal evictions take place in the shadow market, where landlords and letting agents deliberately breach the law to maximise rental profits. Many renters in the shadow market are on lower incomes in marginal employment, and they are unfamiliar with their rights.
In 2019, there were just 30 prosecutions of offences under the Protection from Eviction Act 1977 in the whole of England and Wales. Such a low prosecution rate allows criminal landlords to act with impunity. When sentencing, magistrates are also very lenient; fines of less than £1,000, community service and conditional discharge are common penalties for such behaviour. If the maximum fine is £40,000—as it currently is in the Bill—because of the nature of civil penalty notices, it is unlikely that the fine will ever reach that maximum unless the offence is particularly violent. So—and here is the rub—landlords may still take a calculated risk that they can save money by unlawfully evicting tenants, given the abolition of section 21. Even where illegal eviction is not violent, it is still a horrific crime, so it is appropriate that fines reflect that. I therefore propose a maximum fine of £60,000, to give space for appropriate fines to reflect the criminality and harm caused within that range.
The change would help to ensure that, for rogue landlords, illegal eviction is not the path of least resistance, as I fear it could otherwise be. Increasing the maximum will also give a strong indication to the courts that this is not just a technical breach, and that will hopefully therefore have a knock-on effect on sentences issued upon conviction.
These cases are particularly complicated and expensive for councils to pursue, and that brings us back to the point about the cost to councils that we discussed earlier, especially where landlords refer a case to the first-tier tribunal. If local authorities are bound to lose money even when they win the case, they will be hesitant to begin proceedings. Increasing the maximum fine will help them to have more confidence that they will not lose a substantial amount of money. That is particularly important in the context of 14 years of council funding cuts, as we all know, which mean that if councils stand to lose a lot, they are disincentivised to act.
Matthew Pennycook
As we move to the final set of clauses in part 1, we cover several miscellaneous issues. As we have heard, clause 57 concerns unlawful eviction and harassment of an occupier.
The Bill clarifies and expands grounds for possession so that landlords can take their property back when there is good reason for them to do so. Landlords must always follow correct court procedures to legally evict a tenant. There is no excuse for those who seek to gain possession in an unlawful way.
The Government are clear that illegal eviction, which can include harassing individuals to leave their home, is a criminal offence, and those who flout the rules and deprive tenants of a home in this way must be punished accordingly. Clause 57 amends the Protection from Eviction Act 1977 to strengthen local authorities’ powers to do so if they are satisfied beyond reasonable doubt that a person has committed such an offence.
At present, local authorities can only prosecute offenders. That can be a lengthy process, and the fines imposed can be low. Although local authorities will still be able to prosecute after these provisions come into force, for the first time they will be able to issue a financial penalty on landlords who evict their tenants illegally in lieu of such a prosecution. That fine will be up to £40,000. It will be an alternative route to criminal prosecution, and it may often be simpler and more cost-efficient for local authorities.
The schedule that accompanies this clause sets out the procedure that authorities must follow regarding financial penalties. That includes information on handling the imposition of financial penalties, appeals and enforcement, and how to use the proceeds of the penalties.
The provisions will ensure that local councils consistently punish the most egregious offences, while allowing them to take the context of individual cases into account. By strengthening the enforcement framework, we will deter unscrupulous landlords from flouting the rules, drive out bad actors from the sector and improve protections for tenants.
I thank the hon. Member for Bristol Central for tabling amendment 44. The Government accept that any attempt to force a tenant from their home unlawfully is unacceptable, and those who do so must be met with enforcement. However, in our view, the amendment is not required. It seeks to increase the fine for illegal eviction in the Protection from Eviction Act 1977 from £5,000 to £60,000, as the hon. Lady has just set out. However, the cap on magistrates’ court fines for these offences has already been removed by section 85 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, and the offences are punishable by a fine of any amount.
Through the Bill as a whole, we are taking strong action on illegal eviction. We are extending civil penalties and rent repayment orders, placing a new duty on councils to take enforcement action and enhancing their powers of investigation to make that easier. We consider that our approach to enforcement is a fair and proportionate one. We are taking a clear, escalatory approach to civil penalties with first time, less serious non-compliance subject to much lower maximum penalties than serious or repeat non-compliance. The Government believe that the £40,000 maximum penalty for illegal eviction will act as an effective deterrent and is consistent with other serious offences across the Bill. I point out that that is higher than under the previous Government’s Renters (Reform) Bill, in which the amount was set at £30,000. As such, in our view it will act as a greater deterrent.
As I have said, criminal prosecution of course remains available for illegal eviction, and local authorities may decide that is the right course of action for the most serious cases. In such cases, landlords can be sentenced to imprisonment or to an unlimited fine. I therefore ask the hon. Lady to withdraw the amendment.
Carla Denyer
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 57 ordered to stand part of the Bill.
Clause 58
Abandoned premises under assured shorthold tenancies
Question proposed, That the clause stand part of the Bill.
Matthew Pennycook
One of the key objectives of the Bill is to give tenants greater security in their homes. It is imperative that landlords cannot evict their tenants without a valid ground for possession, and we want to ensure that none can circumvent the requirements of the Bill in respect of seeking possession. Part 3 of the Housing and Planning Act 2016 permits the landlord to recover abandoned properties let under an assured shorthold tenancy without a court order, provided that the tenant or tenants in question are in rent arrears and three warning notices have been served without receiving a response.
Although the Government recognise that genuine abandonment can cause problems not just for landlords but for the wider community, we do not believe that these historic provisions should remain on the statute book. They were criticised at the time of their introduction —I recall this, Mrs Harris; it was one of the first Bill Committees I sat on as a relatively new Member back in the 2015 to 2017 Parliament—for being a rogue landlords’ charter. It is not surprising that, as with a number of provisions of the 2016 Act, they were never brought into force.
Clause 58 repeals part 3 of the 2016 Act. As a result, where tenants abandon properties, landlords will need to demonstrate that they have a valid ground for possession under schedule 2 to the Housing Act 1988, as amended by this Bill. In unequivocal cases, implied surrender may also apply, such as when keys have been returned that the landlord has accepted, even if no notice has been provided. It is likely that when properties are abandoned, tenants are not paying rent, so the rent arrears grounds are available. Landlords may also be able to seek possession for breach of the tenancy agreement, if the agreement prohibits the property from being left unoccupied for long periods, or even the deterioration of property grounds. It is right that tenants have access to justice when they are at risk of losing their homes. Clause 58 ensures that provisions are removed from the statute book to make it coherent.
Question put and agreed to.
Clause 58 accordingly ordered to stand part of the Bill.
Clause 59
Remedying of hazards occurring in dwelling-houses in England
Matthew Pennycook
I beg to move amendment 22, in clause 59, page 84, line 23, leave out from “in” to end of line 25 and insert “section 13(1A), (1AA) or (1AB);”.
This adds a reference to the new subsection (1AA) which will be inserted into section 13 of the Landlord and Tenant Act 1985 by clause 30(3)(b)(ii).
The Chair
With this it will be convenient to discuss the following:
Clause stand part.
Clause 60 stand part.
Matthew Pennycook
The death of two-year-old Awaab Ishak, as many Members will know, was caused by prolonged exposure to mould in his social rented home in Greater Manchester. It was an avoidable tragedy that shames us as a nation, and it should never be repeated. I had the privilege of meeting Awaab’s family. Following a campaign by them, the Manchester Evening News and Shelter, the previous Government legislated to introduce Awaab’s law for social housing tenancies. I must credit the previous Government and the former Secretary of State, the then right hon. Member for Surrey Heath, for introducing that legislation. It was absolutely the right thing to do. We supported it in opposition, but it was only a welcome first step. This Government are clear that we need to go further and ensure that no tenant is forced to live in a home that places their health and safety at risk. That is why, in our manifesto, we committed to extending and applying Awaab’s law to the private rented sector.
Clause 59 will extend Awaab’s law to tenancies in the private rented sector. It will allow us to set legal requirements about how private landlords must tackle hazards in their properties, including setting clear timescales for repairs. It will ensure that those living in privately rented homes are empowered to challenge dangerous conditions, and that landlords cannot ignore their complaints. We recognise that there are important differences between private and social landlords, such as the average size of property portfolios, so we plan to consult on the detail of how we will apply Awaab’s law to the private rented sector. That will allow us to ensure that our approach works effectively for the sector, and that it is fair and proportionate for both tenants and landlords.
Clause 60 allows Awaab’s law to be applied to accommodation occupied under licence. A licence to occupy is used rather than a tenancy in certain circumstances, mainly for short-term arrangements or where there is no exclusive right of occupation. In general, it would be disproportionate to apply Awaab’s law to accommodation occupied under licence, such as when homeowners have a lodger staying in a spare room. However, there are cases where it may be appropriate to do so. For example, some temporary homelessness accommodation and supported housing is occupied under licence. We should explore whether vulnerable tenants of such accommodation should be subject to the protections provided by Awaab’s law as part of the consultation to which I have referred. Clause 60 will therefore allow us, as part of that wider consultation, to consider and consult on what types of accommodation occupied under licence should be in scope. It will then allow regulations to be made to bring such accommodation within scope.
Government amendment 22 is a minor and technical amendment that will ensure that Awaab’s law continues to apply to social rented properties let by private registered providers under tenancies of more than seven years. It is simple and straightforward.
David Simmonds
This measure was introduced by the previous Government. We supported it then, and we support it in opposition. Will the Minister reassure me that, as part of the consultation, he will include large public sector landlords, particularly the Ministry of Defence and the NHS? They have significant numbers of people in employment-related accommodation, and we are all aware that there has been a history of issues such as those that this legislation is specifically designed to tackle.
Matthew Pennycook
I hope I can give the shadow Minister some reassurance in that regard, taking Ministry of Defence accommodation as an example. Colleagues in the Ministry of Defence are clear that they want to mirror the same level of standards as we intend to apply across the sector, but the approach that we are taking through this Bill is not necessarily appropriate for the unique circumstances that surround Ministry of Defence accommodation. That is a good example of where a Department is taking forward its own work on standards separate from this Bill. I will get the shadow Minister a full written response that sets out exactly how such accommodation, which is not necessarily within the scope of this clause, aligns with not only Awaab’s law but the decent homes standard more generally.
Amendment 22 agreed to.
Clause 59, as amended, ordered to stand part of the Bill.
Clause 60 ordered to stand part of the Bill.
Clause 61
Meaning of “residential landlord”
Question proposed, That the clause stand part of the Bill.
Matthew Pennycook
We move on to part 2 of the Bill, which concerns landlord redress schemes and the private rented sector database. Clause 61 sets out the meaning of “residential landlord”, “relevant tenancy” and “dwelling” for the purpose of defining which tenancies fall within the scope of that database and ombudsman service.
Most private rented sector tenants have assured or regulated tenancies, and those arrangements are covered under this clause. Certain other tenures and dwellings are excluded by clause 61. That is because some tenures, such as licences, provide tenants with very different rights from assured tenancies, while some dwellings, such as non-permanent structures, are subject to different standards requirements from typical PRS properties. Landlords of social housing will also be excluded from the requirements.
We are aware that the private rented sector is dynamic and continues to evolve, and that is why we have included a power in this clause to amend the definition of “residential landlord”, “relevant tenancy” and “dwelling”. That power is required so that the legislation can keep pace with changes in the sector. It will give us the flexibility to extend landlord redress and the database to further tenures or dwellings, if that proves necessary. I commend the clause to the Committee.
Question put and agreed to.
Clause 61 accordingly ordered to stand part of the Bill.
Clause 62
Landlord redress schemes
David Simmonds
I beg to move amendment 65, in clause 62, page 89, line 25, after “residential landlord” insert—
“, whose property is not managed by an agent who is a member of an independent redress scheme approved by the Secretary of State,”.
This amendment would only require a residential landlord to be a member of the landlord redress scheme introduced by Clause 62 if their tenant does not already have access to one by virtue of the landlord using an agent who is a member of another approved independent redress scheme.
The Chair
With this it will be convenient to discuss the following:
Government amendment 23.
Clause stand part.
Clauses 63 to 71 stand part.
Schedule 3.
Clause 72 stand part.
David Simmonds
We move on to the chapter on landlord redress schemes. The Opposition agree on the need for effective measures, but we need to make sure that those measures are functional in practice.
Matthew Pennycook
The private rented sector has lagged behind other housing tenures when it comes to access to redress. For example, tenants in social housing have long been able to escalate complaints through the housing ombudsman’s social landlord redress scheme. Private tenants have had, in comparison, severely limited options for resolving issues, in spite of the fact that they suffer from poorer housing standards on average. I believe that once tenants no longer have the threat of section 21 evictions hanging over them, they will finally feel able to challenge poor practice from landlords at the disreputable end of the market without the fear of retaliatory evictions.
The Bill introduces a new mandatory landlord ombudsman service, which will give tenants free access to redress if their landlord fails to resolve a legitimate complaint. The landlord ombudsman scheme will be a non-adversarial route for escalating complaints, and it will empower tenants to challenge landlords who provide a poor level of service or who behave inappropriately. The ombudsman will benefit landlords who are committed to providing a decent home and a good service. It will give them access to an impartial decision maker to resolve complaints in the quickest and most cost-effective way. This will help to maintain landlord-tenant relationships and therefore, we hope, sustain tenancies for longer.
Clause 62 allows the Secretary of State to make regulations to require landlords, as defined under clause 61, to be members of the private rented sector landlord ombudsman. The provisions in clause 62 will allow prospective, current and former tenants to raise complaints to the ombudsman. This is because things can go wrong for tenants at any point in the rental process, so tenants should be able to seek redress for issues that occur during the pre-letting period or at the end of a tenancy.
Clause 62 will allow the ombudsman to provide voluntary services as well as mandatory redress, which could include mediation services. As I think I said in the evidence sessions last week and on Second Reading, we are exploring options for introducing landlord-initiated mediation to complement the landlord ombudsman service. That is another example of how we are trying to take pressure off the courts and tribunals system.
Government amendment 23 to clause 62 will enable us to require landlords to register all their properties with the landlord ombudsman and keep that information up to date. That was always the intention, and the amendment clarifies that in the legislation. If a landlord chooses not to provide the correct information, they will be liable for enforcement as set out in clauses 64 and 65. That will ensure that landlords pay the correct fee, where fees are based on the size of their property portfolio.
Clause 63 allows the Secretary of State to set out in regulations the conditions that a private rented sector redress scheme must meet before it is approved or designated by Government. By putting conditions in regulations, we will set the framework for a high-quality redress service that can adapt to an ever-changing housing market. For example, to be approved, the scheme must include provision about accepting tenant complaints and requiring landlords to put things right. That could be achieved by making a repair or paying compensation. We will ensure that the ombudsman’s decisions are enforceable by requiring the scheme to set out a route of expulsion. That means that if a landlord does not comply with a redress order, they could be expelled from the scheme and liable for local authority enforcement.
The clause allows the Secretary of State to set out in regulations how a scheme will be approved or designated. In pursuit of a simple and effective user journey, we will set out in regulations in due course that only one scheme will be operational at any one time. It is crucial that the ombudsman is supported by a robust enforcement regime, so that all landlords understand the importance of abiding by the requirements to join the scheme and tenants can get the resolution that they deserve.
David Simmonds
It has been helpful to hear from the Minister in detail on those points. The intention of amendment 65 was to avoid a risk of double jeopardy for a landlord if they had a managing agent who was a member of the redress scheme, but if they were also required separately to be a member of the redress scheme by virtue of the fact that they were a landlord. The Minister has set out how he intends to deal with that in regulation.
I ask the Minister to clarify something—perhaps not today, but in due course. He mentioned examples of where damp and mould would be considered a landlord issue as opposed to a managing agent issue. We are all aware that certain blocks, which may be owned by an absentee landlord or someone who works abroad, are let and managed entirely by an agent who handles the day-to-day responsibility in return for payment and under a contract. We do not wish to exclude completely the possibility of redress through the agent, where the agent has been explicitly given responsibility for dealing with such things, by saying that that will always be a matter for the landlord. Will the Minister write to me to explain how that issue—most of us have seen it from time to time in our constituencies—will be dealt with, should it arise in practice?
Matthew Pennycook
I am more than happy to write to the shadow Minister to clarify that. If I have understood him properly, there are certain issues that we think are the landlord’s responsibility, and that is why our approach is the right one. To address his point directly, I will happily set out in some detail in written correspondence how that will operate when landlords are completely absent for the process, and the managing agent’s role in that situation vis-à-vis the new redress scheme.
Mr Gideon Amos (Taunton and Wellington) (LD)
It is a pleasure to serve under your chairmanship, Mrs Harris. The shadow Minister’s amendment refers to agents, such as managing agents, and their redress schemes. Managing agents are often also letting agents—they are the same kinds of companies. Can the Minister comment on the case for regulating those agents, for which this Bill provides an excellent opportunity? Members of the other place who are experts in housing have spoken to me about the need to do that. The Liberal Democrats would certainly support such a move, and I would be grateful if the Minister commented on it.
Matthew Pennycook
I suspect I know the noble Lord that the hon. Gentleman refers to. I have had many extensive conversations with the noble Lord about the matter, and I will continue to engage with him. We supported the implementation of the Lord Best review in opposition. We took the view that the Bill was not the appropriate place to consider those measures, but we intend to set out our approach to the regulation of managing agents, letting agents and estate agents in due course. If the hon. Gentleman wants a specific comment from me, I refer him to the answer I gave in oral questions a few a days ago on this point in response to one of his colleagues. We understand the necessity for regulation in this area, and I hope to have further discussions with him and others in due course.
David Simmonds
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment made: 23, in clause 62, page 90, line 16, at end insert—
“(4A) Regulations under subsection (1) may require a person—
(a) to provide relevant property information to the administrator of a landlord redress scheme, on applying to become a member of the scheme;
(b) at any time after becoming a member of a landlord redress scheme, to notify the administrator of the scheme of any change to relevant property information previously provided by the person as soon as reasonably practicable, or within a period, as specified in the regulations.
(4B) For the purposes of subsection (4A), ‘relevant property information’ means such information as may be specified in the regulations relating to—
(a) any residential tenancy under which the person is the residential landlord;
(b) any dwelling which is proposed to be marketed for the purpose of creating a residential tenancy under which the person will be the residential landlord.”—(Matthew Pennycook.)
This enables regulations made under clause 62 (landlord redress schemes) to require a person on applying to join a landlord redress scheme to provide certain information about residential tenancies of which they are the landlord, or dwellings that will be marketed for the purpose of becoming residential tenancies of which they will be the landlord. There is also a separate duty to notify the scheme administrator of any changes to such information.
Clause 62, as amended, ordered to stand part of the Bill.
Clauses 63 to 71 ordered to stand part of the Bill.
Schedule 3 agreed to.
Clause 72 ordered to stand part of the Bill.
Clause 73
The database
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clauses 74 to 83 stand part.
Clause 87 stand part.
Matthew Pennycook
I turn to the private rented sector database provisions. Clauses 73 to 83 and clause 87 set the framework for establishing a database and the functions required for its operation and maintenance. The database has the potential to be transformative in the regulation of the sector, and I know there is a huge amount of interest across the Committee in that regard. The database will record the details of private landlords and their properties that are currently, or will be, let as a residential tenancy.
Clause 73 introduces the legal basis for the database to be created and maintained. The database will allow local authorities to build up a detailed picture of the private rented sector in their areas. It will support improvements in health and safety standards by increasing the intelligence available to local authorities. Landlords will be required to register on the database. The registration process will ensure that landlords are aware of their legal obligations and allow them to demonstrate their compliance.
Renters will be able to use the publicly available information to understand more about a landlord or a rental property. That information will increase renters’ confidence when deciding whether to rent a property. The information on the private rented sector database will support the Government in developing a richer understanding of the sector to inform future policy. The database will be key to the successful implementation and enforcement of the wider reforms legislated for in the Bill.
David Simmonds
I have a few questions and would be grateful for the Minister’s response. In this chapter of the Bill, the regulations will clearly do a lot of the heavy lifting on what the database is like and what the tenant and landlord experience will be. First, how will the proposed database interact with the existing selective licensing schemes that a number of local authorities have in place? In the regulations, will the Government draw on the learning from the existing schemes to inform the database’s operation? It is not entirely clear how it will interact, given the different regimes in Wales and Scotland that the Minister has announced. Again, I do not necessarily expect him to answer those questions straightaway, but it would be helpful to know, particularly given that a different enforcement regime will apply in Wales.
It is also not entirely clear what the Government’s thinking is about the geographical extent of the database and the way in which it will be designed. Given that designated local authorities will be enforcement bodies, will it operate in the same way as, for example, existing children’s social care databases? Will it be maintained by individual local authorities, but in a connected way so that we can extract data from it? Will there be a single national database or an England-wide database? I appreciate that the answers to some of those questions will result from the process of engaging with the market on who the provider will be. We know, from examples where such policies have been successful or gone badly wrong, that there are significant risks to the effectiveness of the Bill if we do not get this right. It would be helpful if the Minister could address those points, either now or later in writing.
Matthew Pennycook
I am grateful for the opportunity to provide some clarification, particularly on selective licensing, because I know that is a source of interest to many Members.
The Government are clear that selective licensing and the private rented sector database have different purposes. The database is not designed to replace selective licensing. Unlike the database, selective licensing schemes aim to target specific local issues in specific local geographies by enabling more intensive practical enforcement strategies. We believe that selective licensing is a valuable tool when used appropriately and combined with other measures. It enables local authorities to drive better outcomes for local residents, tenants and responsible landlords.
What is important, and what we are committed to doing, is ensuring that the use of selective licensing complements and is aligned with the new private rented sector database. There is some important work to do, which we are already engaged in, to refine the way the two systems will work together once they are both in force.
The shadow Minister asked me a reasonable question about the geographical extent of the database. I will come back to him on that specific point, particularly in respect of how it interacts with the rental discrimination provisions in the Bill, given our previous discussions on their application in Wales and Scotland.
Mr Amos
Clause 75 deals with the making of the database, and I want to raise the importance of its content. Had I been quicker off the mark and more used to the procedures, there would be an amendment before the Committee that I would speak in favour of, but it is absent—time ran away.
Will the Minister comment on the importance and potential real value of the database, depending on the information that it carries? The Liberal Democrats want to see the Bill include: the accessibility of the property for disabled people; whether enforcement action has been taken against the landlord; the energy performance certificate rating of the property, so that people have some idea of how expensive it will be to heat and live in; and, crucially, the rent that was paid in the first tenancy.
As I said the other day, we firmly believe that market rents are often inaccurately described and arrived at, by virtue of looking at advertisements. I appreciated the points the Minister made the other day in response, but none the less it remains the case. As I also said the other day, we believe that the cost of interest is the bigger driver of landlords’ costs, rather than inflation, and it should be a better proxy for limiting rent increases. Even without that, a database with the actual rents paid could be an enormously powerful tool for both renters and landlords, as well as the market generally. More information makes for a better marketplace and will hopefully improve the lot of landlords and tenants. We particularly wish to see all those features in the register and believe that would enhance the market.
The other day, in relation to whether the Bank of England rate was a relevant proxy for landlords’ costs, the shadow Minister said that the commercial interest paid by landlords was more important, but there is a relationship between the Bank of England base rate and the commercial rates of interest paid. It is the key driver of commercial rates of interest.
My main point is that having on the register the rent, including the level of the last increase in rent, would be a really important and powerful indicator. We wish to press for the details I have outlined to be on the register. If I had been quicker off the mark, there would be an amendment before the Committee.
Matthew Pennycook
I will say two quick things. I remember probing the previous Minister about this issue during the debate on the previous Government’s Bill, because I thought it was worth teasing out. In general, we did not want to be too prescriptive with what is on the face on the Bill in terms of the frameworks, because we need to strike a balance between the primary legislation and the flexibility for the details of the database to be developed in secondary legislation, so that we can respond to any evolutions in the sector and technology. We do not want to be too prescriptive on the face of the Bill.
In response to the call from the hon. Member for Taunton and Wellington for particular data to be included on the database, I draw his attention to my previous comments, which I think I made in the third or fourth sitting, about the potential for rents to be included. I am extremely sympathetic to that. Other information could potentially go on the database that might show patterns of behaviour on the part of landlords that would inform tenants’ choices. At a minimum, we want the database to include information about private landlords, the homes they rent out and how those homes are managed. I want debate with hon. Members about what goes on the database, but all the detail, as I am sure the hon. Gentleman will appreciate, will come forward in secondary legislation. At that point, the hon. Gentleman or his colleagues will be able to have a further debate and discussion on those matters.
Matthew Pennycook
I am making no specific commitment, but such is the significance of the regulations—they will provide all the detail for how the service will work in future—it would not be a cursory debate.
Question put and agreed to.
Clause 73 accordingly ordered to stand part of the Bill.
Clauses 74 to 83 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Gen Kitchen.)
Terrorism (Protection of Premises) Bill (Third sitting)
Thursday 31st October 2024
(4 days, 17 hours ago)
Public Bill CommitteesRead Full debate Terrorism (Protection of Premises) Bill 2024-26 View all Terrorism (Protection of Premises) Bill 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 31 October 2024 - (31 Oct 2024)
The Chair
Good morning, everybody. I begin with a few preliminary reminders. Please switch electronic devices to silent. No food or drinks are permitted during sittings of the Committee, except for the water provided. Hansard colleagues would be grateful if Members emailed their speaking notes to hansardnotes@parliament.uk or, alternatively, passed them to Hansard colleagues in the room.
We now begin line-by-line consideration of the Bill. The selection list for today’s sitting is available in the room and shows how the selected amendments have been grouped for debate. Amendments grouped together are generally on the same or a similar issue. The selection list shows the order of debates. Decisions on each amendment are taken when we come to the clause to which that amendment relates. Decisions on new clauses will be taken once we have completed consideration of the existing clauses of the Bill.
Clause 1
Overview
Question proposed, That the clause stand part of the Bill.
The Minister for Security (Dan Jarvis)
It is a pleasure to serve under your chairship, Dame Siobhain. It is good to see the shadow Minister, the right hon. Member for Tonbridge, in his place. He and I have known each other for a very long time, and as this may be our final exchange—
Dan Jarvis
Well, as it sounds as though it will be our final exchange, I take this opportunity to thank the right hon. Gentleman for his service and wish him well for the future.
The purpose of clause 1 is to aid the reader of the Bill to understand its content and structure, which I am sure will be a great relief to members of the Committee as we debate the Bill. As the clause provides an overview of the Bill, this seems an appropriate moment to set out a reminder of why we have sought to legislate.
The first responsibility of any Government is to keep the public safe; that is, and will always be, our No. 1 priority. Since the start of 2017, agencies and law enforcement have disrupted 43 late-stage plots, and there have been 15 domestic terror attacks. As the MI5 director general, Ken McCallum, set out last month, this country is today subject to
“the most complex and interconnected threat environment we’ve ever seen.”
As can sadly be seen from recent terrorism incidents, the public may be targeted at a wide range of public venues and spaces. We know, too, that the terror threat has become less predictable and potential attacks harder to detect and investigate. That is why those who run premises and events need to know what they can do, and what they should be doing, to keep the public safe. That view is supported by inquests and inquiries into terror attacks, which have recommended the introduction of legislation to improve the safety and security of public venues. That includes, but is not limited to, monitored recommendation 4 in volume 1 of the Manchester Arena inquiry.
The purpose of the Bill is to ensure that appropriate procedures are in place, or appropriate measures taken, to keep us safe. Wherever people are and whatever they are doing, they deserve to both be and feel safe, ensuring protection of life and of our way of life.
While we recognise that the risks posed by terrorism are already proactively considered for some premises and events, there is a lack of consistency, which needs addressing. The Terrorism (Protection of Premises) Bill—Martyn’s law—will remedy that inconsistency. The Bill’s proposals have been subject to extensive development, and a draft version of this legislation was subjected to pre-legislative scrutiny under the previous Government. Indeed, the shadow Minister gave evidence to the Home Affairs Committee on that matter.
The Bill that we have brought forward has been adjusted to strike an appropriate balance between protecting the public and avoiding an undue burden on premises. We recognise that a one-size-fits-all approach would not be suitable for all premises and events, which is why, for example, we have adapted the Bill’s requirements to include the “reasonably practicable” test. That will enable those responsible for qualifying premises or events to take into consideration what is within their control and the resources they have available to them, as well as what is suitable and appropriate for their venue.
I take this opportunity to pay tribute once again to Figen Murray, from whom we heard so movingly on Tuesday. She has without doubt been the driving force behind this Bill. I am sure that all Committee members will agree that Figen is an inspiration to us all. With that, I look forward to the exchanges to come in the course of proceedings in this Committee.
Paul Waugh (Rochdale) (Lab/Co-op)
I would like to start with something that Figen Murray said this week in her evidence to us, which, as my hon. Friend the Minister said, was incredibly powerful:
“Martyn’s law will save lives.”––[Official Report, Terrorism (Protection of Premises) Public Bill Committee, 29 October 2024; c. 7, Q1.]
That is what she said, and that is what will happen.
As the Minister has pointed out and as Ken McCallum of MI5 has put so powerfully, the number of foiled plots shows that, sadly, the terror threat is not going away but getting more intense. That puts even more of an onus on all of us to keep the public as safe as possible, especially when they are at their most vulnerable —simply going on a night out to enjoy themselves. I think I speak for all members of the Committee when I say how moving it was to hear Figen read out the names of all the individuals who lost their lives in the Manchester Arena bombing.
Like many Greater Manchester MPs, I know that many of my constituents in Rochdale will welcome the Bill, not least because many of them regularly go to the Manchester Arena—indeed, many were present on that awful night in 2017. Brendan Cox put it perfectly when he said that
“nobody wants to have a law named after their child.” ––[Official Report, Terrorism (Protection of Premises) Public Bill Committee, 29 October 2024; c. 8, Q1.]
It is a tribute to both him and Figen that they have turned their own losses into campaigning to make sure that no other families suffer at the hands of terrorists.
We as a Government are also bringing in Awaab’s law, named after two-year-old Awaab Ishak, who died when he was exposed to mould at his family’s home in Rochdale. We are creating new duties on private landlords to make sure that no other child dies in the same way. And, of course, there is the Hillsborough law: a duty of candour on all public bodies to ensure that the state can never again fail to comply with public inquiries or deny bereaved families the right to fair legal funding. What links each of those pieces of legislation is that they have been driven by the sheer determination of individuals—of those who have suffered a loss but are determined to turn that into something positive for others.
As the inquiry into the Manchester Arena bombing found, both the state and the private sector have more to do to make our public venues safer. This Bill at least makes a real start on delivering that change. Andy Burnham was right when he said that Manchester and Greater Manchester have shown resilience since the 2017 bombing. I would add that the city showed similar resilience after the 1996 IRA bombing, turning that awful event into a catalyst for the regeneration that we have all seen since.
With Martyn’s law, we can make our public spaces across the country more resilient. We expect public premises to have a fire safety plan, so it seems obvious to expect them to have plans in place to mitigate the threat of a terror attack. This version of the Bill recognises the need to balance safety with proportionality, while retaining flexibility to amend that proportionality at a later stage if that is needed.
Manchester’s experience of a voluntary version of this Bill has shown that if smaller venues are engaged with and supported in the right way, these changes can help our thriving night-time economy and do not hinder it. But it is simply unacceptable that, for bigger venues in particular, there has been inconsistency on whether they have strong enough security checks. The terrorists will win if they restrict our freedoms to do simple things such as going out to enjoy a concert or show. We can reduce that fear—the fear that all those terrorists feed off—if we make our public venues safer in the way the Bill intends.
Ben Maguire (North Cornwall) (LD)
I really welcome the bipartisan work that the Minister has done on this legislation and also welcome the Conservative party support. I would like to add the Liberal Democrats’ wholehearted support for this important legislation. However, I would like to flag with the Minister my concerns about training, or the lack thereof, under the Bill at the moment. I would like to work with him to explore that area in a bit more detail. That issue has certainly been raised a lot by constituents when it comes to smaller venues just over the 200-people threshold. I would like to clarify that in more detail before we reach Report. The hon. Member for Rochdale rightly raised the comparison with other safety procedures, such as fire. That is a powerful point, but I add that often those fire safety procedures come with training programmes for the staff responsible. I sound that note of caution.
I pay tribute to Figen Murray, Brendan Cox and everyone the Committee has heard from. I again give my wholehearted support for the legislation.
Sonia Kumar (Dudley) (Lab)
Clause 1 offers a comprehensive overview of the Bill’s structure, laying the foundations for essential protections across public venues. The Bill introduces a two-tier system, distinguishing between “standard duty” and “enhanced duty” premises, based on venue size. That tiered approach ensures that venues expecting 200 to 799 attendees may face manageable requirements, if needed, focusing on basic but effective protective measures that respect available resources. Meanwhile, venues expecting more than 800 attendees are subject to higher standards, proportionate to the risk.
Witnesses such as Matt Jukes, assistant commissioner for specialist operations in the Metropolitan police, said that
“the proposed measures in the Bill…are proportionate, and highly likely to be effective.” ––[Official Report, Terrorism (Protection of Premises) Public Bill Committee, 29 October 2024; c. 29.]
Another witness, Keith Stevens, the chair of the National Association of Local Councils, talked about the village halls where many parish and town councils meet, and was pleased that the threshold has now been lifted to 200 because that is proportionate. Those and other witness statements demonstrate that the balance of measures in the Bill will help prevent small venues from becoming overburdened, aligned with the Government’s commitment to proportionality and public safety.
By providing clear and adaptable guidelines, clause 1 provides an overview to the Bill that enables venues to enhance security in ways that suit their unique operational needs, promoting safer and more resilient public services across the UK.
Tim Roca (Macclesfield) (Lab)
I think I am right in saying that the right hon. Member for Tonbridge is withdrawing his amendment.
Tim Roca
Fair enough. But I will speak to clause 1 of the Bill. I will focus on small businesses, because we heard a lot in the evidence session about the impact on them. They are the lifeblood of our economy and key contributors to keeping our high streets vital and thriving.
It is important to reflect on the evidence we heard about the impact that the Bill will have on small businesses, particularly what Mayor Andy Burnham said about the experience they have had in Greater Manchester already. The city council in Manchester held partnership sessions with large and small businesses alike—over 2,000 people across 10 sessions representing 700 businesses. They then held the tabletop discussions that Figen Murray talked about, including with large spaces such as the Printworks, all the way down to small independent restaurants. The response of those businesses was clear. They believe that there is a need for the legislation, and they do not believe that the provisions are prohibitively onerous. They believe that, at most, it would cost them two hours of staff time.
I will quote from Gareth Worthington, the night time economy officer at CityCo and Manchester business improvement district, which I am happy to place in the Library:
“If a venue operator does not know how to evacuate their venue they should not be running that venue and if training can be provided to help make that evacuation safer then venues should grasp it with both hands.”
Businesses recognise that their first duty is to keep their patrons safe, and that sensible practical measures can be taken to reduce the chance of harm. Businesses are aware of the threats out there. The Minister alluded to those when he spoke: 43 late-stage terrorist plots foiled, and in the last year the number of state-threat investigations launched by the security services increased by 48%. The practical measures in the Bill are necessary, reasonable and proportionate.
Finally, I want to talk about Figen Murray, as she is one of my constituents. I cannot put it better than the way Mayor Andy Burnham phrased it:
“Figen responded to an awful, evil act of hate, with love…Everything she has done since losing her son has been about making the world a better place in his memory.”
He also said:
“Through her work with young people and her campaign for Martyn’s Law, she is helping to prevent future tragedies and give every parent peace of mind. She is a real icon of Greater Manchester.”
I am proud that she is one of my constituents.
Tom Tugendhat
Given that this is the last time I will speak on this Bill Committee, I want to pay tribute to Figen and Brendan for the work they have done.
There is always a danger with such Bills that we put the blame not on the perpetrator but on those who are actually victims. I say that because the businesses that must make provision, pay the cost and bear the burden are also victims of the perpetrators. Let us be absolutely clear: for all that this law lays out the responsibilities on businesses, the true responsibility falls on those perpetrating these attacks.
Today, as Ken McCallum would tell us, the Iranian state is a prime originator, and the Muslim Brotherhood is a feeder, of the evil we see perpetrated. It is the various jihadi extremist organisations that make this country less safe, and different aspects of other political parties also make it more dangerous. We must be absolutely clear that responsibility for the actions we are talking about actually falls not on the businesses but on those who encourage, tolerate and perpetrate terrorism. Let us be absolutely clear today that one of the principal vectors for this violence comes straight out of Tehran and through various organisations that are still operating in this country despite many attempts to close them down.
Dan Jarvis
I am grateful for the contributions made by my hon. Friends the Members for Rochdale, for Dudley and for Macclesfield. I am also grateful for the contribution made by the hon. Member for North Cornwall; the Government appreciate the Liberal Democrat party’s support, and I am happy to work, and have further conversations, with him before Report on the important point that he raised about training.
Finally, I thank the shadow Minister for his comments. I completely agree with his point about responsibility, and he is right. He will know that this new Government take these matters incredibly seriously, and I can give him and the rest of the Committee an absolute assurance that we will not rest in seeking to address the points he made and the concerns he dealt with admirably when he was the Minister.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2
Qualifying premises
Tom Tugendhat
I beg to move amendment 22, in clause 2, page 2, line 11, leave out “200” and insert “300”.
This amendment sets the threshold for qualifying premises at 300 individuals.
The Chair
With this it will be convenient to discuss the following:
Amendment 20, in clause 32, page 22, line 9, leave out “100” insert “200”.
This amendment sets the floor for standard duty at 200 individuals.
Amendment 21, in clause 32, page 22, line 12, leave out “500” and insert “799”.
This amendment sets the floor for enhanced duty premises and qualifying events at 799 individuals.
Clause stand part.
Tom Tugendhat
I tabled the amendments for the simple reason that a burden will fall on businesses and on individuals; we can belittle it and say that complying will take only an hour or two, but for many small businesses that is a significant burden. As was made clear in the evidence session only the other day, the burden on local authorities, including at parish level for parish halls, can change the way in which trustees approach this issue, which is why we looked to make the changes that I recognise the Minister has indeed made.
It is important to ensure that the burdens do not grow. That is why I have tabled some of the amendments before us, which change some of the fines and request a change from simply issuing an instruction to introducing a statutory instrument—a very specific moment when the Minister actually has to make a decision and bring the issue back to Parliament. We can belittle the hours, but trustees and volunteers at village halls make their own time available—I speak from personal experience, and others will have seen this as well—so if the burden is too great, plenty of village halls will simply close because we are asking people to take on more than they are willing to give.
That is why we have tabled the amendments, but as they all speak to the same point, which is not overburdening people, my remarks can be taken to apply to them as a whole.
Dan Jarvis
I am grateful to the right hon. Gentleman for tabling his amendments. Before I turn to them, I will briefly explain why clause 2, which sets out the criteria by which premises are determined to be qualifying premises that fall within scope, is so fundamental.
I recognise that the scope of the Bill—particularly the qualifying thresholds—is an important issue to discuss. Once more, I assure Committee members that the scope of the Bill, including the thresholds, has been developed following detailed discussion with those responsible for premises and with security experts within Government. That has involved hundreds of stakeholder engagement meetings, two public consultations and the important pre-legislative scrutiny process. As a result, the Government’s firm view is that the Bill strikes an appropriate balance between protecting the public and avoiding an undue burden on premises.
Let me turn to the detail of amendments 20 and 21, which were tabled by the right hon. Member. He will be well aware that the Government have increased the qualifying threshold in the Bill from 100 to 200. As he correctly set out, clause 32 provides for the Secretary of State to be able to increase or decrease that figure and the threshold for the enhanced tier. As a result, the number of premises in scope of the Bill, and therefore required to comply, may be increased or decreased.
I assure the right hon. Gentleman and the Committee that that power is narrow, and regulations made under it will be subject to the affirmative procedure before they are made, to ensure the appropriate level of scrutiny by parliamentarians. The power is also limited in that the Secretary of State may not amend the figure to less than 100 in respect of the standard tier or to less than 500 in respect of the enhanced tier. That provides a floor, or absolute minimum number, below which the qualifying threshold cannot go.
The Government’s intention, in having the power in clause 32, is to be equipped to respond to changes in the nature or level of the threat from terrorism. We envisage that the qualifying thresholds would be reduced to either floor in only very limited circumstances, such as the nature of the threat changing significantly. The power therefore provides a necessary lever that can be used, if needed, to ensure that the legislation remains fit for purpose and continues to strike an appropriate balance between protecting the public and avoiding placing an undue burden on premises. The Government do not therefore support the amendments.
Finally, I turn to amendment 22. As I set out during oral evidence, setting a threshold inevitably raises discussion as to whether it is the right figure, and what falls on either side of the threshold will inevitably be questioned. Indeed, the Committee heard a range of views from witnesses giving evidence on Tuesday, many of whom spoke to what they believe the appropriate threshold to be. The discussion included arguments for setting it higher or lower than 200.
Ultimately, the Government have to take a view about what the most appropriate threshold is. After careful consideration of the pre-legislative scrutiny findings and consultation responses, and after taking into account the views of stakeholders and security experts, the Government have decided that 200 is the right judgment.
The amendment changing the figure to 300 would significantly impact the outcomes of the Bill, and particularly what the standard tier seeks to achieve. Furthermore, as we will discuss when we debate clause 5, the standard tier requirements have been redesigned to be relatively simple and low-cost for responsible persons to take forward. They do not require premises to make physical changes.
The Government’s firm view is therefore that 200 represents the right threshold to bring premises into the scope of the Bill. That figure strikes an appropriate balance between protecting the public and imposing a burden on premises. The Government therefore do not support the right hon. Gentleman’s amendment.
Tim Roca
I want to speak briefly to the point about thresholds, which has just been discussed. The consultations prior to the Bill were based on a threshold of 100 at the standard tier, and I welcome the ability the Bill gives the Secretary of State to reduce the threshold back to that, should the evidence warrant that. I think Members will be reassured by some of the safeguards the Minister has just talked about, which would have to be in place before any such change happened.
In the protect duty public consultation, half of respondents thought that the threshold should be 100. Moving it to 200 has already taken 100,000 premises out of the scope of the legislation, leaving 180,000 within it. Raising the threshold to 300 would in effect remove the standard tier altogether. Figen has been very clear on this point:
“Raising the threshold of 200 even higher would mean that proportionality would no longer exist”.
She has also pointed out that in her small town of Poynton, in my constituency, a threshold of 200 would already mean that not a single venue is covered by this legislation. A move to 300 would therefore be a mistake and fatal to the purpose of the Bill.
Tom Tugendhat
Given the very obvious numbers on the Committee, there is no point in pushing the amendment to a vote, but I still believe that the burden on small businesses is too great. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 ordered to stand part of the Bill.
Schedule 1
Specified uses of premises
Dan Jarvis
I beg to move amendment 10, schedule 1, page 26, line 15, leave out paragraphs 3 and 4 and insert—
“Entertainment and leisure activities
3 Use (other than a use mentioned elsewhere in this Schedule) for the provision of entertainment, leisure or recreation activities of any description, where the activity is principally for the benefit of visiting members of the public.”
This amendment makes general provision about premises used by the public for entertainment, leisure or recreation activities and replaces references to specific types of such activities.
Dan Jarvis
The amendments in this and the following group seek to ensure that the Bill will work as effectively as intended, including by clarifying and simplifying the definitions of certain uses of premises and certain terms. They are not intended to bring any new premises into scope or to inadvertently bring unintended premises within scope.
Government amendments 10 and 11 simplify schedule 1 by creating a new category of “Entertainment and leisure activities”, which brings together the premises previously captured by paragraphs 3, 4 and 6. That will help to ensure that the legislation and accompanying guidance are simpler to understand for persons potentially within scope of the Bill.
Amendment 10 agreed to.
Amendment made: 11, in schedule 1, page 27, line 10, leave out paragraph 6.—(Dan Jarvis.)
This amendment is consequential on amendment 10.
Dan Jarvis
I beg to move amendment 12, in schedule 1, page 29, line 29, at end insert—
“(but see paragraph 4(a) of Schedule 2)”.
This amendment makes clear that paragraph 14 of Schedule 1 (aerodromes) is subject to the exception in paragraph 4(a) of Schedule 2 for premises covered by an aerodrome security plan under the Aviation Security Act 1982.
The Chair
With this it will be convenient to discuss Government amendments 13, 14 and 15.
Dan Jarvis
Government amendment 12 simply highlights that the term “aerodromes” does not include those covered by the exception in schedule 2 with an aerodrome security plan under the Aviation Security Act 1982.
Government amendment 13 is a technical amendment to ensure that Scottish further education establishments are more appropriately described and to reflect any future changes to relevant Scottish legislation.
Government amendment 14 is a change to clarify that agricultural colleges in Northern Ireland are captured, and Government amendment 15 is a technical change to improve the accuracy of the definition of higher education institutions as applied in Scotland.
Amendment 12 agreed to.
Amendments made: 13, in schedule 1, page 32, line 4, leave out from “listed” to “in” in line 6.
This is a drafting change.
Amendment 14, in schedule 1, page 32, line 13, at end insert—
“or established under section 5 of the Agriculture Act (Northern Ireland) 1949 (c. 2 (N.I.)).”
This amendment provides that paragraph 17 of Schedule 1 covers use of premises for the provision of further education at Northern Ireland agriculture colleges.
Amendment 15, in schedule 1, page 34, line 19, leave out from beginning to “the” in line 22 and insert—
“in Scotland, a higher education institution within the meaning of section 35(1) of”.—(Dan Jarvis.)
This is a drafting change.
Dan Jarvis
I beg to move amendment 16, in schedule 1, page 34, line 37, after “to” insert “visiting”.
This amendment clarifies that the use of premises for the provision by a public authority of facilities or services is only relevant for the purposes of Part 1 of the Bill if members of the public visit the premises in connection with those facilities or services.
Dan Jarvis
Government amendment 16 clarifies that premises used by public authorities for the provision of facilities or services are only in scope if the public visit the premises to use the facilities or receive those services.
Government amendment 17 clarifies that
“visiting members of the public”
includes members of the public who have paid to access, have invitations or passes allowing access to, or are members or guests of a club, association or other body. That more accurately captures the differing arrangements for public access that may be in place at premises in scope, such as private members’ clubs.
Amendment 16 agreed to.
Amendment made: 17, in schedule 1, page 34, line 42, at end insert—
“References to “visiting members of the public”
20 In determining for the purposes of this Schedule whether premises are used by “visiting members of the public”, it is irrelevant that access to the premises may be limited (at all times or particular times) to members of the public who—
(a) have paid to access the premises,
(b) have invitations or passes allowing access, or
(c) are members (or guests of members) of a club, association or other body.”—(Dan Jarvis.)
This amendment contains provision about the meaning of references in Schedule 1 to “visiting members of the public”.
Question proposed, That the schedule, as amended, be the First schedule to the Bill.
Dan Jarvis
We have previously spoken at length about the purpose of schedule 1, so I trust that the Committee are suitably satisfied as to why it should stand part of the Bill.
Question put and agreed to.
Schedule 1, as amended, accordingly agreed to.
Schedule 2
Excluded premises and events
Question proposed, That the schedule be the Second schedule to the Bill.
Dan Jarvis
Schedule 2 specifies certain types of premises that are excluded from the Bill’s scope, which is necessary where there are already similar legislative requirements or protective frameworks in place. This covers, in particular, certain transport premises and premises occupied by Parliament and the devolved legislatures.
Schedule 2 also defines a category of open-air premises that might fall in scope, but where it would be impractical or disproportionately difficult to deliver the requirements given the nature and operation of those premises. The category includes parks and premises used for grassroots sports, which generally do not have controlled access or defined physical boundaries. These premises are therefore excluded, except where they employ individuals to ensure that members of the public have paid to access the premises, or where they have invitations or passes to do so; in cases where entry and exit to the premises are controlled and payment is taken, it is considered that there is a greater capacity and capability to consider reasonably practical procedures and/or measures as required.
Schedule 2 also maintains the provisions in schedule 1 that places of worship and premises used for childcare or primary, secondary or further education fall within the standard tier, meaning that qualifying events cannot occur on those sites.
Question put and agreed to.
Schedule 2 accordingly agreed to.
Clause 3
Qualifying events
Amendments made: 1, in clause 3, page 2, line 38, leave out “all or part of”.
This amendment is consequential on amendment 4.
Amendment 2, in clause 3, page 2, line 41, after “time” insert
“in connection with their use for the event”.
This amendment clarifies that, for the purposes of determining whether Part 1 of the Bill applies to an event, the number of individuals present on premises in connection with the event must be considered.
Amendment 3, in clause 3, page 3, line 2, leave out “all or part of”.
This amendment is consequential on amendment 4.
Amendment 4, in clause 3, page 3, line 7, at end insert—
“(2) Where the condition in subsection (1)(e) applies only in relation to one or more parts of the premises at which an event is to be held, for the purposes of this Part treat what is to be held at each such part of the premises as a separate event (to be held at that part).”.—(Dan Jarvis.)
This amendment caters for cases where parts of the premises at which an event is to be held are open to the public generally and other parts are areas for which members of the public will need permission to enter.
Clause 3, as amended, ordered to stand part of the Bill.
Clause 4
Persons responsible for qualifying premises or events
Question proposed, That the clause stand part of the Bill.
Dan Jarvis
Clause 4 defines who is responsible for qualifying premises or a qualifying event, and therefore who is responsible for meeting the relevant requirements. With regard to premises, paragraph (a) of subsection (1) provides that:
“a person is responsible for qualifying premises if the person has control of the premises in connection with their relevant Schedule 1 use”,
such as the operator of a hotel.
Subsection (2) sets out what is meant by “relevant Schedule 1 use”. If premises are used for one of the uses specified in schedule 1, that is the relevant use. That is the case even if premises are also used for other purposes not listed in schedule 1. Some premises will be used for more than one of the uses specified in schedule 1. In such cases, it is the person with control over the premises in connection with that principal use who will have to meet the relevant requirements.
Subsection (3) provides a regulation-making power that enables the Secretary of State to provide specific rules as to how the principal use is to be determined. We expect that the principal use will be readily apparent in the vast majority of cases, but the power will ensure that clarity can be provided if and when needed. Principal use is to be determined on a case-by-case basis. Guidance will set out the relevant factors that should be considered when making a determination—for example, taking account of the amount of time for which the premises are used for each type of activity. The regulation-making power can be used if further specific provision is necessary.
On qualifying events, subsection (1)(b) provides that the person responsible is the person who has
“control of the premises at which the event is to be held in connection with their use for the event”—
for example, the organiser of a music festival. The relevant circumstances of the event will need to be considered to determine who the responsible person is. For example, if a concert is to be held in a park, and a company putting on the event has control of an area of the park for the purposes of delivering the concert, that company will be the responsible person. Conversely, if the local authority that operates the park puts on the concert, it will be the responsible person. Where the local authority is not the responsible person, it will still have a duty under clause 8(5) to co-operate with that person to enable them to comply with their requirements.
Subsection (4) specifies that if there is more than one person responsible for qualifying premises, or a qualifying event, they are jointly responsible for ensuring compliance with the Bill’s requirements, and may act jointly in meeting their requirements. In addition, clause 8(2), which we will debate shortly, imposes obligations on the responsible persons to co-ordinate with each other in meeting the requirements. Such a situation will arise when each of the parties has control over parts of the premises in connection with the relevant schedule 1 use. It does not mean, for example, that the multiple tenants of a shopping centre are jointly responsible for the shopping centre as a whole; rather, each will be responsible for their respective premises.
Finally, schedule 1 includes some specific provisions to identify the responsible person for particular types of premises. For example, in the case of a primary or secondary school, paragraph 16 provides that the responsible person will either be the local authority or the governing body of the school. Clause 4(5) provides that those specific provisions apply instead of the general provisions of the clause.
Question put and agreed to.
Clause 4 accordingly ordered to stand part of the Bill.
Clause 5
Public protection procedures
Question proposed, That the clause stand part of the Bill.
Dan Jarvis
Clause 5 places a requirement on those responsible for all qualifying premises and events to put public protection procedures in place, so far as is reasonably practical. This applies to both standard and enhanced duty premises and events. The intention of having such procedures in place is to reduce the risk of physical harm that could be caused to individuals present at qualifying premises and events if an act of terrorism were to occur.
The procedures will help to prepare people working at premises and events to take steps to reduce the risk of harm and move people away from danger. All qualifying premises and events will have to consider how to evacuate, move people to safety, lock down and communicate information. In practice, these procedures focus on simple, low-cost activities such as identifying safe exit routes and lockable doors. The Bill does not require standard duty premises to make physical changes to their sites. Premises must consider the procedures that are appropriate for them.
The procedures that the Bill requires are simple steps to reduce the physical risk to the public from acts of terrorism. They are similar to, but often with key differences from, other legislative procedures. For example, in developing evacuation procedures, those responsible may want to consider safe exit routes for full, partial or phased evacuations, and where they differ from evacuation procedures required by fire safety, such as how they are communicated and where people should congregate. With a focus on ensuring preparedness, security experts advise that these types of procedures are best placed to reduce the risk of physical harm. Qualifying premises will all be different. Further information on how the procedures would apply in practice is provided in the factsheets. Statutory guidance will support the development and implementation of appropriate procedures to allow premises and events to introduce procedures that are right for them, taking into account their circumstances and resources.
Chris Murray (Edinburgh East and Musselburgh) (Lab)
I wanted to speak on this clause because it is arguably the most important component of this legislation and could have the biggest impact. Obviously we all hope that terrorist events do not happen, but we must be alert to the possibility that they can, and to what we collectively need to do to prepare for that situation.
Enhanced-tier organisations, particularly those at the upper end such as stadiums, will already have many operations in place to prepare for that. They will do table-top exercises; they will do war games; they will designate staff; they will have protocols. But for the standard tier, in particular, will not automatically be doing that. As we see the terror threat evolving to target those smaller standard-tier institutions, it is important that we prompt them, through this legislation, to do that thinking.
The former US Under-Secretary of State for Homeland Security, Juliette Kayyem, talks about the distinction between “pre-boom” and “boom” with terrorist events. Pre-boom, we can do a lot of work to stop terrorists—put in checks and do things—but we have to think about what we do in the moment when the terrorist attack has already begun. That is not the time for institutions, particularly small institutions, to be thinking, “What is the exit route? What do we need to do? Who’s in charge here?” In reference to American school shootings, Juliette Kayyem says that the least useful person, once a school shooting has started, is the person who says, “We should have banned guns.” It is too late to be having that conversation, and the gun is already in the school. People need to be prepared for that situation.
The four requirements under subsection (3) are small, and quite intuitive, prompts that we are asking of standard-tier institutions; but in giving those prompts we could be encouraging them to take the small steps that will, when the terrorist event happens, affect the outcome and could really save lives. This is a really important clause.
The Opposition have made the point that the clause presents a burden on business, and it is true that it is bringing into scope organisations that probably have not had this burden placed upon them before. Admittedly, there is a component of burden being placed here—but actually it is not the legislation that is doing that; it is the evolving terror threat, which we are responding to. That is why it is important to note that the proposals made here—those four requirements—are straightforward. As I say, they are almost intuitive and commonsensical. They are not onerous and they are low-cost.
My constituency, the city centre of Edinburgh, is event central. We have hundreds of events there every week, and in August we host the third-biggest ticketed event in the world—double the number of people go to events in that month as go to the Olympics. But they are not all in one place. It is not one big stadium; they are spread throughout the city.
Some of those events, such as the Tattoo, would qualify for the enhanced tier, but many of them would be standard tier. If we can prompt them to make these changes, we really could make a huge impact. If we do not do that and there is a chilling effect because people feel insecure, the burden on organisations will significant; we need to take that seriously. That is why the distinction between standard and enhanced is appropriate, and I think the requirements being made of the standard tier are the right ones.
This very important clause codifies something that society should be doing anyway, given the evolving terror threat. The way we will know it has had an impact is that we will never hear about it again, because the prompts will mean that further action is not required and tragedies do not happen.
Question put and agreed to.
Clause 5 accordingly ordered to stand part of the Bill.
Clause 6
Public protection measures for enhanced duty premises and qualifying event
Tom Tugendhat
I beg to move amendment 25, in clause 6, page 5, line 1, leave out paragraph (a).
This amendment prevents the Secretary of State from creating further requirements for enhanced duty premises by regulations.
The Chair
With this it will be convenient to discuss the following:
Amendment 26, in clause 6, page 5, line 8, leave out subsection 6.
This amendment allows the Secretary of State to omit or amend the description of public protection measures for enhanced premises and qualifying events without regard to the considerations set out in Clause (6)6.
Clause stand part.
Tom Tugendhat
This very simple amendment is in line with the others that I have already spoken about. It would limit the Government’s power to exert extra burdens on small businesses.
Dan Jarvis
I thank the right hon. Gentleman for tabling this amendment. The Government consider that specifying further measures is an important power for the Secretary of State and must be available to ensure effective protection of the public through these measures.
Having the ability to specify further public protection measures through regulations means that the requirements of the enhanced duty can be amended to reflect changes in the terrorism threat, advances in technological solutions and our response to them. For example, there may be lessons learned from future incidents, further common types of attack may emerge, or best practice may evolve.
The right hon. Gentleman’s amendment would limit the Government’s ability to protect the public and safeguard them from harm. I understand that the intention behind it may relate to fears over the burden that future measures may create. However, the clause is drafted to constrain the power to be exercisable only where it is considered that the further measures will reduce vulnerability to, or the risk of physical harm from, an attack. It is intended to ensure that new requirements are limited to those necessary to protect the public, and remain in line with the overall objectives of the measures under the clause. Given the evolving nature of terrorism and the threat it poses, the Government consider it necessary to include this power, and therefore do not support the amendment.
On amendment 26, the Government consider it important to be able to remove or amend public protection measures from the list in subsection (3). For example, the Government might identify potential amendments to improve the measures through lessons learned and evolving best practice. This power is drafted so that the Secretary of State may remove or amend the types of measures only if they consider that doing so will not either increase the risk of physical harm to individuals or increase the vulnerability of the premises or event to the risk of acts of terrorism. That is in accordance with the overall objectives of the measures within this clause, as stated in subsection (2).
Were we to agree to the amendment, specified measures could be amended or removed without a requirement in the Bill for the Secretary of State to expressly consider how those public protection objectives would be effective in taking away or altering a measure in the list approved by Parliament. The Government do not consider that appropriate and therefore respectfully do not support the right hon. Gentleman’s amendments.
Tom Tugendhat
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 6 ordered to stand part of the Bill.
Clause 7
Enhanced duty premises and qualifying events: documenting compliance
Question proposed, That the clause stand part of the Bill.
Dan Jarvis
Clause 7 places a legislative requirement on those responsible for enhanced duty premises and events to prepare and maintain a document that records their compliance in relation to putting in place procedures, under clause 5, and measures, under clause 6. This is necessary to ensure that premises are able to more easily demonstrate compliance, and the Security Industry Authority is able to assess that against the Bill’s requirements. Many premises will already be documenting similar mitigations in regard to existing security plans for non-legislative purposes—fire safety and health and safety legislation, for example.
Documents should contain statements that relate to the public protection procedures and measures that are implemented, or proposed to be implemented, at their premises or event. Documents should also contain assessments to provide a rationale as to how the proposed procedures and measures will reduce both physical harm to individuals present and vulnerabilities of the premises or event if an attack were to occur.
When complete, the document should contain the totality of the procedures and measures deployed and sufficient detail to enable the authority to assess whether those responsible for premises and events are compliant with the Bill’s requirements. In the first instance, those responsible for enhanced duty premises and events are required to provide the document as soon as reasonably practicable after it is prepared and within 30 days of any subsequent revision.
Question put and agreed to.
Clause 7 accordingly ordered to stand part of the Bill.
Clause 8
Requirements to co-ordinate and co-operate
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clause stand part.
Amendment 24, in clause 9, page 6, line 19, leave out paragraph (a).—(Tom Tugendhat.)
This amendment prevents the Secretary of State from specifying further matters relating to qualifying premises or a qualifying event on which the responsible person would have to inform the Security Industry Authority.
Clauses 9 and 10 stand part.
Dan Jarvis
Clause 8 places a requirement upon certain duty holders to co-ordinate or co-operate with each other when complying with requirements. Subsections (1) and (2) deal with instances whereby there is more than one responsible person, requiring those persons to co-ordinate so far as is reasonably practicable with the requirements imposed upon them. An example of this may be a joint venture between two parties with equal control. The requirement applies to all premises and events within scope of the legislation. It will ensure organisation between mutually invested parties and encourage unified decision making in relation to the requirements placed upon them.
Subsections (3) and (4) concern where one qualifying premises forms part of another. The persons responsible for both premises must so far as is reasonably practicable co-ordinate with each other in complying with the relevant legislative requirements. The purpose of this provision is to ensure that responsible persons in such scenarios, such as a shopping centre, combine efforts or actions to reach mutually effective and compliant outcomes in relation to relevant requirements. That might, for example, entail the shopping centre operator liaising with different units in scope to ensure there is a co-ordinated and effective evacuation plan.
Subsections (5) and (6) concern where a person has some form of control of an enhanced duty premises or event, but is not the responsible person. Where that is the case, they must so far as is reasonably practicable co-operate with each other in complying with the relevant legislative requirements. Examples of persons in control but not the responsible person would be a building owner who has leased the premises to a separate operator, or a landowner who has given permission for a qualifying event to take place on their land. The purpose of this requirement is to assist the responsible person in ensuring that appropriate public protection measures are in place under clause 6. In instances where they require relevant permissions or support from other parties who have some control over the premises, there is a duty placed on such parties to co-operate so far as is reasonably practicable.
Subsection (7) specifies that a requirement under this section does not extend to a requirement imposed by a penalty notice. Those responsible may require co-ordination or co-operation from other duty holders in regards to meeting relevant requirements, including compliance and restriction notices, but this does not extend to penalty notices. If there is a dispute in relation to scenarios of co-ordination or co-operation, clause 11 enables interested persons to apply for certain determinations by a tribunal. The tribunal may be asked to determine whether a person is a responsible person, or the extent to which a person who is not a responsible person has control of the premises. In summary, placing a requirement upon relevant responsible persons and duty holders to co-ordinate or co-operate will further drive compliance with the Bill’s requirements and therefore better protect the public.
I turn briefly to clause 9, which requires those responsible for qualifying premises or events to notify the SIA when they become or cease to be responsible for premises or events. Those responsible for premises or an event must notify the SIA of that responsibility upon commencement of the legislation. If a person becomes responsible for premises or an event after the legislation has commenced, they too must notify the SIA of that. The requirements of the clause will assist the SIA in knowing which premises and events within scope of the legislation are actively demonstrating compliance and so identifying those who are not. The time limit within which notifications must be made will be specified by the Secretary of State in regulations. Clause 9 also sets out that the Secretary of State may, via regulations, specify the form and manner in which notifications must be sent and the information that is required to be included in a notification, such as information about the premises or event and contact details for the responsible person.
Clause 10 places a legislative requirement on those responsible for all enhanced duty premises and qualifying events to designate a senior individual where the responsible person is not an individual. Examples of responsible persons that are not individuals are bodies corporate, limited partnerships and unincorporated associations. The individual undertaking the role must be someone who is involved in the management of, or has some form of control within, the organisation—for example, a director or partner, rather than a lower-level employee. That will help ensure that the individual appointed has appropriate influence and seniority to drive forward compliance with the requirements. The senior individual may delegate actions that relate to the relevant legislative requirements to ensure they are complied with. However, they cannot delegate their overall responsibility for ensuring compliance.
Question put and agreed to.
Clause 8 accordingly ordered to stand part of the Bill.
Clauses 9 and 10 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Keir Mather.)
Terrorism (Protection of Premises) Bill (Fourth sitting)
Thursday 31st October 2024
(4 days, 17 hours ago)
Public Bill CommitteesRead Full debate Terrorism (Protection of Premises) Bill 2024-26 View all Terrorism (Protection of Premises) Bill 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 31 October 2024 - (31 Oct 2024)
The Minister for Security (Dan Jarvis)
It is a great pleasure to serve under your chairship, Sir Edward. Clause 11 will enable an interested person to apply to the tribunal for an independent determination on matters where disagreements may arise. An “interested person” can mean either the Security Industry Authority or a person who has—or, for an event, will have at some point—control of the premises or event to any extent. Interested parties may apply to the tribunal where there are disagreements or a need for clarity on whether a premises or an event are in scope and in which tier they fall, who is responsible for them, and whether a person is required to co-operate with the person responsible for them. A determination by the tribunal will be legally binding.
Question put and agreed to.
Clause 11 accordingly ordered to stand part of the Bill.
Clause 12
Role of the Security Industry Authority
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
New clause 2—Review of the role of the regulator in oversight of public protection requirements—
“(1) Within 18 months of the passing of this Act, the Secretary of State must lay before each House of Parliament a report reviewing the role of the Security Industry Authority as the regulator.
(2) The report must include a cost-benefit analysis comparing the respective situation for each of the matters listed in subsection (3) on how—
(a) these have been carried out by the Security Industry Authority, and
(b) they might be carried by local authority teams if the regulatory duties were transferred to them.
(3) The issues which must be included in the analysis contained in the report laid under subsection (1) are—
(a) effectiveness in performing investigation and enforcement functions;
(b) relationship and synergies with other locally-based enforcement regimes;
(c) relationship and interaction with existing statutory licensing regimes; and
(d) effectiveness of provision of guidance as part of oversight, adherence and awareness of the new public protection requirements.”
This new clause would require a report reviewing the role of the Security Industry Authority, including a comparative cost-benefit analysis of the regulatory functions being carried out by the Security Industry Authority with those functions being provided alternatively at a local authority level.
Schedule 3.
Dan Jarvis
Clause 12 will allow the SIA to effectively operate as the regulator for the Bill by setting out its responsibilities, powers and role. The primary role of the SIA will be to provide support and guidance. However, it is also important that it has the powers necessary to investigate and monitor compliance, so that the legislation can be enforced effectively. Schedule 3 therefore grants powers to authorised inspectors to investigate whether persons responsible for premises or events are contravening or have contravened requirements of the Bill. The schedule outlines their powers to gather information, the use of warrants, their ability to enter premises without a warrant, and supporting offences.
Under the schedule, inspectors will be able to serve information notices to gather relevant information for inspection purposes. The notice could require a person to provide written detail relating to an investigation or to attend an interview. Inspectors may enter premises without a warrant, subject to certain conditions in paragraph 4. However, schedule 3 also provides for inspectors to apply for warrants to enter premises, with paragraph 6 setting out the powers afforded to inspectors once a warrant is issued. The schedule also creates criminal offences for failing to comply with information notices, obstructing authorised inspectors and impersonating inspectors.
Under clause 12, the SIA must prepare guidance about how it will exercise its functions, which must be submitted to the Secretary of State for approval. Approved guidance must then be published and kept subject to review, and revised accordingly as needed. The SIA must also provide advice about the requirements of the Bill, as well as reviewing the effectiveness of the requirements in reducing the risk of harm and the vulnerability of premises and events in scope.
The clause also requires the SIA to comply with requests from the Secretary of State and provide an annual report, which is to be laid before Parliament. The SIA is the appropriate body to undertake this role, due to its years of experience in increasing security standards and ensuring public protection. I hope that the Committee will support clause 12 and schedule 3.
I turn now to new clause 2, tabled by the shadow Minister, the right Member for Tonbridge. Establishing the SIA as the new regulator for this legislation, which is the first of its kind, will take at least 24 months. That is in line with the timeframes taken to establish new regulatory functions in existing bodies over recent years. I am sure he will agree that it would not be possible or fair to judge a new regulator’s performance before the regime has been established. Once the SIA has taken on its new role, it will take time before there is robust data against which to evaluate its performance.
The legislation already establishes several checks and balances on the performance of the SIA, as is standard with arm’s length bodies. They include the production of an annual report on performance, enabling the Secretary of State to issue directions to the SIA, and ensuring that the Secretary of State has the power to appoint board members and approve statutory guidance for publication.
Further to this, I have confidence that the SIA is the right home for the regulator because it already plays an important role in safeguarding the public through its statutory and non-statutory work. With a wealth of experience in inspecting and enforcing legislation, it better protects the public. With the addition of its new function, the SIA will be able to raise security standards for both people and places.
The Home Office will maintain appropriate levels of oversight and accountability to ensure that the regulator is delivered as intended. Once operational, the Secretary of State will closely monitor the performance of the regulator to ensure that it carries out its functions under the Bill effectively. For the reasons that I have set out, the Government do not support the amendment.
Tom Tugendhat (Tonbridge) (Con)
I tabled the new clause on the SIA for the simple reason that its reputation goes before it. Work that was done in the Department under a previous regime demonstrated that there were alternatives, which we felt would offer not only better value for money but greater ministerial oversight and better accountability to those who are forced to use its services. But clearly, with the Government’s majority, it is for the Minister to decide.
Question put and agreed to.
Clause 12 accordingly ordered to stand part of the Bill.
Schedule 3 agreed to.
Clause 13
Compliance notices
Question proposed, That the clause stand part of the Bill.
Dan Jarvis
A successful terrorist attack can have devastating consequences. It is vital to the effective operation of this legislation that the SIA can take action if it believes there is or has been a failure to fulfil the Bill’s requirements. Clauses 13 to 16 will enable it to do so. Clause 13 therefore gives the SIA the ability to issue a compliance notice.
A compliance notice requires the recipient to remedy non-compliance within a certain period and could require specific actions to be taken. For example, a notice could require the recipient to put in place an evacuation procedure within four weeks where no such procedure is already in place.
The SIA must allow a reasonable period for specified steps to be taken, and, before issuing the notice, must give an opportunity for representations to be made. Failure to comply with a compliance notice could lead to the SIA issuing a monetary penalty and, in relation to enhanced duty premises and qualifying events, would be a criminal offence. A person may appeal a compliance notice under clause 16. Due to the risk posed by terrorism, it is important that the SIA has the tools to address non- compliance where guidance and engagement fall short.
Clause 14 provides that the SIA may issue a restriction notice where it believes that appropriate public protection procedures or measures are not in place at an enhanced duty premises or event. The SIA may issue such a notice if it believes that the restrictions specified within it are necessary to protect people from the risk of harm if an attack occurred at or near a premises or event. To reiterate, a restriction notice cannot be issued for standard duty premises. For that reason, it is anticipated that it will be used in exceptional circumstances where immediate action is needed to mitigate the risk.
The notice can require the temporary closure of premises, prohibit an event from taking place, or impose certain restrictions on the premises or event. For example, it could limit the number of people who may attend an event at any one time. The restrictions would apply until appropriate measures are in place, or the notice expires or is withdrawn. A notice cannot last more than six months initially, but is subject to being extended for three months at a time.
I do not wish to pre-empt our debate on later clauses, but it is important to note that the SIA will be able to issue both non-compliance and daily penalties where a restriction notice has not been complied with. Where it is in the public interest, a person may ultimately be prosecuted for breach of a restriction notice, which is an offence under clause 24.
I turn now to clause 15. Once a compliance notice or restriction notice has been issued, it is important that the SIA has the flexibility to vary and withdraw it if needed to reflect positive steps taken by the recipients or to deal with their continuing non-compliance.
The clause also contains several safeguards. First, it specifies that a compliance notice or restriction notice cannot be made more onerous, in order to protect the recipient from changes that are more burdensome. It could therefore be used, for instance, to vary a notice to reduce the requirements in it or to extend the period for complying with it to allow the recipient more time to satisfy it.
The clause also includes the further safeguard that a restriction notice may be varied to extend the period for which it has effect by no more than three months at a time. That must happen before it expires, and only so long as there are reasonable grounds to believe that the reasons for the original notice still apply.
The SIA may also withdraw a compliance or restriction notice where it considers that the notice is no longer required. For example, a restriction notice may not be needed to protect the public from the risk of harm because non-compliance has been rectified or sufficiently reduced. That is what the clause seeks to achieve.
Finally, clause 16 provides a right of appeal against a compliance or restriction notice, or the variation of either notice. An appeal can be brought within 28 days of the notice being given, on the grounds that the decision to give or vary the notice was wholly or partly based on an error of fact, wrong in law, unfair or unreasonable, or for any other reason. Pending the outcome of an appeal, a compliance notice will have no effect unless the tribunal orders otherwise, but given the reasons for issuing a restriction notice, a restriction notice will ordinarily continue to apply.
The clause ensures that enforcement decisions of the SIA are subject to review by an independent judicial body. The tribunal may consider evidence that was not before the SIA at the time of its decision and, where it does not dismiss an appeal, the tribunal will vary or cancel a notice.
Question put and agreed to.
Clause 13 accordingly ordered to stand part of the Bill.
Clauses 14 to 16 ordered to stand part of the Bill.
Clause 17
Penalty notices
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Government amendments 5 to 7.
Amendment 28, in clause 18, page 13, line 17, leave out “18” and insert “10”.
See explanatory statement to Amendment 30.
Amendment 29, in clause 18, page 13, line 18, leave out from after first “is” to “5%” in line 20.
See explanatory statement to Amendment 30.
Amendment 30, in clause 18, page 13, line 21, at end insert
“up to a maximum amount of £10 million”.
This amendment sets a maximum non-compliance penalty for enhanced duty premises at £10 million.
Government amendment 8.
Clause 18 stand part.
Amendment 27, in clause 19, page 14, line 24, leave out “different” and insert “lower”.
The amendment restricts the Secretary of State to lowering the daily penalties rate for non-compliance by regulation.
Clauses 19 to 23 stand part.
Dan Jarvis
This group of clauses sets out the means by which the SIA will be able to issue civil penalties for non-compliance. Although it is intended that the SIA will rely mainly on advice and guidance in the first instance, a credible sanctions regime with suitable monetary penalties is necessary to ensure that the regulator can secure compliance where it identifies serious or persistent non-compliance.
Where a person fails to fulfil a requirement, it is important that the SIA has the ability to issue financial penalties that can reduce the financial benefit of non-compliance. Where a person fails to comply with a compliance notice, restriction notice or information notice, they may be prosecuted for a criminal offence if it is in the public interest. In most cases, however, penalties will likely be the appropriate way of dealing with non-compliance.
Clause 17 enables the SIA to issue a penalty notice if it is satisfied, on the balance of probabilities, that a person is contravening or has contravened a relevant requirement—for example, if the responsible person for an enhanced duty premises has failed to put in place appropriate public protection measures. A penalty notice will always specify a non-compliance penalty to be paid by the recipient.
The maximum amount of a non-compliance penalty to be imposed by way of a penalty notice is set out in clause 18, which sets the penalty amounts at a level to counter financial gain from non-compliance. The maximum penalty is higher for enhanced duty premises and qualifying events because of the potentially more impactful consequences of non-compliance in the event of an attack.
In most cases, it is anticipated that penalty notices will be used in the event of breach of a compliance or restriction notice, but the Bill allows for a penalty notice to be issued regardless of whether a compliance or restriction notice has been issued. That will provide a powerful deterrent to those who would seek to evade the requirements.
Clause 17 also includes particular provision to ensure that penalty notices are issued fairly. A penalty notice cannot be issued more than once for the same contravention, and payment cannot be required less than 28 days from the issue date.
Government amendments 5 to 8 update the clause in respect of the maximum penalty for failing to attend an interview. Paragraph 3(1)(b) of schedule 3 gives the SIA the power to issue notices to require a person to attend an interview. Notices can be issued to a broad range of individuals, including employees, who the SIA considers may hold relevant information.
Tom Tugendhat
Simply to say that, although there needs to be a maximum sum to levy as a penalty, £18 million strikes any reasonable person as extremely high. Although we completely agree with compliance, the fines strike me as a little out of proportion.
Clause 17 accordingly ordered to stand part of the Bill.
Amendments made: 5, in clause 18, page 13, line 10, at end insert—
“(za) in the case of a contravention of a requirement imposed by a notice under paragraph 3(1)(b) of Schedule 3 (requirement to attend and answer questions), £5,000; paragraph 3(1)(b)”
This amendment sets at £5,000 the maximum monetary penalty that an individual may be given for failure to comply with a requirement imposed under paragraph 3(1)(b) of Schedule 3.
Amendment 6, in clause 18, page 13, line 11, after “if” insert
“, in a case to which paragraph (za) does not apply,”
This amendment is consequential on amendment 5.
Amendment 7, in clause 18, page 13, line 13, after “if” insert
“, in a case to which paragraph (za) does not apply,”
This amendment is consequential on amendment 5.
Amendment 8, in clause 18, page 14, line 1, at end insert—
“(za) subsection (1)(za),”—(Dan Jarvis.)
This amendment is consequential on amendment 5.
Clause 18, as amended, ordered to stand part of the Bill.
Clauses 19 to 23 ordered to stand part of the Bill.
Clause 24
Offences of failing to comply with compliance notice or restriction notice
Question proposed, That the clause stand part of the Bill.
Dan Jarvis
As I have already said, the Bill gives the SIA powers to take a range of enforcement action, including issuing monetary penalties, to enable it to deal with non-compliance. Such action is anticipated to be the primary method of enforcement, allowing swifter resolution without resorting to criminalisation. However, where civil enforcement is not enough, the public will expect criminal consequences for cases of non-compliance, such as persistent and egregious failures.
Clause 24 makes it a criminal offence to fail to comply with a compliance or restriction notice that has been given in relation to enhanced duty premises or a qualifying event. It will be a defence for the accused in subsequent criminal proceedings to show that they took all reasonable steps to comply with the relevant compliance or restriction notice. The offences are triable either way and, if convicted on indictment, a person will be liable to a sentence of up to 2 years’ imprisonment and/or a fine.
Turning to clause 25, receipt of accurate information will be vital to the effective functioning of the SIA and to ensure that any public safety risks arising from non-compliance can be addressed. Although we expect information to be provided in good faith in the majority of cases, clause 25 makes it a criminal offence to provide false or misleading information where the person either knows that the information they are providing is false or misleading, or is reckless as to whether it is.
That might happen where the responsible person notifies the SIA that they are responsible for qualifying premises but knowingly misleads the SIA as to whether their premises are in the standard or enhanced tier. A person in receipt of an information notice might also give false information to the SIA in responding to that notice. The offence does not criminalise genuine or honest mistakes, such as where a person provides information that proves to be inaccurate but did so in good faith. The offence is triable either way and, if convicted, a person may be liable to a sentence of imprisonment for no more than 2 years and/or a fine. The offence will provide a deterrent and an appropriate punishment for those who purposely provide false or misleading information to the SIA to avoid complying with the requirements or to evade enforcement action.
Clause 26 provides that a person other than the body may also be liable in some cases for a criminal offence committed by the body. The person must be a relevant person in the body or a person purporting to act in that capacity for the body. A relevant person is involved in the management or control of the entity, such as a company director or partner. That ensures that those involved in senior management can be liable for offences committed by the body. Those offences relate to serious misconduct and persistent, egregious non-compliance by the body.
Specifically, a relevant person may be liable alongside the body for the offences of failing to comply with a compliance, restriction or information notice if the body committed the offence with their consent or connivance or as a result of their neglect. They may also be liable where they have consented to, or connived in, the body committing the offences of providing false or misleading information, obstructing an authorised inspector or pretending to be an inspector. The provision is necessary to deter serious non-compliance by ensuring managerial responsibility within bodies. Members of the Committee will no doubt have seen the importance of similar measures in other legislation.
Chris Murray (Edinburgh East and Musselburgh) (Lab)
I want to make a few points on offences, following our evidence sessions on Tuesday.
Obviously, the situation in the aftermath of a terrorist attack can be very febrile: emotions run high, and media attention can be high. It is human psychology, sadly, to look for someone to blame, and we might have imagined, before we scrutinised the Bill, someone guilty of this offence finding themselves in the eye of that storm. When we questioned Shropshire council representatives on Tuesday, they spoke about the obligations that would be on them if they were the people affected. I was reassured to hear them say that they already felt that burden of responsibility and that this legislation did not impose any further such burden on them.
The legislation refers to non-compliance in general, not non-compliance in the aftermath—that is really important. I thought it would be good to put on record the reassurances we heard on Tuesday on these measures.
Clause 24 accordingly ordered to stand part of the Bill.
Clauses 25 and 26 ordered to stand part of the Bill.
Clause 27
Guidance
Question proposed, That the clause stand part of the Bill.
Dan Jarvis
Clause 27 will place a duty on the Secretary of State to publish dedicated guidance to assist those in scope of the Bill in understanding how best to fulfil the requirements placed on them. The guidance will be easy to follow, requiring no particular expertise. It will help in determining how many persons may be reasonably expected to be present on the premises, and whether premises or an event are in scope and, if so, in which tier. It will provide guidance around the requirements to be followed, such as what an appropriate evacuation procedure should include or understanding what public protection measures it might be reasonably practicable to have in place at enhanced duty premises.
The published guidance must be laid before Parliament. It must be kept under review and may be revised accordingly. The revised guidance must also be published and laid before Parliament. The guidance may be used by the SIA in providing advice to duty holders and, where the SIA has taken enforcement action, a person will, in proceedings such as an appeal, be able to rely on proof that they have acted in line with the guidance to show that they have not failed to comply with a requirement in the Bill. I should be crystal clear at this point that the Government do not endorse guidance or advice issued by third-party providers. We continue to refer people to the ProtectUK platform and we have factsheets on gov.uk for all guidance and Bill updates.
Clause 27 accordingly ordered to stand part of the Bill.
Clause 28
Disclosure of information
Dan Jarvis
I beg to move amendment 9, in clause 28, page 20, line 1, at end insert—
“(A1) Any person may disclose information to the Security Industry Authority for the purposes of the exercise by the Security Industry Authority of any of its functions under this Part.
(A2) The Security Industry Authority may disclose information held in connection with the exercise of any of its functions under this Part to—
(a) any person for the purposes of the exercise by the Security Industry Authority of any of its functions under this Part;
(b) any person with functions of a public nature for the purposes of the exercise by that person of any of those functions.”
This amendment makes provision about the disclosure of information to, and by, the Security Industry Authority.
Dan Jarvis
Clause 28 provides that any necessary disclosure of information under the Bill will not constitute a breach of obligations of confidence owed by the individual or body making the disclosure. At the same time, the Bill ensures that the disclosure of information under the Bill is in accordance with the requirements of the data protection legislation and any relevant prohibitions in the Investigatory Powers Act 2016. The clause provides assurance that disclosures required by the Bill should not contravene data protection and other relevant obligations.
Government amendment 9 ensures that the clause achieves the aims of the Bill. For the SIA to effectively carry out investigation and enforcement, it is vital that it can receive and use relevant information, especially that held by other regulatory and public bodies. Government amendment 9 therefore seeks to ensure that there is a clear and express information-sharing gateway for both the SIA and those who propose to share relevant information with it. The gateway is appropriately limited to either the SIA exchanging information with any person so long as it is for the purposes of the SIA exercising its functions under the Bill, or the SIA sharing information with other public bodies to exercise that body’s existing public functions. In relation to the latter, many of those bodies will derive their relevant functions from statute, but in some limited cases, the public functions will not be statutory, such as for sharing with central Government.
As clause 28 already provides, disclosures required or permitted by the Bill must be in accordance with the data protection legislation and the Investigatory Powers Act 2016. That ensures that there will be compliance with the requirements of the Data Protection Act 2018 and UK GDPR. I hope the Committee will support the amendment.
Linsey Farnsworth (Amber Valley) (Lab)
I intend to speak only briefly on the clause. I welcome the data protection assurances given by the Minister. This is an important clause because it allows the SIA to receive and share information by way of disclosures to facilitate the exercising of its functions. This morning the Minister spoke about our security agencies having thwarted 43 late-stage plots. Integral to that would have been the sharing of intelligence. Sadly, that is not always the case, as we saw in Manchester—terror plots do happen.
Time and time again in inquiries following tragic events, whether that is large-scale disasters or children being harmed in the family home, we hear people confirming that things could have been so different if only agencies had shared information and disclosures had been made. Clause 28, as amended, will allow important preventive work to be undertaken and information to be shared. It will only serve to strengthen the SIA’s ability to ensure our safety.
Dan Jarvis
I very much thank my hon. Friend for her helpful contribution. I trust that hon. Members agree that these measures should stand part of the Bill.
Amendment 9 agreed to.
Clause 28, as amended, ordered to stand part of the Bill.
Clause 29
Means of giving notices
Question proposed, That the clause stand part of the Bill.
Dan Jarvis
We have already debated clauses 12 to 14 and clause 17, and the compliance restriction penalty and information notices that the SIA will be able to issue to fulfil its investigative and enforcement functions. Clause 29 sets out the valid methods of service by which the SIA can give these notices and to whom. The methods specified are post, email, delivery by hand and leaving a notice at the person’s proper address. That will ensure that the SIA can reach people effectively.
Clause 29 also provides that notices issued to a body corporate, limited partnership and unincorporated association can be validly served on specified persons within those entities. For example, where the notice is issued to a body corporate, it can be served on an officer or member of that body. Such a person could include, but is not limited to, the designated senior individual under clause 10. Issuing notices to such persons will ensure that they are made aware and will reduce opportunities for avoidance or non-compliance.
Clause 30 allows the Secretary of State to make further provision about notices issued under part 1 of the Bill. That includes, in particular, their form and content, and the variation and withdrawal of notices. The relevant notices are compliance notices, restriction notices, penalty notices and information notices. The main provisions for these notices, which we have debated, set out the information that must be included in a valid notice, and how they may be varied or withdrawn. The power for the Secretary of State to make further provisions under clause 30 is considered necessary for adjustments to be made once the legislation is implemented.
Question put and agreed to.
Clause 29 accordingly ordered to stand part of the Bill.
Clause 30 ordered to stand part of the Bill.
Clause 31
Civil liability
Question proposed, That the clause stand part of the Bill.
Dan Jarvis
The clause prevents a person from bringing a claim in private law against a person responsible for qualifying premises or events for a breach of statutory duty where they have failed to comply with requirements in the Bill. The Government consider it appropriate that means of redress for non-compliance with the new regime should be limited to enforcement by the SIA.
The SIA will have a range of enforcement actions, which are underpinned by some criminal offences, as has already been debated. It is not considered necessary to allow persons to bring private claims for simple non-compliance, such as seeking compensation for the responsible person failing to put in place public protection procedures. However, the inclusion of the clause does not preclude or otherwise affect any right of action that a person may have independently of the bail.
Clause 31 accordingly ordered to stand part of the Bill.
Clause 32
Powers to amend this Part
Tom Tugendhat
I beg to move amendment 23, in clause 32, page 22, line 20, leave out from “for” to “in” in line 21 and insert
“enhanced duty premises to be standard duty premises.”
This amendment prevents standard duty premises from becoming enhanced duty premises at the discretion of the Secretary of State.
Tom Tugendhat
This is a simple repetition of the amendments we have made throughout the Bill to alleviate the burden on small businesses and ensure that the balance is appropriate.
Dan Jarvis
I again thank the right hon. Gentleman for tabling his amendment. He seeks to remove the provision in the clause that would allow the Secretary of State, via regulations, to make standard duty premises be treated as enhanced duty premises. It would have the effect of limiting the Secretary of State to only being able to provide that premises that would ordinarily be in the enhanced tier be treated as if standard duty premises. That is already the case in the Bill for certain premises, such as places of worship.
As I have explained, the nature and level of the threat from terrorism can evolve and change rapidly, with different behaviours, methods and tactics emerging. It is therefore important that the Government can respond quickly to protect the public if it becomes evident that there is a particular threat to certain types of premises and that the public protection measures in the enhanced tier should be in place there to reduce vulnerability and the risk of harm.
I again reassure the right hon. Gentleman and the Committee that regulations to make amendments to schedule 1 under this power would be subject to the affirmative procedure, requiring the express approval of both Houses of Parliament. For those reasons, the Government cannot support the amendment.
Tom Tugendhat
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 32 ordered to stand part of the Bill.
Clause 33
Interpretation of this Part
Question proposed, That the clause stand part of the Bill.
Dan Jarvis
The clause is technical in nature, defining certain terms used throughout the Bill. For example, the clause provides that the meaning of “terrorism” in the Bill is the same as in the Terrorism Act 2000. The clause is necessary to provide the meaning of these terms for the purposes of the Bill.
Clause 33 accordingly ordered to stand part of the Bill.
Clause 34
Licensing: disclosure of plans of premises
Question proposed, That the clause stand part of the Bill.
Dan Jarvis
Current licensing legislation in England, Wales and Scotland requires that detailed plans for all licensed premises are kept on a register and made available for inspection by the public. These plans include sensitive information, such as CCTV and emergency exit locations, and we know that this information could potentially be utilised for hostile reconnaissance.
To minimise the accessibility of such information to hostile actors, we are amending the Licensing Act 2003, which covers England and Wales, and the Licensing (Scotland) Act 2005 to enable the UK Government to make regulations on the form and content of plans that will be kept on a public licensing register. The regulations will restrict the public disclosure of sensitive information that is likely to be useful to persons committing or preparing acts of terrorism.
Specifically, the regulations will set out that new licence applicants will be required to supply—in addition to the standard detailed plan—a new high-level plan, which will be available for public inspection. This second plan will not include any sensitive information, but will still enable members of the public to see information about licensing applications that might affect them. The standard detailed plan will still be available to licensing authorities and other responsible authorities, including the police and fire authorities, to enable them to make informed licensing decisions.
Schedule 4 provides that plans compliant with clause 34 must accompany premises licence and club premises certificate applications, which will include any variations or amendments. In practice, once the regulations are in effect, this will mean that the two-plan approach will need to be adopted by businesses applying for these licences.
The schedule further sets out that businesses with pre-existing licences may, if they wish to, seek to replace the existing non-compliant plan with a compliant one. The compliant plan would then be placed on the register and thus be available to the public. For the avoidance of doubt, this will not be mandatory for businesses that already have a licence—we are clear that that would not be proportionate. Taken together, these provisions will better protect licensed premises across England, Wales and Scotland.
Question put and agreed to.
Clause 34 accordingly ordered to stand part of the Bill.
Schedule 4 agreed to.
Clause 35
Regulations
Question proposed, That the clause stand part of the Bill.
Dan Jarvis
Briefly, clauses 35 and 36 are general provisions required for the operation of the Bill. Clause 35 sets out the parliamentary procedure accompanying the regulations. Clause 36 details the territorial extent of the Bill: parts 1 and 3 of the Bill extend to England, Wales, Scotland and Northern Ireland; part 2 of the Bill does not extend to Northern Ireland, with part 1 of schedule 4 extending to England and Wales and part 2 of schedule 4 extending to Scotland.
Question put and agreed to.
Clause 35 accordingly ordered to stand part of the Bill.
Clause 36 ordered to stand part of the Bill.
Clause 37
Commencement
Tom Tugendhat
I beg to move amendment 18, in clause 37, page 25, line 5, after “force” insert “for enhanced duty premises and qualifying events requirements”.
See explanatory statement to NC1.
The Chair
With this it will be convenient to discuss the following:
Amendment 19, in clause 37, page 25, line 10, at end insert—
“(2A) Parts 1 and 2 come into force for standard duty premises requirements on such day as the Secretary of State may by regulations appoint in line with section [Independent review of operation of enhanced duty premises and qualifying events requirements].”.
See explanatory statement to NC1.
New clause 1—Independent review of operation of enhanced duty premises and qualifying events requirements—
“(1) Within 18 months of the passage of this Act, the Secretary of State must commission an independent review of the operation of the enhanced duty premises and qualifying events requirements, including any recommendations for the implementation of the standard duty.
(2) The review in subsection (1) must—
(a) assess the level of costs and liability transferred to businesses and individuals arising as a consequence of the statutory provisions in this Act;
(b) consider any wider implications for businesses and individuals in meeting the new public protection measures and any potential need for additional statutory safeguards, support or guidance for businesses and individuals as result of the passing of this Act; and
(c) be led by an independent chair and comprise a panel comprising representatives from the hospitality, live music, performing arts, cultural and retail sectors, grassroots sports venues, small businesses and local government.
(3) The Secretary of State must lay before both Houses of Parliament a report setting out the Government’s formal response to the review specified in subsection (1).
(4) The Secretary of State may not make a regulation under section 37(2A) until—
(a) the end of the period of two years beginning with the day on which this Act is passed, and
(b) the report specified in subsection (3) has been laid before both Houses of Parliament.”.
This new clause, together with Amendments 18 and 19, would require the Secretary of State to review the operation of the enhanced duty premises and qualifying events requirements before commencing the standard duty requirements.
Tom Tugendhat
I am afraid that amendment 18 is on the same point we have made throughout, which is about overburdening.
Dan Jarvis
Again, I thank the right hon. Gentleman for these amendments. While I completely understand the sentiment underpinning them, the Government do not support them. I would, however, like to assure the Committee that the Government are committed to learning the lessons from implementation, which is why a robust monitoring and evaluation plan to monitor the Bill’s effectiveness is in place. What is more, the Government have already committed to undertaking a thorough post-implementation review, which will assess whether the legislation is meeting its policy objectives, including analysing the costs and impacts on businesses and other premises in scope.
The Government have been clear that, following Royal Assent, we expect there to be an implementation period of at least 24 months, which will allow for the set-up of the regulator, while ensuring sufficient time for those responsible for premises and events in scope to understand their new obligations and to plan and prepare. Detailed guidance will be provided to assist those in scope to prepare for the requirements, as well as extensive communications and engagement with business and organisations.
Furthermore, as I have already set out, the Bill’s requirements in the standard tier are focused on straightforward procedures designed to increase preparedness and reduce the physical risk to the public from acts of terrorism. The procedures are intended to be simple and have no cost, other than staff time, to develop and implement, with no requirement to purchase or install any additional equipment beyond what they already have in place.
Tom Tugendhat
It’s your chairmanship! I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Dan Jarvis
I turn finally to clauses 37 and 38, which are further general provisions. Clause 37 provides that the Bill’s provisions will be commenced via regulations made by the Secretary of State, save for the provisions contained within part 3 and the regulation-making powers in parts 1 and 2 of the Bill, which come into force on the day that the Bill is passed. Clause 38 details how the Bill should be referred to once it has become an Act.
Clause 37 accordingly ordered to stand part of the Bill.
Clause 38 ordered to stand part of the Bill.
The Chair
New clause 1 has already been debated and is not being moved. New clause 2 has been debated already, but do you wish to comment on it, Mr Tugendhat?
Tom Tugendhat
On a point of order, Sir Edward. I will comment on it very happily, and merely repeat that the SIA is a regulator that has faced significant challenges over recent years and, again, I raise the question as to whether it is the appropriate regulator. As usual, however, the Minister would have the numbers in a vote.
The Chair
Thank you.
Question proposed, That the Chair do report the Bill, as amended, to the House.
Dan Jarvis
With your leave, Sir Edward, I will take this opportunity to thank you for chairing this Committee and to thank all Members on both sides of the House for their contributions, not just today but in proceedings on Tuesday. I will also take the opportunity to say a particular thank you to all those members of my Department who have worked incredibly hard to draw this legislation together, in conjunction with the staff of this House. Their efforts have been very much appreciated. I am grateful for the cross-party nature of what we have achieved as we have progressed the Bill through the House.
Tom Tugendhat
It would be churlish of me not to thank you, Sir Edward, for the speed and efficiency with which you have guided us through this. This is also an opportunity to put on the record my thanks to the Minister, who has been a friend for many years—nearly 20 years, actually. It is a wonderful symmetry that, on my last day on the Front Bench for my party, I am doing what I did when we first met, which is scrutinising him.
The Chair
It has been a pleasure to serve you all, and it has been so easy—no controversy. Thank you very much.
Question put and agreed to.
Bill, as amended, accordingly to be reported.
Westminster Hall
(4 days, 17 hours ago)
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SEND Provision: Hampshire
(4 days, 17 hours ago)
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Luke Murphy (Basingstoke) (Lab)
I beg to move,
That this House has considered SEND provision in Hampshire.
It is a pleasure to lead my first Westminster Hall debate under your chairship, Sir Mark, particularly on this important topic. I begin by recognising the parents, advocates and campaigners who have brought the issue into the public eye, especially the Kids nursery parent committee from Basingstoke, who are here today in the Public Gallery. Their dedication to advocating for inclusion and calling for urgent reforms to the special educational needs and disabilities system is inspiring, and their personal stories highlight the real impact of this crisis on children, young people and their families.
When I first stood as Labour’s candidate for Basingstoke, I knew that SEND support faced challenges, but it was not until I met families across Basingstoke that I truly understood the depth of the crisis. I spoke to two mothers on the campaign, who live just two doors apart, yet both said they felt alone in their struggles with an adversarial and confusing system. They had no idea that their situations were nearly identical. Both were battling to secure essential support for their children, believing that they were alone in that fight. A mother in my constituency, Michelle, perfectly summarised the struggle. She told me:
“Raising children with SEND is incredibly challenging, exhausting and stressful. There isn’t enough support for parents to cope. We face constant appointments, endless form-filling, and have to fight for the education our kids deserve. It shouldn’t be this hard, and it doesn’t need to be this hard.”
No family should be placed in Michelle’s position, having to fight tooth and nail for a fair, inclusive education for their children.
Just last week, the National Audit Office issued a report described by the Minister for School Standards as a “damning indictment” of the SEND system. The report highlighted that the system is not only financially unsustainable, but is failing to deliver the necessary outcomes for children. It is a broken system—a crisis we inherited, after 14 years of inaction. It is heartening to know, looking around this room, that the sentiment is shared across party lines. The last Conservative Education Secretary labelled the system she left behind as “lose, lose, lose” while current Tory shadow Ministers say that they did not do enough on SEND and should hang their heads in shame. We agree.
The NAO report underscores the reality that families and councils live with every day. The demand for SEND support has surged. Education, health and care plans have increased by 140% since 2014, with more than 576,000 individuals now needing that support. Local authorities are also struggling under a £4.6 billion deficit as high-needs funding, even at £10.7 billion, fails to meet demand. Tribunal appeals have risen by 334%, which is testament to a system where families must fight for basic rights rather than being supported to achieve them.
One parent shared her story with me recently. After waiting two and a half years following an initial needs assessment, her daughter finally secured a placement in a specialist school, but it is a 70-minute round trip for only two hours of schooling each day. That family’s experience reflects a system that feels combative rather than supportive—where councils, as this mum pointed out, spend public funds on solicitors and barristers to deny or delay access to services that children are legally entitled to.
The impact of the crisis on families is stark. Nationally, only 50% of EHC plans met the statutory 20-week timeline in 2023—down from 60% in previous years. That failure to meet deadlines has left parents understandably losing faith in the system. It is little wonder that parents who have children with SEND are significantly more likely to consider home schooling than parents who have children without SEND—a sad consequence of a system that is failing them.
Chris Bloore (Redditch) (Lab)
I congratulate my hon. Friend on securing this debate, and thank you, Sir Mark, for your chairmanship. I also thank the parents that my hon. Friend has brought along in support. I have the same situation in my constituency of Redditch in Worcestershire, and if it was not for the parents dotted around the country who fight for their children or grandchildren, we would not have such energy in the new Parliament to fight for the proper solutions for SEND. My hon. Friend talked about trust and the broken system; does he agree that it is essential, if we are to rebuild a system that is fit for purpose, to rebuild trust between local authorities and parents and grandparents, so that co-production can truly start again?
Luke Murphy
I completely agree with my hon. Friend: crucial to fixing the system will be rebuilding trust between parents, national Government and local authorities. There is much work to do, but I think yesterday’s Budget showed that this Government are making a downpayment on that commitment—and there will be more to come. As my hon. Friend mentioned, the lack of adequate support has lasting impacts on families. Many parents have had to reduce their work hours or even leave employment entirely to care for their children when the local authority fails to provide adequate support. I know, from hearing families’ stories, that many are reaching breaking point, and parents are exhausted from the constant battle against the system.
Hampshire county council, like many others, has been coping with a system in freefall. The number of EHC plans in Hampshire has nearly doubled, from just over 8,000 in 2019 to around 16,000 this year. Hampshire’s cumulative deficit for the dedicated schools grant is now at £86.1 million, representing 9.4% of its total dedicated schools grant income. To put that in perspective, for every £100 that Hampshire receives for schools and SEND provision, it has accumulated nearly £9.40 in debt. That deficit is expected to reach £250 million by 2025-26 if nothing changes. Hampshire also currently spends £47.2 million annually on independent school placements, due to the lack of available spaces in state-funded options, underscoring the urgent need for expanded state provision and the need to support mainstream settings in providing essential SEND support.
I am particularly concerned about the exploration of the statutory override in 2026, which currently allows the education deficits to be kept off councils’ balance sheets. When the override ends, councils like Hampshire could face financial insolvency, forcing them to declare a section 114 notice and request Government intervention. The situation is clearly untenable, and serious reforms are urgently needed, but this crisis is not just about budgets or statistics; it is about real lives and families.
Eleanor, a mother in my constituency, told me about her son. When he turned two, she sent him to the local nursery to be with his older sister, but there it quickly became clear that his development was delayed. On multiple occasions, Eleanor would go to pick him up and find him playing alone in the toilets unsupervised. Quite understandably, that is not what she wanted for her son, but without sufficient support from early years education, and because he could not talk, he was left to blend into the background and slip through the cracks. Eleanor describes the process of fighting for SEND provision as “just terrible”—a constant battle with the local authority in a system that she describes as completely broken.
Another parent, Kelly, shared her story with me. After multiple appointments where she raised concerns about her son’s development, she was told that he was simply the “lazy twin”. But Kelly did not give up. She described how, without clear guidance and support, parents go into the SEND system “blindfolded”, feeling their way through a complex maze that should be straightforward. Jodie, another mother from Basingstoke, told me that
“the only support you get consistently through the whole SEND journey is from other parents who are going through the same thing.”
It is a sad reflection of the system when parents find that their only reliable support is each other.
My hon. Friend the Member for Aldershot (Alex Baker), who wanted to be here today, has heard similar experiences of a lack of suitable school places leaving parents with no option but home schooling for their children. That puts unacceptable pressure on parents, resulting in mental health issues and self-harm, while children miss out on vital opportunities to develop wider life and social skills
A parent in my constituency described the impact of finally receiving specialist provision for her daughter as having a “halo effect”. It brought a sense of normalcy and confidence back to her daughter’s life, sparking interests outside the classroom, but that positive impact should not just be the rare exception; it should be the standard experience for every family navigating the SEND system.
When I committed to a manifesto focused on building a truly inclusive, responsive and supportive education system, it was not just a pledge; it was a mission. Every child deserves an education system that meets their needs, especially those children with special educational needs and disabilities.
I am encouraged by the Government’s actions in taking the first steps towards real change. Yesterday’s Budget marked a significant commitment from the Chancellor, with a £1 billion increase in SEND and alternative provision funding. That is a 6% real-terms boost. The funding is a critical step towards improving outcomes for children and families, and guiding our SEND system towards much-needed financial stability, fixing the foundations to ensure that every child in England can achieve and thrive regardless of their background.
The children’s wellbeing Bill, which was announced in the King’s Speech, will mandate schools to collaborate with local authorities to improve SEND inclusion. That is a foundational step. Our commitment to expand early years support by investing in SEND-specific teacher training and establishing a framework for early intervention, such as the Nuffield early language intervention, is all part of a larger strategy to prevent children as soon as possible from slipping through the cracks. The Government have also said that they will ensure accountability in mainstream settings through bodies like Ofsted to guarantee that every school is equipped to meet the needs of students with SEND. More widely, the Government have committed to recruiting 6,500 new teachers to reduce class sizes, which I hope will also allow for more inclusive classrooms.
This crisis has stretched on for far too long and we must work on a cross-party basis to address it before the situation becomes truly unsalvageable. Every child, regardless of whether they have SEND or not, should have the support in place so that they can thrive in school and beyond.
Today, with the Kids parent committee from Basingstoke and the Minister both present in Westminster Hall, I want to amplify a clear message from families in my constituency: we need greater training and support for mainstream early years staff in SEND, because early intervention is crucial. By equipping early years staff with the skills to recognise and support children with additional needs, we can ensure that children receive timely help, giving both parents and children a solid foundation. I fully support that goal and will work alongside others to make it a reality.
In yesterday’s Budget, the Chancellor announced an additional £1.8 billion to expand Government-funded childcare and allocated £69 million to grow the network of family hubs. This funding represents a chance to provide essential support and early intervention for SEND families across the country.
I hope that this debate shines a light on the reality of SEND provision for families, not only in Hampshire but across the country. Today I urge the Minister and colleagues from all parties urgently to support a reformed SEND system that lifts up our young people and their families.
The Government have rightly committed to breaking down barriers to opportunity for all, which must include children and young people with special educational needs and disabilities. We know that there is no magic wand that can fix this broken system overnight, but I urge the Minister to collaborate with her colleagues across Government to urgently reform the SEND system, so that we can restore faith in SEND provision, and I am hopeful that this Government will lead the way in creating a system that truly works for every young person, every family and every community. As Michelle put it:
“It shouldn’t be this hard, and it doesn’t need to be this hard.”
Sir Mark Hendrick (in the Chair)
I remind Members that they should bob if they wish to be called in this debate.
Jim Shannon (Strangford) (DUP)
It is a pleasure to serve under your chairship, Sir Mark. As the hon. Member for Basingstoke (Luke Murphy) and I were walking down to Westminster Hall, I asked if he would be speaking and he said he was. I know that the debate is about Hampshire, but I always want to come along to support hon. Members who are bringing forward critical issues. I also want to add comments from a Northern Ireland perspective.
I am pleased to see the Minister in her place; I always look forward to meeting her and I know she clearly understands the issues that the hon. Member presented. I want to support him and his parents group, which has come here today. On the way here, he mentioned that those parents are the reason he secured the debate, and parents should be in everything that we do. These things are about our constituents and about what we can do to help them and give their perspective.
I spoke on this issue just last week; indeed, like almost everyone here, I have spoken in every debate on SEND education since we came back after the election. As I said, I want to give a Northern Ireland perspective, if I may.
I welcome the Budget, which allocated extra money to the SEND education system, as the hon. Member mentioned. I am always hopeful that some of that allocation will come our way through the Barnett consequential, which results in us gaining from investment here on the mainland.
Sir Mark Hendrick (in the Chair)
Order. The debate pertains to Hampshire. Although you raise issues that are common, the subject is aimed in the direction of Hampshire. Can you please make the main points and try not to veer off the subject in terms of specifics in your own part of the UK?
Jim Shannon
I will make sure that whenever I mention Northern Ireland, I mention Hampshire as well. That will hopefully keep the perspective right, because what the hon. Member said happens in Hampshire happens in my constituency as well. I want to illustrate that and make some suggestions on how we can provide better help in the system. What we do back home in Northern Ireland can help those in Hampshire with how they move forward.
We have a clear teacher funding issue, especially in the SEND sector. One of my questions to the Minister, which I hope will be helpful for the hon. Member for Basingstoke and for the wider debate, is this: what has been done to ensure that there are more adequately trained people to respond to this issue?
I also speak in this debate because this matter is personal for me. I have six grandchildren, and three of them unfortunately have some difficulties with autism, learning and speech issues. I will not mention their names, because it would not be appropriate, but that is why this is personal.
Whenever I come here to make a contribution, it is clear to me what I am asking for: for the same things that have already been done back home. I will give a couple of examples of how things have happened and, by doing so, show what has made the situation better. I know that the hon. Member has referred to that.
A teaching assistant back home told me that she did a level 3 qualification on specialist support for teaching and learning in schools. If she lived here in England, she would fully qualify as a substitute teacher; in Northern Ireland, further training is necessary. That is an example for us back home. With the same system here, someone qualifies, but with the system back home, they do not. That clearly highlights the issue.
Across Northern Ireland—the hon. Member’s contribution has convinced me that this is similar to what is happening in Basingstoke and Hampshire—we have autism assessments, and some 66,000 pupils have some form of SEND. That is 20% of the population—the figures are similar to what the hon. Member referred to. Children fight for a diagnosis from the day they enter school, but unfortunately there are detrimental educational psychology delays, which coincide with delays in our health service. Even though we are focusing on SEND and education, will the Minister, when she responds, consider that there must also be a tight relationship between education and health? That is important and I hope she will respond in a positive fashion.
As I said, this issue is a personal one: three of my six grandchildren unfortunately have autism and speech therapy needs. I want to give an example of what has happened. I have mentioned diagnosis; get the diagnosis done early and we can change the child’s life—wow! I will give an example that is personal, because it happened in our family. One of the grandchildren—one of the boys—was quite boisterous and seemed to have difficulty expressing himself. Unfortunately, the result was that when he was at nursery and early school, he was hitting out at other children and became quite a difficult child. It was nobody’s fault; it was just that he was not able to express himself in the way he wished to.
We got the early diagnosis, and with the early diagnosis came the speech therapy, and with the speech therapy came an absolute change in that wee boy. When we were going to my son’s house for Christmas, I said to my wife, “Sandra, there’ll be some goings-on the day, when we get there,” and she said, “You’ll see a difference.” I had not seen my grandson for a while, and what a difference there was in that wee boy because he had got the diagnosis and the speech therapy—you could not have kept him quiet. What a change in that wee fella because the system had worked and helped him.
I give that as an example of what can happen if we have the right strategy and the right way forward. The opposite is now true of the wee boy: he never keeps quiet. It is lovely to have a wee boy in the corner who is so boisterous and alive and so respectful—we heard so many pleases and thank yous. There can be such a difference as a result of the system when it works. We now have two others coming through, and the provision of an early diagnosis has to be the same for them. The hon. Member for Basingstoke has asked for that, and I am sure the Minister will respond.
Another example is about how education can help. This is an example to help the Minister, because I think the great advantage of these debates is that we can give examples of where things have been going the right way and thereby exchange ideas on ways forward and how we can do things better. Movilla high school in my constituency increased its enrolment from 401 to 600, because the education authority enabled it to extend the special provision for pupils with autism to include 10 and 11-year-olds, and it has established what are called nurture classes. It is not a novel idea, but it is a good idea in terms of helping to move forward education and mainstream education in particular.
Those are just two of the points I want to raise: early diagnosis and the nurture classes that we have in my constituency of Strangford. I do not know what the reason is, but in the last number of years—the last 10 to 15, in particular—I have certainly seen more children there who have difficulties with autism and other issues. More should be done to create specialist nurture units within mainstream schools and to support specialist training for teachers of all ages. There must be the capacity for us to do our best for pupils who require additional support; they should not have to suffer because of a funding crisis.
I look forward very much to hearing the Minister’s thoughts and those of the shadow Minister, the hon. Member for North West Norfolk (James Wild). Around this room, we have people with incredible knowledge, and I look forward to all their contributions. I hope the Minister can undertake further discussion with the devolved nations on this matter. I said earlier—I mean it, and it is true of any debate I come to—that there are always lessons that can be learned regionally, and we can then share them in this great United Kingdom of Great Britain and Northern Ireland. There is that benefit that comes from regional knowledge, which may be specific, but which can help us all to do things better. With that, I commend the hon. Member for Basingstoke for bringing the debate forward. I hope my contribution kept exactly to the line that you asked me to keep to, Sir Mark. Thank you so much.
Darren Paffey (Southampton Itchen) (Lab)
It is a pleasure to serve under your chairship, Sir Mark. I am still learning about these things, but I believe I may need to refer to my interest as a member of the Education Committee.
I thank my hon. Friend the Member for Basingstoke (Luke Murphy)—my childhood home—for securing this important debate for our county. I fully recognise the picture that he so comprehensively and eloquently set out. As a former council cabinet member for education in Southampton and a proud dad to an amazing SEND child, both my professional and personal experience move me to take part today. I am grateful for the opportunity to do so representing the people of Southampton Itchen— I did move further south in the county a few years ago.
The debate could not have come at a better time. Not only is the need for SEND reform at its greatest after being overlooked by the Conservative Government for 14 years, but the debate follows the announcement of £1 billion of extra SEND funding in yesterday’s Budget, as my hon. Friend mentioned. I do not intend to repeat the points he made, but I will take this opportunity to share three reflections from my experience that hopefully contribute to a way forward for SEND children and their families in Southampton and across the county.
I will start by saying as clearly as I can that inclusion in mainstream schools is the right approach for many. However, the metrics around schools must change. I can tell Members what inclusion is not: it is not just putting a child with SEND in a mainstream classroom and then, “Job done!” It is not just a box to tick or a target to meet; it is a fundamental shift in how we think about education—not only how we define school success but, far more importantly, each child having the opportunities they deserve opened up to them.
Our current metrics of attainment 8 and progress 8 often fall short in recognising a school’s full achievements. In Southampton Itchen, and I am sure in other parts of the county, we have seen promising improvements in school performance, and schools are making remarkable strides towards inclusivity, but the performance metrics often do not reflect that. Teachers are working incredibly hard to meet the needs of students with special educational needs and disabilities, tailoring their classroom approach to ensure that those students are not left behind in their learning journey. Yet those efforts—that dedication, adaptability and commitment to inclusivity of our teaching staff—are somehow not considered a measure of a school’s success. I want to argue that they absolutely are and should be.
In our very welcome Ofsted reforms, will the Minister consider how we might ensure that not just statistics, but inclusive practices that open up opportunities for SEND children, count towards the new report cards? In that way, we can expand measures from just academic achievement to educational practice that makes a difference to whether SEND children have the opportunity they need and deserve.
My second point is on the National Audit Office report mentioned by my hon. Friend the Member for Basingstoke. Some 1.7 million young people are identified as having special educational needs and disabilities in UK schools, but the report notes that there have been no consistent improvements since 2019 in outcomes for those children and young people. That is a huge swathe of our children—our future—that cannot, should not and must not be left behind.
In Southampton Itchen, the rate of growth in the number of children with SEND is outpacing the national average. Dealing with that increased need inclusively in mainstream schools relies on adequate teacher training and teachers’ preparedness for future trends. Yet the current national standards require teacher trainees to spend just one day of their placement in a SEND setting. Contrast that with what they face in the mainstream classroom, where one in five school pupils in England has identified special needs. There needs to be much more attention to the needs of those children and much more preparation in teachers’ professional development.
The professional evidence is that when we get the inclusive approach right, the benefit is felt not just in the outcomes for SEND children, but by all children. Will the Minister consider revising the initial teacher training framework so that all new teachers coming to Hampshire and other parts of the country will have received training on how they can best support, draw out the best in, and provide the greatest strides forward for those who will be in their care in the classroom? We must ensure that teachers’ needs for comprehensive training and support are met to empower them to meet pupils’ needs.
Finally, no discussion of the issue can avoid money completely. Resourcing has been a key issue in recent years. In particular, independent SEND provision is growing. While we recognise that those places are needed, it means that councils are at the mercy of market prices set by market providers. No one in their right mind would deny those children the provision they need, but it puts a significant strain on council budgets dedicated to SEND children. Yesterday’s announcement of £1 billion in extra funding is a welcome and much-needed step but, if we are to make the most of the investment, we need to ensure that it supports state-funded special schools and mainstream schools with inclusive practices, so that every child can make the strides they need and deserve, and gets the support that they are due.
We are not just talking about more money. Schools in my constituency tell me that they need certainty about what will happen with the proposed national funding formula and top-ups. Can the Minister give a timeline of when we can expect that certainty to come? Can she also confirm what will happen to the statutory override for the dedicated schools grant?
We must get this right if the Labour Government are to achieve our mission of breaking down the barriers to education and opportunity that too many SEND children face. I am aware of the scale of the challenge, and no one is more aware of it than the families in the Public Gallery today. It is my belief that the Government will deliver the long overdue changes for families here and in my constituency seeking support for their children with SEND.
Alex Brewer (North East Hampshire) (LD)
I thank the hon. Member for Basingstoke (Luke Murphy) for securing this debate and it is a pleasure to see you in the Chair, Sir Mark. In North East Hampshire, as in many other places, special educational needs and disabilities come up repeatedly in casework, constituency surgeries and local council meetings. The system, frankly, is broken. I welcome the calls from the hon. Member for Basingstoke to work across parties on a solution.
Children are frequently not getting the support that they need, schools do not have the funding for further provisions, and Hampshire county council is running at an £86-million deficit trying to meet the need. As a result, children and their families suffer, despite the hard work of headteachers, teachers, teaching assistants and parents. I have met constituents to talk about these challenges, as well as meeting charities that support families in the local area and local councillors to talk through the concerns. I pay tribute to all those who support our children with additional needs, despite the complexity of the system as it stands.
Raising a child with additional needs is hard. We cannot deny that there is an additional parenting burden, although parents, of course, bear it willingly. There is also an additional administrative burden, and council budgets are squeezed so hard that they cannot meet that need.
The number of parents who have to make appeals for SEND support has more than trebled since 2014. When provision is scarce and parents have to fight for it, it becomes an exhausting battle just to have their child’s needs met. The increasingly cited narrative—that pushy parents are just trying to get a bit of extra help for their child—is utterly nonsensical given how much work it is to ensure even the most basic provision.
North East Hampshire is a beautiful place to live, but as a largely rural area with many small villages, hundreds of children have to travel a long way to their nearest school. Those families who live a long way from their nearest suitable provision have to deal not only with the stresses of the system, exclusion, lack of academic progression, high levels of anxiety and the opaqueness of the process, but with transport. Due to the severe lack of public transport, they often have to take private taxis.
According to the Department for Education, the net planned expenditure on SEND transport in Hampshire for the ’24-25 financial year is £56,795,000, yet I hear time and again from my constituents about the failure to secure transport in time for the start of the school year. The lack of a secure transport route can have a huge impact on a child’s relationship with school and their real and perceived safety. It also increases the pressure on working parents, who frequently must leave work or reduce their hours due to the lack of accommodation for their child’s needs. The result? A postcode lottery in access to support.
One of my constituents had SEND transport approved in June. We are now on the last day of October and they have not received any further information—two months of the school year have been missed. That is not good enough, and the situation is not unique in my constituency. Another child in North East Hampshire has been told to use a bus stop a mile away from her home, but because of her disability, she and her parents are understandably anxious about the safety of this journey each morning, given the challenges and dangers she faces when crossing roads.
Prior to being elected this year, I was the chief executive of a charity that supports children and young people with Down’s syndrome and their families. I saw at first hand what those families must grapple with to secure the right educational support for their child. The charity provides specialist support throughout a child’s education —a service that used to be provided by many county councils across the UK.
Charities are often left to pick up the pieces. I recently met Special Needs Jungle, which analyses the sector, provides recommendations and supports families. The Hampshire Parent Carer Network is also a helpful source of support and information. But these organisations cannot find additional services out of thin air.
In the Budget yesterday, the Chancellor stated that she wants
“to improve outcomes for our most vulnerable children”,—[Official Report, 30 October 2024; Vol. 755, c. 822.]
but she also announced that VAT will be charged on private schools. That is highly concerning for North East Hampshire: we have at least four independent schools, each of which has explicit provision for SEND pupils, and our state schools not only are full but are telling us clearly that they cannot meet the needs of many children with additional needs under the current funding models. There is a budgetary disincentive to including children with additional needs in mainstream schools, which the Liberal Democrats have said we would halve.
The announcement of a £1-billion funding uplift for SEND in the Budget yesterday was welcome, but we must go further to clean up this mess. The system needs a complete overhaul, not just an increase in funding. We must undo the damage inflicted on our wider education system by the previous Conservative Government. We must ensure that early help is restored so that children develop the tools to navigate the school system as early in their lives as possible. We must rebuild play into our early years programme and dispense with testing at age five. We must build outdoor learning into our core curriculum and much more besides.
One school in my constituency is building a new room. It is not for teaching and it is not a classroom; it is a welcome room where children who are refusing to go to school can come and feel safe, secure and welcome. It is a bridge between school refusal and school acceptance. It is a great idea, but it should not be needed.
SEND provision must be flexible, tailored and suitable for all communities, both urban and rural. Most of all, it must be available, and that includes the transport required to get to the school gate. I close with a sentiment from an assistant headteacher in North East Hampshire, who said:
“Parents and families shouldn’t have to fight against systems that are meant to be helping their children.”
James Wild (North West Norfolk) (Con)
It is a pleasure to serve under your chairmanship again, Sir Mark. I congratulate the hon. Member for Basingstoke (Luke Murphy) on securing his first Westminster Hall debate on such an important topic for children and parents in Hampshire—it is good to see a number of them in the Gallery listening to the debate. This is the third debate on SEND that I have taken part in since the election, which reflects the importance of the issue to hon. Members in Hampshire and across the whole county, including in Northern Ireland, who all see the challenges and demands facing the sector.
Those problems are familiar to us all. As has been mentioned, last week’s National Audit Office report into support for children and young people with special education needs highlighted the 140% increase in the number of children with education, health and care plans since 2015, and there has been a 93% increase in Hampshire since 2019 alone. Overall, half of those EHC plans are not delivered within the 20-week timeframe, although, in Hampshire, around three quarters are issued on time, a timeframe that my own county of Norfolk aspires to. The NAO also recognised the significant increase in high-needs funding to £10.7 billion put in place by the last Government, but demand continues to grow and there are still big deficits in local authorities that need to be addressed.
That report highlighted the need for whole-system reform; an integrated approach to improve outcomes, which has rightly been mentioned; and the financial sustainability of funding. It also recommended research to understand the root causes driving the increase in SEND and in the demand for EHC plans. I know that the Department is funding some work—I think through the University of Newcastle, and others—to look into those issues, and that there is action to put the budgets of local authorities on a sustainable footing.
I was a member of the Public Accounts Committee a few years ago when another NAO report looked at the SEND system and identified similar problems. The report that we as a Committee put forward helped to inform the SEND and alternative provision improvement plan that the last Government came forward with. We all recognise and accept that the system needs to be reformed; it is not working at the moment.
First, we need a national framework and standards to address the inconsistent support across the country. The previous Government’s plan set out a blueprint for a unified system for SEND and AP that would be driven by new national standards. The first area that we were going to bring forward was around speech and language therapy, and, in a recent written answer to me, the Minister confirmed that the Government are still considering doing that, which we welcome. The hon. Member for Strangford (Jim Shannon) referred to the powerful impact that early diagnosis and access to speech and language therapy can have. It is great to hear such stories, and they should be told far more often.
We also need to improve the EHCP process because, as the constituent of the hon. Member for Basingstoke said, it shouldn’t be this hard. As constituency MPs, we see the families who have had to battle. We help them to get through the system, but they should not have to come to us. Our plan also committed to improving the timeliness of those plans through a standardised and digitised approach. I would like to hear from the Minister whether the Government will proceed with those proposals as well.
The second area where we need reform—again, there is a lot of consensus—is around building capacity and expertise in mainstream schools, with a focus on early help. As I said in the Chamber last week during an urgent question, we wholeheartedly support the focus on inclusivity. That means improving skills and training in the SEND workforce, with a particular emphasis on early intervention, and sharing the real expertise in specialist schools with those working in mainstream settings. I have mentioned in previous debates that I have been to specialist schools where the teachers are desperate to get into mainstream schools and talk about the activities and expertise they have to support children with those needs in mainstream settings.
Some people clearly do need specialist school support, however, and I understand that Hampshire has been expanding such provision with three new schools, including one that I think was approved shortly before the election. I hope that the Minister will confirm that that school is not part of the review of free schools, but will be proceeding and will be funded.
Hampshire, like my own county of Norfolk, is one of the counties that spends a huge amount of money on transporting children to schools with specialist provision. The hon. Member for Basingstoke referred to the impact on children of being stuck in taxis or buses, and travelling long distances for learning. The hon. Member for North East Hampshire (Alex Brewer) also talked about the impact on parents and their ability to work—and, importantly, on the safety of children, who have to get to bus stops far from their homes.
The third area on which we need to focus is partnerships between education and health groups; we need to ensure that they are working together to lead the change. The NAO said the current system has
“misaligned incentives, accountabilities and priorities across the system”.
That creates challenges in a whole-system approach. Collaboration between key partners is important, and the last Government proposed measures for SEND and AP partnerships. We look forward to proposals in the children’s wellbeing Bill that look to achieve the same outcome.
We all want to see a bit more leg from the Government about their plan for reform and inclusivity. We know that the SEND team in the Department has been moved into the schools unit to help bring greater focus. That sounds perfectly sensible. In yesterday’s Budget, as has been referred to, there was also an additional £1 billion for SEND and AP funding.
Additional funding for SEND is needed and welcome, but I suspect that hon. Members and families listening to the Budget would expect that to be used to provide additional support to their children and the inclusive practices to which the hon. Member for Southampton Itchen (Darren Paffey) referred. Can the Minister confirm, however, that the Government actually expect £865 million of the £1 billion to be used by local authorities to reduce their deficits in SEND? Clearly, financial sustainability and addressing deficits—including the statutory override, which a number of Members mentioned and which I have referred to in every other debate we have had on the subject—is important, but we should be clear about where the extra £1 billion of funding is going and what we are going to see on the ground as a result.
Beyond funding, the Minister has regularly said that we need significant change, but despite last week’s urgent question, we are still lacking clarity on what that change looks like, although one thing that the Minister did say in response was that the Government would be looking at
“any legislation that needs to be amended or brought in to achieve our vision for an inclusive mainstream education”.—[Official Report, 24 October 2024; Vol. 755, c. 419.]
Can the Minister confirm that she was referring to the Children and Families Act 2014, which established EHCPs, and what is her timeframe for potentially reviewing that legislation? Is her intention that the number of EHCPs required will be reduced, and will she consult widely before implementing any such changes?
In yesterday’s Budget, the Government put up taxes by £42 billion, but one area where they were actually honest with the electorate that they would put up taxes was the 20% education tax. We now have the Office for Budget Responsibility assessment, which says that up to 37,000 pupils will leave or not enter the independent schools sector as a result of the new tax; and many of them may be in independent schools that offer specialist support for children.
More than 100,000 children in specialist schools do not have an EHCP. Those are children whose parents have decided that that is the best place for their child to be educated. However, in response to the technical consultation, the Government have refused to exempt them from the new tax, as they believe that there must be a formal independent assessment that a child’s needs cannot be met in the state sector. I repeat a question that I have asked before, because I do not think I have had an answer: how many extra EHCP applications do the Government expect local authorities will have to assess?
Since the election, the Minister has said that the Labour Government are absolutely committed to fixing the SEND system. I know that she means that, and the Opposition want to work with her to achieve that. Every hon. Member wants to ensure that families get the support that their child deserves to realise their potential, so our offer is: let us work together to improve outcomes and give children the best start.
The Minister for School Standards (Catherine McKinnell)
It is a pleasure to serve under your chairmanship, Sir Mark. I congratulate my hon. Friend the Member for Basingstoke (Luke Murphy) on securing a debate on this incredibly important subject. I know that he, like every Member here, has been supporting families in his constituency to navigate the SEND system. He has raised this issue in the main Chamber regularly, particularly during oral questions. In his opening speech, he spoke incredibly passionately on behalf of his constituents, and I am sure that it will be a huge comfort to them to have their voices heard in such a powerful way in this Chamber.
Improving the special educational needs and disability system across the country is a priority for this Government. We want all children, regardless of where they are in the country, to get the right support to succeed in their education and lead happy, healthy and productive adult lives. Every child deserves the opportunity to achieve and thrive, but far from every child is getting that chance and, for far too long, families have been let down by a system that is not working. As my hon. Friend the Member for Basingstoke highlighted, a National Audit Office report last week echoed that, finding: a system that has totally lost the confidence of families; that children with special educational needs and disabilities are being failed on every measure; and that, despite the high-needs funding for children and young people with complex special educational needs and disabilities rising to higher and higher levels, the whole system is not delivering and is clearly in need of reform.
I want to give a sense of light at the end of the tunnel. Our promise to families is that we are completely committed to improving the SEND system and rebuilding the confidence that the education system will provide for every child. I know that there are families in the Gallery today, and I am glad that they are here to hear this message. Last week, we published independently commissioned insights showing that if the system was extensively improved, using early intervention and better resourcing in the mainstream schools, it could lead to tens of thousands more children and young people having their needs met without an EHCP and in a mainstream setting, rather than in a specialist placement.
To do that, we need to urgently improve the inclusivity and expertise in mainstream schools while ensuring that there are special schools that can cater to those with the most complex needs. As my hon. Friend the Member for Southampton Itchen (Darren Paffey) said, this requires a holistic approach to reform: getting more teachers into our schools; creating a voice for support staff, who we know are so crucial in supporting children with special educational needs and disabilities, through the school support staff negotiating body that we will bring forward in legislation; and improving training for support staff, teachers and leaders to ensure that we have a curriculum and assessment system that truly serves every child and enables them to thrive, with a broad curriculum that gives them the opportunity to have a rich education that taps into their skills and talents.
Of course, we also need to look at Ofsted and how it is motivating the school system to be as inclusive as possible. We want to see all schools co-operating with their local authorities on admissions, strengthening the accountability of the mainstream system to be more inclusive through Ofsted and supporting the mainstream workforce to have that SEND expertise.
We want to see early intervention and identification improved and supported, which is why—as the shadow Minister, the hon. Member for North West Norfolk (James Wild), said—we have announced that the ongoing funded support for schools registered with the Nuffield early language intervention programme will continue. It is so important that children get speech and language intervention support at the earliest stage possible, so that they can find their voice and we can identify challenges at the earliest stage possible.
As hon. Members have highlighted, improving the SEND system is vital to fulfilling our opportunity mission to break the unfair link between background and opportunity, and that starts with giving every child with SEND, along with all children in our system, the best start in life. But this is huge, complex reform: there is no magic wand or quick fix, and the Government cannot do it alone. That is why we will work with the sector. It is essential that we work with valued partners to ensure that the approach is planned and delivered together with parents, schools, councils and expert staff, who we know already go above and beyond to support children. We ask for patience, but we will work as fast as we can to make the changes that we know families are crying out for.
Following the Budget announcement yesterday, high-needs funding will increase by almost £1 billion in 2025-26 compared with 2024-25, which brings the total high-needs funding to £11.9 billion. The funding includes £90 million to increase the high-needs element of the 2024-25 core schools budget grant to the full-year equivalent, which will be incorporated with the other teachers’ pay and pension grants for 2025-26 to make sure that they are fully funded.
We are now in the process of calculating the high-needs national funding formula, which will provide local authorities with their indicative allocations for 2025-26. We expect to publish that by the end of November. The structure of the high-needs national funding formula remains largely unchanged in 2025-26 because we want to take time to consider what changes are needed to make sure that we establish a fair education funding system that directs funding to where it is needed and to support the special educational needs and disability reforms that we want to take forward. That will take time, so we ask for patience.
My hon. Friend the Member for Southampton Itchen asked specifically about the statutory override. We recognise the unprecedented pressures that local authorities find themselves under. We are providing almost £1 billion more for high-needs budgets in 2025-26, as I mentioned. The impact on individual local authorities’ deficits will be variable, and the statutory override is a temporary accounting measure that separates local authorities’ dedicated schools grant deficits from their wider financial position so that they can manage their deficits.
It remains important that every local authority continues to look at what it can do within the current system to manage its high-needs budget while continuing to provide the support that children with special educational needs and disabilities need. We are working to consider how we can help councils manage the impact of the dedicated schools grant deficits on their accounts within a SEND system that is in desperate need of longer-term reform.
With reference to Hampshire specifically, Ofsted and the Care Quality Commission jointly inspect local area SEND provision to ensure that there is a joined-up approach for children and young people. The inspections enable the Department to intervene in cases of significant concern and to work with local areas and professional advisers to try to address weaknesses that have been identified.
The last joint local area SEND inspection in Hampshire took place in March 2020. Inspectors visited a range of providers and spoke to leaders, staff and governors to determine strengths and weaknesses in the local area’s SEND provision. The inspection found that leaders in Hampshire at the time were highly ambitious for children and young people with SEND, and although the inspection did identify areas for improvement, it did not identify areas of significant weakness. Since that inspection, the Department for Education and NHS England have stayed in regular contact with Hampshire local special educational needs and disabilities officials to discuss the local area’s strategic direction and to offer support where needed.
As the hon. Member for Strangford (Jim Shannon) rightly pointed out in his characteristically constructive contribution, there is a significant need for the Department for Education and Department of Health to work closely together at a local level on this issue. Hampshire will be inspected under the new area SEND inspections framework, which came into effect in 2023, in due course
Jim Shannon
The Minister has very kindly given us some hope about the way forward. I should have mentioned the Department for Work and Pensions earlier. It is important that parents are aware of all the help in the system—for instance, there is disability living allowance. Whenever somebody comes to me with a child who has experienced educational issues, I always ask them, “Are you aware that there is a system set up to help you?” Is that something we should emphasise a wee bit more strongly?
Catherine McKinnell
The hon. Gentleman raises an important point. That should happen at the earliest possible point, because we know—I have mentioned this already—that children’s earliest years make the biggest difference to their life chances, and high-quality early years education can lead to much better outcomes for all children. Arrangements are in place to support early years providers and access to early education, including disability access funding and special educational needs inclusion funding, but he is absolutely right to highlight the ways in which we can help children and families to access support. If we do that at the earliest possible stage in a child’s life, we will be able to improve children’s outcomes and families’ experiences.
We want more children and young people to receive the support that they need to thrive in their local mainstream setting, which reduces the need for them to travel a long way to access a specialist placement. Many mainstream settings are going above and beyond to deliver specialist provision locally through resourced provision and special educational needs units.
We know that there will always be a place in the system for special schools and colleges for children and young people with the most complex needs, so the Department supports local authorities to provide those places for children and young people through annual high-needs capital funding, which can be used to deliver new places in mainstream and special schools as well as in other specialist settings. It can also be used to improve the suitability and accessibility of existing buildings, and we will set out plans for future high-needs capital funding in due course. The Government are committed to working with councils, school leaders and other sector partners nationally and in Hampshire to develop and improve inclusive education in the mainstream setting.
The hon. Member for North East Hampshire (Alex Brewer) raised concerns about transport. No child should struggle to get to school because of a lack of transport. Local authorities are obliged to arrange free travel for children of compulsory school age who attend their nearest school and cannot walk there because of the distance; because of a special educational need, disability or mobility problem; or because the route is not safe. There are additional rights to free travel for low-income households to help them exercise school choice, but we know how challenging home-to-school travel is for local authorities at the moment, in large part due to the pressures on the SEND system.
In our manifesto, we committed to improving inclusivity and expertise in mainstream schools, which will mean that fewer children have to travel long distances to a school that can meet their needs. It will also reduce the pressure on home-to-school travel. I am keen to understand how well the school travel policy is working to support children to access educational opportunities, and I will continue to work with officials in the Department and across Government to improve the situation, because transport is a cross-Government challenge.
I thank my hon. Friend the Member for Basingstoke again for bringing this matter forward and I thank all hon. Members who have contributed to the debate. We all care passionately about SEND outcomes in Hampshire and across the country.
Jim Shannon
I thank the Minister for her comprehensive and helpful response. In my contribution, I referred to “nurture” classes in a school in my constituency, which bring together and look after children with educational challenges in a big school. That is in the education system in Northern Ireland, of course, but I know the Minister always makes contact with the Education Authority there. As I said earlier, different regions have ideas that may be helpful elsewhere, so will the Minister consider that?
Catherine McKinnell
I thank the hon. Gentleman and I will take that away, because we are open to examples of good practice and ideas for reform that can be rolled out and used in other settings. We do not want the SEND system to work only in pockets; it must work everywhere and we must have a reformed system across the board.
Catherine McKinnell
I am glad that my hon. Friend has intervened, because it reminds me that I have still not answered a couple of his questions—I will come to them.
Luke Murphy
The Minister talked eloquently about how the Government intend to work with councils, providers and others on the reform of the system. How can parents like those I represent in Basingstoke and those represented by other hon. Members present inform and provide input into the future review and reform? Their experience and expertise would be incredibly useful.
Catherine McKinnell
My hon. Friend makes an important point, which the hon. Member for North West Norfolk also made. We are clear that the Government cannot deliver this work alone; it must be delivered with partners who are serving children in the community and in partnership with the families who we know are crying out for change. We are keen to consult and engage, and that must be done on as localised a basis as possible to get a real sense of the challenges in different areas. There are many common themes across the country, but there will be issues in particular areas that need to be addressed. I will take that point away and consider it.
Regarding the questions about education, health and care plans, figures released by the Department in September clearly show that children with special educational needs and disabilities are not having their needs addressed and are waiting far too long for action from a system that is currently creaking at the seams. Without further improvements, it is clear that it will just deteriorate further because a growing number of families need support. We know that local authorities have been affected by an increased demand for education, health and care plans, and that their workforce capacity to meet the demand has also been affected. A more efficient and effective service delivery, alongside communication with schools and families, is therefore central to improving the situation.
From this year, we are investing £21 million to train 400 more educational psychologists to support workforce capacity in local authority services, including for the delivery of statutory assessments. We will work as quickly as possible to ensure that there is more effective early identification, because, as I have already said, it is important to provide training to early educators so that we can identify the challenges that a child might face early in their life.
We will continue to monitor and work closely with any local authorities that have issues with their education, health and care plan timelines. Where we have concerns about a local authority’s capacity to make improvements, we will work with it to identify the barriers and to put in place effective recovery plans, which includes securing specialist SEND adviser support to help to identify the barriers to ECHP process timeliness and put in place plans for recovery.
There were questions about private schools and the VAT change. Private schools can provide choice, high-quality education, economic benefit and public benefit through partnerships, but most parents cannot choose private schools. We need to improve the provision for the 93% of pupils who are at state-funded schools—that is our focus. Parents who use private schools can pay to support that process by paying the VAT that would apply to other optional services. Ending the tax breaks that private schools currently enjoy will raise revenue to improve public services, including through the provision of 6,500 new teachers in our state-funded schools. Children whose place at a private school has been commissioned by a local authority—for example, under an education, health and care plan—will not be affected by the VAT change.
I absolutely acknowledge the hardship that too many families face when they try to secure the right support for their child with special educational needs and disabilities. I am determined that the situation will change, so I conclude by thanking all those working across the education, health and care systems in the interests of our children and young people with special educational needs and disabilities, both in Hampshire and across the country. We need to deliver the very best for all our children and young people, including children with special educational needs and disabilities, and the Government are determined to do that.
Luke Murphy
I thank all hon. Members who have contributed to the debate and I will conclude by referring to some of their remarks. I thank the hon. Member for Strangford (Jim Shannon) for highlighting the issue around early intervention, which many parents in my constituency have also recognised. I thank my hon. Friend the Member for Redditch (Chris Bloore) for recognising the great campaigning work of the parents who are here in Westminster Hall, and of parents in his constituency and across the country.
I thank my hon. Friend the Member for Southampton Itchen (Darren Paffey) for highlighting the fundamental shift that is needed in inclusive practices in schools, the issues around teacher training and the fundamental importance of resourcing a reformed system. I thank the hon. Member for North East Hampshire (Alex Brewer) for highlighting an important quote, which echoes the comments of many parents I have spoken to, suggesting that this should not be a fight against the system, but that the system should provide support. I also recognise the transport challenges that she highlighted.
I thank the hon. Member for North West Norfolk (James Wild) for recognising many of the issues I highlighted around early intervention training in mainstream schools and transport. Given how devastating the NAO report was, I gently suggest that he should acknowledge that that was a summation of where the system had got to over the last 14 years. None the less, I thank him for his contribution and the nature of the debate, which has been conducted in a cross-party manner. I also thank the Minister for recognising the challenges in the system and for her passion in committing to reforming the system and ensuring it works for parents and children in Basingstoke and across the country.
As other hon. Members have said, this is my first Westminster Hall debate and I thank the Minister and all hon. Members for contributing, as well as the Chair, the House officials and the officials from the Department. I also thank all the teachers and others in the education system in Basingstoke and beyond. I have had lots of conversations with primary and secondary school headteachers in my constituency who have talked about the challenges they face. I know that they struggle every day to do their best to provide opportunities for the kids who attend their schools. We must help them with that and ensure that it is not a struggle for them, the parents or the kids, but is instead a system that works and delivers for them.
Most of all, I thank the families and parents who have raised the issue with me. I look forward to continuing to campaign with them and to working with the Government and hon. Members on both sides of the House to ensure that we build a truly inclusive education system where every child has the opportunity to succeed.
Question put and agreed to.
Resolved,
That this House has considered SEND provision in Hampshire.
Cancer Strategy for England
(4 days, 17 hours ago)
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Clive Jones (Wokingham) (LD) [R]
I beg to move,
That this House has considered the potential merits of a cancer strategy for England.
It is an honour to serve under your guidance this afternoon, Mr Betts. This debate is significant to me for many reasons. When I was diagnosed with breast cancer in 2008, it came as a massive shock to me and my family. Questions whirled around in a haze of uncertainty: “Is it serious? What happens next? What does the future look like? What treatment will I have?” Some people think, “Am I going to die?”, and, sadly, far too many do.
Cancer is an evil that takes your life completely out of your own hands. The hardest thing I had to do was to tell my two daughters about my diagnosis. They were 13 and 14. It was a very emotional time. Was our family of four about to become a family of three? Because of the delay in diagnosis, my cancer spread. I had surgery twice, chemotherapy and radiotherapy. I was one of the lucky ones who survived.
Looking back on my personal experience of the NHS, I can only be grateful and thankful for the service I received. Our NHS consultants, oncologists, radiologists, radiographers, histopathologists and specialist nurses work with diligence and dedication to provide their patients with the best possible care. Yet it is hard not to reflect that being diagnosed in 2008 was in one respect a blessing, because cancer care in 2024 is simply not working.
Lord Darzi’s independent investigation of the NHS in England plainly said:
“The National Health Service is in serious trouble.”
It did not surprise me to read his report calling out the failings in cancer care. I felt genuine anger when he highlighted that some of our services are lagging behind those of other countries. As a stark reminder, the UK has higher cancer mortality rates than any comparable country. One patient in three waits longer than 31 days for radical radiotherapy. The national target to start treatment within 62 days of an urgent referral has never been met since 2015. The Conservative party should be ashamed of those statistics.
In my constituency of Wokingham, most cancer care is delivered at the Royal Berkshire hospital, and I am thankful that we have fantastic people working there. I am sure Ministers in the Department of Health and Social Care are sick of me saying this, but that hospital urgently needs a rebuild. The consequences of delay, disrepair and degradation put patients on the frontline of risk to their health, and they see at first hand the consequences of failing to invest in the future. That is especially clear in cancer care. Some of the Royal Berkshire cancer treatment is performed in buildings that were built when Viscount Melbourne was Prime Minister: in 1839.
A broken estate is one of many issues stopping cancer standards from being met and is putting patients at risk. Across the country, the target of 85% of patients starting their first definitive treatment within 62 days of referral is not being met. The statistics are shocking. These are people with families and friends. They deserve better.
Ian Sollom (St Neots and Mid Cambridgeshire) (LD)
I thank my hon. Friend for securing this debate. The statistics he has shared are truly shocking. I want to draw attention to the five-year survival rate for pancreatic cancer, which several of my constituents have raised with me. They have heartbreaking stories of losing loved ones from a position of diagnosis at stage 4. Does my hon. Friend agree that those statistics highlight the need for a cancer strategy in the UK in order to up early diagnoses and drive forward research?
Mr Clive Betts (in the Chair)
Order. I remind Members that interventions are supposed to be brief and to the point, not a substitute for a speech.
Clive Jones
I absolutely agree with my hon. Friend. This is why we need a national cancer strategy. So many cancers do not get the resources they need. Everything is a bit too general; a lot of cancers need the focused, targeted resources that will lead to better outcomes.
Rachael Maskell (York Central) (Lab/Co-op)
I am grateful to the hon. Member for hosting today’s debate. In the last Parliament, the Health and Social Care Committee carried out an inquiry into future cancer. From all the evidence we received, we came to the conclusion that a bespoke future cancer strategy was needed to support the NHS, and that it should not be combined in a major conditions strategy, which frankly went nowhere under the last Government. I congratulate the hon. Member on his advocacy; will he read the Committee’s report and our letter about all the interventions that this Government could make to drive forward cancer care?
Clive Jones
I am aware of that report and will refer to it later in my speech.
The challenges will only grow. Experts state that one in two of us will get cancer in our lifetime. An expanding and ageing population means that the number of cancer cases is only going to grow. Cancer Research UK projects that there will be about 2.2 million new cancer cases in the current five-year parliamentary term, a 21% increase on the previous term. Cancer services are struggling now, and they will continue to struggle to keep up with demand. We have a greater number of people being diagnosed, but we have services that are not working. The challenge is stark, but there is a diagnosis for the problem. We now need to deliver meaningful action to recover England’s cancer care to full health.
The Liberal Democrats have made cancer care one of our top priorities for health. There are many policies that we think are crucial to boosting cancer survival rates. We are calling for the introduction of a guarantee for 100% of patients to start treatment within 62 days of urgent referral. We cannot just be content with replacing old radiotherapy equipment; we need replacements, but we also need more equipment. We are calling for the recruitment of more cancer nurses so that every patient has a dedicated specialist supporting them throughout their treatment.
Those crucial policies all feed into the very first step we must take, which is to give England the dedicated cancer strategy that it needs. It beggars belief that we do not have one. A cancer strategy is the best route to delivering genuine improvements for patients, for their families and loved ones and for those who work in our health system to research, prevent, diagnose and treat cancer.
The recent announcement of a 10-year health plan for England and its aim to improve health outcomes for all is very welcome, but I fear that the plan for all could be a plan for none. For example, analysis from Bowel Cancer UK found that the existing NHS long-term plan failed to sufficiently address the barriers to early diagnosis for bowel cancer. That is the case for many cancers. The approach is just too broad. We need detail, we need political will to be focused and we need a rapid and urgent turnaround.
A dedicated cancer strategy would provide a huge opportunity to fix the entire system, not just for the present but for the future—for our children and our grandchildren. It will not be simple or easy: that is why a strategy requires political will and bold leadership to bring Whitehall together and make tackling cancer a priority.
It is clear that when there is strong, bold leadership, cancer strategies work. That is the case across the world. At present, internationally and across our four nations in the UK, England is an outlier in not having a cancer strategy. Comparable countries with a cancer strategy have seen greater improvements in survival rates. For example, having started from a similar position in the 1990s, countries such as Denmark have raced ahead of England in improving survival in recent decades. Denmark’s success is linked to a series of cancer strategies that successfully and strategically built on one another over a 20-year period to tackle critical issues facing cancer services.
Past cancer strategies in England have worked. The 2000 cancer plan for England set ambitious targets across research, prevention and care outcomes. A report by the National Audit Office found that that strategy had supported progress in most aspects of patient experience.
The last Conservative Government launched a consultation on a 10-year cancer plan for England in February 2022. They promised to wage a war on cancer, yet the then Health Secretary, the right hon. Member for North East Cambridgeshire (Steve Barclay), scrapped the dedicated cancer strategy, turning it into a broader major conditions strategy. Delays, delays and more delays meant that the strategy was never published. That is just another legacy of failure from the Conservatives.
In May 2024, the Health and Social Care Committee wrote to the Government and argued that it was a mistake for the Conservatives to abandon the 10-year cancer plan. The current Government have the opportunity to turn that around. Having a cancer strategy is very popular with the public. Almost eight in 10 people think that the Government need to develop a long-term and fully funded plan for cancer. Organisations ranging from Cancer Research UK and Breast Cancer Now to global biopharmaceutical companies and medical institutions support having a cancer strategy for England. Yes, this requires effort, cross-Government thinking and focus, and the ambition to make England and the UK a world leader in cancer outcomes and research. But that effort will mean that we have the chance to save tens of thousands of lives and that millions of people will not need to suffer the upset of losing a loved one or friend.
Last week, I tabled a private Member’s Bill—the National Cancer Strategy Bill—calling for the Government to implement a cancer strategy for England. But unlike other private Members’ Bills, mine does not need to be law for that to happen; the Government could make the decision tomorrow to kick-start the work to implement it. Indeed, if my interpretation of Hansard is correct, they may well be intending to do so. In response to a question from my hon. Friend the Member for North Shropshire (Helen Morgan), the Secretary of State for Health and Social Care recently said that the Government will
“work tirelessly through a national cancer plan to make sure that we deliver the cancer waiting time standards that the last Labour Government met”.—[Official Report, 15 October 2024; Vol. 754, c. 684.]
A national cancer plan sounds quite similar to a national cancer strategy, and I would like to use the final section of my speech to make some recommendations to the Secretary of State as to what his cancer plan could and probably should include, because if the Department is seriously considering doing this, it will need to get it right. Broadly, the plan needs to cover all aspects of cancer prevention, research and care. It requires political leadership to bring together stakeholders to develop a strategy and co-ordinate implementation. It requires dedicated governance. There must be a robust central oversight function with a mandate to bridge the gap between disconnected Government structures. It must clearly detail how it will implement the strategy, with measurable objectives and achievable timelines. It must have regular, robust and transparent reporting of implementation and, inevitably, it needs dedicated resources to enable the right change.
A cancer strategy also provides the opportunity for us to unlock innovation in the future. We are living in a golden age of cancer science. New types of cancer treatment, from immunotherapies to cell and gene therapies, are enabling clinicians to attack cancer from multiple angles. These advances are helping to improve cancer outcomes. Therefore, I implore the Government, if they do take up a cancer strategy, to look at how the National Institute for Health and Care Excellence can be reformed to unblock barriers to investment and to strengthen the current infrastructure to increase genomics and biomarker testing.
I could go on. We could discuss the historical lack of strategic direction in terms of having a national policy for blood cancer, or the fact that every day 12 children and young people hear the news that they have cancer. Sadly, 10 die every week, making cancer the biggest killer by disease of children and young people in the UK. Despite that, it remains overlooked in existing strategies and reviews. That reflects the scale of the challenge we face in English cancer services; it feels like a never-ending list of things that we need to fix.
I will use this opportunity to ask the Minister a few questions. Can he assure people living with cancer and cancer charities that the Government will address the current crisis facing cancer services and build long-term resilience through a dedicated cancer strategy? Will he give his support to my private Member’s Bill, which would put into legislation a requirement for the Government to establish a 10-year cancer strategy? Will he meet me and, more importantly, representatives of the cancer community to discuss the need for a cancer strategy? Finally, will he make the case to his colleague the Minister for Secondary Care that the Royal Berkshire hospital requires an urgent rebuild?
Rachael Maskell
The hon. Member is making an incredible and powerful speech. Will he add one more ask to his list: for the cancer strategy to be joined up with a life sciences strategy? The UK is fantastic at primary research around cancer, but there is work to be done in scaling that research and translating it into delivering a holistic product for the whole of cancer care, with the ensuing treatments and therapies.
Clive Jones
I thank the hon. Member for her very good intervention. We are lucky in this country to have many life science businesses, many of which would really like to work as part of a joined-up cancer strategy. I have several in my constituency that I know would really like to do that, so I thank her for making that very good point.
Let us utilise this crucial opportunity to fix our cancer services. Some 360 people will die of cancer in the Wokingham area in the next year, and there will be around 2,000 cancer deaths over the next five years of this Parliament. We need to do our best to ensure that that figure is not reached but comes down.
Mr Clive Betts (in the Chair)
Order. I count seven Members who would like to speak, so that gives us about a six-minute maximum for contributions. I am not imposing a rigid time limit, but that is an indication of how long you should try to speak for.
Tony Vaughan (Folkestone and Hythe) (Lab)
It is always a pleasure to serve under your chairship, Mr Betts. I thank the hon. Member for Wokingham (Clive Jones) for securing this important debate.
I will start by talking about a constituent who emailed me last week. She is a cancer patient, and when she was discharged from hospital she was informed that there is no specialist cancer rehabilitation and recovery support in Folkestone—a town of 52,000 people. She was told that the nearest support could be accessed only in the neighbouring constituency of Dover or in New Romney, which is 14 miles away. However, she does not have a car, and the effects of the cancer treatment make it challenging for her to move around. Folkestone has been allocated a single cancer support nurse, but they are expected to cover the patients at eight GP surgeries in the area of Folkestone and Dover—a town with a population of 116,000. We obviously do not need to be maths geniuses to work out that the ratio of nurses to the population is unacceptable.
Cancer is the UK’s biggest killer, and as we speak more than 3 million people are living with it. Lord Darzi’s recent report highlighted in stark terms that cancer patients are waiting far too long to be diagnosed and treated, and when they leave hospital there is inadequate support for recovery and rehabilitation.
The lack of a national cancer plan correlates with, and is likely to be one of the causes of, the geographical inequalities in access to cancer care and rehabilitation, which affect my constituency. I appreciate that the NHS long-term plan includes important commitments for cancer services, but it does not provide the comprehensive transformation needed across all areas of control, including research and prevention. A critical question for the Government is: what can we do to ensure that a national cancer strategy generates additional capacity in cancer care and rehabilitative support?
The statistics are shocking and a national disgrace. According to Macmillan Cancer Support, in 2023 almost 90,000 people with cancer across the UK waited more than two months from either urgent referral or when the cancer was first suspected to start treatment. The most recent cancer care waiting times for England, to July 2024, showed that only 68% of people received a cancer diagnosis and started treatment within 62 days of an urgent referral. As the hon. Member for Wokingham reminded us, the 85% target has not been met since 2015.
The situation is not inevitable. I agree that we need to start with a comprehensive plan for cancer of the kind that many of our European partners have. When the 10-year NHS plan is published in spring 2025, it should contain a national plan for cancer that focuses especially on how waiting times for diagnoses and treatment can be reduced and on how geographical variations in the quality of cancer treatment and care can be tackled. The plan should focus on how we as a nation can recruit and retain cancer care and rehabilitation specialists; how we can use new technologies and medicines to improve treatment outcomes and increase survival rates; and how we can use our thriving life sciences sector, to which my hon. Friend the Member for York Central (Rachael Maskell) referred, to reduce diagnosis and treatment waiting times.
I fully appreciate the state of the NHS that the Labour Government have inherited—it struggles to recruit and retain, it has been starved of capital investment, and its workforce have had their morale beaten down by successive Conservative Governments—but we can do better. It falls to the Labour Government to lead the way forward so that we have an NHS that can effectively treat, rehabilitate and support patients, and prevent this terrible disease.
I pay tribute to charities such as Macmillan, which do a brilliant job of providing cancer care to patients. We must never forget their compassion, empathy and service; that should inspire us every day in this House.
Sir Roger Gale (Herne Bay and Sandwich) (Con)
I do not want to go down the road of party politics. The previous Government poured shedloads of money into the national health service, but throwing money at the problem is not the answer. I am not saying that there is not any demand for more capital expenditure—there is—but that is not the point. Unless we get the structure right, we will go on wasting more and more money. We need to be grown up about this; we must all understand that.
In the few minutes I have, I want to concentrate on an issue that the hon. Member for Wokingham (Clive Jones) touched on, but only briefly: the incidence of cancer in young people. It is many years since my eldest son used his wedding—and probably his bride too—to raise money for the Teenage Cancer Trust. In the time between then and now, sadly not a very great deal has changed. That is lamentable. The point was made that, every day, seven young people between their teenage years and their mid-20s are diagnosed with cancer. By the end of this decade, that figure is likely to have risen to 10 per day.
Most of us in the Chamber probably have family members who have had experience of cancer—or even have personal experience, as the hon. Member for Wokingham clearly has. We all know somebody who has had cancer, and sadly some of us know, only too well, people who have died of cancer. But the instances of cancer among young people are widely disregarded and neglected within the health service and beyond. It is not infrequent for a young person, subsequently diagnosed, to have to make at least three visits to a general practitioner before even being referred, because it is assumed, completely wrongly, that cancer is something that affects old people—people like me. I am expected to get cancer, but young people do not get it, do they? Well, sadly, yes they do, at a rate of seven a day, rising to 10 a day by the end of the decade.
My plea is for the Minister to take away this message: however much money is being pumped into the health service and being made available for investment in diagnostic kit, there is a real need to address one area of the population that has been neglected. That area is teenage cancer victims. It is the largest single killer of young people in this country—bar none—yet young people are overlooked when it comes to clinical trials that could be lifesaving. There is a real reason why young people as a proportion of the population should be included in clinical trials, but they are not—they are overlooked. Why? Because there is the assumption that it is not a disease that affects young people. But it does.
I make my plea on behalf of those in my family who support the Teenage Cancer Trust, and those in the Teenage Cancer Trust who have taken the trouble to brief Members of Parliament. I ram home this message to the Minister and ask him to take it away to the Secretary of State: when we set up, as I am sure we will, a national cancer strategy, the Government must make certain that the 13-to-25 age group is given the recognition it deserves, so that they get the diagnoses in time, before they die, and the treatment they need, and so they are included in clinical trials.
Noah Law (St Austell and Newquay) (Lab)
Thank you, Mr Betts, but I will not make a speech.
Mr Clive Betts (in the Chair)
Jim Shannon probably will want to make a speech.
Jim Shannon (Strangford) (DUP)
There is hardly a day when I do not make a speech, Mr Betts.
I thank the hon. Member for Wokingham (Clive Jones) for securing the debate and for sharing his personal story. Demonstrating an issue is best done with a personal story, if possible, so I thank him for that—it was incredible. I am minded of his story, and I think of my dad as well. My dad is dead and gone now, but when he was living in this world he had cancer on three occasions. It was many years ago, and the expertise for cancer care and healing were not as good then, but he survived because of the surgeon’s skill and the nurses care, and because he was a Christian and he believed very clearly in God’s help and the prayers of God’s people.
I start by saying how pleased we are to see £22 billion set aside for the NHS. That is constructive and positive and we should welcome it. Within that £22 billion there will be money for radiotherapy, and hopefully for training and bringing staff forward—it is important to have that as well. The hon. Member for Wokingham referred to the Royal Berkshire hospital, and in Northern Ireland we have similar problems.
I am going to tell a story that has been heard often. I am sure that most of us in this House were struck by the candid and very emotional video released by the Princess of Wales to inform the nation that she was going through the valley of cancer. The video was in response to a concerted campaign of disinformation against the princess of my heart, and probably all our hearts. She was disgracefully confronted with that every day. She was forced into a declaration of her intensely private journey with cancer, highlighting the effect on her husband, children and family. That very public declaration and the updates that she has so wonderfully provided have started a wide conversation about the dreaded C-word. We are deeply indebted to the Princess of Wales for that.
We also had the announcement about the King’s health. I was surprised and I immediately prayed for him, as I do every day. But the announcement about the Princess of Wales, a young woman in her prime, goes back to what the right hon. Member for Herne Bay and Sandwich (Sir Roger Gale) said: many people do not see cancer as a disease of younger people. The Princess of Wales, who was apparently so healthy and vibrant, has caused many of our young people to remember that cancer is not a disease that is a respecter of person, age, religion or background. All are brought to their knees by this disease that is ravaging the nation.
In Northern Ireland the target is that at least 98% of patients diagnosed with cancer should begin their first definitive treatment within 31 days of a decision to treat. At least 95% of patients should begin their first definitive treatment for cancer within 62 days. The problem is that those timescales here on the UK mainland and for us back home in Northern Ireland are not always met—indeed, they are rarely met. That means that that first definitive treatment, which is so important, does not happen at the time it should, and the figures are not getting any better. With the £22 billion that has been set aside for the NHS, I am hopeful that, through the Barnett consequential for Northern Ireland, we will get additional money that we can use specifically for cancer treatment.
I want to make a point about research and development and make a plea for Queen’s University Belfast and the partnerships it has with companies. It brings students from all over the world to find treatments and cures for cancer. I know that happens in many other parts of the United Kingdom, which is good. Research and development is so important, so perhaps the Minister will give us some ideas about research and development when he sums up. I am pleased see him and welcome him to his place.
The question should not be about lowering the target, but about how we deliver and meet the target of curing cancer. Having spoken to cancer specialists, I know that the need for more staff in radiology and in labs to provide a quicker turnaround, as well as the need to ensure that there are trained specialist cancer nurses and staff in place, is a long-term issue that needs to be dealt with not with words but with action. We need to spend the budget in a much better way throughout the UK—perhaps the Minister will indicate how that will happen. I believe the answer lies in the recruitment of staff in all facets of the cancer machine—labs, radiology, pharmacy and care. Every area needs specialist training. We need to keep staff in place with better working conditions, rather than the wonderful staff that we have simply burning out due to the pressure.
Noah Law
The father of my constituent, Eli Martyr, has been diagnosed with bowel cancer. Despite a difficult time, his father is being looked after amazingly well by NHS staff. If the Government commit to a national cancer strategy, will they ensure that the second biggest cancer killer, bowel cancer, is given sufficient attention? Can we address the staff and kit shortages and ensure that we improve the bowel cancer screening programme to improve the chances of survival?
Jim Shannon
I am of an age—I am not sure many others are in this Chamber—where I get a test for bowel cancer every year. A kit is sent out to do the job. Thankfully, every time I have done a bowel cancer test it has come back negative. To be fair, the NHS has a good system for that. When someone reaches 60, they are sent a test. They do the test and the NHS comes back very quickly. If something is wrong, they will hear right away. Although we sometimes criticise the NHS—rightly so—we should always recognise the good things that the NHS does. The hon. Gentleman was right to bring that up; I thank him for that.
The questions regarding cancer care in England are the same as for Northern Ireland: “How can we get the best outcome with what we currently have?” and “How can we plan to do better in the future?” Neither are easy questions, but the fact that some 9,000 new cancer diagnoses are made every year in Northern Ireland—these are drastic figures—in a population of 1.85 million, equating to one in two people developing cancer in their lives, means this issue must be a priority for us all.
I know that in his response the Minister will give us some positives in relation to where we are—I expect that, knowing the nature of the Minister—but it would also be helpful if we could have some idea about how we can better address this issue together, across this whole United Kingdom of Great Britain and Northern Ireland.
Claire Young (Thornbury and Yate) (LD)
It is a pleasure to serve under your chairship, Mr Betts. I thank my hon. Friend the Member for Wokingham (Clive Jones) for securing the debate. Some 2.2 million people are expected to be diagnosed with cancer during this Parliament, and almost one in two of us will get cancer in our lifetimes, so we should all be concerned about the crisis in cancer care that was highlighted by the Darzi report.
In my constituency of Thornbury and Yate, just over half of cancer cases are diagnosed early—that is around 2,500 people a year—but just over two thirds of those diagnosed are able to start treatment within two months after being referred. That is far lower than the 85% NHS target. This Government have promised to do more to tackle the delays in cancer diagnosis and treatment, and I think a specific cancer strategy is the way to achieve that. I will illustrate that with two examples from my constituency.
The first constituent suffers from a rare cancer condition and sought treatment at Cheltenham general hospital, where they received immunotherapy treatment. However, they have since been informed that their treatment will cease on 31 January 2025, due to financial considerations. It simply is not acceptable to have a situation in which a patient is told that they need a particular treatment and then has it halted part way through, not because it needed to stop for their own best interests but because of financial constraints. That is absolutely appalling, and it is a glaring example of where the system is failing. Everyone who has cancer deserves timely and consistent treatment. That is the first thing I highlight for Ministers: when they are looking at producing a cancer strategy, will they look at the treatment and how it is delivered, to make sure that decisions are being made in the best interests of patients, rather than the accountants?
My second example shows how early treatment can save lives. This constituent told me how, in 2021, they were diagnosed with cancer in their eyes. They are one of the lucky ones: it was caught early by their optician and they got an urgent referral. Because they got treatment quickly, they are still cancer-free today. However, it is fair to say that they are not out of the woods; there is a high chance of recurrence and possible metastasisation in the coming years. They told me how that is hanging over their head every day, and made the point that one small change could have meant that, instead of living their life, they would no longer be with us.
That shows exactly why identifying and treating cancer as early as possible is vital. It highlights, in particular, the importance of professionals who are not specialists in cancer but play vital roles in identifying possible signs of cancer at the early stage. There are probably people up and down the country who can give examples of how pharmacists, opticians, dentists and so forth have been the ones who set them on the road to that all-important diagnosis. As we know from other debates in Parliament, all those professions are under strain. We know that people cannot get dental appointments, yet we know how important that is for identifying oral cancers. As I raised in the Chamber this morning, we also know about the issue of pressures on community pharmacists. When the strategy is drawn up, will Ministers look at the importance of non-cancer specialists in referring people for diagnosis, and ensure that that forms part of the strategy?
My hon. Friend the Member for Wokingham identified Denmark as a good example of a country that had been where this country is, but has managed to race ahead. The point is that it had a series of cancer strategies. Reference has been made to delays, or to the idea that we should make this part of a wider strategy. Let us get something done, as a starting point, and then it can be an iterative process. The strategy can be looked at again, and gradually we can make the improvements we need.
A dedicated cancer strategy would complement the Government’s 10-year health plan by offering a clear road map for an integrated approach to improving outcomes across cancer prevention, diagnosis, treatment, research and care. That is why we need a dedicated cancer strategy and a wholesale review of the system, to ensure that everyone gets an early diagnosis and the treatment that they need, when they need it, and are fully supported in their journey with cancer.
Mr Will Forster (Woking) (LD)
I thank my hon. Friend the Member for Wokingham (Clive Jones) for securing this debate on the urgent need for a comprehensive cancer strategy, and particularly for his moving personal story, which I think touched us all. In Woking, my constituency, and Surrey, my county, the situation is increasingly concerning, in a similar way to the situation he presented.
Woking does not have a dedicated cancer centre, meaning my constituents have to travel outside of the area to receive specialist care. This adds to the burden of those already facing the weight of a life-changing diagnosis. My constituency, like the rest of England, really wants a strategy that actively meets the needs of our patients and improves access to timely, high-quality cancer treatment.
This year, 2024, is projected to be the worst year on record for cancer care since the NHS last met its 62-day target in 2015. Already, more than 72,000 patients across the country have not been treated within the NHS’s 62-day window from referral to treatment. If those trends continue, we could see more than 107,000 patients treated outside the standard by the year’s end. That is simply not acceptable.
To put that into perspective, the number of patients who did not start treatment within the 62-day timeframe in 2015 was just under 27,000. By the end of 2023, that figure had risen to more than 100,000, and it continues to climb this year. That near four-fold increase is staggering. Each of those statistics represents real people—our constituents—facing unnecessary delays at the most critical time for them and their families.
The causes are clear, and so are the consequences. Each delay not only impacts the outcome for patients, but places strain on the healthcare system and the wider employment system. What we need now is a long-term, well-resourced cancer strategy, exactly as outlined earlier, that prioritises investment in early diagnosis, improves treatment infrastructure and supports the research needed to make real progress in combating cancer. Patients in Woking and across the whole country deserve nothing less. A national cancer strategy would help to reduce the postcode lottery for cancer care, ensure prompt treatment and provide patients with the security of knowing that our health system is equipped to meet their needs. I urge the Government, and particularly the Minister, to work with us to reverse this distressing trend and deliver the strategy that we desperately need.
Tessa Munt (Wells and Mendip Hills) (LD)
I thank my colleague, my hon. Friend the Member for Wokingham (Clive Jones), for calling this timely and critical debate. It is good to see the Minister for Care in his place. I would like to mark the passing of many friends and some of my family who have lost their lives in a battle with cancer—a dreadful disease.
When I arrived here in 2010, my team and I started a five-year project tracking the use of radiotherapy in England, using freedom of information requests every six months to gather data on the availability and frequency of the use of stereotactic ablative radiotherapy in England’s then 51 cancer centres. It was not a pretty picture.
It is a pleasure to return to the subject of radiotherapy, about which many of my constituents in Wells and Mendip Hills care deeply, as do I. I recall that the hon. Member for Easington (Grahame Morris) and I had common cause. He represented a constituency in the north-east and I one in the south-west of England, the two areas with the greatest incidence of cancer per head of population. I hope and trust that every one of us is persuaded that when confronted with a serious problem or challenge, the odds of successfully tackling it are immeasurably improved if one has a plan. Without a plan, there is a serious risk of misguided or confused action. Benjamin Franklin, one of America’s founding fathers, reportedly said, “If you fail to plan, you plan to fail.” That phrase is as relevant now as when he said it nearly 300 years ago.
In England we are in a battle royale against this deadly disease of cancer, which will directly affect one in two of us and indirectly affect almost every one of us through our connections to friends or family. The evidence is absolutely clear: countries with a dedicated cancer control plan show a better overall five-year cancer survival rate. That is not anecdotal; it is the clear result of an international cancer benchmarking partnership study published in The Lancet Oncology.
A report in The Lancet Oncology by 12 leading cancer experts published a blueprint for a national cancer plan. Those experts were from Imperial College London, #CatchUpWithCancer and Radiotherapy UK, the Faculty of Public Health and Policy at the London School of Hygiene and Tropical Medicine, and the Institute of Cancer Policy at King’s College London. Their blueprint consolidates four reports published separately in The Lancet Oncology over two years, clearly outlining the necessary steps—a plan—to improve cancer outcomes.
The need for a plan is urgent. We had a 10-year one, which ran out in 2022. The then Health Secretary promised a new one. There was a five-month consultation, and then the next Secretary of State binned the whole idea. We are in a dire situation on the cancer front. Cancer mortality in this country is among the highest in the OECD. The key 62-day target to start treatment has not been met in England since 2015. When we consider that international research shows that a four-week delay in cancer treatment can increase the risk of death by 10%, this failure to meet that 62-day target has potentially fatal consequences.
If the Government are in any doubt about the consensus across the cancer care community on the need to get back to having a dedicated cancer plan, they need make only a cursory scan of all the charities and other stakeholders. Almost without exception, every organisation of any standing is in favour of getting a cancer plan and getting it fast. As is widely known, there are several main cancer cure pathways: surgery, chemotherapy and radiotherapy. Any cancer plan would obviously need to include all these pathways, but I would like to say a few words about radiotherapy in the context of any such cancer plan.
For clarity, I am talking about radiotherapy, not radiography. Radiography is vital. It is the use of techniques to scan an image to detect potential issues such as cancer. Radiotherapy is the use of high-energy radiation to kill cancer cells. If anyone is perplexed by my need to clarify that, they may understand when I say that some former Secretaries of State for Health and Social Care have been heard to confuse the two. I am confident that this Minister and the current Secretary of State will not suffer a similar confusion.
Radiotherapy offers technologically-advanced, cost-effective, personalised and precise solutions to treat more patients more quickly, more accurately and better. We have about 270 radiotherapy machines in England. Of those, 70 will pass their 10-year recommended life this year, and replacing them would cost £150 million. The Minister will know that this will be money well spent, as it takes people off the waiting lists and straight into treatment and gives them a life chance that is longer, and many will return to work, just like my hon. Friend the Member for Wokingham.
Until recently, radiotherapy has been overlooked in both priority and investment, so I would like to pay testament to the impressive work of Professor Pat Price of Radiotherapy UK, the charity she founded and still leads. I also thank the Secretary of State for Health and Social Care for agreeing to meet Professor Price, representatives of Radiotherapy UK and me, so that we can all do what we can to help. I am sure that the Minister for Care will also be involved in that conversation. Professor Price’s relentless campaigning is putting radio- therapy back at the heart of the political debate. This was reflected in the recent Budget announcement of £70 million for new radiotherapy machines. That money is not enough, but it is a really positive start.
The recent Radiotherapy UK productivity report shows that smart investment in the sector could create 87,000 new cancer appointments, and the need for a new national cancer plan including measures to boost radiotherapy is clear. Only 27% of cancer patients in the UK can access the radiotherapy that they need, compared with the international recommendation of 52% to 53%. In total, 7.4 million people in the UK live in radiotherapy cancer treatment deserts. Lord Darzi’s independent review of the NHS revealed that more than 30% of patients are waiting too long for their radio- therapy cancer treatment.
Radiotherapy cannot be used on all cancers, but where it is appropriate a typical radiotherapy cancer cure can cost as little as £3,000 to £5,000, which is dramatically less than chemotherapy. The case for a national cancer plan is well made. I urge the Minister to bring the experts in and to produce such a plan.
Mr Clive Betts (in the Chair)
I thank all hon. Members for adhering to the time guidance; that is really helpful. We now move on to the Front-Bench speakers, who will have 10 minutes each—
Max Wilkinson (Cheltenham) (LD)
It is an honour to serve under your chairmanship, Mr Betts, and I will be as brief as I possibly can be. I thank my hon. Friend the Member for Wokingham (Clive Jones) for securing this important debate.
Two days ago, it would have been my father’s 64th birthday, but sadly he died of lymphoma in 2018 aged just 57. Recently my family marked 18 months since my wife was given the all-clear after ovarian cancer. It is thanks to the skill of a highly-qualified surgeon, who removed an absolutely huge lump from her body, that she is with us today and I am very grateful to them every single day.
Much has been said about the need for a national cancer strategy. I will offer the Minister one local opportunity, and it is an opportunity because the previous Government, despite taking some political credit for it in Cheltenham, failed to offer very much money to the Big Space Cancer Appeal to revamp Cheltenham general hospital’s oncology centre. As a regional cancer centre, Gloucestershire hospitals NHS foundation trust treats thousands of patients each year, but many of its buildings are now at end of life, many of the rooms have no natural light, and the outdated design is unsuitable for the number of patients in need of treatment.
We know that identifying cancer early and beginning treatment soon afterwards is key to giving people the best chance of survival. The staff at the trust work very hard but they are working under huge pressure and it is no secret that, as others have mentioned, targets are routinely missed. Our local trust is not alone in that. Many staff in the trust feel that the current space is not fit for purpose, and that certainly will not help their best efforts. That is why the trust has launched the Big Space Cancer Appeal. That situation is representative of the challenge we face in not having a strategy for dealing with cancer. The last Government gave almost no money for the project, and the £17.5 million that is being raised in Cheltenham is almost the entire capital cost of the project.
The new centre will offer patients a modern space and a better environment for treatment, healing and recovery. It will have modern consulting rooms, allowing more patients to be treated every day. That will help to cut down waiting times, so that targets can be hit and patients get better outcomes. For some people, this will mean the difference between life and death.
You asked me to be brief, Mr Betts, so I will draw my remarks to a close by thanking Dr Sam Guglani, Dr Charles Candish and all the staff at the trust’s charity—the initiative is charity-led but backed by the trust, which does not itself have the funding to deliver it. I also thank Dr Diane Savory, who has been working extremely hard on the project.
If the Government are looking for opportunities to invest in cancer care—we have already heard about some of the consequences of not doing so in my area from my hon. Friend the Member for Thornbury and Yate (Claire Young)—I urge them to get in touch, because there is a real opportunity with this project to make a huge difference on the ground.
Mr Clive Betts (in the Chair)
We move on now to the Front Bencher. If they could just leave a minute at the end of the debate for the hon. Member for Wokingham to respond to the debate, that would be really helpful.
Mr Paul Kohler (Wimbledon) (LD)
It is a pleasure to serve under your chairmanship, Mr Betts. I thank my hon. Friend the Member for Wokingham (Clive Jones) for securing this important debate.
As so many have said, and as Lord Darzi has confirmed, our NHS is in crisis. Spiralling waiting lists, crumbling infrastructure and demotivated staff are symptoms of the mismanagement that was all too common under the previous Government. The current state of cancer diagnosis and treatment is a testament to their failure: a lack of vision and of strategic thinking has let patients and families down. Under NHS guidelines, 85% of cancer patients are expected to wait no longer than 62 days between referral and the start of treatment, but last year the figure was less than 65% and this year is shaping up to be even worse. On current trends, in excess of 100,000 patients are failing to begin treatment within that timeframe. That is simply not good enough.
The UK is a global hub for life sciences research, yet we lag behind many countries without that expertise when it comes to applying the very research that we have often pioneered. Cancer research is a top priority for the UK, but we must aim to lead the world in outcomes too. As the Health and Social Care Committee made clear earlier this year, that requires
“a long-term strategy…which has innovation at its core.”
We need a more integrated, forward-looking approach to cancer that ensures that research, policy and delivery pull in the same direction, not opposite directions. The current system is much too fragmented.
In my constituency of Wimbledon, there are concerns around breast cancer, for which early diagnosis and treatment is critical. Across Merton, the London borough within which most of my constituency lies, breast cancer screening rates are significantly below both NHS targets and the national average. In 2022, less than 57% attended a screening when invited, which is significantly lower than the 70% national standard required to make screening truly effective. Behind those statistics are lives and families. When breast cancer is diagnosed and treated at stage 1, survival rates are close to 100%, but lower uptake of screening inevitably leads to later diagnosis and a commensurate decline in survival rates. That is why my council colleagues and I have been campaigning for NHS England to provide a breast cancer screening site in Wimbledon, which lacks the screening infrastructure necessary to meet national screening targets.
At a recent Radiotherapy4Life session in Parliament, I heard similar concerns about the lack of investment across England in radiotherapy. Only half of those who could benefit from radiotherapy are accessing it, because—in the words of the medics I spoke to—this country lacks a cancer strategy. The entire set-up is far too fragmented. To take one depressing example, even though integrated care boards are responsible for radio- therapy, some 30% of them, when subjected to a freedom of information inquiry, did not even know that.
In contrast, when the cancer referral system works well, the approach is transformational. Two weeks ago, in the wake of an elevated prostate-specific antigen level, I was put on a two-week cancer pathway; two days ago, I had an MRI and received a clean bill of health. It took just 10 days to give me peace of mind. Not everyone will be so fortunate, but everyone deserves that alacrity. A more integrated approach to cancer will speed up diagnosis and treatment and improve cancer outcomes. Consequently, I echo my colleagues’ calls for the Government to introduce a cancer strategy.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
It is a pleasure to serve under your chairmanship, Mr Betts. I thank the hon. Member for Wokingham (Clive Jones) for securing this important debate on what is clearly a difficult subject, given how much cancer affects people: as several hon. Members have said, it affects all of us, not just those who are directly affected. I listened carefully to the powerful speeches that he and the hon. Member for Cheltenham (Max Wilkinson) made about the direct impact that they have experienced.
I pay tribute to all the people who work in our NHS, the charity sector, the research sector and all parts of our community that are active in prevention and in supporting, treating and helping people through the journey with cancer. My speech cannot cover every cancer in the limited time I have, but I will focus on the major cancers, so to speak, in terms of prevalence and mortality rates. That is not to diminish the importance of the range of cancers: it is critical that we focus on rare cancers as well as the major ones.
I thank the hon. Member for Wokingham again for his speech and for sharing his personal experience. He did not mention the fact that he has raised more than £800,000 for cancer charities in his work following his diagnosis. It is important that we pay tribute to him for bringing forward this debate.
I was deeply concerned by the story told by the hon. Member for Thornbury and Yate (Claire Young) about the impact on her constituent of the cessation of their treatment as a result of financial measures. I hope that the Minister can meet her or take up the case; I would be interested to hear how that decision was taken. I hope that the family and the individual affected are doing okay with their treatment. My right hon. Friend the Member for Herne Bay and Sandwich (Sir Roger Gale) made important points, to which I will return later, about childhood and teenage cancer.
I was pleased that the hon. Member for Woking (Mr Forster), my constituency neighbour, raised the impact on his constituents in terms of seeking direct cancer care. As he knows, both of our constituencies are served by Ashford for broader cancer support. I would welcome the chance to meet him to discuss how we can help our constituents, particularly with journey times to access cancer care locally.
It is important to focus on data, so I will refer to data from the NHS and from Cancer Research UK. I have a series of questions for the Minister; I know that a lot may not be in his portfolio, but if he cannot answer today I will be grateful for a written response.
Fundamentally, the things that the state can do about cancer strategies break down into prevention, diagnosis, care and treatment, and research. All the major cancers have modifiable risk factors. Of the 44,000 bowel cancer cases a year, 54% are deemed to be preventable, with 11% linked to obesity, 28% linked to diet and fibre, 13% linked to processed meat and 5% linked to physical activity. Breast cancer is the most common cancer in the UK: of the 56,800 cases a year, about 8% are believed to be linked to or caused by obesity. Lung cancer is the third most common cancer: of the approximately 50,000 cases a year, about 80% are preventable and 72% are linked directly to smoking.
Overall, tobacco is the largest preventable cause of cancer. Some 50,000 cancer cases per year are attributable to smoking. In the last Parliament, we introduced the Tobacco and Vapes Bill because we recognised the importance of reducing smoking. Can the Minister tell me when his Government plan to reintroduce that Bill, so that we can start to see its health benefits? Obesity is the UK’s second biggest cause of cancer, after smoking. It is believed to cause about one in 20 cases: 20,000 cases of cancer per year are attributable to obesity. We brought forward an obesity strategy. Will the Minister review it and bring forward an obesity strategy in this Parliament?
On screening and treatment, while cancer outcomes continue to improve in comparison with the OECD, it is worth looking at the data in the Darzi report. One of the most interesting slides shows that over the past 14 years, we have improved relative to the gradient of cancer outcomes, but we started at a very low point. There are lots of questions to be asked about why we started at such a low point back in 2004. The NHS is still recovering from the disruption to cancer care caused by the covid pandemic, but thanks to the hard work of NHS staff, waits of more than 62 days declined between September 2022 and August 2024. Obviously there is still more work to be done.
Community diagnostic centres and surgical hubs made a difference. They were backed by a £2.3 billion investment, the largest cash investment in MRI and CT scanning in the history of the NHS; those scans, tests and checks are now being delivered in 170 CDC sites. As the independent Health Foundation recently pointed out, surgical hubs have helped to build capacity and reduce waiting lists over the past few years. Although it was not mentioned in Lord Darzi’s report on NHS performance, I welcome the Government’s intention to expand surgical hubs. Will the Minister provide more details on how many new surgical hubs will be established? What plans have the Government to expand the CDC network further?
There is clearly more work to be done to improve cancer waiting times and outcomes. The major conditions strategy developed under the last Government was designed to provide more impetus for improving cancer outcomes, alongside those for other major conditions. Developing the strategy involved significant consultation and engagement with cancer charities and professional bodies. Since the election, the Government have decided to scrap the strategy. Can the Minister explain why he made that decision?
Given the time that cancer charities and organisations have put in, can the Minister explain how their contributions will be used to develop the 10-year plan for the NHS? Can he explain why, in the NHS consultation that is now being run, there are no cancer-specific questions? We heard earlier that eight people in 10 want a cancer strategy. Will he respond if similar results emerge from the consultation?
The Government scrapped the children and young people cancer taskforce, and we have yet to hear an alternative approach to improve of outcomes in that area. Will the Minister provide clarity on the Government’s plans on children’s cancers and the reasons why they discontinued the children and young people cancer taskforce?
Research is most relevant to some of the rarer cancers that are often not talked about. We very much welcome the protection of Government investment in R&D, with £20 billion allocated to 2025-26 and core research spending protected. That includes a £2 billion uplift for the National Institute for Health and Care Research. I should mention that my doctoral research fellowship was funded by the NIHR, although it was mental health research rather than cancer research. It is great that we support that fantastic institution.
I am pleased that the Government have kept the current rate of research and development tax relief. However, the Minister will know that a lot of support and research is provided by or directly commissioned from charities, which are a critical part of the cancer care and treatment infrastructure. My understanding is that in yesterday’s Budget, public services were protected from the rise in employers’ national insurance contributions. Can the Minister explain what the impact of national insurance employer contributions will be on charities that provide care and treatment in this area? What conversations has he had with those charities, and what concerns have they raised with him?
In the Darzi report and elsewhere, there is rightly a focus on the diagnostic pathway and on the time it takes to diagnose and treat someone following a query as to whether someone has cancer. When does the Minister expect the huge £22 billion injection in the NHS to produce outcomes? Or does he agree with the comments in Lord Darzi’s report that the NHS does not necessarily need more money for outcomes? It has had a lot of money from the former Conservative Government over the past few years. Does the Minister think that reform is the best way to ensure improvement?
Mr Clive Betts (in the Chair)
I call the Minister. It would be helpful if he could finish by 4.28 pm to allow the mover of the motion a couple of minutes to respond.
The Minister for Care (Stephen Kinnock)
It is a real pleasure to serve under your chairship, Mr Betts. I thank the hon. Member for Wokingham (Clive Jones) for raising this vital debate about the future of cancer care and the potential merits of a cancer strategy. I am aware of the impressive work he has done on access to primary care on behalf of his constituents in Wokingham and that, as he very movingly set out in his speech, he is a cancer survivor. I welcome and commend his efforts in campaigning for cancer charities. I understand that he has raised a mind-boggling £800,000 for charity, so I pay huge tribute to him. I also thank and pay tribute to every Member who has spoken today. They have spoken with such clarity and passion, and it became clear that many present have personal experiences of cancer, which adds a poignancy to our discussion that makes it even more powerful.
Access to cancer care is an important issue for many people, and it is at the heart of this Government’s health mission to build an NHS that is fit for the future and to reduce the number of lives lost to the biggest killers. Our work will focus on three shifts: from hospital to community, from analogue to digital, and from sickness to prevention. On cancer services, I reassure the hon. Member for Wokingham and other hon. Members that the Government are absolutely committed to fighting cancer on all fronts, from prevention to diagnosis, from treatment to research. The NHS can be world-leading on cancer care as part of a wider health system that incorporates innovation and technology. It also benefits from access to world-class research and medicines, and we will look to realise the potential of both.
Nearly a third of patients are waiting more than two months for their referral before starting treatment. That is unacceptable, and the Government have made reducing those waiting times a core part of our health mission. Thanks to the hard work of NHS staff, we are now meeting the faster diagnosis standard so that more than 75% of patients get an all-clear or cancer diagnosis in 28 days. However, we know that there is much more to be done. The Chancellor set out yesterday how we will invest in the NHS to deliver 40,000 additional operations, scans and appointments per week as part of our commitment to cut waiting lists, and how we will invest in new radiotherapy machines so that cancer patients have access to the most effective treatment. NHS England is also working to make cancer diagnosis and treatment faster and more efficient through the use of innovative approaches such as teledermatology and faecal immunochemical test kits for risk stratification in bowel cancer.
The NHS has made historic strides in cancer care. Ten-year survival has doubled since the early 1970s—but that rate of improvement slowed in the 2010s, and there is still a lot of work to be done. Early diagnosis and innovative treatments are key to enhancing survival rates and quality of life for cancer patients, so we will ensure that the Government and the NHS work hand in hand with life sciences research institutions and industry to drive the development of new treatments and diagnostics. Members of all parties have rightly raised some of the deadliest cancers, including pancreatic and bowel cancers and cancers affecting children and teenagers. We recognise that different tumours have different diagnostic and treatment pathways, and will consider that as part of our cancer strategy.
Since taking office, this Government have wasted no time in taking steps to accomplish our vision. Earlier this month, we announced funding for a raft of new UK-created therapies for cancer that will be trialled in the UK. Developing early diagnosis technologies is a key aim of the National Institute for Health and Care Research funding. The potential to find cancers earlier will give patients more choice of treatment and enable us to save lives.
We also commissioned an independent investigation of the health service in England, carried out by Lord Darzi. Published in September, Lord Darzi’s report set out in stark terms the profound challenges faced by the health service, and he was honest about the scale of the work that will be needed. He highlighted that people in the UK are more likely to die from cancer than in any other European and English-speaking country, and that improvements to survival rates have slowed. He also pointed to the need to improve waiting times for cancer treatment—particularly curative radiotherapy—and expand access to the most sophisticated treatment options, such as genomic testing. Not enough progress has been made on increasing the number of patients diagnosed at stages 1 and 2—the best way to improve survival. However, Lord Darzi said that there are signs of hope, thanks to the success of initiatives such as the targeted lung health check programme. We are not daunted by the scale of the challenge; we know that we need to roll up our sleeves and get to work.
In response to the Darzi report, and as part of our mission to build an NHS fit for the future, we have launched an extensive programme of engagement to develop a 10-year health plan. The plan will set out a bold agenda to deliver on the three big shifts that I outlined earlier. This will be a team effort. We will listen to, and co-design the plan with, the public, the health workforce, charities, academics and other partners. I encourage every parliamentarian, in this Chamber and right across the House, to get involved in this big national conversation—the biggest conversation we have had about our healthcare and care system since the NHS was founded in 1948. Please go to change.nhs.uk and get involved. There will also be approximately 100 deliberative events around the country so that Members and their constituents can get involved in the big conversation, which will lead to the publication of our 10-year plan strategy in spring 2025.
Organisations such as Cancer Research UK have been at the forefront of advocating for a robust cancer strategy. Their reports highlight the importance of dedicated cancer strategies in driving efforts and impact towards improving cancer research, diagnosis and care. We have launched the Change NHS online portal to facilitate that national conversation and help develop the 10-year health plan. The journey of developing a plan is as important as the plan itself. We want the public and healthcare staff in England, and all other stakeholders and people who care about the future of our health and care system, to share their views, experiences and ideas. The portal opened on 21 October and will run for several months.
To build an NHS fit for the future, we first need to listen. To reduce the number of lives lost to the biggest killers, like cancer, we need to learn from people with lived experience, researchers and our NHS staff. We also recognise the need for leadership by the Government, and my right hon. Friend the Secretary of State has been clear that there needs to be a national cancer plan. We are now in discussions about what form that plan should take and what its relationship to the 10-year health plan and this Government’s wider health mission should be. However, we are clear that we must develop and publish the 10-year health plan in spring 2025, before we can publish a stand-alone cancer strategy. We will provide updates on that in due course. The sequencing is important; it is best to set the strategic framework through the 10-year plan, and then a stand-alone cancer plan will flow from that. I have absolutely heard the message about the need for a cancer strategy loud and clear from hon. Members, and I will convey it to my ministerial colleagues and to officials.
I thank the hon. Member for Wokingham for bringing this important matter to the House, and once again I thank all hon. Members who contributed. I also thank the hon. Member for Runnymede and Weybridge (Dr Spencer) for the constructive way in which he has engaged in this debate. He asked me a vast range of questions. It is probably better, in the short time that I have available, to say that I will write to him so that I can respond in the detail that is required, which I do not think I can today.
I am pleased to assure hon. Members that rebuilding our NHS and delivering world-class cancer services for every person remains a top priority for this Government. We have wasted no time in taking action, announcing funding that will make innovative treatments accessible to cancer patients. We have published an independent investigation of the health service in England, which has highlighted the challenges that cancer patients face and the scale of the work needed. With input from members of the public, researchers and NHS staff, we are now developing a plan to make the health service fit for the future and to reduce the lives lost to the biggest killers, including cancer.
The foundation of the NHS was, of course, one of the proudest achievements of the Labour Government of 1945 to 1951. We created a service that was right for the 20th century at that time. It now falls to the Labour Administration of 2024 to shape a health and care service that is fit for the 21st century, so let us work together to get our health and care service back on its feet and ready to tackle the scourge of cancer.
Clive Jones
I thank you, Mr Betts, and the Minister for giving me a few minutes to sum up; that is very kind. I thank colleagues from all political parties who contributed to the debate. I made notes of what everybody said. I do not think that I can go through all of them, but I have to say that I agree with the hon. Member for Strangford (Jim Shannon): we have got from the Government another £22 billion for the NHS, and that has to be welcomed. I am also very pleased to say that I agree with everything that the right hon. Member for Herne Bay and Sandwich (Sir Roger Gale) said. Children should be included in clinical trials; I totally agree. I am very pleased that he also said that there should be a national cancer strategy. I am delighted that the wife of my hon. Friend the Member for Cheltenham (Max Wilkinson) has had successful treatment—the same that I had.
Both the Minister and the shadow Minister, the hon. Member for Runnymede and Weybridge (Dr Spencer), were kind enough to mention that I have helped to raise over £800,000. But it is not just me; many other people have been involved in the raising of that £800,000. My daughters and I did skydives. They went out of the plane first, and that really made me decide that I had to go out as well—I did not want to! We have had dinners, tea parties and golf days with friends, and the two very big events have been fashion shows in front of 1,000 people. If Members think that it is daunting to make their maiden speech in Parliament, they should imagine what it is like to walk out in front of 1,000 people, dressed in a ridiculous pink three-piece suit. That was not the easiest thing that I have ever had to do.
I was really pleased to hear the Minister say that he has heard loud and clear the request from all of us for a national cancer strategy. I hope that in the next few weeks, few months, or certainly by the end of the spring and beginning of the summer, he will have been able to persuade the Secretary of State that we need a national cancer strategy. It is a very popular policy. Eight out of 10 people want us to have a national cancer strategy. Many, many cancer charities want us to have a national cancer strategy. It would be really good if the Minister and the Secretary of State could help to deliver one.
Question put and agreed to.
Resolved,
That this House has considered the potential merits of a cancer strategy for England.
Written Correction
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Ministerial Correction
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Foreign, Commonwealth and Development Office
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Mr Mark Francois (Rayleigh and Wickford) (Con)
History shows again and again that appeasement does not work. It was inevitable after the abject surrender of the Chagos islands, for that is what it is, that the Spanish would try to exert pressure on Gibraltar. [Interruption.] Hon. Members shake their heads, but the Government are so embarrassed by the Chagos deal that they will not even tell the House of Commons what we will have to pay to rent our own base.
Coming back to Gibraltar, my hon. Friend the Member for Romford (Andrew Rosindell) is right that under Blair, Labour tried to sell out the Gibraltarians for joint sovereignty and a referendum killed it. We could not trust Labour on Gibraltar before, so why on earth, after what it has done to Chagos and the Chagossians, should we trust Labour now?
Anneliese Dodds
I really regret this playground-style characterisation of issues that are so fundamental, particularly for those who live in Gibraltar. I mentioned the comments of the Chief Minister of the Falklands, and the right hon. Member has now forced me to quote them, given the nature of what he has just said. The Chief Minister said some of these claims are
“more about party politics, blame-gaming and Tory Party leadership issues…than”
they are actually about the sovereignty of people who live in the overseas territories. He could not have been clearer.
[Official Report, 14 October 2024; Vol. 754, c. 608.]
Written correction submitted by the Minister for Development, the right hon. Member for Oxford East (Anneliese Dodds):
Anneliese Dodds
I really regret this playground-style characterisation of issues that are so fundamental, particularly for those who live in Gibraltar. I mentioned the comments of the Chief Minister of Gibraltar, and the right hon. Member has now forced me to quote them, given the nature of what he has just said. The Chief Minister said some of these claims are
“more about party politics, blame-gaming and Tory Party leadership issues…than”
they are actually about the sovereignty of people who live in the overseas territories. He could not have been clearer.
Written Statements
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Public Library Usage: England
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The Minister for Creative Industries, Arts and Tourism (Chris Bryant)
Libraries matter to people. They provide inspiration, education, entertainment and a safe haven for many thousands every week. In addition to their core function of providing books to lend or consult, they provide digital services, audio recordings and information that can be vital to building a local business as well as bringing people together across communities.
Despite the value and benefit of public libraries for users, the library sector has faced several long-term challenges, and the context for library engagement and delivery has changed significantly. Recent challenges include: the impact of Government-driven austerity, leading to cuts to local authority budgets; the covid-19 pandemic, which drastically affected people’s engagement with and use of libraries; and the increasingly digital world. We cannot shy away from those challenges; the amount that councils are spending on public libraries in England fell by almost half in real terms between 2009-10 and 2022-23.
The Department for Culture, Media and Sport has a statutory responsibility to superintend and to promote the improvement of local government’s provision of public library services in England. The Culture Secretary is responsible for ensuring that library authorities deliver a “comprehensive and efficient” library service for their communities. DCMS works closely with sector stakeholders to achieve this, as well as to advocate for public libraries across Government.
As part of that work, the Government are publishing DCMS-commissioned research by Ipsos on barriers to library usage by the general public. The research explored the barriers to and enablers of library usage through a number of focus groups and sets out potential policy interventions that could be deployed by local or national Government to promote library usage. A copy of the research will be placed in the Libraries of both Houses.
This research has identified a number of ways that public libraries could tackle these challenges and encourage more engagement from the public, including:
raising awareness of the range of services that public libraries offer, particularly digital services;
addressing practical barriers to engagement with public services, such as opening hours and parking facilities;
clarification of the types of spaces available for all demographics; and
harnessing the appeal of public libraries as spaces that enable and encourage community cohesion.
We are sharing the findings to ensure that library services across England can actively consider how they might act on the results. DCMS is commissioning further research to test the findings and insights from phase 1 at scale to inform policy design and implementation. I will also be meeting with library sector organisations and leaders to discuss the challenges in the sector, reflect on priority policy areas and consider how best we can support the sector.
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Afghanistan
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The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Hamish Falconer)
Today, I am updating the House on the efforts the UK Government have made to support those most in need in Afghanistan. The future of this country continues to matter to the UK due to the risk of terrorism, illegal migration, the humanitarian and food security crisis, and appalling human rights situation, particularly for women and girls.
Afghanistan remains in humanitarian crisis. According to the United Nations, over 23 million people—more than half the population—require humanitarian assistance in 2024. The Foreign, Commonwealth and Development Office has provided support to the most vulnerable and marginalised people in Afghanistan. In financial year 2023-24, we provided a total of £113.5 million in overseas development assistance to Afghanistan. All UK funding was channelled through UN agencies, non-governmental organisations and the Red Cross Movement. Through these partnerships last year, the UK Government supported access to humanitarian assistance for more than 2.7 million people, including providing assistance to prevent malnutrition to at least 1.5 million people. The UK also helped more than 1.4 million people, of whom over 1 million were women, to access essential health services. We aim to ensure that more than 50% of people reached with UK assistance are women or girls.
The Government have repeatedly condemned the Taliban’s repressive policies and behaviour. However, like many of our allies, we maintain a limited and pragmatic dialogue with the Taliban where it is in our national interest to do so. This process was started by the previous Conservative Government. This engagement does not represent legitimisation of the Taliban’s actions. We will continue to hold the Taliban to account for their actions, including on the rights of women and girls, counter terrorism, human rights and maintaining humanitarian aid access.
Government officials have engaged with the Taliban to help protect the operating space for humanitarian partners in Afghanistan, pressing on priority issues such as counter-terrorism and human rights, including the rights of women and girls. We have consistently underlined the need to ensure that women continue to play an active role in the humanitarian response to the crisis in Afghanistan, and can safely access assistance and provide feedback on the quality and appropriateness of the response. We will continue to push the Taliban on this issue, and ensure women and girls remain at the heart of our aid response.
Beyond immediate humanitarian needs, the UK Government are working with the international community to support longer-term basic services for the Afghan people, including health, education and livelihoods. Through our bilateral programmes, in 2023-24, at least 83,000 children, including 54,000 girls, were supported to access education and at least 466,000 children, including 310,000 girls, were fully immunised. In February 2024, with strong UK support, the World Bank Board endorsed the provision of grant finance from the World Bank’s International Development Association to Afghanistan. This funding, to which the UK Government contribute, will deliver further health, livelihoods and education programming in Afghanistan through the World Bank’s Afghanistan resilience trust fund.
Through newly approved UK funding we will scale up livelihoods and agriculture programming to support vulnerable Afghans to grow more food, improve their income, and be more resilient to climate change, helping tackle the humanitarian crisis in Afghanistan in more sustainable ways. New UK investments in health and education, with a focus on women and girls, support wider goals to champion rights, equality and a healthier world.
In August, the Taliban passed a “vice and virtue” law imposing wide-ranging restrictions on Afghan women, men and children and the media, including effectively removing women from public spaces. The laws have attracted widespread international condemnation. As the Foreign Secretary has said, the exclusion of women from all aspects of public life is another tragic setback for Afghanistan and its people. Officials have directly pressed the Taliban to reverse this law and, alongside like-minded international partners, have lobbied senior Taliban officials emphasising that we consider the law a grotesque backwards step. We have also condemned the law publicly through the UN, including the Human Rights Council. We will continue to raise our serious concerns and press for the reversal of these restrictions.
We continue to engage with Afghan women and are committed to providing platforms for Afghan women to speak out, advocate for their full inclusion in society, and promote their rights. In August, the Minister for the Middle East, Afghanistan and Pakistan hosted a group of senior Afghan women leaders to hear their perspectives and discuss the inclusion of women in Afghanistan’s future political process. In September, the Minister delivered a speech to the All Afghan Women Summit in Tirana, emphasising the UK Government’s continued support to Afghanistan and solidarity with Afghan women.
In September, the Afghan embassy in London closed following the dismissal of its staff by the state of Afghanistan. This decision was not made by the UK Government. In line with international law, specifically the Vienna convention on diplomatic relations, Afghanistan is responsible for the appointment and termination of staff at its embassies. The FCDO recognises that the closure will create challenges for Afghan citizens in the UK who require consular services.
We continue to work constructively with parties inside and outside of Afghanistan for an Afghanistan at peace with itself, its neighbours, and the international community.
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Government Wine Cellar Report 2022-'24
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The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Catherine West)
I have today placed a copy of the report on the Government wine cellar for the financial years 2022-23 and 2023-24 in the Libraries of both Houses.
This biennial report meets our commitment to transparency on the use of the Government wine cellar, covering consumption, stock purchases, costs, and value for money.
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Housing and Regeneration: London
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The Minister for Housing and Planning (Matthew Pennycook)
Since the construction of Britain’s first inter-city rail link between London and Birmingham, Euston has been not just a bustling London neighbourhood but a gateway to the west midlands, north-west England, north Wales and Scotland.
However, as in many of London’s neighbourhoods, the need for housing in the area around Euston station far outstrips supply, resulting in higher housing costs, rising levels of overcrowding and workforce pressures. To meet the challenges and grasp the opportunities facing this important part of our capital city, bold action is required.
The Government are already taking forward plans for a much-improved Euston station, and my Department is committed to supporting the delivery of significant numbers of new homes alongside this project. To progress that work, the Ministry of Housing, Communities and Local Government has established the Euston housing delivery group in partnership with the London Borough of Camden. This group will advise Ministers and local leaders on an ambitious housing and regeneration initiative for Euston, assessing the shape and scale of the opportunity for growth in the area, and acting as a driving force for new investment in the area.
My Department will work with local leaders and communities to ensure that the redevelopment of Euston is an example of exemplary place-making. Housing delivery and commercial development will be backed by the necessary social infrastructure and amenities to create thriving new communities and bolster existing ones. Ready access to primary healthcare, spaces in primary and secondary schools, and access to open green spaces for communities will be central to our vision.
Sustained economic growth is the only route to improving the prosperity of our country and the living standards of working people. That is why it is this Government’s No. 1 mission. Regenerating Euston, at the heart of our capital city, will both contribute to meeting housing need locally, and support economic growth nationally by releasing the productive potential of this historic neighbourhood.
The Euston housing delivery group
As announced in the Budget, I am appointing Bek Seeley to chair the Euston housing delivery group. The group will:
Assess the scale of opportunity for housing growth and regeneration beyond the existing Euston station site.
Identify the infrastructure, services, and green space required to unlock maximum housing delivery.
Consider how these housing opportunities can be delivered across Euston, working alongside with the Department for Transport, the Greater London Authority, and the London Borough of Camden.
Advise central Government and local leaders on an ambitious housing and regeneration scheme, as well as the routes to deliver it.
Bek has worked in the public and private sectors, has held a range of operational and commercial roles in economic development, infrastructure, built environment and public services, and has overseen major housing projects in London, Birmingham and Manchester.
The delivery group will be made up of industry experts in urban design, architecture, affordable housing delivery and financing large-scale projects. Their core focus will be to develop a trailblazing regeneration scheme, which will unlock more investment in Euston and drive growth, benefiting the local community and the whole nation.
We will continue to update Parliament on the work of the delivery group.
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Greater Cambridge
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The Minister for Housing and Planning (Matthew Pennycook)
I am today updating the House on the next steps the Government intend to take, in collaboration with local partners, to support ambitious and high-quality sustainable growth in Cambridge and its environs.
Sustained economic growth is the only route to improving the prosperity of our country and the living standards of working people. That is why it is this Government’s No. 1 mission. The economic growth of Cambridge has been a phenomenal success and the city’s strengths in knowledge-intensive businesses within its unique innovation ecosystem are well documented, with strong connections between investors, researchers, businesses and local government. We know that greater Cambridge has the potential to make an even greater contribution to the UK economy, and the Government are determined to make this happen.
While local partners in greater Cambridge share the Government’s ambitions, there remain significant barriers to further growth. It is essential that the Government help to remove them to overcome the issues that have held up planned development for essential housing and laboratory space. It is also vital that we take a collaborative approach to addressing the costs that have come with success, including housing affordability pressures, traffic and congestion, and air pollution. We know what can be achieved when local authorities, central Government and public bodies work in partnership to overcome these challenges. I want to sustain the constructive relationship I have established with local leaders and key partners over recent months.
The Cambridge Growth Company
The Deputy Prime Minister and I are determined to realise the full potential of greater Cambridge to the benefit of its existing communities and the UK economy. I am therefore appointing Peter Freeman to chair the Cambridge Growth Company, which will work with local partners to develop and start to deliver an ambitious plan for delivering high-quality sustainable growth in Cambridge and its environs.
Peter is a development and regeneration expert with a strong track record, working with private and public partners. He brings a wealth of experience in delivering complex mixed-use projects, including in his current role as chair of Homes England and through the renowned redevelopment of King’s Cross.
The growth company will focus on the following core activities:
Enable and accelerate developments which align with the Government’s ambitions for Cambridge, and unlocking development on stalled sites.
Develop the evidence base to support development of an infrastructure-first growth plan and a long-term delivery vehicle, working with experts to assess infrastructure requirements, including water and transport, and laying the foundations to establish a long-term delivery vehicle.
Identify solutions to complex constraints and support a cross-Government approach to unblock existing development, providing the right incentives for successful development in the long-term.
The work of the Cambridge Growth Company will be supported by £10 million of new funding committed at yesterday’s autumn Budget. This funding will be used to develop an ambitious plan for housing, transport and wider infrastructure, and for the water needed to support sustainable growth.
We will continue to update Parliament on the work of the Cambridge Growth Company.
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Civil Aviation Authority Annual Progress Report
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The Parliamentary Under-Secretary of State for Transport (Mike Kane)
The airspace modernisation strategy refresh, published on 23 January 2023, sets out, through nine elements, the ways and means of modernising airspace, focusing on the period until the end of 2040.
The Civil Aviation Authority must report to the Secretary of State annually on the delivery of the AMS, through an annual progress report. This report details the progress made by industry, as well as work the CAA have conducted against each of the AMS’s elements. For 2022, the progress report reports on the previous AMS’s 15 initiatives.
In total, six of the 15 initiatives are assessed as “requiring attention”, two are on track, one has been implemented and six initiatives have been assessed as having “major issues”.
The Department is working with the CAA to strengthen delivery and ensure greater progress is made in implementing the airspace modernisation programme. Ministers are giving the programme urgent attention and have already announced measures to tackle these challenges, including the consultation launched on 22 October on our plans to create a new UK Airspace Design Service. This will drive forward airspace modernisation and create a system fit for the future by delivering quicker routes, easing delays, and reducing harmful emissions.
Areas of progress
Free route airspace (initiative 2) was implemented in Scotland in 2021 and remains on track for deployment in Q1 2023 across south-west England and Wales. This will see airlines being able to fly more direct routes in upper airspace, reducing aviation’s carbon emissions, and will save 12,000 tonnes of CO2 a year—equivalent to the power used by some 3,500 family homes.
The airspace classification review (initiative 10) has made significant progress with the publication of the findings into the review of the Cotswold region. This work has identified where airspace can be opened up for all airspace users to use (e.g. general aviation).
Under the deployment of electronic surveillance solution (initiative 11), the Department for Transport and the CAA established the Surveillance Standards Task Force, developing national, voluntary specifications for electronic conspicuity. This is a key enabler in the refreshed AMS, bringing together current and new airspace users, such as drones, in order to promote a safe and integrated lower airspace.
Areas assessed as having major issues
There are a number of initiatives assessed as having “major issues”, in part because of covid-19 recovery and the complexities of the airspace changes in the London cluster. However, formal acceptance of the Airspace Change Organising Group’s masterplan iteration 2 in January 2022 was a critical milestone. This was enabled in part by £9.2 million Government funding. Iteration 3 will be published later this year following a number of public engagement exercises.
Of the six initiatives requiring attention, timescales and delivery plans have been reassessed and re-baselined as a result of publication of the refreshed AMS.
I will place a copy of the airspace modernisation strategy 2023 progress report in the Libraries of both Houses.
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DVLA and VCA Business Plans 2024-25
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The Parliamentary Under-Secretary of State for Transport (Lilian Greenwood)
I am pleased to announce the publication of the 2024-25 business plans for two of the Department for Transport’s motoring agencies: the Driver and Vehicle Licensing Agency and the Vehicle Certification Agency.
Each agency’s business plans sets out:
The key business priorities that each agency will deliver and any significant changes they plan to make to their services, and;
The key performance indicators, by which their performance will be assessed.
These plans allow service users and members of the public to understand the agencies’ plans for delivering their key services and managing their finances.
The business plans will be available electronically on gov.uk and copies will be placed in the Libraries of both Houses.
The Driver and Vehicle Standards Agency 2024-25 business plan will be published separately as we continue to work with them on measures to drive down practical driving test waiting times.
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Grand Committee
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Arrangement of Business
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The Deputy Chairman of Committees (Baroness Finlay of Llandaff) (CB)
My Lords, if there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes. The time limit for this debate is one hour.
Defence Policy: Deterrence
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Lord Trefgarne
To ask His Majesty’s Government whether deterrence remains a core element of the United Kingdom’s defence policy.
Lord Trefgarne (Con)
My Lords, I will not detain the Committee for all the time allocated to me but will do my best to be clear and precise. Deterrence covers a wide range of defence activity. Nuclear is at the top. We have never fired a nuclear weapon in anger, following the two weapons fired by our US allies to end the Second World War. Nuclear weapons are to be used only when our “supreme national interest” so requires. So far, that has not occurred. I hope I can be assured that the new Defence Ministers in post have accepted briefings on these matters, whatever their inclinations may be.
At the other end of the scale, we cast our minds back to 1982 when HMS “Endurance” was on patrol in the south Atlantic. We withdrew it, somewhat unwisely, and the rest is history. The noble Lord, Lord West, who is not here this afternoon, played an important part in the Falklands conflict all those years ago, as I believe did the noble and gallant Lord, Lord Stirrup. Are any British forces deployed to the south Atlantic at present? It seems that potential enemies there are again making unhelpful noises about the Falkland Islands. They were easily deterred last time by a single vessel; when we withdrew it, the rest became history.
Yesterday we heard from the Chancellor about defence spending generally. I felt that her remarks were not wholly awful. But deterrence has to be credible, and I hope that point is made to Chancellor Reeves as well as to the rest of us. There are also threats elsewhere in world, not just in the south Atlantic, and I hope we are taking account of those. I do not intend to detain your Lordships any longer.
Lord Harris of Haringey (Lab)
My Lords, I am grateful to the noble Lord, Lord Trefgarne, for giving us the opportunity to debate this important issue. I will talk about deterrence in the broadest sense. In so doing, I declare my interest as chair of the National Preparedness Commission.
Deterrence is not just about the ability to hit back hard against an aggressor, thereby making that aggression less likely. It is also about demonstrating a level of preparedness against the threat posed and a degree of resilience to recover quickly from any attack mounted. The first duty of government is to keep the country safe and protect its citizens. That is an essential platform on which the nation’s economic growth and prosperity depend.
Increasingly, hostile states pursue their objectives in the grey zone between peace and open conflict. Conventional campaigns are supplemented or preceded by tactics of hybrid warfare involving cyberattacks, campaigns of misinformation and disinformation, and disruption to civil infrastructure, the economy and the vital services on which citizens and communities depend. For example, we have seen a spate of unexplained fires in installations around Europe, and in the past 24 hours have read the news with great interest in that context.
Such grey-zone operations may take place without any associated conventional military activities. They are often conducted by proxies, non-state actors or groups that may be state-controlled, state-sponsored or state-tolerated; or they may be conducted by covert means. They may be plausibly deniable and, although they may fall below the threshold of armed conflict, their consequences are likely to be just as serious as those of a more conventional attack.
Recent years have seen attacks on undersea cables and fuel pipelines; cyberattacks by state-sponsored actors, such as those leading to the SolarWinds hack in 2020 or the Hafnium attack in 2021; the jamming and spoofing of navigation satellite systems; and various sorts of drone activity, which of course can be conducted from hundreds of miles away. A preparedness to respond effectively to such attacks, or to recover quickly from them, makes them less worth while for the adversary and therefore helps to deter them.
The consequences of these grey-zone activities are not just immediate or limited only to recovering from the event itself. Of course there are costs involved in addressing the immediate challenge but, more seriously, there may be a weakening of the nation’s ability to respond effectively to other attacks. More significantly, such attacks and the failure to deal with them effectively may undermine public confidence in the state and the ability of the Government to protect their citizens. That would be a win for any adversary.
Similarly, the objective of misinformation and disinformation campaigns is to sow discord and undermine faith in a legitimate, democratic Government. Such campaigns are fuelled by social media and ever more sophisticated applications of artificial intelligence, but the intent is to undermine citizens’ faith in their Government and the democratic process itself.
Dealing with such challenges may not necessarily involve a military response. It will need a response from the rest of government, local authorities, emergency services and, indeed, the whole of society. Such a level of preparedness and resilience is an essential part of the nation’s defence capability, and it has to be a key component of modern deterrence.
Lord Stirrup (CB)
My Lords, it is a pleasure to follow the noble Lord, Lord Harris of Haringey, with whose remarks I entirely agree. The noble Lord, Lord Trefgarne, has asked whether deterrence is still at the core of the UK’s defence policy; the Minister’s answer will surely be yes, so I shall use my allotted time to highlight just four of the many consequences of that anticipated affirmative.
It is quite clear that this Government, like the last, are committed to the maintenance of our strategic nuclear deterrent, through the continuous at-sea deployment of our Trident-armed submarines. But as we transition from the Vanguard to the Dreadnought, we shall for some time need to operate both classes of boat. However, the two types are very different and will require different crews and different logistic support chains. This will place a considerable strain on the Royal Navy and on defence resources in the round. What planning has taken place to ensure that the strain can be borne without damaging other areas of defence capability?
Of course, nuclear deterrence by itself is not nearly enough. Effective conventional deterrence exercised through NATO is essential if we are to have any chance of avoiding future war. But almost everyone, perhaps most importantly the Secretary of State for Defence himself, recognises that our Armed Forces are too small and inadequately equipped to constitute much of a deterrent at present.
Remedying this will be a long, difficult and expensive task, but, as the saying goes, it is the job never started that takes longest to finish. The substantially increased investment in our fighting capability, our combat sustainability and the defence-industrial capacity that underpins both needs to start now. When will the Government give clear evidence that the security of this country and its people really is their top priority?
I have mentioned nuclear and conventional deterrence, but these cannot be considered in isolation. The NATO doctrine developed during the Cold War recognised the need for a so-called escalation ladder that provided for a graduated response to increasing levels of aggression. One important element of graduated response was the provision of an increased element of choice in the boundary between conventional and nuclear war. Moving from conventional fighting to an all-out strategic nuclear exchange was seen as far too big a step. It would present politicians with almost impossible choices and would leave little or no room for second thoughts on either side. NATO’s tactical nuclear capability is greatly reduced from the Cold War, and the UK’s is now non-existent. What thought have the Government given to these missing rungs on the escalation ladder, which are an important contribution to the overall effectiveness of a deterrence posture?
Finally, deterrence begins in the mind. One area of conflict that is attracting increased attention is termed “cognitive warfare”. It is about getting into the minds of one’s opponents and undermining their will and capacity to resist. It is not a new concept, but new technology such as AI is offering new ways of doing old things. China takes cognitive warfare very seriously, and Russia is already deeply engaged in it. We are currently poor at defending against it, and our offensive capabilities are even worse. We need to do much better if our deterrent capability is to be credible to potential aggressors. What priority are the Government giving to this crucial area of capability?
Today I have been able to do no more than scratch the surface of some very important issues. I hope that future debates will enable me to expand on them. Meanwhile, I ask the Minister to reflect on them most carefully.
Lord Harlech (Con)
My Lords, it is a pleasure to follow the noble and gallant Lord, Lord Stirrup. I declare my interests as a serving Army Reserve officer and a member of the APPG for Climate, Nature and Security. I congratulate my noble friend Lord Trefgarne on securing this important and timely debate. As noble Lords have already alluded to, deterrence is a broad subject, so I shall focus my remarks on the High North.
Due to climate change, natural resources and shifting geopolitical interests, the Arctic High North region has gained significant strategic importance for the United Kingdom. As the region warms, the melting sea-ice creates new opportunities and challenges, establishing the Arctic as a hot zone of environmental degradation, international competition and heightened insecurity. Opening new sea routes makes previously inaccessible resources such as oil, gas and minerals available, transforming the Arctic into a theatre of contest.
The Arctic region is home to critical shipping routes, such as the Northern Sea Route, which are becoming more viable due to melting ice. The NSR runs along Russia’s Arctic coast, providing a shortened connection between Europe and Asia. These routes could shorten global shipping times by nearly 40% and bypass traditional choke points such as the Suez Canal, offering significant economic advantages.
The region contains vast untapped natural resource reserves, including oil, gas and minerals. Control over these resources has become a geopolitical priority for nations with Arctic interests, including Russia, the United States and China, with China self-identifying, despite geographical terms, as a near-Arctic state. The Arctic’s proximity to critical defence zones makes it an area of military interest, particularly nuclear deterrence, early-warning radar systems and missile defence installations. In short, Arctic militarisation is amplifying strategic competition.
Russia has significantly ramped up its military presence in the Arctic, reopening old Soviet bases, building new ones and deploying advanced military capabilities, including nuclear-powered submarines and long-range missiles. The Arctic Trefoil base on Franz Josef Land is one of the most advanced installations, designed to operate all year round in extreme Arctic conditions, equipped with advanced radars, missile systems and infrastructure to support hundreds of personnel.
Russia views the Arctic as vital to its national security and economic future—Arctic oil and gas account for 20% of Russia’s GDP—and its activities there have heightened regional tensions, necessitating a strategic response from NATO and its allies. Russia has deployed sophisticated air defence systems such as the S-400 and Pantsir-S1 to protect its northern territories. These systems can intercept aircraft and missiles at long ranges, providing a protective shield over key Arctic installations and energy infrastructure. Russia has also deployed Bastion coastal missile defence systems along its Arctic coastline. These systems are designed to defend against naval incursions, allowing Russia to control access to the NSR and deter foreign naval forces from operating in the region. Russia frequently conducts large-scale exercises involving thousands of troops, warships, aircraft and submarines.
Deterrence in the Arctic will involve a combination of military preparedness, advanced technology and diplomatic efforts. For the UK, it is vital to maintain a credible deterrent by having the capability to project power in the High North, particularly naval and air power, through all-domain awareness and access considerations for airfields and port infrastructure. Can the Minister say what the United Kingdom is doing to secure supply chains and enhance crisis management capabilities in this region?
To conclude, the UK should focus on deterring aggression, mainly from Russia, and ensuring the stability of crucial Arctic waterways. Through NATO co-operation, military preparedness, and a strong naval presence, the UK can be positioned to safeguard its interests and contribute to the broader defence of the Arctic.
Lord Bilimoria (CB)
My Lords, there is direct deterrence and extended deterrence. The noble Lord, Lord Trefgarne, spoke about the credibility challenge that arises when states question the reliability of a defender’s commitment to protect allies, impacting extended deterrence.
The UK’s continuous at-sea deterrent, the CASD, has kept a nuclear-armed submarine patrolling undetected since 1969 to deter aggression. The nuclear policy in 2024 maintains a minimum credible and independent deterrent, used only in extreme self-defence and authorised solely by the Prime Minister. In 2023 the previous Conservative Government updated and prioritised an integrated multidomain deterrence strategy to counter state and transnational threats, with NATO as central. The UK’s nuclear deterrent pledged to NATO’s defence would be used only in extreme self-defence.
The Labour Government have affirmed NATO as a core to European and global security, and have committed to a new UK-EU security pact and improved defence ties with France, Germany and the Joint Expeditionary Force partners. The current Government pledge absolute support for the UK’s nuclear deterrent, including a triple-lock commitment to four nuclear submarines, continuous at-sea deterrence and future upgrades. Can the Minister confirm all this? Foreign Secretary David Lammy and Defence Secretary John Healey highlighted NATO’s role against Russia’s aggression and reinforced nuclear defence capabilities only in July this year.
Engaging with the moral implications of deterrence policy can lead to responsible decisions regarding the UK’s nuclear arsenal. Effective deterrence requires understanding and addresses complex motivations and perceptions. There are two strategies: deterrence by denial, which seeks to make aggression infeasible and relies on military presence, and deterrence by punishment, which threatens severe consequences but may be perceived as less credible. Historical evidence suggests that denial strategies are generally more reliable than punishment strategies, as they provide clearer signals of intent and capability to potential aggressors. The United States used deterrence effectively in Europe during the Cold War, leveraging its presence to complicate aggressors’ calculations and act as a trip-wire.
Combining deterrence threats with reassurance is crucial to avoiding provoking aggression, as seen with the US strategies towards North Korea. Success in deterrence requires clear communication of what is being deterred and the actions that will follow if ignored.
NATO has now been hugely strengthened by Finland and Sweden joining. At the Madrid summit in 2022, NATO identified Russia as the most significant threat to Euro-Atlantic security and terrorism as a direct, asymmetric threat. Twenty-three NATO allies are projected to meet or exceed spending 2% of GDP on defence, compared to only three allies in 2014. That is very good news. Collective defence is at the heart of the alliance, as set out in Article 5 of the North Atlantic Treaty, which is a huge deterrent in itself.
We must continue to remember that the purpose of nuclear deterrence is to preserve peace, prevent coercion and deter aggression. Collaboration is key to this—the way in which we collaborate with the United States and France on nuclear deterrence, ensuring cost-effective operations. Our independent nuclear deterrence supports thousands of jobs nationwide.
I am a proud honorary group captain in 601 Squadron of the RAF. The “but” here is that the Defence Secretary has expressed concerns that our Armed Forces are unprepared for war, emphasising the need for improved deterrent capabilities against future aggression. The outsourcing of recruits has meant that only 10% of applicants successfully joined the British Armed Forces in 2023. Does the Minister agree that that must change?
I am a member of the GREAT Campaign’s advisory board. We in the UK have the strongest combination of hard and soft power, which gives us great global influence. Our strong nuclear deterrent is a huge element in this combination of hard and soft power.
Earl Attlee (Con)
I am grateful to my noble friend Lord Trefgarne for introducing this Question for Short Debate. I used to read my father’s Hansard when my noble friend was a Minister in the Foreign Office and in the Ministry of Defence.
The noble Lord, Lord Harris of Haringey, is absolutely correct: this is not just about conventional military deterrence. He is right to be worried about the home base and society’s sentiments. If those things were damaged in a conflict, in the grey area, it could have devastating effects on our conventional operations.
I am sure that the answer to my noble friend’s Question is “yes, but”. Many noble Lords have touched on nuclear deterrence, where our defence posture and signalling are absolutely clear and effective. As we have seen, we have not been cowed by President Putin’s nuclear sabre-rattling in the conflict in Ukraine. I am pleased to observe that this Government are as sound as their predecessor on nuclear deterrence but, several years ago, the noble and gallant Lord, Lord Craig of Radley, observed that an inadequate conventional deterrent will result in the nuclear trip-wire being set too low. The noble and gallant Lord, Lord Stirrup, just asked the Minister about tactical nuclear weapons and deterrence; I look forward to his answer.
In conventional deterrence, our signalling is not positive or clear to any potential adversary. For instance, it is easy for a potential adversary to measure our land logistics capability and intent. They will note that we are still selling off perfectly serviceable, brand-new logistic vehicles to meet resource accounting and budgeting requirements. In the current situation, at the large scale of effort we ought to be able to deploy on land in 12 weeks, but I do not think we can do it at all at the moment.
I keep banging on about the essential need to undertake large-scale exercises out of area and overseas to demonstrate and test our conventional capability—or the capability that we should have. My noble friend Lord Harlech touched on the fact that the Russians regularly exercise with large numbers of troops. Yes, it is expensive to do and you can save money by not undertaking such exercises, but it is cheaper than increasing your capability and provides much more conventional deterrence. It also exposes any unrecognised weaknesses in your current capability. Currently, we have too few big exercises and the exercises we undertake are too short in duration, in order to save money.
Noble Lords must not be deluded by the wide range of military operations that we undertake all over the globe at small scale. We are now in the era of state-on-state conflict; that is what we need to deter. We will not achieve that through small operations and exercises, or the completely underresourced Armed Forces that the Minister inherited from the previous Administration.
Lord Harries of Pentregarth (CB)
My Lords, my interest in this area arises from my early academic research on the principles of discrimination and proportion in the just war tradition and their applicability in a nuclear age. This interest was further intensified in my time as dean of King’s College London during the 1980s, when I had the privilege of being a member of a number of think tanks reflecting on the nature of nuclear deterrence, many of them under the influence of the much-missed Sir Michael Quinlan, the architect of British defence policy in its strategic and ethical aspects.
I continue to support a policy of deterrence which contains a nuclear component, but I do so with moral fear and spiritual trembling. It is a morally awesome policy to support. It can be supported only in the belief that it is in principle fundamentally stable, not because human beings are any better than they were—far from it—but because, for the first time in human history, it could not conceivably be in the interest of any power to go to war with another which possessed nuclear weapons. In the words of President Reagan, a nuclear war cannot be won and must never be fought.
I was never a supporter of CND, but it performed an important role in reminding the world of the horrific nature of these weapons. I was appalled a few years ago when there was a period of tension between India and Pakistan to listen to some of the generals involved talking about using nuclear weapons as though they were like any other weapons. They are not like other weapons, and we must never forget that.
We must also not forget that the moral principles which apply to the use of all armed force are equally applicable in a nuclear age: I mean the principles of discrimination and proportion. There are very distinguished ethicists who believe that even the threatened use of nuclear weapons would violate these principles, but when I was most involved, British defence policy was built on the conviction that this was not inevitably the case. I trust that this is so. In that connection, I want to identify with the question raised by the noble and gallant Lord, Lord Stirrup, about graduated deterrence and the ladder of escalation, because that is fundamental to not only British deterrence policy but the possibility of maintaining the use of weapons which are discriminate and proportionate. It is a vital question to which I hope the Minister will be able to give a satisfactory response.
There is an old saying about fighting a present war with the outlook of a previous one. I believe that the major threat at the moment is not the nuclear weapons of another state but their capacity for cyberwarfare. Nuclear weapons are no deterrent to another country that has the capacity to render our whole command and control system inoperative. Although I continue to support our deterrence posture, with its nuclear component, my main concern is in relation to our ability to protect our own command and control structure and our capacity to deter other countries from disrupting it. I hope that the Government will be able to give some reassurance on that.
Lord Balfe (Con)
My Lords, I thank the noble Lord, Lord Trefgarne, for initiating this debate, and I hope that the Hansard is sent to the noble Lord, Lord Robertson of Port Ellen. Of course, deterrence must remain a cornerstone of our defence policy, otherwise there is no reason to have one at all. But it is also important to realise that other countries have a very good grasp of our defence capacity. I do not know whether other noble Lords watched the American series, “Corridors of Power”, a PBS production, from which you could see that the Americans had a much clearer grasp of the limitations of European power than we appear to have.
We need to define much more clearly what we wish to do, then we need to find the resources to do it. I am not terribly impressed with the 2.5% or 3% argument. What we need to look at is what we need and a pathway for achieving it. I was struck last Friday in our debate when the noble Lord, Lord Stevens of Birmingham, pointed out that we had given Ukraine £172 million-worth of equipment, but that it would cost £2.7 billion to replace it. That shows how out of date it was, but it also shows how much money we need to spend to bring our forces up to a level where they can do their job. That is far more important than percentages.
We need to define clearly what our role is in defence. First, it is clearly to defend the home territory. Secondly, I suggest that we need to keep our garrison in the Falklands. Thirdly, we need to keep our bases in Cyprus, which are quite valuable for operations in the Gulf. Finally, we need to pull our resources together with our Baltic allies to look at both the High North, referred to by my noble friend Lord Harlech, and the Baltics, which are within Europe but certainly threatened by Russia. Only by getting together Finland, Sweden and all the countries around the Baltic, including Poland, Germany, the Netherlands and Denmark, are we going to be able to put forward a credible defence. We have to work together and exercise together; we have to have joint exercises and revive the Arctic Council as a viable organisation to talk to the Russians, but also to protect the High North.
Finally, cables and electronic warfare are part of the future, but I often feel that they are seen as an add-on rather than as a key part of our defence capacity, as they should be.
Baroness Smith of Newnham (LD)
My Lords, like other noble Lords, I thank the noble Lord, Lord Trefgarne, for enabling us this afternoon to talk about deterrence and core aspects of UK defence. The noble Baroness, Lady Goldie, the noble Lord, Lord Coaker, and I keep meeting in this venue. We talked about the SDR two weeks ago, we were here again last week, and we are going to meet again in an hour to talk about defence expenditure—so I am not going to touch on defence expenditure, as did the noble Earl, Lord Attlee, and the noble Lord, Lord Bilimoria. I want to pay tribute to the noble Lord, Lord Coaker, and the new defence team, because one concern that the noble Lord, Lord Trefgarne, implied was that the new Government might not be serious about deterrence or about defence.
On Tuesday evening, as a trustee of the Armed Forces Parliamentary Trust, which runs the Armed Forces Parliamentary Scheme, I was at a graduation dinner. Present were the noble Lord, Lord Coaker, because he had been part of the scheme, the noble Baroness, Lady Chapman of Darlington, and Luke Pollard, Min AF. We have among our ministerial ranks people have previously taken the time from the Back Benches or from opposition to ask what defence is all about. It is important to realise that the Government are saying on defence and deterrence almost exactly the same as the previous Conservative Government and almost the same as the Liberal Democrats. We are now all committed to CASD and to the defence of the realm, and we understand the importance of deterrence.
On deterrence and preparedness, which we heard about from the noble Lord, Lord Harris of Haringey, and given that I am winding for the Liberal Democrats, I remind noble Lords of the importance not just of defence commitments but of diplomacy and development, because if we establish the right relationships before we end up in a state where we need to prepare for war, we might make better use of the British budget. Deterrence is important, CASD matters, but so do our alliances, such as NATO and the bilateral relationships which this Government are seeking to build and foster. That is all incredibly important, yet, as we have heard from various noble Lords, the challenges we face in the 21st century are rather different.
In his incredibly important contribution, the noble and right reverend Lord, Lord Harries of Pentregarth, reminded us about a range of issues that we need to think about in nuclear policy and, more broadly, about discrimination and proportionality. He reminded us that our nuclear posture was initially determined in a period of balance: the Cold War, when mutually assured destruction meant that it was unlikely that any side would use a nuclear weapon. They had their deterrent function. In the current world, we face not just state-based threats but threats from non-state actors; not just conventional threats but cyber and hybrid threats. In respect of naval policy, we have the noble Lord, Lord West, repeatedly banging the drum for maritime. Who is banging the drum to deal with hybrid threats and cyber, and to ensure that we have a fully-fledged deterrent alongside our nuclear deterrent?
Baroness Goldie (Con)
My Lords, my noble friend Lord Trefgarne is right to pose his vital Question. It gets to the heart of what a defence capability is, as he, the noble Lord, Lord Harris of Haringey, and the noble and gallant Lord, Lord Stirrup, so clearly described.
On defence capability, it is not enough to want one, it is certainly not enough to talk about one, and there is no point in having one unless it deters. I say to your Lordships that, for me, this all came into sharp relief when Scotland was confronted by the independence referendum in 2014. One of the strongest arguments for staying within the United Kingdom was defence and security, and the attempt by those seeking independence to explain what the defence capability of an independent Scotland would be was risible: no nuclear deterrent, a tiny presence of maritime assets with no strategic purpose, a very small military infantry with negligible assets and a virtually non-existent air capability. As for cyber and space, that was far too far in the future to be worrying about.
The question that such a depleted resource begged was: what is the point of having it? It did not deter, it offered no meaningful contribution to our allies and it was of little interest to NATO. However, this usefully demonstrated that you would actually be better off not having a capability, spending the money on something else and hoping that better-resourced friends would come to your aid if necessary. That is of course not where any of us would want to be and, thankfully, not where the majority of voters in the referendum wanted to be, so independence was rejected.
In fairness to the noble Lord, Lord Coaker, I thought then and still think now that the UK has a strong defence capability. Our continuous at-sea deterrent is at the disposal of NATO, one of only two nuclear powers offering that support. We have invested in the Navy, have modernised equipment for the Army and are actively progressing a successor to Typhoon. Importantly, we have also invested in the new domains of cyber and space. I have to say that I become angry when politicians of whatever stripe diminish that strength, and it is certainly unhelpful for a government Minister to call our capability into question. In fairness to the noble Lord, Lord Coaker, I have never been aware of him doing that.
Underpinning that capability by maintaining investment, demonstrating credibility and ensuring that our deterrent posture is clear requires both vigilance and action by the Government. That is why their attitude to defence, as confirmed by yesterday’s Budget, has got us to a very undesirable position. To talk incessantly about lifting defence expenditure to 2.5% of GDP, to tell everyone in sight that that is your political resolve, to raise a reasonable expectation that you will flesh out the timeline and the trajectory in the Autumn Statement and then to lapse into a deafening silence is deeply damaging on all fronts. By placing a question mark over both the timing and the level of strategic resource for defence, the Government are undermining credibility, and that immediately impacts on our ability to deter. Our allies need to know that they can trust us and that we are solid. Our adversaries need to see that investment and know that we shall not hesitate to deploy our capability when the need arises.
Later today we shall discuss more specifically the 2.5% of GDP in the debate of my noble friend Lord Trenchard, but in my opinion yesterday’s Budget was not good news for defence. It has diminished our stature, impugned our credibility and weakened our deterrence posture. I urge the Minister to use his wisdom and considerable clout to get the Government to review the position.
The Minister of State, Ministry of Defence (Lord Coaker) (Lab)
I thank all noble Lords who have contributed to this debate. I shall deal with a couple of the important questions that have been posed and then lay on the table some of the Government’s position on deterrence.
I thank the noble Lord, Lord Trefgarne, for bringing forward this important debate. The issue of deterring those who would do us harm is of real significance. The discussion about how you do that, from conventional forces right through to the effect of a continuous at-sea deterrence, is an important question for us all. The noble Lord deserves a lot of praise for bringing this forward.
I shall deal with a couple of issues that are of huge significance to this country, to our alliances and to our position in the world. A number of noble Lords have raised the nuclear deterrent. We as a new Government are 100% committed to the maintenance of the nuclear deterrent. We are committed to it with respect to the continuous at-sea deterrent, with the four new Dreadnought submarines. In answer to the point made by the noble and gallant Lord, Lord Stirrup, about the transition from Vanguard to Dreadnought, there are significant training programmes and work going on about how that transition is best done. I reassure him that considerable work is going on with respect to that.
The noble Lord, Lord Trefgarne, raised the point about the Falkland Islands. The British Government remain absolutely committed to the right of self-determination of the people of the Falkland Islands. These are hugely significant and important questions that were raised by a number of noble Lords and the position needs to be stated at the outset. There is no policy change in respect of that.
The noble Lord asked about the forces commitments there. I visited the Falkland Islands. As the noble Lord will know, there is a huge military presence there of British forces. I think other noble Lords speaking in this debate will have visited that base. There are Typhoon fighters there. There are air defence systems and numbers of troops, as well as regular naval patrols, to reassure the Falkland islanders and to make a statement about the desire and intent of His Majesty’s Government to ensure that that right is protected.
The ladder of escalation was mentioned. It is always difficult to say, as you move from one rung of the ladder to another, exactly which rung you reach is the point at which something should happen. It is particularly difficult to lay that out and say specifically when something should happen, as many others who have taken defence decisions will have found. But you can lay out general principles, and they are laid out in various treaties.
That is why we are defending and doing what we are doing with respect to Ukraine. That is why we have talked, in no uncertain terms, about our determination to work to maintain the law of the sea. That is why we have said that Article 5 of NATO remains a key component. That is why we have said that territorial integrity remains important. When a country seeks to undermine or flout that, your exact immediate response and where you draw the line will sometimes depend on the particular circumstances.
However—this is the point of deterrence, and I take the point of the noble Lord, Lord Trefgarne—it must be known that this country, with its allies, will not stand aside and watch international law or rules be flouted. That is the important statement. That is why, as noble Lords will have heard me say and will have said themselves, what we are doing in Ukraine is so important. We are saying that we will not stand to see those laws flouted. When the noble Baroness, Lady Goldie, was in my position, that is exactly what she said, quite correctly; that is what the then Government said, quite correctly. Those statements are important.
My noble friend Lord Harris was right to raise the issues of cyberwarfare, information and disinformation and the resilience of the population, which are all important matters. They are new aspects of war, especially cyberwarfare He will have visited, as I have, numerous places where we are trying to put defences in place and build resilience into computer systems, datasets and so on to resist those who would attack us. With his knowledge of local government, my noble friend has much more experience than me in the resilience of the population and in civil emergencies and defence, which we will have to address. I will just say that, when I look back in history, I see that the resilience of the British people has been immense when they have had to resist the threat of attack or have indeed been attacked. The whole area of cyberwarfare and information is important, as my noble friend said.
I thank the noble Lord, Lord Balfe, for his remarks about the importance of identifying the threats that we face and trying to configure the Armed Forces in order to meet those future threats. That is important and it is part of what the defence review seeks to do. Indeed, as the noble Earl, Lord Attlee, and I have often discussed, it is important that you know what you are seeking to do in order to configure your Armed Forces to meet a particular threat, which can sometimes be quite difficult. We have heard from numerous noble Lords about the importance of cyberwarfare, so that will be an increasing demand and it will be important for us all to work, across government, on that aspect.
We face other issues, as the noble Lord, Lord Harlech, pointed out. We talk about the threat of China as though China is thousands upon thousands of miles away; with climate change, it is now thousands of miles nearer and, indeed, is seeking to exploit the High North through the opening up of sea passages that were not available even a couple of decades ago. I know that, if you talk to Norway, Iceland and many other countries such as the Baltic states—I mentioned Finland—they are all increasingly concerned about not only Russia, of course, but the implications with respect to China.
The noble Lord can be reassured that, like the work that has happened previously, which the noble Baroness, Lady Goldie, will have been involved with, we are seeking to extend and develop our relationships with those countries. The Joint Expeditionary Force is a classic example of countries coming together to try to see how they meet common threats.
I cannot remember whether it was the noble Lord, Lord Balfe, or the noble Earl, Lord Attlee, who mentioned the importance of the Arctic Council. Going back to the point by the noble and gallant Lord, Lord Stirrup, we are seeking to reinvigorate that and work to ensure that it maintains the rule of law according to treaties that most nations of this world have signed. We will enforce those laws and expect them to be adhered to. Countries should know that there are consequences if they do not adhere to them. That is part of what we seek to do.
The noble Lord, Lord Harlech, will also be reassured that on Monday I am speaking to a conference of Norwegian military and parliamentarians about the High North. Again, it is one of those areas that, even a few years ago, we would perhaps not have thought of in the way that we do now. Many of these things are extremely important.
The noble Lord, Lord Bilimoria, also mentioned the nuclear deterrent. He heard the answer that I gave and will hopefully be reassured.
On the point by the noble and gallant Lord, Lord Stirrup, we are looking seriously at cognitive warfare, and it will have to be an increasing priority for government. It is a capability that we will need to look at to see how we develop it. I thank him very much for raising that point.
On some of the broader points made, let me say this. We talk about hard power. On deterrence, we have a NATO-first policy as a Government. The carrier strike group sailing around the Mediterranean into the Indo-Pacific, whatever route it takes in the end, visiting numerous countries there as an international alliance, says this to countries across the world: we are sailing our carrier strike group, led by the “Prince of Wales” carrier, with aircraft on it, with allies, to assert the freedom of navigation and the rule of the law of the sea, and we expect other countries to adhere to that. That is why we bothered to do that. That is why we have a nuclear deterrent.
There is an issue in the debate about what sort of Armed Forces we will need to ensure that they can fight the battles of the future. The strategic review that we have at the moment is seeking to deal with that. I will tell noble Lords one thing I heard. I thank the noble Baroness, Lady Smith, for her remarks; we will debate the points about money by the noble Baroness, Lady Goldie, more fully in the next debate, and I thank her for her remarks as well. The noble Baroness, Lady Smith, will have heard the CDS make what I thought was a very good speech at the dinner. He said that one of the things Britain should do more than it does—and I totally agree—is to rediscover its own confidence in the things it can do and the things it does to deter others from taking actions that they might. We should all reflect on that. We sometimes look at the challenges we face, which is quite right, but alongside that we should look at the things that we do and do well. This country should have pride and confidence in what it does, not only in this continent but across the globe.
Diets: Fat
(4 days, 17 hours ago)
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Lord McColl of Dulwich
To ask His Majesty’s Government what assessment they have made of the benefits of diets with adequate fat content for reducing appetite, as an alternative to the use of drugs such as Ozempic.
Lord McColl of Dulwich (Con)
My Lords, the Question in this debate lists two different treatments for the same problem: the obesity epidemic. The first treatment is as old as the hills—simply to eat the right amount of the right kind of fat. The other treatment is to use new drugs such as semaglutide, marketed as Ozempic, which have been found to act in the same way as fat. I suggest that the former—the healthy diet—should be where we concentrate our efforts to combat the epidemic.
When we consume healthy fats, gut hormones such as CCK and GLP-1 are secreted in the duodenum, delaying the emptying of the stomach and creating a natural sense of fullness that curbs overeating. When the fat has been absorbed and moves on, normal service is resumed by the stomach. This simple process helps to tackle the root cause of obesity. By contrast, the new weight-loss drugs have serious side effects, including pancreatitis and other problems, along with long-term effects that are as yet unknown.
The new weight-loss drugs require regular injections. They act in a similar way to fat but with a stark difference. Natural fats are safe, inexpensive and readily available in whole milk, nuts, butter and so on. Studies such as those showing lower obesity rates in Canadian children who were raised on whole milk underscore these benefits. Will the Minister ensure that her department considers this evidence instead of the biased propaganda of the food lobby? It was, after all, the food lobby that caused the obesity epidemic in the first place. It put profit over health by encouraging the overconsumption of the wrong types of food.
Since the 1960s the food industry has promoted a low-fat diet, allegedly to address concerns about atheroma, which tends to block arteries. As noble Lords will know from their Greek studies, atheroma is the ancient Greek word for porridge—well, it may be Greek porridge but it is no Scottish porridge, that is for sure. The food industry has excessively promoted low-fat products packed with a lot of sugar; a low-fat diet is pretty tasteless because fat is what gives food its taste. So they had to pour in vast quantities of sugar, which fuels the cravings and excessive calorie intake contributing to today’s obesity epidemic.
Despite evidence supporting the benefits of certain fats, the Department of Health still publishes on the web outdated low-fat guidelines, in part because misleading information such as the Eatwell Guide and the traffic light labelling on food packaging demonises fats without considering their positive role. After years of vilifying fats, we now turn to drugs that mimic fats’ natural benefits—a perfect case of the food industry being hoist by its own petard.
Ultra-processed foods have frequently been blamed for the obesity epidemic, but there is no scientific confirmation of this. It is clear that excessive consumption of UPF can cause obesity, of course. Unfortunately, many so-called scientific publications blur these lines, incorrectly blaming the obesity crisis on ultra-processed foods. Meanwhile, we overlook the impending disaster of nearly 40 million citizens facing premature death from obesity-related diseases.
The argument that obesity is unavoidable because we live in an obesogenic society, with factors such as genetics and thyroid dysfunction, is misleading. These claims suggest that obesity cannot be controlled, which diminishes the role of personal responsibility. The reality is that obesity results from consuming too much food or too much alcohol, regardless of genetics. It does not matter what your genetics are: there is only one way of getting obese, and that is putting too many calories into your mouth. There is no disease that causes obesity per se. A failing thyroid gland is often blamed, but it is the resulting slowing of the metabolism for such a patient that requires fewer calories. If people continue eating the same number of calories, obesity will result.
Beyond the physiological aspects, we need a transparent, evidence-based public health campaign. A well-executed campaign has been successful in the past, although this has been denied in some quarters. Let us look back in history, as most of the answers are in history. The AIDS awareness campaign launched in the UK by the then Secretary of State for Health, Norman Fowler—the noble Lord, Lord Fowler—was highly successful, as was a similar campaign in Uganda. A similar approach to obesity could save the UK economy £98 billion every year.
The Department of Health should encourage practical dietary changes, such as reducing daily intake and incorporating healthy fats, and support these choices through better regulations and labelling to clarify the benefits of healthy fats and reduce confusion about what constitutes a balanced diet. Rather than complex BMI measurements, we need only a simple assessment. For instance, if your waist measurement is more than half your height, you are eating too much of the gross national product.
It is important that this message gets through. The APPG on Obesity criticises the “nanny state” approach, yet if we seek a hands-off solution, more individual responsibility and awareness will be essential. Imagine the impact if each of the 40 million obese people in this country were to reduce their intake slightly, perhaps by skipping a meal a day or choosing foods with fats that encourage fullness. This approach could improve individual health, reduce NHS expenditure and, ultimately, save many from premature death.
Lord Brooke of Alverthorpe (Lab)
My Lords, I am most grateful to the noble Lord, Lord McColl of Dulwich, for this debate. I pay tribute to his long and consistent work in this area. He is experienced in a whole range of different aspects of this, having been a surgeon, and probably knows more about the gut than I ever will. My contribution is one of gratitude for having a peg on which I can hang a coat and pick up several other topics related to obesity.
Obesity, like drink or drugs, comes from filling the empty hole inside us. It can lead to greed, excess and, as we see in many areas, premature death, or certainly an unhealthy later life. It represents a great cost to the NHS and we have to continue working on it. I declare an interest as a member of the Food, Diet and Obesity Committee, which has just produced the report Recipe for Health. We did not focus excessively on fat, but I am sure that colleagues who are better qualified than I may make contributions on that topic.
We did not focus on the new drugs either. I am worried about what lies ahead with the changes in prospect from those drugs. I shall say a little more about that. In the committee, to the extent that I was able to attend, I focused primarily on the fundamental problem of excess sugar being consumed, particularly by children, who I worry about, and the consequences of that. The major reason why children go to hospitals and A&E is dental problems, which in the main arise from sugar.
Like our committee, I should have liked to see taxes introduced to reduce the amount of sugar that we find in soft drinks and elsewhere, but we did not get that yesterday in the Budget. Instead, we got a reduction in the price of alcohol—what a surprise. Our report did not look at the point the noble Lord, Lord McColl, raised about the effect of alcohol on obesity. I welcome my noble friend the Minister, who is listening to me again on this topic. I have been campaigning for years that we should show calories not just on menus but on all drinks. The one area of drinks that is excepted, of course, is alcohol. The previous Government were looking at that and undertaking consultation. I do not know whether they ever concluded it, so could my noble friend say whether they did? She may not have the answer to hand, but could she write to us? If it was concluded, what is the outturn of that exercise and when will we see a Labour Government prepared to introduce calories to labelling on alcohol? Some of her forebears spoke in favour of it when I was campaigning for this over a decade ago. It is sugar that worries me.
The new drugs will be used and needed, but we have to avoid some of the difficulties of lack of regulation and oversight that we have had in the past when new drugs have been introduced. I have done work over many years on addiction related to drink and drugs. I did work on heroin in the early part of this century, when methadone was introduced in lieu of heroin to try to reduce harm. We were spending next to nothing in 2005 on methadone. I cannot now get from the Government a precise or even a round figure on what we are spending currently on methadone, but the rumour is that it is about £1 billion a year, when you take into account not just producing it but the way it has to be administered and the secondary trading that takes place. This is the danger that I bring to the Committee’s attention, which we must be aware of. Unless we keep strict controls on the new drug, we could see it mushroom and spread very quickly indeed—and we could even see secondary markets start to develop. I hope that the Minister is aware of that.
Can we look for incentives to get the food and drinks industry to change its approach? I know that some of them are willing to have conversations about trying to have better formulas in foods, and I hope the Government will be prepared to move on that front.
Lord Krebs (CB)
My Lords, I declare my interests as recorded in the register, in particular my work with the World Cancer Research Fund and the fact that I am a scientific adviser to Marks & Spencer. Like the noble Lord, Lord Brooke of Alverthorpe, I was a member of the Select Committee which reported last week on diet and obesity. I congratulate the noble Lord, Lord McColl of Dulwich, on securing this debate and his introduction to it.
The idea that eating a diet with plenty of fat suppresses appetite is not new. About 50 years ago, Dr Richard Mackarness published a book entitled Eat Fat and Grow Slim. However, like so many other dietary fashions, this one ran into the sands of evidence. I will mention just one study: a double-blind randomised control trial published in the journal Nutrients in 2018. The participants—older, healthy males—were offered one of three calorie-controlled drink supplements containing different amounts of fat, protein and carbohydrate, or a control drink containing virtually no calories. The results showed that adding fat to the supplements raised levels of the gut hormone cholecystokinin, to which the noble Lord, Lord McColl, referred, but did not suppress energy intake from a subsequent buffet meal with ad libitum food. The evidence does not support the idea that eating more fat suppresses appetite.
The National Diet and Nutrition Survey shows that the population-average intake of fat is close to the recommended guideline of 35% of daily energy intake. However, the intake of saturated fat is above the guideline of 11% of daily energy intake. Saturated fat, in particular animal fat rather than fat from dairy produce, is associated with an increased risk of cardiovascular disease and stroke. Therefore, dietary advice is, correctly, to consume less saturated fat, but not because of its contribution to obesity.
Turning to obesity, I will make three points. First, the best way to tackle the obesity crisis is to prevent people putting on excess weight in the first place. This is most effectively achieved, as the noble Lord, Lord McColl, said, by reducing calorie intake rather than by trying to burn it off with exercise—if you try to burn off the calories from one energy drink, you will find out how tough it is.
Secondly, the dramatic rise in obesity during the past 30 years has been driven largely by the increased availability of cheap, highly palatable, calorie-dense food, known colloquially as “junk food”. The report of the Food, Diet and Obesity Committee published last week recommends a raft of policies to deal with this challenge. The overarching theme is that there should be a switch from the 700 or so failed policies based on individual choice to policies based on regulation of the junk food industry and the junk food environment. Does the Minister agree with that general proposition?
Thirdly, it might be tempting to see effective weight-loss drugs such as Wegovy and Ozempic as a “get out of jail free” card. They will have an important role, but they are not the answer to treating the millions of obese people in this country and a much larger number around the world. At the moment they are very expensive, although it is possible, with many drugs in development, that the price will come down. More importantly, they require a lifelong commitment: it is not just about taking the drug for a few weeks; it is about taking it for ever. Recent data from the United States, where one in eight people has tried a weight-loss drug, show that two out of every three obese people give up taking the drug within a year and then regain the weight they have lost.
The Government have said they want to shift from treatment to prevention as one of the three pillars of reforming the NHS. Can the Minister explain to us in broad terms how she envisages this shift from treatment to prevention being applied to diet and obesity, the second-biggest avoidable risk of ill health? In this context, I want to cite one example and ask the Minister to comment on it. My local sports centre, owned by Oxford City Council and which I visit regularly, has an entrance packed with junk food—sugary drinks, ice creams, doughnuts, the lot. Does the Minister think that that is an appropriate way for a local council to run a fitness centre?
The Earl of Caithness (Con)
My Lords, I declare my interests. I am a member of the committee to which noble Lords have already referred and I have a problem in keeping my weight down, so it is a subject that has been of great interest to me and I am very grateful to my noble friend Lord McColl for introducing this debate.
One of the difficulties, perhaps the greatest difficulty, when we are discussing food and diet is the tendency now to use hyperbole and oversimplification in dealing with a very difficult, complex subject. Of course, the press loves hyperbole and simplification, because it increases sales, but it does not actually solve the problem of obesity.
From our report I take out two important factors. One is that obesity has overtaken tobacco as a risk factor for disability in England. The second is that the total cost of obesity is now calculated at £100 billion a year, equivalent to a tax rate of £400 per head. So, there is a lot to be gained by getting obesity under control.
When we talk about simplification, the word “fat” is an oversimplification. There are good fats and bad fats, as my noble friend Lord McColl said. Some fats are extremely important to us. They are a source of energy; they help vitamin absorption; and they provide fatty acids, particularly omega 3 and omega 6, which are essential for keeping our nervous and brain systems healthy. Indeed, fat can be used to help reduce the urgency for food. Sarah Berry, associate professor at the Department of Nutritional Sciences at King’s College, says:
“Fat makes us feel full for longer. It delays the rate at which our stomach empties food, which again helps us create that feeling of fullness. So, it also controls our blood sugar levels as well, so that we tend to consume less calories, potentially later in the day”.
The idea that one can solve this problem of obesity with weight-loss jabs and get people back to work, which the Prime Minister seems to think is a good idea, is very flawed. Trials of the drugs have shown that people need help as well as just taking the drug. Eligible people who will require support cannot access the support to achieve behavioural change. These drugs will not work for everyone; all the trials have shown that. I repeat that obesity is a complex issue and trying to solve it with an injection is a poor cure when prevention would be far better.
There is of course the question of obesity stigma in the workplace, which is a huge barrier to satisfactory employment and leads to poor well-being and burnout. On the barriers, it is not obesity alone that causes a person to be unemployed; there are many other problems.
When we talk about oversimplification, we must remember that diets and our bodies are very complex. New research is demonstrating the importance and relevance of our gut microbiome. It demonstrates that we need to eat over 30 different plants of different colours weekly, 30 grams of fibre a day and around 100 grams of protein a day. We need to stop eating foods that are high in fat, sugar and salt, especially those that are ultra processed. There are other issues. We need to eat within a certain timeframe. All our daily consumption should be within a 12-hour period.
To pick up the point made by the noble Lord, Lord Krebs, exercise is not the panacea. I was very sorry to hear Chris Whitty say that this was going to be the new solution to obesity; it is much more complex. Exercise can help on the fringes, but it is not the main solution. The main solution is eating a healthy, balanced, varied diet, but that is not what the Eatwell Guide tells us to do. I hope the Minister will look at our report where we analyse this very carefully, because we come up with some sensible solutions, including raising tax on people that produce the wrong food for us.
Lord Mitchell (Lab)
My Lords, I thank the noble Lord, Lord McColl, for securing this short debate. It is certainly of the moment, but I come at this issue from a slightly different viewpoint.
I am not in the habit of discussing my weight in public, but this is the moment of truth; I am going to out myself. For the past two years, I have been injecting myself every week with either Ozempic or Mounjaro. As a result, I have lost over 12% of my body weight and I am keeping it off. Yes, it is expensive and, yes, I will probably have to continue my injections for the rest of my life, but to me it is worth every penny.
I was not fat, but I was in danger of getting on the wrong side of chubby. I knew the risks. I never eat desserts nor sweets nor any junk food, but still the dial went in one direction. The key to weight loss can be summarised in two words—eat less—but that is easier said than done. I suppose the corresponding two words are: exercise more. Fewer carbs, more carbs, protein only, no fruit, skip breakfast, do not eat after 6 pm, fast for 18 hours a day and of course the 5:2 diet—I tried them all. The trouble is, you work hard at it, perhaps you reach your target weight and then it creeps back again. You are always miserable.
As for exercise, those who know me can attest that I can bore for Britain on the subject. Three intense workouts every week, and my phone tells me that I average 7,200 steps per day over a year and often over 10,000 paces—all this is to no avail.
Then along came Ozempic. A weekly self-administered injection is all that it took. It suppresses the appetite and reduces the craving for food—you just lose interest. To me, the difference between dieting and Ozempic is that when you diet all you ever think about is food. When you inject, all you ever think about is the next morning’s rendezvous with a weighing machine.
However, there is more to Ozempic than just weight loss. First, there are all the other health benefits. This week, the Economist, not known for hyperbole, called it the most important drug ever. A drug that started out being used to regulate diabetes can now reduce weight. There is strong evidence that it can control the incidence of kidney and liver disease, cardiovascular issues and sleep apnoea, and reduce drug addiction and opioid inflammation. They say that it can contain ageing and even Alzheimer’s. That is a lot of things. This medication is up there with statins, Prozac, aspirin and even the contraceptive pill in changing our health and behaviour.
Then there are the economic benefits. Some 25% of the population are obese. Many are prone to illness. Their potential productivity is often diminished. At present, the annual cost of obesity to the NHS is around £6.5 billion, and it is expected to increase by 50% by 2050. It is the second-biggest preventable cause of cancer. Add to that the cost of treating all the other illnesses that I have mentioned which GLP-1 might be able to arrest, and you can see that the NHS could make some major savings from the wholesale employment of GLP-1.
If these drugs are as game-changing as I suggest they are, they will have a profound and positive effect on our health and on our economy. They are to be encouraged.
Baroness Jenkin of Kennington (Con)
My Lords, I, too, thank my noble friend Lord McColl for initiating and introducing today’s debate. He and I have shared a tiny cupboard—sorry, room—for the past 10 or so years and have spent many happy hours discussing obesity, its impact on the population and the cost to the country. It is great to be expanding those private conversations into a more public arena today. For many years, this topic was rather a niche interest; my noble friend I were almost the only people to raise it in the Chamber. However, I am delighted that more people are now aware of the urgency of the situation, as the financial and personal costs have rocketed.
I am delighted to be the fourth member of the Food, Diet and Obesity Committee, which reported last week, to speak today. I hope my noble friend and the Minister will forgive me for straying a little outside the subject of today’s debate to make some broader comments about a healthy diet, including learnings from our report. As we have heard, the report, Recipe for Health: A Plan to Fix Our Broken Food System, has been widely welcomed by food campaigners and others active in the sector. I urge noble Lords who were not on the committee, especially the Minister, to read at least the report’s conclusions and recommendations.
What became clear over the course of hours of evidence is that our food system is broken and needs to be fixed for people to have better diets and healthier lives. The statistics speak for themselves and are terrifying. Two-thirds of adults are overweight or obese, while the situation with children is as bad—and growing. The costs are enormous: at least 1% to 2% of UK GDP, with billions in healthcare costs and lost productivity.
This public health emergency is driven primarily by the overconsumption of unhealthy foods. As we have discussed, today’s debate is not about ultra-processed foods, which now make up nearly 70% of the average young person’s diet; there will be plenty of opportunity to debate those and the responsibility of the food industry in greater detail when—in the not too distant future, I hope—our report is discussed. Rather, it is about having a healthy and balanced diet, and how we can achieve that for both children and adults.
All of us in this Room—at least, those of us speaking —grew up eating real food: meats and two veg, liver, stews and roasts, all freshly cooked. There was little choice, and there was no constant marketing or encouragement to snack between meals. There were no takeaways or out-of-home delivery services, which add significantly to excess calories. Today’s children are more likely to be drinking puréed fruit from pouches than biting into an apple. They are more comfortable opening packets or takeaway trays and are hardly able even to recognise real food. Our parents would find today’s dietary patterns absolutely unrecognisable.
Only last month, the Prime Minister said that the NHS was in a critical condition and that there would be no extra money without reform. The review of the noble Lord, Lord Darzi, and the Secretary of State’s response to it confirmed the analysis of Henry Dimbleby’s food strategy and highlighted the importance of prevention, as the noble Lord, Lord Krebs, and others mentioned. It was disappointing, therefore, to see seemingly nothing in the Budget to address this matter. We have a major health problem on which, if it were a communicable epidemic, the Government would be forced to act. People want to do the right thing but need help and support. The recommendations in our report are clear; I urge the Government to act on them.
Lord Rennard (LD)
My Lords, I am a type 2 diabetic. I overcome some embarrassment about my weight to say that I have lost more than 30 kilos over the past 30 years. More importantly, I have kept it off.
Self-evidently, however, I need to lose more weight. My diabetic control has been very difficult and required major lifestyle changes, but they were not enough. So, in the past four months, I have been assisted in improving my diabetic control and reducing my weight by a further few kilograms with the help of Mounjaro, a drug from Eli Lilly. Since being diagnosed with diabetes in 1994, I have always had great support from St Thomas’ Hospital. It advised me a few years ago that a typical type 2 diabetic like me, in their 50s and 60s, can be expected to put on an average of between one and two kilos every year. Over a decade or two, that gain of between 20 and 40 kilograms is likely to have catastrophic health consequences requiring significant and costly medical intervention.
For many people struggling with their weight and diabetic control, these new injections give great hope, but we should not see any of the different injections becoming available as a silver bullet to achieve weight loss. We should recognise first that they are helpful in improving diabetic control, which can be very difficult, as your pancreas becomes less and less effective at producing insulin and your sugar levels rise. The associated weight loss with these drugs is also helpful, but such treatment is far from appropriate as a first resort and some people struggle with unpleasant side-effects from them.
However, we should never accept an approach towards obesity or diabetic control which says little more than, “Pull your socks up, make yourself eat much less, but eat more fat”. This approach will lead only to the obesity crisis in many of the more affluent countries becoming even greater. It will result in great damage to the health of their populations, their health systems and their economies. The Atkins diet is now widely discredited after the demise of the author of the books on it.
The British Dietetic Association says that fat plays an important part in our diet and that people need a small amount of it. But it has warned against a high intake of saturated fats, which are often found in processed foods and associated with weight gain, making diabetic control harder, causing joint problems and some cancers.
The questions for us to discuss should be about how to take strong steps to help prevent people becoming obese in the first place and how to help them achieve and maintain healthier lifestyles, manage their diets better, and adopt healthier lifestyles, including regular exercise.
As the excellent report from the Select Committee on Food, Diet and Obesity, chaired by my noble friend Lady Walmsley, suggested last week, we need a broad range of measures to tackle the obesity crisis. I would begin with healthy, nutritious, and free school meals and stopping the proliferation of fried chicken and burger shops in close proximity to schools. We need, as the Select Committee says, to reduce the prevalence of marketing and advertising of unhealthy ultra-processed foods, especially to children. We need also to promote health education and physical activity in schools and after school.
Poverty must also be recognised as a significant factor in many people having unhealthy diets and suffering from health inequalities. Poor parents struggle to provide healthy diets for their families. Healthier foods are more than twice as expensive per calorie as less healthy foods. One of the most important poverty-relieving measures would be to scrap the two-child limit for universal credit or tax credits. I am disappointed that this was not in yesterday’s Budget.
In conclusion, we need to follow medical advice and look at evidence over time about the use of injections assisting diabetic control and weight loss. We cannot simply let people think that they can just resort to expensive weekly injections provided by the state. But nor can the state ignore the tremendous costs of obesity and diabetes.
Lord Kamall (Con)
My Lords, I thank my noble friend Lord McColl for securing this debate on a timely and important matter, but I also thank all noble Lords in this debate for their contributions. I warn the Minister that I tend to take a rather Socratic approach, so I will have lots of questions. The noble Baroness may not be able to answer all of them but I am happy for her to write to all of us.
The noble Earl, Lord Caithness, and the noble Lord, Lord McColl, have shared some interesting statistics: an NHS survey estimated that 28% of the population are obese, and a further 38% are classified as overweight. As other noble Lords said, this is not only a health issue but an economic problem. The question is: how do we as a society encourage people to lose weight—to help them live healthier lives but also to reduce the cost to taxpayers of the NHS treating obesity, be that through medication or lifestyle changes?
As someone who believes in personal freedom, I would not oppose anyone who decided to take Ozempic, as long as it was safe for them to do so and they were aware of the risks, as the noble Lords, Lord Mitchell and Lord Rennard, testified. However, there have been reports that the popularity of such drugs has led to a market for dangerous counterfeit drugs that mimic these effects. Can the Minister confirm whether the Government are aware of the proliferation of cheaper alternatives? Have the Government made any assessment of the safety of these alternatives and of whether some are in fact counterfeits?
While medical advancements such as Ozempic can help to manage someone’s weight, surely it is important that we explore and promote alternative approaches, as the noble Lords, Lord Brooke and Lord Krebs, said. As my noble friend Lord McColl and the noble Earl, Lord Caithness, suggested, research shows that diets with enough healthy fat content, especially unsaturated fats, can be effective in making people feel that they have eaten enough and reducing their appetite. These diets can also stabilise blood sugar levels, which is critical for weight management and overall health.
Education and prevention are just as important. Many people may not understand the impact of their dietary choices on their long-term health; they may not realise that better diets will not necessarily cost more; and they may not be aware that a small increase in physical activity can contribute to better physical health and mental well-being—although it is not a panacea, as the noble Lord, Lord Krebs, and the noble Earl, Lord Caithness, said.
Can the Minister reveal whether the NHS is prioritising cost-effective lifestyle approaches, rather than focusing on weight-loss drugs as some sort of magic bullet? I urge the NHS and the Office for Health Improvement and Disparities, as well as the department, to ensure that accessible support is available to those from all backgrounds. Often, those from the most disadvantaged backgrounds face the greatest challenges in accessing healthy food and exercise facilities, leading to higher incidences of obesity within those communities.
Noble Lords may have seen daytime television programmes—I know they work very hard, but in their rare moments of relaxation they might switch on the TV—where families are taught to cook healthier meals, which can often be cheaper than ready meals from the freezer section of a supermarket. When I was a Minister, I often wondered how you transfer these daytime TV lessons into people’s homes. I know that my noble friend Lady Jenkin has taken an interest in this issue for many years.
One of my students recently wrote an assignment on Brite Box, a fantastic project in Kingston upon Thames that provides families with ingredients and an illustrated recipe guide so that they can cook a healthy meal on a budget together. What happens is that cooking together leads to meals being family occasions rather than one parent being stuck in the kitchen. Can the Minister tell us how the NHS, the Department of Health and OHID are working with similar local community projects across the country to encourage families in poorer communities to eat healthier diets? What steps are being taken to enhance dietary and health education in our schools, workplaces and community spaces?
Finally, as weight-loss drugs such as Ozempic gain popularity and we start to see the results of the trial of tirzepatide in Manchester, we have to recognise the psychological aspect of obesity. Can the Minister tell us about how weight-management initiatives will consider the link between poor weight management and the mental health of individuals? What mental health support is available to overweight individuals with underlying mental health conditions, and how do we avoid the unintended consequences of those who suffer from eating disorders such as anorexia or bulimia?
Once again, I thank my noble friend Lord McColl for securing this debate and all noble Lords for their contributions. I look forward to the Minister’s responses.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Baroness Merron) (Lab)
My Lords, I thank the noble Lord, Lord McColl, for bringing this important issue to the fore. He is a doughty campaigner and I know he has many strong views, to which I have listened not just on this occasion but on many occasions. I welcome the airing that we are having today. I thank other noble Lords, too, for their contributions. As ever, there is a fair amount of common ground and quite a bit of divergence in the opinions about how we tackle what is an obesity crisis. I particularly thank noble Lords, including my noble friend Lord Mitchell and the noble Lord, Lord Rennard, for sharing their very personal experiences; that always assists us.
As many noble Lords have said, there is no doubt that obesity is significant in our country—and not just our country. As the noble Lord, Lord Kamall, observed, over 28% of adults are living with obesity, which puts them at risk of a whole range of health conditions. Obesity is also estimated to cost the NHS more than £11 billion per year, with total costs to the UK of £74 billion per year. The noble Baroness, Lady Jenkin, rightly referred to children’s obesity. It is shocking to realise that children with obesity are five times more likely to be living with obesity as adults. In other words, the seeds sown at the beginning are reaped in a none-too-positive way later on down the line. As mentioned by a number of noble Lords, obesity is particularly concentrated in the most deprived areas, with prevalence for children in the most deprived areas being more than double that in the least deprived areas. That gives some idea of what we are up against. As the noble Lord, Lord Krebs, and other noble Lords indicated, it is absolutely clear that we have to take action.
I share the view expressed that the challenge before us is complex. It would be wrong to see it any other way. Indeed, I share the view that obesity is primarily caused by the consumption of excess calories. We have a food environment where unhealthy foods have become cheaper and more readily available. The noble Lord, Lord Krebs, made a point about a local fitness centre display in his own area. I certainly echo his sentiment that this is not an appropriate way to assist people’s fitness. If the noble Lord has not already, I encourage him to complain to his local authority, because we need a cultural shift as well as a number of practical shifts.
In addition to the food environment that we are in, portion sizes have increased. The noble Lord, Lord McColl, rightly shines a light on this, and we are committed to addressing it. We have made a good start, and our mindset is very much about prevention over cure.
On the question from the noble Lord, Lord Krebs, we have committed to implementing junk food advertising restrictions on TV and online and to limiting schoolchildren’s access to fast food. Our 10-year health plan will also reform the NHS by shifting the focus from sickness to prevention, as noble Lords have already observed.
On the point raised by my noble friend Lord Brooke, as announced by the Chancellor yesterday we will take steps to ensure that the soft drinks industry levy remains effective and fit for purpose. That will be done by ensuring that the levy is uprated to reflect inflation since it came into force and in the future. Importantly for me, the Government will also review the soft drinks industry levy’s operation and structures, to aim to further drive down the sugar content in soft drinks. We will also review the sugar thresholds at which it applies and the exemption for milk-based drinks. I will be pleased to keep noble Lords informed on this development.
I heard the observation by the noble Lord, Lord McColl, that he considers that there is—if I may use this term—a demonisation of fats. I assure him that the dietary recommendations are about promoting a balanced diet. The advice given tells people not to avoid fat per se but—the noble Lord, Lord Krebs, referred to this—to eat foods containing saturated fats less often and in smaller quantities, and to swap to unsaturated fats where possible. The reason for this focus is that there is robust evidence that switching saturated fat for unsaturated fat lowers blood cholesterol and reduces the risk of heart disease by almost a fifth. With more than 150,000 deaths from cardiovascular disease every single year, this is crucial. Indeed, the guidance and the policies, such as junk food advertising, cover both saturated fat and sugar—something of great interest to my noble friend Lord Brooke—so it is not one thing or another, as is often the case when we are speaking about this matter.
Over 12 million people are living with obesity, so we need to provide support for them too—a number of noble Lords correctly outlined the importance of that support. The NHS and local government provide a wide range of services, including behavioural support programmes that provide advice to help people to adapt to a healthier diet.
There are more specialised services for people living with severe obesity and for associated comorbidities. These can prescribe some of the newer obesity medicines as well as offering surgery. However, I emphasise that they should be considered further down the treatment pathway. Exactly what is appropriate for any individual is down to clinicians to advise, in discussion with that patient, and to consider clinical guidance.
The noble Lord, Lord McColl, referred to Ozempic. As he will be aware, it is licensed to treat type 2 diabetes, and healthcare professionals have been reminded in guidance that it should not be prescribed solely for weight loss, although the obesity medicine Wegovy is approved for weight management on the NHS. However, obesity medicines are not a first-line treatment. Other things need to be tried first and other support needs to be in place.
I agree that the primary focus should be on supporting behavioural change, including a healthier diet, and that is confirmed through NICE guidance, but we should acknowledge that obesity medicines can be very effective at helping some people to lose considerable amounts of weight, as my noble friend Lord Mitchell and the noble Lord, Lord Rennard, have described and demonstrated. The losses are considerable—in some cases, over 20% of body weight—and that is a benefit to health.
However, as I said, these medicines should not be given alone, and support on diet and increasing physical activity, which the noble Earl, Lord Caithness, spoke about, are crucial. We need the food environment to be supportive for those managing their weight, ensuring that it is easier for people to eat more fibre, more vegetables and less sugar and salt, and to swap saturated fat for unsaturated.
I turn to the reference to “jabs for jobs”. I am grateful that noble Lords have raised this issue today, because it is an opportunity to address the media coverage. The suggestion is that the Government will somehow target people who are unemployed with such medicines to help them to get back to work. I want to be clear: the NHS continues and will continue to treat people on clinical need. We are not targeting those who are unemployed. The coverage in the media refers to a study funded by the manufacturer of one of these obesity medicines. It will build evidence to increase our understanding about the potential wider value of such medicines, and it will look at the impact on health and healthcare use and collect data on things such as change in employment status.
I turn to some of the other points raised. In answer to my noble friend Lord Brooke, we are indeed looking at incentives for reformulation and considering the balance of mandatory and voluntary measures.
I thank the noble Earl, Lord Caithness, and the noble Baroness, Lady Jenkins, for raising the work of the House of Lords committee. I am glad to see that it has recently published its final report, and I look forward to looking at it and considering the recommendations.
There are a number of specific questions that I have not been able to address, and I will be very pleased to pick up specifics in that regard.
To conclude, obesity medicines are not to be seen as the first thing to turn to—the guidance is clear on that—but they have a place for some people when other options have not worked. We and the NHS are looking at how best to make the medicines that we are considering today available in a safe and effective way.
Defence Spending
(4 days, 17 hours ago)
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Viscount Trenchard
To ask His Majesty’s Government what progress they have made in laying out the roadmap to spending 2.5 per cent of gross domestic product on defence.
Viscount Trenchard (Con)
My Lords, I must declare my interests as honorary air commodore of 600 (City of London) Squadron in the Royal Auxiliary Air Force, and as a consultant to Mitsubishi Heavy Industries Ltd.
It is timely that we have a chance to debate defence spending today. Since the passage of the Defence of the Realm Act 1914, three days after the start of the First World War, it has rightly been maintained that the first duty of the Government is to protect and safeguard the lives of their citizens. The Armed Forces covenant, promulgated in 2011, starts with these two sentences:
“The first duty of Government is the defence of the realm. Our Armed Forces fulfil that responsibility on behalf of the Government, sacrificing some civilian freedoms, facing danger and, sometimes, suffering serious injury or death as a result of their duty”.
Churchill was fond of quoting the Latin adage, “If you want peace, prepare for war”. In 1943 and 1944, more than 40% of GDP was spent on defence. If this country should again become directly embroiled in a major military conflict, it is reasonable to assume that the Government would again have to spend a huge proportion of our national output on defence to fulfil their first duty. Surely it is absolutely necessary to spend enough on defence now to make it as unlikely as possible that we will again become embroiled in a major war. We all know that we are already involved, with our NATO allies, in Ukraine’s fight for survival against the Russian invader; it is a conflict that we cannot allow Ukraine to lose.
Today’s debate is not the occasion to discuss yesterday’s Budget. It is deeply disingenuous of the Government to go on and on about the black hole against a background where tax revenues are £21 billion higher than the OBR had predicted. I expected that the Chancellor might take the opportunity provided by the Budget to set out the long-awaited road map to spending 2.5% of GDP on defence. I feared she might say that we would have to wait until the report of the strategic defence review by the noble Lord, Lord Robertson of Port Ellen—for whom I have the very highest regard—is published, but she did not even say that. She said that
“we will set a path to spending 2.5% of GDP on defence at a future fiscal event”,—[Official Report, Commons, 30/10/24; col. 822.]
but she has also said that there will be one Budget a year. Does this mean that we will not even know the pathway to spending 2.5% until the next Budget next autumn? In that case, how can the noble Lord, Lord Robertson, produce a coherent defence review next spring?
However, we surely know that we must anyway spend at least 2.5% of GDP on defence now. It is quite possible that the SDR will find that the military capabilities we need now will cost a lot more than can be afforded even by spending 2.5% of GDP on defence.
In the debate introduced by the noble Lord, Lord Robertson, on the SDR on 9 October, the noble and gallant Lord, Lord Stirrup, referred to NATO’s recent assessment that if its members are
“to contribute military capabilities adequate to the challenges that the alliance now faces, they will need to spend around 3.7% of GDP on defence”.—[Official Report, 9/10/24; col. GC 224.]
If NATO is correct, investment in defence needs to be above 3% of GDP, not the 2.5% that the Government say they aspire to but for which, even now, they have not so far set out a firm plan.
As the Committee is well aware, the world is in a more turbulent and unpredictable state than it has ever been since the end of the Second World War. The noble Lord, Lord Robertson, has described China, Russia, Iran and North Korea as the deadly quartet. As I pointed out in the debate on the SDR, the previous Government’s paper, Defending Britain: Leading in a More Dangerous World, published in April this year, explained that any delay in setting out a pathway to reaching 2.5% was likely to lead to front-line cuts at the worst possible time for our Armed Forces.
Spending more will not in itself be enough. Reform of the Ministry of Defence to build a less risk-averse department and improve its procurement process is also essential. Can the Minister confirm that the fact that the SDR was to be reported to not only the Prime Minister and the Secretary of State for Defence but the Chancellor of the Exchequer was not significant? On that occasion, the Minister said:
“The Government have an absolute commitment to 2.5%. I know that that is not what some people want to hear and that there is no timeline given to it, but there is an absolute commitment to 2.5%. It is not an aspiration”.—[Official Report, 9/10/24; col. GC 262.]
We now know what that means: merely setting a path at a future fiscal event.
The noble Lord, Lord Robertson, will assess what threats we face and what capabilities we need to address them, but his task has been made all the more difficult by the Chancellor’s signal that the uplift in defence spending is not the Government’s urgent priority, which it should be. It is at least welcome that the AUKUS programme is protected.
The UK has been one of the few NATO countries to meet the 2% spending target, and our response to the Russian invasion of Ukraine was much appreciated by our allies and by the Ukrainians. However, we are now placing our ability to provide leadership in military operations at risk, because we have in recent years been increasing our defence expenditure at a much slower rate than other nations. Germany, which in 2014 was spending only 1.2% of its GDP on defence, has committed to spend $97.7 billion on defence this year, which is an increase of 29.45% over 2023. France has increased its defence budget by 6.05%, and the United States by 7.21%. Against that, we have managed to provide an uplift of only 1.73% after adjustment for the implementation of the new accounting standard, IFRS 16. That is one of the smallest increases among NATO members. It means that Germany will be spending nearly 40% more than we are. The Chancellor announced an increase of £2.9 billion for next year, but that is not nearly enough given the serious threats we face and the current underfunded state of the Armed Forces. Recruiting is badly affected by inadequate, poorly maintained accommodation and facilities. It is shocking to hear that there are now more civil servants in the MoD than the total strength of the Royal Navy and Royal Air Force.
As a precondition of deploying our aircraft carriers, or indeed any major maritime or land-based assets, to any conflict zone in partnership with our allies, it is absolutely necessary to control the air environment. That is why we need the Global Combat Air Programme —GCAP. Its advantage over alternatives includes its greater range. It will bring a contribution to NATO that nobody else can bring. If we do not fulfil our commitment to our partners Italy and Japan to deliver this project by 2035, it will be disastrous for our international relations and will signal the end of our ability to bring in partners to major defence projects. Some 70% to 85% of our defence exports in the last five years have been combat air in nature, so to fail to honour our commitments to this project would have huge implications for our defence industrial base.
Will the Minister now give a much-needed commitment, or at least say more than the Government’s position on GCAP, which is that
“we continue to progress on that”?—[Official Report, 25/7/24; col. 723.]
That is not quite the firm commitment that our Japanese and Italian friends are seeking. Having heard the Chancellor’s disappointing words yesterday, their concerns and those of all our allies will be seriously heightened.
I thank all noble Lords who are to speak in this debate, and I look forward to their contributions and to hearing what the Minister has to say.
Lord Bilimoria (CB)
My Lords, in defence expenditure as a share of GDP, Poland is at 4.12%, Estonia at 3.43%, the United States of America at 3.38%, and we come ninth at 2.33%. With 2.33% we are nowhere near 2.5%, which is supposedly the target pledged by both the Labour Government and the previous Conservative Government, and NATO’s baseline is of course 2%. If we go up to 2.5%, we will be higher than Finland and Denmark but we still below Greece, the USA, Latvia, Estonia and Poland. I say again: the Labour Government have committed to reach the 2.5% target but have not specified a completion date. The Conservative Government had a date as far away as 2030. Can the Minister give us a commitment to that?
Additional funding of £5 billion was allocated post the invasion of Ukraine, with planned annual increases through 2027-28. The Ministry of Defence faces budget gaps, including a £3 billion deficit in equipment planned for 2024-25, and a £3.9 billion gap for 2025-26. Of course, in the Budget we have had this announcement of £2.9 billion. That is good news but it is nowhere near enough.
The UK’s increased defence spending aligns with NATO’s collective defence strategy, reinforcing our commitment to alliance-readiness. I am like a stuck record: in 2019, in our debate in the Chamber on the 70th anniversary of NATO, I first said that we should be spending 3% of our GDP on defence—not 2.5% but 3%. That was five years ago. Five years ago, there was no sign of Putin invading Ukraine, or of 7 October and the tragic situation in the Middle East since. Since the end of the Cold War and the fall of the Berlin Wall in 1989, we are closer to global conflict than ever before, and then 3% will be nowhere near enough.
As a country we have provided £12.8 billion in support to Ukraine, including £7.8 billion of military support and £5 billion of non-military support. One of the proudest parts of my career was being president of the Confederation of British Industry and, within that, there is my pride at helping British industry help Ukraine, from literally days after the war started, with medical kits, ration kits, food supplies and so on.
Our support for Ukraine has been amazing. As the noble Viscount, Lord Trenchard, said, we cannot let Ukraine lose. But the defence of Ukraine is possible only if the United States continues its support. It has provided over $100 billion of support; if it pulls out its support, that war is over. The election in America is next week; the repercussions will be very serious indeed and we must be prepared for that.
I am a proud honorary group captain in 601 Squadron of the Royal Air Force, and I thank the noble Viscount, Lord Trenchard, for leading this debate. He is an honorary air commodore, so I have to salute him.
We heard in the defence debate earlier today about the outsourcing of recruitment in our Armed Forces. It is appalling. How can you outsource the esprit de corps of our finest Armed Forces? The recruitment should be done by the Armed Forces and services themselves. Please will the Minister confirm that he will stop this?
The UK should join the Quad—the Indo-Pacific alliance between the USA, Japan, Australia and India, to make it Quad Plus. We are at the top table of the world. We have a permanent seat on the UN Security Council, we are the second-biggest power in NATO, and a member of AUKUS, Five Eyes, the G7 and the G8, though sadly not the EU any more. We have the finest, most respected Armed Forces in the world, which we should all be proud of.
The “but”, as I have said before, is that, in real terms, we were spending £57 billion in 2010 and today we are spending £54 billion. Our Armed Forces are too small, at 192,760. The SDR, chaired by the noble Lord, Lord Robertson, is wonderful news, and it is crucial that we get it absolutely right.
To conclude, as I have said, the noble and gallant Lord, Lord Stirrup, has said that we have a
“shrinking and hollowing out of our Armed Forces”.—[Official Report, 9/10/24; col. GC 226.]
and the noble Lord, Lord West, has said that
“money is the elephant in the room”.—[Official Report, 9/10/24; col. GC 227.]
The price of freedom is not free. We need to spend at least 3% of GDP on defence.
Baroness Buscombe (Con)
My Lords, I am pleased to have this brief opportunity to speak of the road map to spending 2.5% of our GDP on defence, particularly given that I was unwell and therefore unable to contribute to the recent SDR debate. I will focus on the need to apply a substantial proportion of the £2.9 billion increase announced yesterday to reinvesting in our Armed Forces personnel.
Taxpayers’ money is there but the priorities for government expenditure are just wrong. A cursory comparison with our welfare spending alone makes the moral case. In April this year, the Government’s forecast for our total defence budget in 2024-25 was £55.6 billion. At the Department for Work and Pensions, figures for the same period forecast a spend of £315.8 billion on our social security system. Working-age benefits go to 9.3 million people, a huge proportion of whom are capable of working.
There are principles involved here. To give just one small but significant example, in contrast with our brilliant Armed Forces, benefit claimants receive a Christmas bonus for doing nothing. In addition, the reliance on Armed Forces charities to purchase the most basic items for wardrooms and messes, such as televisions, is scandalous, given our current expenditure on fully serviced hotels and weekly cash payments given to illegal migrants.
If we are to confront the many challenges referred to by noble Lords in the SDR debate, we must seriously invest in our Armed Forces personnel. As the noble and gallant Lord, Lord Stirrup, said in that debate, we must
“make good the shrinking and hollowing out of our Armed Forces that has been the handiwork of successive, delinquent Governments”.—[Official Report, 9/10/24; col. GC 226.]
Having listened to a brilliant ex-Army officer in January this year—I emphasise “ex”—telling me that some of his fellow officers were being asked if they would continue to serve unpaid, the picture is clear: it is dire.
My plea to the noble Lord, Lord Robertson of Port Ellen, who I am pleased to see in his place, is to visit some bases and barracks unannounced. We all know that the military is adept at putting on a good show. I experienced this myself as Minister for Armed Forces Veterans at the Department for Work and Pensions. Just turn up to an RAF or Fleet Air Arm base and listen out for a plane in the air, and you will be lucky to hear or see anything. Go into the empty wardrooms and look around the desolate acres. Visit Army barracks and more desolate acres. Check out the equipment—what equipment is there, where is it and does it actually work?
I said in your Lordships’ House on 20 May this year that Armed Forces personnel in the Navy would be better off being subject to the process of court martial from the Navy than being discharged on medical grounds, given the outdated and inhumane processes in place. Following correspondence with the Navy this summer, I am sad to say that I hold firmly to that position.
In addition, the system of what is known as holdovers, leading in some cases to training taking more than seven years instead of three because we have not invested in the right equipment for training, is, frankly, shocking. Careers are blighted before they have begun, at enormous wasted expense to the taxpayer. Furthermore, equality of opportunity, which I believe is sacrosanct, is very different from the equality, diversity and inclusion now in vogue. EDI entrenches difference. It is an expensive and divisive diversion from what needs to be done and does nothing for morale. For many, VAT on private school fees will be the last straw.
It is not enough to stamp a letterhead with the words, “Global, Modern, Ready”. If we are to confront the many challenges referenced by noble Lords in this month’s SDR debate, we must prioritise and invest in a complete review and overhaul of how we recruit, train, properly incentivise and thereby support and retain our Armed Forces. Given all the petty regulations that just grow, and the satisfaction expressed in some quarters for the status quo, that review must be independent of the MoD.
I gather that serious consideration is being given to creating an integrated force. That would of course be a radical move, but it might present the best opportunity for a total reset and renewal for the future. It would require serious investment in the short term, but I predict that the investment would prove well spent and invaluable to our future defence force.
Lord Mountevans (CB)
My Lords, I congratulate the noble Viscount, Lord Trenchard, on securing this important and timely debate. The Chancellor’s announcement yesterday in the Budget of an additional £2.9 billion for the Armed Forces, for all that it is most welcome, does not represent an adequate investment in our forces, their people and their equipment. The additional payments that seem to have become a feature of recent defence financing represent sticking plasters rather than a serious attempt to bring the forces to the level that is required in the current international and geopolitical condition.
Of course we all realise and welcome that the much respected noble Lord, Lord Robertson of Port Ellen, is currently leading the strategic defence review, but my concern is that cost will be the key decider of how much money and resource is allocated, like small boys laying out their pocket money on the shop counter to see what sweets they can afford. Money is tight at this time, but the nation and especially the Government need to rethink priorities. With a changing world order and greatly increased threats, we desperately need to reprioritise. Defence is a long-term issue, particularly in the fast-changing world that we inhabit. It is simply not possible to make up lost ground over a short period. We are seeing that now, following— I regret to say—the neglect of the Armed Forces and our defences since the so-called peace dividend following the end of the Cold War. We and the democracies in general took our eye off the ball. We now have seriously and rapidly to address our weaknesses. Most other NATO countries are doing this.
I strongly recommend an increase to 3% of national income to be allocated to defence, as proposed by the noble Lord, Lord Bilimoria, and the famous Chief of the Defence Staff from the RAF. The vast majority of our countrymen wish to be a force for good, to be able to defend the nation and to play our full part in NATO as well as, on occasion, further afield. But the Secretary of State recently admitted on a Politico podcast that the Armed Forces are not ready to fight in a war and must do more to act as a deterrent against future aggression. He added that the forces would need to become more effective if the UK had to go to war.
It is not just for our Armed Forces to try harder and work smarter. There is a chronic need for resourcing adequately. For example, the defence-industrial base needs consistent government policy and time, due to the fact that the base has been allowed to shrink so profoundly over recent decades. It requires time for the base to be expanded, and then outputs will be swifter and more lethal.
Noble Lords will be aware of the questions around American support for NATO, especially if the Republican candidate were to succeed in the US presidential election next week. More generally, it has to be faced that attention in the United States is turning towards the Indo-Pacific. Europe will be expected to take greater responsibility for its own defence.
More widely, if the US is to continue to regard the UK as a key ally, we must maintain the fabric and capabilities of our Armed Forces. If not, they will regard us differently, as having less value as an ally. Having left the EU, Britain has to reinvent itself and find a new role. The alternative is that we be regarded as a small country facing many challenges. It is important that we remain a strong contributor to the rules-based order and world peace.
Strong and effective Armed Forces are an arm of foreign policy and an asset to the UK as we shape our new role in the world post Brexit. The success of the Joint Expeditionary Force is an excellent example of where our Armed Forces can play a highly positive role. The JEF can be regarded as essentially a British initiative. The Swedes and the Finns found that they work well with other JEF participants—all NATO members, of course. The equipment was compatible, and the people liked and trusted each other. A good chemistry had been established so that, when Putin commenced his illegal war on Ukraine, generating great alarm in the Baltic, it felt natural for these two highly respected nations, Sweden and Finland, to join NATO.
The UK is also of course a key participant in the AUKUS deal. UK defence has played a role in strengthening peace prospects in the Indo-Pacific. I believe we can be very hopeful that this important co-operation project will give courage to south-east Asian and other Indo-Pacific nations that they can be part of a response to a bullying China. The GCAP agreement is similarly a positive development in alerting those facing challenge that we recognise their situation.
Some 40% of Russian state expenditure is now on the military. Should Russia be successful in Ukraine, many analysts feel that Putin will be emboldened to embark on further military action in Europe. As noted by the noble Lord, Lord Bilimoria, it is significant that prominent among NATO states with the highest proportion of national income spent on defence are Baltic countries bordering on Russia. If Britain continues to respond to the risks and challenges inadequately, it would all come back to haunt us.
There is never enough money for welfare payments. Would the Minister like to comment?
Earl Attlee (Con)
My Lords, I am grateful to my noble friend Lord Trenchard for introducing this debate. The noble Lord, Lord Bilimoria, said that our Armed Forces were the finest in the world. I have to say that I am not absolutely convinced about that, and my noble friend Lady Buscombe outlined some of the problems. My noble friend Lord Trenchard talked about the problems that the noble Lord, Lord Robertson, may have in producing a defence review when he does not know how much money he has to spend, but he does know how much he can spend—it is about 2.5% of GDP.
If a defence analyst was to analyse both me and the Minister, he would find it very difficult to get a fag paper between us. I think we both think that we want to spend at least 3% of GDP on defence, but no more than 5%. The problem is that we live in a democracy, and political parties tend to use focus groups—and they ask the focus groups what their priorities are. We know what the priorities are for focus groups: it will always be the health service at the top, and the welfare state—all the lovely things that we want to be able to do. It is understandable why the electorate want that. If you ask them about defence, the focus group will attach a very low priority. But we do not explain to the focus groups or the general public the consequences of insufficient defence expenditure; we talked about that in the last debate on the failure of deterrence and its consequences. If you asked a focus group, “Are you happy for your daughter, son, sister or brother to be compulsorily conscripted for an overseas military operation that is not doing very well?”, just as we experienced in the 1940s, I suspect you might get a rather different answer.
Lord Shinkwin (Con)
My Lords, I congratulate my noble friend Lord Trenchard on securing this debate and his powerful opening remarks. I completely agree with other noble Lords that making rapid progress in laying out the road map to spending at least 2.5% of GDP could not be more important.
The Budget states that the Government
“will set a path to spending 2.5% of GDP on defence at a future fiscal event”.—[Official Report, Commons, 30/10/2024; col. 822.]
I think this misses the point. The point is Putin. He has to be the starting point because, ultimately, it is not a future fiscal event that is going to determine UK defence spending—it is a future military event, orchestrated by Putin and his allies.
So the question is: how committed are we to ensuring that that military event is not a third world war? As noble Lords have said, it surely depends on the extent to which we are prepared to invest now in defence and deterrence as a means of averting war.
I do not question the sincerity of the Minister here and the Secretary of State in the other place, John Healey, but I fear that yesterday’s Budget will be interpreted by Putin as confirmation that we intend to continue living in a never-never land. That is reinforced by this sentence in the policy paper on the Budget:
“This underlines the government’s commitment to strengthening the Armed Forces and protecting national security during a period of geopolitical instability”.
I must say, I sense the hidden hand of Sir Humphrey in such an understated, anodyne turn of phrase. I am not sure that it quite captures the urgency of the situations in Ukraine, Lebanon, Gaza, Yemen, Iran—the terrorist puppet master—Georgia, Taiwan and North Korea. The list is long, and it is red hot.
As the excellent report from the International Relations and Defence Committee of your Lordships’ House, Ukraine: A Wake-up Call, makes clear, any increase in defence spending
“should be seen in the context of decades-long defence cuts and recent inflationary pressures on the defence budget”.
However, one thing is clear: it would be unfair to accuse the Chancellor of producing a Budget for defence—including, as my noble friend Lord Attlee alluded to, the defence of items of expenditure such as the NHS, which focus groups say are so important to them, bearing in mind Putin’s fondness for targeting maternity hospitals and other crucial civilian infrastructure. Sadly, yesterday’s Budget was a vital missed opportunity, because it was in no way a wake-up call for Vladimir Putin. In fact, I suspect that he is laughing at us—laughing at our increased indebtedness and our reduced readiness for war.
I conclude with one question for the Minister, who will know that the economic and financial dialogue between the UK and China was paused after the imposition of the national security law in Hong Kong. Since more than 60% of the components used to prosecute Putin’s illegal war in Ukraine come from China, can the Minister assure the Committee that the UK will not seek to deepen trade relations with China, which is making not only the continuation of conflict in Ukraine possible but a third world war far more likely?
Baroness Smith of Newnham (LD)
My Lords, like other noble Lords, I thank the noble Viscount, Lord Trenchard, for giving us the opportunity to discuss defence expenditure. I fear that already, after not yet four months in office, the Minister may be getting a little tired of the record that says, “All the main parties committed to 2.5%, but when on earth are this Government going to deliver?”, because it is clear that whether the Government deliver the 2.5% of GDP is in the hands not so much of the Secretary of State for Defence or the Minister of State for Defence as of the Treasury.
The noble Baroness, Lady Goldie, keeps suggesting that the Minister—or the noble Lord, Lord Robertson of Port Ellen, when doing his review, where he is capped at 2.5%—should go to the Treasury and say, “Give us more money”. Yes, we need to be spending at least 2.5% of GDP, but I want to raise something that we have not really talked about: how we are spending that money. The aspiration is important, but when looking at defence procurement matters, we need to think about more than just what pennies we have in the sweetshop. I thought that was quite a good analogy, because you do not get many sweets for pennies now; you need pound coins and so on. Similarly, if we are looking at pennies for defence, we are not in the right quantum.
It is already clear that if we are going to backfill what we have given to Ukraine then we are looking at costs that are in billions rather than millions of pounds. There are real questions about how we are going to procure the kit that we need, for which there are already black holes, and to backfill the equipment which we have rightly given to Ukraine. So how we spend matters, how we procure matters and moving beyond the exquisite is important.
There are two or three other economic factors that matter. The Prime Minister and the Chancellor of the Exchequer have talked a lot about growth. In a growing economy, 2.3% of GDP being spent on defence, which is roughly what we have at the moment, would be of far greater interest than in an economy that is stagnant —and at the moment we appear to be in a stagnant economy. So the 2.5% matters, but so does the economic growth that would mean that we could increase defence in real terms. Inflation is currently low, but traditionally defence inflation runs much higher than RPI. The exchange rate also matters, and at the moment the dollar exchange rate is relatively good. All those factors are outside the influence of the MoD, but they all make a real difference to what we can deliver. Although I join other noble Lords in saying we need that timeline to understand when defence expenditure will increase in terms of GDP, it is vital that we see economic growth to be able to expand our defence budget.
I very much agree with the suggestion by the noble Baroness, Lady Buscombe, that we should be putting a lot of the additional £2.9 billion into personnel, but one of the headlines in the Budget was how much is going on employers’ national insurance. Of the £2.9 billion, how much is the additional wage bill for the MoD arising from the increase in the employer’s national insurance contribution? It is sort of a cost on the Armed Forces but certainly not one that will benefit our service personnel—and we need that.
We need to find a pathway, but we also need to think about how best to deploy our limited resources to make sure that we are as capable as we desire to be. We have had the best Armed Forces in the world, and we should ensure that we continue to. I pay tribute to all our service personnel and veterans and their families.
Baroness Goldie (Con)
My Lords, it is clear from the contributions today how informed about and engaged in the defence of our nation your Lordships are. That knowledge was manifest in my noble friend Lord Trenchard’s contribution, and I am grateful to him for bringing this debate before us.
I am not going to patronise noble Lords with a preamble about why defence is the most important obligation of any Government; it is, and we know why. I am going to examine how the current Government are discharging that responsibility.
It all flows from budget—the money—because, quite simply, that is what shapes the capability. Yesterday, after all the repeated rhetoric and reassurances over many months from the Prime Minister downwards that the Government believe in defence, are committed to 2.5% of GDP and will lay out the trajectory to that point, we held our breath and waited. Notably, the Minister for the Armed Forces, Luke Pollard, addressing air and space chiefs at a London conference in July this year, said:
“How we get to 2.5% will be laid out by the Chancellor, Rachel Reeves, at a fiscal event, which is government code for a budget, or an autumn statement. So looking at that, she will be setting up the path to that”.
We are still holding our breath. What did we get? Clarity? No. Leadership? No. Instead, we got a deafening and supine silence. We got a sticking plaster of £2.9 billion for 2025-26. In defence budget terms, we know that that is sticking a finger in the dam and hoping for the best. There is nothing strategic about it, no trajectory to anywhere. While this response says a lot about the Government, and I do not expect the noble Lord, Lord Coaker, to comment on that, I am much more concerned about what it says to our allies, friends and global partners.
We are a respected global power, a perception underwritten by our defence capability. As a Minister, regularly visiting south-east Asia, I saw at first hand how many of these countries value their relationship with the United Kingdom; how carrier strike group 21 had a massive impact in the region and on the stature of the UK in that area; how the legacy of the permanent deployment of HMS “Tamar” and HMS “Spey” through the region had a tangible effect; and how so many of these countries wanted to pursue a closer engagement with the United Kingdom. I know that the Minister has diligently and effectively prosecuted these relationships.
How is the Government’s ambivalence on defence spend likely to play out to our European friends, our NATO allies, our partners and friends across the globe? Well, 2.5%, as my noble friend Lord Trenchard indicated, is the minimum we need to spend to keep up with allies and competitors. The current NATO estimates for 2024 spending put the UK as the third highest spender in NATO, now overtaken by Germany, and we stand at 2.33% of GDP. The difference between 2.33% and 2.5% is significant but not massive, and the previous Government committed to that by 2030. Just to clarify for the benefit of the noble Baroness, Lady Smith, that is the position I supported then and it is the position I support now.
The present Government have been talking about this for months—they have now been in Government for nearly four months—and that is why the failure by the Chancellor yesterday to bring clarity is so serious. The Government are saying to our allies, “We cannot tell you anything about our strategic defence spend and we do not know when we will be able to”. What a message. What about our adversaries? They must be rubbing their hands in glee: this chaos is music to their ears. The only message any onlooker can infer from this mess is that neither the Prime Minister nor his Chancellor get defence. I know that the noble Lord, Lord Coaker, does get defence, and I have sympathy with him. He will put up a stout and loyal response to this debate, but his position is unenviable.
Let me mention the Government’s imposition of VAT on school fees having an immediate and deeply damaging impact on defence families. Approximately 4,000 children of service personnel get the continuity of education allowance, which is to mitigate the disruption to education of regular postings. It does not cover the full fees, and many parents, despite that CEA, will struggle to meet the additional cost created by VAT. All that has been offered is a proportionate increase in the CEA, but it is the balance over and above that that many service families will find unaffordable. I am at a loss to understand how the Chancellor does not get that. It seems an extraordinary insult to our Armed Forces personnel. The Government need to exempt the children of all military personnel from VAT on school fees with immediate effect.
I have the highest regard for the Minister, and I know that defence has a doughty advocate in him, so I exhort him to relay the pungent message that he has heard this afternoon to his colleagues in government.
The Minister of State, Ministry of Defence (Lord Coaker) (Lab)
I start by thanking the noble Baroness, Lady Goldie, for that ringing endorsement. My colleagues always read your Lordships’ debates with intense interest and scrutiny, so they will no doubt look at that. I thank the noble Baroness, Lady Goldie, for the way in which she puts her remarks strongly but also in a proper and challenging way—I appreciate that.
I will come on to some of the specifics about the 2.5% but before I forget, I want to take on the point the noble Baroness, Lady Smith, made, and I will put my head above the parapet on this one. My understanding of employer national insurance is that the public sector does not pay it. I think that answers her question. I have given that answer out of my own knowledge and professional experience of these matters, plus the fact that I heard Kate McCann on Times Radio yesterday. The question was asked about the impact of employer national insurance on the National Health Service, to which the reply was that the National Health Service does not pay employer national insurance because it is a public sector body. If I am wrong, I will write to the noble Baroness and to every other member of the Committee, but I think I am right. If I am not, I will correct the record, because it is an important question, but I do not think that the Armed Forces pay it.
I will answer the specific questions of noble Lords, but the position of the Government is as was laid out in the Budget, and it is on the various pages in the Autumn Budget report, which noble Lords will have read. There is not a scintilla of difference between any of us about the desire to protect our nation, to have the Armed Forces that we need and to meet all those threats. There is a discussion and a debate about how we get to 2.5% and when we should do that. Indeed, as the noble Lord, Lord Bilimoria, raised, as well as the noble Lord, whose name escapes me—
Lord Coaker (Lab)
Yes. They talked about 3% and beyond. I have even heard people then start to talk about 3.5% or 4% or whatever. So, there will be a debate on what one considers to be right, but the Government have said that we have seen what the policy is and 2.5% will be at a future fiscal event. That will be laid out, and the additional £2.9 billion for next year will be laid out with that.
Of course, alongside that, the defence review is looking at various issues. A number of your Lordships —the noble Earl, Lord Attlee, the noble Baroness, Lady Smith, and others—talked about the fact that how we actually spend that money is as important as the actual amount. What are the threats that we need to face in the future? With those few introductory remarks, that is the position of the Government, and that is where we are, so let me turn to some of the specifics raised in the debate. I know that the noble Baroness, Lady Goldie, will be disappointed, but that is the position of the Government, which I am reiterating to the Committee.
I thank the noble Viscount, Lord Trenchard, very much for ensuring that we have this debate. He was very fortunate that it came the day after the Budget—I might have preferred it the day before the Budget, but there we go. The serious point is that he has brought forward an important debate, he made the points about the Budget and I responded in the way I have by laying out the Government’s position.
I want to go through some of the questions that were raised, alongside the whole issue of the Budget. The noble Viscount is absolutely right about AUKUS and the importance of that within the defence review, and it is protected within that. There will be a debate and a discussion about the best way of delivering that. It was started under the last Government—the noble Baroness, Lady Goldie, was involved. That is protected within the overall strategy of the defence review, although there will be a discussion about the best way of delivering it, and the noble Viscount would expect nothing else.
The noble Viscount is a firm and stout defender of the Indo-Pacific. He will know that, notwithstanding the Government’s NATO-first policy, we also understand the importance of the Indo-Pacific. He will know that when I have been there, I have talked about the indivisibility of conflict: that what happens in the Indo-Pacific impacts on Europe, and what happens in Europe impacts on the Indo-Pacific, on the south of our globe and on the High North. All those things are interrelated. The challenge of the future and of funding for the future, not just for our country but for others, is how we establish that global alliance of free, democratic nations in response to the threat from Russia, China, North Korea and Iran. There will be debate and discussion about how we do that, but it is very important.
The noble Viscount, Lord Trenchard, talked about the sixth-generation global combat aircraft. Last week I was at the Italian embassy, and the week before at the Japanese embassy. He will know that, time and again, I go and discuss with them the sixth-generation fighter and its importance within the defence review, which will come to its own conclusions. He will also know that we have just signed the treaty allowing the governance of that project, and we continue to make progress.
I know the noble Lord, Lord Bilimoria, will be disappointed by my remarks about the Government’s position, but that is our position and it is an absolute commitment. Our Treasury Minister is here, who will also have heard it. The 2.5% commitment will absolutely be delivered. At present, we cannot give a timeline, but we are determined to deliver it and will do so when we are able. We all know how much the noble Lord has helped Ukraine, not just with military support but with the medical and other support that he has given. He is to be much congratulated on that work.
I cannot predict the outcome of the American presidential election. It is not for me to discuss that or say who we would want to win, but I will say that the importance of the US-Europe relationship is crucial to the defence of democracy and the free world. We will have to ensure that, whatever the outcome, we work with our American colleagues and friends, and the American system, to deliver that. I believe that the American system, founded on one of the greatest declarations of independence and the establishment of freedom, will not forget its roots.
The noble Lord and the noble Baronesses, Lady Buscombe and Lady Smith, mentioned the problem of recruitment and retention. A review is ongoing on that; it has not yet reported but it will look at many of the matters that noble Lords have mentioned, including the inability to recruit the numbers that we need, skilled labour shortages, retention and the important point about accommodation and welfare. All of those will be looked at as a package. We are starting to try to invest the money in housing, some of which is not acceptable.
Baroness Buscombe (Con)
I am sorry to interrupt, but is that review independent of the MoD?
Lord Coaker (Lab)
No; it is being conducted within the MoD. I am pleased that the review is taking place, and it is being done without fear or favour. We want it to come forward with proposals on those very real problems, and I have great confidence in that being done.
The noble Lord, Lord Mountevans, mentioned the crucial question of the defence industrial base. There is no doubt that we and our allies have not looked at how we ensure that we have the defence industry capability that we need to prosecute a war of some length. That has caused all of us to reflect on what we do about it. Our response has been to appoint a National Armaments Director—I believe we have already done so but, if not, we will—who will look at how we ensure that we have the armaments we need. One of the most distressing things about Ukraine—the noble Baroness, Lady Goldie, would have witnessed it; it might have happened when she was the Minister—was to read about Ukrainian troops having to retreat because they did not have sufficient ammunition or shells. That is not acceptable to us. Everyone is looking at what we do there.
The noble Baroness, Lady Smith, made a point about procurement. We absolutely need to look at that. She heard what I had to say about the National Armaments Director. She was right to make the point about economic growth: of course, 2.5% of a growing economy is more than 2.5% of a declining one. One of the arguments that might be made about the Government’s economic strategy is that, in the short term, they are making difficult choices to allow the economy to grow in a way it might not otherwise do; that will be of benefit, notwithstanding the short-term discomfort it may cause some of us.
I have, I think, dealt with most of the major points made. I finish on something said by the noble Lord, Lord Shinkwin, because it is a really important point that I want to make sure is heard by our allies and friends. It is important for us in these debates—in this Committee, in the Chamber and in the Commons—to have the confidence to let our allies know that, notwithstanding our debates and discussions on the right configuration of our Armed Forces and the right amount to spend on them, we as a country are determined, alongside our allies, to defend freedom and democracy wherever they are threatened across the world. That is the message Putin should hear and understand.
We will not relent or step back in the face of Russia’s illegal invasion of Ukraine. This country has never stepped back when it has faced an adversary in this way; that is the message we should take forward. The fact that we can discuss what we are debating today in a democracy, without fear or favour—even if our opinions are unpopular—is something that we have fought for long and hard. Whatever our disagreements about the Budget, that is the message that Putin, China, as one noble Lord mentioned, Russia, Iran and North Korea should hear. This country has always stood up for democracy and always will.
Employment: Tax Policy
(4 days, 17 hours ago)
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Lord Leigh of Hurley
To ask His Majesty’s Government what assessment they have made of the impact of tax policy on employment.
Lord Leigh of Hurley (Con)
My Lords, I draw noble Lords’ attention to my entry in the register of interests, which notes the businesses I have started, invested in and grown over the years, including my main business, Cavendish Financial plc, which I started with one colleague and a PA and, I am pleased to say, now employs over 200 people.
The timing of this QSD seems remarkably fortuitous—I cannot claim it was wholly planned this way—and will perhaps allow us to consider the rationale and effect of some of yesterday’s Budget as well as reflecting on how future changes to tax policy might affect employment and related areas.
The Minister will be pleased to know that I will not be spending all my allotted time digging in the illusory black hole, as the OBR has rightly confirmed that, other than a possible contentious £9.2 billion, the £22 billion was not something that it could support—at least in respect of the reserves, where the underspend is yet to be determined. We will have to leave that matter there. I suspect that the Minister will also be pleased to know that we will not spend the whole of the next four years going over this, to our mutually enormous pleasure. That is not really the point here, other than to note that Labour created a reason to increase tax and so, like every other Labour Government, increase tax they so did.
As I am sure the noble Lord, Lord Bilimoria, will recall, we were warned by the CBI earlier this week when Mrs Newton-Smith said:
“If we see a rise in national insurance contributions paid by employers … that will make it more difficult for businesses”.
That warning was echoed by the respected economist Paul Johnson of the IFS, who pointed out that NI is a tax felt solely by working people and employers. His response to the actual rise has been to remind us that the OBR suggests that three-quarters of the impact of employer NICs will be felt by employees, even if the changes do not immediately show up on their payslips. Indeed, these tax rises partly explain why the OBR has downgraded its projections for real household income growth over the next few years. Someone will pay for the higher taxes, and it will largely be working people.
The employers’ NIC rise will further increase the incentive for employers to switch to contracting with the self-employed or, as many will have heard on today’s radio broadcasts—and this is really worrying for us here—to subcontract to overseas production. Indeed, I have talked to employers today who have said to me that they are cutting down on their future recruitment. Radio 4’s “Today” programme said it had not found one business person who thinks that yesterday’s Budget will help their business to grow and employ more people.
Incidentally, Paul Johnson also opined that a rise in employers’ NI would be a straightforward breach of Labour’s manifesto. His views on the damage to employment that the rise will cause has been echoed by normally non-political characters, such as the CEO of Lloyds Bank, and of course for certain industries, such as the hospitality sector, it will be a disaster. Mark my words: care homes will close after this Budget.
A Mrs Christina French from Birmingham, founder of Diverse Sparks Ltd, an electrical contractor, has been quoted in the press as saying that the rate rise and the threshold drop has meant that she has now to consider selling her business. Her exact words were:
“It’s rubbish because I’ve created jobs and apprenticeships for the last 12 years, and now that’s not going to be an option for us”.
That is the reality of life for business owners. Sadly, Labour’s Front Bench has not much experience of starting a business and hardly any of running a small business, so they may not be aware of the pressures facing business owners. If they are not going to listen to business creators and owners such as Mrs French and me, perhaps their friends at the OBR might persuade them that, when it points out that,
“The employer NICs rise is estimated to reduce labour supply by 50,000 average-hours equivalents”
and promptly downgrade the UK’s growth prospects, it should be listened to.
The wonderfully named Growth Commission, which one would have thought would take pride of place at Labour’s top table, has modelled a rise in NI and predicts that it leads to a negative hit to GDP, peaking all the way to 2030 but still impacting GDP negatively in 2045-6. One has to wonder whether the gamble, which has been taken to fill a hotly disputed black hole with a tax rise on jobs, really makes sense? Perhaps the Minister can explain the thinking here, particularly given the hugely respected Growth Commission’s views.
I am grateful to some other great folk, such as those at the Jobs Foundation, chaired by my noble friend Lord Elliott of Mickle Fell, who remind us that businesses and entrepreneurs provide 80% of the jobs in the UK. Their mantra comes from Winston Churchill, who famously said—though I refrain from doing the accent—that:
“Some people regard private enterprise as a predatory tiger to be shot. Others look on it as a cow they can milk. Not enough people see it as a healthy horse, pulling a sturdy wagon”.
Famously, the Chancellor herself referred to an increase in NI as a jobs tax. This was in 2021, when criticising the proposals then to raise national insurance. Her point was that NI is purely a tax on people who go to work and those who employ them. She then said, revealingly, that, if you earn an income through dealing in stocks and shares, you do not pay a penny more in NI. That is revealing because it shows that Labour does not really understand and appreciate the difference between capital gains and income. Perhaps the Minister can explain to the Chancellor that dealing in stocks and shares is not a source of income: it is an activity that requires you to risk capital, which you might lose because of the great uncertainty. This brings me to my concern about the effects of other tax rises on employment.
For businesses to grow and employ more, they need capital. Many, like mine, have been to the capital markets through the Alternative Investment Market—AIM. That market has become harder and less liquid, despite the best efforts of Jeremy Hunt and the Mansion House compact. The decision taken yesterday to reduce business property relief—BPR—on inheritance tax by 50% will be a hammer blow to many entrepreneurial family businesses. When a family member passes on, they will now have to find 20% of the current value of the shares and pay for that in cash. That will simply lead to more firms closing down, selling up and having to sell assets to release cash, simply for the Exchequer.
This huge rise in IHT for private business owners has yet to be fully assessed. In its booklet, the OBR does not split out APR and BPR, so we have no idea of the true cost. We do know that this move and, of course, the potentially disastrous decision to tax the non-doms, in particular by including the EPTs in inheritance tax, means that wealth creators who create jobs are despairing at the effects that this Budget will bring to employment.
In my opinion, these measures are not just about raising tax but about ramming through ideological dislike for inherited wealth and, indeed, private enterprise. Sadly, the measures taken will, in reality, really damage everyone employed in the UK. I ask the Minister what assessment HMG have made of the impact of their tax policy on employment. I beg to move.
Lord Davies of Brixton (Lab)
I thank the noble Lord, Lord Leigh of Hurley, for raising this issue. As he says, the debate is extremely timely. I have set up and run a small business—not at all on the sort of scale that he has achieved but it has given me a perspective that he perhaps suggested in his speech did not exist on this side of the discussion. Many noble Lords who take the Labour whip have been successful in business, so I think the suggestion that we on this side of the Committee do not know what is required to achieve success in business is wrong.
I will not pursue the issue of the £22 billion, which has been well trodden, but will pick up on the noble Lord’s comment that Labour created a reason to increase tax. It was not Labour that created the reason; it was 14 years of Conservative mismanagement of our economy that created the situation that has led to increases in tax.
I spoke briefly to the noble Lord, Lord Leigh, yesterday, and we agreed that it is a general issue and not just about the Budget. Looking at the issue in general, it is quite clear that if firms have to pay higher tax then there will be impacts on employment, on the pay that can be given to employees, and presumably on profits. Of course, profits does not just mean entrepreneurs; it means pension funds and other investors who hold those investments. Clearly, those effects exist—I do not think anyone would argue about that.
However, in truth, it is a lot more complicated, because the Government receive the money and then spend the money—they do not bury it in a hole in the ground. The Government increase their revenue and use it to create employment, through providing their own services, and to create the society infrastructure that is required for business to operate. Higher quality infrastructure means more successful businesses. The Government also purchase, using that money significantly to buy from the private sector—and much of the private sector depends on government revenues for its economic success. There are two sides to that equation and we cannot assume, a priori, that one side is more significant than the other. We have to look at the evidence.
I thank the Library for its relatively short briefing. It identifies that this whole area is contested, at the least. It is very difficult to identify cause and effect in this area because the whole system is moving on. It is not an isolated, scientific experiment, with a control for all the variables involved; to reach a definitive conclusion is not straightforward. For example, there is the vexed issue of incentives and disincentives. The situation as it works in practice is not quite as clear-cut as the anecdotes that are often advanced to try to argue on one side or the other. The general issue, as I say, is a lot more complicated than perhaps was suggested by the noble Lord in asking his Question.
The noble Lord quite rightly identifies that we have an interesting case study in yesterday’s Budget of what the effect of the increase in national insurance contributions will be on employment. The Office for Budget Responsibility’s report makes for interesting reading. Of the net effect of the measures in yesterday’s Budget, principally the increase in national insurance contributions, it says that:
“The unemployment rate is forecast to average 4.3% in 2024, a small increase on 2023, before remaining close to 4.0%. The employment rate (for those aged 16 and over) is expected to remain close to 60% over the forecast”.
Whatever the impact of the increase in national insurance contributions by itself, the overall effect of the Budget is to maintain employment and, ultimately, provide the basis on which our Government will move forward and achieve the sort of growth we need to repair our public services.
Lord Bilimoria (CB)
My Lords, the Government, the Chancellor and the Prime Minister keep talking about growth. The investment summit at the Guildhall had a huge sign saying “Growth”. But, to do that, the private sector has to be supported to grow. It is private sector growth that creates the jobs that pay for the taxes that pay for public services—no growth; no taxes. If you put up taxes, you get no growth. That is the paradox.
I thank the noble Lord, Lord Leigh, for his excellent opening speech. Taxes on employment generate £454.8 billion. That accounts for 45% of total public sector receipts. It is huge. Employment tax revenues represent almost 17% of UK GDP. For a married worker with two children earning an average salary, the UK has a tax wedge of 27%, above the OECD average of 25.7%. Higher employment taxes can discourage firms from hiring, reduce wages and affect workers’ decisions to enter the workforce or seek higher-paid jobs. Corporate and consumption taxes also influence that. Employment corporate taxes can deter investments in jobs. I am sorry but the previous Government have to be blamed for raising taxes to their highest level in 70 years and, in particular, putting up corporation tax from 19% to 25%. That was a huge mistake and should not have been done.
Consumption taxes create a wedge affecting labour, demand and supply. Higher taxation is associated with reduced labour supply, and studies show that a 1% rise in tax correlates to a 0.5% drop in hours worked. Of the 17 OECD studies, only five found no significant negative impact of taxes on unemployment. The remaining studies indicate that higher labour taxes increase unemployment levels. A 10% reduction in the tax wedge could lower equilibrium unemployment by 2.8% and raise the employment rate by 3.7%. That is what we are talking about. The fiscal drag that the previous Government put in place until 2028 is also hugely damaging, affecting 7 million tax payers.
The Labour Party has promised to maintain corporation tax at 25% and not raise income tax, employees’ NI or VAT. That is all great, but the noble Lord, Lord Leigh, mentioned the hugely damaging effect of the taxes on non-doms and the removal of the non-dom regime. Inheritance tax reforms will drive investment away from this country. I know many people who have already left. Some 75,000 non-doms pay £9 billion of tax; they spend and invest in this country. Those people are mobile and that money will fly.
The increase of capital gains tax from 20% to 24% was not as bad as we thought, but the elephant in the room is the £40 billion of tax increases. The OBR warned that this could weaken long-term growth in the UK economy. Sure enough, the forecasts for growth do not even reach 2% in the years ahead, at about 1.5% or 1.6%. Increasing national insurance by 1.2% to 15%, raising approximately £25 billion, is a tax on jobs. I agree with the noble Lord, Lord Davies, that if you spend more and increase infrastructure then that should help productivity, but our public spending will reach 44% of GDP by the end of the decade, funded by tax and borrowing. Businesses are bearing the brunt of this £40 billion tax increase. The threshold of NI going down from £9,100 to £5,000 will bring many more people in as well. The business rates discount put in place by the previous Government of 75%, which has really helped, is going down to 40%. How many pubs and restaurants and how much of the high street will be able to take that?
On top of that, we have a £5 billion cost on the impact of employment regulation, and we have flexible employment, which is a huge advantage over a country such as France. If you make our workforce less flexible, it has a cost to it, and it makes us less attractive for investment. Inflation is now predicted to go up to 2.5% or 2.6%.
To conclude, since 2008, over those 16 years of financial crisis, austerity, the Covid pandemic, the Ukraine war, with inflation up to 11%, energy inflation, the cost of living crisis, 7 October and the tragedy of that day and the tragedy since, and with the uncertainty in every direction you look in the world, how much more can business put up with? How much can business deal with? How resilient can our businesses be? As the noble Lord, Lord Leigh, said, 80% of the jobs are provided by it, and then there are the 5 million SMEs and the jobs that they provide. How can we carry on and deal with just one challenge after another? Then we get this Halloween Budget, burdening business with higher taxes. This is a tax, borrow and spend Budget, not a growth Budget. It is not a pro-business Budget or a pro-entrepreneurship Budget. The Government’s job is to be a catalyst and create the environment for businesses and entrepreneurship to flourish and grow. The Budget does exactly the opposite.
Lord Elliott of Mickle Fell (Con)
My Lords, I congratulate my noble friend Lord Leigh on securing this timely debate, which feels like a dress rehearsal for the actual Autumn Budget debate on 11 November.
I wish to contribute three points today. First, I want to share some views from business leaders outside London on employment taxes. Secondly, I want to highlight what appears to be an inconsistency in government policy. Thirdly, I want to focus on the need to encourage UK-born entrepreneurs to stay here and create jobs rather than going overseas.
On my first point, I draw the attention of noble Lords to a report launched by the Jobs Foundation this week. As my noble friend Lord Leigh kindly mentioned, I am president of the Jobs Foundation, as declared in the register of interests. The report is called: Two Million Jobs: How Businesses Play a Crucial Role in Helping People from Welfare into Work. It is a ground-breaking piece of research that tries to help the Government to deliver on their highly commendable ambition to increase the employment rate to 80% by helping 2 million people from welfare into work.
The author interviewed business leaders, employees and stakeholders in four locations—Sheffield, Loughborough, Hartlepool and Pembrokeshire. These locations were chosen to cover the length and breadth of Britain, and represent the individual needs of a city, a town, a coastal community and a rural community. Many policy areas were discussed, and I know from these conversations that some elements of the Budget will have been very much welcomed, including the measures to improve transport links. But a consistent theme from the interviews was a concern about increasing taxes on employment, so I know that many of the business leaders spoken to, who are all involved in helping people from welfare into work, will be concerned about the announcement on employers’ NI in yesterday’s Budget.
That brings me on to my second point. Listening to the Budget, I was struck by the apparent inconsistency in government tax policy. On the one hand, the Chancellor announced an increase in the soft drinks levy, presumably to discourage people from buying sugary drinks; a rise in alcohol duties to discourage drinking; and an increase in tobacco duty
“to maintain the incentive to give up smoking”.—[Official Report, Commons, 30/10/2024; col. 819.]
All these tax rises are premised on the correct assumption that increasing taxation reduces consumption. But, on the other hand, there seems to be little recognition that increasing taxes on jobs by increasing employers’ NI will similarly reduce demand for employees, and potentially reduce the number of people in work. If increasing taxes on tobacco is designed to reduce smoking, surely increasing taxes on employment reduces the number of jobs? I would be interested to know whether the Minister expects the number of jobs in the UK to fall with the increase in employers’ NI. If that is the case, will it not hinder the Government’s laudable efforts to get 2 million people from welfare into work?
My third and final point is that we need to focus on how taxation affects where entrepreneurs locate themselves and their businesses. Earlier this month, I attended the GITEX conference in Dubai, which gathered together over 6,500 entrepreneurs from over 180 countries. It was a wonderful window into the future and so inspiring to see innovators enacting their ideas and creating the world of tomorrow. However, something was painfully striking: the number of young UK-born entrepreneurs who had left the UK to pursue their dreams and ambitions. I asked them why they had chosen to do this, and a consistent theme was the UK’s business environment, including, but not solely, the level of taxation. One might ask: why is this a problem? It is a problem because start-ups create far more new jobs than established companies.
A report by the Ewing Marion Kauffman Foundation in 2022 looked at the United States and found that, in 2019, companies in their first year created 5.24 new jobs each, while companies older than that created, at most, 0.4 new jobs each. Therefore, it is essential that we incentivise start-ups to locate here in the UK to create some of the 2 million jobs required to increase the UK’s employment rate. Sadly, some entrepreneurs are already looking to vote with their feet. A recent survey by the Startup Coalition found that more than 80% of the start-up founders it represents were considering leaving the UK. We need the young entrepreneurs I met in Dubai to want to stay here in the UK to build their companies and create jobs, and that requires a tax system that encourages entrepreneurship and incentivises wealth creation.
Lord Petitgas (Con)
My Lords, I thank my noble friend Lord Leigh of Hurley for this debate about the impact of tax policy on employment. I repeat the title, because I can see that the exam question has moved to the impact of the Budget on business. Unfortunately, I will probably fail as well.
I talked about a “boom in gloom” in the short debate on foreign investment in September. At that time, business had already grown fearful about slowing growth, with a foreboding that we were heading away from a market economy towards big state-led economic management. Confidence was waning. Employment is a barometer of business confidence and investment, so will this Budget shore up or further blunt such confidence? The answer boils down to whether business trusts the Government to spend their higher tax and new borrowings productively and deliver the future growth dividend ultimately to balance the books.
Many, if not most, are sceptical about this tax, borrow and spend Budget package. It seems doubtful that it can deliver the innovative entrepreneurial economy that the UK should aspire to. The OBR’s own revised forecasts on inflation, rates and growth made for poor reading overnight, while sovereign yields widened in the gilt market. That is not anecdotal; it was on the Financial Times website all day. Rates will stay higher for longer, increasing the cost of capital for the economy, the Treasury and mortgage holders.
The impact of these tax measures on employment is the key for growth. I shall frame this around three observations, first addressing the impact on business and employment. Business is facing a trifecta of a high minimum wage, increased NI and a new set of labour rights. Let us not pretend that, by taxing business, the impact will not fall on working people and consumers themselves. This is taxing employees through the backdoor. It will sap confidence, increase costs and hurt employment. An increase in income tax, although equally regrettable, would at least have been more transparent and given workers a clearer idea of the impact on them. It is rather complicated to get to the same money. The OBR report says:
“The rise in employer NICs in this Budget will further erode profits and we assume firms are only able to pass on around 60 per cent of the cost to employees in the short term”—
probably rising to more than 80%. Moreover, uncertainty about new labour rights represents a policy risk.
All this will feed into the real economy through high prices, low consumer spending and a slow labour market. This painful trifecta will raise costs for business, discourage expansion, and hurt staffing levels and hiring plans. Certain sectors, such as hospitality and retail, and SMEs, which cannot cushion from shocks easily, will have to pass on these higher costs if they can and, if they cannot, they may need to lay off. It is misleading to suggest that, by taxing business, you are not taxing employees—unless, of course, they are in the public sector. What analysis has been prepared, sector by sector and for SMEs, on the impact of these measures on employment?
My second point concerns inflation. We, along with the OBR, should worry about continued inflation. The “tax, borrow and spend” spree is happening at pace while the returns of large public investments, if any, will come through only in the long term. As the noble Lord, Lord Davies, said, a fundamental issue is the mismatch between borrowing the money now and spending it and the long-term returns; that is not to say we do not need more infrastructure. Confidence is therefore crucial to seeing us through the interim years. However, so far, the OBR, the markets and business are all showing grave misgivings. The costs of capital and of doing business in the UK have gone up. It is a difficult quandary and a real dilemma. Did the Government assess the impact of their new labour rights, raised minimum wage and public sector awards on inflation?
Let me end on the NHS. It is, as I see it, one of the case studies on investing in infrastructure for the long term. It binds two key aims: ensuring a healthy workforce, and the productive use of money. These are crucial, because the welfare bill is growing faster than GDP while too many working-age people are unfit to work. The Government have rightly said that they want greater emphasis on preventive care—I appreciate that this is not necessarily the Minister’s area of expertise—but preventive care is about telling people how to live their lives in healthier ways. Is money the obstacle, therefore, or is it more about finding the right language and legitimacy for the state to have these conversations? I say that not to belittle the huge issues facing the NHS, including its need for money, but to highlight the fact that it is not always about spending more money—and the same applies to education. It is also about setting productivity targets and changing the culture.
Lord Razzall (LD)
My Lords, the noble Lord, Lord Petitgas, suggested that this QSD would make a good exam question. I have often thought of it as a possible topic for PhD study; perhaps somebody has done it already.
Before I get on to the detail of the Budget, let us look at the positive use of tax policy in this country’s economy. I can think of three good examples. Let us take the agriculture industry: without the use of tax subsidies since the Second World War, we would not have the farming industry we currently have. Secondly, let us take the use of tax relief for microbreweries, which the Government want to encourage—I think that is somewhere in these documents. The tax relief given to microbreweries has created a lot of employment in the sector for people creating small breweries. Thirdly, the obvious example is the use of tax relief for the film and television industry, which provided a massive subsidy. If you make a film that qualifies in the UK with a budget of £100 million, you get back £25 million to £30 million in cash the moment you deliver the product. This has meant a huge increase in the number of films made in the UK; almost every Hollywood studio no longer makes its films in Hollywood but in the UK, entirely as a result of the positive use of the tax system to benefit our economy.
Inevitably, as the noble Lord, Lord Leigh, said, we must touch on what happened in the Budget. I do not think that I have so far heard anybody defend what happened in terms of the use of NI to raise £25 billion. Actually, it is not just the use of NI that is potentially damaging to small businesses, care homes, pubs and restaurants. It is also the triple whammy of the possibility of an NI increase, the increase in the minimum wage and the changes to zero-hours contracts. Nobody quite knows how those will impact on small businesses, particularly in the entertainment sector. The OBR says—this is common ground, I think—that, as a result of these policies, at least 50,000 jobs that would not have been lost otherwise will be lost and that our growth rate will be a lot lower than it would have been otherwise.
I am slightly disappointed that I have not yet heard a speaker in this debate say what they would have done as an alternative. We have heard all the arguments as to why this is a lot of rubbish; the noble Lords, Lord Bilimoria, Lord Leigh and Lord Petitgas, all suggest that it is what they would not have done, but we have not heard what they would have done. There seems to be some common ground; although the noble Lord, Lord Leigh, denied the existence of the £22 billion black hole, which I do not want to get into, I do not believe anyone thinks we do not need to raise more revenue to improve our public services. In that case, how do we do it? Bearing in mind that the Labour Government boxed themselves in by saying they were not going to increase income tax, VAT or NI, they had to do something.
Personally, I would not have done this. Our policy would have been to look to raise tax revenues elsewhere. We would have looked again at a better windfall tax on the oil and gas companies. We might have reversed the tax cuts that the Tories gave to the banks, and we might have looked at the obvious group that can provide more revenue for us: the large social media companies. We could have found creative ways to raise the money without doing this, which in a lot of ways is a tax on jobs.
We are all very pessimistic at the moment, but I have always been a bit optimistic. I remember standing in the Chamber in about 1998 or 1999 when the Labour Government introduced the minimum wage, and every speaker on this side said, “This is going to be a complete disaster; the minimum wage will destroy jobs and destroy our country as we know it”. It did not, and I hope this does not either.
Baroness Vere of Norbiton (Con)
My Lords, it is a great pleasure to follow the noble Lord, Lord Razzall. I agreed with some of what he had to say, which is a bonus for me today, so I am enormously grateful for his contribution. I am also grateful to my friend Lord Leigh for tabling this debate. Who knew that it was going to be so well timed? Like many others, I too will fall into the trap of focusing on the Budget because it is top of mind at the moment, and not in a good way.
I have to say, from listening to my noble friend Lord Leigh’s opening remarks, that he brings extraordinary expertise of commerce and the private sector, as of course do many other speakers in this short debate today, notably my noble friend Lord Petitgas and of course the noble Lord, Lord Bilimoria. Unfortunately, that is more than can be said of the current Chancellor and indeed the wider Cabinet—I think some analysis has been done, and private sector experience is somewhat lacking—so I hope that the suggestion made by the noble Lord, Lord Davies of Brixton, that some of the Labour Peers are promoted to positions of greatness such that they can share their private sector expertise, is taken up. It is definitely the case that there is private sector expertise on the Labour Benches; it just does not seem to have got up to the top levels.
Yesterday the new Labour Government raised the tax burden to the highest level in our country’s history. Despite making an outright promise not to raise taxes on people, they raised taxes on working people. In hiking the employers’ national insurance contributions—NICs for short—to raise a headline figure of £25 billion, the Government have committed a straightforward breach, according to the IFS, of their manifesto. Furthermore, there are numerous examples of the now Prime Minister and Chancellor promising before the election not to hike taxes. Can the Minister give the Committee any insight into how the discussions went when drafting the section of the manifesto about no increase in taxes on working people? Was it a cunning sleight of hand that left the words “national insurance contributions” unencumbered by the “employees’” qualifier, or was it just incompetence?
The noble Lord, Lord Bilimoria, made an excellent contribution. I appreciate his comments about the last Government. As a Conservative, I can say that no one wants to see taxes go up—it is just not in our DNA.
I remember many debates when I was a Treasury Minister and the noble Lord, Lord Livermore, in opposition, would slam me for tax rises. I was going to come up with various quotes today about the number of times he has previously slammed me for tax rises, but I thought that would be really cruel.
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
Could the noble Baroness not be bothered to do so?
Baroness Vere of Norbiton (Con)
No; my speech is already six minutes long, but I will do it next time.
Of course, at that time, we were dealing with the pandemic and its fallout, and the fallout from the energy price support we had given. Therefore, we had a very firm footing on which to raise taxes.
The Minister will try to bring out his fictitious black hole; I sincerely hope that he will not, given what the OBR has now said about it—I am starting to feel a bit embarrassed for him. Plainly and simply, promises have been broken, and we need to now think about what we can do to ensure growth in the private sector. The views of the private sector on this are now well known. Can the Minister share with me whether anyone in the private sector thinks the rise in employer NI is a good idea?
I want also to look at what the OBR has to say in its economic and fiscal outlook. My noble friend Lord Elliott is right. It is like beer, which is going down by 1p in a pint—that is huge, is it not?—and wine: the more you tax it, the less you get. The noble Lord, Lord Razzall, was very helpful in this regard. If you tax the film and creative industries less, they grow more. Unfortunately, we have seen taxes go up, so—surprise, surprise—the labour supply is forecast to come down by 0.2%. I do not know whether the Minister is happy with this, but I wonder what the Government will do to mitigate for those people who would otherwise have been in a good job.
But it is worse than that. Real earnings will then stall in 2026 and 2027, as firms rebuild their margins and pass on the costs of higher employer NICs. Real wages are not expected to resume growing in line with productivity until beyond the forecast horizon. What interventions will the Minister set out in terms of increasing productivity such that we can get some sort of real wage growth going?
It is not just the OBR that has an issue here; it is also HMRC, which reflects that 940,000 employers will lose an average of £800 per employee. This is not good news for employment, and it is not good news for growth. Labour’s No. 1 mission is to secure the highest sustained growth in the G7. I am an optimist, but this Budget literally has the forecasts for growth coming down. I cannot see how that is compatible with Labour’s No. 1 mission.
The noble Lord, Lord Razzall, asked for alternatives. I will give him two that are still on the table. First, if we increased productivity to pre-pandemic levels, we would get £20 billion a year. Secondly, reforms to adult welfare would save £34 billion a year. That was our plan; we did have a plan but, unfortunately, we were not able to put it in place.
Lord Livermore (Lab)
My Lords, I congratulate the noble Lord, Lord Leigh of Hurley, on securing this debate and on his opening speech. I thank all noble Lords for their contributions.
The manifesto this Government were elected on promised to invest in our public services and prioritise working people. Keeping those promises was at the core of yesterday’s Budget. Many noble Lords focused today on specific tax decisions made in the Budget, and the impact and analysis of those decisions as set out by the independent Office for Budget Responsibility. It may be helpful to noble Lords if I begin by explaining the background to the decisions we made.
First, in July, as the noble Lord, Lord Leigh of Hurley, kindly mentioned, the Chancellor exposed a £22 billion black hole at the heart of the previous Government’s plans—a series of promises they made but had no money to deliver. This Government yesterday published a line-by-line breakdown of that £22 billion black hole, and the OBR published its own review of the circumstances surrounding the Spring Budget forecast.
For the benefit of the noble Baroness, Lady Vere, the OBR’s report says that the previous Government “did not provide” them “with all the information” that was available and that, had the OBR known about these
“undisclosed … pressures that have since come to light”,
its spring forecast would have been “materially different”.
Secondly, the country inherited not just broken public finances but broken public services too, with NHS waiting lists at record levels, schools literally crumbling, and rivers filled with waste. Yet, since 2021, there had been no spending review—no detailed plans for departmental spending set out beyond this year.
Thirdly, the previous Government had failed to budget for costs which they knew would materialise, including funding for compensation schemes for the infected blood scandal and the Post Office Horizon scandal.
Put together, these three things—the black hole in our public finances, the compensation payments which they did not fund and their failure to assess the scale of the challenges facing our public services—meant that, in order to meet our first fiscal rule, yesterday’s Budget needed to raise taxes by £40 billion.
So, we had in yesterday’s Budget some very difficult decisions to take in order to rebuild our public finances and our public services. In doing so, we made an important choice: to keep every single commitment we made on tax in our manifesto. We did not raise taxes on working people—their income tax, their national insurance or VAT—and we were able to go further, by not increasing fuel duty and by not extending the last Government’s freeze of income tax thresholds, which hit working people so hard, as the noble Lord, Lord Bilimoria, mentioned.
Of course, in the circumstances I describe, any responsible Chancellor would need to take difficult decisions to raise the revenue required to fund our public services and to repair our public finances. So, in yesterday’s Budget, the Chancellor announced an increase in employers’ national insurance contributions by 1.2 percentage points to 15% from April, and that the secondary threshold would be reduced from £9,100 per year to £5,000.
We know that it is particularly important to protect our smallest companies, so we also increased the employment allowance from £5,000 to £10,500, meaning that 865,000 employers will not pay any national insurance at all next year, and over 1 million will pay the same or less than they did previously. In the Budget, we also increased the lower rate of capital gains tax from 10% to 18%, and the higher rate from 20% to 24%, which means that the UK will continue to have the lowest capital gains tax rate of any European G7 country.
Alongside these changes to the headline rates of capital gains tax, we are also maintaining the lifetime limit for business asset disposal relief at £1 million, to encourage entrepreneurs to invest in their businesses. Business asset disposal relief will remain at 10% this year before rising to 14% in April and 18% from 2026-27, maintaining a significant gap compared with the higher rate of capital gains tax.
We also published a Corporate Tax Roadmap, which confirms our commitment to cap the rate of corporation tax at 25%—the lowest in the G7—for the duration of this Parliament, while maintaining full expensing and the £1 million annual investment allowance and keeping the current rates for research and development reliefs to drive innovation.
The Budget also set out additional tax measures, including reforming inheritance tax and measures on tobacco duty, vehicle excise duty, air passenger duty and alcohol duty.
We also delivered on our other commitments, which some noble Lords addressed during this debate: to abolish the non-dom tax regime and replace it with a new residence-based scheme; a new approach to the way carried interest is taxed; reforms to the stamp duty land surcharge tax for second homes, and to the energy profits levy; and we introduced VAT on private school fees. In total, these changes—alongside our measures to tackle tax avoidance—will raise over £9 billion to support our public services and restore our public finances.
We are asking businesses to contribute more, and the Chancellor acknowledged in her speech that the impacts of this measure will be felt beyond businesses, too, as the OBR has set out and as noble Lords raised in today’s debate. In addition, as my noble friend Lord Davies of Brixton observed, the employment rate will increase by 1.2 million over the forecast. These are, however, very difficult choices, and not ones that the Chancellor took lightly. But, in the circumstances we inherited, we believe they are the right choices to make.
Several noble Lords mentioned growth, and it was of course welcome that the OBR was so clear: this Budget will permanently increase the supply capacity of the economy, boosting long-term growth. However, there is of course much more to do.
It is important that we also consider in this debate the purpose of the difficult decisions we have taken on tax, which enable us not just to repair the public finances but to begin to rebuild our public services. It is worth noting that, in this debate, some noble Lords spoke in favour of some of this investment, but without supporting the taxation necessary to fund it. Because of the difficult decisions the Chancellor has taken on tax, day-to-day spending from 2024-25 onwards will grow by 1.5% in real terms, while total departmental spending, including capital spending, will grow by 1.7% in real terms.
In this, the first phase of the spending review, the Chancellor has prioritised day-to-day funding to deliver on our manifesto commitments. We will increase the core schools budget by £2.3 billion next year to support our pledge to hire thousands more teachers into key subjects; to triple investment in breakfast clubs to put them into thousands of schools; and to provide an additional £300 million to our further education colleges, while taking steps to transform the apprenticeship levy into a more flexible growth and skills levy.
We will deliver a real-terms funding increase for local government next year, including £1.3 billion of additional grant funding to deliver essential services and £200 million to tackle homelessness and rough sleeping. We are also providing funding to support public services and drive growth across Scotland, Wales and Northern Ireland, with the largest real-terms funding settlement since devolution delivering an additional £3.4 billion to the Scottish Government, £1.7 billion to the Welsh Government and £1.5 billion to the Northern Ireland Executive in 2025-26.
Finally, we are fixing the NHS after years of neglect. Because of the difficult decisions the Chancellor has taken on tax, which we are debating today, and because of our commitment to a new investment rule, yesterday’s Budget announced that we are now able to provide a £22.6 billion increase in the NHS budget over two years. That is the largest real-terms growth in NHS spending outside of Covid years since 2010. Many NHS buildings were left by the previous Government in a state of disrepair, so we will provide £1 billion of health capital investment next year to address the backlog of repairs and upgrades across the NHS estate. To increase capacity for tens of thousands more procedures next year, we are providing a further £1.5 billion for new beds in hospitals across the country and more than 1 million additional diagnostic tests, as well as new surgical hubs and diagnostic centres, so that the people waiting for treatment can get it as quickly as possible. Because of this record injection of funding, the thousands of additional beds that we will secure and the reforms that we are delivering in our NHS, we can now begin to bring waiting lists down more quickly and move towards our target of an 18-week waiting time by delivering our manifesto commitment for 40,000 extra elective appointments a week.
The difficult decisions on tax that we made in yesterday’s Budget, which have been debated here today, were made for a purpose. We made choices to rebuild the public finances and our public services, to invest in the national interest and to keep our manifesto commitment to prioritising working people. It is perfectly possible to make different choices, of course, but noble Lords should keep in mind that, at the last election, the country voted for change. They did not reject the previous Government so overwhelmingly because they thought the choices they had made were the right ones; they gave this Government a mandate to fix the foundations of our economy and to deliver the change they voted for.
As the noble Lord, Lord Razzall, observed, we did not hear very much about any credible alternative during this debate. We believe that any responsible Chancellor would have had to take action in the circumstances we faced, but, of course, it was possible to choose not to act. Some noble Lords may think that it would have been better to choose the path of irresponsibility and ignore the problems in the public finances altogether. If that is their choice, they should say so. I believe that the choices the Chancellor set out at the Budget are the right choices for our country, to repair our public finances, to protect working people, to fix our NHS and to rebuild Britain.
Other choices could have been made, of course, but let me be clear: not making the choices that we have made would make it impossible to protect working people; not funding public services in the way that we have would mean cuts to schools and hospitals; not supporting our investment rule would mean delaying or cancelling thousands of projects that drive growth across our country. We have made our choices—the only responsible choices—to protect working people, to fix the foundations of our economy and to invest in Britain’s future.
Baroness Vere of Norbiton (Con)
Before the Minister sits down, if I may say so—he has a minute left—I am concerned that he is answering the wrong exam question, as he did not seem to mention employment. However, he did mention the NHS and the £22 billion for it. How much of that sum is the RDEL compensation for the public sector, which will not have to pay employers NI?
Also, I would like the Minister to write, if possible, to cover the question from my noble friend Lord Petitgas about any sector-by-sector analysis of the impact of this tax policy on employment.
Lord Livermore (Lab)
I am very happy to write. I did mention employment: I set out that there would be an increase of 1.2 million over the course of the forecast. That is the question I was asked.
House of Lords
Railway 200
(4 days, 17 hours ago)
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Lord Faulkner of Worcester
To ask His Majesty’s Government what support they are giving to Railway 200 to celebrate the two-hundredth anniversary of the birth of the modern railway.
Lord Faulkner of Worcester (Lab)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper. I refer to my railway interests as listed in the register.
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My Lords, Railway 200 marks the anniversary in 2025 of the first public passenger railway in the world and will celebrate the railway’s contribution to the nation’s and the world’s development and connectivity. A reformed railway is vital to the Government’s commitments to deliver more growth, jobs and housing. Railway 200 is a celebration not only of the past with heritage railways but of the present and the future, including the UK’s exciting technical and engineering innovations and the career opportunities across Britain that they offer. My department is playing a full role in this.
Lord Faulkner of Worcester (Lab)
My Lords, that is a great Answer. In 1845, 20 years after the first passenger railway, Benjamin Disraeli wrote:
“The railways will do as much for mankind as the monasteries did”.
He was right about that. Can my noble friend the Minister be a bit more specific about the support that the Department for Transport is giving to Railway 200, particularly the financial contribution? Does he agree that the celebration provides a great opportunity to not only showcase what the early railway pioneers did but to look forward to what the railways can achieve in future?
Lord Hendy of Richmond Hill (Lab)
I have to agree with Disraeli after all these years. The railway is currently, and will remain, publicly supported to a great extent but with significant private sector contributions. As my noble friend would imagine, we are appealing to all the people whose businesses support the railway, to make sure that the public sector contribution is as low as possible at a time of financial stringency. We have not finished that process yet. Meanwhile Network Rail, which is supported by the department, has contributed some support to get the project going. I cannot say exactly what the department’s contribution is. I expect it to be as low as possible, and in due course if my noble friend asks we will be able to tell him. At the moment we are still collecting financial contributions from those people whose businesses support the railway and vice versa. As far as the nature of the celebration goes, quite clearly the benefits are not only a good celebration of history but of the fact that the UK’s railways are leading the world with technological innovation. Those are the things that we will be clearly showcasing alongside, as I said, the career opportunities offered.
Lord Parkinson of Whitley Bay (Con)
I too agree with the first Earl of Beaconsfield. As Heritage Minister, conscious that plans for the anniversary might be derailed by an intervening general election, I encouraged people from across the sector to liaise with the now Minister in his capacity as chairman of Network Rail. Little did I know that after the election he would be in such an excellent position to help deliver it. The Minister shares the passion of so many, particularly in that cradle of the railways the north-east of England, to ensure that this anniversary celebrates the past and inspires people for the future. I imagine he shared my dismay to hear the news in the Budget yesterday that the Government are not minded to honour the £15 million of capital funding for the National Railway Museum in York which we announced in March. Will he use his good offices to try to persuade his colleagues across government not to cancel that funding, particularly at such a historic juncture?
Lord Hendy of Richmond Hill (Lab)
It is a great pleasure to see the noble Lord in front of me. He was material in moving this project on at an earlier stage, for which I thank him very much. I had not caught the issue that he raises and my best course of action is to go away, inform myself, and then see what can be done about it.
Lord Ravensdale (CB)
My Lords, I declare my interests as set out in the register. The Midlands Rail Hub project is eagerly awaited by stakeholders right across the region, not least in addressing those east-west links in the region that have been such a problem in the past. I heard no mention of the Midlands Rail Hub in yesterday’s Budget. Can the Minister update the House on progress within the department on this vital project?
Lord Hendy of Richmond Hill (Lab)
It is as with so many other projects; this Government found when they took office a very large list of projects with a much smaller funding envelope to deliver them. The Secretary of State for Transport has commissioned a full review of all transport infrastructure projects. This needs to be done properly. As I have said before here, everything you do with the railway lasts 150 years. When we have finished reviewing all those projects we will have a plan to go forward to invest in the best possible way.
Baroness Randerson (LD)
My Lords, one of the commercial supporters of the celebration the noble Lord referred to is Alstom, a train manufacturer based in Derby. Some months ago, there were serious concerns about jobs in and the viability of Britain’s train manufacturing companies, caused by intermittent orders. Given that there is a lack of information from the Government so far about how the system will work in the future under nationalisation, and given that they have not committed to touching the roscos and the system of ordering trains, can the Minister reassure us that those threats to well-paid, skilled jobs have now receded?
Lord Hendy of Richmond Hill (Lab)
The Government are absolutely committed to maintaining jobs in the railway manufacturing sector. The noble Baroness needs to know that the creation of Great British Railways will enable the Government for the first time for a very long time to produce a long-term plan for rolling stock strategy for Britain, which will give much more clarity to the manufacturing industry about what will be replaced when.
Baroness Winterton of Doncaster (Lab)
I know that my noble friend the Minister believes, as I do, that rail freight is as important now as it was 200 years ago. Can he assure me that he will continue discussions with companies such as Freightliner, which has a base in Doncaster, which are eager to see a rail freight strategy to move more freight on to rail and help the Government meet their environmental targets?
Lord Hendy of Richmond Hill (Lab)
Indeed, I recognise that. I met the managing director of Freightliner on Tuesday. I met the managing director of DB Cargo on Monday. I met the managing director of GB Railfreight three weeks ago, and I have met the industry collectively since I took office. The Government recognise the importance of rail freight and the need to grow it. A target for the growth of rail freight with be part of the Great British Railways commitment.
The Lord Bishop of Newcastle
My Lords, the father of the modern railways, George Stephenson, was born in Wylam in my diocese. The noble Lord, Lord Parkinson, has already referred to the pride that the north-east feels in his legacy. Would the Minister consider adding his name to those of colleagues from all sides of this House and the other place in pledging support for the reinstatement of the Leamside line in the north-east, adding a modest 21 miles of connectivity to that region?
Lord Hendy of Richmond Hill (Lab)
The Leamside line is one of many projects—I have already had a question about the Midlands Rail Hub—that are part of the review commissioned by the Secretary of State for Transport. We need to allocate the funding we have for railways in the best possible way. The comprehensive review she has commissioned will seek to do just that.
Lord McLoughlin (Con)
My Lords, I welcome the department’s contribution to the 200-year anniversary. Will the Minister acknowledge that we have seen massive growth on the railways over the past 20 years, with passenger journeys going up from 700 million to 1.8 billion before the Covid pandemic? What is the Government’s plan to see them continue to grow? That growth has been brought about by bringing in the private sector.
Lord Hendy of Richmond Hill (Lab)
We all recognise the growth in passenger traffic on the railways in the past 20 years. There are many reasons for it. Sadly, post Covid, the railway has less patronage than it did and certainly less income than it did, so the Government’s proposals for a reformed railway have to address the issues on the railway as they are now, not what happened in the past.
Young People: Government Policy
(4 days, 17 hours ago)
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Baroness Anelay of St Johns
To ask His Majesty’s Government, further to the Duke of Edinburgh’s Award report Youth Voices 2024, published on 23 July, what assessment they have made of how young people are represented in Government policy development and decision-making.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
The noble Baroness mentions a report that highlights how young people feel disengaged from politics and policy-making. We know that if we fail to involve young people in the development of policies that affect them, we may widen the disengagement gap between young people and politics. This Government are committed to empowering young people to make a difference in their communities and are working work with them to develop a new national strategy for young people.
Baroness Anelay of St Johns (Con)
My Lords, the Minister refers to a new strategy. In the real world, there is a key ask in Youth Voices 2024, which reports on a wide consultation. The key ask is to say, “Can there be in that strategy a commitment to involve meaningful representation of young people and involvement at all levels of policy-making?” Does she agree that that will be in the strategy? How will it be delivered?
Baroness Twycross (Lab)
The Secretary of State is incredibly passionate about the new national youth strategy and the principle of coproduction with young people and the sector. She is clear that it will support the next generation to succeed. Unfortunately, I have to say that further details will be announced shortly, but I and the Secretary of State are clear that integrating the youth voice in policy-making can strengthen the quality of policies that affected people, build bridges between young people and government and make sure that the policies that affect them are the ones that they want and that recognise and reflect their needs and aspirations for the future.
Lord Blunkett (Lab)
My Lords, I know that the Minister will welcome the initiative by the Lord Speaker and the education and outreach service from Parliament. Perhaps she would also indicate how critical it is that citizenship is taught in schools and that citizenship encouraged in terms of youth provision is vital. On a day when my grandchildren, Finley and Harriet, are in the gallery, will she, with the education service and the Minister of State, help to make this work for the future, because it is crucial to our democracy?
Baroness Twycross (Lab)
Absolutely, and one of the things that was striking from the Duke of Edinburgh’s Award survey was that two-thirds of the young people surveyed were politically active but only 40% were likely to vote in a general election. For me that was really telling. Young people are engaged and we need to use every mechanism to make sure that they see their political activity reflected in the type of politics we engage with in your Lordships’ House and in the other place. I will speak to the Minister of State in the Department for Education about this, but I am confident that the curriculum review will allow for a proper assessment of what is required for future education in this space.
Baroness D'Souza (CB)
My Lords, does the Minister agree that one of the main conclusions of the excellent Youth Voices report is the failure to reach young people? And does she further agree that one way of encouraging participation would be to have mandatory and tailor-made citizenship classes at both primary and secondary level?
Baroness Twycross (Lab)
The noble Baroness correctly identifies that schools are the place in which we can reach children most systematically. I will feed that back to the Minister of State. I had understood that citizenship did run through the curriculum, but I stand to be corrected and I will pick that up with my noble friend.
Lord Addington (LD)
My Lords, do the Government agree that it does not matter what you do unless you get that information out to the group that is going to consume it? Are the Government going to have a strategy for having online news and information about politics that is targeted at the young where they are liable to read it? Because it is quite clear they are not engaging with traditional forms of news and information.
Baroness Twycross (Lab)
The noble Lord correctly identifies that one of the reasons young people do not engage with traditional politics is that we do not engage with them. I will feed back the points he raises but I assume that, as the national youth strategy is going to be co-produced with young people, how politicians communicate with young people, including what resources we need online, will be part of the development of that strategy.
Lord Parkinson of Whitley Bay (Con)
My Lords, I am delighted that the noble Baroness and the Government are helping to ensure that people of all ages can play their full part in our democratic processes, but how does she square that with the Government’s proposals to remove people from one of our Houses of Parliament based solely on their age?
Baroness Twycross (Lab)
The noble Lord might have to wait until that comes up through the legislative process to have a further debate on that point.
Baroness Taylor of Bolton (Lab)
Will my noble friend the Minister look at the recent experience of the Hansard Society—I declare an interest as the chair—in running mock elections with many schools in this country at very short notice and developing a comprehensive and effective way of engaging young people in our democratic process?
Baroness Twycross (Lab)
My noble friend makes a valid point. From my own experience, my first formal political engagement was through the democratic process when I voted for the first time as an 18 year-old. But we had had a youth election at the school. I am not sure I won it, but it is a really important way and I pay tribute to everybody, including schools, who managed to put together mock elections at such short notice.
Baroness Smith of Llanfaes (PC)
My Lords, in recent months I have visited a number of schools and colleges and young people have told me that they fear that they are not going to be able to afford to buy their own home in the future and will not have a job after they leave education. What are the Government going to do to ensure that they meaningfully engage with young people to find out what priorities they care about and to involve them in the solution?
Baroness Twycross (Lab)
Going back to the report the Question relates to, housing did come up as one of the key issues, and the cost of being able to afford somewhere to live. Obviously, it is not just an issue of people needing to stay at home; they cannot envisage getting out of house shares or flat shares. I hope they will recognise that the Government’s planned investment in housing for first-time buyers and social housing reflects their need and desire to have their own home.
Baroness Coussins (CB)
My Lords, are His Majesty’s Government willing to reconsider extending the franchise to 16 and 17 year-olds?
Baroness Twycross (Lab)
We are planning to introduce votes for 16 and 17 year-olds because they can work, pay tax and serve the country in the Armed Forces. We think it therefore stands that they should be entitled to vote and have their say on the issues that affect them and their future. We will legislate to lower the voting age to 16 for all UK elections when parliamentary time allows.
Lord Anderson of Swansea (Lab)
My Lords, I was very happily surprised to learn that one of my grandsons, who lives long-term in Prague, is able to take the scheme. Is the scheme not a valuable contribution to people beyond our shores and should not this be noted?
Baroness Twycross (Lab)
I was not aware that it was available to young people in Prague, but I welcome that point. The role of the Duke of Edinburgh’s Award scheme in opening up activities to young people who might otherwise not have the opportunity to take part in them is recognised on a cross-party basis.
Earl Russell (LD)
My Lords, young people are deeply concerned about the climate crisis. What efforts are the Government considering to set up a national volunteering service to encourage our young people to get involved in helping to fight the climate crisis in a way that is beneficial to everyone?
Baroness Twycross (Lab)
I do not want to pre-empt the work that the Secretary of State is going to do, working with young people. I recognise from my own family the deep concern young people have about the climate crisis, but I think we should leave it to the Secretary of State and the young people she is working with to focus on how that would best be delivered for them.
Food Banks
(4 days, 17 hours ago)
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Baroness Kingsmill
To ask His Majesty’s Government what steps they are taking to eliminate the need for food banks.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Sherlock) (Lab)
My Lords, this Government are committed to reducing mass dependence on emergency food parcels. Tackling poverty and getting Britain working will be the foundation of our approach. The Child Poverty Taskforce will publish a UK-wide strategy in the spring, and we will soon publish a White Paper setting out our plans to reform employment support to help people enter work, and stay and progress in it.
Baroness Kingsmill (Lab)
Does the Minister agree that the very existence of food banks in the UK is shameful? Notwithstanding our admiration for the amazing efforts of the thousands of volunteers around the country in community groups, schools and churches and their efforts to tackle food poverty, it is nevertheless shocking to learn that there are nearly 3,000 food banks in this country. Special thanks must go to the Trussell Trust, which operates 1,400 of them. Hungry families should not have to rely on charity to feed their children in one of the richest countries in the world. It is the political choices made over the past 14 years that have caused this. What choices will the Government now make to eliminate the need for food banks?
Baroness Sherlock (Lab)
I thank my noble friend for raising this extremely important issue. I join her in paying tribute to the Trussell Trust and to the many community and faith groups that run food banks. I have seen them in churches, mosques and community centres, and it is wonderful that people volunteer. However, like her, I am concerned that they have gone from something at the margins to help someone when they run into trouble, to mass dependence and an integrated part of the system. Something has gone wrong in recent years that we now see 2.3 million people living in households where a food bank was used in the last 12 months. We are committed to ending mass dependence on emergency food banks.
My noble friend talked about families with children. The Secretary of State made this one of her early priorities. She gathered around her a food poverty round table with experts and charities. She has a child poverty strategy, which will be produced in the spring. In the meantime, as a down payment, the Budget yesterday announced additional help for those struggling with debt and for carers. We will offer free breakfast clubs in primary schools. We are getting in and doing things at the start, but above all we need to make sure the system works for families, and we will.
Baroness McIntosh of Pickering (Con)
My Lords, does the Minister not share my concern that the need for food banks might actually grow in the coming months? There has been a bad harvest and we produce only 16% of our own fruit and vegetables. Food prices are going up and the Budget yesterday will impact negatively on farmers. What does she propose to do to reduce the dependence on food banks, rather than increase it?
Baroness Sherlock (Lab)
My Lords, what we are going to do is to support families. People should be able to support their own families, but research has found that if you look at households where somebody had used a food bank in the previous 12 months, 40% of those people are in jobs. Working people should be able to go to work and bring home enough money to feed themselves and their families so, for a start, the Government have just made a significant announcement about an increase to the national living wage. We have a plan to make sure that work pays so that people get into decent jobs and keep them, bringing home enough money to support their families. In the short term, we will make a real difference: free breakfast clubs in every primary school mean that children will not be hungry there. That helps the children and takes a big pressure off their families.
Baroness O'Loan (CB)
My Lords, despite everything that the Minister has said about the Budget yesterday, it is being widely reported that it will lead to lower incomes for people generally. Does she think that this will assist in reducing the numbers reliant on food banks, or will it inevitably end in an increase in those who have to rely on them?
Baroness Sherlock (Lab)
My Lords, the strategy came through loud and clear in my right honourable friend Rachel Reeves’s Budget yesterday. We have to get this country back to work and get it growing. If we are to reach a point where we can not only repair the damage done to our public services but rebuild our country, we have to make it work. The foundations were laid really well and clearly in the Budget yesterday. The Government have a plan to make work pay. We have a White Paper coming out on that and are reforming the whole of employment support. We want people to be able to get into jobs, keep them and progress in them—not just to make a difference to themselves but to rebuild our country.
Baroness Janke (LD)
My Lords, to pay for the Government’s healthy eating recommendations, the poorest 10% of UK households would need to spend 74% of their post-housing disposable income on food. The consideration of healthy eating is not a factor in calculating benefit rates. Do the Government believe that the poorest and most vulnerable people should have access to healthy food and, if so, how will calculations about benefits in the future reflect this?
Baroness Sherlock (Lab)
I absolutely agree about the importance of access to healthy food and there are schemes out there to help the lowest-income families access it, particularly pregnant women and the parents of younger children. Having been asked by a noble Baroness previously about breakfast clubs in primary schools, I went off to check and discovered that they are to be covered by the school standards for food, so we will make sure that there are nutritious breakfasts there. But in the end the noble Baroness, Lady Janke, raises a really important point: we have to tackle the child poverty at the root of this if families are to be able to feed their kids appropriately. That brings us back again to the child property strategy but I am delighted that, in the short term, there were some down payments. One small thing, which will not have gone widely noticed, is that we will introduce a fair repayment rate for universal credit. It sounds really technical but reduces the total cap on deductions from universal credit from 25% to 15%. That means that 1.2 million of the poorest households have £420 a year more to spend, which makes a real difference.
Viscount Younger of Leckie (Con)
My Lords, compared to pre-Covid times, when people tended to visit a food bank for emergency purposes—as a result of a home emergency—there is anecdotal evidence, as I am sure the noble Baroness is aware, that visits per head are more sustained and that the needs of those visitors are more varied. It is not just about poverty. It is about rising cases of mental health and domestic abuse, so what are the Government doing to help food bank volunteers to cope and to spot these signs in customers?
Baroness Sherlock (Lab)
My Lords, our local jobcentres are doing very good work, as I am sure the noble Viscount will know from his time doing my job. There are incredibly good arrangements, including partnership schemes to engage with all kinds of local charities to make the connections, but the most important thing is to have somewhere to refer people to. I am afraid that our mental health service has been in such decline that, even if problems are identified, it is quite hard for volunteers to know where people can go. This Government are committed to restoring our mental health support and investing in child and adolescent mental health. As a down payment on that, we will recruit another 8,500 mental health professionals to work with children and adults. I am really grateful to the noble Viscount for raising that really important point.
Lord Sahota (Lab)
My Lords, before I ask my question, can I wish all noble Lords a happy Diwali? When all food banks are eliminated, do the Government have any plan for what will happen to all the surplus food that has been donated by the supermarkets and other retailers over time to them?
Baroness Sherlock (Lab)
My Lords, obviously I dream of that day. I have visited a fascinating place in the north-east called REfUSE, based in Chester-le-Street in County Durham. It gets free food and has people, as either volunteers or staff, who can help to create meals where people then pay what they can afford. It has branched out from that to start doing catering for events, such as weddings. This does a couple of things. It raises awareness of the tragedy of food waste, while showing how we can reuse things creatively to produce brilliant food; it also helps all of us to think better. If we do not want to end up with food shortages, we all need to get better at reusing and recycling, and buying well in the first place.
Baroness Boycott (CB)
My Lords, I declare my interest as the chair of Feeding Britain. The Minister has just outlined one of our social supermarkets, which are a bridge between a food bank and getting people back into normal eating and being able to afford food. We sell surplus and waste food for about 30p in the pound with people joining a club depending on their status, area and income. They are taught to cook and allowed to shop with honour, and our cafes become self-sustaining after the initial costs of setting up. Will she agree to meet us or to come and visit some of our supermarkets? I can see that she has already visited one. They are a way forward, whereas the food bank is a way back.
Baroness Sherlock (Lab)
My Lords, they both have their place, at least at the moment, but I would be very happy to visit. I have visited other such things but I am always interested in the creativity behind this. I have visited a brilliant one over in Waterloo, run by Oasis and the Catholic Church. It was fascinating that they were able to engage with and provide support to people who came in, finding out their problems and dealing with them at the root. But there was also a pantry, and somebody proudly told me how he could not only go and get food from it but had been able to cook dinner and invite his neighbours in. That is a wonderful thing to do; it tackles isolation and gives him the opportunity to give something out to others and to learn along the way. It is brilliant and I commend the noble Baroness for her work on this.
MV “Ruby”: Ammonium Nitrate
(4 days, 17 hours ago)
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Lord Berkeley
To ask His Majesty’s Government what discussions they are having with the Great Yarmouth Port Authority about additional safety precautions to be put in place to enable the MV Ruby to dock with a cargo of ammonium nitrate.
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
The Government have engaged with Peel Ports, which owns the port of Great Yarmouth, and the ship’s management company. They have provided guidance and advice to ensure the safe transfer of this cargo from the motor vessel “Ruby” on to another vessel for onward travel. Ammonium nitrate is regularly handled at UK ports and standard health and safety procedures have been, and are being, followed.
Lord Berkeley (Lab)
I am grateful to my noble friend for that Answer and declare an interest as an honorary president of the United Kingdom Maritime Pilots’ Association. The cargo of 20,000 tonnes of ammonium nitrate is benign on its own, but I know from construction experience what happens when you mix it with a little bit of diesel and an explosive: in Beirut, about two years ago, it demolished most of the city, as I understand it. Is Great Yarmouth a great place to have a transfer like this, when that ship has been sitting in the North Sea for probably weeks, if not months, trying to get some port somewhere to accept it and unload the cargo? I would be interested in my noble friend’s response.
Lord Hendy of Richmond Hill (Lab)
My Lords, the explosion in Beirut occurred because of the incorrect storage of a large amount of ammonium nitrate over a prolonged period. It was stored in a shed, alongside fireworks that caught fire and caused the explosion. The ammonium nitrate on the motor vessel “Ruby” has been stored correctly and is not believed to be compromised in any way. The port of Great Yarmouth has experience of handling agricultural dry-bulk cargoes including ammonium nitrate, over 200,000 tonnes of which are imported into the United Kingdom through various ports.
Lord Bellingham (Con)
My Lords, I declare an interest as a former MP for a constituency very near Yarmouth. I can endorse what the Minister has just said. He is aware, obviously, that this port, owned by Peel Ports, has state-of-the-art handling facilities for hazardous goods, including ammonium nitrate, and I have every confidence in Peel Ports’ ability to carry out this trans-shipment contract. Is he aware that it is going to be very important for the local economy? The port is doing well, but this is a big contract. Can he just comment on one point? The vessel was originally en route from the northern Russian port of Kandalaksha to, I think, Lagos via the Canary Islands. Is there an issue regarding sanctions here?
Lord Hendy of Richmond Hill (Lab)
I echo what the noble Lord says about the port of Great Yarmouth. The department has engaged with HMRC and the Department for Business and Trade, which have separately considered whether the goods on board the “Ruby” are subject to import sanctions. They have confirmed that ammonium nitrate, the substance on board the motor vessel “Ruby”, is not subject to import sanctions under the Russia (Sanctions) (EU Exit) Regulations 2019.
Baroness Randerson (LD)
My Lords, as the previous question has illustrated, there is a complex background to this situation. A couple of years ago, it was discovered by the Secondary Legislation Scrutiny Committee that the Department for Transport had fallen badly behind in transposing international maritime law into British legislation, a situation exacerbated by Brexit as we no longer had to follow EU law. Can the Minister assure us that the UK is now fully signed up to our international maritime obligations and therefore fully protected in a sensitive and complex situation?
Lord Hendy of Richmond Hill (Lab)
The noble Baroness is obviously right that this is an important issue. I will write to her about the current position in this respect, but I have to say that the position of the motor vessel “Ruby” is not affected by the situation in the past that she talked about.
Lord Moylan (Con)
My Lords, I agree with the tone of what the Minister has said about not spreading alarm unnecessarily, but can he say what actions the port authority has taken to engage with communities in Great Yarmouth to address their understandable concerns?
Lord Hendy of Richmond Hill (Lab)
I am told that handling ammonium nitrate is a normal operational activity at Great Yarmouth, as we have heard. My understanding is that there has been no special public consultation and, in fact, the transfer of cargo has begun and is regarded by the port as not being an exceptional activity.
Lord Greenway (CB)
My Lords, I welcome the Minister to what I think is his first maritime Question. I agree with him entirely about the transportation of this particular fertiliser, many hundreds of thousands of tonnes of which are transported safely around the world every year. He mentioned the Beirut explosion. This particular commodity can be set off only through shock or heat in a confined space. On that occasion, having been poorly stored for several years, as the Minister said, the fireworks caught fire and exploded, providing the perfect whammy for the major explosion which followed.
Lord Hendy of Richmond Hill (Lab)
The noble Lord is right that it is my first maritime Question. I was not expecting to be so knowledgeable about ammonium nitrate 48 hours ago, but I am now and I welcome his information about the explosion in Beirut.
Lord Kamall (Con)
My Lords, can I just follow up the question from my noble friend Lord Moylan about the information given to local residents? It is a routine operation, as the Minister rightly says. But given the extended publicity around this particular transfer and this particular docking, it may well be that some local people who were not aware that this was routine are now alarmed. Can the Minister have another go at answering the question of whether there are any concerns, given the media coverage of this ship docking there?
Lord Hendy of Richmond Hill (Lab)
Given what the noble Lord has said, I will ask again, but I emphasise that as far as the port is concerned this is a routine activity and accounts for no more than removal of the cargo from one ship by means of lorries on the quayside and putting it in a second one.
Lord Dannatt (CB)
My Lords, I am delighted to be able to come to the assistance of the Minister and can assure him that there has been very responsible coverage of this incident in Great Yarmouth, as I live not terribly far away. The Eastern Daily Press yesterday and this morning showed the ship very safely in the outer harbour, with the ammonium nitrate being handled in the way that it has been handled on many occasions in the past. I congratulate Peel Ports, Great Yarmouth and the borough council for the way in which they have carried out this operation, despite the scare stories that have appeared in the media, which, by and large, have been groundless.
Lord Hendy of Richmond Hill (Lab)
I thank the noble Lord for that information.
Lord Lancaster of Kimbolton (Con)
My Lords, it is one of those odd occasions when you realise that you have some slightly strange expertise: I declare my interests as a firework maker and a bomb disposal officer. I think the tone of this Question is exactly right. Poor old ammonium nitrate is perfectly safe in its own condition, but when it is mixed 16:1 with diesel it becomes a high explosive. I simply suggest that the best approach the Minister could take to reassure local residents is to reassure them that there is no diesel seepage and therefore no threat.
Lord Hendy of Richmond Hill (Lab)
I thank the noble Lord for that. I hope he goes nowhere near Great Yarmouth for the foreseeable future. It is a serious point, and the Health and Safety Executive has been fully engaged. It has been helpful and supportive in providing advice and guidance to the ship’s management company and Peel Ports to ensure that the handling of this cargo is in line with UK regulations and, of course, safe.
Lord Blunkett (Lab)
Given the intervention of the noble Lord opposite, can we have a reassurance that he will be checked very carefully next Tuesday?
Baroness Altmann (Non-Afl)
My Lords, I also wish everyone celebrating a happy Diwali. What was the rush to get the ship docked when it was? It had already been in the North Sea for quite some weeks and had been turned away by Norway and Lithuania. Might it not have been more reassuring for the public had it waited until after 5 November?
Lord Hendy of Richmond Hill (Lab)
Indeed, happy Diwali. The ship was on its way to its home base of Malta and, given the likely conditions in the Bay of Biscay and the weather at the time of year, the ship’s management company took the commercial decision to make repairs to the ship instead of risking the safety of the 19 crew members on board. The Government therefore supported them in convening conversations with UK ports and authorities to identify an appropriate port for the offloading of this cargo type, and I think that is a very responsible thing to do for mariners who were otherwise at sea for a prolonged period in a vessel that was clearly not fit to finish its journey.
International Engagements
(4 days, 17 hours ago)
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Lord Callanan (Con)
My Lords, we welcome the news that the Prime Minister and the Foreign Secretary, and indeed the noble Lord himself, attended the Commonwealth Heads of Government Meeting. CHOGM is an opportunity to reinvigorate the Commonwealth, which is well-equipped to continue its status as a leading forum for discussion. With a combined Commonwealth population of 2.7 billion, His Majesty the King as the new head of the Commonwealth, and a new secretary-general elect, the future looks bright. Samoa did a great job of hosting the meeting and demonstrating that a small Pacific island state has equity of membership with some of the bigger Commonwealth nations.
It seems that the Government were outmanoeuvred on the issue of reparations. While of course we must never forget history, we must move forward to a brighter future and focus on the pressing issues of today. British international investment alone has created employment for hundreds of thousands of people in Commonwealth nations. The UK provides expertise in financial services and pandemic research, as well as Commonwealth and Chevening scholarships. How does the Minister view our commitments to international investment following yesterday’s Budget, which seemed to actually reduce some of that funding?
In the CHOGM communique, the wording in paragraph 22 implies the UK’s openness to “reparatory justice” in relation to the abhorrent slave trade. It is perhaps not as off-limits as the Prime Minister had previously stated. What is His Majesty’s Government’s actual red line on reparations? Given the Foreign Secretary’s well-known views on the topic in the past, is this yet another example of saying one thing in opposition but then doing something entirely different in government? Can the Minister tell us whether he agrees with the Foreign Secretary’s frankly clumsy tweets on this issue? On paragraph 16, what is the Government’s position on UN Security Council reform? Will the Minister rule out giving away our permanent seat?
In conclusion, we welcome that His Majesty’s Government attended CHOGM. Let this be the start of a bold new age, with His Majesty the King at the helm. If the Minister could provide some clarity on yesterday’s Budget and the content of the communique, I am sure the House would be grateful.
Lord Purvis of Tweed (LD)
My Lords, the Commonwealth is a greatly valued institution, in which the UK should be playing as full a part as possible. Therefore, the communique from CHOGM requires very careful study. These are the priorities of our Commonwealth partners, and the UK has a special obligation to support them in the delivery of them.
I want to ask a number of questions to the Minister regarding the Statement, primarily in regard to intra-Commonwealth trade. I declare an interest: in 2018 I co-chaired an inquiry into intra-Commonwealth trade with the then Nigerian Trade Minister. I welcome the technical support and the elements of supporting intra-Commonwealth trade, but what is the Government’s ambition? What is their estimate as to how much intra-Commonwealth trade can grow? Under the previous Government we had an aborted investment summit for African nations and within the Commonwealth. What is the Government’s intent when it comes to ensuring that the UK, with our trade partners, can be an investment priority and can migrate continuity trade agreements with our Commonwealth partners into full free trade agreements?
Primarily, I wish to ask about the part of the Statement that said:
“We will be confident about championing the power of international development so that we make progress wherever we can,”
and recognise that putting our best foot forward in all we do at home and around the world is
“in everyone’s best interests, not least the British people”.
Can the Minister explain how this Statement, given on Monday to the House of Commons, was then reflected in the Budget on Wednesday, in which development assistance was cut to the lowest level in 17 years? We have seen development assistance cut in a truly terrible way by the previous Conservative Government; very few people would have been expecting further cuts under a new Labour Government. The cuts now are stark, with £2 billion in reductions. This means that development assistance has gone from 0.58% to 0.5%. In addition, there are real-term reductions in the Foreign Office budget overall.
How will the ambitions in the Statement be met? Of the 45 least-developed countries in the world—the poorest nations on earth—14 are Commonwealth countries. It is one thing for the Government to say that they do not intend to provide funding for reparations, but it is starkly another thing for the Government to cut development partnership assistance to the very nations that need it most, especially those in the Commonwealth.
The Parliamentary Under-Secretary of State, Foreign, Commonwealth and Development Office (Lord Collins of Highbury) (Lab)
I thank the noble Lords for their questions. I will start with the question asked by the noble Lord, Lord Purvis, who referred to cuts. He and I expressed shock and horror when the previous Government cut ODA from 0.7% to 0.5%. This was not just about the principle of working within the economic circumstances then; it was the way those cuts were adopted and the speed of them. There was not a planned approach; bilateral programmes were simply stopped midway through, causing damage to our reputation. That is not what we are doing.
We are committed to creating a world free from poverty. To do this, we will take a new approach to international development, based on genuine partnership, trust and respect. We will once again restore our position as a leader in development, particularly with partners, and will reform international institutions. The FCDO’s ODA programme budget in 2025-26 will be £9.24 billion—the highest level in recent years. I do not accept the noble Lord’s characterisation of where we are. We are determined to ensure that we have effective spend on our ODA and we are looking at the priorities.
On the CHOGM element of the Statement, it is really important that we focus on what the Commonwealth can deliver for our partnership approach. The noble Lord, Lord Callanan, mentioned my own participation. I deliberately went to CHOGM at the start, when all the fora were taking place. I had seven bilateral meetings, five of which were with delegations from Africa, including from Gambia, Malawi, Zambia, Uganda and the Cayman Islands. I met with civil society, including the Commonwealth Trade Union Group and the Commonwealth Disabled People’s Forum. It was a busy CHOGM in those forums. I spoke at the Commonwealth Equality Network on LGBT equality. I also spoke at the high-level sports breakfast, profiling the launch of the Commonwealth Games in Glasgow. We had a very positive engagement. This was the first CHOGM in a Pacific island that a Prime Minister attended. We are absolutely committed to it and to strengthening our partnerships.
I turn to the final communique. We fully recognise the horrific impacts of the transatlantic slave trade and the understandable ongoing strength of feeling on the issue across communities in the United Kingdom and our Commonwealth family. Commonwealth heads agreed in Samoa that the time has come for a meaningful, truthful and respectful conversation on the issue. We remain committed to continuing that dialogue with our partners in the Caribbean and beyond as we work to tackle the issues of today, in particular strengthening our partnerships for the future. We are focused on making a real difference to the lives of people today, building partnerships to address challenges such as how to catalyse growth, tackling the climate and nature crisis, and empowering our youth. Minister Dodds in the other place made it absolutely clear that there is no contradiction and no change in our policy in relation to reparations. It has not changed, but having a positive dialogue with partners is the vital point that we make.
On Security Council reform, I point out to the noble Lord, Lord Callanan, that his party, when in power, and my Government today have had a long-standing policy about strengthening the Security Council by expanding its membership, reflecting the realities of today and not the realities of 1945. I spoke at the Security Council in August, supporting the African case for permanent representation from Africa. It is that policy that we are expanding and pointing out. There is no question about our permanent seat on the Security Council—I do not know why the noble Lord raised it. He should reflect on his own party’s policy to support the expansion of the Security Council, in particular to include Africa, which by 2025 will make up one-quarter of the world’s population. The idea that they should not be represented on the Security Council is absolute nonsense.
Baroness D'Souza (CB)
My Lords, can the Minister confirm that the parliamentary visit by the former president of Taiwan, Tsai Ing-wen, planned for earlier this month, was in fact cancelled on the advice of the FCDO because of the Foreign Secretary’s forthcoming visit to China?
Lord Collins of Highbury (Lab)
The invitation extended by the representatives of the Government has nothing to do with that. There was no issue about advice or a challenge. The timing is very much up to the people who invited the former president of Taiwan and certainly nothing to do with the Foreign Secretary’s visit to China at all.
Lord Anderson of Swansea (Lab)
Does my noble friend agree that a key justification of the Commonwealth is allowing smaller countries, particularly island countries, to walk tall? Is there not a danger that reparations could be a diversion from the real tasks facing the Commonwealth today? I fear that that issue will not go away, however. Is there not a danger also that expectations will be raised and we will be led unwillingly along a path we do not want to take?
Lord Collins of Highbury (Lab)
All I can say is that genuine concern is being expressed. The transatlantic slave trade is a diabolical stain on our history, and we do have to remember what happened in the past, condemn it and say why it was entirely unacceptable. That is the sort of dialogue we need to have with our partners in the Commonwealth. What I do know is that the agenda discussed at CHOGM was far more extensive and was looking to the future, particularly that of small, developing island states, which will experience the huge impact of climate change. I was at several launch meetings in CHOGM where we directly addressed that issue by providing information and support. The Commonwealth is dynamic and forward-looking, and I have every confidence we will be able to face the challenges of the future.
Lord Alton of Liverpool (CB)
My Lords, we are about to commemorate our war dead. Will the noble Lord reflect on the 1,000 British soldiers who died during the Korean War—more than in Afghanistan, Iraq and the Falklands combined—and on our agreements with the dynamic democratic Republic of Korea as it faces dangers on the peninsula itself as well as in Europe, with North Korean soldiers fighting alongside Putin in his illegal war? How can we strengthen our relationship further with the Republic of Korea and ensure that we see off what the noble Lord, Lord Robertson, has described as a “deadly quartet” of dictatorships that is a threat to our democracies?
Lord Collins of Highbury (Lab)
I am glad that the noble Lord has raised our relationship with the Republic of Korea; I think he and I share a respect for its democratic credentials. Our relationship is as close as ever, and certainly, the Downing Street accord elevates that relationship to a global strategic bilateral partnership, placing it second only to that with the US in terms of strength. The noble Lord said that it looks like the DPRK is extending tensions further globally. The assessment is that its troops could be deployed in Ukraine, and that would be a very significant and concerning development. I reassure him that our relationship with the Republic of Korea has never been stronger, and we are determined to develop it.
Lord Ahmad of Wimbledon (Con)
My Lords, perhaps there is a typo in the Statement. The first sentence refers to reconnecting Britain. From my seven years as Minister, I recall us being pretty well connected and respected.
I congratulate the excellent new secretary-general elect, Shirley Botchwey, who has done some fantastic work in co-operation with the United Kingdom. A number of countries were not represented at leader level, including South Africa, India and Pakistan. What assessment have His Majesty’s Government made of their absence, and of the importance of elevating the Commonwealth and working with the new secretary-general elect in ensuring that the Commonwealth is at the heart of British policy?
Lord Collins of Highbury (Lab)
I reassure the noble Lord that I completely respect his commitment to the Commonwealth and his engagement when he had that responsibility; he did an excellent job, and I hope to ensure that I can continue his work. In that respect, the attendance at CHOGM was incredible. Despite the travel difficulties, we had the highest level of participation from all Governments. The communiqué reflects the importance all our countries place on developing that partnership, which does include economic and trade relationships but is also focused on the challenges the world faces at the moment.
I am hugely optimistic about the role of the Commonwealth in the future. The fact that it is growing and people are expressing an interest in joining is a reflection of its becoming even more relevant today. One of the things I kept saying at the CHOGM meeting when I met government officials is that the Commonwealth is more than Governments and Heads of State, and that is why I spent so much time with the civil society fora talking about building those relationships. So I am very optimistic about the future, but I acknowledge the noble Lord’s work and hope to continue it.
Baroness Prashar (CB)
My Lords, I absolutely agree with the noble Lord that the Commonwealth is a commonwealth of people and that strengthening the civil society connections is therefore very important. Going back to the question of reparations, I like the approach of a constructive dialogue, but it does seem rather vague to me. Does the noble Lord agree that we need to create a structured forum through which a dialogue can take place, and where there can be a proper conversation about the past and how you reconcile dealing with some of the future issues? At the moment, it seems rather vague—a dialogue, but to what end? A structured forum would be of some help.
Lord Collins of Highbury (Lab)
I acknowledge what the noble Baroness says, but it is important not to be too prescriptive. We will have such opportunities next spring, at the UK-Caribbean Forum, where I think this issue will be raised and we can have that honest exchange and dialogue. I will be absolutely clear: there is no change in the position of the United Kingdom Government on reparations. But the change is: how do we address those issues and have an honest, open dialogue? That was the important thing in the Commonwealth, and if you read the whole of that paragraph, it does say that the Commonwealth is the place we can be honest with each other, and that is what we will continue to do.
Lord McNally (LD)
My Lords, during many years, on all sides of the House, there was a campaign for 0.7% of GNI on overseas aid, not just as a number but as a direction of travel. No one doubts the Minister’s commitment on these issues, but it is very worrying that virtually the first step of a new Labour Government should be a step backwards on overseas aid.
Lord Collins of Highbury (Lab)
I do not accept that definition—we are not stepping back. We remain committed to restoring ODA spending to 0.7% of GNI as soon as fiscal circumstances allow, but, sadly, the OBR’s latest forecast shows that ODA fiscal tests are not due to be met within the Parliament. We will continue to monitor forecasts closely each year and will review and confirm, in accordance with the International Development (Official Development Assistance Target) Act 2015, whether a return to 0.7% for ODA is possible against the latest fiscal forecasts.
As I say, next year’s spend and the year after’s will be some of the highest. I have said to the noble Lord, Lord Purvis, before that this Government are committed to ensuring that we have effective spend on ODA; it will be about the priorities in building that partnership. I have a strong view that, if we are to deliver the SDGs, it will be on the basis of a partnership of all aspects of society, including the private sector. We have to get investment back into Africa; we have to join that partnership and get jobs going. That is why I was at the Financial Times conference yesterday morning, focusing on how we can deliver partnership for growth across the African continent.
Baroness Lawrence of Clarendon (Lab)
My Lords, my understanding is that the transatlantic slave trade is always talked about as historical, but if slave owners were receiving money until 2015 then it is not historical. This Government and the previous Government seem to have missed the fact that countries’ resources were reaped and taken, and the people suffered so much. Now is the time to apologise and think about reparation, because countries have suffered. Every time each Government speak about this, they seem to forget that slave owners were being paid until 2015.
Lord Collins of Highbury (Lab)
I recognise my noble friend’s strength of feeling on this subject. She is absolutely right to describe the horrific nature of the slave trade, which is a stain on our history and something we need to have honest and open dialogue about. I believe that the current Government’s position is clear: we will focus on the future and build an inclusive and fair economic partnership for the future. We will focus on addressing the real and genuine challenges that the world faces at the moment—primarily climate change and security.
Baroness Butler-Sloss (CB)
I respectfully ask the Minister whether words may be part of the problem. It is clear that such overseas aid as the Government have will be distributed to various countries, including in the Caribbean I would expect. I hope the Government will be able to give this as part of overseas agency and not in respect of reparations—the money would be there, but the wording could perhaps be changed.
Lord Collins of Highbury (Lab)
Let me be clear that we are committed to supporting overseas development and those countries that face challenges today. That is what we will do. I do not have a problem with words when committing to that partnership for growth and delivering economic development. We need to acknowledge the genuine feelings that exist. It was an abhorrent trade, and its consequences are still being felt by people today. If we do not acknowledge that then we are not part of the human race.
Lord Polak (Con)
The Statement talks about the Prime Minister announcing
“a new UK trade centre of expertise”,
based at the Foreign Office. Do I read into that the demise of the Department for Business and Trade? My second question is on the Disasters Emergency Committee in the Middle East. Can the noble Lord be confident that the money will reach the people who need it, not those who have a history of abusing it?
Lord Collins of Highbury (Lab)
I will address the latter point first. We are absolutely committed to ensuring that the hundreds of thousands of people affected get that aid. Our problem currently is getting it in. I assure the noble Lord that, like the previous Government, we are absolutely determined to ensure that those most in need get it, and we will continue to do that.
My absolute common narrative with the eight African countries I have visited in the last three months has been how we develop a partnership for economic growth. That win-win situation develops from trade too. I see myself not in competition with the Department for Business and Trade but rather in partnership. We are taking a one-government approach, working together.
Lord Callanan (Con)
My Lords, if there are no further Back-Bench questions, I will have another go at getting an answer from the Minister. In his reply to the noble Lord, Lord Purvis, and me, he spent some considerable time saying that he had worked with the noble Lord, Lord Purvis, when they were both in opposition, to condemn the reductions in overseas aid under the previous Government. That is a reasonable point. However, he neglected to say why that therefore meant that the current Government were going to cut it even further.
Lord Collins of Highbury (Lab)
The straightforward answer is that the economic circumstances that this country now faces are very much down to his party and his Government. We should fully understand that. I find it rich for him to lecture me on overseas development, when we had a Prime Minister who crashed the economy of this country and caused huge damage. We are absolutely committed to returning to 0.7% and to getting value for money from our ODA—nothing will change from that. I will give the noble Lord a straight answer: we are giving the maximum amount under the 0.5% commitment. We are sticking to that commitment and will increase it when fiscal circumstances allow.
Lord Ahmad of Wimbledon (Con)
If we have time, I will ask a question based on that final point. The previous Government invested a great deal, and both the noble Lords, Lord Collins and Lord Purvis, supported the international development strategy that the Government delivered. Can the Minister reassure me that the new Government are absolutely committed to the international development strategy? A lot of time went into its creation and the consultation. I hope the Government will keep it as a guiding principle for development assistance and support around the world.
Lord Collins of Highbury (Lab)
The noble Lord knows that, when Andrew Mitchell launched his international development White Paper, he repeatedly said that he did it in consultation. I do not recall the consultation, but I was very happy with the contents of the White Paper. As the noble Lord knows, the new Government are absolutely committed to drawing from its elements. That is why we have asked for an international development review from a Cross-Bench Peer—I have a mental block and cannot remember her name. We are committed to a review that will, I hope, be published in the new year, and it will reflect and build upon that. I know that there is banter in competitive Opposition/Government politics, but one thing we are absolutely determined to do in the international development space is ensure the long-term picture. Far too often there has been short-termism; so much of our international development work requires a longer-term strategy, so we will build upon it.
Baroness Hodgson of Abinger (Con)
My Lords, while we cannot undo the painful wrongs of the past, did the meeting consider the question of slavery that continues today? Is there a move across the Commonwealth to ensure that people are properly paid for the work that they do?
Lord Collins of Highbury (Lab)
I am pleased that the noble Baroness has asked that question, because I think that is absolutely right. Modern slavery was addressed, and certainly when I addressed some of the civil society groups, we looked at that issue. However, it is not just about issues of modern slavery, which is outrageous; it is also about the exploitation of workers across the board. Supply chains and labour have been a real focus, which is why I found the meeting with the Commonwealth Trade Union Group and other trade unionists in CHOGM really interesting. They were concerned that we work within the ILO, promote ILO conventions and ensure that those supply chains truly reflect our aspiration for people to be delivered sustainable development goal 8 in terms of fair employment. That was absolutely discussed, and it was a very positive exchange.
Community and Voluntary Sector
(4 days, 17 hours ago)
Lords ChamberRead Full debate Read Hansard Text Watch Debate
Baroness Morgan of Drefelin
That this House takes note of the contribution of the community and voluntary sector to society across the United Kingdom.
Baroness Morgan of Drefelin (Lab)
My Lords, I am genuinely humbled to be introducing this debate, given the unparalleled collective wisdom that I see across the House among all those taking part today. That is why I am delighted that we gather to acknowledge and celebrate the indispensable role of charities in our nations. I look forward to the maiden speech of the noble Baroness, Lady Porter of Fulwood.
Charities are indeed the backbone of our society: they are on the front line wherever things are in crisis in our communities. From the riots in the summer to the pandemic to the devastating cost-of-living pressures still being experienced across the country, charities are there for people at the worst of times. However, charities are also there for things that make life better and communities richer. They build bridges; they bring people together where there is division; and they are deeply trusted, often where the state is not.
I am delighted to share, hot off the press, figures from the National Council for Voluntary Organisations’ annual voluntary sector almanac. This shows the size and shape of the sector and provides rich data to understand the trends and challenges that are being experienced. The latest data published only last week shows that, in 2021-22, we had 166,000 voluntary organisations across the UK, and a striking eight out of 10 of these were small charities with income below £100,000. These organisations provide essential services, from health and social care to homelessness, and we will hear so much more about that today. While some services receive government funding, let us remember that many do not.
Charities strengthen our communities by engaging volunteers and creating spaces for connection. They are led by volunteers, who give their time and skills as trustees, and many are entirely volunteer run. Moreover, they amplify the voices of the marginalised, ensuring that they are heard by decision-makers. It is such a key role for the sector. Last year—we will hear more about this this afternoon—the Association of Medical Research Charities invested £1.7 billion in UK research. It has contributed much more than money to the sector, supporting R&D that focuses on patients, accelerates impacts and addresses areas of unmet need.
Charities play a crucial role in our economy, as everyone knows. They develop skills in communities, supporting people back to work and providing opportunity to young people. As organisations, charities are major employers, running businesses with a social purpose. Charities contribute an estimated £20 billion per year—or 1% of GDP—to the economy. That is very impressive. Andy Haldane, former chief economist of the Bank of England and now chief executive of the Royal Society of Arts, has estimated that, when the impact of volunteering is accounted for, this contribution increases tenfold to £200 billion, which looks like 10% of GDP. In 2024, the sector employed 3% of the UK’s workforce, and the sector’s workforce has grown by 30% since 2011. Believe it or not, charities employ more people than all the major supermarkets put together.
Charities raise funds from diverse sources, including philanthropy, social enterprise and innovative partnerships with businesses. In 2021-22, the sector generated £69.1 billion, with the public contributing an amazing 48% through donations, legacies and trading activities in charity shops. Notably, according to the UK Giving report, some of the least affluent areas are the most generous—it is such an impressive observation. Government funding accounted for 26% of the sector’s income in 2021-22—down, I am afraid, from 30% in previous years—and this is part of a long-term decline in government funding to the sector. I very much hope that this might be about to change.
As the Prime Minister said at the launch of a new civil society covenant earlier this month, charities are innovative and dynamic. They are, indeed, resilient. However, crisis upon crisis, experienced by many charities, means they are struggling. More people than ever are turning to charities for the support that they cannot get elsewhere. According to the latest VCSE barometer from the Pro Bono Economics observatory, most charities expect demand to rise for their services. One in three charities do not expect to be able to meet this demand, which is very concerning.
I believe that, with the right focus, we have the opportunity to create a better environment, where voluntary action can thrive, especially in deprived areas where the impact can be so great. There are three main areas on which I want to quickly focus, because I know we have so much to talk about today.
First is the relationship that the sector has with local and national government. Charities and volunteering are essential, as we know, for building a healthy, resilient society, yet the relationship between the voluntary sector and government has become truly strained in recent years. This is especially true for the vast majority of charities that are small, local and heavily reliant on local government support—support that has been continuously cut over recent years. Despite these challenges, 61% of the public believe that Britain would be a better place if charities and community groups had a stronger voice in decision-making. Initiatives such as the VCSE accord in Greater Manchester show what is possible when civil society and public bodies collaborate effectively together, but these successes need to be more widespread, and there is huge potential for that.
NCVO and the Association of Chief Executives of Voluntary Organisations are effectively working together to change the dynamic with government, and I know that the Minister will want to say more about that. Following the publication of their Voluntary Sector Manifesto, they are engaging directly with government to reset the relationship with civil society. On 17 October, I was delighted to hear, a ministerial round table and a reception hosted by the Prime Minister in Number 10 kicked off the development of this new civil society covenant—a vital opportunity to redefine how we all work together. NCVO and ACEVO are engaging with civil society to bring them in and help shape the covenant, including charities and voluntary organisations, particularly including those small organisations I have talked about. The new covenant has a real chance to build meaningful, long-term partnerships for social change. That is what it is all about. For this to succeed, both government and civil society must commit to collaboration, ensuring that charities can continue their mission while helping shape a more equitable, engaged society.
The second area that I think is worth focusing on briefly is how the voluntary sector is indispensable to public services. It delivers nearly £17 billion in services each year, reaching people often left out of mainstream systems. Charities bring innovative, efficient solutions across health, social care, housing, the environment and education, meeting essential needs, often where government services fall short. Yet austerity measures have cut deeply into local and departmental budgets—we know that. Many charities are now subsidising public services out of their own limited funds. According to NCVO’s March 2024 research, 72%—a striking number—are starting to step away from public service delivery, with more than one in 10 forced to return contracts before they are completed, despite serious financial and legal consequences for the organisation.
The Government’s redrafting of the national procurement policy statement, which underpins the Procurement Act 2023, is a vital opportunity to emphasise the inherent social value that charities create. The policy statement has the opportunity to clarify that commissioners must account for this social value and reinvest the surplus in innovation and service delivery, where possible. There should be recognition that charities typically do not operate in markets in any conventional sense of that phrase.
Thirdly and finally, I want to say something about volunteering. I can see that everyone around this Chamber has some experience of volunteering; I know the incredible work that that noble Lords do to promote the sector. Volunteering, as everyone here knows, plays a vital part in our society and our economy. The evidence shows that around 14.2 million people volunteered in the UK through a group, club or organisation in 2021; many more volunteered informally. The ONS calculated that, in 2012, frequent formal volunteering produced around £24 billion of economic output, or 1.5% of GDP. That is pretty amazing. If occasional and informal volunteering had been included, that figure would have been much greater.
People give their time to their communities and to the causes that they care about in diverse ways. Volunteers for the RNLI save lives at sea. People in hospitals provide social connection. Governors support the strategic direction and sustainability in schools. Breast Cancer Now campaigners champion access to modern treatments. Volunteers run over 160,000 charities across the country, with 1 million people serving as trustees. Volunteers play a vital role in supporting our communities, delivering public services and building social cohesion. Eight in 10 volunteers give their time in their local area—what a feeling of community this has the opportunity to develop. Volunteering brings significant benefits to individuals, communities and society. It supports positive social, mental and physical health and well-being. It helps to develop skills, knowledge and experience, sometimes serving as a stepping stone into employment. It helps people to build social connections and capital, fostering that sense of community that we all know matters so much. When asked why they volunteer, people say—there are no surprises here—that the most common motivation is the desire to make a difference.
However, fewer people are volunteering now, particularly in formal roles, and this decline in volunteering is particularly challenging for smaller organisations. There are many barriers to volunteering today, which need to be addressed. People living in deprived areas find it more difficult than others to volunteer. Disabled volunteers and people from the global majority are less satisfied than other volunteers, so there is much that we could do there. Younger people are more likely to cite financial issues as a barrier. I therefore support calls for the uplift in the approved mileage allowance payments scheme, which would allow volunteers using their cars to be reimbursed to reduce that financial burden. I also support calls to broaden Section 50 of the Employment Act 1996 to give trustees reasonable time off to carry out their duties, similar to the current provisions for magistrates and school councillors. These ideas could help address the challenge in recruiting trustees, as there are currently 100,000 trustee vacancies and 62% of people who volunteered in the last three years say they could be encouraged to take part in volunteering again. We should look at that huge potential.
In closing, I am extremely honoured to be the president of NCVO, and I take on that role following the incredible contribution of my noble friend Lady Pitkeathley, who is in her place today. I acknowledge the incredible work that she has done. NCVO supports campaigns, such as Volunteers’ Week and the Big Help Out, and celebrates volunteers, encouraging people to get involved. NCVO regularly brings together those involved in the sector to support volunteers across the country, and it is one of the partners of Vision for Volunteering, a 10-year collaborative project to create a better future for volunteering.
I am looking forward to hearing the contributions from across the House and to learning a great deal from the noble Lords speaking today. I also look forward very much to hearing the contribution of the Minister, who I know is very thoughtful on these matters. I beg to move.
Baroness Fraser of Craigmaddie (Con)
My Lords, I thank the noble Baroness, Lady Morgan of Drefelin, for securing this important debate and for her excellent introduction on the—as she said, indispensable—contribution of the voluntary sector. I declare my interests as set out in the register; in particular, as chief executive of a voluntary sector organisation, Cerebral Palsy Scotland. The work that we do supports people with CP, their families, the NHS and education and social care services. It seems, however, that too many people think that we can do this for free.
This sector is not voluntary. As the noble Baroness said, it employs around 1 million people, the majority of whom work for smaller organisations with fewer than 50 employees, which will all be struggling with yesterday’s announcements regarding increased employer NI contributions and an inflation-busting 6.7% increase to the living wage. According to the SCVO’s Scottish Third Sector Tracker, Scotland’s voluntary sector is facing unprecedented challenges. We have had years of warm words and promises of multi-year funding from the Scottish Government, which have yet to be fulfilled. Crises such as the pandemic and increased costs of goods and utilities have all put the sector under increasing pressure. As costs for organisations have risen, so too has demand for services. The sector is in crisis, and many organisations are having to close their doors.
Headway is the UK-wide charity that works to improve life after brain injury. Key information and vital services provided by local Headway charities have propped up statutory services but, now that financial pressures are accumulating from all sides, this has become unsustainable. Over the last two years, four local Headway charities have had to close their doors—three volunteer-led branches have also closed—leaving many vulnerable brain injury survivors and their families with no support. Three more are scheduled to close in the next couple of months. The strain placed on families as survivors can no longer access specialist daycare services will be unsustainable. Many will not cope, leading to family breakdown due to family carers becoming unable to meet their loved ones’ needs that previously were met by Headway services, and unable to access respite care.
Small and medium-sized charities such as Headway are the most likely to close. Charities with an income of under £1 million each year accounted for over 97% of charity closures for each of the last 10 years. As these organisations have seen diminished statutory funding over the years, a decline in meaningful corporate support and not enough philanthropists, they have become over-reliant on funding from trusts and foundations.
However, in recent months, several large and well-known funders, such as the Foyle Foundation and the Schroder Charity Trust, have closed applications and are spending down their funds. Others, such as the Henry Smith Charity and the Tudor Trust, have changed their priorities. Their motivation is often rationalised by pointing out that they receive many more applications than they can fund, and how few of these can be successful.
The sector is facing a perfect storm, and I am deeply concerned about what the future looks like for many, many charities. We face a situation where organisations are closing due to cash flow, not based on their impact. This will affect beneficiaries as well as essential public services. NPC, which the noble Baroness referred to, estimated recently that charities prop up state services by £2.4 billion a year. These organisations are key partners and it is about time we treated them as such. When will there be recognition that this sector is not voluntary, it is essential?
Baroness Scott of Needham Market (LD)
My Lords, I congratulate the noble Baroness on securing this debate. It is easy to see that NCVO continues to be in great hands. The number of speakers today is testament to both the importance of the subject and the wide range of experience in this House. I am sure we have all been impressed by the many briefings that we have received, which show the sector in all its diversity. The recent praise for the sector from both Keir Starmer and Lisa Nandy has been very good to hear, as was their commitment to resetting the relationship. Hopefully, the days of government telling charities that their deeply held views are somehow woke and undesirable are behind us.
One of the problems with getting to my age is the constant sense of déjà vu—covenants, compacts, big society and so on—and how few lessons are ever learned from what has happened in the past. I am a member of the advisory board of the Institute for Volunteering Research at the University of East Anglia, and I can point the Minister and her team to some excellent analysis of what works and what does not, when it comes to the relationship between government and the sector.
There is not time today to go into why this relationship can be so problematic, but it is like that popular book from the early 1990s: Governments are from Mars and charities are from Venus. Charities have their own specific purposes, which do not always dovetail with the conventional way that government like to do things. Nowhere can you see this better than in commissioning. There is a body of advice available to government on making procurement practices really work for this sector and on the need for sustainable funding models, but it is too often ignored. NCVO reports that 84% of the organisations it surveyed reported that their grants and contracts had not covered their costs since 2020.
Community Action Suffolk, the county’s infrastructure body where I live, reported that 65% of respondents were oversubscribed and underfunded on projects for which they receive statutory funding. It seems to me that this is based on the myth that charities have a bottomless pool of volunteers on which they can draw and that it is somehow free labour—and that funding will always be met by an endless stream of philanthropy. Of course, none of the above is true. Volunteers need to be recruited, trained and managed, and, in an ideal world, we should meet some of their basic costs, such as bus fares. In any event, as we have heard, volunteering is in decline. Many people are working longer hours, older people are undertaking childcare duties and some cannot afford the basic costs of volunteering.
There are a few things government can do, as we have just heard from the noble Baroness, such as enabling more employer-supported volunteering. However, one of the lessons of the past is that top-down initiatives —snazzy apps and so on—simply do not provide results. The fact is that volunteering is an expression of an individual choice to give your time to something that you value; it is not really under the direction of the state.
Larger charities do have a bit more in the way of resource to recruit and manage volunteers, but we know that 77% of organisations have an income of under £100,000 a year and 47% have under £10,000 a year. I want to end with a plea for local infrastructure bodies such as Community Action Suffolk, where I was a trustee. They provide advice and support to hundreds of community-based voluntary organisations: everything from trustee recruitment and training, volunteer portals, a directory of funding opportunities and help with IT, DBS and charity commission compliance. We have heard a lot about investment and infrastructure, so let us not forget our social infrastructure.
Baroness Grey-Thompson (CB)
My Lords, I too thank the noble Baroness, Lady Morgan of Drefelin, for tabling this debate. I draw noble Lords’ attention to my registered interests: I am chair of trustees for the Duke of Edinburgh’s Award, president of the Local Government Association and chair of Sport Wales.
Voluntary organisations and community groups are the backbone of social and economic provisions across the United Kingdom. In 2021, the voluntary sector injected £17.8 billion into the economy and employed nearly 1 million people, making up 3% of our national workforce. But there are many challenges for volunteering, which is an important part of the sector.
Youth Employment UK have said that the volunteering participation rate among 11 to 30 year-olds has reduced from 24% in 2023 to 17% in 2024. As more young people become socially isolated, more sedentary and resultingly more vulnerable to physical and mental health issues, I am particularly worried about the impact on young women. Girlguiding’s Girls’ Attitudes Survey 2024 has shown that the number of young girls who feel unsafe due to sexism has doubled over the past decade; it has gone from 17% to 47%. That is just one organisation that helps young women volunteer.
Organisations such as the Duke of Edinburgh’s Award continue to champion youth volunteers because we recognise the profound impact that volunteering has on young people. Overall, more than 545,000 young people across the UK are currently working towards a DoE award. Participants gave 4,725,825 hours of volunteering in their communities. This is equivalent to over £24 million in paid working hours. Young people come from a variety of backgrounds; among last year’s participants, 15.2% were experiencing poverty, 26.7% were from ethnic minority backgrounds and 7.8% had additional needs. It is important that volunteering opportunities are open to everyone.
The Local Government Association’s 2010 Hidden Talents report, which is still valid, shows how volunteering helps build the confidence of young people, instilling in them invaluable interpersonal skills that they may not receive in the classroom. Whether it is volunteering at a sports club, helping in a charity shop or even shopping for an elderly neighbour, these experiences foster real-world interactions that are so evidently lacking in a world that revolves around technology. I know my own personal experience of volunteering had a huge impact on my life. When I was an athlete, all my coaches were volunteers; I could not have done what I did as an athlete without them.
Local authorities are under huge pressure and we must find ways to strengthen the relationship that they have with other organisations. Without cohesion and support, these organisations cannot close service gaps within communities, nor will they be able to provide adequate assistance to the most vulnerable in our society.
Finally, while I welcome the Government’s introduction of the new Civil Society Covenant Framework, I urge the Minister to maintain continuous dialogue and co-ordination with the devolved Governments. In order to achieve the full, positive impact of this covenant, it is essential that it resonates across all nations within the United Kingdom.
The Lord Bishop of Newcastle
My Lords, I thank the noble Baroness for bringing this timely debate to your Lordships’ House and I look forward to the maiden speech of the noble Baroness, Lady Porter.
I recently had the privilege of attending the North East Charity Awards. I wish I could highlight all the inspiring charities and individuals featured but, for the sake of time, I will limit myself to two. The North East Young Dads and Lads Project is a support service dedicated to helping young men and fathers play an active and meaningful role in the lives of their children and wider society. The project works with them to build a greater sense of self-worth and resilience, reducing social isolation and challenging negative perceptions. Smart Works Newcastle helps unemployed women with clothing and coaching into employment, transforming their lives. Some 69% of clients gain employment within one month. These are small, local north-east charities that understand the needs of their communities and make a tangible impact. It is so often the small charities with personal relationships that can most effectively bring about lasting change in people’s lives.
When it comes to funding, 85% of charitable income in England and Wales goes to just 4% of registered charities, with small charities often struggling to raise the funds they need. What steps are the Government taking to rebalance charitable funding and ensure adequate investment in smaller charities that possess a deeper understanding of their communities?
I must also recognise the work that local churches and faith communities do to serve their communities. In Newcastle, the cathedral plays a vital role in responding to prison leavers, those seeking asylum, those sleeping rough and those struggling with drug and alcohol misuse within the city. What steps are the Government taking to support the work of faith groups in their communities?
I expect there will be more to say on this in the forthcoming Budget debate, as the noble Baroness, Lady Fraser of Craigmaddie, alluded to in her excellent speech. For now, I welcome the Government’s recently announced civil society covenant and the emphasis that it places on partnership. So much can be gained from government and civil society working together, but we must also ensure that it is a constructive partnership, as the noble Baroness, Lady Morgan of Drefelin, mentioned in her opening speech, not one where the work of the voluntary and charity sector becomes a substitute for effective government policy.
The value of the community and voluntary sector across the UK cannot be overestimated nor taken for granted. It is the glue that fills in the gaps in our society, and I am glad that this House is recognising this today.
Lord Kestenbaum (Lab)
My Lords, I thank the noble Baroness, Lady Morgan, for securing this important debate. I declare my interest as a trustee of Teach First.
This debate, coming as it does one day after the Budget, could not be more timely. Yesterday, we heard a passionate, well-reasoned argument on the vital role of the state: where it can intervene, where it makes a difference, where it can change lives—and rightly so. Yet Governments themselves are the first to acknowledge the limits of the state. However well intentioned, it has those limits. We have long understood that overcollectivist economies are deeply flawed, not least as inhibitors of growth. However, this country has also seen and indeed lost faith in the alternative too, namely that what we cannot achieve collectively as a state we will achieve as individuals. The state withdraws; the free market does it all. Were we not told once:
“There is no such thing as society”?
Yet in each case, profound social ills continue, while expectations of services are in danger of outgrowing our ability to fund them. We know that between the overinterventionist state and the minimalist state lies the most potent force of all, found in localities, voluntary associations and faith groups: the force of community. It is in communities that we find—indeed learn—the virtues that sustain the common good: integrity, compassion, neighbourliness. These are the kind of virtues that both state and market are too impersonal—at times too arbitrary—to nurture. It is in communities that we find shared belonging.
For that reason and more, I, like other noble Lords, welcome the Government’s creation of a civil society covenant, a new era of partnership that will help to tackle some of the country’s biggest challenges. The very concept of covenant, as used in this instance by the Government, is inspired. That is not just semantics, for covenant is at the heart of a community’s power. Most economic and indeed many political relationships are by no means covenantal. They are, as we all know, contractual; they assume a coming together of broadly self-interested parties that benefit from an exchange. Contractual relationships are transactional.
Covenantal relationships, as found in communities and voluntary organisations, are not transactional at all. They are about common good; they foster trust, reciprocity, loyalty. Economists of course call this social capital. We have seen that without the features of social capital—such as mutual help, compassion and kindness—societies break down. Such social capital is not created by isolated individuals or remote mechanisms of state, but by the strength of community networks and the bonds of volunteerism. Societies rich in social capital, with strong, inclusive communities and vibrant voluntary organisations, will have high morale, a strong sense of belonging and greater cohesion.
We are blessed in the UK to find these ties up and down the land. I personally have experienced their impact particularly strongly in my faith community. The Jewish community, of which I am proud to be a part, through its multiple voluntary organisations and its care for the vulnerable aims to be a community of dignity and purpose, and in so doing helps make Britain a better, stronger society. As we have just heard, it is so often in faith communities that we help others, and they help us, without calculating relative advantage. As the late Lord Jonathan Sacks, former Chief Rabbi, whose eloquence hovers across this Chamber, has written:
“The virtues of the common good are found not where people are brought together by exchange of wealth or power, but by a commitment to one another and to a larger common cause”.
For the foreseeable future we will be beset by social problems which will yield neither to state intervention nor to private initiative. This is indeed the moment for a partnership to be forged between politicians, communities, voluntary organisations, churches, entrepreneurs and others. Underpinning it all is a vision of society where we can bring our diverse talents and traditions as gifts to the common good.
Lord Bassam of Brighton (Lab)
My Lords, I begin, as others have done, by congratulating the noble Baroness, Lady Morgan, on initiating this debate. Apart from being a highly effective Minister in the last Labour Government, she has for many years skilfully led Breast Cancer Now. Her work has undoubtedly saved many lives and raised awareness of this awful disease.
I also declare my interest as a co-director of Place, working for Business in the Community, a role I share with the noble Baroness, Lady Valentine—I am told, the oldest job-share in the UK. We are the UK’s largest and most influential responsible business network dedicated to building a fairer, more sustainable world. We work in the UK’s most deprived communities, mobilising leading figures from FTSE 100 companies to transform the lives and opportunities of millions. Led by our inspirational CEO, Mary Macleod, we aim to operate in 50 places by 2032, focusing on literacy, training, food poverty, upskilling and capacity building. Our business-led boards focus on physical regeneration projects like housing and transport.
However, we are one small part of the eco-structure of the 166,000-plus voluntary organisations identified by the NCVO. Although a major charity in NCVO terms, we have fewer than 250 staff. In a “bang for buck” ratio, our impact, like that of other voluntary organisations, is immense. The sector is estimated to contribute nearly £18 billion to the economy and employs, roughly speaking, a million people but mobilises over 14 million a year as volunteers. Our impact is unquantifiable.
Without the voluntary sector, community cohesion, the drive for social justice, economic fairness and greater equality would have long ago withered. We campaign, provide life-saving services, change lives, and shape opportunities. Our research changes perceptions.
However, we should not kid ourselves that everything in the voluntary sector is rosy or that we could not do better. Worryingly, there are signs that our work and impact may be faltering. A recent DCMS survey found that participation rates in formal volunteering have fallen. The NCVO too found a significant drop-off. Most concerning is the decline in young people volunteering, down 7% in 2024.
Like others, I welcome the Prime Minister’s announcement of a fundamental reset. His aim to unlock and harness the sector’s dynamism, innovation and trust is timely. The covenant framework, incorporating high-level principles of recognition, partnership and participation is most welcome, and I applaud the desire to engage across government.
The strength of voluntary organisations is, as others have said, our ability to be different, to innovate and to challenge. These strengths have been sorely tested over the last 14 years, as government has looked to us to solve its problems. Too often, we have been seen as a cheap option or substitute for government intervention.
Lisa Nandy was right when she said that we should be recognised as a “trusted partner” but, to fulfil that role, we must find ways to collaborate better, maximise our impact, and acknowledge that there is overlap and duplication. As a quid pro quo, we need long-term funding commitments from central government and our local and regional partners. UK businesses, like BITC’s partner, Aviva, could be better incentivised to support communities.
Finally, as a piece of advice to the Government, while there is no free money on offer to fund initiatives, there are dormant assets. Gordon Brown’s scheme was given a boost by the last Labour Government, but it barely scratches the surface in unlocking assets tucked away in the banking, insurance and financial systems that could provide billions for social purposes. Will the Minister urge the Government to reconvene the commission that examined options for expanding the scheme? There is an estimated £800 million coming through the new scheme, and it could fund the community wealth fund that provides essential services for long-term investment. There are other funds that could be tapped from dormant assets: £1 billion in unclaimed gift cards; £3 billion in Amazon gift cards; and Sadiq Khan estimated there is a quarter of a billion pounds in balances on Oyster cards. Unused assets like these could be unleashed to transform the lives of millions of people across the UK and unlock the real potential of our civic institutions.
Baroness Blake of Leeds (Lab)
My Lords, can we just be mindful of the four-minute advisory time, please?
Baroness Porter of Fulwood (Con) (Maiden Speech)
My Lords, at a time when our country is facing challenges on so many fronts, the unique role of your Lordships’ House is more important than ever. It is a privilege to be joining at such a critical time.
I have appreciated so much already the collegiality and warmth of this place. I would like to especially thank those who have made my introduction to this House so smooth—Black Rod and her team, and the doorkeepers. I would also like to thank the clerks, as well as my noble friends Lady Vere of Norbiton and Lord Johnson of Lainston, who supported me at my introduction, and my mentor, my noble friend Lady Wyld, all of whom have given me valuable advice.
Like others in your Lordships’ House, I have spent many years working in government across various departments as an adviser. I have been privileged to serve in Defra, the Cabinet Office, the Department for Transport, the Ministry of Justice and No. 10. I have also worked in business at the heart of the City, helping countries and companies from around the world raise capital and advising some of the world’s largest public and private businesses on their corporate reputation. During the Brexit years, I saw first hand the value of this House when I was working at the London Stock Exchange Group, and we were navigating many detailed, complex regulatory changes. The tireless work of so many here was invaluable.
I am very aware that life is not just—in fact, not even primarily—about formal institutions, whether Parliament or the City of London. As a mother of young children with no extended family living nearby, the invisible mesh of mutual support and care from others in my community is what makes life possible. We all know this, and during Covid it was the glue that held the country together. It takes all these elements: business, politics, media, community and family. We are at our best as a country when these parts understand each other and work well together. They are, though, too often siloed and at cross-purposes. This House has a special role to play in its ability to offer a dialogue between our country’s formal and informal institutions, and to foster and build the social capital that our future depends on as a country.
It is this that brings me to today’s debate. One area where we need to focus in coming months where this is especially true is criminal justice. This country has roughly 90,000 people locked up—almost double the number of people who were in prison when I was born, just over 40 years ago. Anyone who has been involved with criminal justice will tell you the same stories of heartbreaking, layered problems: gangs; drug abuse; mental health issues; a lack of mentors or family figure role models; children growing up who barely stood a chance. They will also tell you stories of transformation, where the practical commitment of a volunteer, or the deep care of a family member, has been the key to someone finding the strength to turn their life around.
Circumstances are forcing our hand on prisons. We should not look for quick fixes for this crisis but rather far-reaching reform. As the Government respond to this practical imperative, they need to use this moment as a jumping-off point for a proper rethink of how we approach criminal justice and the role of prison more generally. The part that community and the voluntary sector plays in this must be at the heart of this reform. Charities are able to provide a level of personal support and resource that government simply cannot. The charities Clean Slate Solutions and Recruitment Junction are both great examples of this, helping people who have been in prison adjust when they get out.
I started by referencing the breadth and scale of the challenges the UK faces. These are serious times. They are also times that require us to take a look at how we have been doing things and think anew. I look forward to working with other noble Lords who are focused on these issues to bring about lasting change.
Baroness Stroud (Con)
On behalf of the whole House, I congratulate my noble friend Lady Porter on her excellent maiden speech. It is a privilege to speak after her, and we can all see just how much she will contribute to this House.
We have known one another for many years. I first met my noble friend when she was working for the Maxim Institute in New Zealand, which is a think tank that works to promote the dignity of every person by standing for freedom, justice, compassion and hope. It therefore came as no surprise to me that, with this background, she pursued her commitment to human dignity, freedom and justice and made her way to the UK, expressing those principles in both the business world and the political world as a special adviser. It came as even less of a surprise to hear that she had rightly been elevated to this place, and that at the first opportunity she chooses to contribute to a debate on the importance of the community and voluntary sector. We are delighted that she is here.
It is easy in today’s individualistic world to conclude that there are two entities that make up our society: the individual and the Government. The noise in the public square in the advent of social media makes individuals feel atomised and makes the state feel powerful, but there is supposed to be a space between the individual and the Government, and that space is called family, civil society, community and the voluntary sector; together they bring life and vitality to our nation. It is the place where you can give and where you can receive. It is a place of reciprocity and mutuality.
I can remember a young girl in the care system saying, “I just want someone to take me to the dentist who wants to take me to the dentist and not because they are paid to do so”. It was a cry for family. It was a cry for community. In our atomised society, the danger for the voluntary sector is that in its pursuit of funding and professionalism, it forgets its unique contribution to the space between government and the individual—that is its humanity. There are many reasons for this. It is the voluntary sector that can break the norms of a maintenance culture and bring healing and transformation. What is it that transforms the human heart and restores the soul? Is that not sacrificial love? Person after person around this nation is serving their neighbour sacrificially in a volunteering capacity.
For 17 years, I used to run a community project for homeless people. We were able to say to them that if they came across someone who was hungry, they should feel free to give them something to eat; that if they came across someone who needed a coat, they should feel free to give them theirs. What professional organisation is still free in the 21st century to say these things to people? The act of sacrificial love coming from a volunteer was healing and dignifying for both the individual giving the care and the individual receiving the care. It was human.
The voluntary sector is free to intervene early, too; the voluntary sector is free to get ahead of social breakdown. For many years, many of us have spoken about the need for government programmes to be built around early intervention. It was the noble Baroness, Lady Stedman-Scott, who co-chaired the CSJ’s work on Breakdown Britain 20 years ago, who said that it was better to build a fence at the top of a cliff than to drive an ambulance at the bottom. Even though there is nothing new about how obviously right this early intervention is, over the last 20 years, with Governments of all colours, who all believe that early intervention is the right approach, none of us has found a systematic way through the funding structures of the Treasury to change the orientation of government social programmes away from picking up the pieces towards early intervention on a systematic scale.
So far, it is only the voluntary sector that is genuinely free to do that. Take, for example, Safe Families, which is a great example of a voluntary sector programme that can save the Government literally millions of pounds by caring for children ahead of a family breakdown, so that the children do not need to go into care. Made up of over 5,000 volunteers from over 1,000 churches and community groups, with a staff of around 150 passionate, talented and dedicated people the UK, they care for children and families before they reach breaking point and prevent them from going into prison. We all know that, but can a Government—of any colour—get funding to reflect that? No. But that does not stop the determination of the voluntary sector or Safe Families. So let us not burden the sector; let it be deeply relational, let it take time with people, do not overprofessionalise it, and allow it to be free.
Lord Dubs (Lab)
My Lords, I welcome this debate and I am grateful to my noble friend for having initiated it. I declare my interests having been the chief executive and chair of a number of voluntary organisations and having served on various boards. I will talk about three things: the relations between the voluntary sector and government; the influence on debate and legislation by the voluntary sector; and some important voluntary initiatives.
The voluntary sector is a crucial part of a democracy, and I welcome very much the recent speech made by the DCMS Secretary of State, when she said that it should be up to charities to tell government when it has got it wrong and to co-operate with government to get things right. That is in contrast to the disparaging comments made by some people from the previous Conservative Government, who told the voluntary sector to stick to their knitting and the RSPB that it should not stray from nesting boxes and bird feeders. Clearly, what we want, and what we have now, is a much better relationship, which was initiated at the meeting in No. 10 and the consultation on the civil society covenant. It is fundamental to the voluntary sector that it should be able to criticise government and to state its views on government policy—provided that these are within the general terms and scope of what that voluntary organisation is about. In the past, attempts have been made to stifle the voluntary sector from making comments on policy.
I think we all welcome the fact that voluntary organisations contribute by briefing us on debates and amendments to legislation. Some of us depend very much on this help and support. It ensures that our debates are better informed and based on the experience that the voluntary sector itself has, as opposed to just theoretical concepts. I have worked very closely with both the Refugee Council and Safe Passage on supporting the cause of asylum seekers and refugees, and I very much welcome the help that they have given us. Of course, there are so many other organisations—I cannot mention them all—including the Holocaust Educational Trust, the MS Society and Humanists UK. In Northern Ireland, the Integrated Education Fund has played a key role in ensuring that integrated schools play a larger part in educational provision there. We depend on the voluntary sector. When we come to debate on assisted dying, which will be quite an issue—first in the Commons and then possibly here—we should get briefings on opposite sides of the argument. That is not unhealthy; it is a good thing.
I must mention one or two important initiatives from the voluntary sector. I particularly welcome the part played by volunteers in refugee camps abroad—for example, in Calais—where individuals from this country have gone and given a lot of their time, sometimes years, to support the most vulnerable of their fellow human beings. The Refugee Council has done enormously good work on this. The Duke of Edinburgh’s Award is also important. I will give one example. Some years just before the pandemic, the Chelsea and Fulham football foundations—I say this as a Manchester United supporter, alas—joined together to provide an evening of football training for refugee boys on Fulham football ground, inspired by Gary Lineker. It was a great evening and a very important contribution to the understanding by refugees of sport in this country. All over the country, there have been initiatives such as Wandsworth Welcomes Refugees and so on, and refugees have come. It is a privilege to have been involved with the voluntary sector, which has helped me with some of the contributions I have made to debates in this Chamber.
Lord Murphy of Torfaen (Lab)
My Lords, it is a great pleasure, as always, to follow my very good friend—my noble friend Lord Dubs—and to congratulate the noble Baroness, Lady Morgan, on her wonderful introduction to an important debate. I pay tribute to the noble Baroness, Lady Porter, for a very impressive and effective maiden speech; we look forward to hearing far more of her speeches in the years ahead.
A few weeks ago, I spoke in this Chamber in the debate on social care and referred to the work of my own local authority in Wales, Torfaen County Borough Council, on the importance of community and voluntary groups in trying to solve the social care issue. That also applies to other issues and problems as well. Today we celebrate the community groups, voluntary groups, churches, Rotary International, charities, pensioner groups and youth groups, all of which play an enormous part in our society, locally and nationally.
Very often, they are unco-ordinated. Local voluntary groups can come together—of course they can—but I will bring to the Minister’s attention the work of my own local authority, which employs what it calls “community connectors”. These are individuals who go into various parts of the local authority, work with the community groups, identify issues such as isolation and then report back to the local authority.
The reason I wanted to say that to the Minister is because there is a tendency to ignore what happens across the River Wye in Wales—or, for that matter, in Scotland and Northern Ireland as well. For the five years when I was Welsh Secretary, it was often a battle against the establishment in Whitehall to learn best practice from the devolved Administrations. It was referred to as “devolve and forget”. In fact, we should do the opposite: devolve and work together.
The NCVO has pleaded that it should be allowed to have a more structured engagement with the United Kingdom Government and to make its comments on the civil society covenant framework, which the noble Baroness, Lady Grey-Thompson, referred to. It seems to me that we can learn from each other in a very special way. Very often, we criticise each other in the different nations, countries and regions of our United Kingdom, but the Government themselves have decided that there should be a Council of the Nations and Regions. There is already a British-Irish Council and a British-Irish Parliamentary Assembly, which bring together Governments and Parliaments from across these islands—and we learn from each other. There is still a reluctance in government here in London for that to happen. If one thing can go from this debate to my noble friends and colleagues in government it is: connect, connect, connect with what goes on elsewhere in the United Kingdom. Devolution does not mean separation; it means working together as much as anything else.
Lord Addington (LD)
My Lords, I totally agree with the last sentiment. We tend to find that Governments think that the voluntary sector is a great idea until it starts to criticise their current policy, as my noble friend Lady Scott referred to. It is almost universal; Governments of all colours have done that. As the noble Lord, Lord Dubs, said, when we deal with any subject in this House, we get our information from the voluntary sector. They are outside groups that lobby us and make us better at our job. I encourage all of them to keep that stream of information coming, because without them, the process of government is worse, and government itself will not be able to answer the questions it should on all its legislation.
I welcome—as I should have done earlier—the noble Baroness, Lady Porter, to our midst. The first 30 years are the worst, in my experience. Somebody with outside experience and new experience is always welcome here. She has started well and I hope that the next steps are at least pain-free.
The one section of this that I really wanted to raise has already been touched on, which is reaching those who are, as we used to say, in danger of offending: those who have had bad experiences going through life. People with bad experiences, bad educational backgrounds et cetera, end up filling up our prisons. We will all be drawing attention to a charity that I have had some interaction with: TackleLondon. It is a rugby-based charity. Your Lordships would never have guessed, would you? What we do there is something that has been referred to by many. We go in, speak to young people who have had, in our terminology, ACEs—adverse childhood experiences such as family breakdown, losing a house, something that puts you on a path towards educational failure, disruption and being in that group that is vulnerable to getting sucked into the criminal justice system.
A major problem that we have down there, after you have got through people from the Atlas Foundation such as me who are raising money for them, which is always a battle, is the interaction with the state. We want to get into schools. We have got expertise, volunteers, people coming forward, people who like their sport, people who think that it should go forward and people who enjoy getting information out there. Remember, it should be people who enjoy what they are doing and enjoy giving. We are not looking for masochistic saints. If you are, you will have nobody to do this. What are the Government going to do to make sure that we can get into that school, that section, and do it easily? We know that we have to do DBS checks and all the rest of it. If we are prepared to do this, how will the education sector embrace this expertise?
As to positive experiences, rugby union is a good sport because it is complicated. You have nice authority figures. Other sports may be better for playing but, for giving authority and structure, rugby union is great. Many other sports do not have their rules described as “laws”: we are a very authoritative sport. How will the Government enable the volunteering charity sector, if they approve of it, to get into the education system and give support? It is a problem that we have had for a long time. It is a resource that we do not make the best of. I look forward to hearing what the Minister has to say about this, if not today then at least in the future.
Baroness Wilcox of Newport (Lab)
My Lords, I am delighted to speak in this debate, called by my noble friend Lady Morgan of Drefelin, whom I congratulate. I also congratulate the noble Baroness, Lady Porter, on her maiden speech, and welcome her to her place. I associate myself with the wise words of my noble friend Lord Murphy of Torfaen.
Volunteering is recognised by the Welsh Government and the Third Sector Partnership Council as an important aspect of strong communities and something to be promoted and supported. Jane Hutt MS, the Minister for Social Justice and Chief Whip, made an Oral Statement last year outlining the development of a new approach to volunteering in Wales. She noted that the approach will be one that is fit for the future, for generations of volunteers and including the voluntary, public and private sectors. In preparation for this debate, I, like others, was contacted by the Wales Council for Voluntary Action, the national membership body. It welcomes the launch of the Government’s new civil society covenant framework and, as others have already mentioned, it believes that the covenant should include a commitment to continuous dialogue with devolved Administrations across the UK. That ensures the co-ordination of all policy, legislative and funding decisions.
Last week, we had the annual celebration event of the Gwent Association of Voluntary Organisations. Due to parliamentary business, I was unable to attend. It celebrated volunteers who have been nominated by the community in 12 different awards. It was an excellent evening and my Newport colleagues, Jess Morden MP and Jayne Bryant MS, had great photographs of the event on their social media pages.
I have decided that one way to highlight the work of volunteers would be to record the immense contribution that individuals have made to my own experience of working together with them over my 20 years as a local councillor. Sadly, Joan Davies is no longer with us. However, as I said when I had the honour to give the eulogy at her funeral two years ago, Joan was the heart and soul of the Maesglas community in Newport. She dedicated decades to volunteering, running a branch of the Newport credit union from the community centre, where people could save money and take affordable loans. She was a key figure in running the centre, where she held the wonderful Wednesday night bingo club. Over the years, the people of Maesglas, one of the lowest socioeconomic wards in the city, under Joan’s leadership raised many thousands of pounds for charities. In 2018, Joan was given the High Sheriff of Gwent award. When asked for my nomination, as leader of Newport City Council, without hesitation I nominated Joan, who was the epitome of what it meant to serve the community.
The spirit of volunteering lives on in Newport today. In closing, I will mention two further people who volunteer in the important area of school governorship. I worked beside them on the governing body for many years at the John Frost School in Newport. Sue O’Brian is not only a committed and supportive chair of the governing body; she is at the heart of girl guiding in Newport and runs one of the many popular Brownie packs in the city. Similarly, the vice-chair of governors, Jan Atkinson, has a long background in the community, including foster caring, raising funds and cooking a Christmas lunch in one of our community centres for people who would otherwise be alone on Christmas Day.
I am glad that this debate has allowed me to put on record their achievements and the importance of people such as Joan, Sue and Jan to the future of the sector in communities in Wales, and indeed across the whole of the UK.
Lord Black of Brentwood (Con)
My Lords, I join others in congratulating the noble Baroness on leading this debate and my noble friend on her excellent maiden speech. I am a trustee of a number of charities that are listed in the register and declare an interest accordingly.
I want to talk about a specific set of charities that rely on an army of incredible volunteers in communities across the country to look after one of the most vulnerable groups in our society: our pets and animals. Mine is one of the 57% of UK households that own a pet. Over a quarter of a century of owning cats, I have seen up close the work of animal welfare charities, which is not just about caring for animals that have been abandoned or cruelly treated—the tragic face of so much work in this sector—but about education for young people, giving support to bereaved pet owners, and many other areas that are crucial to a caring society.
Every day, the UK’s largest animal welfare charities—Cats Protection, Dogs Trust, RSPCA, Blue Cross, Battersea and PDSA—do astonishing work on limited resources that is made possible by the work of around 29,000 volunteers, contributing an average of 2.5 million hours of work each year. Cats Protection values its 9,000 volunteers’ priceless gift of time at around £37 million each year, while volunteer cat and dog fosterers at Battersea each gave an average of 200 hours of volunteering last year. PDSA has volunteer vets and nurses within its veterinary hospitals, providing essential care. As Cats Protection says to its volunteer army, and it is the same across the sector, “We wouldn’t be here without you”.
What these charities and their remarkable volunteers—increasingly, people under the age of 35 and many who identify as disabled—achieve in incredible circumstances is remarkable. Volunteers are there for not just animals but their owners. Anyone who has ever loved a pet knows full well the terrible pain of parting. Blue Cross is there to help by running a wonderful bereavement service, with volunteers dealing with over 20,000 calls, webchats and emails each year from those in distress.
It is not just the big charities that gain so much from volunteers: smaller ones rely on volunteers even more. Take the Suffolk Owl Sanctuary, where my husband and I help sponsor Titch, a tawny owl. Its volunteers get involved in aviary cleaning, feeding rounds for the birds and painting, decorating and gardening—all essential to the smooth running of a really small charity.
Equally vital is the role that volunteers play in raising funds. They give money themselves, organise events and encourage their friends and colleagues to do so as well, helping to ensure that 15 million people each year donate to animal charities.
There is another crucial role that volunteers for all these charities play as vocal ambassadors for animals, providing an independent voice for those who have none, ensuring that animals always remain high on the political agenda here in Westminster and in local authorities, and ensuring that we are held to account for delivering for those in need of care.
There are many things we can do to assist this army of volunteers, as the noble Baroness said, not least by developing a civil society engagement strategy and charter, as set out by the NCVO, to reduce barriers to volunteering. Training passports would help too, allowing volunteers to develop transferable skills, such as in health and safety or safeguarding, across different charities.
This debate has shown of how much we have to be proud as a country. I take this opportunity to applaud the tireless, selfless and often unsung work that so many volunteers undertake for our pets and animals, and to thank them for their devotion and energy. They are a jewel in the crown of our civic life; without them, our society, two-legged and four-legged, would be so much the poorer.
Lord Parekh (Lab)
My Lords, I congratulate the noble Baroness, Lady Morgan of Drefelin, on initiating the debate so very well. Basically, we are concerned with exploring the relationship between civil society and the state. Civil society represents the idea of persuasion and the state represents the idea of compulsion. The question for any kind of civilised society becomes: what is the role of persuasion and what is the role of compulsion? Which areas of life are best left to persuasion and which to compulsion? Once you have formulated it in this way—I find it easier to handle—you begin to see how it applies to our own situation.
This is a problem that every society faces, because every society involves both coercive machinery in the form of the state and a voluntary set of institutions in the form of associations. One could say, for example, that the two should be merged, as is the case in Germany. In Germany, the state collects taxes for churches. In France, it is the opposite; the two are totally separate. The state has little to do with civil society.
Our approach has been mixed. We rely on the state in certain cases, on civil society in other cases. We expect the state to intervene in certain areas of civil society. This mixed approach has been a source of much beneficence, but also much unease. I will briefly point out why it has led to some degree of unease.
First, when you talk about civil society, will you support organisations concerned with protest—for example, against Israeli actions in Gaza, the Indian occupation of Kashmir or whatever? The state would say that it is not going to support that; it is against its policy. What happens to the issues concerned? As we have not been able to handle this question, the result is that we periodically hear issues about people not being allowed to protest and why.
Secondly, the state draws a conventional set of lines. Within those lines and that framework, civil associations are supposed to function. That is all right, but it leads to the bureaucratisation of civil society, and that bureaucratisation does not allow associations to function properly.
The third difficulty is that it concentrates on certain material things. A philanthropic activity is one where you give money, but what about those societies where money is not given or prized, but time or concern is given? I come from a society where per capita philanthropic contributions would be rather low, but per capita time or attention would be far greater. Would you therefore say that one society is more philanthropic than another? Our society, by and large, has been concentrating on money and matters other than personal sympathy and concern for rehabilitating individuals. This can be seen in relation to prisoners.
Lastly, the relation between civil society and state is not ultimately a matter of ad hoc contestation and compromise. It is a matter of culture, and a culture has to develop that allows that society to throw up responsible civil associations.
Lord Hastings of Scarisbrick (CB)
My Lords, we all love a debate of this nature, because it shows the very best of British brilliance, so I thank the noble Baroness, Lady Morgan, for allowing us to have this wide conversation together. All of us have interests that express our passion for communities and our voluntary engagement, and we all know that, as much as we may give voluntarily, we receive immense delight, joy, respect and purpose in the time and resources that we give away to others.
My many interests are in the register, but I will focus on a few. As president of UK Community Foundations, I am proud that we are in every single constituency of the UK, through our 47 community foundations that cover every postcode of the UK. Some £190 million of resources are contributed to individual and community needs every year through the Community Foundations network. We provided small things such as basic laptops, in the Covid years, which individuals needed so that they could undertake work from home. We provided support and resources for people to get access to psychiatry and individual support for mental health, so that people can ensure that they can work. That is the value of Community Foundations, and that money is gathered mainly from local contributions and giving. People feel so proud; 86% of people feel proud to give locally, volunteer locally and support locally.
I am also chairman of the Pathway Fund, and I am glad that the noble Lord, Lord Bassam, raised dormant assets, because we are awaiting the Government’s release of information on the availability of dormant assets and the expectation that the Pathway Fund will be one of those. I ask the Minister at what point a decision will be reached on the release of dormant assets for 2024-25. We are expecting a substantial allocation to do the work that the Pathway Fund was set up to do. I only recently became its chairman, in the last couple of months.
One of the greatest areas to which I contribute voluntarily is ongoing. I refer with grateful respect to the maiden speech of the noble Baroness, Lady Porter, which raised issues of criminal justice. I have spent 21 years as a trustee and chairman of Crime Concern, where we helped to create neighbourhood watch and Victim Support. To this day, neighbourhood watch is probably one of the best community access linkages that we have across the UK. I know that from my own area, where you just watch the angst of the people going back and forward and their joy in realising that we are not under threat.
Community crime prevention was Crime Concern’s theme and we have carried that on into Catch22, which I was also delighted to found in 2009. All these interventions save the taxpayer substantial amounts of money but allow individuals to give to the better estate of preventing crime and making communities safer.
I am also the co-founder of My Brother’s Keeper, which is a prisoner engagement programme. On Tuesday, I made my 11th visit to HMP Isis, where it was delightful to spend time with 46 young men in the prison. Our team of eight is mentoring those 46 and has seen the transformation of that particular prison and its culture. None of us gets paid and we do not seek to be paid; the payment is in the delight of witnessing transformation and life for others.
As the Government look around for ways to save money, as well as invest it better, I ask them to please rely more heavily on the voluntary sector and volunteers to do the great work that we all love to do. Give others life and freedom.
Baroness Thornton (Lab)
My Lords, I congratulate my noble friend on securing and opening the debate. I also congratulate the noble Baroness, Lady Porter, on her maiden speech.
This is an important debate because our Government have the chance to restore the mutually productive trusting relationships with civil society that we have enjoyed in the past and which have been eroded in recent years. I unreservedly welcome the words of my honourable friend the Minister, Stephanie Peacock, who said,
“this government has announced a commitment to reset the relationship with civil society and work together to develop a new Civil Society Covenant”.
As someone who started their working life at Gingerbread then moved to the citizens advice bureau and then worked for Michael Young at the Institute for Community Studies, I have huge commitment to this sector going back 50 years.
From the Ministers in the last Government I am afraid we saw attacks on charities to generate headlines and attempt to stoke culture wars. We should be pleased that the public has sound instincts on this. We all know about the campaigns to undermine the work of great charitable institutes such as the RNLI and the National Trust—it did not work. Attacks on the National Trust by political campaigners have included everything from its research into the historic places in its care to “secretly woke” scone recipes. Public trust in the National Trust has, I am glad to say, only increased since all this began, but it represents a waste of charities’ scarce resources. Let us hope that, under a new leadership, and with the influence of noble Lords opposite, there will be a change in attitude toward the voluntary sector.
As I said, the resetting of the relationship with civil society is wholly to be embraced. However, I have to ask my noble friend where social enterprises and social and community businesses feature in this new world. Because of an accident of supine government, the social enterprise world ended up in the DCMS, along with civil society organisations, several years ago. There are more than 131,000 social enterprises in the UK, with a collective turnover of £78 billion and employing around 2.3 million people. They can be SMEs or very large suppliers of public services. Therefore, this is not a small matter, as they match in size the voluntary sector. It feels that, at the moment, they are slightly losing out in the policy world. Unless I am mistaken, I cannot see any mention of social businesses in the proposals for the new compact.
If we wish to fulfil our manifesto commitment to build diverse business models to support the regeneration of our economy, co-operatives, mutuals and social enterprises have an important part to play. The same is true of civil society organisations, but the support and policy that they need are not the same.
I asked this question during the King’s Speech debate and I ask it again: how is that diversity to be achieved? How will social enterprises be involved in the important discussions around procurement, reform of our public services and things such as regional investment? I and the sector have long believed that social enterprises and social businesses should be the responsibility of the Business Department not the DCMS, because they are businesses. At the very least there needs to be a plan to promote and support social businesses. Will my noble friend the Minister help to organise a meeting with her honourable friend Stephanie Peacock, social enterprise leaders and me to find a way forward with this dilemma?
Lord Griffiths of Burry Port (Lab)
My Lords, it is a great privilege to speak in a debate of this kind and to thank my noble friend for giving us the opportunity to share experience in this way.
I have spent my entire working life in the voluntary sector and have struggled very hard throughout that time to maintain the balance between administrative roles, management and client-facing co-working with the people one is serving through the voluntary activities in question. That is an immense privilege, as my dear and noble friend Lord Hastings in the corner alluded to—why he sits in the corner, I do not understand. His practical experience is a model for all of us. He has held high office at a number of very significant institutions and yet it is the person-to-person relationship that strikes home whenever one meets him. I would hope that that would be my emphasis too.
I pay tribute to this little man sitting next to me, my noble friend Lord Parekh, whose books I read years ago, whose leadership I enjoyed on visits to South Africa and other places as part of building relationships across international borders, and whose thinking has always been so clear and helpful.
I am unashamedly going to speak about churches today, and have been given encouragement to do so by my noble friend who, from a Jewish perspective, seemed to open the door for that. Years ago in my work, I had responsibility for a day centre for homeless people in Seymore Place, Marylebone, and for halfway houses for young offenders in Wandsworth. The Home Office approved a centre for prisoners on remand, resourced by an astonishing criminologist from the University of Cambridge, and a self-referral place for people fearing that they were dependent upon substance abuse. In that context I have witnessed human suffering at an extraordinary level. In order to catch the picture properly, I remember, for example, sleeping in Lincoln’s Inn Fields or in shop doorways with the homeless as we built relationships that would allow for a conversational approach to the way we handle what we on the giving side too often describe as problems when in fact they are situations that can be entered into and dark places that people can be brought out of simply by having someone else they can trust.
In my cozy retirement in leafy Croydon, and attending church—no longer running the wretched place because it was so complicated in the end—it is wonderful to have the space and the people who bring people from the community together. We help people with mental health problems, we hold art classes and University of the Third Age sessions, we host winter sleeping shelters on rota with other churches in the region, and those of us who do not need our £300 winter fuel allowance put it into a fund so that it can be administered on behalf of those who need it most. In all these ways, such wonderful opportunities occur. I so agree with my noble friend in the corner that what you receive is far more than anything that you give.
The last thing I want to say, although noble Lords will get the sense that I could go on a long time, is that I picked up the Methodist Recorder—who has heard of that?—this morning on my way here. It carries a report from the National Churches Trust that shows how—it has been quantified and worked out by experts—churches save the NHS £8.4 billion per year through the direct and indirect services that they offer to their public. So let us note the decline in numbers who go to church, but glory in the fact that those who do punch above their weight.
Baroness Sater (Con)
My Lords, I thank the noble Baroness, Lady Morgan, for securing this debate today and I congratulate my noble friend Lady Porter on her excellent speech. I am fortunate enough to be on a fellowship programme with the Industry and Parliament Trust, focusing on corporate social responsibility and looking at how companies and organisations are delivering their employee workplace volunteering programmes. Today, I will talk about the contribution that businesses and their employees can make to charities, voluntary organisations and communities, and how society and the economy are benefiting from their work. I declare my interest as a trustee of the Dartington Trust and vice-chair of the Specialised Healthcare Alliance.
Volunteers provide a vital resource to charities and volunteering organisations across the UK, many of which work to support the most vulnerable members of society. In turn, volunteers benefit hugely in personal satisfaction from knowing the value their contribution makes and from the skills that they can acquire. The Time Well Spent report from the NCVO—the National Council for Voluntary Organisations—backs this up, with 74% of volunteers feeling more confident and 71% feeling that their skills have improved.
I recently visited the impressive Felix Project charity in Poplar and was overwhelmed by the contribution that volunteers were making daily to help deliver meals to local communities. A survey of some 200 corporate volunteers visiting one of its farms this year reported that 92% said it improved their relationship with their colleagues and made them more aware of the issues around food waste.
Analysis conducted earlier this year by Pro Bono Economics—PBE—highlighted that workplace volunteering benefits individual employees and their employer by improving well-being and delivering improved skills. This combination drives productivity and means that £1 spent by employers on good-quality workplace volunteering schemes can generate between £1.50 and £3.60 in benefits. The Business in the Community 2024 State of the Nation report surveyed CEOs from some of the largest companies and found that 78% believe that progress on addressing societal and environmental issues can also help with business growth. BITC is a responsible business network that works with charities, voluntary organisations and local authorities. More than 20% of the UK workforce, some 7 million employees, are its network, which shows the potential scale of what can be achieved.
These behaviours, values and cultures are becoming increasingly important to young people. When they are looking for a job, they will sometimes be the reason that they will choose one company over another. A KPMG study last year revealed that nearly half of UK office workers considered a company’s ESG credentials important, with this sentiment most pronounced among young groups. This potential new group of volunteers in business can help communities continue to make a difference in tackling social injustices and improving our environment with much needed additional capacity at a crucial time, with six out of 10 charities struggling with volunteer recruitment, as reported by the VCSE Data and Insights National Observatory at Nottingham Trent University in May this year.
However, charities, voluntary organisations and business should not be burdened with these responsibilities alone. Government also has a role to play. The PBE report in April cited some £1.6 billion to £2.8 billion of net productivity benefits to the economy from rolling out more workplace volunteering. Companies and organisations are required to report on many things and need no more burdensome obligations, but I wonder whether there may be a benefit in voluntary reporting of employee hours spent volunteering, both in business and perhaps across the Civil Service. With PBE reporting that 17 million to 23 million employees do not have the opportunity to access workplace volunteering, that tells us we have a long way to go, but the potential is huge.
Baroness Pitkeathley (Lab)
My Lords, I thank my noble friend Lady Morgan for this debate. It was an honour to precede her as president of the NCVO and to listen to the maiden speech of the noble Baroness, Lady Porter. I have worked in or with the charitable sector for most of a long working life and I was privileged to chair one of your Lordships’ Select Committees on charities in 2017. I begin with a quotation from the report we produced:
“Charities are the eyes, ears and conscience of society. They mobilise, they provide, they inspire, they advocate and they unite … their work touches almost every facet of British civic life”.
The then Government took 10 months to respond to the report that my committee submitted, and, when it came, the response was not worth waiting for. Although there was general acceptance of the problems facing the voluntary sector, there was no plan for dealing with them and much of the tone of the response could only be called dismissive.
Indeed, this rather typified the relationship between the previous Government and the voluntary sector, which is why the Labour Government’s renewed approach has been so welcomed by colleagues. A fundamental reset was needed and has now been announced by the Prime Minister in the form of a covenant, as we have heard.
We are in the engagement period now for that covenant, when consultation is going on between the Government and the sector; and the sector, as we know, will not be reluctant to make its views known. However, the huge variety of the sector, as we have heard, from tiny kitchen-table charities to multi-million-pound enterprises, makes it very difficult to consult in any meaningful way, although the intermediary bodies such as the NCVO and ACEVO do a magnificent job.
Up until 2010 I had the honour of chairing the advisory body for the third sector. This was set up by the Labour Government to encourage, promote and facilitate communication and co-operation between the sector and the Government. All the appointments to it were made through a public appointments process and members sat, not as representatives of their particular sector, but to act as a sounding board and a conduit for issues of concern to both the Government and the sector. All parties seemed to find this helpful and I wonder if the Minister would consider reactivating the idea. It was wound up by the incoming coalition Government but I believe it did a useful job. Our Leader, the noble Baroness, Lady Smith of Basildon, was Minister for the Third Sector at the time. She had a lot of contact with us and I am sure could be consulted about the role of such an advisory body going forward.
I will just say a word about partnership. If I had £1 for every time I had heard Governments, the NHS and local authorities say they wanted to work in partnership with the voluntary and community sector, I would be a rich woman. We have to ask what partnership means. It does not mean deciding what services you want to provide for your citizens, progressing those plans, and then throwing a crumb or two out about what you want the volunteer sector to do when it was never even in the room when the plan was devised. This is very short-sighted for two main reasons. First, you do not get the best out of any partner unless you involve them at the earliest possible stage in planning, and secondly, you are ignoring the priceless contribution of the voluntary sector, which is its contact with consumers. Every piece of research about consumer involvement shows that people, especially those who are disadvantaged or vulnerable, engage more readily with charity or non-statutory agencies than someone perceived to be from the Government or the council. This is one of the many priceless contributions that the voluntary sector brings to the public life of our country.
Baroness Gohir (CB)
I congratulate the noble Baroness, Lady Porter, on her maiden speech and thank the noble Baroness, Lady Morgan of Drefelin, for securing this debate and for her excellent introduction. I declare an interest: I am the CEO of a women’s charity and a trustee of another, so I will focus my comments on the women’s charities sector, which is underfunded and undervalued.
A study commissioned by the Rosa fund for women and girls, the National Lottery and the Esmée Fairbairn Foundation found that women and girls’ charities get less than 2% of grants and that these are often micro grants. The study showed that 50% of the grants are for £10,000 and less, so the grant value going to women and girls’ organisations is far less compared to other organisations, and the situation is far worse for minoritised women’s groups.
Some of the factors contributing to this include the fact that the sector is undervalued. It is expected to do the work for little or no money. Also, the previous Government made it very hard for small organisations to access funding to address violence against women and girls. They changed a very simple grant process to a complicated tender process and raised the income threshold so that only large charities could access that funding. Smaller organisations had to form coalitions so their collective income could meet the threshold, but managing coalitions is very difficult and resource-intensive.
Other barriers include local councils having their budget slashed, which means less or no money going to local women’s groups. Also, several charitable foundations and trusts, which are very good at giving money to women’s groups, have paused their allocation of grants temporarily for more than a year while they refresh their strategy—something highlighted by the noble Baroness, Lady Fraser. I wish they had consulted and spoken to each other and staggered that process, because they have made life very difficult for charities such as mine.
Now I turn my attention to the Budget. I welcomed some announcements which are helping to put more money into the pockets of women. However, some announcements are going to hit the charity sector very hard. As mentioned by the noble Baroness, Lady Fraser, the rise in employer national insurance contributions is going to significantly increase the wage bill. If you take that in combination with the rise in the national living wage, plus pay rises that charities would like to give their workers in line with national inflation, even with the employer allowance it is going to be a significant increase. Last night I was number-crunching what the salary bill for my charity is going to be next year and thinking about how I am going to raise that money in a very precarious, unstable funding environment.
Women’s organisations, with that rise in demand that has already been highlighted, are having to do a lot more for a lot less money. Staff are getting burnt out and they are leaving the sector. On top of that the charity sector will probably have no choice but to scale back services, close down some of them and make staff redundant, and unfortunately many charities will end up closing.
This is deeply concerning because the women’s charity sector is an essential source of support. It is also a source of employment, as highlighted by the noble Baroness, Lady Morgan, and an essential source of volunteering. I started my second career, after caring for my children, by getting back into volunteering and that has led me to your Lordships’ House. Pro Bono Economics has estimated that women in the charity sector contribute £19 billion to the economy, £9.9 billion through volunteering and £9.2 billion through employment. How are the Government going to support the charity sector? Will they increase funding to it and make that funding accessible, including through the dormant assets highlighted by the noble Lord, Lord Bassam?
Baroness Prosser (Lab)
My Lords, along with others, I thank my noble friend Lady Morgan of Drefelin for introducing this debate. I have long held a very fond memory of the voluntary sector and the role of volunteers. Many years ago, I was lucky enough to work in the voluntary sector in the London Borough of Southwark. At that time, the Home Office had its community development programme and Southwark was one of the boroughs fortunate enough to be funded in this way. The CDP, as it was called, was established in an area of the borough that was up for regeneration. It was generally seen as pretty deprived. The work we did there was in reaching out to the local community and making ourselves known, via mother and toddler groups and the local youth centre—back in the days when we had youth clubs, of course—or through the churches and any organisations within that part of the borough where people met and got to know each other.
The whole difference between the voluntary sector providing services and services provided by what we might call the more formal authorities, such as the local authority or the Government, is that it is in a position to go into areas where local people meet and go about their business. We could set up our own little schemes by making ourselves known and giving confidence to those people who have questions to ask or are in need of some sort of service and advice. In that part of Southwark, there were a lot of what used to be described as problem families—they gave lots of problems to lots of people in the area, that was for sure. Those people really did not know how to organise themselves. The pity of it was that many children were therefore not properly brought up, advised or guided. We had community workers who worked with those young people, getting them back into school and a bit more on the straight and narrow.
We then applied for funding to establish a law centre, and I was fortunate enough to find work there. We had four qualified lawyers and two of us who did welfare rights advice and support. Again, we went out into the community, meeting tenants’ organisations and residents’ groups et cetera, to make sure that our services were known to everyone.
Back in 2010 David Cameron, now of course the noble Lord, Lord Cameron, launched what he called the big society. At the time—I have never been convinced otherwise since—I drew the conclusion that he had absolutely no idea what the big society was supposed to do and how it would be able to do it, because there was no recognition of the need for some kind of structure or support. There needed to be some kind of link to local government, to the Government themselves and to the community in general. I think it was somehow supposed to come out of thin air.
In much later times, I have been grateful for support from the voluntary sector in a different way. I am advised, helped and guided by a volunteer from Sensory Services by Sight for Surrey, an organisation that works across the county of Surrey, where I live. Its volunteers come and enable people like me who are now registered as partially sighted to do all kinds of things that, on our own, we would not be able to do. That is a very different kind of volunteering but it is just as good, as important and as meaningful as the voluntary sector where those being paid operate. I congratulate my noble friend Lady Morgan again because this is a very important debate.
Lord Rooker (Lab)
My Lords, I congratulate the noble Baroness, Lady Porter, on her excellent maiden speech.
Last Thursday, at a fund-raising quiz in Ludlow Brewery, Susie O’Hagan, the chief operating officer of the charity Hands Together Ludlow, outlined the aims of the charity: reducing isolation and loneliness; helping people remain independent; supporting the most vulnerable; and building networks across the town. Ludlow is a wonderful market town with much history, but it has wards in the most deprived categories and the numbers of people registered disabled and children on pupil premium are above the national average. Salaries in Ludlow are 12% below the national average, and it is the southern tip of a financially failing council. Hands Together Ludlow receives no public finance and raises running costs from trusts, individuals and fundraising. The brewery fundraising quiz was sponsored by MFG Solicitors.
To best illustrate the work of Hands Together Ludlow, Susie simply described the work it had carried out in three days last week—last Thursday evening, she described Monday to Wednesday. Volunteers collected 145 kilograms of surplus food from local supermarkets and stocked the community fridge they operate. In those three days, the community fridge served 57 people and distributed all the surplus food. Some eight people worked in the men’s shed, which also caters for women. Rough sleepers were fed and supported to engage with other services. Someone was provided with a phone and a quiet space to access universal credit. The charity organised for a 90 year-old with no food in the house to be taken shopping, followed up with a visit to the doctors’ surgery and a social worker to agree a forward plan. It liaised with 30 organisations across the county to identify sharing-information opportunities and keep Ludlow on the map. It explored improvements in the referral process for the household support fund and looked at how it could better support people to apply to the fund. It also responded to issues received from Facebook, the telephone and the website—from finding financial advisers to offers of free wood, requests for a befriender and how to dispose of white goods.
Some 37 people were fed at the community lunch, and the charity served another 22 in its own community space; 10 people were taken for a social walk around town followed up with refreshments. The charity provided mindful colouring and board games social sessions, walked a dog whose owner was ill, planned for an event to highlight and celebrate volunteering in Ludlow, and met with the town council to plan co-delivery of a new food project. Some nine lonely people spent an hour with a volunteer befriender, and the charity organised and supported 40 volunteers to deliver 111 hours of activity. All that happened in just those three days.
That was Susie’s brief introduction to what the evening was about. These activities cannot be delivered without a secure infrastructure of small staff and building costs. The charity has to stay flexible to meet the needs of the town, as statutory services are cut, closed or moved out of town to Shrewsbury. Last year, 18,332 hours of volunteer time was given. Small local charities, such as those we have heard about today, keep society going. They reduce isolation for individuals and help them maintain independence, and they support the most vulnerable.
Finally, the thing noble Lords will want to know—the quiz team we were on included the mayor, and we came fourth.
Baroness Barker (LD)
My Lords, I welcome the noble Baroness, Lady Porter. Noble Lords who, like me, have visited Fulwood, will appreciate that it is one of the best places in Britain to test new models of buses and possibly the worst place to sit your driving test, as you head up those hills out to the Peak District. I wish her all the best.
I thank the noble Baroness, Lady Morgan of Drefelin, for this very timely debate. Every new Government come into power and have a vision for the voluntary sector. It is good that we get to discuss it at this point. I am not sure what a covenant is, but I am going to make some suggestions about what I think it might be. As others have said, the voluntary sector is important. I declare my interests. I have always worked in the voluntary sector. I have a consultancy, which works primarily with charities. I am on the board of GiveOut, a charity developing philanthropy to support LGBT human rights around the world.
If you want to know about the importance of the voluntary sector—my noble friend Lord Fowler is here; I will call him my noble friend on this occasion—look at the progress made over the last 40 years on HIV. None of that would have happened at the pace that it did without the ability of innovative voluntary organisations to bring together scientists, Governments, health and everybody else, with intensity and purpose. When Governments get that the voluntary sector has a powerful presence and part to play in convening different sectors, things begin to happen at pace.
I hope that a covenant means that the Government are going to properly treat charities as professionals. I hope for one thing they dismiss the suggestions in the last few days that the NI increase should not apply to charities. We are professional bodies; we employ professional people. Yes, we do a lot as well and have a very different role and approach to what we do, but we are at heart professional. That is why government—local government as well—needs to start treating us as professional bodies which add value to what they do. I hope that we will stop treating charities as organisations that subsidise public services but instead as ones that bring value to them. I would like to ask the Minister whether the procurement regulations will be reviewed, and if we will go back to looking at the social value Act, which I think is a key point about how we treat charities properly.
One of the big announcements in the Budget yesterday was £22.6 billion for the NHS. As a user of NHS services, along with everybody else, I have come to wonder whether we have a National Health Service. I really do wonder whether it delivers care pathways, as it often says it does. I suspect quite often it does not; I think it delivers episodes of care, not many of which are joined up to form a pathway. It is often informed voluntary organisations, such as the one chaired by the noble Baroness, Lady Morgan, which does the work of developing care pathways. Will the Government be bold—they are not, at the moment, appearing to be a very bold Government, but they should be—in making a large part of that £22 billion conditional upon proper involvement of the voluntary sector? They should make sure that some of that £22 billion goes to the voluntary sector, that day in and day out covers many of the deficiencies of a malfunctioning service.
I have a great deal of sympathy for chief executives of local authorities, whose budgets are disappearing. As part of what they have to do, they focus on the statutory responsibilities and are often forced to cut the voluntary sector. I would like the Minister to say whether the Government will be looking at the way local authorities in jeopardy and the voluntary organisations within them can be maintained and helped to endure. They are very much needed in those situations.
Now, people have heard me speak about this subject before, so it will come as no surprise that I want to return to one of my particular hobby-horses—the fact that the majority of central government funding for youth services goes to the National Citizen Service. The National Citizen Service is a good organisation and does good things, but it was set up under the previous Government with an enormous amount of political cover and investment. It was given a royal charter body status, which it did not deserve and does not need. I think it is now time that the National Citizen Service should be reviewed, and there should be a comparative review of what it does alongside other youth services, to see whether or not—and I make no prediction about the outcome—it deserves to continue to have that favoured status. As we all know, around the country, youth services have been badly hit.
I want to follow up the point made by the noble Baroness, Lady Thornton, about the development of the social enterprise sector. It is a long-running and very technical issue—charity “anoraks”, put them on now: this is your moment. Enabling individuals who do not mind investing in the social capital of their area to do so by liberalising the rules on social investment bonds is something various Governments have looked at and run away from. Now is the time, under a covenant, if you like, to look again at that issue.
In recent years the Charity Commission has done a very good job of digitising and improving its information systems, but like the EHRC, it has been very politicised under the last Government and has strayed—admittedly not as far as the EHRC—from its purpose. It is time to depoliticise the commission and get it back to doing its job, which is the impartial regulation of charities. There is enough to be doing on the technical regulation of charities and social enterprise without becoming another warrior in the fake world of woke wars.
This covenant could be a good thing if, in particular, it got an agreement from government to work with the sector on costing models for prevention. We know that in pretty well every government department—Home Office, Justice, Environment—the imprint of the voluntary sector does save money. Prevention saves money, but we have never been able, nationally or locally, to come up with a costing model that enables an authority, particularly one with statutory responsibilities to deliver services, to defend the funding of something preventive at the expense of something immediate and urgent. If the Government assembled a task force to do that—it could include all sorts of economists and so on—that would be a very important service.
One group that should be involved, although we have not spoken a lot about it, is the big tech companies. I am old enough to remember when there were towns that were company towns, where everybody worked for a particular company. The people who owned those companies had a strong sense of social responsibility to the places where they were based. Not Google, not Microsoft—I look at the towns up north, which I know very well, and such companies contribute nothing. They might come along and find the brightest and best in schools and take them out to work for them, but they do not contribute at all. They have got away with so much. A bold Government would challenge them, first, on the paucity of what they call their charitable donations, and most of all on what they take from communities and fail to return.
I thank noble Lords for this debate. I hope the Minister is going to go back to her department with some specific arguments for being bold and making an actual difference to the voluntary sector.
Viscount Younger of Leckie (Con)
My Lords, the noble Baroness, Lady Morgan, allows this House once again to highlight the importance of community work and the role of the voluntary sector in our lives. This has been an excellent debate, and I pay tribute to my noble friend Lady Porter for an excellent maiden speech. I am sure that her experience in government, No. 10 and the City will stand her in good stead for her future contributions in this House.
Speaking of maiden speeches, volunteering happened to be a core theme of my own back in 2010, and it is just as important and relevant now as it was then. What I said in speeches then rather chimes with remarks made by the noble Lord, Lord Parekh, who I see is not in his place. I said that this is
“all about effecting a behavioural and cultural shift for individuals within communities. It is about extending the concept and values of volunteering and self-help from societies and geographical areas where they are working to those where they are not”.—[Official Report, 11/5/11; col. 955.]
As was alluded to by the noble Baroness, Lady Morgan, the voluntary sector contributed £17.8 billion to the UK economy in 2020-21, according to NCVO estimates, equating to approximately 0.8% of total GDP.
Volunteering is indicative of a way of thinking, or a philosophy, based on stepping up and solving problems. Essentially, it is altruism in its purest sense: working to the benefit of others. There are numerous examples of generous and selfless work all over the country, and we have heard many examples this afternoon. In my local area, I witness small groups of people picking up litter along roads, way beyond the boundaries of their own front doors; people generously giving to food banks; and professionals giving their time and expertise pro bono in legal advice clinics, for example. It would be fair to describe volunteering as a British value of which we can all be very proud.
In my role as Minister for Communities back in 2019, I saw much good work undertaken by a small and dedicated team of civil servants embedding themselves in specially targeted communities, such as Wolverhampton. Success was measured by the work these people did to initiate and encourage the development of nascent communities, then backing away when they were operating and flourishing. I witnessed diverse communities mingling and families coming to know each other and becoming firm friends, with their children playing together; thus, a cohesive community, imbued with self-help, was born. It was satisfying to watch that. Can the Minister update the House on the progress of these initiatives, admittedly five years on?
From such work, I urge the Minister to help people lead by example. The nature and number of successfully burgeoning projects should be broadcast both regionally and nationally. I believe that this will generate interest, develop momentum and, I hope, encourage copycat activity in other localities. Is this government policy? I hope the Minister agrees that there is a balance to be struck, so does she also agree with me that the Government should not micromanage the sector? The voluntary sector should be allowed to flourish and do what it does best: use local expertise to help local communities and people.
I want to highlight an example of volunteering that is not often enough honoured, applauded or even venerated: the lifeboats, alluded to by the noble Baroness, Lady Morgan. I do not have an interest to declare, but I have a badge in the form of some yellow wellies on my lapel. A fortnight ago, I was privileged to visit the impressive RNLI centre in Poole, where lifeboats are manufactured and lifeboat personnel trained. More than 10,000 of the operational crew members and around 100 lifeguards are volunteers. A further 14,000 volunteers fundraise and help the charity in other ways. To date, in 2024, the lifeboats have launched around the UK—wait for it—7,307 times, saving 160 lives and helping another 6,795 people, 98% of whom found themselves in difficulty onshore rather than offshore, which is an interesting statistic. We should remember that lifeboat volunteers are often on call and have to drop everything at their jobs or in their beds, if at night, to go and risk their lives in their difficult work.
However, examples of a voluntary spirit do not always take the form of heroism. Sometimes, they just make the world a more tolerable place. Here, I am talking about pubs. The pub in my local village closed about two years ago, but it has been rescued through a funding collaboration by not only villagers but many supporters much further afield. We read of similar stories in the papers.
A line must be drawn between where the state—mostly in the form of local government—is obliged to help and where local communities should support themselves. I think this point chimes with questions raised by the noble Baronesses, Lady Morgan and Lady Scott, and the noble Lord, Lord Addington. Where do the Government think that the line should be drawn? That is perhaps rather a challenging question.
This debate would not be complete without mention of the Duke of Edinburgh’s Award scheme. It was mentioned yesterday by the noble Lord, Lord Boateng, and today in the Chamber, notably by the noble Baroness, Lady Grey-Thompson. We know the scheme focuses on young people aged 14 to 24 developing their own programmes, with the gold award the ultimate goal. It is run not just in schools but in youth clubs, hospitals, fostering agencies and prisons. The noble Baroness, Lady Grey-Thompson, stole my thunder in reading out a number of key statistics from the award scheme, and the House will be relieved to know that I am not going to repeat these. Will the Minister tell us what commitment the Government are giving to provide our young people with activities that prepare them for—to quote the Duke of Edinburgh’s Award scheme—
“the opportunities, responsibilities and experiences of later life”?
We know that many young people are struggling with mental ill-health and that rising NEET rates are taking their toll. We were made aware of those disturbing figures on Tuesday in the Chamber. Participation in the Duke of Edinburgh’s Award helps to engender positive outcomes for young people. They include improved skills and independence, improved social mobility, and improved mental and physical health, including reduced likelihood of mental ill-health in later life. It can also foster non-academic skills and soft skills that can lead to successful career pathways. Can the Minister outline the steps that the Government are taking to engage the young in voluntary work?
Access to youth work and positive activities is directly correlated with a reduction in incidents of anti-social behaviour and low-level crime, and with improvements in school attendance. That is a key point to make. I will now ask the question that was asked by the noble Lord, Lord Addington: to what extent are schools including this in their curriculum? Are they perhaps including the spirit of citizenship? What are the Government doing here?
When given the opportunity, communities are more than capable of coming together and achieving truly astonishing results. This was never clearer than during the lockdowns, when people dropped off supplies at the houses of those who were sheltering. Coronation and jubilee street parties have been a magnificent, visible and prime example of how volunteering to organise a community event can raise people’s drawbridges and bring them out to meet, talk and engage with one and other—sometimes for the first time.
I believe there is more that can be done to encourage people to come out of their front doors, to put away their mobile phones, to not look at the next episode of reality TV, and, simply, to help in their neighbourhood. I look forward to some answers from the Minister.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
My Lords, I thank my noble friend Lady Morgan of Drefelin for securing this excellent debate on such an important topic, not just for my department but for society as a whole. She has a wealth of experience in this field, as do so many noble Lords who have spoken today. I congratulate my noble friend on her recent appointment as president of the NCVO.
I congratulate the noble Baroness, Lady Porter of Fulwood, on her maiden speech. I have no doubt that the noble Baroness will make a valuable contribution to the work of this House.
We are quite tight on time and a lot of questions were raised during the debate, so if I do not respond to specific questions, I will write and place a copy of the letter in the Library.
As the title of the debate acknowledges, the voluntary and community sector plays an absolutely vital role in all areas of public life, right across the UK. It is no surprise that there is general cross-party recognition of the sector’s value, as has been reflected in today’s debate. I personally had the pleasure of working in the charity sector, being a trustee, and working closely with the voluntary and community sector as chair of the London Resilience Forum. I know that the sector has a hugely valuable role, not least during the Covid pandemic, as has been noted in the debate.
The right reverend Prelate the Bishop of Newcastle referred to the sector as the glue that holds society together, a point reflected in the speech of the noble Baroness, Lady Porter. My noble friend Lord Parekh noted that the relationship between the voluntary sector and the state is one, essentially, of culture.
My noble friend Lady Morgan highlighted the economic value of the sector. The Government highly value the work that the sector does and the social value it delivers; it is an incredible force for public good. We recognise the sector’s economic value, with civil society contributing over £22 billion to the UK economy and employing approximately 981,000 people. A 2023 survey by the NCVO reported that, for every £1 generated by a community organisation, £2.50 is created for the local economy. There have been numerous other statistics cited in this debate.
There are approximately 160,000 registered charities in England, 9,000 in Wales, 25,000 in Scotland and 7,500 in Northern Ireland. The breadth of the sector is vast, both in the types of organisations within it and the variety of work that they do. Organisations might be large multinational charities responding to international crises, such as the Disasters Emergency Committee, which recently launched the Middle East humanitarian appeal through which the Government are matching public donations to provide urgent humanitarian assistance up to £10 million. However, we must not forget—noble Lords definitely have not—the importance of the thousands of local groups run solely by steadfast volunteers, including sports clubs and community libraries.
There were so many examples of the contribution of this sector; I had meant to reflect some of the examples that noble Lords gave, but there are far too many for me to list without going way over time. All of them are clearly making a valuable contribution, both locally and to our society. I particularly recognise the point from the noble Baroness, Lady Barker, about their role in innovation, which is one that we forget at our peril.
As my noble friend Lady Thornton noted, social enterprises and community businesses also make an incredibly important contribution as part of the broad umbrella of civil society organisations. The DCMS is currently delivering the Social Enterprise Boost Fund to drive local growth and innovation. We recognise that the issues affecting such organisations are different from those of other civil society groups and we will, and do, work closely with colleagues from DBT and HMT to develop policy solutions in this space.
I particularly welcome the focus by the noble Viscount, Lord Younger, on his legacy during his time as a Minister. I will write with an update on the projects that he mentioned, which I have not been able to secure in time for today’s debate.
It is clear that civil society organisations perform a multitude of functions, including the relief of poverty, tackling environmental issues, supporting conservation and heritage, and providing education and training. The sector consistently rises to some of the major challenges that society faces, whether that be the Covid-19 pandemic or the civil unrest this summer. I reassure the noble Baroness, Lady Fraser, that we do not view the voluntary sector as an add-on; we view it as essential. I noted my noble friend Lord Griffith’s point about the role of churches.
Voluntary, community and social enterprise organisations are an essential and major provider of services across the country, delivering almost £17 billion-worth of UK public services each year, including 69% of contracted homelessness support and 66% of contracted domestic and sexual violence support. The noble Baroness, Lady Gohir, focused particularly on the charities and organisations that support women in this sphere.
The sector plays an important role in advocacy and campaigning, with an ability to amplify the voices of different groups, evidence people’s lived experience and speak truth to power. This includes work by my noble friend Lady Morgan during her tenure as the chief executive of Breast Cancer Now and in her continued work within the sector.
One of the sector’s unique strengths is voluntary and community organisations’ rich understanding of the areas and communities in which they are embedded. Indeed, they are often trusted when formal public services are not and are able to reach underrepresented groups in society to provide critical support and services to those most in need. In 2018, 90% of households reported having used a charity service at some point.
The sector is therefore essential to deliver our government missions effectively. I will not touch on all five but, as an example, the sector will be a critical partner in building an NHS fit for the future, with direct delivery responsibilities for a large array of community-based health services. Civil society will play a particularly pertinent role in the preventive space, including interventions to tackle loneliness—which has come up in the debate—or employment coaching for those returning to work with health conditions or disabilities.
The noble Lord, Lord Addington, raised charities’ access to schools, and I will raise his points with my noble friend the Minister of State for Education. However, voluntary and community organisations are, in the Government’s view, fundamental to our approach to improving opportunity for all. For example, the charity Football Beyond Borders found in its 2021-22 impact report that young people at risk of exclusion who participated in the programme were 11 times more likely to achieve their GCSE English and Maths than those excluded from school and attending alternative provision.
The noble Baroness, Lady Porter, and the noble Lord, Lord Addington, both raised points around youth. The Government are committed to intervening early to prevent young people being drawn into crime and other poor outcomes. Fundamental to this is the delivery of the Young Futures programme. The Young Futures hubs will reach every community, delivering universal youth programmes as well as support for young people at risk of being drawn into crime, or facing mental health challenges. The establishment of prevention partnerships in every local authority will help map local provision, identify at-risk young people, and bring together local services to tackle local drivers of serious violence and better support young people.
This Government understand that, to achieve our vision for these missions throughout the whole of the UK, we must work more effectively and in genuine collaboration with the voluntary and community sector. Doing so will help us deliver for the public, 61% of whom—I was surprised it was only 61%—believe that Britain would be a better place if charities and community groups had more involvement in decision-making at a national level, according to the Law Family Commission on Civil Society in 2020.
As my noble friend Lady Pitkeathley said, a reset with civil society is needed. This Government, led by our Prime Minister, are committed to resetting the relationship with civil society and ensuring that the sector is recognised and valued for the crucial support it provides to so many people. I hear what my noble friend said about the importance of partnership and I will pass on the points made by the noble Baroness, Lady Barker, on this issue.
My noble friend Lord Kestenbaum focused on the value and significance of the word “covenant” and the covenant itself. DCMS has worked closely with key civil society bodies to develop a framework for the new covenant between the Government and civil society, which was launched by the Prime Minister earlier this month. There is currently an eight-week period of engagement during which we want to hear from the rich diversity of the civil society sector across the UK. My noble friend Lady Wilcox raised the importance of including devolution in the mix of the covenant. I reassure her, and my noble friend Lord Murphy, that we recognise the importance of learning from best practice across the devolved nations.
Policy on civil society and many of the issues that civil society organisations focus on are, as my noble friend Lord Murphy highlighted, devolved. Over the coming months, DCMS plans to engage and listen to devolved Governments and civil societies across all four nations, to help inform the development of the covenant framework.
I am proud that DCMS holds responsibility for civil society policy across government, recognising and responding to the pressures the sector faces. I acknowledge, however, that this is not an easy time for voluntary and community organisations, many of which have had to reduce or adapt their services, or even close their doors, in the face of the financial pressures of the last few years.
In response, DCMS supports the sector through a variety of mechanisms. This includes the delivery of direct funding to voluntary and community organisations, such as in the response to the Covid-19 pandemic and to the cost of living challenges last year. Our role at DCMS also covers developing other funding sources for the sector, from growing the impact investment market to supporting organisations to apply for government contracts. It includes driving innovation and best practice, such as through the Know Your Neighbourhood Fund, focused on increasing volunteering and tackling loneliness.
My noble friend Lord Bassam, the noble Lord, Lord Hastings, and the noble Baroness, Lady Gohir, referred to the potential of the dormant assets. The dormant assets scheme has unlocked £982 million across the UK to date. In England, this has been directed to independent, expert organisations to deliver innovative programmes seeking to address complex social challenges at scale. The Government will shortly set out how they intend to allocate the £350 million expected to flow into the dormant assets scheme in England between 2024 and 2028 to the named causes: youth, financial inclusion, social investment and community wealth funds.
We have taken a phased approach to implementing the expansion of the scheme into the three new sectors. Any further expansion will need to be carefully considered and will require close collaboration between the Government, RFL and industry. The Government recently ran a call for evidence, seeking views on the expansion of the scheme.
I will now touch on the points raised by the noble Baroness, Lady Gohir, about the implications of the Budget, including the potential impact of national insurance contribution and minimum wage increases—a point on which I feel she and the noble Baroness, Lady Barker, potentially differed in their views. These decisions and the minimum wage increases were necessary as part of the package in the Budget to restore economic stability. I also highlight that the minimum wage increase will potentially benefit some of the lowest-paid workers in the sector, so we need to understand the balance.
However, the Government recognise the need to protect the smallest businesses and charities, which is why we have more than doubled the employment allowance to £10,500, meaning that more than half of businesses with national insurance contribution liabilities will either gain or see no change next year. Businesses and charities will also still be able to claim employer national insurance contribution reliefs, including those for under-21s and under-25 apprentices, where eligible. More broadly, our tax regime for charities, including exemption from paying business rates, is among the most generous of anywhere in the world, with tax reliefs for charities and their donors worth just over £6 billion for the tax year to April 2024.
My noble friend Lady Morgan raised points around charities withdrawing from public sector delivery. I am aware that cost increases will compound the fact that public sector grants and contracts have often not covered rising services costs for organisations in the sector. On an individual basis, commissioners are able to adjust contract terms where appropriate, through existing provisions in contracts.
On procurement, mentioned by the noble Baronesses, Lady Barker and Lady Gohir, and my noble friend Lady Morgan, a key initiative being introduced by the Cabinet Office is the new Procurement Act, which includes a host of reforms that make it easier for smaller providers, such as VCSEs, to bid for public contracts. On the points made by the noble Baroness, Lady Barker, about public procurement and social value, this Government recognise social value as a vital element of public procurement. DCMS is also working to deliver the VCSE contract-readiness programme to help improve the capability of VCSE organisations when bidding for public contracts.
Crucially, the tough decisions taken in the Budget will allow for vital investment into public services. The Chancellor announced yesterday that the Government are providing an additional £233 million in grant funding for homelessness services, over £250 million to continue testing children’s social care reforms and a £1 billion uplift to SEND and alternative provision funding other public services, to allow local authorities to further support those most in need. Much of this investment will of course be delivered through the voluntary and community sectors, as outlined by many of the examples in today’s debate.
Yesterday’s Budget was focused on “investment, investment, investment”, and this includes exploring a way for socially minded investors to support the Government to deliver better social outcomes, aligned with their missions, with further details to be announced in the spring. Alongside the important funding landscape, the Charity Commission for England and Wales, as well as the charity regulators in Scotland and Northern Ireland, help to ensure that charities are appropriately and robustly regulated and carry out their responsibilities effectively and in line with the law. I noted the noble Baroness’s points on the Charity Commission and will feed them back to the Minister, Stephanie Peacock.
A number of noble Lords, including the noble Baroness, Lady Scott, mentioned the importance of volunteering, not just what it contributes to society but what it gives to the person volunteering. The Government are aware that what really drives civil society are those people who constitute it—both the staff and the amazing contributions of volunteers. In 2021-22, approximately 25 million people in England volunteered at least once, and my noble friend Lord Rooker gave a vivid portrait of what volunteers deliver. We want to see as many people as possible getting involved and taking action on the causes that mean the most to them. My noble friend Lord Bassam also raised the challenge of recruiting volunteers, and we support people to volunteer through a range of government policies and programmes, including supporting this year’s Big Help Out campaign in June, which amplified local volunteering programmes and opportunities for people to support their communities. Despite this, the recruitment and retention of volunteers is an increasing challenge for charities, with barriers ranging from a lack of awareness to opportunities to time constraints—I am aware I have one of the latter.
We are committed to removing these barriers and to supporting organisations to adapt to a changing world where increasing numbers of volunteers want to get out in a less formalised way. The Government’s reform of employment rights should help enable this. I probably do not have time to go into the points from the noble Baroness, Lady Sater, on the volunteering premium and the benefits, but I will revert to her. I will also respond to the noble Baroness, Lady Grey-Thompson, and the noble Lord, Lord Black, on volunteering and community ownership, and to the noble Viscount, Lord Younger, about young people volunteering.
We know that charities and their trustees play a valuable role in society, and I am hugely sorry not to be able to go through all the other points I had, but I note the time. I finish by taking this opportunity to say thank you again to the noble Baroness, Lady Morgan, for securing this debate, and to all those Peers who have taken part, and to say a heartfelt thank you to all those working and volunteering in the sector for the invaluable work they do day in, day out.
Baroness Morgan of Drefelin (Lab)
My Lords, the Minister speaks on behalf of us all when she thanks those volunteers throughout the country. I have only a couple of minutes. I congratulate the noble Baroness, Lady Porter of Fulwood, on her lovely maiden speech. I also thank each and every Member of your Lordships’ House who has taken the time to join this debate and furnish us with yet more insights into the way that the voluntary and community sector adds incredible value to our society.
We have been reminded that the voluntary sector must not be complacent. It has to continue to think about inclusion and how to drive up volunteering rates. We have been reminded of the sector’s power to convene and the responsibility that that brings with it. The incredible variety and diversity of the work of the sector has been discussed brilliantly today. We have also been encouraged—and I want to say this very clearly—to learn from all our nations, particularly sWales. There is so much to learn and so much positivity that can be gained by all the nations working together on the covenant. We learned about the importance of the word “covenant” and how it means not being about transaction but very much about values.
We have heard about people from all over the UK, from Ludlow to Newport, and about the North East Young Dads and Lads. There have been so many great insights in this debate. Something that really piqued my interest is the potential for finding new dormant assets, and I wonder whether the Minister might want to look at that. Perhaps she will write to us about that when there is more to say.
Finally, I say another huge thank you to everyone who has taken part in this debate and to all the voluntary organisations throughout the sector which have sent briefings to your Lordships and supported us in making this such a tremendous debate.
Science and Technology: Economy
(4 days, 17 hours ago)
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Viscount Stansgate
That this House takes note of the contribution of science and technology to the UK economy.
Viscount Stansgate (Lab)
My Lords, to say it is a privilege and an honour to open a debate of this kind is an understatement. I have been in the House for just three years, and this is the first time that we have had a general debate about the contribution of science and technology—including engineering, research and innovation—to the UK economy. I welcome everyone in the Chamber today. A very impressive range of expertise shines through the speakers’ list, which includes my noble friend the Minister, for whom this is his first debate as Minister. In fact, we will hear from several other distinguished former Ministers of Science, whose experience in some cases stretches back over 30 years.
I am sure that there will be a bipartisan spirit this afternoon, but I begin by paying tribute to the noble Lord, Lord Waldegrave of North Hill, whose 1993 White Paper, Realising Our Potential, was the first time that science policy emerged in the modern era, having been ignored by Governments for far too long. The title of that White Paper remains very relevant today.
I welcome the range of attendance in this debate, and I am sorry that noble Lords have only four minutes to speak. I will highlight the maiden speaker. I made my own maiden speech three years ago this month, and I know just how the noble Baroness, Lady Freeman of Steventon, feels right now. I thank her for choosing today in which to make her own maiden speech, to which we all look forward.
When we begin our speeches, we often make reference to our register of interests, and I am proud to be president of the Parliamentary and Scientific Committee, which is Parliament’s oldest all-party parliamentary group by a long way—85 years this year. That is not in any way a financial interest. I am very pleased that our former chair, Stephen Metcalfe, is with us in the Public Gallery watching the debate. In his own parliamentary career, he also chaired the Science, Innovation and Technology Committee in another place. Now that the Parliamentary and Scientific Committee has been reformed for the new Parliament, I very much hope that Members from all sides of the House will take advantage of the activity we undertake. For example, noble Lords should come to the STEM for BRITAIN event held in March and see the astonishing work of our early-career researchers who represent the future. If they cannot come, they can read about it in Science in Parliament, which is available in the post room and in their pigeonholes.
One of the great benefits of initiating the debate is that it has triggered a wealth of informed briefing from a wide range of scientific societies. Sadly, I cannot possibly make use of most of it in the time available, but it is important that Parliament understands what a formidable array of expertise exists in the country. My profound thanks go to the Royal Society of Biology, the Institute of Physics, the Royal Society of Chemistry, the Physiological Society, the Geological Society, Cancer Research UK, the Institute of Cancer Research, the University of Leeds, the Russell group of universities, the Microbiology Society, the Royal College of Pathologists, the Campaign for Science and Engineering, the Society for Experimental Biology, the Royal Astronomical Society, the Society of Chemical Industry and the Royal Society—not to mention, of course, POST and our own House of Lords Library. With the leave of the House, I intend to place a copy of all the briefings that I have received in the Library, so that it can be of use to Members.
Today is an excellent time to have this debate because of yesterday’s Budget, which referred to our
“extraordinary strengths in science and innovation”.
It also follows the investment summit earlier this month. Both events stressed the Government’s aim to create the long-term stability that is needed to use science and technology to grow the economy. This is a Government who are openly committed to growth and the core message from today’s debate will undoubtedly be to emphasise just how much science and technology contribute to the UK economy. Science is a long-term enabler of opportunity. Scientific advances underpin all areas across our economy and are essential to the Government’s five missions.
I forget who coined the phrase “punching above our weight” to describe the UK’s record in science. The basic statistics are well known. For example, we have about 1% of the world’s population and yet produce 16% of the most highly rated scientific papers. Our scientific research is truly excellent. The Government spend over £20 billion a year on R&D. Oxford Economics has estimated that, in 2023, the life sciences sector alone contributed over £13 billion. DSIT estimated in 2022 that the value of the digital sector, which includes everything from information technology to digital content and media, was over £158 million. In March last year, DSIT also estimated that the value of the UK’s AI sector was already £3.7 billion and growing. In February, the Energy and Climate Intelligence Unit reported that the gross value added of the UK’s net-zero sector, which includes renewables, carbon capture manufacturing et cetera, was already £74 billion.
Also, there is no shortage of science sectors emphasising their own contribution. I will give a few examples. The Royal Astronomical Society says that the growing space sector is worth £19 billion a year. The Institute of Physics points out that the photonics industry, which is the technology of light, had an output of £15 billion in 2023, employing almost 80,000 people—as many as the automotive and aerospace industries combined. The Rolls-Royce small modular reactor programme is forecast to create 40,000 jobs and could generate an enormous export market of up to £250 billion by 2050. Meanwhile, the Royal Society of Chemistry points out that the chemical sciences sector generated £3.2 billion for the Exchequer. The Institute of Cancer Research says that its research has saved the NHS £68 million per year by updating clinical radiotherapy practice for cancer patients. Meanwhile, Cancer Research UK says that every £1 invested in cancer research in 2021 generated £2.80 of economic benefit, to the tune of nearly £1 billion.
In this Parliament and its successor, the life sciences sector holds enormous potential to drive economic growth and productivity, delivering goods, services, treatments, medicines and vaccines that are critical to the nation’s health and our resilience against—I hope not—any future pandemic. Overall, it is estimated that every £1 of public investment in R&D unlocks between £2 and £4 of private R&D investment in the longer term. I am pleased that the DSIT budget will increase from £12.5 billion for 2024-25 to £13.9 billion in 2025-26, which is real-terms increase of 8.5%.
So we have a lot going for us. We have world-class universities, not to mention places such as the Crick Institute, the Wellcome Foundation, the Catapult Network and so on. We have world-renowned public sector research establishments such as the National Physical Laboratory. I well remember a story told by a former Minister of Technology, to whom you might say I have a hereditary connection. He went to visit the NPL. When he was shown around, the director proudly said, “Here we can measure down to the smallest unit of measurement ever known, the POBA”. The Minister, being inquiring, asked, “What is a POBA?” He said, “Oh, Minister, it means point one of bugger all”. I hope that, when my noble friend the Minister next visits the NPL he will discover that it is still using the same unit of measurement today.
A word about the institutional landscape: the Government have been bequeathed a scientific landscape and institutional structure that can be made to work. Building on the science and technology framework published last year, the Government have just published an important industrial strategy Green Paper. This is central to the growth mission and its success will depend, crucially, on the application of science and technology. The Green Paper has identified eight sectors that drive growth: advanced manufacturing, clean energy, defence, creative industries, digital technologies, financial services, life sciences, and professional and business services.
We have UKRI. We have had the Nurse review. We have our world-class universities, a plan for a national data library and Project Gigabit. We also have ARIA, about which I hope we will hear more. We need to take advantage of the UK’s unique strengths to enable world-leading companies to grow and seize opportunities to lead in new and emerging industries. As yesterday’s Budget said,
“we are not doing enough to capitalise on these strengths”.
We must fund successful scale-up companies and not leave other countries to exploit our science to make millions for themselves.
I think our current structure will help. We now have a proper department in DSIT, with a Secretary of State at the Cabinet table for the first time in 30 years and distinguished Ministers in both Houses. We have a Cabinet committee chaired by the Prime Minister. Its job is to
“consider matters related to science and technology, to drive the United Kingdom’s economic growth and national security”.
Those are pretty much the same terms of reference as for this debate. We have a Chief Scientific Adviser and a network of advisers embedded in all departments, and we have a Science Innovation Network, which is embedded in all our embassies.
With a renewed commitment to an industrial strategy, we need to take advantage of the UK’s unique strengths to enable world-leading industries to grow and seize opportunities. If we match our undoubted research expertise with an industrial strategy that plays to our strengths, we can make an impact.
I will give the House an example. Your Lordships’ Science and Technology Committee, of which I am a member, is nearing the end of an inquiry into engineering biology, which is a very exciting new area of science. Put simply, in the future we will be able to make things by growing molecules and cells. Last week, the Government’s Chief Scientific Adviser, Dame Angela McLean, came to us and held up for the committee a handbag. It was not made of leather, nor of plastic; it was made of coconut oil that was processed by bacteria. The food industry is developing meat that is not real meat; it is grown in a laboratory. In the aircraft industry, there is real interest in producing synthetic jet fuel without using carbon or oil. All these new developments offer the additional benefit of recycling and helping us to reach our net-zero targets. That is why, incidentally, it is absolutely right for the Government to set up the regulatory innovation office to exploit these new areas.
What of the future? There are one or two things we must try to do. First, there is no doubt that we need to start with education. It is absolutely vital that we enthuse and inspire the next generation, and it must start in primary schools if not before, opening young hearts and minds to the wonders of science. We must make use of all the many scientific role models that exist, whether it is Maggie Aderin-Pocock on astronomy, Hannah Fry on maths or Hamza Yassin on wildlife photography. Brian Cox’s latest TV series on the solar system has been watched by millions. Of course, David Attenborough remains our national treasure, inspiring us with his documentaries: everything from “Life on Earth” to the new series, next weekend, which I think is entitled “Asia”. I think I am right in saying that my noble friend Lord Winston recently went to a school in Northamptonshire and the head teacher reported an upsurge of interest in science after his inspiring visit.
Secondly, we need to create and sustain a public and society that understand the importance of science and technology and are supportive of innovation. Whenever I meet someone who expresses great scepticism about science or, in recent years, vaccines, I say to them, “Well, just look at your mobile phone. There is not one iota”—perhaps I should say one POBA—“of a feature of a mobile phone that isn’t the result of science. It would not exist without science”.
Thirdly, another key to the future is to be as international as possible. The UK must maximise all available international co-operation. We should join and collaborate with as many international countries as we can, including countries in the Indo-Pacific. We have rejoined Horizon Europe—good—but now we need to prioritise an expanded role in its successor, Framework Programme 10. I have lost count of the number of times that I have been told that we need a visa system, with its costs, that attracts talent rather than deters it.
Fourthly, we must not take our universities for granted. On the contrary, the House is only too well aware of the signs of stress in the HE sector and the funding of our universities. There was a breakfast briefing for Peers on this subject last week.
Fifthly and finally, although I mean no disrespect to my noble friend the Minister, science and technology is too important to be left to DSIT alone. We need nothing less than a sustained cross-departmental science strategy to attract foreign direct investment and the global scientific talent that we need.
By the end of this Parliament, when we use the phrase “science superpower”, I for one want to feel that it is a reality and not a slogan. I beg to move.
Lord Markham (Con)
My Lords, I thank the noble Viscount, Lord Stansgate, for securing this important debate. We on this side feel fortunate to have the Minister in his new role. His previous role in this area is very relevant and we welcome him to his first debate. We are delighted to have someone with such knowledge in his position.
I hope to conduct my speech in the constructive manner proposed by the noble Viscount. We all know and recognise the incredible impact that science and technology has in this country. The 4% that it is estimated to add to the economy is a massive boost. We can all point to massive scientific successes. One of the biggest illustrations of this is that, of the 10 Formula 1 teams, six are based in the UK. You cannot get more cutting-edge science and technology than Formula 1. We have those that noble Lords will know—great British names such as McLaren, Williams and Aston Martin—but also other well-known brands such as Mercedes, Renault and Red Bull. Yes, those foreign brands’ Formula 1 teams are located in the UK because they know that we are the best and most cutting-edge.
I will take the limited time available to talk about the area I know best from my former health role: life sciences. We have some fantastic examples in this field too. Google’s AlphaFold project will see many breakthroughs. The Government’s involvement in Covid and the Minister’s involvement in the Moderna deal that followed are a good example of putting long-term relationships in place.
But what I have seen all too often at first hand is what I call the UK disease: we are very good at innovation but pretty poor at the rollout. I saw this particularly in medtech. The joke I always heard is that the NHS has more pilots than British Airways. Those pilots were good in their innovation but so often fell down when it came to rolling out across the network. We would often see them lost to the US, which would come in with the funding and the rollout programme, and we would see a brain drain of our expertise.
One of the last things we tried to do was introduce what we called a medtech rules-based pathway, which tried to provide a pathway so that there was a way that exciting parts of medical technology could be rolled out through the NHS under a set of well-known rules. We were consulting on that around the time we left government. I would be pleased if the Minister could update me on the findings—it would be super to have that by letter if he does not have them to hand.
Another area was the data for R&D. As we all know, AI is only as good as the data that it comes from. We are fortunate in the medical space to have probably the best data in the world, as I have been told by many people, dating back to 1948—primary care, secondary care and biobank data. We were working on a project to bring this all together to create the possibility of a Silicon Valley of life sciences. I would be delighted to hear where we are in the progress of that project.
I end on a note of caution. A £1 investment achieving a £3 to £4 return is a case of modern-day alchemy, but it requires deep pockets, long-term investment and hard work to achieve those rewards. Anything that diminishes those rewards will be a threat. My concerns about the latest Budget, dare I say, are the moves on tax increases. The crowding out of private finance that the OBR is concerned about puts this at risk, so I hope that we are careful and make sure that we do not kill the golden goose that we have in this space.
Baroness Northover (LD)
My Lords, I too thank the noble Viscount, Lord Stansgate, for securing this debate and for opening it so comprehensively. I declare my higher education interests. The Minister has rightly been welcomed to his position, and he has a major strategic task. He will need to reach right across government if science and technology are indeed to be at the heart of the Government’s industrial strategy and plan for growth.
I was a Minister in the coalition Government, latterly in DfID. Vince Cable as Business Minister developed an industrial strategy, ably supported by David Willetts—now the noble Lord, Lord Willetts—and others, analysing the UK’s strengths and weaknesses. They established catapults in promising areas and committed funds, for example, to the globally significant Francis Crick Institute, despite the post-2008 financial constraints. Universities were supported. We brought the aid budget up to 0.7% of GNI, with a proportion for research relevant to developing countries.
Chris Whitty, then DfID’s chief scientific officer, took me to Oxford and Cambridge to hear about ODA-supported research. In Cambridge, I learned about work in Vietnam that sought to improve the productivity of small-scale pig farmers and at the same time to reduce the co-living of humans and animals, risky markets and the use of bat droppings for fertiliser. Pandemics that cross species were already worrying scientists, post the SARS and MERS outbreaks, anticipating “disease X”, which was to hit us a few years later with massive effects on our society and economy.
In Oxford, I visited the Jenner Institute and learned about its vaccine work, so relevant then to the west African Ebola outbreak. Sarah Gilbert and Catherine Green, in their superbly readable book Vaxxers, noted the contribution that ODA money made to their work which was the groundwork for their Covid vaccine. Then what happened? Aid was cut, DfID was in effect abolished with no consultation, Boris Johnson spoke of cashpoints in the sky. Was that joined-up government? I think not. That was compounded by the huge damage done to our scientific and university sectors by Brexit, the failure to remain in the Horizon scheme and the barriers to continental students and researchers coming to the UK, barriers which persist.
The UK has certainly had an exceptional scientific and technological base, but that cannot simply be assumed to continue despite batterings. The new Government propose an industrial strategy again with science and technology at its heart, and that is very welcome. Science and technology have long underpinned economic development, such as in the Industrial Revolution, the chemical revolution which enabled Germany and the US to power ahead, and the green technology revolution which is right now powering China and needs to power us as well.
The noble Viscount, Lord Stansgate, effectively laid out the range of our strengths in science and technology, and we will hear more today about that promise but also that universities are under threat and that the UK’s growth depends on investment, skills, the removal of barriers and a willingness to take risks and to allow those risks to be taken plus assistance in scale-up, as the noble Lord, Lord Markham, said. Governments promise to be joined up. The Minister has a special responsibility to seek this in this Government. He will know how damaging it can be when one part of government fails to see the impact of its actions on another. I look forward to his response.
Baroness Greenfield (CB)
I congratulate the noble Viscount, Lord Stansgate, on drawing attention to this important issue. I declare an interest as CEO and founder of a small biotech company, Neuro-Bio Ltd, pioneering a novel approach to Alzheimer’s disease and spun out originally from Oxford University.
In the light of my experience over the past 10 years, I would like to focus on opportunities for the UK economy to benefit from its science and technology even more than is currently the case. For example, dementia is costing the UK £42 billion this year, rising to £90 billion in 2040, so the value of developing an effective therapeutic intervention would be enormous, and not only for the huge saving. Such a treatment developed in this country would provide an incalculable boost to our national pharma industry.
But there are unnecessary headwinds. SMEs are now losing out by some 50% compared to 2023 for R&D tax credits. If we factor in the significant amount of time required, new administrative rules and the risk of HMRC inquiry, smaller companies may abandon making a claim altogether. The recent changes, including those in subcontracting rules, may provide a negligible uplift in the tax revenue but come at a great cost.
R&D tax credits should be a UK co-investment, hand in hand with the company, into innovation happening on its shores, creating jobs and value immediately, followed by an incredible dividend when resulting in a globally competitive technology. These credits should be restored to at least previous levels. Big multinationals might then expand their footprints in the UK, rather than divesting as they do now.
Today, UK public investment in R&D of 0.44% GDP needs to be 50% higher just to reach the average OECD spend, let alone to be ahead of the competition. It could be argued that, pound for pound, we already outcompete most other countries, but the UK is heavily underinvesting in itself, banking on the high innovation input of our academia and industry—after all, it is an easy short-term win on the budget line.
Why would we not see this as a brilliant reason to invest even more, rather than as an excuse to get away with less? True, there are government loans and schemes and grants, but the former places a stressful burden on repayment within a fixed period while the latter may entail a time-consuming amount of effort that is more than likely to be wasted. The latest Innovate UK competition saw a success rate of a mere 4.5%. As with claims for tax credits, many may feel that applying for a grant is just not worth the time that could otherwise be spent progressing the science itself.
Then there is the question of gender. Less than 2% of total VC funding goes to female founders. Earlier this year, a Women in Innovation grant offered some 50 awards for a very modest £75,000 per project. Less than 4% were funded. Programmes levelling the playing field for women should go a distance towards changing the present blatant inequality, not entrenching it further.
More generally, it is the baked-in and oftentimes biased decision-making that stifles the otherwise great economic impact of our entrepreneurs. It is safer to fund small, transitional technologies, at the cost of truly disruptive innovation, because there is very little in the way of incentives or protections if an investment does not work out. There is much willingness to charge capital gains on investments where success can be shared but no appetite for sharing the consequences of a failure—hence the mindset to back only cautious advances at a cost of truly transformative ways of thinking.
This lack of support often forces disruptive scientists into looking further afield for funding to grow. Once they enter, say, the US ecosystem, it is that economy which will ultimately benefit from the stimulus provided by innovation which the UK has fostered in its infancy. Too often this country is seen as a feeder ecosystem into the US, not giving full rein to its homegrown ingenuity.
STEM innovation is the crown jewel of our economy. It is high time we invest at least as much as others to show the world what the UK science and technology sector can achieve. But without an improved national strategy and support, R&D-stage companies such as mine will have no choice but to consider M&A overseas. It is high time we think of innovators and the Government as partners in building the economy of tomorrow, the foundations of which should be laid today.
The Lord Bishop of Newcastle
My Lords, I thank the noble Viscount, Lord Stansgate, for bringing this important and timely debate. I look forward to the maiden speech of the noble Baroness, Lady Freeman, and welcome her to your Lordships’ House.
I want to focus my remarks on the north-east region’s rapidly growing science and tech sector as a huge asset to the UK economy, attracting skills and investment from across the world. At the heart of the sector in this region are its five distinguished universities: Durham, Newcastle, Northumbria, Sunderland and Teesside. This month they announced their new partnership, known as Universities for North East England, that will strengthen their collaboration, making a greater contribution to everyone who lives, works, and studies in the north-east and driving regional economic growth.
In his opening remarks, the noble Viscount alluded to the urgent need for cross-departmental work in government, as did the noble Lady, Baroness Northover, in her excellent speech. I think this point demonstrates that. Access to skilled workers is a vital component of a flourishing science and technology sector. With 67,000 people studying STEM subjects across these universities, the region has the highest proportion of STEM students in the country, resulting in a plethora of highly skilled and employable graduates. There is a clear partnership between the universities and businesses within the region, demonstrated by the increasing number of spinouts from universities. In 2023, spinouts from Newcastle University alone raised £40 million in investment.
One development that is demonstrating innovation in the region is the Newcastle Helix—a 24-acre site in the city centre bringing together industry leaders, businesses and top researchers in an internationally renowned innovation cluster. What makes this development stand out is not only its world-leading research but its integrated approach of growing fiscally while strengthening communities. The Helix is committed to creating growth for businesses and investors, but also to driving positive change through its purpose to help families in communities and cities around the world to live healthier, longer, smarter and easier lives.
Another advancement was this year’s announcement that Northumbria University would become home to the North East Space Skills and Technology Centre. Funded by investments from a US aerospace and defence firm and the UK Space Agency, the centre will transform the UK space economy through the research of world-leading space experts and by bringing together industry with academia. It is expected to create 350 jobs and to inject £260 million into the north-east’s economy, further demonstrating the growing recognition of what this region has to offer.
I welcome the emphasis that yesterday’s Budget placed on this sector through the record levels of research and development investment, as well as the greater regional powers granted through the North East Combined Authority and its mayor, which will unlock funding and powers to further the growth of science and technology in this region. I feel that we must now ensure its future success, and that the potential of this region is fully unlocked through continued recognition and investment.
Baroness Donaghy (Lab)
My Lords, I thank my noble friend Lord Stansgate for introducing this debate. He is a whirlwind of knowledge and energy, as anyone who has attended one of his STEM events in Portcullis House will know.
I was a member, and subsequently chair, of two of our former EU sub-committees, on internal markets and services. Among other activities, we visited universities and catapults, and invited representatives of the UK’s space industry, just referred to by the right reverend Prelate, to give evidence to our committee. I notice that another member of that committee, the noble Lord, Lord Rees of Ludlow, is in his place, and I look forward to hearing what he has to say. Some of the issues raised will not surprise anyone here: skills gaps, the importance of attracting and retaining talent, international interdependency, the mobility of skilled labour and the need for long-term strategy. Incidentally, talking about catapults, the House of Commons Science and Technology Committee reported that SMEs that had worked with catapults grew 50% faster than those that had not, with an average of five times return on investment.
As a former university administrator of over 30 years, it pains me to see the dire straits to which our universities have been reduced. Their significance for research and development should not be understated. As the daughter of an aero-engineer who worked for Armstrong Siddeley, which became Bristol Siddeley and then Rolls-Royce, it was the space industry which captured my imagination —perhaps it was also listening to “Journey into Space” on the radio. In pride of place on my bookshelves, which I inherited from my father, are the complete works of HG Wells—but it is not just a romantic interest.
The Minister has already answered questions this week about medical research, defence research and the importance of curiosity-based research. These are all vital, but I want to draw his attention to the importance of the UK space industry, which employs 50,000 people. According to the World Economic Forum, the global space economy will be worth $1.8 trillion by 2035, up from $630 billion in 2023—almost twice the rate of global GDP growth. It will connect people and goods and play an increasingly crucial role in mitigating world challenges, ranging from disaster warning and climate monitoring to improved humanitarian responses. This will involve agriculture, construction, insurance and climate change mitigation.
The Minister will be aware of the previous Government’s policy paper Space Industrial Plan: From Ambition to Action published in March this year. It was obviously too late in that Government’s election cycle to do much about it, but it stated:
“Global satellite services … underpin at least 18% of UK GDP (£370 billion), supporting everything from mapping to weather forecasting, to monitoring the power grid and enabling every single financial transaction”.
I ask my noble friend the Minister: do the Government recognise the potential importance to the UK economy of the space industry, and what action do they propose to take to ensure its growth and future potential?
Lord Mair (CB)
My Lords, I too am grateful to the noble Viscount, Lord Stansgate, for introducing this important debate. Science and technology could not be more vital to the economy than at the present time. As an engineer, both in practice and at Cambridge University, I welcome the Government’s very recent Green Paper. Invest 2035: The UK’s Modern Industrial Strategy identifies eight key growth-driving sectors. Three of these are advanced manufacturing, clean energy and digital technologies. Engineering is at the heart of all three, driving innovation and economic growth. It also plays a key role in many aspects of other sectors, such as defence and the life sciences. Engineering is integral to achieving outcomes from science and technology. The resulting new products, services and enterprises generate jobs, boost the economy and benefit society.
Demands on engineers are greater than ever, with the world facing challenges and opportunities that depend on substantial engineering input. Chief among these are the climate emergency and the rapid progress in artificial intelligence and related digital technologies. At the heart of the Government’s agenda is making the UK a clean energy superpower, with zero-carbon electricity by 2030. This involves major investments in wind and solar power, carbon capture and storage, hydrogen and long-term energy storage. Nuclear power will also be essential, and small modular reactors—mentioned by the noble Viscount, Lord Stansgate—have considerable promise. To be successful, all these technologies will require increasing numbers of engineers and technicians.
However, the UK faces an acute engineering skills gap. The Royal Academy of Engineering’s National Engineering Policy Centre has laid out how to bridge this gap—by reversing the shortage of STEM teachers, increasing apprenticeships and promoting engineering as an attractive career choice in the application of science. We should take a leaf out of Germany’s book: 20% of its 25 year-olds have a higher technical qualification; in the UK, the present figure is only 4%. Further education colleges and their role in science and technology have been neglected for too long, so I welcome yesterday’s Budget announcement to increase the funding of further education by £300 million. The plans to reform the apprenticeship levy are also welcome. In addition to supporting our world-class universities, an enhanced future for apprentices, including degree apprenticeships, will be especially important if this country is truly to become a technological superpower.
Our world-class, research-intensive universities are undoubtedly national assets and are highly regarded globally. As well as their key roles in education, training and curiosity-driven research, their science and engineering departments are hugely important drivers of economic growth. But many universities are now in a precarious financial state. In the upcoming spending review, their R&D needs further investment and support from the Government so that they can continue to innovate, attract foreign investment and stimulate industries. “Invest, invest, invest” was the mantra of the Chancellor in her Budget speech. Enhanced support for science, technology and engineering in our universities and for university-business collaboration could not be a more important investment. It will be crucial for the successful delivery of the industrial strategy, for growth and for the economy.
Lord Waldegrave of North Hill (Con)
My Lords, it is a great pleasure to follow one of our great civil engineers and to precede one of our distinguished science communicators, who I am sure will add greatly to the debates of this House. This is not just because he was nice about me, but surely—I address this to the Front Bench opposite—some way must be found, however we are selected for this House, for the noble Viscount, Lord Stansgate, to continue to give us his wisdom, because we need it.
Disraeli warned us against falling into anecdotage, but I will tell one story from my own time. When I left my role as Chief Secretary to the Treasury, I left a note for my successor, the much-lamented Alistair Darling, who was a great public servant and a very good Chief Secretary and Chancellor. The practice of leaving a note ended later, because somebody tried to make political capital out of it, which was silly. My note said that he had to support two things in particular that did not have votes in them: the intelligence services and science. You need them and you never know when you are going to need them—but, my goodness, when you have not got them, you know it.
It is a wonderful thing that cross-party support for science over recent years has developed as a result of some outstanding Ministers; I think of Lord Sainsbury of Turville and my noble friend Lord Willetts. The infrastructure of support in this Parliament and across the country for our scientific effort is a vital part of our science effort.
I congratulate the Minister on a very good first settlement in the Budget. Some of it is for one year, but that is better than it not being for one year. I congratulate him on getting the Horizon subscription properly funded, which is absolutely vital. But—and there is always a but—there is more for him to do, and we are lucky to have him. I genuinely think that he will be another of these Science Ministers who will be remembered.
There is, as other noble Lords have said, an emerging slow cascading crisis in our universities. The business model does not work anymore. We cannot subsidise research and lots of other things, through arguably overpriced foreign students. They may not continue to come, and they are beginning not to come. I think the Russell group estimates that there is a £5 billion funding gap in research, which is cross-subsidised at the moment and is vulnerable. This is beyond the remit of the department in which the Minister serves, but it is vital to his interests, and all our interests, that the Government turn their attention to this.
One more specific item I would like to raise is supercomputing power. The previous Government announced the project in Edinburgh. It was then stopped because it was said not to be properly funded and so on, and it is being reviewed. It is absolutely essential, particularly to the skills available in AI and others which we have in this country, that we have first grade supercomputing power available, but we do not have it. We are not in the top league.
Finally, I once went off as a junior Minister and sat at the feet of a great man at Caltech, a hero of mine, Murray Gell-Man. He said that there was too much rowing and stuff in Cambridge. There was some science, but the vital thing we had in England was long-term funding. Of course, we immediately threw that away. The Minister is doing his best, I believe, to try and bring it back with seven and 10-year rolling contracts. I give him all our support in attempting to do that.
Baroness Freeman of Steventon (CB) (Maiden Speech)
I thank the noble Viscount, Lord Stansgate, for initiating this debate and giving me an opportunity to introduce myself to your Lordships’ House. This is a very welcoming place, with its wonderful staff—especially the doorkeepers, with their encyclopaedic knowledge—and also all the noble Lords who have come to introduce themselves to me and make me feel welcome. I thank them.
I thank especially my mentor and supporter, the noble Viscount, Lord Colville of Culross. We were colleagues at BBC Science, where we were documentary-makers trying to communicate the importance of scientific ideas and make them relevant to people’s lives. Some people might say I have come a long way from my first job there, “Walking with Dinosaurs”—
Baroness Freeman of Steventon (CB)
Moving swiftly on.
I worked both at BBC Science and at the BBC Natural History Unit after doing a doctorate in what my father—initially, concernedly—thought was “not a proper science”. He was trained as a chemist; my sister is a mathematician; my mother is a theoretical physicist. I, of course, was a biologist—and, worse, I studied animal behaviour. But, under the firm tutelage of Professor Richard Dawkins, I learned to apply scientific ideas to any subject, and even my father finally admitted that the scientific method applies everywhere.
The other supporter I was honoured to have at my introduction to your Lordships’ House was Onora—the noble Baroness, Lady O’Neill. When I moved from the BBC to Cambridge University to study the slightly different art of evidence communication, it was her philosophy that guided our work. She says that, to be trusted, you must be trustworthy, and, to demonstrate trustworthiness, you must be open and clear about all the processes that lead you to your conclusions, so that people can follow them, understand them and assess them—wise words that I try to live by.
At the Winton Centre in Cambridge, we worked on how to communicate evidence in a trustworthy way to support decision-making. We all need evidence, whether we are patients choosing treatment options, parents choosing education or police chiefs choosing policies, and that evidence comes from the application of scientific methods. So, although science can obviously bring us great inventions with direct economic benefits, it is much broader than that.
Working at the statistics department in Cambridge helped me realise that science as a method is a way of us learning from past experiences to foresee likely futures, and even to put some kind of likelihoods on those possible futures. By applying scientific methods, we can understand and tease apart cause and effect: the link between smoking and lung cancer, or between CFCs and the ozone layer. The field you apply it in does not matter. We even do it in animal behaviour—and human behaviour.
At the Winton Centre, we worked with the UK’s wonderful What Works Network to help communicate the evidence it brings together from experiments done on all sorts of problems—education, crime prevention, tackling homelessness—to test potential policies. Science not only helps us understand causality from past experience and get glimpses, however fuzzy, of possible futures; it allows us to make decisions that are most likely to take us along the paths we want to follow. How can you calculate the value to the economy of being able to foresee the future and how you might be able to affect it?
When talking about science’s contribution to the economy, or industrial strategy, or science policy, we often talk about the great inventions, with their direct economic benefits. And we often also talk about the value of curiosity-driven research. But I want to make sure we recognise a third category in the middle: researchers seeing how something could be of direct societal or environmental benefit, with no direct economic benefit but huge economic benefits anyway—like getting people fit and active, children being better educated, reducing crime, or testing existing drugs and treatments for Covid, as in the UK’s world-leading recovery trial, which discovered that the commonly used steroid dexamethasone was very effective. This kind of science does not aim to make direct profits for anybody: it is probably invisible to the Treasury. It is bypassing the Treasury and directly benefiting society—but that saves the Treasury money.
The Minister knows this kind of research well from his previous roles, so, with this in mind, I have two asks for him. First, I know from own experience that, when you are a researcher at a university, there is all sorts of support for you to spin out enterprise into profit-making companies. But, if you are doing the kind of research that would be better served as a not for profit or a social venture, there is a lot less obvious support for you. Secondly, can the Minister help communicate that scientific methods, applied to all fields, are crucial to both society and the economy, through helping us choose and reach the futures we want?
Baroness Bennett of Manor Castle (GP)
My Lords, it is an honour and a privilege to be the first to commend the powerful and important speech of the noble Baroness, Lady Freeman of Steventon, and to welcome her to this House—I will describe her accurately, if perhaps not technically, as my noble friend. Her diligence in listening and learning as a new Member has, I am sure, been noted across this House—scientists like evidence. I have long proclaimed, to audiences up and down this land, that we need more people from a scientific background in this House, and indeed across politics. I am very glad that the noble Baroness in particular heard that message, for, with her long experience in health and environmental issues, and particularly her knowledge and skills in explaining risk, the House is truly getting a gem.
As the noble Baroness explained, she joins us from her role as the executive director of the Winton Centre for Risk and Evidence Communication, part of the Cambridge Faculty of Mathematics. If that sounds a little daunting, I should add that she also has experience in designing websites, games and social media content, so we need have no fear of incomprehension. For those in the House who, like me, are subscribers to the frequently terrifying Retraction Watch, it is worth noting that she has a long-time interest in reforming the science publishing system and led the UKRI-funded Octopus platform for primary research publication.
The noble Baroness referred to her work with the BBC. One of her other programmes was “Climate Change by Numbers”. Some of the noble Lords who took part in last week’s climate action impact debate might like to reconsider their approach for the future.
But what about dealing with politics in your Lordships’ House? Preparing for today, I went back to the noble Baroness’s Oxford PhD thesis, which in part covered the mocker swallowtail butterfly. The females are polymorphic—have many different body forms—and come in three main groups of colours. That sounds like good preparation for your Lordships’ House, at least as currently instituted.
Like everyone else, I thank the noble Viscount, Lord Stansgate, for securing this debate. My speech very much follows on from that of noble Baroness, Lady Freeman, for the economy is a complete subset of the environment: the physical, biological and social environment determines what our economy is like. This morning, I was at a round table discussing the Carnegie UK Life in the UK 2024 report, which reported “persistent inequality” and a “stagnation” in well-being. Our collective score for well-being was 61 out of 100 —in many university contexts, that would be a fail. The science is telling us about the reasons for that and we need to do much more to listen to that science, for the benefit of all of us, as well as for the economy.
I draw attention to an event this morning. Defra, operating on behalf of three government departments, has settled the legal case over the tragic death of Ella Adoo-Kissi-Debrah, who was killed by air pollution in 2013. The scientists keep telling us, again and again, at increasingly higher levels, how much damage air pollution is doing. Just this week, a report highlighted how about 4,000 premature deaths are caused by gas cooking in the UK each year—54% of UK homes use gas cookers.
As the noble Baroness, Lady Freeman, said, there is much focus on science making money, but we need a lot more focus on science that looks after our society and its well-being. With that thought, I welcome the Minister to his place and ask one question—I will understand if he needs to write to me. Agro-ecological approaches to producing healthy food are absolutely crucial to fixing our broken food system. How much of the research going into agriculture is going into agro-ecological approaches?
Lord Winston (Lab)
My Lords, in 2023, Sir Paul Nurse reported on how best we might keep Britain’s scientific research world-leading. One excellent example he chose to identify in his report was the role of the Medical Research Council’s so-called research units. Sir Paul’s report made it very clear how vital these were and how they must be supported to maintain our scientific expertise in healthcare and so on. These 20 units are scattered around the country and most are associated with universities—Oxford, Cambridge, Dundee, Glasgow, Edinburgh and certainly UCL in London. These units are truly world-class and are recognised worldwide as being absolutely outstanding but threatened. One such is the Cognition and Brain Sciences Unit at Cambridge, which I first visited about 20 years ago and was deeply impressed with what they were doing there. It has an 80-year history of cognition and brain science and its remit includes mental health; it focuses on the current global mental health problems, developmental disorders, stroke, dementia, and the nature of human consciousness.
People at the unit tell me that they do not think they can survive on the funding that is now being offered to them as the MRC has changed its funding plan, as we heard on Monday from my noble friend Lord Vallance when he answered my Question. I am sorry that I have not actually warned him of my speech in advance but, of course, I have been besieged by phone calls all day from different research units across the country that are seriously and deeply concerned about this problem. They think that they cannot survive. The Cognition and Brain Sciences Unit is one of six units in Cambridge that would have to be supported by the university if the MRC ceased the full funding that it currently has. The university has certainly not agreed to fund it—as, indeed, as far as I am aware, no university has agreed to fund any of the host units.
I will refer briefly to another unit that I think is particularly interesting: the Prion Unit in London. That one, of course, is famous for its work on mad cow disease, and how that particular dementia was a result of a protein that could affect the brain and fatally change its other proteins. At a recent meeting in China only a few weeks ago, members of the Prion Unit in London were greeted as the world leaders in this, feted all over, particularly at the main Chinese meeting, and the Chinese are now pouring millions into this research—for what reason I am not sure, but certainly these prions are going to come back. There are lots of species that look as though they could be vulnerable, and certainly the risk of mutation in animal species, perhaps in America, could really recur, and this would produce a massive disaster. The Prion Unit still has a very important role to play.
In answer to my Question on Monday, we heard from my noble friend Lord Vallance, the Minister of State, that the MRC had decided to change the funding model in such a way that the units are now expected to reapply for continued funding for a maximum of 14 years, with a review halfway through, after seven years. It is proposed that the host university funds the principal investigators up to 80% of their salary and the on-costs, and the surviving units will be limited to £3 million per annum. That is quite inadequate to maintain what they are doing: it is probably about one-quarter of what they actually need for their current expenses. Of course, many of these units are lab-based and therefore much more expensive.
I listened to my noble friend Lord Vallance very carefully on Monday when he answered my Question. I was extremely grateful for his care in taking up so much of his time to explain the current position, and also for speaking to me outside the Chamber on various occasions. Ultimately, I do not think that the format of an Oral Question could possibly give him anything like enough time or scope to address the concerns that the scientific community and the employees have about these units. They are certainly worried about their jobs: it is likely to affect up to 200 professors, perhaps, and around 2,100 scientists, which is of major concern.
Of course, my noble friend Lord Vallance was absolutely right to express the need for response-mode funding as an alternative but, unfortunately, as Paul Nurse pointed out, these units are truly unique in so many ways and losing their research output, training and maintaining of technical expertise will be extremely serious. Does my noble friend the Minister accept that the way the research councils have been set up means that we cannot interfere with their decisions on money? But we should indeed have some consciousness about their strategy and this is certainly where politicians have a right to decide. Of course, we all hope that my noble friend the Minister might find a better solution to a crisis which is adversely affecting UK science and those who contribute most effectively towards its success and its continued financial income.
Baroness Wheeler (Lab)
My Lords, I respectfully remind noble Lords that the speaking time limit is four minutes. I urge all noble Lords to keep within that so that the debate may be concluded within the time allowed without the Minister having to cut short his response.
Lord Willetts (Con)
Quite right. My Lords, I congratulate the noble Baroness, Lady Freeman, on her excellent maiden speech; we look forward to many more of her interventions in the House. I also congratulate the noble Viscount, Lord Stansgate, for such an excellent opening to the debate, displaying his typical enthusiasm and making a subtle case for the hereditary principle.
I should declare my interests, particularly as chair of the UK Space Agency. I am also a member of this club of former Science Ministers, which has been referred to several times. It is great to see the noble Lord, Lord Drayson, in his place; we look forward to his speech. There is a very crude view of the role of the Science Minister: to extract money from the Treasury. I am sure that the noble Lord, Lord Vallance, has a much higher and more strategic view of his role than that, but he nevertheless did very well this week and I join those congratulating him on seeing off what looked like a significant threat.
I congratulate the noble Lord also on the speed with which the funding for science announced yesterday is already moving. There was an announcement of £520 million for the life sciences innovative manufacturing fund; it was up on the Government’s website by midnight, with the first round of applications for grants now open, with a deadline of 30 November. That is an excellent example of moving vigorously in an innovative environment. I hope, in that spirit, that the Minister will commit that the Government will indeed be implementing my proposals on improving the business case process so that it is similarly efficient and fast-moving, rather than cumbersome and bulky. We must not be complacent, however. There are of course challenges to face in the CSR, and we wish the Minister the best on that.
I would like very briefly to put three specific points to the Minister. First, cell and gene therapies are a great British scientific and technological success. However, they are suffering from the very uncertain VAT regime for cell and gene therapies sold to the NHS. HMRC defined these therapies as “work on goods”, apparently on the argument that the cells start from the human body and are eventually returned to the patient’s body and, in the meantime, they have just had a service, rather like a car going into a garage. In some cases, VAT is charged at 20%, which, in turn, affects the NICE calculations of the cost-benefit ratio in these treatments. Sometimes they are exempt. The best way forward would be for all these treatments to be clearly zero-rated and treated consistently.
My second point, if the Minister is able to comment, is that yesterday we also heard in the Statement from the Chancellor very good news on investment in the railway link between Oxford and Cambridge. Progress is gradually being made in the recreation of the old Varsity line, although it is a pity that there is a large housing estate somewhere between Bedford and Cambridge on the route of the original line.
Can the Minister confirm that, with this investment in transport, there will also be a recognition of the value of the Oxford-Cambridge supercluster and an attempt, alongside the claims of many other parts of the UK, to recognise and support that?
Finally, if he were here, I think the noble Lord, Lord Knight, would make an important point about investing in science teaching. The Government make a lot of the 6,500 new teachers. It is equally important and, in some ways, more cost-effective to invest in upskilling and retaining the teachers we have already have. Improving CPD for science teachers, so that they remain up to date, would be of great value.
Lord St John of Bletso (CB)
My Lords, I join in thanking the noble Viscount, Lord Stansgate, for introducing this debate in such a comprehensive and impressive fashion, and in congratulating my noble friend Lady Freeman on an outstanding maiden speech.
There is no doubt that the United Kingdom stands at a pivotal moment in its scientific and technological development. While I welcome the Chancellor’s commitment in her Budget speech to drive innovation to protect
“record funding for research and development to harness the full potential of the UK’s science base”,—[Official Report, Commons, 30/10/24; cols. 814-15.]
the reality is that the UK and Europe tech sector is massively underpowered and underfunded compared to the United States. What are the equivalents of Meta, Alphabet, Tesla, Apple and Microsoft in Europe? While we have much to be proud of in our achievements in science and technology in the UK, the reality is, sadly, that we are failing to fully commercialise our advantages in research excellence in our top global universities, as well as the growth in fintech and health tech companies.
I wish to focus my brief remarks on the life sciences sector, where the advances in technology have huge potential both to cut costs and to promote patient care, especially in imaging, diagnostics, and predictive analytics, as well as in administration. In this regard, AI and quantum computing have played, and will continue to play, a major contribution in harnessing more efficiencies and breakthroughs in new treatments and pharmaceuticals.
The United Kingdom is well recognised as a world innovation hub, but we have to retain that. To grow its true potential, we need to retain our talent pool. We have some of the highest costs of visa applications compared to other European nations, which has sadly resulted in the loss of a lot of talent. We certainly need to be a lot more proactive in promoting and retaining highly skilled talent. We have hugely successful science parks, particularly in Oxford and Cambridge, which have driven commercialisation, despite the infrastructure challenges of the lack of lab space.
Time restricts me from elaborating on the challenges of IP commercialisation. Many spin-outs have lost substantial equity to foreign interest, with UK universities retaining only 20% equity, which has led to substantial IP leakages in company commercialisation abroad. Can the Minister elaborate on the scope for setting up a cross-departmental implementation taskforce for streamlining funding mechanisms for scaling SMEs in the tech sector? We need to create specialised regulatory pathways for emerging technologies and develop incentives for preventive healthcare. A lot more could, and should, be done to fund longevity research initiatives—particularly for this House.
In conclusion, I say that there is no one lever to pull, but making the UK tech sector more attractive to global capital is key. The integration of science, technology and healthcare offers significant potential for economic returns and improved population health outcomes. Without immediate action, Britain risks falling behind in the global race for technological supremacy. The time for decisions is now.
Lord Liddle (Lab)
My Lords, I add my congratulations to the noble Baroness, Lady Freeman, on an excellent maiden speech. I have to say that I hesitated to put my name down for this debate. There are so many able people, including our wonderful introducer, the noble Viscount, Lord Stansgate. The whole debate has shown this House’s great expertise in and knowledge of science and technology issues.
I am afraid I am a classic of what used to be —I hope—wrong with the British education system. I was a humble grammar school boy who got a scholarship to Oxford, where I did two degrees—but I did not even have a science O-level. I hope that weakness has now been remedied.
Since then, I have tried to make up for it by taking a close interest in science and technology policy, as a result of a close interest in industrial policy. For seven years, I had the great privilege of chairing the council of Lancaster University, on which I was ably assisted by the noble Baroness, Lady Neville-Jones, who knew far more about the scientific issues than I did. Lancaster is an interesting institution. It was born in the “white heat” era—Harold Wilson opened it in 1965—but in the late 1990s, it decided to make a major commitment to science, building new departments in chemistry, physics and engineering, and a medical school, all opened up while Pauline—the noble Baroness—and I were on the council. This was an interesting attempt to build a strong science base outside the golden triangle. I would like to know what the Government’s attitude is to building research bases outside the golden triangle. I hasten to add that I am all in favour of the golden triangle, and I think that one should invest in places that are globally successful, but what contribution can a small but research-intensive institution like Lancaster make?
One of the things that was essential to us was Horizon. That brought us into partnerships with continental universities in areas of expertise. We also built partnerships in the UK, but I was always pushing the vice-chancellor harder on this. I thought: why do we not merge with a comparable institution where our scientific expertise would be complementary? What are we doing to help universities outside the golden triangle to build on their strengths?
What are the Government doing to make spin-offs from universities more effective and to increase them? When I worked with Peter Mandelson—the noble Lord, Lord Mandelson—when he was Industry Secretary, I chaired an advisory panel on new industry and new jobs, and came across the wonderful Hermann Hauser, of Arm. One of his ideas was the catapult initiative, which I think the noble Lord, Lord Willetts, in his time took forward. What more are we doing to incentivise the better use of scientific research in stimulating innovation and new enterprise? This is a very big unanswered question which I hope the new Government are going to take very seriously.
Lord Stevens of Birmingham (CB)
I declare my interests as the incoming chair of King’s College London and the chair of Cancer Research UK.
I start by picking up where the noble Lord, Lord Waldegrave, left off: congratulating the Government on not whacking the science budget to the tune of £1 billion with the Horizon costs in yesterday’s Budget. That is clearly a bullet dodged, but that is not the same as success assured. The question between now and the spending review, when decisions are made as to what the next decade’s worth of science funding will look like, is: are we going to get the sort of progress that we need?
I will make three brief observations, the first of which concerns, as has been touched earlier, the current state of universities as providers of the research excellence and scientific and technological progress we all want to see. Unfortunately, the reality is that, in yesterday’s Budget, universities got what we now can describe as a “POBA”: point one of bugger all. Essentially, there was no great reference to universities and no attempt—yesterday, at least—to deal with the underlying funding pressures and the opaque cross-subsidies that are just about keeping the show on the road, but which nevertheless constitute the slow and inexorable decline in the relative performance of UK science and research compared with other countries, as measured by most of the relevant league tables.
We want strength to the elbow of the Science department, but that cannot be seen in isolation from what is happening at the Department for Education. As other noble Lords have said, there is a funding gap between the cost of research undertaken and the resourcing to deliver it—only £0.69 in the pound is being funded across the sector in the full economic cost of research, and £0.74 in the pound for the most research-intensive universities—a huge wedge that is being cross-subsidised through international students and other mechanisms. That cannot continue over the next decade if we are going to see the kind of progress we want.
Secondly, we need to connect the debate we have just had with the debate we are having. Charities’ support for medical and life sciences research, in particular, plays an enormous role in the overall ecosystem: north of £1.7 billion in research funding; and in the case of Cancer Research UK, which I chair, over £4 billion in the last decade for cancer science, providing three in four NHS patients being treated for cancer with some of the drugs they receive. That is half the cancer drugs on the WHO’s top 100 list. Yet the ratio of the cost of science being funded through charities is even lower than that from the research councils: some £0.58 in the pound through that route. One of the great things that the last Labour Government did was to introduce the Charity Research Support Fund, which has somewhat atrophied in the intervening years. That would need to double, roughly, to get the charity funding contribution back to the £0.80 in the pound that is necessary to sustain the excellence we see in university research.
Finally, to pick up on the excellent maiden speech of the noble Baroness, Lady Freeman, I almost want to argue with the exam question that the noble Viscount, Lord Stansgate, has set us. It is quite easy in these debates to become relatively reductionist about the role of translational science at the technology-commercial interface and the economic benefits that has, whereas we need to remember that basic science— discovery science—in all sorts of serendipitous ways is the secret to our success as well.
Baroness Neville-Jones (Con)
My Lords, I am lucky enough to be one of the Members of this House who is on the Science and Technology Committee. I very much welcome this debate and the excellent introduction that the noble Viscount, Lord Stansgate, gave it.
The excellent briefing that we received, among many others, from the Library, for which I thank it, rightly says that it is hard to measure the value of the contribution made by science and technology to the UK economy because of its all-pervasive nature and the fact that it is growing all the time. I also want to emphasise the general scene and the many problems we face, but one thing that is reassuring is the recognition across the Benches of this House, and indeed in Parliament generally, of the fundamental importance and quality of the scientific work and technological development that takes place in this country, and the opportunity we now have to make good on it to further benefit our own society and, more broadly, the population of the world.
I will make one point about something rather concerning that is connected to that. Science and technology, as a topic, is beginning to become a source of hostility and tension in international relations. One only has to think of the way in which the Chinese are exploiting it. Far from being a binder among nations, it can very easily become a source of real competition, hostility and seriously malign action. We should bear in mind that the liberal democracies do not have an agreed strategy on how to deal with this, but we need to develop one. We should not go on refraining from tackling the issue because it is difficult, even though that is the case. If we do not tackle it, we will find in due course that the extent to which science and technology can benefit society is greatly reduced by the potential problem of conflict.
Returning to the UK, something puzzling about our situation is that we are a society with a reputation for science and innovation, but we seem to lag behind in what we ought to be good at, which is greater productivity. How come we have this contradiction? Our universities are the bedrock of our capability; their graduates feed our independent laboratories and learned societies, and their geographical spread helps to keep our educational disparities under control. However, as has been rightly said, they are not going to survive the financial situation in which they now find themselves. I am very concerned that we are about to witness a drama if that situation is not gripped.
The public sector needs to intervene, but I do not believe that it can deal with the whole thing. What is notable is that private sector companies, which used to be great sources of R&D themselves, no longer—with some notable exceptions—play that role. It is very important that they begin to move closer to universities, so that they themselves become sources of innovation. Whacking up the tax on them does not help with the notion that they will engage in greater investment. The Chancellor said yesterday that the public spending outlined will crowd in private investment, but I worry that it might crowd it out.
The low skills base is another problem we need to tackle. As the noble Lord, Lord Mair, rightly said, it is a soluble problem, and other people have models that we ought to draw on. We are making heavy weather of that, and we ought to do better.
I will make just one last point. The difficulties British start-ups face when they want to scale up are well known. Our relatively small economy, openness and English language make us an attractive research destination, but they also make us vulnerable to poaching. We have to inculcate the habit of investing in our intellectual property and rewarding higher-risk, higher-reward propositions. If we do that, we will go a long way towards dealing with the issue of our lag in productivity.
Lord Leong (Lab)
My Lords, the advisory speaking time for this debate is four minutes. I gently urge all noble Lords to keep within this time limit so that the debate can finish at a reasonable time.
Lord Taylor of Warwick (Non-Afl)
My Lords, I too thank the noble Viscount, Lord Stansgate, for introducing this important debate today, and congratulate the noble Baroness, Lady Freeman of Steventon, on an excellent maiden speech. This is a wide-ranging topic, but since I am delighted to be an officer of the All-Party Group on Artificial Intelligence, most of my comments will be in the context of AI.
The Stone Age did not end because we ran out of stones. It is simply a fact that mankind has always found a new and improved way of doing things. The catalyst for this change is science and technology. Although this debate relates science and technology mainly to the economy, we must not forget the effect that it has on peoples’ personal lives. My mother was a fit and healthy 79 year-old, even swimming most days. Suddenly, a major heart attack reduced her to paralysis. She was unable to speak. Within a year, she was back at the same hospital, this time as a volunteer counsellor to some of the stroke patients. It was explained to me by the consultant leading her care that their pioneering heart valve AI technology had saved her life—which would probably have been lost had the attack happened just a few years earlier. Science and technology is about people as well as the pound.
However, every industrial revolution has been met with some who resist change. In relation to AI, some say that this is a new error, not a new era. One of the lessons of history is that we do not learn lessons from history. During my time as chancellor of Bournemouth University, I emphasised to the students that this AI revolution requires new skills. Yes, some jobs will be lost, but even more jobs will be created. Increasingly, it will be skills that pay the bills. Yet a number of commentators including, in June 2024, the Council on Geostrategy, highlighted that Britain’s current visa system is one of the barriers to attracting top international talent and risks making the country a less competitive environment. How do the Government intend to address the skills gap in science and technology?
There is also the issue of regulation. I was a barrister and judge for some years and am aware of the need for some regulatory framework for AI. A few years ago, I had the privilege of meeting Sir Tim Berners-Lee, the creator of the world wide web. It was just me and Sir Tim in the room—and 200 other people—but I had a tremendous conversation with him. He told me that he has been warning for years about too much power being accumulated by just a few giant social media platforms. I understand that too much regulation could stifle innovation, but what plans do the Government have concerning future regulation?
Science and technology, including AI, are driven by data. Data is an increasingly powerful source of information. In fact, data is so important that instead of a baby’s first word being “Dada”, one day it might be “data”. The need to protect personal data, especially that of children, the elderly and other vulnerable groups, is paramount. For 10 years, I was vice-president of the British Board of Film Classification. Our main remit was to protect vulnerable groups. What extra safeguards will there be to ensure the protection of, for example, patients’ records in the NHS?
I see science and technology as providing solutions to people’s everyday lives. It should be reducing the gap between the have-nots and the have-yachts, so let us embrace this industrial revolution with faith, not fear.
Lord Lucas (Con)
My Lords, I am very grateful to the noble Viscount, Lord Stansgate, for giving the chance of this debate, and I really enjoyed the maiden speech of the noble Baroness, Lady Freeman. I totally agree with her on the need for trustworthiness and openness. I very much hope that the Government will give her the job of writing the story of the road to net zero, which is currently not displaying those characteristics.
There are three things that I want to urge on the Government. The first is that they really put money and effort into the international standards and regulations by sending really good people to the conferences which set the standards. By doing regulation really well in this country, we make this a really good place to do business. Look at the opposite; look at what happened to telecoms. When I was young, we were top of the tree and now we are nowhere. We started sending rubbish people to the standards conferences and we just became irrelevant.
The second point I wanted to make to the noble Lord is that science must challenge. We spend billions on string theory and dark matter: lots of scientists cuddled up in the comfort of an unfalsifiable consensus. It may be that this is right, and that the universe is as cold and uninteresting as those theories offer, but there are alternatives. Faced by consensus, our bias ought to be to challenge. We ought to be looking at things like quantised inertia, because of its explanatory power and the hope it offers for things such as motion and power. We ought not to be leaving that on the sideline, as we are doing now with its tiny bit of funding. This applies to lots of other interesting alternatives to the consensus and to many other bits of consensus which have established themselves around science.
We must be better at supporting challenge. We must help the Civil Service to be better at dealing with failure. We ought to reward good failure and to encourage the Civil Service to go for the kill factor. Do first what is really difficult and dangerous, and leave the easy things. If you fail early doing something difficult and dangerous, you learn from it and you do not spend a lot of money doing things that will only fail later, because you did not tackle the main subject.
To pick up on something that I think my noble friend Lord Markham was aiming towards, let us have more pull mechanisms—prizes for success and advance market commitments. Give Innovate UK a clear mandate to do those things, because that way will really crowd in private sector interest and investment and end up rewarding success, leaving the cost of failures to the private sector.
I know that the noble Lord is keen on resilience and fire drills. I hope that we have a serious fire drill in the course of this Government. To engage the country in understanding the vulnerabilities of, say, the electricity supply system will really help us to understand the need to have and benefit from having manufacturing in this country in a serious way, so that we can recover from a setback. To have a fire drill will give the public confidence that we will react well when something happens. Suppose we were to have a Carrington Event—a huge solar storm knocking out the transformers in the electricity network. There would be no power for a year or two, because we do not have the capacity to rebuild the transformers. Having a fire drill means that we do not make that mistake, because we will have the courage to turn off the transformers in time and the public will know that we will do it and do it well.
Lord Tarassenko (CB)
My Lords, I declare an interest as a director of Oxford University Innovation. I thank the noble Viscount, Lord Stansgate, for securing this debate and for his thorough review of UK science and technology.
I was surprised, however, that there was no mention of the 2024 Nobel Prizes for Chemistry and Physics. Earlier this month, we celebrated the award of the Nobel Prize for Physics to Professor Geoff Hinton. The next day, we celebrated the award of the Nobel Prize for Chemistry to Sir Demis Hassabis. Both are home PhD students from British universities— Edinburgh and UCL. Both ended up working for the same US big-tech company, a company currently valued at $2 trillion.
What would it take for a deep-tech company to emerge from one of our research-intensive universities and become the UK’s first $1 trillion company? First, it would need a good supply of home PhD students. Unfortunately, there is mounting evidence that an unintended consequence of the rise in the undergraduate tuition fee to £9,000 is a loss of home PhD students in STEM subjects.
For example, from 2019 to 2022, there has been a decrease of 39% in the number of UK-domiciled computer science graduates in doctoral study 15 months after graduation. We know that the least well-off students graduate with the most debt; now it looks as though many students from disadvantaged backgrounds will no longer consider PhD study as a financially viable option. This trend must be reversed.
Secondly, the spinout ecosystem that exists around our research-intensive universities must be nurtured further, not only with human capital but with finance to start new companies, scale them and grow them. The £40 million over five years of proof-of-concept funding to seed new spinouts announced in yesterday’s Budget is welcome, but it should be targeted where it is needed—outside the golden triangle.
Thirdly, a coherent industrial strategy makes it more likely that the UK’s first trillion-dollar company will emerge by 2035. The UK on its own is not able to invest in all possible areas of science and technology. Even in my area, described as “digital and technologies” in the industrial strategy Green Paper, further choices will have to be made.
The House of Lords Select Committee report on large language models called for a “sovereign LLM capability”, but it would be pointless, because of the prohibitive costs, to compete with US big tech companies in training hyperscale LLMs such as GPT-4 or Gemini—other LLMs are also available. Instead, and this chimes in with the excellent maiden speech of the noble Baroness, Lady Freeman, we should be backing UK companies developing trustworthy AI using medium-scale LLMs and proprietary datasets, giving them privileged access to our sovereign data assets.
The final piece of the jigsaw is the scale-up funding available to British tech firms, which is still mostly missing. The target set by the Mansion House compact to have 10 of the UK’s largest pension funds invest 5% of their assets in private ventures needs to be met by 2030. If progress is also made on sorting out the issues highlighted in the Harrington report on foreign direct investment into the UK, there is a fighting chance that a British tech company, with its roots in one of our universities, will reach a trillion-dollar valuation within the next decade.
Lord Drayson (Lab)
My Lords, I join noble Lords in thanking my noble friend Lord Stansgate for opening this debate in such style. I take this opportunity to pay tribute to the long-standing commitment and passion he has shown to science and the scientific community. It is a particular pleasure to follow a former colleague, the noble Lord, Lord Tarassenko, given his deep expertise in engineering and innovation and his skill as an academic entrepreneur, and to build on the argument that he made.
I will focus my contribution in this debate on artificial intelligence, given the accelerating impact that this technology is having on our society and economy. In doing so I draw the House’s attention to my registered interests, particularly regarding Appella and Arcturis—two companies engaged in the development and application of AI.
Over the past 38 years as a science entrepreneur, I have experienced first hand the challenges of creating wealth from UK science and technology. However, never have I witnessed the pace of change and the breadth of impact that I see now, as virtually every company, CEO and entrepreneur tries to understand and adopt AI technology, whatever sector they are in.
Unusually for a new technology, AI plays to the strengths of the large incumbent tech businesses and disadvantages the start-ups aiming to disrupt them. The key elements needed to develop and apply AI, such as access to large sets of training data and huge computing power, require massive capital investment. This puts the big US tech companies at a considerable advantage. Together with their ability to leverage their established customer bases to deploy AI via their existing product platforms, it presents a formidable barrier to competition. This has serious implications for the UK and for government policy.
How can we ensure that the value generated by the adoption of this transformative new technology, often based upon research undertaken here, fuels the UK economy? The answer is for the UK to adopt a proactive partnership strategy in AI with the United States and its leading technology companies. We know that many UK businesses are enticed to the US by access to its substantial market and large pool of capital. To ensure that AI businesses stay and grow here, we need to create joint UK-US initiatives that leverage our complementary strengths and enable those businesses to become transatlantic—for example, by establishing joint R&D grants; building on existing programmes to encourage US/UK talent exchange in AI; facilitating transatlantic university partnerships with common IP and data-sharing agreements; and building bilateral AI labs where we can work together to develop and scale the application of AI in health, defence and finance, sectors where the UK and the US have common interests and where the UK has deep expertise and competitive advantage.
As we look to regulate AI, let us align our policies with the US and attract American capital to fuel UK-based businesses and infrastructure by creating a common listing framework for the London Stock Exchange that is aligned with NASDAQ, rather than trying to sustain our own failing AIM. In summary, let us leverage our special relationship with America to ensure that British science remains at the forefront of AI research and is a major driver of a prosperous UK economy.
Lord Rees of Ludlow (CB)
My Lords, I add my thanks to the noble Viscount, Lord Stansgate, for his fine introduction to this debate and add a welcome to our very well qualified new Minister who will reply to the debate. I am sure he would agree that the prospect of a scientific career should remain attractive to enough of our young talent and that our research institutions should remain attractive to foreign talent. I shall comment briefly on these issues, especially in a global context.
Some people will become academics, come what may —the nerdish element, of which I am one—but UK science cannot survive just on them. It must attract a share of young people who are savvy about their options and ambitious to achieve something distinctive by their 30s. They increasingly associate academia with years of precarity and financial sacrifices, which is not what they want.
A further off-putting trend is the deployment of ever more detailed performance indicators to quantify outputs and the labour involved in preparing grant applications with diminishing chances of being funded. The so-called REF is very damaging in discouraging high-risk and long-term projects. Confidence and high morale drive creativity, innovation and risk-taking, whether in science or entrepreneurial activity. We need to support excellence. The difference in pay off between the very best research and the merely good is by any measure hundreds of per cent, so what is most crucial in giving taxpayers enhanced value for money is not the few per cent of savings that might be made by improving efficiency in the office management sense; it is maximising the chance of the big breakthroughs by attracting top talent, backing the judgment of those with the best credentials and supporting them appropriately.
We cannot confidently predict how, when or whether a specific research project will pay off intellectually, still less whether its applications will offer social or economic benefits. To ensure that we effectively exploit new discoveries, research institutions must be complemented by organisations in the public or private sector that can offer adequate development and manufacturing capability when it is needed. This fortunate concatenation certainly proved its worth in the recent pandemic. It is imperative, likewise, that nations should foster expertise in agriculture, energy, climate and the cybersphere.
We should also welcome the growing mobility among scientifically advanced countries in North America, Europe and Asia. One exemplification of this is that three of the greatest US-based companies—Microsoft, Google/Alphabet and IBM—now have Indian chief executives. But this mobility offers little consolation to the least developed countries. They face daunting challenges in retaining their all too few highly trained people and even more in attracting them back. We in the developed world should surely be uneasy and feel an obligation to redress this loss. Of course, Africa’s predicament is worse. About half its health workers want to leave and their departure can be ill afforded. It is doubly tragic if, after moving to a developed country, doctors find that they are not accredited and become cab drivers. It is just as bad in all the other specialities that African nations require if they are to develop their potential. The poorest nations need to engage their diaspora communities, encouraging those with expertise to at least make regular visits back home.
Wealthier nations should take some responsibility too. A cost-effective form of aid would be to establish in Africa and elsewhere centres of excellence, with strong international links, where ambitious scientists could work in less dispiriting conditions, perhaps via linkages with foreign experts. They could then fulfil their potential without emigrating and strengthen tertiary education in their home country as well as working with other countries on the challenges of health, clean energy, and intensive agriculture on which their future depends. Let us hope that as a way of providing aid in a cost-effective and distinctive way, the Foreign Office and the department can collaborate on this goal.
Viscount Hanworth (Lab)
My Lords, I concur in the praise that has been accorded to the proposer of this debate and to the maiden speech. I wish to discuss the failures of Britain to profit from its own technological innovations, which has been an enduring pathology.
Long ago, the Civil Service developed a methodology of cancellation aimed at projects for which it could not envisage immediate and secure returns. To understand the development of that mindset, we may cast our minds back to the early post-war years, when Britain was at the forefront of a wide range of scientific and technological innovations. Britain was endowed with a large and vibrant aircraft industry, which had been sustained by the demands of the war. Under the aegis of the Ministry of Supply, it had been devoted to the mass production of a limited range of military aircraft. After the war, the constituent firms acquired their independence. Many of them had active design offices and there was a proliferation of military prototypes that sought and received government support.
However, the expense was exorbitant and in 1957 the Minister of Aviation, Duncan Sandys, called a halt to military aviation. It was decreed that henceforth military aircraft should be replaced by guided rocketry. Surface-to-air missiles were to replace interceptor aircraft and ballistic missiles were to replace bombers. The project was successful in staunching the expenditure and in curtailing the aircraft industry. Some projects for manned military aircraft did survive, only to face later cancellation, and we aimed to purchase American aircraft instead.
The Civil Service also turned its attention to other expensive technological endeavours, of which those of the nuclear industry were the most prominent. Britain had been a leader in civil nuclear development, beginning with the Magnox reactor, which was succeeded by the advanced gas-cooled reactor—AGR. The development of the AGR was protracted and problematic but eventually the design was perfected and such reactors remain in operation today, albeit they are approaching the end of their life. However, such a prejudice against the AGR had been derived during the process of its development that it was abandoned at precisely the time that it had reached perfection. The next reactor to be commissioned in the UK, of course, was the American pressurised water reactor, such as at Sizewell B.
Our nuclear industry is currently subject to a weak attempt at its revival, but this is also subject to the familiar pathology. We are seeking to restore our electricity generating capacity by harnessing wind and solar power and by using nuclear reactors to provide a baseload of generating capacity. This is to be provided mainly by small modular reactors. There are four contenders for the favoured design: three from American companies and one from a British company. The American contenders benefit from substantial subventions from the American Government and our Treasury is glad to have been relieved of the costs of developing these reactors.
All of the SMR reactors embody a tried and tested pressurised water technology that is fit to be replaced by the superior technologies of fast closed-cycle reactors, molten salt reactors and advanced high-temperature gas-cooled reactors. There have been projects within the UK aimed at developing these technologies, which threaten to go into abeyance or to be withdrawn to other countries through lack of government support. It is likely that Britain, which pioneered these technologies, will be depending on foreign suppliers for its future technology.
I would like to instance many other cases where we have failed to exploit British technological developments, but there is insufficient time to do so, as I have been strongly reminded. However, as a footnote, I will mention that I recently travelled on an Italian Pendolino tilting train on the west coast main line. This is a straightforward derivative of a cancelled APT—our advanced passenger train.
Baroness Bowles of Berkhamsted (LD)
My Lords, it gives me pleasure to commence the winding-up speeches on this debate. I congratulate the noble Viscount, Lord Stansgate, on bringing it to us and the noble Baroness, Lady Freeman, on an excellent maiden speech.
We have had a great debate, showing how important science and technology are today and the far greater economic contribution they could make, as the noble Lord, Lord St John of Bletso, said. My noble friend Lady Northover pointed out that it is all about interconnections. I was expecting to congratulate the noble Viscount, Lord Hanworth, on reminding us of the importance of mathematics in all these scientific projects and so forth, which I do agree with. I am sure that the Minister will not be surprised that I look forward to the Procurement Act and that it will be one of the topics I will speak about. If there is not a supportive environment for the procurement of new innovation for small enterprises, we will lose out, in AI and elsewhere, just as we did to the US super-corporations on internet technology when once we were ahead.
For 30 years, my career was in scientific research on semiconductors and then as a patent attorney. I was working with companies that were highly successful and some which struggled to make a breakthrough, despite great innovations. It is that which drove me into politics, where I have now spent 18 years looking at finance and the economy, including in industry. I come back to the same point: lack of procurement is preventing scale-up and better commercialisation of our technical innovation. It prevents a greater contribution to the economy, in particular for exports, and it prevents us closing the productivity gap.
I will focus on three linked things that are blocking innovative companies and scale-up: the treatment of start-up and growth companies, under which competitive tendering for round after round of piecemeal grants and loans sets them up for failure; the closed shop of government procurement, tied up with frameworks that ask discriminatory questions and favour incumbents; and the fact that the Government have become a systematic expropriator of early-stage intellectual property, killing instead of growing innovative companies.
Why is it that we have a trail of breadcrumb grants via our innovation agencies—including catapults, Innovate UK and small business research initiatives—with each grant expensively competed for at every stage in time consumption, but never leading to public procurement? In many instances where a lot of public money is spent on procurement, this is closing the door on making that expenditure bring multiple returns.
As various think tanks have highlighted, first public procurement is the ticket that enables growth companies to create exports—far better for our economy than those businesses relocating to the US or selling out equity in their innovation to other countries. That pattern has even hit Rolls-Royce and its small modular reactors, losing 20% equity to other countries.
In the US, they use a programme, From Innovation to Procurement. More entrants start than finish, but there is procurement at the end, which launches commercialisation. It is still competitive to enter, but the succeeding companies can progressively get on with the real job, instead of spending half their time applying for the next grant.
In our system, there is no promise of procurement: indeed, little chance, because of the procurement frameworks and the incumbency factor. An innovative growth company cannot positively answer the questions about previous alpha and beta delivery in the way incumbents can, so it falls at the first hurdle. How are innovators and emerging technology companies expected to grow to export level with that approach? Additionally, the incumbents essentially have a procurement fast track and get asked to support innovation programmes, which then allows them to learn from and ultimately undermine new market entrants.
Returning to the grant process, if you look at the contract clauses for the breadcrumb grants, for just a £50,000 early-stage development or proof of concept, there are clauses requiring the recipient of the grant to give to the relevant government body and its partners free, perpetual, irrevocable and royalty-free licences, together with the right for the Government to grant sublicences to anyone to use all the information, data, results and conclusions arising from the project. In other words, all the IP generated is as good as lost to competitors.
I know some people think those clauses just mean reading and benefiting from the reports, but it is far more. It is licensing use and licensing performing the invention. It is undermining patents and IP and allowing the Government to license competitors at the procurement stage. I have shared the clauses with the Chartered Institute of Patent Attorneys and it concludes the same as me.
It is so unfair, on many levels. The breadcrumb grant has never been a commercial rate for the work performed and, due to the UK’s own, rather short-sighted, Subsidy Control Act, never covers the full cost. Why should a measly £50k that forces high-tech entrepreneurs to work for free or below minimum wage rates—I can provide figures that prove that—entitle use and sublicensing rights of IP that could be worth £1 million or more were they not undermined by such a clause and that may have been the bedrock of success for the innovative company had it not been expropriated to competitors.
Yes, real innovation can happen in a matter of months. But, like a jeux sans frontières competition, innovative companies face repeated grant application hurdles. In a game of chance, does your presentation fit a set of part-time assessors’ preferences, complete with marking down smaller businesses for factors such as not having the top and most costly accounting or risk-tracking software? I have seen it all.
Solving this is not rocket science. First, use a staged programme system, with end-stage procurement like in the US. Secondly, stop poaching early-stage IP to put in the hands of competitors and incumbents. There are fair licensing provisions that can cover large bills and contracts and prevent vendor lock-in. Thirdly, maybe look at treating innovative company IP and intangible assets as collateral for loans alongside grants. Fourthly, give those IP assets an export market opportunity weighting in assessments, instead of eliminating applicants out of fear of lock-in. Fifthly, recognise that value for money assessment must incorporate risk for growth, and that sometimes ends in failure.
Every project cannot be run like this, but even a relatively few smaller ones would make a big difference. If we do not make public procurement truly open to growth companies, great economic opportunities for getting more bang for your procurement buck are being missed. While I celebrate with other noble Lords the strength of science and technology in the country, I hope that the Minister can find ways that penetrate into procurement in the big spending departments to bring about the economic transformation that is there for the taking to bring money back to the Treasury.
Viscount Camrose (Con)
My Lords, it has been an absolutely brilliant debate, and I join others in thanking the noble Viscount, Lord Stansgate, for bringing it forward. I also join others in congratulating the noble Baroness, Lady Freeman. Many years from now, eventually “Walking with Dinosaurs” will be a fantastic title for her memoir, but we are not there yet. I have been asked to slightly curtail my remarks and I am very happy to do that. I hope noble Lords will forgive me if I do not reflect on everything that has been said in the debate, but rather offer, just to begin with, some of my personal highlights from what I heard.
As a theme, it is clear that we are as one in deeply recognising and valuing the contribution that science and technology can and will make to our economy. Sadly, and frustratingly, many different approaches have been advanced as to how we can best finance that. I hope that we can be on the path of constant improvement to get more investment into this crucial space. I noted a sense of ruefulness from my noble friend Lord Willetts as he said that the role of the Science Minister was to extract money from the Treasury; I am pleased to say that we have somewhat moved on from this position.
I was very struck by the noble Baroness, Lady Neville-Jones, reminding us of the growing importance of international rivalry in this space. I think that is going to play an increasing part in our deliberations here.
The noble Lords, Lord St John of Bletso, Lord Tarassenko and Lord Drayson, asked, one way or another: where are our Metas or Alphabets? It is a question that certainly bugs me. Let us hope that, between us, we can move towards more of an answer. The noble Baroness, Lady Bowles, spoke powerfully about the issue of IP retention in universities, and that is clearly something we need to continue to look at.
The noble Lord, Lord Lucas, raised the issue of standards and regulations. There are not many silver bullets in technology regulation, but standards will be one of them. International global standards, particularly for instance with the copyright issue in AI, are going to be a big part of that solution.
I absolutely share the wish of the right reverend Prelate the Bishop of Newcastle to foster a faster-growing tech community in the north-east of England. If I may, I commend to her the work of the brilliant organisation CyberNorth; she may know it already.
Innovation is not merely an advantage; it is the foundation of economic growth and global competitiveness. Science and tech are no longer confined to laboratories or research institutions; they are part of the fabric of almost all the work we are doing of any kind across this country.
As of last year, we are one of three countries in the world with a trillion-dollar tech sector. Today, that sector contributes £150 billion annually to the UK economy, a figure that reflects not only the sector’s rapid growth to this point but its remarkable potential for expansion. With emerging fields that have been mentioned many times—quantum AI, engineering biology, and so on—we have the opportunity to cement the UK’s status as a global leader in scientific and technological innovation.
Of course, the contributions of science and tech, as I enjoyed hearing from the noble Baroness, Lady Bennett of Manor Castle, are not limited to economic growth. They enhance our resilience in the face of global challenges. I frequently argue that for all the amazing scientific advances we have seen over recent years, perhaps the most impactful was the development of the Covid vaccine, which I think we can all agree underscored, among other things, the power of UK-led scientific innovation, saving lives and demonstrating the critical impact of robust scientific infrastructure.
Investment in science and technology is also an investment in the workforce of tomorrow. The noble Lord, Lord Mair, and others raised this point very powerfully, as did my noble friend Lord Willetts and the noble Lord, Lord Taylor of Warwick. By prioritising education in STEM fields and by fostering partnerships between industry and academia, we are equipping future generations with the skills and knowledge required to thrive in a rapidly evolving landscape. It is not only essential for individual opportunity but vital to our ongoing economic competitiveness.
I want to address some pressing concerns raised by yesterday’s Budget. The Chancellor announced a significant allocation of £20.4 billion for research and development, including £6.1 billion aimed specifically at protecting core research funding. There is no doubt that this funding is crucial for advancing the core of our scientific curriculum. However, the research community has expressed some apprehensions regarding the implications of this. The Budget allocates an increased £2.7 billion for association with EU research programmes and covers the cost of the old Horizon Europe guarantee scheme. This means we are committing with this money not only to new funding but to managing the cost of past obligations. I would welcome some clarity from the Minister on how this is going to break down.
Further, as raised by my noble friend Lord Waldegrave, the abruptness of the decision over the summer to cancel the exascale computing investment—which was, by the way, fully funded through DSIT’s budget, contrary, I am afraid, to statements from the Government that I have heard from time to time—must stand as a significant red flag to AI investors, if only for its unexpectedness and suddenness. When we take this together with the additional costs and risks of hiring staff, the reduction of incentives to invest in technology and the—in my view, rather aggressive—treatment of non-domiciled investors, I think we have grounds for concern. I wonder whether, when the Minister rises, he could tell us to what he attributes our leadership today in science and tech. Is he concerned that these decisions may diminish that leadership and, if so, what do the Government propose to do about it?
That said, I am keen to close on a note of excitement and positivity. Ray Kurzweil, of “singularity” fame, argues that the time between major advances in science and technology diminishes exponentially. If he is right, the technologies available to us at the end of this Parliament will be truly staggering. So let us all be working together to make sure that as many of those breakthroughs as possible are delivered and safely exploited in this science and tech superpower, the United Kingdom.
The Minister of State, Department for Science, Innovation and Technology (Lord Vallance of Balham) (Lab)
My Lords, I am sure noble Lords will agree that we have heard many thoughtful and insightful comments from all sides of this House. Like everyone else, I thank my noble friend Lord Stansgate for organising such an engaging and important debate this afternoon. I also thank him for introducing me to the concept of the POBA and for mentioning the Science and Innovation Network, known as SIN. It gives me an opportunity to apologise for the fact that I introduced the right reverend Prelate the Bishop of Oxford to SIN, which does not feel entirely right. I congratulate the noble Baroness, Lady Freeman, on her terrific maiden speech and thank her for the reminder of the ubiquitous value of applying the scientific method in all sorts of ways.
Science, technology and engineering are fundamental to every aspect of modern government, from healthcare and education to housing, planning, green energy and climate. Indeed, I cannot think of a single area of government policy or operations where science, technology or engineering would not make a difference, and none of the national missions are achievable without investment in innovation. Science and technology are essential for national security; they are the bedrock of our shared prosperity in an era of global instability—as the noble Baroness, Lady Neville-Jones, rightly pointed out—when relationships and partnerships will be important. I agree with my noble friend Lord Stansgate that science and technology are not just for DSIT but for all of government, and that there needs to be an all-of-government approach to this. That is why there is a Cabinet Science and Technology Committee, chaired by the Prime Minister.
Our discussion today is focused on growth. Growth is the first mission of this Government but it is also the first mission of my department, because the economic importance of science and technology is hard to overstate. In historical terms, to state the obvious, the impact of innovation is so profound that standard metrics cannot really grasp it. I do not know how you measure the effect of electricity on growth, or how you really look at the impact of the invention of engines, whether that is James Watt’s steam engine, the combustion engine or the jet engine.
Science and technology remain essential for economic growth today. Seven out of the world’s top 10 companies are science and tech companies, and, in the UK, engineering businesses such as Airbus, BAE Systems and Rolls-Royce employ tens of thousands in communities right across the country—whether they are designing the defence technologies needed to keep us safe or developing small modular reactors to drive forward clean energy. My noble friend Lord Hanworth rightly identified the importance of both SMRs and advanced modular reactors. Pharmaceutical giants such as GSK and AstraZeneca, now Britain’s most valuable company, have transformed healthcare for billions, here and around the world.
Today, a new generation of UK-founded—I emphasise that—companies are putting us at the forefront of the global race for tomorrow’s technologies. Our thriving start-up scene means that the UK receives two times more venture capital investment than anywhere else in Europe. Companies such as DeepMind and Darktrace are harnessing the power of artificial intelligence to tackle some of the toughest challenges, whether that is accelerating the discovery of life-saving drugs or protecting us against increasingly sophisticated cyberattacks.
As the noble Lord, Lord Tarassenko, pointed out, Demis Hassabis and Geoffrey Hinton this month became Britain’s latest Nobel Prize winners for their contributions to artificial intelligence. I know that noble Lords will want to join me in congratulating them on their extraordinary achievement. The noble Lord, Lord Tarassenko, rightly asked what it would take for these companies to grow to be major stable companies in the UK. That is a key question.
I hope noble Lords will join me in welcoming the soon to be Baroness Gustafsson to the Government and to this House. We will all benefit immeasurably from her experience and expertise, and I look forward to working closely with her in the Department for Business and Trade.
As several speakers touched on, investment in science and tech is about not just today’s economy but the economy for decades to come. The rather sudden success of large language models is the result of 70 and more years of research. The outcome of that research was never inevitable, and nor can we possibly predict the path that certain technological progress might take in the century ahead. The scientists and engineers who launched the initial spacecrafts could hardly have imagined the impact of GPS technologies, and the post-war pioneers of quantum theory could not have known how British businesses would one day start using quantum science to devise new scanners, transform the way we monitor climate change or, in the future, enhance rapid financial analysis.
While we cannot always know where innovation will take us, nor predict all of the challenges we will face, we can be certain that science and technology will be fundamental in overcoming them and therefore an absolutely core requirement for any modern Government. Countries that invest in science and technology for the long term will perform better than those that do not. The rapid rise of Singapore or South Korea—now two of the most innovative economies on earth—reflects sustained, strategic R&D co-operation between government, industry and academia to invest in the high-value sectors that hold the key to long-term economic growth.
In this context, I am of course pleased to note that, in the Budget, the overall public R&D spending will rise to a record level of £20.4 billion. Of course, as the noble Lord, Lord Stevens, pointed out, we have a multi-year settlement coming up in March, and it will be crucial to make sure that this future-looking approach and the points raised in this debate are taken into account as we think about what needs to happen then. The noble Lord, Lord Waldegrave, rightly pointed out that long-term funding is essential, and we have recently seen the seven-plus-seven years funding for new MRC centres, which I will come back to, and we have a plan for 10-year funding for certain types of science activity.
The UK’s historical success in science and technology is testament to the strength of our research base, with four of the top 10 universities in the world. This simple point was not just noted by academics but raised repeatedly by investors at the recent investment summit. ARIA is a new part of our important funding landscape, adding different ways of thinking and contributing to this vibrant system. The right reverend Prelate the Bishop of Newcastle is absolutely correct to point out that this is right around the UK—the strength of the north-east and the Helix project she referred to is an important part of this.
In the years ahead, researchers and businesses will, of course, continue to push the limits of the possible. Their innovations will provide security, opportunity and prosperity for future generations: better jobs, better public services and longer, happier and healthier lives. However, they will only do so if we protect basic, curiosity-driven research—as several speakers have said—and if we invest in the skills and the infrastructure that research and development need. That includes the development that is not always about economic growth, but has other purposes, as has been pointed out by the noble Baroness, Lady Freeman.
Moreover, as many people have mentioned, including my noble friend Lord Hanworth and the noble Lord, Lord Mair, we must support the formation and growth of companies through strong partnership with the private sector. This is why the industrial strategy will have R&D running through its core. I will say a little more about that in a minute. If we wish to lay the foundations for long-term growth, we must support the businesses that are taking ideas out of the lab and into lives. We know that £1 of every Innovate UK grant creates £3 of benefits for businesses, and we know that businesses that have Innovate UK funding do better than those that do not.
My noble friend Lord Liddle asked about spin-outs. In yesterday’s Budget, the Chancellor announced £40 million to support researchers spinning out from UK cutting-edge research into the firms of the future, right the way across the UK. That money will go to the sorts of things that take place before the private sector is prepared to come in but will catalyse private sector investment. As the Science & Technology Framework makes clear, however, this has to be about more than just public sector research funding and start-ups. The noble Lord, Lord Tarassenko, listed several of the things that need to be done if we are to be successful at growing companies. We need to unlock private sector capital for scaling; we need to have a supportive regulatory environment; and—a point made very eloquently by the noble Baroness, Lady Bowles—we need clear procurement signals and processes.
The recently announced regulatory innovation office will streamline the regulatory journey for high-tech firms to ensure that the process is easier and simpler and that people and public services can benefit from early access to transformative technologies, whether that is AI for healthcare, pest-resistant crops or cultivated meat that could provide food security—all these are in scope. The noble Lord, Lord Taylor, asked about AI in healthcare, and it is one of the topics that will be covered by the regulatory innovation office.
The noble Lord, Lord Lucas, spoke quite rightly about standards and their importance. This will be looked at as part of what the regulatory innovation office does. He also made a point about the poor quality of people sent to standards meetings—I went to two of those in Edinburgh two weeks ago, so I apologise if that was not satisfactory.
The Government will seek to use procurement to be an early customer of high-tech businesses, learning from models such as the National Security Strategic Investment Fund. This will not only help grow our domestic companies but enhance public service delivery. The missions of course provide a very clear opportunity to link procurement through to R&D. The industrial strategy will have R&D running through every sector. It identifies “life sciences” and “digital and technologies” as two of the key growth-driving industries in the decade to come. In yesterday’s Budget, the Chancellor announced the first £70 million—as has been pointed out—for the new Life Sciences Innovative Manufacturing Fund, which is up to £520 million.
The noble Baroness, Lady Greenfield, rightly pointed out—this point was also raised by the noble Lord, Lord St John—that there is something about join-up that becomes very important here. It is about not looking at each of these things individually, but having a package that can work. That package includes everything, including of course the tax environment, which is important for those companies.
My noble friend Lady Donaghy and the right reverend Prelate the Bishop of Newcastle both raised the importance of the space sector. It is an increasingly significant commercial sector for the UK that now employs over 50,000 people. It is one of four areas in the initial wave of work for the regulatory innovation office and, over the current spending period, UKSA will have spent something like £1.9 billion. We will continue to look at ways to support and grow this sector, including through the catapult network and through some of the sectors identified in the industrial strategy, including advanced manufacturing and defence.
We must harness science and technology for public good and for public services. To achieve sustainable, equitable economic growth, it will be necessary to champion the adoption and diffusion of technologies to ensure that everyone can access the benefits that they bring. Today, the UK’s AI sector is the third-largest in the world. At the international investment summit a fortnight ago, over £24 billion in inward investment was directed specifically to AI. However, without the right infrastructure and the right skills, too few British people stand to benefit from the enormous opportunities.
My noble friend Lord Stansgate and the noble Lords, Lord Mair, Lord Rees and Lord Willetts, all raised questions about skills and education. We remain strongly committed to the idea of supporting teachers in their ability to teach these subjects through the subject knowledge enhancement training programme. I also draw to noble Lords’ attention the £300 million for FE. I would like to reassure the noble Baroness, Lady Bowles, and my noble friend Lord Hanworth that, in terms of mathematics, I have recently met both the Royal Society and the Academy for the Mathematical Sciences—which has just got started—on the topic of maths teaching and education. The noble Baroness, Lady Greenfield, rightly raised the question of diversity. I can assure her that we will be very focused on that question of diversity, both in grants and in terms of training. It is crucial if we are to be successful.
We will shortly publish the AI opportunities plan—work done by Matt Clifford—to set out how we will drive up the research, development and adoption of AI across our economy and how we will ensure that the public sector is well positioned to harness its power to improve the quality and efficiency of the services it provides.
We will also, as part of that, look at the question of compute power, which was raised by noble Lord, Lord Waldegrave, and the noble Viscount, Lord Camrose. It is an important area for the UK where we need significant compute infrastructure. The Exascale project in Edinburgh—I visited Edinburgh very recently—was not funded at the time we took over. It is important that we get the AI and the Exascale process sorted out, so that we have proper compute infrastructure right the way across the UK academic and business communities.
I am very pleased to say that the Government Chief Scientific Adviser and the National Technology Adviser will undertake a review to advise on how to promote adoption of technologies more broadly, which is very important. In answer to the specific question asked by the noble Lord, Lord Markham, about the med tech pathway, I can tell him that the innovative devices access pathway has been launched, eight technologies are under review and, in addition, the NICE process has undertaken a review to see what could be done to improve uptake and adoption. I can certainly provide more detail if the noble Lord would like.
Finally, I would like to say something about the national data library, to unlock the full value of public data assets. This is going to be important and will address the questions that were quite rightly raised by the noble Lord, Lord Markham, about the real value and opportunity in life sciences data. We have huge resources, including UK Biobank. Bringing these together and getting them properly interoperable and accessible will be important.
I turn now to some specific points that have been raised by individual noble Lords. The noble Lord, Lord Willetts, rightly identified cell and gene therapy as a crucial and transformative industry, and he raised important points about the complexity of VAT being applied to something that is both a service and a product. I will certainly raise these issues with both the Department of Health and the Treasury, and I will also point out that the Dutch system has found an answer to this, so there may be a model to look at.
Coming back to the question of procurement, I agree with the noble Baroness, Lady Bowles. It is crucial; we have to get this right. It is a big part of what will drive innovation. In terms of the points on IP, I will not go into details, but the IP requirements for Innovate UK are not for any IP. There is a specific requirement in one part of the process, called “Contracts for Innovation”, which concerns departments looking for grant-giving for companies. Because of the Subsidy Control Act, there is a nuance which means that it is quite difficult for them not to have some IP taken—but I want to look at that and see if we can get to an answer.
International work was raised, and it is so important that we are back in Horizon and that we have an uptake both from academia and industry, which should be everywhere across the country. The noble Lord, Lord Drayson, asked about the links to the US. I point him to the interest that has come up as a result of the AI Safety Institute, where there is now a very strong link with the US and, indeed, with US companies. His point about where we align regulation is a critical one.
Europe also came up in relation to FB10. I have commented on this previously; we are keen to be part of future European programmes, provided they are based on excellence and create value, and we have already issued a statement on FB10 in a paper.
The noble Lords, Lord St John and Lord Taylor, talked about skills, visas and talent, and it is important that we get that right. We know that the ability to retain skills in this country will be crucially important, and we know that we have always relied on significant overseas skills to be at the forefront of what we do in science and technology. I completely agree with the noble Lords, Lord Mair, Lord Waldegrave and Lord Stevens, that universities are key and I am working very closely with the Department for Education to make sure that we get the right support for them.
In reply to the noble Baroness, Lady Bennett, I am afraid I do not have the answer on agro-ecological approaches and the per cent spend, but I will find the answer and get it to her. I will also come back to the noble Lord, Lord Winston, on the MRC centres, which are important—I gave quite an extensive answer on that earlier this week, but I will come back to the noble Lord with more details.
Finally, I will pick up on the point about failure and the acceptance of it, raised by several noble Lords, including the noble Lord, Lord Lucas. It is crucial that we have a system that allows failure to occur; you cannot innovate without failure. I have talked to the National Audit Office about this and, as we look at UKRI and Innovate UK, it will be part of trying to get this into a much better position.
In the Budget yesterday, the Chancellor set out an ambitious plan to fix the foundations of our economy and to rebuild Britain by mending public services and delivering sustained economic growth. None of that is possible without science and technology. Without science, technology and innovation, we will not be able to transform the quality and efficiency of our hospitals and schools. Without championing science and technology in start-ups and scale-ups, we will not create the good jobs that are needed. It is a crucial part of what we need to do for today and tomorrow, it will reap benefits for years to come, and it is important for national resilience. I end by saying that I completely agree with the fire drill point.
Viscount Stansgate (Lab)
My Lords, in making a few closing comments, I wish it was rather like those old red phone boxes, where you could press button B and speak for as long as you like. Sadly, I have only 60 seconds in which to thank everyone for taking part. The wealth of expertise in this House is amazing, and today’s debate is an example of the House at its best. There has been a good bipartisan spirit; there may have been a few comments about the Budget but, as somebody once said, recollections may vary. On the whole, the debate has been conducted in a good spirit.
I particularly thank my noble friend Lady Freeman, if I may call her that, for her excellent maiden speech—look at the impact it has had on all of us here today. I was rather pleased to convene a sub-committee of the “former Science Ministers’ club” as part of today’s debate. I very much hope that the Minister will feel that he has the support of the House as he undertakes his role. I, for one, am going to send a copy of today’s Hansard to members of the Cabinet committee, as it is worth them reading the debate and having this on their agenda.