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Oral Answers to Questions
(2 weeks, 1 day ago)
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Carolyn Harris (Neath and Swansea East) (Lab)
Adam Thompson (Erewash) (Lab)
The Secretary of State for Wales (Jo Stevens)
Steelmaking is key to our missions to grow the economy and deliver clean power by 2030. We are committed to providing up to £2.5 billion for steel in addition to the £500 million already earmarked for Tata to build its electric arc furnace at the Port Talbot steelworks. I was pleased to reaffirm at the Budget £80 million of funding for the Port Talbot transition board, which I chair. We will continue to deliver this money to people and businesses affected.
Carolyn Harris
Unlike the previous Government, this Government are fully committed to enabling the £800 million transition fund to support former steelworkers. I recently visited the steelworkers’ support centre in Port Talbot, in the constituency of my hon. Friend the Member for Aberafan Maesteg (Stephen Kinnock). In its opening four weeks, it has helped almost 600 individuals, many of whom will be from Neath and Swansea East. Will the Secretary of State join me in thanking Community union and the other organisations that have set up the centre, and provide an update on the transition fund?
Jo Stevens
I completely agree with my hon. Friend that the hub is great. I opened the hub last month, and Community union and others have done a fabulous job with this one-stop shop to help support workers affected by the changes at Tata. This Government are determined to do everything we can to support workers and businesses. That is why this renewed partnership of Governments, unions and the local council is working together to ensure that the town gets what it needs. Funding from the UK Government is already making a difference via the transition board. We know that there is a huge amount of work to do, but we are already seeing people successfully placed in new jobs as a direct result of the £13.5 million that we have made available so far.
Adam Thompson
I thank the Secretary of State for her hard work to support our steel industry and our general steel communities, including in Port Talbot, since she has been in post. I was pleased to see the Chancellor confirm in the Budget £80 million of funding for the transition board, which the Secretary of State chairs. Will she tell the House why that was necessary?
Jo Stevens
In my first week as Welsh Secretary, I discovered that the £80 million promised by the previous Conservative Government for the transition board was part of the £22 billion of unfunded promises they had made. That shocking dereliction of duty threatened to leave workers and businesses high and dry without the support they needed. I have therefore made it my mission to fight tooth and nail for that money on behalf of our steel communities, and I would not have left them unsupported. I am pleased to be able to confirm that under this Labour Government the transition board is fully funded, and we are getting on with the delivery.
Mims Davies (East Grinstead and Uckfield) (Con)
Thank you, Mr Speaker. At the outset, as I come to the Dispatch Box for the first time in this role for Wales questions, may I please pay tribute to my former private secretary in the Wales Office, Debbie John, who was taken at a tender age due to pancreatic cancer? She and her family are in my thoughts today as I take up this role. She is much missed and very fondly remembered.
The right hon. Lady clearly needs to acknowledge to the House that the deal for Tata steel recently re-announced by her UK Government is identical to the one negotiated by my right hon. Friend the Member for North West Essex (Mrs Badenoch), who is now Leader of the Opposition.
Jo Stevens
I welcome the hon. Lady to her place and join her in her comments about her former private office secretary.
I think the hon. Lady needs to read the deal reached by the Government. The £1.25 billion transformation project at Port Talbot will deliver a state-of-the-art electric furnace, the contract for which has just been signed. In just under 10 weeks, without providing any additional funding beyond the £500 million previously announced, we delivered a better deal that secures the immediate future of Port Talbot and lays the foundations for future investment, as well as enhanced protections for the workforce in Port Talbot, Llanwern, Trostre and Shotton.
Mims Davies
I am delighted that the right hon. Lady has read the deal that we wrote, but the facts are simple: despite the protesting, this is the same deal that was previously negotiated by the last Conservative Government, involving the same amount of money to build the electric arc furnace and the same cash for the transition board. It is ludicrous for her or others to continue to claim that no support was in place and that it somehow appeared when she found it down the back of the sofa. She is fully aware that the cash had been sitting there the whole time. Perhaps an apology is needed for that, and for claiming that Port Talbot supplies the defence industry with materials.
Jo Stevens
If an apology is due, it is to the people of Port Talbot for promising £80 million for a transition board that operated for nine months under the previous Secretary of State for Wales, and delivered not a single penny to the people of Port Talbot, and now we know why: the £80 million did not exist.
David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)
The closure of the last blast furnace at Port Talbot has resulted in the loss of several thousand highly skilled jobs across south Wales, prompting another economic contraction across our region. The global centre for rail excellence at Onllwyn is one project that could reverse the trend of deindustrialisation and bring back good, well-paid jobs to south Wales. Will the Secretary of State confirm that the UK Government intend to make further investments in that project, and give an update on what conversations she has had to ensure that the project gets going?
Jo Stevens
The hon. Gentleman will know from both the Budget and the international investment summit that significant investments are being made in Wales as a result of this Government’s work: £63 billion was announced at the investment summit, £1 billion to Shotton Mill in north Wales—the biggest investment in Wales for decades. That will secure 300 jobs and mean that we will have the largest UK paper manufacturing site in the whole United Kingdom. We are growing the economy, creating jobs and delivering significant investment. I will write to him about the rail project.
Tonia Antoniazzi (Gower) (Lab)
Mark Ferguson (Gateshead Central and Whickham) (Lab)
The Secretary of State for Wales (Jo Stevens)
We have reset our relationship with the Welsh Government. Our approach is based on trust and mutual respect, and is spearheaded by the new Council of the Nations and Regions, which met for the first time last month. My regular meetings with the First Minister of Wales are also driving forward our new partnership, which is already delivering for Wales. That was evident in the biggest ever real-terms Budget settlement delivered for the Welsh Government last week.
Tonia Antoniazzi
The Secretary of State has been clear that this Labour Government will build a new partnership with the Welsh Government based on co-operation, respect and delivery. Will she say how the Government will give meaning to the manifesto commitment to strengthen devolution?
Jo Stevens
The previous Conservative Government ran roughshod over the devolution settlement, including by legislating in devolved areas without consent on numerous occasions. This Government will respect the devolution settlement and work in partnership with all devolved Governments. We will honour our manifesto commitment to do that by strengthening the Sewel convention, including a new memorandum of understanding between our Governments, ensuring that the petty squabbles of the past are confined to history and we can focus on delivering for the people of Wales.
Mark Ferguson
The Secretary of State has been very clear about the much-needed reset between the Welsh and UK Governments. Can she also make clear how the recent Budget has contributed to that reset?
Jo Stevens
Our Budget delivered for Wales for the first time in a generation, because the £21 billion settlement announced last week is the largest settlement in real terms since the dawn of devolution. It will provide a record boost for the Welsh Government to support vital public services in Wales, such as the NHS. It includes £25 million to maintain work to keep coal tips safe, and £320 million for investment zones in north and south Wales to power our sector strengths, which include the creative industries, life sciences and advanced manufacturing—for example, our world-leading compound semiconductor cluster. That shows the difference of Labour Governments working together.
Tom Tugendhat (Tonbridge) (Con)
First, may I pay tribute to my hon. Friend the Member for East Grinstead and Uckfield (Mims Davies), who has just taken on the role of shadow Secretary of State for Wales? It is a fantastic opportunity for her to champion a vital part of our Union. Secondly, may I ask the Secretary of State, who is newly in her post, what she will do to ensure that the power that brings our Union together comes out of Ynys Môn—that is Anglesey to her—so that she can ensure that the nuclear projects that keep us safe are properly invested in and not dropped, as they have been by this Labour Government? Labour Governments control both sides of the M4 now, and it is about time they delivered.
Jo Stevens
I wonder whether the right hon. Gentleman has ever been to Anglesey—or Ynys Môn, as he describes it. I am eager to see new nuclear developments in north Wales that will provide high-quality jobs across the region and drive economic growth. We recognise that a nuclear future at Wylfa could help to deliver several of our strategic objectives, achieving net zero energy independence and restoring economic prosperity across our nations and regions. Great British Nuclear completed the purchase of the site in June this year, and we will make further announcements about it very soon.
Jim Allister (North Antrim) (TUV)
Could the Secretary of State explain how it is possible to strengthen the Union while maintaining a partitioning border in the Irish sea at the behest of a foreign jurisdiction and under its laws?
Jo Stevens
I refer the hon. and learned Gentleman to my previous answer about the resetting of the relationship with the Welsh Government, and about working together and respecting the devolution settlement with all devolved Governments.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
The Secretary of State talks about respecting the devolution settlement. Mark Drakeford wrote to the Chancellor before the Budget asking for a review of Wales’s Barnett formula for transport funding, which had fallen from 81% in 2015 to 36% in 2021. However, the Budget revealed a further cut in the Welsh transport comparability factor, which is now down to 33%. How come strengthening the Union under Labour means that every major rail project in England results in Wales losing out?
Jo Stevens
We are having ongoing discussions with the Welsh Government about funding flexibilities and their fiscal framework. We will deliver our manifesto commitment to work with the Welsh Government to address the outdated fiscal framework. As the right hon. Lady knows, heavy rail infrastructure is not devolved in Wales as it is in Scotland and Northern Ireland, and the Department for Transport settlement provides a £1.1 billion cash increase to total budgets in 2025-26 compared to 2024-25.
Llinos Medi (Ynys Môn) (PC)
The Secretary of State for Wales (Jo Stevens)
I have regular discussions with the First Minister of Wales on a range of topics, including, of course, the autumn Budget. This Budget has delivered for Wales for the first time in a generation. The Welsh Government are receiving the largest settlement in real terms since devolution, to support public services such as the NHS. More than 100,000 workers in Wales benefit from increases in the national minimum wage and the national living wage each year.
Llinos Medi
In the Budget, the Chancellor announced that the Barnett formula would apply to funding for agriculture, rather than the devolved Governments receiving a ringfenced amount. The Farmers’ Union of Wales says that the Barnettisation of funding could lead to a cut of £146 million a year, or more than 40%. Can the Secretary of State say whether that figure is correct, and whether she believes that her Government’s Budget has shown any consideration at all for our farming communities?
Jo Stevens
I was very pleased that the Budget was able to protect the current farming budget for the next financial year, despite the difficult decisions that we had to make because the Conservative party had trashed our economy. [Interruption.]
Mr Speaker
Order. Mr Griffith, you are continually being a nuisance on the Front Bench. I want you either to restrict it or to go and get yourself that cup of tea.
Jo Stevens
Thank you, Mr Speaker. Obviously, farming is devolved in Wales, and the decision on how to spend that budget will be up to the Welsh Government.
Catherine Fookes (Monmouthshire) (Lab)
I welcomed last week’s Budget announcements about improving rail transport, and I want to bang the drum for a most excellent project in Monmouthshire, the Magor walkway station, which is ready for investment—indeed, we might even call it oven-ready. Will my right hon. Friend commit to working with the Rail Minister and me, and Welsh Ministers, to deliver the five Burns stations, and will she meet me to discuss progress?
Jo Stevens
My hon. Friend is a wonderful advocate for her constituency and for the Burns commission’s recommendations for her constituency, and I would be very happy to meet her to discuss them.
Mims Davies (East Grinstead and Uckfield) (Con)
Will the Secretary of State express her regret about the impact of Labour’s Budget on Wales? It will undoubtedly make the people of Wales poorer. Pensioners have been left wondering whether they should turn on their heating this winter, and family farms will be destroyed. The Budget is affecting business confidence and employment across the nation.
Jo Stevens
The Budget provides the biggest ever settlement in real terms since the dawn of devolution, a protected £80 million for steelworkers and businesses, £88 million for city and growth deals, £320 million for funding through investment zones, £25 million for coal tips and a protected £440 million for local communities— I could go on. It was a great deal for Wales.
Mr Speaker
Order. You cannot just keep asking questions, shadow Secretary of State. You are allowed only two, and that was your second.
Andrew Ranger (Wrexham) (Lab)
The Secretary of State for Wales (Jo Stevens)
The growth mission is the central priority for this Government. Our new industrial strategy and national wealth fund will boost economic growth across Wales, creating jobs and driving up living standards. Working alongside ministerial colleagues, I was pleased to confirm £320 million of funding for two investment zones in Wales, the green light on the freeport in the Celtic sea and protection for local community growth funding across Wales.
Andrew Ranger
I thank the Secretary of State for her answer. Universities in Wales, such as Wrexham University in my constituency, are crucial not just for the educational and research outcomes they provide, but for the economic opportunities they give our towns and cities, with a recent report by Universities Wales showing that their contribution to the economy stands at £11 billion. At a time when we are firmly in pursuit of economic growth, can the Secretary of State tell me what conversations she has had to ensure that universities in Wales are partners in this mission? Will she agree to visit Wrexham University with me to see at first hand the brilliant work that it is doing in collaboration with local businesses?
Jo Stevens
I would be delighted to go back to Wrexham and visit the university with my hon. Friend. Welsh universities will benefit from record levels of investment in research and development, which will be worth over £20 billion next year. The Budget confirmed £160 million of funding for the Wrexham and Flintshire investment zone, which was chosen due to the presence of world-renowned research institutions such as Wrexham University and Bangor University.
Carla Lockhart (Upper Bann) (DUP)
We say the phrase “no farmers, no food” so often, but never has there been a need for such emphasis as in the wake of the autumn Budget. Farmers in Wales, in Northern Ireland and right across this United Kingdom are reeling from the change in agricultural property relief and the impact it will have on the future of family farms. What is the Secretary of State doing to support farmers and make this case to the Treasury?
Jo Stevens
This Government continue to provide significant tax relief for farmers. For example, farming parents are able to pass up to £3 million to their children free of tax. They then pay half of the normal inheritance tax rates on anything over £3 million, and they have up to 10 years to pay it. The vast majority of farms will be unaffected by the changes in the Budget and will continue not to pay inheritance tax.
Ruth Jones (Newport West and Islwyn) (Lab)
The Secretary of State for Wales (Jo Stevens)
Cutting waiting lists is a top priority for both this Government and the Welsh Government. Last week’s spending review provided the Welsh Government with the largest real-terms settlement since devolution, including an additional £1.7 billion for 2025-26, enabling them to spend more on public services such as the NHS. I continue to collaborate with ministerial colleagues in both Governments, with the aim of driving down waiting lists.
Ruth Jones
I welcome this new partnership between the Welsh and UK Governments, which represents a real opportunity to share best practice and help to cut NHS waiting lists in England and Wales. Will the Secretary of State expand on how she will ensure that patients on both sides of the border get access to the best healthcare possible in a timely matter?
Jo Stevens
Both Governments are working collaboratively to make the NHS fit for the future. We provided a £1.75 billion boost for the Welsh Government to spend on public services such as the NHS, and the Welsh Government have just announced £28 million to cut NHS waiting times. Both Governments are sharing best practice and will consider more cross-border arrangements where capacity allows. The Welsh Government’s ministerial advisory group on NHS performance and productivity has been established to support improvements and bring down long waiting lists.
Robin Swann (South Antrim) (UUP)
The Secretary of State will know that health is devolved across all the nations. Can she reassure me that the Secretary of State for Health will work with all the devolved Health Ministers to make sure that we can truly engender a national health service for the likes of mental health provision?
Jo Stevens
I know that the Health and Social Care Secretary wants to ensure that the national health service across all of our four nations is fit for the future.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
The British Medical Association in Wales says that GP funding has decreased as a percentage of the Welsh Government’s budget by over 2.6% since 2005. Treflan surgery in Pwllheli cannot afford to fill key staff roles, and Budget measures will cost it an extra £19,000. The Secretary of State for Wales knows the state of the NHS in Wales, so why is she instrumental in Labour at both ends of the M4 threatening GP surgeries?
Jo Stevens
We are not threatening GP surgeries. If the right hon. Lady does not think that the £1.7 billion additional funding to spend on the NHS in Wales as a result of the Budget is a great idea, she needs to say what she would do instead.
Clive Jones (Wokingham) (LD)
The Parliamentary Under-Secretary of State for Wales (Dame Nia Griffith)
I recently met the Deputy First Minister of Wales to discuss a range of matters relating to farming. In September, the inter-ministerial group meeting on rural affairs agreed to improve food security and environmental land management by increasing the exchange of data and insights on farming support schemes. I was also pleased to see the Budget protecting Welsh farm budgets at current levels for the financial year.
Clive Jones
The Secretary of State, while in opposition, warned that the New Zealand trade deal would push Welsh farmers into bankruptcy and noted that Australian meat was produced at a far lower standard than in Wales. I agree. My constituents want high-quality Welsh lamb, beef and chicken. Will the Minister therefore push her colleagues in the Department for Business and Trade to review the Australia and New Zealand trade agreement and get it right for our farming communities?
Dame Nia Griffith
The hon. Member will know as well as I do that the new Leader of the Opposition is the one who sold our farmers down the river, negotiating deals with places such as Australia and leaving our farmers open to increasing quotas on imported meat. I assure him that this Government are committed to promoting robust standards, nationally and internationally, to protect consumer interests and to ensure that consumers have confidence in the food that they buy. We will consider the full range of tools at our disposal to uphold the UK’s commitment to high standards. That includes using our influence in the World Trade Organisation and other multilateral bodies to argue for better and fairer trading rules.
Steve Witherden (Montgomeryshire and Glyndŵr) (Lab)
The Parliamentary Under-Secretary of State for Wales (Dame Nia Griffith)
Our mission to kick-start economic growth will deliver good jobs and growth in Wales. Just last month, our international investment summit secured over £63 billion in private investment into the UK. Since July, we have secured over £1 billion of investment into north Wales, creating and sustaining 400 well-paid jobs in manufacturing.
Steve Witherden
The Secretary of State has said that economic growth is her No. 1 priority. Can the Minister say how the Budget’s confirmation of the investment zones will help contribute to that aim?
Dame Nia Griffith
The Budget includes a total of £320 million and a commitment for the investment zones in Cardiff and Newport and in Wrexham and Flintshire. This is a crucial part of our work with the Welsh Government to provide a rocket boost for sectoral strengths such as the creative industries, the life sciences and advanced manufacturing, including our world-leading compound semiconductor cluster.
Jim Shannon (Strangford) (DUP)
There is great potential for creating new jobs in wind energy and sea energy in Wales. We in Northern Ireland, and in Belfast in particular, have the engineering skills to provide the turbines for that energy production. Everyone would gain: Wales would get the jobs, and Northern Ireland would get the jobs as well.
Dame Nia Griffith
This Government are absolutely committed to economic growth across all parts of the United Kingdom.
Mr Speaker
I welcome the Leader of the Opposition and wish her well.
Dame Caroline Dinenage (Gosport) (Con)
The Prime Minister (Keir Starmer)
I begin by congratulating President-elect Trump on his historic election victory. As the closest of allies, the UK and the US will continue to work together to protect our shared values of freedom and democracy. Having had dinner with President-elect Trump just a few weeks ago, I look forward to working with him in the years to come.
I also welcome the Leader of the Opposition to her place—my fourth Tory leader in four and a half years. I look forward to working with her in the interests of the British public.
This weekend is Remembrance Sunday, when people across the country will come together to pay solemn tribute to those who made the ultimate sacrifice in defending the values and freedoms that we enjoy today. I am sure the entire House will join me in paying tribute to them.
This morning, I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have further such meetings later today.
Dame Caroline Dinenage
My constituent Suzanne is going to miss out on her winter fuel allowance this winter because she is just £10 above the pension credit threshold. As well as losing out on that vital money to keep her house warm, she does not get the £150 warm home discount, the £169 free TV licence or free NHS prescriptions. For the sake of a tenner, is this fair?
The Prime Minister
We introduced a Budget to fix the foundations of this country and to rebuild our country. One of the issues we had to confront was the £22 billion black hole left by the last Government. We have taken the tough decisions that will stabilise our economy. This means we can commit to the triple lock, which means that pensioners will be better off, seeing an increase in their pension, than they would have been under the Conservative party.
Jacob Collier (Burton and Uttoxeter) (Lab)
The Prime Minister
I thank my hon. Friend for his question. He is a champion for families in his constituency. My answer is simple: yes. I do not agree with the Leader of the Opposition when she says that maternity pay is excessive and has gone too far.
Mrs Kemi Badenoch (North West Essex) (Con)
I thank the Prime Minister for his almost warm welcome. I echo the comments he has made. It is an immense privilege and the honour of my life to lead the Conservative party. I look forward to joining him at the Cenotaph this Remembrance Sunday.
As Leader of His Majesty’s Opposition, I will be taking a different approach to the last Opposition, by being a constructive Opposition, so I would like to start by congratulating President-elect Trump on his impressive victory this morning. The Prime Minister and the Foreign Secretary met him in September. Did the Foreign Secretary take that opportunity to apologise for making derogatory and scatological references, including
“Trump is not only a woman-hating, neo-Nazi-sympathising sociopath. He is also a profound threat to the international order”?
If he did not apologise, will the Prime Minister do so now, on his behalf?
The Prime Minister
There will be many issues on which the Leader of the Opposition and I disagree, but there will be issues that unite this House, on national security and Ukraine. I look forward to working closely with her on that. I will provide her with the information that she needs to discharge her duties. That is the right thing for the country and it is far more important than party politics. The Foreign Secretary and I did meet President-elect Trump, just a few weeks ago, for dinner, for about a couple of hours. We discussed a number of issues of global significance. It was a very constructive exercise.
Mrs Badenoch
The Prime Minister did not distance himself from the remarks made by the Foreign Secretary, and I am very sure that President Trump will soon be calling to thank him for sending all of those north London Labour activists to campaign for his opponent. Given that most of his Cabinet signed a motion to ban President Trump from addressing Parliament, will the Prime Minister show that he and his Government can be more than student politicians by asking the Speaker to extend—[Interruption.]
Mr Speaker
Order. Mr Perkins, I do not need any more. Your voice carries; it is like mine—too loud.
Mrs Badenoch
Will the Prime Minister show that he and his Government can be more than student politicians by asking you, Mr Speaker, to extend an invitation to President Trump to address Parliament on his next visit?
The Prime Minister
The Leader of the Opposition is giving a masterclass on student politics! But seriously, we live in probably a more volatile world than we have lived in for many decades. It is absolutely crucial that we have a strong relationship—that strong, special relationship, forged in difficult circumstances—between the US and the UK. We will continue to work, as we have done in our four months in government, on issues of security, our economy and global conflict.
Mrs Badenoch
The Prime Minister does not answer the questions; he just reads the lines the officials have prepared for him. It does not sound like he wants to invite President-elect Trump to Parliament. He needs to look after the special relationship. The US is our single biggest trade partner. Given the risk of increased tariffs on UK exports, which threatens our manufacturing sector, will the Prime Minister commit now to continuing the negotiations on our free trade agreement with the US, which the Biden Administration cancelled when they came into office?
The Prime Minister
Of course we will discuss issues of our economy with the President-elect, as we already have done. Economy, security and global conflict are issues of real significance that ought to unite this House. When it comes to the economy, what we have done with our Budget is to fix the foundations after 14 years, and return economic stability after the £22 billion black hole. We have protected the payslips of working people. We have made the single biggest investment in our country for a generation in the NHS, schools and homes. We have given a pay rise to the 3 million lowest paid. If the Leader of the Opposition is opposed to that investment or the pay rise for working people—she is a straight talker, as I understand it—perhaps she should say so.
Mrs Badenoch
Discuss, discuss, discuss; chat, chat, chat—the Prime Minister has no plans whatsoever for building on the special relationship. He needs to realise that we in this country rely on our single biggest trade partner. President Trump is also right to argue that Europe needs to increase its defence spending. The last Conservative Government committed to raising defence spending to 2.5% of GDP by 2030. Will the Prime Minister finally match that commitment?
The Prime Minister
There is no more important duty than keeping the people of this country safe. It was the Labour Government who signed the NATO treaty in the first place, and we are strong supporters. We have a strategic defence review, and we are committed to 2.5%. [Interruption.] I remind Conservative Members that the last time 2.5% was met was under the last Labour Government. Fourteen years, and they never did it once. Last year, the National Audit Office identified a £17 billion black hole in the Ministry of Defence finances. The former Defence Secretary said that the previous Government “hollowed out” the armed forces. The plan that the Conservatives put forward at the election was pure fantasy.
Mrs Badenoch
The Prime Minister will not make that commitment; that is very clear. All that he is doing —[Interruption.]
Mr Speaker
Order. I am going to hear the questions. If there are people who do not want to hear them, they can leave now.
Mrs Badenoch
The Prime Minister will not make that commitment, yet the world is getting more dangerous. His Chancellor’s Budget did not even mention defence. The Chancellor’s Budget last week was a copy and paste of Bidenomics. It turns out that a high-spending, high-borrowing and high-inflation approach is less popular than she may have thought. May I suggest that he now urges her to change course, or is he determined to be a one-term leader?
The Prime Minister
The one thing that I learned as Leader of the Opposition is that it is a good idea to listen to what the Government are actually saying. I think the right hon. Lady just said that defence was not mentioned in the Budget. It was seven days ago that it was absolutely clear and central to the Budget, as was economic growth. We are fixing the foundations. We are giving a pay rise to millions of people. We are picking up the mess that the Conservatives left, including the £22 billion black hole, and giving a pay rise to working people. I have not yet heard her welcome that pay rise for the 3 million lowest paid workers. Does she now welcome it, or does she stick to her previous policy that it is excessive?
Mrs Badenoch
I was the one who, as Business Secretary, raised the minimum wage last year; I have a strong record on this. We need to make sure that we balance the books. The Prime Minister’s scripted lines show that he has not even listened to the Budget himself, so I will try a different question. Perhaps he can give something that is unscripted to the people who are watching.
Farmers across the United Kingdom—[Laughter.] Mr Speaker—[Interruption.]
Mr Speaker
Order. I do not need any help. If anybody wants to leave, I will help them do that. I am going to hear the question, and I certainly want to hear the answer as well, so, please, let us have some courtesy.
Mrs Badenoch
We have heard the Prime Minister on television repeat the lines “fixing the foundations” and so on, over and over again, but what does he say to farmers who are facing uncertainty about their futures as a result of the increased taxes announced by the Chancellor? I am very clear that we would reverse Labour’s cruel family farms tax. [Hon. Members: “Reading!”] What can he say now to reassure the farming community —[Hon. Members: “Reading!”]—who provide security for the whole nation?
The Prime Minister
I am happy to help the Leader of the Opposition. If she is going to complain about scripted answers, it is probably best not to read that from a script! [Hon. Members: “More!”] I am glad that she raised the issue of farmers, because the Budget last week put £5 billion over the next two years into farming. That is the single biggest increase, unlike the £300 million underspend under the last Government. When it comes to inheritance, the vast, vast majority of farmers will be unaffected, as she and her party well know.
The Budget was about fixing the foundations, fixing the £22 billion hole that the Conservatives left and investing in the future of our country—investing in our NHS, our schools, our hospitals and our homes. I am proud that we are making that investment. If the Opposition oppose it, they should go out there and tell their constituents that they are against that investment in the future of our country. That is the difference: a Labour Government taking us forward; the Conservatives are stuck in the past.
Matthew Patrick (Wirral West) (Lab)
The Prime Minister
I thank my hon. Friend for raising this really important issue. Economic abuse has a devastating impact on victims, leaving them vulnerable and isolated, and we are committed to ending this national emergency and keeping women safe from domestic abuse, harassment and stalking. That includes £200,000 this year for the charity Surviving Economic Abuse, and His Majesty’s Revenue and Customs has launched an online tool to help charities and businesses to identify and respond to economic abuse. I will make sure that my hon. Friend has a meeting with the relevant Minister.
Ed Davey (Kingston and Surbiton) (LD)
I join the Prime Minister in his comments about Remembrance Sunday. We must always remember the brave British men and women who gave their lives for our country. I also join him in welcoming the Conservative leader to her place, and congratulate her on becoming the first black leader of a UK-wide party—a major and historic achievement.
President-elect Trump praised Vladimir Putin’s invasion of Ukraine. He called it “genius”. He also said that he would encourage Russia
“to do whatever the hell they want”
to NATO allies, so what action is the Prime Minister taking to encourage a Trump presidency to change its mind? Otherwise, it is a huge threat to global security, and national security in the UK. Does the Prime Minister agree that, if the US will not oppose President Putin and support our brave Ukrainian allies, the UK must lead in Europe, so that together we do?
The Prime Minister
I am very proud that in this House we are united on the question of Ukraine, and clear about Russian aggression, and we will continue to be so. I have long taken the view that the only winner if we are divided in this House is Putin, and I am not prepared to let that happen. Our relationship with the US is a strong relationship, forged in very difficult circumstances historically. It remains as strong today as it was when it was first forged, and I look forward to working with President-elect Trump to ensure that that relationship stays the special relationship.
Ed Davey
I am grateful for the Prime Minister’s comments on Ukraine, but Donald Trump has also said that “trade wars are good”. He calls himself “Tariff Man”. People are really worried that Trump’s trade wars and tariffs will damage our economy, damage businesses, and hit the cost of living here in the UK. Given that, does the Prime Minister recognise that it is more urgent than ever that we support our British economy by getting rid of the damaging trade barriers with Europe put in place by the Conservatives?
The Prime Minister
As the right hon. Member will know, we made the economy the centrepiece of our Budget, and we will do everything that we need to do to ensure that our economy grows, and that is measured in living standards going up for working people across the country.
Alex Baker (Aldershot) (Lab)
The Prime Minister
I will leave the Leader of the Opposition to respond to those words. As the recent National Audit Office report exposed, children with special educational needs and disabilities were being failed by the system under the previous Government. This has come up I think five times in the last two or three weeks at PMQs. It is clearly a serious issue. Our focus will be on ensuring that every child receives the right support to succeed in their education.
Sorcha Eastwood (Lagan Valley) (Alliance)
Northern Ireland is considered one of the most dangerous places in Europe to be a woman—24 women have been killed in the last four years—but one of the most dangerous places for women and girls is online. I pay tribute to Belfast and Lisburn Women’s Aid, which is tireless in its advocacy of women. What are the Government doing to keep women and girls safe online, not just in Lagan Valley but right across the United Kingdom?
The Prime Minister
The hon. Member is right to draw attention to that issue. Misogyny and abuse, both online and offline, cause horrendous harm to women and girls across the UK. I commend her for her honesty and bravery in speaking out about her own experiences, and for her dedication to creating safe spaces for women in her constituency. We must create a safer world online for women and girls through the Online Safety Act 2023, mitigating the risk of illegal content and activity that is abusive or incites hatred.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
The Prime Minister
The previous Labour Government transformed the labour market with the national minimum wage. That was opposed by the Conservatives at the time, and sadly they do not seem to have changed. I was surprised by the comments of the Leader of the Opposition. I was surprised to see the new shadow Business Secretary say that the minimum wage was
“something that legislators pass to make themselves feel good.”
I disagree. I am very proud of the fact that this Labour Government have raised wages for 3 million low-paid workers, and I expect the Conservative party to welcome that.
George Freeman (Mid Norfolk) (Con)
The Prime Minister
I thank the hon. Member for welcoming the industrial strategy. I know that this issue is close to his heart; he has spoken about and acted on it for many years. The Budget sees record R&D investment, with over £20 billion next year, including over £2 billion to support our world-leading life sciences sector. Through the British Growth Partnership, we will crowd in pension fund investment to support innovative business, and we have launched our landmark pensions review to unlock billions of pounds of investment into the UK and boost growth and living standards across the country.
Catherine Fookes (Monmouthshire) (Lab)
The Prime Minister
The River Wye is one of our most important and iconic rivers, and we are working closely with the Welsh Government on that pressing issue. The destruction of our waterways should never have been allowed. That is why we have launched a water commission to attract investment and speed up infrastructure delivery, and why we have introduced legislation to enable tougher penalties and severe fines to crack down on polluters. I will ensure that my hon. Friend gets a meeting with the relevant Minister.
Sir Edward Leigh (Gainsborough) (Con)
The Prime Minister
We are listening to farmers, and the Environment Secretary and Treasury Ministers met with the NFU on Monday. We have taken a fair and balanced approach: the vast, vast majority of farms will not be affected. What I will also say is that having grown up in a rural community, I know that rural communities also need an NHS that is back on its feet, schools that their children can go to and homes that their families can afford to live in, but we will continue to talk to the NFU and others.
Mary Glindon (Newcastle upon Tyne East and Wallsend) (Lab)
The Prime Minister
Across the country, people made enormous sacrifices during covid. They missed weddings, births and deaths—really important moments in their and their families’ lives. In doing so, they saved the lives of people they will probably never meet. That was a collective effort, and unfortunately the party opposite, who set the rules, did not follow them themselves. It was a betrayal of those who did, and I think the Leader of the Opposition was wrong to describe the public anger and upset as “overblown”. I am sure she will want to clarify that at the first opportunity.
Llinos Medi (Ynys Môn) (PC)
The Prime Minister
What we did in last week’s Budget was ensure that no one would face tax rises in their payslip. We had to deal with the £22 billion black hole, but when we did so, we protected the smallest businesses and charities. We doubled the employment allowance to £10,500, meaning that 40% of employers will not pay employer national insurance contributions. Companies with four employees or fewer on the minimum wage will pay no employer NICs at all, and half of businesses that pay NICs will see no change or pay less after the Budget.
Phil Brickell (Bolton West) (Lab)
The Prime Minister
My hon. Friend is a champion for the north-west, and the Budget secured investment for vital transport projects to transform connectivity across the north of England and drive economic growth. That includes completing the Wigan to Bolton electrification —a really important moment on Northern Powerhouse Rail. Over £5 billion has been allocated to support everyday journeys for working people. By restoring economic stability and increasing investment, we are taking our country forward.
Victoria Collins (Harpenden and Berkhamsted) (LD)
The Prime Minister
The hon. Lady will be pleased to know that I have been to Berkhamsted a number of times, as we have very good friends who live there. I pay tribute to the work of the Swan Youth Project; too many young people—she cited some of them—are struggling with mental health and not receiving the support they need. That is why we will recruit an additional 8,500 mental health workers and are introducing long-overdue reforms to the Mental Health Act 1983. That is happening today. We will put more money into SEND, but we also need to look at reforming SEND, which I think and hope will be supported across the House. I will ensure that she gets a meeting with the relevant Ministers about that.
Clive Lewis (Norwich South) (Lab)
The Prime Minister
My hon. Friend is right to raise higher education. We inherited a sector facing severe financial challenges. Universities have suffered a real-terms decline in their income and the gap between disadvantaged students and their peers is the highest on record. We have had to take tough decisions to put that on a secure footing, but we are also taking the step of easing living pressures by increasing maintenance loans, which is worth an extra £414 per year.
Alex Brewer (North East Hampshire) (LD)
Jo Hamilton, my constituent and a former sub-postmistress, has long campaigned with Alan Bates for compensation following the Horizon Post Office scandal. Can the Prime Minister give an exact timeframe in which those who have been waiting more than a decade might finally be compensated?
The Prime Minister
I am grateful to the hon. Lady for raising this important issue. A commitment was made to properly compensate the victims of this scandal. Unfortunately, the Conservative Government, having made that commitment, regrettably did not allocate any money. Her constituents will be pleased to know that we have changed the approach. We have set out the compensation within the Budget—a transparent, accountable Budget—and we will make the payments as soon as we can.
Torcuil Crichton (Na h-Eileanan an Iar) (Lab)
The Prime Minister
Last week in the Budget we delivered the largest settlement for the Scottish Government in real terms since devolution. That includes £3.4 billion through the Barnett formula, a fuel duty freeze and an increase to the national living wage, benefiting my hon. Friend’s constituents and all those across Scotland. The result of the Budget is now clear. The SNP in power in Scotland have the powers and they now have the money, so they have no more excuses.
Ben Obese-Jecty (Huntingdon) (Con)
Does the Prime Minister think it is acceptable for a Back-Bench MP to suggest that the Leader of the Opposition represents “white supremacy in blackface” and is
“the most prominent member of white supremacy’s black collaborator class”,
with all the race traitor innuendo that that carries? If he does not, why has he not removed the Whip?
John Slinger (Rugby) (Lab)
As a semi-retired violinist and rock musician asking a semi-retired multi-instrumentalist, I feel confident that the Prime Minister shares my belief in the importance of music education. Does he agree that, as we unleash the potential of our country, we must invest in the educational infrastructure of creative arts subjects so that they are accessible to all, and will he visit my constituency, to see the great work of the schools there despite the inheritance that we received?
The Prime Minister
I am not sure about the description “semi-retired”, although that may be the wish of the Conservative party. What I know from personal experience is that music, the creative subjects and art are really important not only for the pleasure and knowledge that they give to children and young people but for the experience of working in groups and leadership. That is why we are determined to ensure that they are counted as subjects again in the curriculum, which will encourage many more schools to provide them in the curriculum and enrich the futures of children and young people across the country.
Mr James Cleverly (Braintree) (Con)
Before the election, the Prime Minister claimed that he would not put up national insurance contributions; he put them up. Before the election, he claimed that he would scrap tuition fees; he put them up. Before the election, he said that he would not tax family farms; he is taxing them. Will he address his party’s growing reputation for dishonesty by making good on his commitment to close the Wethersfield asylum accommodation centre in my constituency?
The Prime Minister
We are keeping the promises that we made in our manifesto. The right hon. Gentleman’s problem is that he cannot add up; if he could, he might be down on the Front Bench rather than up on the Back Benches. We will take up the issue in his constituency.
Douglas McAllister (West Dunbartonshire) (Lab)
Monday marked the seven-year anniversary of my constituent Jagtar Singh Johal’s arbitrary detention in India. Can the Prime Minister assure me that he and his Government will do all they can to secure Jagtar’s immediate release and bring him home?
The Prime Minister
Yes. We are committed to pushing the Government of India on this important case. The Foreign Secretary has raised it and will continue to do so, and we will ensure that we speak to my hon. Friend as we do so.
The Leader of the House of Commons (Lucy Powell)
On a point of order, Mr Speaker. Does the Leader of the Opposition want to correct the record, as she said in Prime Minister’s questions that the Chancellor did not mention defence spending in her Budget, yet the Chancellor mentioned it many, many times, including its allocation of £2.9 billion, which far exceeds our commitment?
Mr Speaker
It is not for me to correct the record—and that is not a point of order—but the right hon. Lady has done it.
Small Boat Crossings
(2 weeks, 1 day ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
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Chris Philp (Croydon South) (Con)
(Urgent Question): To ask the Secretary of State for the Home Department to make a statement on the recent increase in dangerous, illegal and unnecessary channel crossings by small boat?
The Minister for Border Security and Asylum (Dame Angela Eagle)
For too long, smuggling gangs have been undermining our border security and putting lives at risk, which is why the new Government have made it a top priority to address the crisis we inherited. Let us be clear about what that crisis entailed: small boat crossings in the first half of the year at their highest point on record, and over 100,000 arrivals in the five years prior; over 200,000 cases stuck in the asylum system, costing the taxpayer billions in support; and £700 million spent on a gimmick that sent just four volunteers to Rwanda.
When we entered government, we said it was time for grip, not gimmicks, and that is exactly what we are delivering. Since July, we have established the border security command, headed by experienced police chief Martin Hewitt. In the King’s Speech, we set out our intention to bring forward legislation to give the border security system stronger powers to investigate and prosecute organised immigration crime. We are recruiting 100 new specialist agency and investigation officers at the National Crime Agency to target and dismantle the criminal networks behind this phenomenon. We have also announced an extra £75 million to bolster border security, bringing our investment in the border security command over the next two years to £150 million. This Government’s border security funding boost will go towards a range of enforcement and intelligence activities and capabilities including covert technology as well as hundreds of staff and specialist investigators as we crank up the pressure on the smuggling gangs.
This is an international problem requiring international solutions. Since the general election we have intensified co-operation with partners overseas. We recently struck a new anti-smuggling action plan with G7 partners and the Prime Minister and Home Secretary both attended the Interpol general assembly in Glasgow on Monday to press the case for a much stronger and more integrated global response to organised immigration crime.
As well as tackling the issue upstream, we have taken action to speed up decision making and stepped up returns of those with no right to be in this country. The result of all this action is 9,400 returns since this Government took office including a 19% increase in enforced returns and a 14% increase in returns of foreign national offenders.
Sticking plasters and gimmicks have failed. The smugglers and traffickers have been getting away with it for far too long. It is time to show them we are serious, not with words, but with action. The security of Britain’s borders is paramount and under this Government it always will be.
Chris Philp
Shadow Home Secretary; thank you, Mr Speaker.
I am afraid the Government’s actions belie the reality. Since they came to office, 17,520 people have crossed the English channel, more than twice the number they have removed. That is one and a half times the number in the previous four months and 15% more than the same period last year. In October alone, last month, 5,417 people crossed, three times higher than in last October. Tragically, since this Government came to office 50 people have lost their lives or gone missing—more than in the previous 18 months put together—and, tragically, that includes 16 women and children.
This Government decided—they chose—to cancel the Rwanda scheme before it had even started. The first flight was due to take off, from memory, on 24 July but they cancelled it. Had they allowed that to go ahead and the scheme to continue, the deterrent effect would by now have started. We know it works, because it worked in Australia under its Operation Sovereign Borders about 10 years ago. We know the deterrent effect of returns works: it worked with Albania where we secured a 93% reduction in arrivals. Do not just take my word for it: the National Crime Agency said that law enforcement alone is not enough and we need an effective removal scheme to deter crossings. The Government’s announcements in Glasgow on Monday are simply not enough, and they repeat work that is under way already. The NCA and I are not the only ones saying that we need a returns deterrent. Just a few weeks ago, European Commission President Ursula von der Leyen encouraged member states to develop their own returns hubs outside the European Union. Will the Minister follow Ursula von der Leyen’s advice and urgently implement offshore processing?
May I also draw attention to the success that Belgium has had in stopping boats by the shore? Will the Minister ask France to do the same? Finally, because of their failings Labour are breaking their manifesto pledge to end hotel use, so will she pledge not to open any more hotels?
Dame Angela Eagle
I welcome the right hon. Gentleman —the shadow Home Secretary—to his new Front-Bench position. What a pleasure it is to be opposite him; I am going to look forward to jousting with him over the years.
On the Rwanda scheme, during the period from when it began to when we scrapped it, 83,500 people crossed in small boats. If that is a deterrent, the right hon. Gentleman has a peculiar view of the meaning of “deterrence” in the English language.
When I realised that we were doing this urgent question, I took the opportunity to look at the right hon. Gentleman’s record as a Home Office Minister. During his first stint at the Home Office—from September 2019 to 2021—23,849 people crossed the channel on small boats. During his second ministerial sojourn at the Home Office, 50,637 people crossed the channel in small boats, so his overall total is 74,486. In September 2020, the shadow Home Secretary answered an urgent question. He said that the last Government would
“not rest until we have taken the necessary steps to completely end these crossings.”—[Official Report, 2 September 2020; Vol. 679, c. 168.]
How did that go?
Mike Tapp (Dover and Deal) (Lab)
In 2018, 400 crossed the channel. Since then, more than 140,000 have crossed, the majority of them on the Conservatives’ watch. All they could introduce were ridiculous gimmicks, such as Rwanda, which cost taxpayers millions of pounds. Does the Minister agree that the new injection of cash into border security command is a better use of taxpayers’ money than the gimmicks that the Conservatives introduced?
Dame Angela Eagle
Yes, I agree wholeheartedly. The issue here is dealing with cross-border organised immigration crime. To do that, we have to talk to our international allies and co-operate with them across borders. That is exactly what the creation of the border security command will do, both operationally and politically, and we will see the results.
Lisa Smart (Hazel Grove) (LD)
I join the Minister in welcoming the new shadow Home Secretary to his place. Leading with the chin on the first full day in the job is an interesting approach, but if any situation highlights the manifest failings of the last Conservative Government, it is surely this. We in this House all want to stop the dangerous channel crossings. I am afraid that the last Government totally failed at that, so I am surprised we are discussing it today. The asylum backlog ballooned under the Tories. The human beings we are talking about who are in these small boats are often the victims of smuggling and trafficking gangs that profit from human suffering. Does the Minister agree that it is therefore imperative that we work in closer co-ordination than ever before with Europol and our French counterparts to smash these criminal networks? I urge the Government to address the root causes of the problem, not just the symptoms. We must empower the Foreign, Commonwealth and Development Office to provide robust aid to regions in an increasingly unstable world.
Dame Angela Eagle
The hon. Lady is exactly right. This is not about gimmicks, or having a parallel immigration policy that is unconnected with any of the treaties we have signed or international law; it is about doing the day job, and making sure not to leave an inheritor Government a 200,000-person backlog by not doing the day job. The issue with small boat crossings is dealing with organised, internationally focused immigration crime, which often originates in countries very far away. To tackle this issue, we have to co-operate with the forces of law and order operationally, across borders, and that is what this Government are determined to do.
Shaun Davies (Telford) (Lab)
May I welcome the Government’s approach on this issue, and the 23% increase in enforced removals since last summer? I agree with the Minister that the way to deal with this issue is to smash the criminal gangs. I urge her to consider what attention she gives to the shadow Home Secretary who, when he was a Home Office Minister, imposed hotels on my constituency, and was the Chief Secretary to the Treasury for Liz Truss during the mini-Budget.
Dame Angela Eagle
The shadow Home Secretary’s record in office is a matter that we may well keep coming back to. I agree with the observations that my hon. Friend makes.
Dame Karen Bradley (Staffordshire Moorlands) (Con)
Everybody in this House wants an end to small boat crossings and the risks that people take to cross the channel. The Minister has announced a number of measures this week. When does she expect those measures to start producing a reduction in crossings? Will she commit to keeping the Select Committee informed on progress?
Dame Angela Eagle
It is my first chance to congratulate the right hon. Lady on her election as Chair of the Select Committee. I look forward to coming before her Committee whenever she wishes to talk to me. The Department certainly wishes to keep her informed about what is going on.
There has been a significant shift in international co-operation, what with the G7 collaboration on smuggling and the dialogues of the European Political Community, of which there is a meeting tomorrow, at which we hope there will be some announcements. The Government have also been working on bilateral memorandums of understanding and action plans across Europe to achieve a step change in cross-border co-operation, which is the key to beginning to tackle the awful criminal smuggling activity.
Chris Murray (Edinburgh East and Musselburgh) (Lab)
In the five years before the election, I worked on preventing human trafficking in Scotland, including with many of the victims who came on small boat crossings. They have gone through the most appalling abuse that chills the soul. Does the Minister agree that public money is far better spent on smashing the gangs and freeing the victims than on a Rwanda plan that was never going to work?
Dame Angela Eagle
Yes, I agree profoundly with my hon. Friend, which is why the new Government have changed tack in this area. I am sure that we will see the results in due course.
Suella Braverman (Fareham and Waterlooville) (Con)
The Government have pledged millions of pounds to smashing the gangs, on top of the millions of pounds that we spent on stopping the boats. The Government have pledged more drones on the channel and to fast-track cases, just as we deployed drones on the channel and fast-tracked cases. The Government have set up a border security command, which sounds remarkably similar to the small boats operational command that we set up when in government. Other than scrapping the one thing that would have worked—that is, the deterrent—what have this Government done that is different that is actually going to stop the boats?
Dame Angela Eagle
First, the border security command is operationally completely different from the command on the channel, which is deliberately there to try to save life and find out what is going on on the water. Operationally, the border security command will co-operate across borders in a very different way. If I were the right hon. and learned Lady, I would not be boasting about the colossal morass of wasted expenditure that the Rwanda scheme represented—£700 million down the drain, with plans to spend nearly £10 billion on the plan over the next few years. It was a gross waste of money that did not deter a single boat crossing.
Ms Polly Billington (East Thanet) (Lab)
The gangs that run this vile trade care only for their profits, not for the lives that they put at risk. Will the Minister reassure the House and my constituents in East Thanet that the border security command will do everything to break the evil smuggling gangs and bring the ringleaders to justice?
Dame Angela Eagle
Yes; the point of the increase in operational co-operation across borders is that if we cannot bring people to justice in our jurisdiction, we can ensure that information is swapped in real time, so that they can be brought to justice in other jurisdictions. There will be a step change in that kind of international co-operation, which will deliver results.
Mr James Cleverly (Braintree) (Con)
Will the Minister describe clearly and unambiguously, without bluster, the difference in function between the border security command and the small boats operational command?
Dame Angela Eagle
The border security command is not focused only on channel crossings; it is much more about using our intelligence capabilities and our operational arm to co-operate across borders, with other jurisdictions and in real time, to ensure that organised criminal gangs can be tracked, apprehended and dismantled. We have given £150 million extra to the border security command to start to do that work. The command on the channel is about saving lives and co-operating with the French once people have reached the beaches. It is far too late once people have reached the beaches; we need to go far back to the origin countries, and do a lot more work there.
Amanda Martin (Portsmouth North) (Lab)
Will the Minister acknowledge the real concerns felt by people in the UK and in my city of Portsmouth about the small boat crossings? Does she agree that the 23% increase since last summer in enforced returns of people who have no right to be here shows what can be done when grown-ups are in the room, and when a Government focus on getting a grip?
Dame Angela Eagle
I absolutely agree with the points my hon. Friend made.
Monica Harding (Esher and Walton) (LD)
There are 120 conflicts globally, which, along with other factors such as poverty, food insecurity and the effects of climate change, cause populations to move. Does the Minister agree that, as my hon. Friend the Member for Hazel Grove (Lisa Smart) pointed out, it is essential that we look at the root causes of immigration? Does she therefore support an increase in the development and aid budget, rather than the cut in official development assistance in last week’s Budget?
Dame Angela Eagle
In the end, any work that we can do upstream, whether in respect of development or aid, will deal with some of the causes, some of which the hon. Lady rightly points out. We have to stay within the bounds set by the Budget, but I assure her that I regard prevention as much better than cure.
Alistair Strathern (Hitchin) (Lab)
This Government inherited a situation on our borders in which there was failure on all fronts. There were record numbers of tragic deaths in the channel, millions wasted on the failed Rwanda gimmick, and criminal gangs profiteering off exploiting our borders. Will the Minister reassure my constituents that, unlike the previous Government, we will not waste time on political gimmicks, but will focus on the practical measures that can bring an end to the persistence of these damning failures?
Dame Angela Eagle
I assure my hon. Friend that we will do exactly that. It is why we have seen a step change in returns since this Government took office. There have been 9,400 in that period, which includes a 19% increase in enforced returns and a 14% increase in returns of foreign national offenders. We will ensure that our immigration system has integrity.
Pete Wishart (Perth and Kinross-shire) (SNP)
Sometimes, when listening to the exchanges between Labour Front Benchers and the Conservatives, we can forget that we are dealing with real people who are fleeing the most unimaginable horrors. Aside from the bizarre Rwanda plan, why is the Minister continuing with the same failed approach as the Tories? The Government continue to spend millions on hotels, drones and various bits of high tech; how about trying something different? How about looking at safe and legal routes, in order to smash the gangs? And how about showing some compassion?
Dame Angela Eagle
I am not going to get into a competition with the hon. Gentleman about compassion. We have a duty to ensure that asylum seekers who come to our shores are properly processed and dealt with, and integrated in our society if asylum is granted. [Interruption.] Despite the hon. Gentleman chuntering away, I am not going to stand here and say that we will let people smugglers, who exploit people for money, decide who comes to our country. We have to stop this trade; that is not at odds with treating those who arrive here with compassion.
Jo White (Bassetlaw) (Lab)
When I stood for election on 4 July this year, my commitment to my voters was that we would smash the criminal gangs and stop the small boats. At that point, the number of small boat crossings was 6% higher than in the worst ever year, 2022. Does the Minister welcome the data that shows that the number is now 9,000 lower than in 2022?
Dame Angela Eagle
Yes, but the House has to have patience. There are no magic wands to wave in this policy area, and there are no fantasy policies now that we have got rid of the Rwanda scheme. There is hard, day-to-day operational work to try to get the system that we inherited—which is in complete chaos, with huge backlogs—back into some kind of order, so that we can run it properly, fairly and efficiently. That is what we are focusing on.
Mr Andrew Snowden (Fylde) (Con)
I recently listened to an interview with a retired former inspector of borders and immigration, who was responding to the Government’s announcements. He outlined his concerns about the impact of the measures on their own, without an effective deterrent, and about how the Government will measure their success—the percentage or volume by which they want to see small boat crossings reduced after the announcements. What percentage reduction in small boat crossings would the Government view as success?
Dame Angela Eagle
I am not getting into a numbers game in the House. We are trying to deal with and dismantle a trade that was allowed to become established and industrialised on the previous Government’s watch. I am not going to stand here and say, “It’ll happen overnight,” but we will make progress.
Fred Thomas (Plymouth Moor View) (Lab)
Folks in Plymouth are really interested in how the Government will solve this big problem. They will welcome the increase in money towards dealing with the problem and the increase in returns. Another thing they want is constructive, lively debate with ideas in this place. Unfortunately, the Opposition seem so devoid of ideas that they will bang on for another four years about their landmark Rwanda policy to stop the boats—a failed scheme that got firmly rejected by the electorate. Does the Minister agree that the first sign of insanity is trying the same thing over and over again and expecting a different result?
Rupert Lowe (Great Yarmouth) (Reform)
In the Home Office annual report, it is confirmed that in 2022-23 £3 billion was spent on hotel costs for illegal migrants, averaging £8 million a day. The cruel inheritance tax assault on British family farms and businesses is estimated eventually to raise £520 million a year. Do the Labour Government need to rethink their spending priorities urgently?
Dame Angela Eagle
No. We have just had a Budget, which we are in the middle of debating and will be voting on, and I expect that that will be the way we go forwards.
Melanie Onn (Great Grimsby and Cleethorpes) (Lab)
The 23% increase in returns of people who have no right to be here is a really positive step in giving the public confidence in our systems. What measures are in place to continue to ensure that our processes remain robust and that the trajectory of returns continues?
Dame Angela Eagle
We are ensuring that the enforcement part of the Home Office that deals with returns is given the resources it needs to do that job, but to make it even more successful, we have to engage with those countries to which we wish to return people so that we can have papers issued. Again, the significant shift in international co-operation is what will deliver that.
Dr Andrew Murrison (South West Wiltshire) (Con)
If Rwanda was a gimmick, why are Germany, Austria, Bulgaria, Cyprus, the Netherlands, Poland and Romania looking at similar schemes? Given the number of crossings and deaths in the channel, would it not, with hindsight, have been wise at least to have allowed the Rwanda scheme a trial run?
Dame Angela Eagle
Those countries are not considering a Rwanda scheme; they are all saying that they will stay within the confines of international law. The Rwanda scheme definitely tore up international law, and it was planned to spend nearly £10 billion up until 2027 on trying to remove 250 people a week from this country, and to spend nearly £3 billion on extra detention camps for them in this country. I do not think that represents British values or good value for money.
Laurence Turner (Birmingham Northfield) (Lab)
Given that only 3% of people who arrived by small boats between 2018 and June 2024 have been returned, a period of reflection from the Conservative party on this issue would be welcome. Does the Minister agree that a Government who have dispensed with gimmicks and who focus on the day job are delivering that progress on returns?
Dame Angela Eagle
Yes, but let us not underestimate the fact that under the Illegal Migration Act 2023 nobody who arrived in that way could be processed, so 118,000 people are waiting to be processed because the previous Government stopped the system dead. We have to get the processing system going again—that is what we are doing—so that we can get the flow of decisions, return those who are not entitled to be here and integrate those who are entitled to stay.
Sir Julian Lewis (New Forest East) (Con)
The Government have a mandate for trying out their approach, and I wish them well. I have always felt that unless the boats are intercepted and turned back near the start of their journey, nothing will deter people from using that method. Will the Minister, whom I respect greatly, explain how it is possible to smash gangs who operate in other jurisdictions once they get to the point where they withdraw their headquarters to countries where there is no possibility of co-operation with the authorities in charge of those states?
Dame Angela Eagle
Well, getting to that level of withdrawal would be a fantastic development that would put incredible pressure on many of the supply lines currently being used; if we could get to that stage, we would have already made significant progress. The answer to what the right hon. Gentleman is talking about is international co-operation to put the maximum pressure on this terrible international trade in human lives and exploitation. I am glad that he is giving me a little bit of time to prove that we can make a difference.
Sarah Coombes (West Bromwich) (Lab)
People in West Brom are appalled by these criminal smuggling gangs. Does the Minister agree that the last Government wasted £700 million on the totally failed Rwanda scheme? Could she set out how the new Government are going to fix the situation?
Dame Angela Eagle
Yes, and the repurposing of some of that money and resource that has not been lost is funding the new approach.
Shockat Adam (Leicester South) (Ind)
Does the Minister agree that the loss of life is colossally too high on these channel crossings, including the loss of a two-year-old child just the other week? Does she also agree that we should reopen safe routes so that we can treat those coming to this country with the dignity and respect that they deserve?
Dame Angela Eagle
I do not believe that safe routes would stop people from attempting to come over the channel in small boats. I have some sympathy with the idea of safe routes, but I do not think they would stop this trade. For example, 1,500 Indians came across, and we have a visa regime with the Indians. The highest nationality for small boat arrivals this year is the Vietnamese. Again, it is not always about people who are asylum seekers coming over; it is people who do not have a right to be here but are paying to come here. Safe routes would not solve that problem.
Mark Ferguson (Gateshead Central and Whickham) (Lab)
The shadow Home Secretary referred to the lives lost in the channel—every single one of them is a tragedy —but does the Minister agree that his trying to make a political point about those deaths, as he appeared to do, is beneath the Conservative party, as were gimmicks such as the Rwanda scheme?
Dame Angela Eagle
Yes, I agree. The loss of life in the channel this year has been the highest on record, and that is because more pressure is being put on the gangs, the boats are being overloaded and there is more anarchy on the beaches in France. Those are all things that we have to try to deal with in co-operation with our French colleagues.
Wendy Morton (Aldridge-Brownhills) (Con)
My constituents want to see an end to the small boat crossings and an end to the use of hotels for asylum seekers—as pledged in the Government’s manifesto. Will the Minister undertake to ensure that, where hotels have seen asylum seekers moved out, more are not put back in?
Dame Angela Eagle
The issue with hotels and other dispersal accommodation is that we have inherited a backlog. Owing to the way in which the Conservatives ran the system, there was no processing of asylum seekers, who then had to be put up in hotels. Hotels are temporary, not a solution. We will do our best to get out of dealing with hotels as quickly as possible by getting the system up and running and processing those who are making claims, so that we can get them either approved and integrated or returned.
Alex Ballinger (Halesowen) (Lab)
The Government came to power this year in the worst year on record for small boats crossings, which were 6% higher than in the previous record year of 2022. That was the legacy of chaos left by the last Government. There is no room for complacency, but does the Minister agree that we should be welcoming the now 20% lower level of small boats crossings this year compared with 2022?
Dame Angela Eagle
I agree that the first six months of this year were the worst on record. There were then a quiet three months, and now there has been a huge increase, not least because of benign weather conditions. I do not want to get into monthly figures. We need to bear down on the organised criminality that is perpetrating the trade, to disrupt it and deal with it that way.
Jeremy Corbyn (Islington North) (Ind)
Does the Minister recognise the distinct lack of humanity about this urgent question and the discussions surrounding small boats and migration? Does she not recognise that those people who risk all to get into those very dangerous boats and cross the chancel are doing so in an act of desperation? The lack of a safe routes system across Europe has created a market for people traffickers. Instead of the current approach, does she not think it necessary to look seriously at safe routes for asylum seekers, to avoid the tragedy of all these deaths in the channel and, for that matter, in the Mediterranean?
Dame Angela Eagle
I said earlier that safe routes would not stop all the channel crossings. There is now an industrialised system run by organised immigration criminals. The Vietnamese would never have a safe route into the UK—there is no visa system—yet they now comprise 20% of the people crossing on small boats. With all due respect to the right hon. Gentleman, I do not think that safe routes would solve the problem.
Jessica Toale (Bournemouth West) (Lab)
The last Government were responsible for an asylum backlog so large that they ended up spending millions of pounds of taxpayers’ money every day on asylum hotels, including in my constituency. As the Minister said, we are now dealing with that legacy, and I welcome her statement. Does she agree that we will take no lessons from the Conservative party, and that we will continue to make progress towards our manifesto commitment to bring down the backlog and end hotel use?
Gregory Stafford (Farnham and Bordon) (Con)
I think there is unanimity in the House that this is a moral issue. When I raised the issue of deterrence with the Home Secretary at her last statement on 22 July, she seemed to agree that we needed a deterrent. Since then, the Government do not seem to have brought forward any specific deterrence. If not the Rwanda scheme, will the Minister look at the schemes that other European nations are considering to see whether we can deter the small boat crossings?
Dame Angela Eagle
The way to deter the small boat crossings is to deal with those who are organising and profiting from that immoral trade. That is what we are doing.
Connor Naismith (Crewe and Nantwich) (Lab)
The shadow Home Secretary, the right hon. Member for Croydon South (Chris Philp), and Conservative Members are still banging the drum for the failed Rwanda gimmick. Does the Minister agree that if the previous Government were so confident that that policy would work, they would not have called an election before that theory could be put to the test?
Dame Angela Eagle
My hon. Friend makes an intriguing point, given that Conservative Members have said repeatedly that they were about to start the Rwanda scheme the week after the election, and that all of a sudden it would work and be perfect—after 83,500 people crossed in small boats knowing that the scheme was legislated for and in place. I suspect, somehow, that the date of the election might have had a bit to do with the fact that they realised the Rwanda scheme would fail.
Lee Anderson (Ashfield) (Reform)
The Minister is claiming credit for an increase in deportations of people with no right to be in this country. I want an approximate figure, please, of how many of the 9,400 people who have been sent back since the Labour Government came in arrived here in small boats since 2018?
Dame Angela Eagle
Given that the Conservative party processed virtually nobody who came over in a small boat, they are still in the asylum backlog that we are attempting to deal with.
Laura Kyrke-Smith (Aylesbury) (Lab)
I am pleased to see this Government taking swift action to tackle the small boats crisis, including scrapping the Rwanda scheme, which was not only ludicrously expensive but inhumane and ineffective. Will the Minister confirm that it is possible to manage our borders in a way that is both effective and humane, and that we will do that?
Dame Angela Eagle
That is certainly the balance that this Government are aiming to achieve.
Sir Ashley Fox (Bridgwater) (Con)
The Minister has said that her policy to smash the criminal gangs will reduce the number of migrants crossing the channel. Can she give the House her estimation of when that policy will start to work?
Dame Angela Eagle
I said in an earlier answer that there are no magic wands in this area. Tough operational processing and international co-operation will begin to bear down on this, and work by the National Crime Agency and by prosecutorial authorities, often cross-border in different jurisdictions. The fact that we have made such a good start with international co-operation and the significant shift in attention here will bear down on this, but I will not stand at this Dispatch Box and pretend that there is an easy timeframe or answer for when that will have the effect that we all want it to have. We will bear down on it and we will make progress.
Steve Yemm (Mansfield) (Lab)
At a time of highly stretched resources right across Government, thanks to the mess in the public finances left by the Conservative party, my constituents will be pleased that £75 million has been secured for further investment in the Border Security Command. Does the Minister agree that it is a far better use of taxpayers’ money than paying people to go to Rwanda or housing them in hotels at great expense?
Dame Angela Eagle
Yes, it is advisable to try to deal with the immediate causes of the problem—organised immigration criminality—as well as bearing down on the longer-term causes, which often are about political stability in other areas of the world.
Jim Shannon (Strangford) (DUP)
I thank the Minister for her answers. I want to take a slightly different look. I welcome the fact that smugglers will now be treated using terrorism powers, as it is my firm belief—and the belief of this House, I think—that the continued abuse of the asylum system is tantamount to an invasion. Can the Minister assure us that those who come across the Northern Ireland border will also be subject to the terrorism provisions?
Dame Angela Eagle
A border security Bill will be introduced. Perhaps the hon. Gentleman will want to serve on the Committee, so that he can be certain that the points he just made are accurately reflected by the Government in that Bill.
Luke Myer (Middlesbrough South and East Cleveland) (Lab)
One of the most colossal failures under the previous Government was the chaos in the channel and the associated backlog in the system, yet the Conservatives seem to have come here today to tell the British people that they had it all under control. Can the Minister reassure my constituents of the serious steps she is taking to disrupt the gangs, speed up returns and end this chaos.
Dame Angela Eagle
Yes, my hon. Friend’s constituents can be assured that a great deal of work is going on and more resources are being applied. A lot more intelligence is being gathered, much of which cannot be discussed publicly. We are on it.
Kevin McKenna (Sittingbourne and Sheppey) (Lab)
I strongly welcome the Government’s focus on tackling the root causes of organised crime behind the small boats, rather than the gimmicks of the previous Government. Across Kent, the criminal gangs are fuelling a rise in organised crime, and in my constituency that is pushing up rural crime, street crime and antisocial behaviour. Will my hon. Friend ensure that the new Border Security Command works closely with Kent police to deal with the effects across the whole of Kent and the wider country?
Dame Angela Eagle
I can give my hon. Friend that assurance. Some areas have suffered particular pressure from this phenomenon over the years, and Kent is one of them, so I am acutely aware of the pressure that he and the local authorities in that area are under.
Dave Robertson (Lichfield) (Lab)
Over the past 14 years, the Conservative party saw this issue become a growing crisis. Conservative Members have spoken much today about how we need a deterrent, but does the Minister agree that, for someone who is willing to get into a vessel of questionable seaworthiness to cross one of the busiest shipping lanes on the planet, a 3% chance of a trip to Kigali is not a deterrent? The only way of getting a handle on this is to go back to where the problem originates. Waiting for people to get to the channel is delaying the response and creating the crisis that the Conservatives oversaw.
Dame Angela Eagle
I agree very much with my hon. Friend’s observations, and so do the figures. Between the date of the announcement of the Rwanda scheme and the date of the last general election, 83,500 people came across in small boats. [Interruption.] The right hon. Member for Croydon South (Chris Philp) says that it had not started then. The Conservatives began by saying that Rwanda would be a deterrent when their Bill was published, and then every time it made no difference, they took it back and said, “It will work, it will work.” It would never have worked. It cost £700 million, and they had budgeted—but not budgeted—for nearly £10 billion of expenditure by the end of that scheme.
John Slinger (Rugby) (Lab)
Given that at the end of 2022, under the last Conservative Government, the asylum backlog had reached 166,261, an elevenfold increase in 12 years, does my hon. Friend agree that Conservative Members—who are very small in number for their own urgent question—are exhibiting a high degree of audacity?
Dame Angela Eagle
They are indeed, and perhaps they should also be reminded that returns collapsed on their watch as well.
Personal Statement
(2 weeks, 1 day ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate
Mr Speaker
Order. Before I call the hon. Member for Ashfield (Lee Anderson) to make his personal statement, I remind the House that such statements should be heard in silence and without interruption.
Lee Anderson (Ashfield) (Reform)
With permission, Mr Speaker, I will make a personal statement, in compliance with the findings of the Independent Expert Panel in its report. I accept the findings of the panel and the Parliamentary Commissioner for Standards in full and without reservation.
On 23 November 2023, at the Derby Gate entrance, I was involved in an incident with a security guard. During the incident, I spoke to the complainant in a manner that was totally unacceptable, and which including swearing and other language that goes against the House of Commons bullying and harassment policy.
I would like to apologise to the complainant and to the House for my behaviour. Our security staff do an incredible job and should always be treated with the utmost respect. An MP’s behaviour must always be of a higher standard. I give you, Mr Speaker, and the House my firm assurance that I have learnt significant lessons through this process, and a firm undertaking that such behaviour on my part will never happen again.
Points of Order
(2 weeks, 1 day ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate
John McDonnell (Hayes and Harlington) (Ind)
On a point of order, Mr Speaker. Have you received any notice of a statement from the Government? I know that a number of Members have written to the Foreign Secretary, in particular, about the case of the writer and human rights activist Alaa Abd el-Fattah, who has served five years in an Egyptian prison for organising human rights protests. He was meant to be released in September but has still not been. His mother, Laila, has now been on hunger strike for four weeks, and many of us are concerned about the risk to her life. If a statement is not forthcoming, perhaps those on the Treasury Bench could urge the Government to make firm representations to Egypt to release Mr Abd el-Fattah.
Mr Speaker
The right hon. Gentleman is in danger of answering his own point of order. I have received no notification of a statement, but I am sure that those on the Treasury Bench will have taken his point on board. Let me also say to him that I know he will not rest there on this matter; that he will use all other avenues available to him ensure that the profile of the case is raised—I would expect nothing else.
Zarah Sultana (Coventry South) (Ind)
On a point of order, Mr Speaker. This concerns the lack of response to my cross-party correspondence addressed to the Foreign Secretary, the Secretary of State for Business and Trade, and the Defence Secretary, dated 13 September 2024. In that letter I, along with 36 parliamentary colleagues, requested clarification on the Government’s decision to exempt offensive F-35 fighter jet components from the 30 out of 350 licences that they have suspended for items that could be used in Israel’s genocidal assault on Gaza, as there is a clear risk that they may be used to commit or facilitate a serious violation of international humanitarian law. Given the significance of the issue and its implications for the UK’s international obligations, it is imperative that MPs receive a comprehensive response. Having to wait two months for a reply raises questions—
Mr Speaker
Order. I have absolutely got the point of order. Obviously, this is not my responsibility, but I take it seriously if any Member of this House writes to the Government and does not receive a timely reply. I am here to defend whoever the correspondence is from and ensure that they receive a reply. I am entirely convinced that those on the Front Bench will have heard what has been said and will already be looking to get that reply. If not, the hon. Lady should inform me and we will raise it again. I thank her for her point of order.
Bills Presented
Financial Assistance to Ukraine Bill
Presentation and First Reading (Standing Order No. 50)
Darren Jones, supported by the Prime Minister, James Murray, Tulip Siddiq and Emma Reynolds, presented a Bill to make provision for loans or other financial assistance to be provided to, or for the benefit of, the government of Ukraine.
Bill read the first time; to be read a second time on Monday 11 November, and to be printed (Bill 48) with explanatory notes (Bill 48-EN).
Armed Forces Commissioner Bill
Presentation and First Reading (Standing Order No. 57)
Secretary John Healey, supported by the Prime Minister, Secretary Angela Rayner, the Chancellor of the Exchequer, Secretary Yvette Cooper, Secretary David Lammy, Secretary Hilary Benn, Secretary Ian Murray, Secretary Jo Stevens, Dan Jarvis, Maria Eagle and Luke Pollard presented a Bill to establish, and confer functions on, the Armed Forces Commissioner; to abolish the office of Service Complaints Ombudsman; and for connected purposes.
Bill read the first time; to be read a second time on Monday 11 November, and to be printed (Bill 124) with explanatory notes (Bill 124-EN).
Child Criminal Exploitation (No. 2) Bill
Presentation and First Reading (Standing Order No. 57)
Victoria Atkins presented a Bill to create an offence of child criminal exploitation; and for connected purposes.
Bill read the first time; to be read a second time on Friday 29 November 2024 and to be printed (Bill 75).
Horticultural Peat (Prohibition of Sale)
(2 weeks, 1 day ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate
Sarah Dyke (Glastonbury and Somerton) (LD)
I beg to move,
That leave be given to bring in a Bill to provide for the prohibition of the sale in England of horticultural peat by the end of 2025; to provide for certain exemptions from that prohibition; and for connected purposes.
Let me begin by paying tribute to the right hon. Theresa Villiers, the former Member for Chipping Barnet, who previously worked hard to bring this Bill through Parliament, and by thanking Rebecca Pow, the former Member for Taunton Deane, who also endeavoured to secure a ban on the sale of peat.
Somerset is one of only two counties in England where peat extraction still takes place. The Somerset levels and moors are the second largest area of lowland deep peat in England, containing 11 million tonnes of carbon. However, drained deep peat is a major source of greenhouse gas emissions and, along with peat extraction, could be responsible for as much as 255,000 tonnes of CO2 per year, according to a 2023 report published by eftec. Somerset’s peatlands are extremely rare and valuable habitats for wildlife. They are the perfect place for plants such as the sundew and the marsh violet, which in turn support invertebrates and bird populations.
Banning the sale of peat and protecting our peatlands both at home and abroad is crucial. I say “abroad” because we offshore most of our peatland emissions by importing about 60% of the peat used in horticulture in the UK. All the major parties agree with the proposal for a ban. The Liberal Democrats have pledged to restore peatlands and ban the use of horticultural peat, Labour’s 2024 manifesto promised to expand nature-rich habitats such as peat bogs, and the last Conservative Government made several attempts, despite failing to ban peat in their 14 years in office.
In 2011, the previous Government said that they wanted to reduce the amount of peat in compost voluntarily by 2020, but as the amount of peat fell by only a quarter in the subsequent years, the threat of legislation was introduced. A consultation by the last Government also revealed how popular a ban was, with 95% of respondents favouring a ban on retail peat by the end of the last Parliament. However, no legislation has been introduced that would ensure a ban on selling peat, so a vast amount of uncertainty remains in the industry today.
I want to be absolutely clear how important it is that the horticultural industry is considered and consulted before any legislation seeking to ban peat is introduced. But banning horticultural peat is the right thing to do, and that is already supported by a vast number of people in the industry, and, if done correctly, will bring huge opportunities for British horticulture. In September this year, professional growers, gardeners, nursery owners, compost manufacturers, retailers and supporters of peat-free horticulture wrote to the Prime Minister demanding a sale ban. The signatories included B&Q, Co-op supermarkets, Chris Beardshaw, Alys Fowler, Chris Packham, the Soil Association, the National Trust, the Wildlife Trust, CPRE, Evergreen Garden Care, Vitacress and the Royal Horticultural Society, to name just a few.
I recently visited Durston Garden Products, just outside Street, which is the largest manufacturer of growing media in southern England. It produces 6 million bags a year, and it supports a ban on the sale of peat. Three quarters of the bags that Durston currently produces are peat free; five years ago, the figure was just one quarter. That is because Durston, like most of the industry, took the previous Government at their word when they committed to banning the sale of peat. Durston has done what it believed was the right thing for the business and for the environment, and it has put in the time, effort and money to develop alternative growing media that can outperform peat. As it stands, however, the investment that Durston has made to prepare for a peat-free market has been for nothing.
Britain is a gardening nation. In fact, there are 30 million gardeners in the country, and 70% of them are interested in gardening more sustainably. The positive reaction to my Bill being announced demonstrates the feeling in the industry. The chair of the Growing Media Association, Simon Blackhurst, told the industry’s main trade magazine, Horticultural Week, that there is currently an “unfair commercial landscape”, as
“peat based growing media is cheaper than peat free.”
Southern Trident’s Steve Harper said:
“There really is no argument for delaying a retail peat ban”.
Floralive’s Sean Higgs said:
“Everyone is expecting it now (or believes it’s already in place)—to reverse would be counterproductive to the industry and undermine it on several counts.”
There are many fantastic examples of businesses moving towards being peat free. One such business is Kelways in Langport, in my constituency, which no longer sells compost containing peat and understands the shift that needs to take place. Moving towards being peat free would help the Government to achieve their aim of moving towards a circular economy. Peat-free compost manufacturers want to keep supply chains close to home, and some, such as Miracle-Gro, have their own on-site waste processors to produce compost. Others have partnerships with local forestry and wood processing businesses. RocketGro in Somerset processes digestate, a by-product of sustainable energy, into peat-free compost.
Advances in technology are clear evidence of the success of peat-free alternatives. The Royal Horticultural Society is set to be 100% peat free by the end of 2025, and is now at the end of a second successful year of trials funded by the Department for Environment, Food and Rural Affairs. The RHS has grown millions of plants peat free in partnership with eight major wholesale growers, and developed practices to help the wholesale industry transition smoothly. By ending the use of horticultural peat at home, we can reduce our reliance on foreign, imported plants grown in peat, and support British peat-free growers. I am fully aware that any ban would require exemptions, time for businesses to transition, and support from the Government to help businesses move forward, but setting dates in stone through legislation would remove the uncertainty that is damaging the industry and reducing opportunities.
I turn to the impact that a ban on peat would have on peatland. Peat grows at a rate of 1 mm per year but can degrade by 1 cm per year if it is in bad condition, which, sadly, is the case for 86% of our peatlands. As I touched on earlier, they are amazing and rare habitats. Given our current knowledge of the damage that peat extraction does to nature, the environment and the land around us, there is simply no excuse for not changing course. Somerset faces ever more devastating flooding every winter, and the degradation and destruction of our peatlands does little to worsen its impact by reducing peatland’s ability to absorb excess rainwater and act as a natural flood defence, as an intact peat bog would do. Whereas preventing the sale of peat opens up opportunities for world-beating peat alternatives, stopping peat extraction opens up opportunities for peat restoration, such as creating new jobs by reskilling the existing workforce to use their expertise in managing peatlands for restoration.
The destruction of these precious, important and beautiful habitats must stop. As many experts, the public and politicians alike have outlined, we must not miss our chance. I urge the House to support this Bill today and ensure that we take the steps that would prevent the release of thousands of tonnes of carbon, help us move towards a circular economy, open up opportunities for British horticulture and protect precious peatlands.
Sir Christopher Chope (Christchurch) (Con)
I am not going to oppose the right of the hon. Member for Glastonbury and Somerton (Sarah Dyke) to bring in a Bill, because I believe in the right of Members to bring forward whatever Bills they want. Most of them are ill conceived, and I have spent much of my time in this place attacking Bills that would have unintended consequences. I think the hon. Lady’s Bill will fit into the category of Bills that have good intentions, but would have unacceptable unintended consequences.
It will not go unnoticed that this Bill is a full-frontal attack on British horticulture, and that it is being promoted by none other than the Liberal Democrats. The hon. Lady referred to the previous Bill, which I spoke against on 16 April. It is a salutary reminder of the work of democrats in this country that none of the 12 Members of this House who supported that Bill is still a Member of the House—the electorate gave their verdict on the ill-conceived support for it. I am delighted to say today that a number of my new and not so new colleagues have said to me, “Why can’t you divide the House and oppose this Bill?” I say to them, including my hon. Friends the Members for Rutland and Stamford (Alicia Kearns) and for Mid Buckinghamshire (Greg Smith), that we should allow the Liberal Democrats to stew in their own juice and bring forward their Bill, so that it can be criticised and never reach the statute book.
One would have thought from the remarks of the hon. Member for Glastonbury and Somerton that she was a supporter of the Horticultural Trades Association. Yesterday, the association ran an event in this House, and so many people attended that the free indoor plants on offer were all scooped up about halfway through. If the hon. Lady went to collect her free plants, she obviously missed the opportunity to talk to representatives of the association, who believe that her proposals would completely undermine British horticulture. What is most important—the HTA makes this point—is that we should have a level playing field with European growers.
We want to grow more trees. Too few trees are being home-grown, and too many of them are being imported. Likewise, we want to promote garden products, but too many of them are being imported. A very large proportion are being imported from Holland, because, far from having a peat-free environment, Holland is the fastest-growing export market for peat coming into our country. Holland is also one of the largest importers and exporters of peat, and it gets a lot of its peat from Germany, Estonia, Belgium, Latvia and Sweden.
The Dutch use peat to make horticultural products, which are then sold into our market because those products are more acceptable to consumers, not least because they tend to last longer, as peat is a substance that enables plants to retain moisture and water a lot longer than products that are peat free, such as coir. Some of the people who promote peat-free products do not seem to realise, when they talk about coir as a substitute, that it is produced mainly in the far east, particularly in Sri Lanka, and that it has to be washed and de-salted before it can be prepared for horticultural use and then has to be transported halfway across the world. That is not an ecologically friendly way of producing a peat substitute.
There is another dimension to the issue of peat. What proportion of it is used in horticulture? It is a very small proportion. I am told that about 95% of the peat consumed in the world is used for peat fires. It is put into domestic boilers and mega-incinerators or used as a substitute for coal or even natural gas. By concentrating on just one aspect of the use of peat, in horticulture, we are ignoring the much larger problem of the burning of peat for fuel. I have looked up how easy it is to buy peat for fuel in this country, and the latest information is that I could get a pallet of 10 or so bags of peat delivered to my home for £260. That peat comes from exactly the same source as peat for agriculture. Why are we having a go at the use of peat in horticulture and agriculture when we could be dealing with the much larger issue of the extraction of peat for heating our homes?
This is a sensitive, emotional subject, but we need to have some hard-headed realism around it. If you, like me, Madam Deputy Speaker, support British horticulture, you should be very much opposed to this Bill, because it is a full-frontal assault upon the viability of our horticulture industry and will result in less choice for all those who engage in horticulture, whether as amateur or professional gardeners.
I urge the hon. Lady to think carefully before she drafts her Bill. If she thinks that it will be mitigated by having a lot of exemptions set out in it, I challenge her to include on the face of her Bill all the exemptions she thinks will be necessary, because only with thousands of exemptions will the Bill be in any way acceptable. That is the challenge to her. That is why I am not going to oppose her bringing forward her Bill. Let us see what it says, but I fear it is going to be absolutely ghastly. I am disappointed, because I thought the Liberal Democrats were the friends of people working in the countryside and in agriculture and horticulture, but this Bill suggests quite the reverse. I strongly oppose it.
Question put (Standing Order No. 23) and agreed to.
Ordered,
That Sarah Dyke, Wera Hobhouse, Tim Farron, Pippa Heylings, Martin Wrigley, Caroline Voaden, Carla Denyer, Layla Moran, Tessa Munt, Richard Foord, Vikki Slade and Steve Darling present the Bill.
Sarah Dyke accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 24 January 2025, and to be printed (Bill 122).
Ways and Means
Budget Resolutions
(2 weeks, 1 day ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
18:57 - The House divided: - Ayes: 401 / Noes: 120 - Question accordingly agreed to.
19:12 - The House divided: - Ayes: 400 / Noes: 120 - Question accordingly agreed to.
19:26 - The House divided: - Ayes: 400 / Noes: 122 - Question accordingly agreed to.
19:40 - The House divided: - Ayes: 455 / Noes: 125 - Question accordingly agreed to.
19:55 - The House divided: - Ayes: 454 / Noes: 124 - Question accordingly agreed to.
20:10 - The House divided: - Ayes: 450 / Noes: 120 - Question accordingly agreed to.
20:25 - The House divided: - Ayes: 383 / Noes: 184 - Question accordingly agreed to.
20:37 - The House divided: - Ayes: 378 / Noes: 116 - Question accordingly agreed to.
20:49 - The House divided: - Ayes: 373 / Noes: 110 - Question accordingly agreed to.
21:00 - The House divided: - Ayes: 371 / Noes: 77 - Question accordingly agreed to.
The Secretary of State for Business and Trade (Jonathan Reynolds)
It is a pleasure to open this final day of the debate on the Chancellor’s growth Budget. Can I welcome the new shadow team? It is lovely to see them in place. I think many of us on this side would admit that we were shadow Ministers for longer than we ideally would have been, and I know that it is a tough and thankless job at times. On a personal level, I wish them well for the future.
As the Chancellor rightly stated, growth is our only path to prosperity, to increasing living standards and to delivering the change that the British people voted for so decisively over the summer, and we on these Benches recognise that we cannot have growth without investment. Growth demands investment in our infrastructure, into our public services, into the cities and regions that have gone overlooked and under-invested in by past Administrations, and that is what this Budget chooses. It chooses investment over decline, with more than £100 billion of public investment into our roads and our railways, our parks and our playgrounds, our schools and our surgeries—all the things upon which a successful economy and a healthy society depend.
This was a Budget for affordable homes, for the NHS, for the school rebuilding programme and—a personal priority for me as MP for Stalybridge and Hyde—for the trans-Pennine route upgrade, including a new station at Mossley, which is something I am sure the whole House can be excited about and get behind. This is literally rebuilding Britain in action, and make no mistake, businesses need that public investment too, because it creates the right environment for them to thrive now and long into the future. That is why the Office for Budget Responsibility says that our increases in spending will drive up the long-term increase in GDP by up to 1.4%.
Kit Malthouse (North West Hampshire) (Con)
The Secretary of State makes much of growth. Of course we all want growth, but the OBR report actually says that growth in real GDP will start to slow over the next three years and that in years four and five of the Parliament it will go negative. It is telling us that the Government’s Budget is actually going to result in a smaller private sector, not a larger one. How is he going to explain that to business?
Jonathan Reynolds
That is not what it says. First, on the figures, we cannot make a like-for-like comparison because we know that the information provided by the previous Government in their financial information was erroneous. They did not square their own spending pledges with what was in those documents. The analysis by the OBR shows that long-term improvement in GDP growth is vital, but the right hon. Gentleman will recognise that it cannot model some of the wider parts of the Government’s agenda. It cannot model those changes in the planning system that are so important to the Government. It cannot model the changes involved in having a long-term industrial strategy. It cannot model our changes to trade policy.
I recognise that there is more to do to prove the case of the Government’s overall commitment, but I can tell the right hon. Gentleman that fundamentally fixing the foundations, honesty and stability in the public finances, and a focus on long-term public investment are essential to the long-term growth of the country. Also, one thing that has not had sufficient recognition is that many of the real benefits of greater public investment do not accrue in this Parliament; they accrue beyond it, and it is about time we had some long-term focus again in this country. Not before time, if I may say so.
Graham Stuart (Beverley and Holderness) (Con)
The right hon. Gentleman will, I hope, be aware that the long-term economic growth of this country relies not primarily on public investment or indeed public infrastructure, but on a healthy private sector—the wealth creators from whom we can take the funding to deliver into those goods that he talks about and that are part of a balanced and successful society. This Budget does not help them. It does the opposite.
Jonathan Reynolds
I am sorry but, again, the right hon. Gentleman is wrong. I agree with part of his assessment, such as that a strong and thriving private sector is crucial to growth, but I find his analysis a little simplistic. Private firms will say that they also need skilled workers, and that they need a decent transport system so they can get to work.
Under the last Government, I would often get up in the morning and check my phone for updates from people using the trans-Pennine line I just mentioned—the one we are upgrading—and it would be full of people saying, “I cannot get to work.” I need the right hon. Gentleman to make a slightly broader analysis.
Despite the previous Government leaving us with a raging skip fire in many areas—we have to raise money, not to deliver our pledges but to deliver their pledges that they did not properly fund—we have had a regard and a heed for the level of competitiveness in the UK economy. For instance, on the rise in employers’ national insurance contributions, over half of all firms with national insurance liabilities will actually pay less or the same, not only because of the changes to the employment allowance but because of how we have removed the threshold so that all firms now qualify.
Despite the frankly terrible inheritance bequeathed to us, we have done our best to meet those needs and to deliver a long-term focus on the future.
Jonathan Reynolds
I was going to move on, but I cannot resist the hon. Gentleman.
Jim Shannon
I hope the Minister will not be disappointed.
There are many good things in what the Government have brought forward, but what is missing, unfortunately, is support for farmers on inheritance tax. Farmers are the backbone of Britain, and they produce almost all the food we eat across this United Kingdom of Great Britain and Northern Ireland. Farmers will be impacted greatly.
I declare an interest as a member of the Ulster Farmers Union and the National Farmers’ Union, and all the farmers I talk to in Northern Ireland have indicated that every farmer in Northern Ireland will be affected by inheritance tax. If the Government want to get it right, the threshold needs to be raised, and it is not too late. Raise the threshold to £4 million or £5 million so that family farms, the backbone of Britain, can continue.
Jonathan Reynolds
I always listen to the hon. Gentleman because he is genuine and conscientious in representing his constituency’s interests. I will always listen to what he has to say. We can judge the exact impact of these changes by looking at the value of claims to date. The Conservative party’s analysis has forgotten to aggregate the impact of the changes to those allowances, such as agricultural property relief, alongside the existing nil-rate band and the ability to transfer the allowances between spouses in all cases. The total number of farms across the UK that will be affected by this change is actually only 500 for the 2026-27 financial year. That has been missed, and I remind colleagues that any inheritance tax liability has a 10-year, interest-free payment period. To be frank, there has been some scaremongering from the Opposition, and we have to be clear with people.
We have had to restore economic stability to deliver that investment, and we should not shy away from explaining why this has been so necessary. The previous Government’s scattergun approach to growth left our country starved of investment, economically divided and struggling to maintain a competitive edge in the global economy.
The previous Government’s claim to have delivered the fastest-growing economy in the G7, based on its performance in the first half of this year, is laughably false. I believe that The Sunday Times likened it to someone walking a marathon in six hours but, because they ran the last 100 yards, claiming to be the fastest runner in the world. The truth is that consistency and stability have been sorely lacking. We have had seven growth strategies since 2010 and 11 Business Secretaries in as many years, to say nothing of the UK’s revolving door of Prime Ministers.
Jonathan Reynolds
I have already given the right hon. Gentleman a go. I will make a little progress, and we will see whether he can do a better one next time.
The result was a protracted period of anaemic growth. Had our economy grown at the average rate of other OECD countries over this period, it would have been £171 billion larger. Imagine the difference that would have made to all of our communities and to today’s Budget debate. British firms, facing such uncertainty, have not seen investing domestically as a sufficiently attractive proposition. They have been reluctant to adopt new technology, to upskill their employees or to plough money into research and development. We have even heard that, in any given year, roughly 40% of UK firms choose not to invest at all. We want to change that for good. We want to give businesses certainty, confidence and stability so that they can make decisions for the long term.
That is why, at the Budget, the Chancellor reaffirmed our new modern industrial strategy. Invest 2035 will be a central pillar of our growth mission. The strategy will allow businesses to plan not just for the next 10 months, but for the next 10 years. It has already won the backing of Make UK, which has told us that businesses will no longer have to
“fear the constant chop and change in policy we have seen over the last decade.”
Instead, they can focus on the long term.
Our industrial strategy will create a strong pro-business environment, making it simpler and cheaper for companies to scale up and invest. It will unleash the potential of our high-productivity services and industries, because our recent economic history has taught us that we have to play to our strengths. Over the last 25 years, high-productivity sectors were responsible for roughly 60% of our economy’s entire productivity growth. Looking at the figures since 1990, over half of the UK economy’s GDP growth has come from just three sectors—information and communications technology, financial and professional services, and advanced manufacturing.
That is why our industrial strategy will channel support to eight key growth-driving sectors, those in which the UK services sector will excel both today and tomorrow—the services and industries that present the greatest opportunity for output and productivity growth over the long term.
Charlie Maynard (Witney) (LD)
How does that all gel with the fact that the OBR is saying that business investment will fall by 0.6%, as a share of GDP, by 2029? It sounds great, but it does not add up in the OBR’s eyes. Will the Minister please elaborate?
Jonathan Reynolds
We have a similar question. The Government’s wider pro-business changes cannot be modelled by the OBR, and we know that we have to prove them. There is simply no way that we will get to the higher business investment, the higher productivity growth and the stronger economic growth that we need in all parts of the country unless we are honest, robust and responsible with the public finances, as this Budget is and the previous Government were not. If the Budget does not set the trajectory for strong long-term public investment, to leverage in that degree of private investment, we will not have the foundations to succeed. I am so excited by this Budget because it gives us those strong foundations for the future.
Dr Andrew Murrison (South West Wiltshire) (Con)
The problem with our economy is that, too often, people build small businesses and then sell them off. They do not sit and develop them before potentially handing them on. Can the Minister explain how the proposed inheritance tax changes will encourage people to take risks in nurturing and growing their businesses in order to pass them on to succeeding generations? Plainly, his suggestion will have the reverse effect and will, therefore, make the situation worse, which will damage growth.
Jonathan Reynolds
I ask the right hon. Gentleman to look at the detail of our plans. From the data held by the Treasury, we can plan for how many firms will be affected, and it is a very small number. In most cases, given the existing inheritance tax nil-rate band, especially where property is involved or where there is a transfer from one spouse to another in the inheritance chain, the allowance is so great that it is already considerably in excess of the average claim for relief in this area.
The right hon. Gentleman is talking about a very small number of firms at the very large end. I think the revenue can be raised in a way that protects the kind of family firms he and I want to see continue to thrive. We all know there are cases where, for instance, people advertise the sale of agricultural land or certain types of investments specifically to avoid inheritance tax, which is not right. That is not good for business. We have to recognise that these fair and proportionate changes will pay for the last Government’s spending commitments. The changes will always have a benchmark for international competitiveness, in a way that the right hon. Gentleman should recognise rather than scaremonger.
At the Budget, as a statement of intent for our new industrial strategy, we saw the Chancellor make the first of many down payments with multi-year funding commitments for these areas of our economy. There will be significant tax relief for our world-leading creative industries, up to £0.5 billion for a brand-new life sciences innovative manufacturing fund, and nearly £1 billion for our aerospace sector to fund vital research and development into jet zero technology, which will boost industries in the east midlands, the south-west and Scotland. There is also £2 billion for our automotive sector, ensuring that the next generation of electric vehicles are designed, developed and built right here in the UK.
At the same time, we recognise that our industrial strategy’s success rests upon working in partnership with mayors and multinationals, councils and CEOs, unions and academics. That is why this Government are championing local growth plans—growth plans for the long term—to be delivered by strong local political leadership, which will work together with the Government to create the right conditions for success.
Crucially, our new industrial strategy will be international from the start, taking learnings from the best of what has been achieved globally so that we enable businesses of all sizes and sectors to thrive in our market. To that end, it will work in lockstep with our trade strategy and our twin-track approach to trade, acceding to the comprehensive and progressive agreement for trans-Pacific partnership and negotiating deals with the Gulf Co-operation Council and India, all to the benefit of British business.
Unlike the previous Administration, we are also making it much easier for UK firms to do business in and with Europe. Although the Opposition might not want to hear it, the EU is not just our closest trading partner but is still our largest trading partner, by quite some margin, yet the previous Government’s adversarial approach to working with the EU—all that incendiary rhetoric—was not conducive to good business. We are changing course, aiming to remove unnecessary barriers to trade, so that British companies will be able to operate more easily in France, Germany, Italy and across Europe.
We are making real progress. Earlier this month, the Prime Minister and the President of the European Commission issued a joint statement to deepen our co-operation on the economy, energy and security. We have agreed to regular EU-UK summits to strengthen our connections in all those areas, including the close business and investment ties that connect our economies.
Mr Gregory Campbell (East Londonderry) (DUP)
On the sectors that will benefit, does the Secretary of State agree that the hospitality sector would benefit more from some honesty and openness? The Government announced a 6% increase for people on the minimum wage, many of whom are employed in the private hospitality sector, but while our constituents will pay for that, the Treasury will benefit by hundreds of millions of pounds, because almost all those minimum wage earners will become taxpayers overnight.
Mr Reynolds
The hon. Gentleman should recognise that the Chancellor did not make an announcement on personal tax thresholds, which, for some Conservative Members, was unexpected and reflected the difficult inheritance of the new Government. Labour Members are proud of the minimum wage, now called the living wage, which has been one of the most successful policies in the history of this country—and even some Conservatives claim credit or support the measure as a policy innovation.
There is no doubt about the burden on the hospitality sector, because if the living wage goes up for people employed in it, that is a business cost. We have to acknowledge that. What those businesses fundamentally need are customers who have some spending power to use their disposable income in those places. The rise is not without benefit, but I recognise that it is painful.
The future for this country, however, cannot be as a low-wage, low-productivity economy that does not give people the living standards they want. I have been on television many times talking about the stagnant wages of the last Government. I want wages to be higher. The doubling of the employment allowance in the Budget recognises the burden on those types of businesses, which can now employ up to four people on the living wage without any national insurance liabilities at all. We have to have a system that accommodates those burdens, but fundamentally this Government are in favour of higher wages, and we are not going to pull away from that in any measure.
Ben Lake (Ceredigion Preseli) (PC)
The Secretary of State is right to emphasise the importance of a well-funded public sector and well-provisioned public- sector organisations to economic growth. He will also be aware that questions remain about how much additional support public-sector organisations will receive to cover the additional costs of employer national insurance contributions. Does the Secretary of State expect or anticipate those employers to be compensated in full for those additional costs?
Mr Reynolds
The hon. Gentleman raises a legitimate point that is considerably outside the remit of the Department for Business and Trade. He is right to put that issue on the record. There will be opportunity for clarity in that space. I understand why, for his constituents, he will want to ask that question in the Budget debate.
As Members’ interventions have shown, the Budget is not just about a set of policies that will be to the advantage of larger businesses; they will also be important to our smallest start-ups and small and medium-sized enterprises, as well as for our oldest, biggest family firms. We have committed to hardwiring the views of small businesses into everything we do, and we have already started to do that. That is why in September, together with the Federation of Small Businesses, we announced robust measures to tackle late payments with a new fair payment code and tough, new rules on company reporting.
At the same time, we are reforming the British Business Bank to free up precious capital for SMEs to expand, to create new jobs, and to take ideas from design to development. The Chancellor’s Budget gives the green light to my Department to invest over £1 billion over the next two years so that the British Business Bank can widen access to finance for small businesses across the country. That includes over £250 million each year for small business loans programmes, like our start-up loans and the growth guarantee scheme.
As hon. Members will know and have asked about during the debate, while we are raising national insurance contributions, we have mitigated the impacts for small businesses by doubling the employment allowance to £10,500. That means 1 million small businesses will either be paying the same or less in national insurance contributions than they do now. That is why the Federation of Small Businesses has said that the
“Budget shows a clear direction in business policy now for the whole of this Parliament to target support at small businesses…prioritising everyday entrepreneurs working in local communities in all parts of the country.”
Through this new support for SMEs, the stability afforded by our new industrial strategy and the resetting of our trade relations, we are showing unequivocally that the UK supports business, wants to partner with business and is open for business.
That pro-worker, pro-business approach is already having a significant impact. Last month, hundreds of the world’s biggest firms and investors, from Blackstone to the BW Group, Haleon to Holtec, lined up at our international investment summit to back Britain and back this Government’s growth mission. That summit resulted in £63 billion of private investment commitments, more than double the amount secured by the previous Government last year—and in just 100 days. It will see billions of pounds flowing into our tech, digital, manufacturing and life sciences sectors, spurring growth in all four nations of the United Kingdom and creating almost 38,000 new jobs in the process.
We saw something else at that business and international investment summit: a ringing endorsement of this Government’s restoration of stability for the UK economy. IFM Investors said that it was
“very encouraged by the new government’s commitment to a long-term pro-investment mindset.”
Ørsted, a global leader in green energy, stated that the main reason it was investing more in the UK was because of our green energy targets. It recognised us as
“a government who wants work with business to enable the investments required.”
M&G went one step further. It said:
“The UK has a clear national mission to drive economic growth and back wealth creation across every region of the country.”
It welcomed our efforts to
“put the UK back on the investor map, showcase market opportunities and reinforce how business and government can work in partnership.”
Let there be no doubt, despite the dust the Opposition are trying to kick up, this is a Budget with stability at its core, which sets a course for growth and rebuilds Britain. The former Prime Minister’s response baulked at the wave of new investment this Budget ushers, but he could not be more wrong. While we are restoring economic stability and going for growth, we are keeping debt on a downward path. Indeed, on the back of the Budget, the IMF has said that it supports the reduction in the deficit over the medium term, including by sustainably raising revenue. It recognises what we on the Government Benches know to be true—the principal way to drive economic growth is to invest, invest and invest.
May I remind the Opposition that we have tried their way? All that did was stagnate wages, stifle growth and put the public finances into a £22 billion black hole, with nothing to show for it. We cannot cut our way out of a hole; we need investment to lift the economy up. Having endured the last Government lurching from crisis to crisis, the British people voted in July overwhelmingly for change. They voted for a Government that would set Budgets to serve their long-term interests, not serve the news cycle or election cycle. They voted for stability, for growth and to fix the foundations. That is exactly what this Budget delivers, and I commend it to the House.
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
Before I call the next speaker, I wish to make a short and hopefully helpful statement. It is about the way in which Members are called to speak in debates. Members who wish to catch my eye, or indeed the eye of Mr Speaker himself or any of the other Deputy Speakers, should write to Mr Speaker in advance. Those who have not written in may still be called, but priority will be given to those who have applied in writing in advance.
Members who have applied to speak, but no longer wish to do so, should notify the Speaker’s Office as soon as possible. Once you have written in to request to speak, you should turn up in the Chamber for the start of the debate and for all contributions from the Front Bench. You should be present in the Chamber for most of the debate. If you are not able to be here because of other commitments, then you should withdraw your application to speak.
Selection of speakers in debates is at the discretion of the Chair. The Chair, however, cannot predict precisely when a Member might expect to speak. When a very large number of Members have put in to speak, as we have seen over the course of the entire Budget debate, it may not be possible to get you all in, even with the use of time limits. If for any reason you need to be briefly absent from the Chamber during the debate in which you are down to speak, you should notify the Chair, but a prolonged absence may result in your name being removed from the list.
May I ask Members not to crowd the Chair, please, to make requests about when they are likely to be called? Please go through your Whip. It is very distracting and difficult for the Chair, particularly if there are a large number of interventions and a large number of Members trying to speak to me. Please go through your Whip, who will be able to handle those requests appropriately.
Andrew Griffith (Arundel and South Downs) (Con)
Thank you, Madam Deputy Speaker. May I start by congratulating our US allies on the election of their 47th president? When it comes to business and trade, America is our most important partner. As our economies are so interlinked, nearly 1.5 million Brits work for American companies, and more than 1.2 million Americans work for British companies. That trade relationship is worth £280 billion a year, and the amount invested in each other’s economies has now surpassed £1 trillion.
The Government may be right to say that there is much to rebuild in Britain today, but what this Budget does, combined with the Government’s nationalisation of railways, Employment Rights Bill, and Great British Energy, is to take us further away from that goal, with higher taxes, more regulation, bigger government and a smaller wealth-producing part of the economy. It is a Budget for prejudice rather than for progress. While Labour Members will praise the Budget for its finer measures and the socialist purity of its design, their constituents can see that, when it comes to growth, the Budget emperor has no clothes. The Office for Budget Responsibility strips it back to its stark, naked flesh. It says that Budget policies temporarily boost output in the near term, but leave GDP largely unchanged in five years. If growth is their central mission, the Government have already failed.
In the harsh light of day, the Secretary of State’s colleagues are starting to realise that the Budget is not such an appealing sell. As was reported on Sunday, Labour Back Benchers have said that the Chancellor’s Budget is impossible to sell to horrified constituents—they have been reading their emails again. One colleague of the Secretary of State for Business and Trade told The Daily Telegraph, “It has been received very badly indeed within the Labour party”. There is a stark contrast between what the OBR is saying and what those on the Government Front Bench are claiming. The chances are that it will not be a growth Budget, as is claimed. All the evidence is that it will have no more growth by the end of it, and it will certainly be paid for by higher effective taxes on working people.
The Secretary of State’s colleagues are right, and no wonder. The private sector experience of the Cabinet could barely fill a beer glass, let alone a boardroom. Conservative Members know that it is business that creates jobs and the prosperity to pay for our public services. Businesses are the builders, and there is no rebuilding without them. That is something that Labour Members simply do not understand. Britain’s business needs a Government who have their back, not one that drags them down.
David Baines (St Helens North) (Lab)
Under the previous Government, life expectancy plateaued, and the number of people living with long-term ill health increased. Was that good for business?
Andrew Griffith
The ability to continue to invest in our public services, and the sterling work done by the predecessor Government on levelling up every part of the United Kingdom—[Interruption.] Government Members do not like it, but that work relies fundamentally on private enterprise, which pays the taxes that fund the prosperity and the infrastructure that this country needs. I am afraid that the hon. Gentleman is merely showing once again his party’s deficient understanding of how a modern economy works—it is markets, not Governments, that drive up prosperity—and how free trade has improved human health.
Mike Martin (Tunbridge Wells) (LD)
Does the shadow Secretary of State think that the Conservative-designed and implemented Brexit is good for markets, good for business, and good for growth?
Andrew Griffith
Well, we will talk a little later about stability. If colleagues do not have maiden speeches to make, I will be very happy to talk at great length about the many benefits of Brexit and the important ability for a country to make its own laws and deliver benefits for the economy.
Let me make some progress. The Secretary of State has talked much about infrastructure, and, indeed, that is partly the subject of today’s debate. Although creating infrastructure is a noble goal, important to all the constituents who send us here, words, I am afraid, are cheap, and the actions of his party somewhat undermine his position. His party voted in the other place against measures to allow 100,000 homes to be built, and his Labour Mayor of London failed to build to such an extent that the Secretary of State for Housing, Communities and Local Government now proposes lowering his targets. This Labour Budget has pulled up the housing ladder for so many, by increasing the burden of stamp duty for first-time buyers. Currently, an estimated 80% of first-time buyers pay no stamp duty, but from April 2025, that could fall to only half.
Andrew Griffith
I will happily give way to the hon. Lady, particularly if she can tell me how this Budget will help deliver for first-time buyers.
Florence Eshalomi
Does the shadow Secretary of State agree that this Labour Government will help renters by banning no-fault evictions?
Andrew Griffith
I was party to the debate in which my right hon. Friend the Leader of the Opposition talked about the unintended consequences of piling burden upon burden on the rental market—in a well-meaning way, I accept. We have only to look north of the border, where similar measures were introduced, to see their devastating effect on the rental markets, and the shocking increase in rents as a result of a Government trying to over-regulate a sector.
Laughably, while the Government talk about investment, in their first 100 days, they cancelled the restoring your railway programme—clearly, with some projects being honourable exceptions—which would have made it easier for constituents to get to work sustainably. They have also cancelled road schemes, including the A303 scheme and—I declare an interest—the A27 Arundel bypass in my constituency. It is not the first time that a Labour Government have cancelled that bypass. The Government talk a great deal about the future of this country, the technology and their modern industrial strategy, but should not new innovative technologies, such as artificial intelligence and supercomputing, be at the heart of that?
Andrew Griffith
I will happily give way to the Secretary of State if he wants to explain why he no longer deems it important to invest in these crucial parts of the economy.
Jonathan Reynolds
Let us reflect on where we are today—the first day of the constructive Opposition. The new Leader of the Conservative party stood at the Dispatch Box two hours ago and called for both tax cuts and massive public spending on defence. How are you going to pay for projects that you promised but never delivered, and that you knew you could never pay for?
Madam Deputy Speaker (Caroline Nokes)
Order. The Secretary of State knows better than to say “you”.
Andrew Griffith
We would have got a better answer from ChatGPT. The reality is that the Budget not only increased taxes in the outyears by £40 billion a year but increased borrowing by £140 billion over the course of the plans—yet despite that largesse, there was no room to fulfil the mandate of British researchers and continue to invest in the supercomputer and infrastructure that they need.
Dan Carden (Liverpool Walton) (Lab)
A Business Secretary in the last Government wrote an industrial strategy, but it was quickly binned. Under the Conservatives’ new leadership, what is their position on industrial strategy, because we went without one for many years?
Andrew Griffith
Forgive me if the hon. Member has been here for more than 120 days, but I fully support the sectors, and the industrial strategies that the Government have articulated for them, because the strategies continue on from, and are identical to, those of the previous Government. Not for the first time, we see what I call name-plating from this Government. A British business bank—the UK Infrastructure Bank—is being re-name-plated as a national wealth fund. The modern industrial strategy takes the existing science, technology and innovation framework, our plan for financial services and our creative industries strategy and re-name-plates them under a different banner. That is welcome. There is nothing quite as flattering as plagiarism, and I am delighted that those really important sectors of the economy will benefit from a degree of continuity.
The Budget has been absolutely crushing for business. If the Secretary of State is honest, he will know that from his engagement. The only thing that it has delivered to businesses across the country is more burdens. According to the Institute for Fiscal Studies, the increase in national insurance contributions amounts to a £25 billion tax on business. The reduction of the national insurance threshold by over £4,000 will keep small and medium-sized businesses up at night. Let us not equivocate: the measures in the Budget amount, in the words of the Chancellor herself, to a “jobs tax”. From industry leaders to shop owners, those in the retail, hospitality and leisure industries in particular will think back to what they heard during the election campaign.
Graham Stuart
I know that my hon. Friend follows these things closely. According to the OBR, the £26 billion jobs tax bombshell actually nets only £16 billion because of reduced investment and other funds, and three quarters of the £26 billion falls on workers’ wages. Only this socialist Government could be so incompetent as to reduce wages by more than they will take from a tax that they have introduced. I have not heard that observation yet in the debate, but I share it with my hon. Friend.
Andrew Griffith
My right hon. Friend is exactly right. We have heard talk from Labour Members of a circular economy. Well, this is entirely circular. As the OBR observes, the measure does not add to growth, and as my right hon. Friend mentioned, three quarters of the burden will fall on the low-paid. The Labour party has a distinguished record on these matters, and if Labour Members are serious and thoughtful about this, they will interrogate their Front-Benchers in much greater depth, because the measure will result in lower-paid, poorer jobs—and it will be much harder for people to get on the jobs ladder in the first place.
There is an enormous number of unanswered questions. The impact on GPs is uncosted.
Andrew Griffith
Indeed, there will be an impact on charities and the third sector—those who care for us at the most difficult points in life. On Friday, I met representatives from a charity in my constituency that cares for those with dementia. Its income is fixed, its needs are ever present, and as a result of this Labour Budget, it simply does not know how it will balance its books.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
Is the reality not that the Labour Government also do not know how they will balance the books? I asked the Secretary of State for Health and Social Care in a written parliamentary question how much the rise in employer national insurance contributions will cost the Department. The Government said that they did not know.
Andrew Griffith
Either the Government do not know but should know, or they do know and should say.
The Budget also included the highest-ever increase in capital gains tax, and a reduction in business property relief. Just as with the family farm tax, that reduction is an attack on the family-owned businesses that dominate our high streets and industrial parks. The incentive to take risk, and to create and grow a family business with the objective of passing it on, will be fundamentally undermined. Some 75% of UK businesses are family run, and in aggregate they employ 50% of all workers in the economy. We are talking about decades of hard work, dedicated to building a legacy, and people creating an insurance policy for their passing. The so-called “loopholes” in inheritance tax that Government Front-Benchers talk about are legitimate tax policies, introduced by a Labour Government in 1976 to ensure that businesses were not broken up and devastated on the death of an owner, to the detriment of the remaining employees, workers, suppliers, customers, the wider economy, and even the Treasury, which would lose future tax take. This measure could be devastating for our communities and our high streets up and down the country.
It is not just Conservative Members who are sounding the alarm, though we may be doing it with a greater degree of passion. The chief executive officer of UKHospitality said that the increase in national insurance will undermine businesses operating at the margins and
“be a brake on growth”.
Family Business UK, which represents family-owned enterprises, has said that the Budget
“removes entirely any incentive for starting or running a family business.”
Lewis Atkinson (Sunderland Central) (Lab)
The hon. Gentleman will recall that in the 2022 spring Budget, the Conservative party increased national insurance for employers by 1.25%, and he supported that. Can he explain why he was in favour of it then but opposes it now, even though we have introduced increased employment allowances that counteract the change?
Andrew Griffith
I am pretty sure that at the time, the now Chancellor described the increase as a “jobs tax”, and that is exactly what this is. What we are seeing is not a need to balance the nation’s books on the back of a global supply chain squeeze, higher energy costs due to the war in Ukraine and the aftermath of covid, but a Government coming in with premeditated plans that they did not share with the British people, and setting the biggest-ever tax raid Budget in British history. That is an enormous difference, and business understands it; it can see through this Government.
One of the UK’s leading hospitality entrepreneurs is Luke Johnson, who runs Gail’s, which I believe some of my Liberal Democrat colleagues are rather keen on—they are the party of Gail’s. He said:
“It is heartbreaking that Britain’s proud record of innovation, flexibility and business success is being thrown away thanks to that old knee-jerk Labour instinct of taxing success.”
I agree.
Sam Rushworth (Bishop Auckland) (Lab)
It is clear that the hon. Gentleman disagrees with the way in which the Budget raises revenue. Does he oppose the £22 billion investment in the NHS, the investment in special educational needs and disabilities education, or the increases in the schools budget?
Andrew Griffith
I hope that the hon. Gentleman has a long and successful career in this House, but he will not have very long to wait; if he is concerned about a lack of investment in the NHS, I ask him to sit down with the Chief Secretary to the Treasury and ask exactly what the rate of growth will be for NHS spending and departmental spending in the years ’26-27 and ’27-28. Then perhaps he could come back and tell me what he thinks about that level of spending growth.
The Government talk of stabilising the economy—we have heard a lot about that—but this is not a Budget for stability; it is anything but. Let me educate Labour colleagues. There is nothing stable about lowering the rate of economic growth. All that does is create a more fragile and susceptible economy. There is nothing sustainable about a Government changing the fiscal rules after saying that they would not. Even with the potentially unsustainable levels of departmental spend, there is nothing stable in a Government having a razor-thin level of headroom that the OBR quantifies at only £10 billion—just one third of the level that the Chancellor’s predecessor set—to ensure that they remain within the fiscal rules, which they have just made up, by the way.
Melanie Ward (Cowdenbeath and Kirkcaldy) (Lab)
Will the hon. Gentleman give way?
Andrew Griffith
I will happily give way to the hon. Lady if she wants to talk about headroom in the fiscal rules, and the lack thereof.
Melanie Ward
The hon. Gentleman is talking about stability, but does he recognise the irony in his party—the party of Liz Truss—lecturing the Government about stability?
Andrew Griffith
The—[Interruption.] I am trying to find something relevant to say to the hon. Lady. There is a—[Interruption.]
Andrew Griffith
I will happily give way in a minute. At least the Budget that the hon. Lady talks about was an attempt to do two things. First, it sought to shield households in this country from going into a cold winter with an increase in energy bills—her Labour colleagues may wish to contemplate what they have done to 8 million pensioners through the reduction of the winter fuel allowance. Secondly, it was a Budget for growth. This Budget, as we have observed—[Interruption.] Well, some people are making interesting comments, but the direction in this Budget is to lower, rather than increase, growth.
Mr Snowden
Does my hon. Friend agree that, in the reaction to the Budget, the gilt market is in a far worse position than it was following the mini-Budget? Labour Members might want to do some research into the impact of their own Budget.
Madam Deputy Speaker (Caroline Nokes)
Order. I will hear the shadow Secretary of State.
Andrew Griffith
My hon. Friend makes exactly the right point. The Government are enormously lucky, given the spike in gilt yields over the preceding weeks and subsequent to the Budget, that the previous Government dealt with the aftermath of the financial regulatory failure in respect of liability-driven investment. We dealt with that, and as a result we have a more stable financial system, which has been able, so far, to survive what the Government have done.
In evidence taken by the Treasury Committee yesterday, Richard Hughes explained, and I shall say this slowly, that an increase to interest rates of just 0.3%—one third of 1%—would wipe out all the headroom. That is in the OBR’s economic and fiscal outlook, and is no doubt why the OBR gives the Government only a 54% chance of hitting their targets. That is barely better than the odds on a coin toss.
So there we have it. The Government spent months talking up their credentials on enterprise. They looked business owners in the eye and told them that they would have their back and support them, but 120 days later they went back on their promise—a prawn cocktail offensive with a nasty dose of indigestion. They have crushed confidence and destroyed investment. They have checked any incentive for growth. They have left thousands of enterprising strivers wondering when the day will come when the shutters on their shops are not lifted any more. I dare the Secretary of State to stand before the 4.8 million family business owners and tell them that this is a Budget that will work for them. Risk takers and wealth creators deserve a Government who have their back, invest in infrastructure and do not embolden the inefficiencies of the public sector. Be in no doubt: while the Government keep growth, innovation and entrepreneurs in their crosshairs, the Conservatives will always be on the side of business.
Florence Eshalomi (Vauxhall and Camberwell Green) (Lab/Co-op)
I am delighted to speak about the first Labour Budget in 14 years. For my constituents, the last fourteen years have been difficult. Too often, they felt that the then Government were not on their side. That Government did not hear that austerity left us not only with deteriorating public services but more fragile communities. They did not reform the planning system, which would have alleviated the housing crisis and stopped the 20% to 30% rent increases that left many of my constituents facing eviction during a cost of living crisis. They did not take the difficult decisions to protect the economy, and left our new Government with a black hole to fill.
We heard loud and clear in July that government must be different. This Budget offers that. We have a rise to the national living wage and to the rate for under-21s, which will make work pay whatever someone’s age. Funding of over £25 billion for the NHS over the next two years will deliver more doctors and tens of thousands of extra appointments, helping hospitals such as St Thomas’, just over the river in my constituency.
As the Chair of the Housing, Communities and Local Government Committee, I have heard a lot from our local authorities, which have borne the brunt of the failure to tackle the housing crisis. Councils have been forgotten, with devastating consequences for communities. Yesterday, at our first public Committee meeting, we heard from homelessness organisations and local authority representatives on the state of temporary accommodation. Councils are having to spend unsustainable amounts to fill gaps in that area, which is driving them to near bankruptcy. In London alone, 70% of local authority housing budgets are being absorbed by temporary accommodation. That means less money for repairs and maintenance of housing stock, which leaves tenants feeling the increase in the crisis.
The human impact is even more shocking. As I speak, over 150,000 children are in temporary accommodation across England. In the last five years, 55 children have died in circumstances linked to temporary accommodation; 42 of them were under the age of one. That should shock and shame us. Those deaths are not coincidental. Yesterday, the Committee heard about families living in one room. That can stunt a child’s growth because they are not able to do the things they should, such as crawling. We heard about how a child’s ability to form social attachments with peers can be affected by the lack of consistency caused by constant moving. We heard about how parents are often plunged into mental health crises because of the stress of raising a family in those conditions, which further isolates the child.
The Government can and must do better. I welcome the steps in this Budget to supplement the affordable housing programme, increase homelessness spending and scale back right to buy to boost our social housing stock, but they must be first steps. We need further significant change in the upcoming funding settlement, and the next Budget must truly start to address that crisis. I am particularly worried about the freeze to local housing allowance rate, because it is a lifeline for people who are struggling. That is covered by the Department for Work and Pensions, but the measure could have a significant impact on attempts to tackle the homelessness crisis, so it must be addressed in upcoming statements.
The deep harm caused by the last 14 years cannot and will not be fixed overnight. The Budget is the first in my five years in this House that gives us a glimmer of hope and a road map for fixing our broken public services. I congratulate the Chancellor and her team on getting on with the job so quickly, but I will be a voice for the thousands of families who continue to fall through the cracks with no safety net beneath them. They cannot afford to wait any longer for help—they need it now. I urge the Government to give attention to people in crisis, such as those in temporary accommodation. We cannot, as a Labour Government, risk failing a generation of young people.
Madam Deputy Speaker (Caroline Nokes)
I call the Liberal Democrat spokesperson.
Daisy Cooper (St Albans) (LD)
It is a pleasure to follow the hon. Member for Vauxhall and Camberwell Green (Florence Eshalomi), who has given another customarily powerful speech and reminded us of the injustices facing those who fall between the cracks.
We live in an uncertain and unstable world, and the US election result makes it more so. As we debate how to rebuild our great country after the mess left by the Conservatives, many of us will have a sense of apprehension today about what the presidential result means for the US—including women and minority groups—as well as for the UK, Europe and the world. Families across the UK will also be worrying about the damage that President Trump and his Administration may do to our economy and our national security, given his record of starting trade wars, undermining NATO and emboldening tyrants such as Putin. None the less, that may well be the context within which we must rebuild Britain.
We Liberal Democrats believe that rebuilding Britain starts with rebuilding our NHS and social care. Never before have I heard so much desperation as at the last general election. The legacy of the last Government was to leave people saying that they could not see a GP or a dentist, and were waiting months for mental health assessments or special educational needs documents. People were asking me on the doorstep whether maybe everything was so broken that it could not be fixed at all, but we Liberal Democrats know that health and social care must be fixed hand in hand. We welcome the Government’s investment in the NHS, but they cannot remain silent on social care—they cannot dismiss it as a second-term issue. Businesses know that people’s productivity plummets when they have to pick up the pieces of a broken social care system.
Graham Stuart
The hon. Lady makes absolutely the right point about the NHS and its interdependence with social care, but the Government have done more than be silent on social care: through the minimum wage and the NICs, they have imposed £2.5 billion of additional costs on social care while giving just £600 million to local authorities. They are taking an already difficult situation and making it rather worse.
Daisy Cooper
I thank the right hon. Gentleman for making that point. He may remember that at Deputy Prime Minister’s questions two weeks ago, I raised precisely that point with the Deputy Prime Minister and advised the Government that if they went ahead with the rise in national insurance contributions, it would affect social care. The right hon. Gentleman will, however, remember that it was the Conservative Prime Minister Boris Johnson who stood on the steps of Downing Street in 2019 and promised to reform social care “once and for all”, but clearly failed to do so.
Monica Harding (Esher and Walton) (LD)
Two managing partners from GP practices in my constituency have written to me about the significant impact of the increase in employer NI contributions, which they say will directly undermine access and patient care. They will also have a huge impact on the brilliant work of Princess Alice hospice in my constituency, which is already hugely stretched—it will cost that hospice £400,000 a year. Does my hon. Friend agree that that hospice and those GP practices should be exempt?
Daisy Cooper
I thank my hon. Friend for that excellent intervention. I absolutely agree that they should be exempt; I think the rise in national insurance contributions is the wrong thing to do, full stop, but if it is going to go ahead, there must be exemptions. In my own area, for example, one local hospice in Hertfordshire will see its national insurance contributions go up by £150,000. Its warning is very clear: that if this rise goes ahead, beds will have to close.
People must see opportunities in enterprise as well, but the rise in national insurance contributions will hit small businesses hard, especially those on the high street. The success of our high streets really matters, not just for growth but for confidence: for so many people, the high street is the most visual and visceral mark of whether or not the economy is thriving. I would be grateful if the Minister could indicate later today whether the Government intend to bring forward a high streets strategy, and if so, when we might see it.
I have been inundated with messages from small businesses on my high street in St Albans. Here are just some of the quotes: one business said that
“the reality of last week’s budget will mean no more investment and no further recruitment as was planned and in all likelihood redundancies.”
Another small business said:
“I provide employment locally, raise money for local charities and have created a much-loved addition to our town centre…I am worried about how much longer I can go on.”
One business said that it
“would be impacted mainly with our business rates increase and my plea is that that can’t happen. The high street challenges are hard enough as they are”
without having to face
“an uncertain Christmas trading period.”
Other colleagues have mentioned the impact on medical charities, hospices and GPs. In Hertfordshire, the local medical committee said:
“Since 2014 we have seen 56 practices close or merge across Bedfordshire and Hertfordshire, representing 35% of the 216 practices that existed back in 2014.”
GP practices need certainty as to whether any of these costs will be passed on to them at a time when they are already feeling the squeeze. I can guess what the Minister may say: he may encourage Members on the Opposition Benches to indicate how we would raise taxes instead. In the spirit of constructive opposition, we Liberal Democrats urge the Government to think again, because we believe the burden of fixing our public services should fall on the shoulders of the big banks, the gambling companies and the big tech companies, not the small businesses that are the beating heart of our communities. Suppressing small business is not the route to growth.
The business rates reforms in the Budget not only fall short of what we need, but actually make things worse in the short term. The last Conservative Government promised to reform the business rates system, but failed to do so. The current system penalises bricks-and-mortar retailers, while out-of-town retailers manage to get off almost scot- free. Pubs, high street shops and the rest of the hospitality sector have been hit really hard, with the discount being reduced from 75% to 40%. That is going to have a major impact. St Albans is renowned for its pubs—as many of the more long-established Members will remember, I talk about the pubs in St Albans on many occasions. We have more pubs per square mile than anywhere else in the UK, but those pubs will now face additional business rates bills of between £5,000 and £35,000. Some fear that this could push them over the edge.
Over the past few days, much has been said about food security as well. We Liberal Democrats agree that the loopholes that are being exploited by big corporations that buy up swathes of our land must be closed, but we are concerned that the Government’s approach is rather crude—that as they try to close those loopholes, some family farms will be collateral damage. Again in the spirit of constructive opposition, I encourage the Government to look again at our proposal for a proper family farming test, as is used in some other countries.
Finally, I will say a word or two about investment. We Liberal Democrats believe that the Government have done the right thing in changing the fiscal rules, and in principle, we believe in the importance of borrowing for productive investment. However—once again, I say this in the spirit of constructive opposition—I think the Government have put all of their growth eggs in the building back basket. I understand why they may be doing that. However, given the Trump presidency and the prospects of potential tariffs and trade wars that could drive up the price of products such as semiconductors and construction materials, there is a very real risk that the investment that the Government make will not reap the rewards that we all hope for—through changes in the global climate, rather than any fault of their own. We need a resilient economy, so I praise the Government for investing, but urge them to look at the question of resilience. At this time, it is even more important that we look to small businesses and high streets for growth, so I urge the Government to think again and unleash the power of our high streets and small businesses, rather than hamper them.
Madam Deputy Speaker (Caroline Nokes)
I call Irene Campbell to make her maiden speech.
Irene Campbell (North Ayrshire and Arran) (Lab)
Many thanks, Madam Deputy Speaker, for calling me to give my maiden speech in such an important debate. It was great to see a Budget delivered by a female Chancellor, the first one ever in this Parliament, and a Budget delivering the largest funding settlement for Scotland in the history of devolution.
I am delighted to be here today as the Member of Parliament for North Ayrshire and Arran, my home constituency, and I am honoured that people put their faith in me and voted for me to be their MP. I thank my family and friends for their support, which was greatly appreciated.
I pay my respects to my predecessor Patricia Gibson for her work in the constituency over the past nine years. Like me, she cares about the community we serve, and I wish her well. I also pay my respects to her staff for their hard work. Staff often go unrecognised, but they play a vital part in delivering for our communities.
I first got interested in politics at a very young age. One of our neighbours, David Lambie, was the hon. Member for Central Ayrshire from 1970 until 1983 and was very active in the area. That was my introduction to politics and to this place. I was fascinated by what was going on and how it all worked. I remember being in the Gallery to see Prime Minister’s questions in the 1980s; I still cannot quite believe that I am now here sitting on the green Benches.
North Ayrshire and Arran is a mix of towns—many of them post-industrial—villages, rural and island communities. It has the best of both the countryside and the seaside, with two beautiful islands, but I will say more about that later. I have lived in the constituency for most of my life, although I started my working life in London in the 1980s. Jobs were scarce at that time in North Ayrshire and many other parts of Britain. Some may remember that unemployment was very high and to get a job people moved to cities. I arrived in London an enthusiastic young punk and not only got a job that I loved, but got to see a lot of bands, go to great art exhibitions, make some lifetime friends and generally have a great time, as most young people do. I would not have expected that years later I would be back in London where I started my career—I am no longer a punk, as you can see, but hopefully I still have the attitude.
Coming back to my constituency, I must mention a very famous resident, Alfred Nobel. In the 1860s he identified a site in the town of Stevenston on the Ardeer peninsula to build his explosives factory. At one time it was the largest explosives factory in the world and in its heyday it employed around 15,000 people, mainly locals. Nobel lived locally during the start of the project, and my great-grandmother Clara came over from Sweden to work for the Nobel family. She never left Stevenston, as she met my great-grandfather and stayed, so I am obviously very grateful.
North Ayrshire and Arran is a diverse constituency with the towns of Kilwinning, Ardrossan, Saltcoats and Stevenston making up a post-industrial landscape along with the Garnock valley, comprising the towns of Dalry, Beith, Kilbirnie, Glengarnock and the villages of Gateside and Barmill. The famous Glengarnock steelworks opened in the 1840s and operated until the 1970s. The north coast is made up of small, pretty coastal towns, with the villages of Seamill, West Kilbride, which is often referred to as a craft town, Portencross, Fairlie, Largs and Skelmorlie, and of course we have the wonderful and beautiful islands of Arran and Cumbrae.
To give a little bit of history, North Ayrshire and Arran has many ancient castles and monuments, from the medieval abbey in Kilwinning to castles in Ardrossan, Portencross, Glengarnock, Kersland, Dalry and many more, and the ancient Machrie Moor standing stones on Arran. The town of Largs is famous for the Viking battle in 1263 and hosts an annual Viking festival. These historical sites attract many visitors, and tourism is important to our local communities, particularly our island communities.
I must mention some famous residents, past and president—[Interruption.] Forgive me—I meant to say “present”. That is a Freudian slip on 6 November! Betsy Miller from Saltcoats was the first woman to be registered as the master of a ship and was apparently mentioned in this House during a debate on the provisions of the Merchant Shipping Act 1834. Henry Faulds from Beith, a Scottish doctor and scientist, was noted for the development of fingerprinting. Moving on to the present day, from Saltcoats we have Steve Clarke, the Scotland football manager, and Colin Hay, singer and musician from the Australian band Men at Work—who incidentally did not come from “a land down under”, but from Saltcoats. We have classical violinist Nicola Benedetti from West Kilbride, Olympic athlete Jemma Reekie from Beith and musicians and songwriters Gallagher and Lyle from Largs.
There are many community organisations and projects working hard in the constituency, including North Ayrshire Women’s Aid, where I served on the board for many years and was chair. The service provides crucial support for women and children. There are also Men’s Sheds throughout the constituency, as I think there are throughout the whole UK, doing great work promoting mental health and general wellbeing. The 1st Alliance Credit Union in Kilwinning ensures that local people can save and access affordable loans. In Kilbirnie there is the Radio City Association, working hard to bring community energy and the associated benefits. We also have the award-winning SeaSalt Streets group in Saltcoats, helping to improve the town centre, and I must pay tribute to the Save Ardrossan Harbour group, fighting hard to save the Ardrossan to Brodick ferry route, which has been in existence for around 190 years. There are many more I could mention.
Finally, I come to my home town of Saltcoats, where I have lived for most of my life. Saltcoats is a small seaside town on the Firth of Clyde. It was a great place to grow up, with plenty for children to do. One feature that I must mention is the great outdoor swimming pool, built in the 1930s, which had a beautiful art deco pavilion that would not have been out of place in the Cote d’Azur—although certainly did not have its weather. The pool welcomed many visitors from Glasgow and beyond and was very busy all through the summer, despite the fact that it was freezing cold and sometimes people would be swimming next to a jellyfish or an eel—that was all part of the experience. I learned to swim in the pool at a young age and have very fond memories of it.
Sadly, the beautiful art deco pavilion was demolished in the 1980s, but the swimming pool remains. During covid, I started a campaign with other local enthusiasts to revive and reopen the pool. We call ourselves the Splash group and we are linked with the UK Future Lidos group, which comprises other lido enthusiasts aiming to build lidos or to reopen existing ones throughout the UK and Ireland. Outdoor swimming has never been so popular and now is definitely the time to do it. It is good for both physical and mental health and wellbeing, and the pool would offer a safe outdoor space for swimmers. The Splash group has been working with London architect Chris Romer-Lee and we have a visionary 21st-century design for our pool. It would be a fantastic asset for Saltcoats and the wider North Ayrshire community.
I have given the House a tour of my constituency. I am in this place to serve my community and my aim during this Parliament is to bring improvement and investment and to work hard to make positive change to the lives of people in North Ayrshire and Arran.
Danny Kruger (East Wiltshire) (Con)
I start by congratulating my hon. Friend the Member for Arundel and South Downs (Andrew Griffith) on his role as shadow Secretary of State. I know what a distinguished career he has had in business and how eminently qualified he is for this role. I also enjoyed listening to the Secretary of State; I know he is a very intelligent man and I know by reputation what a decent man he is, but while I was sitting in the Chamber I looked up on Wikipedia what his business experience is and what qualifies him for his role. I am sorry to report that he has about as much business experience as I do, which is precisely none.
I spent my career before my election working in Parliament and in the charity sector—you could mistake me for a Labour MP, Madam Deputy Speaker; I am almost indistinguishable from them and easily mistaken for one. However, I will do my best to disabuse them of that false impression by saying what a very shameful thing it is that the Labour party allowed the public to be so misled in the run-up to the last election. Labour promised not to raise taxes, not to increase borrowing or to change the borrowing rules and certainly not to impose inheritance tax on family farms. All those things they have done in this Budget, and it is a shameful thing.
Leaving aside whether these measures are good or bad for the country, leaving aside the erroneous idea that suddenly Labour understood the public finances after they got into government, when they did not understand them before—even though before the party got into government it said it knew exactly what was in the public finances, and of course it did, because that is what the OBR enables—the fact is that Labour understandably stressed in the run-up to the election that they were standing on a platform of probity, integrity and trust. Those were the words used repeatedly in their election campaigns, and the public responded to that.
In so far as it is possible to say that Labour won public support at the election—of course it did not really; we just lost it—it was on the grounds that—[Interruption.] Labour Members ask why we lost it. We lost it because the public could not trust us and they did not think we had integrity. I know that. I am not stupid. We understand what the public thought and I am not going to disabuse them, but Labour promised to be different, and in this Budget they have absolutely broken their promises on integrity and trust. This is a day of shame for the party after what they have done with this Budget.
In a less partisan spirit, there is much to critique about the economy that the Labour party inherited when it came into government. I recognise that there were things wrong with our economy and deep structural problems. They go back decades—a lot longer than 14 years. In so far as it is possible to critique the Conservative party for failures, those happened for very understandable reasons—not least because of the deficit and the broken economy that we had inherited 14 years previously, as well as other events that took place during our time in power. Our failure was that we did not fix those fundamental structural problems with the economy that we inherited. Those problems were to do with a high-tax, high-borrowing economy that had high levels of public debt caused by high welfare, high and preventable health spending, high rates of private debt, low productivity and low wages. Those are the underlying structural realities of the British economy going back decades; they are the reality of this century so far. It is therefore right that the Chancellor talks often about fixing the foundations. I welcome that because it is absolutely the right framework within which to approach the challenge that the new Government faces on the economy.
The problem is that the Government are leaning into the broken model that we have. They are further damaging the foundations of our economy, which need to be fixed, by pursuing more borrowing, more tax and spend and, as my hon. Friend the Member for Arundel and South Downs said from the Front Bench a little while ago, a plan that will not lead to greater growth in the economy over this Parliament, with only minuscule improvements if the forecasts are correct.
Nevertheless, in the spirit of cross-party consensus, let me hope that we can fix the foundations of the economy, because we do need to fix them. What are those foundations? Classically understood, the foundations of prosperity—the foundations of any economy—are land, labour and capital. Let me look at each briefly in turn.
The fundamental reality of our land economy is the planning system. Work done in the think-tank world by Southwood, Hughes and Bowman called “Foundations” —that is absolutely the right framing—shows that it is impossible to build things in this country, to build them quickly and to build them in the right places. Yes, we need new housing urgently, and I recognise and applaud the Government’s commitment on that, but their approach is entirely wrong. They propose to build houses where they are not needed and not wanted—on our green fields—instead of where they are urgently needed and very much wanted, which is in our cities.
What we need all across the country, including in rural areas such as the one I represent in east Wiltshire, is more business space. We need space for industrial use, and we need office space. We urgently need to enable our entrepreneurs to create businesses and to grow them in the places where they want to do that. I am very conscious of the challenge we have in Wiltshire with the lack of affordable and available land for business.
Like others, I should also quickly mention the absolute crime of proposing to tax family farms and to insist that farmers sell up when farms are passing from one generation to the next. That is another flagrant abuse of trust by this Government.
The second foundation is the labour market. I have not heard the Government address this so far in the Budget or in this Budget debate, but the crucial challenge for our economy is that it is so dependent on high rates of low-skilled migration, which depresses wages, increases welfare and inhibits productivity—crucially, because it disincentivises employers from investing in people, in machinery or in technology that boosts growth and productivity. We have to cap migration and shift spending into the skills economy and into our own people to support them to gain the skills they need in order to do the jobs that need doing.
The third foundation is capital itself. We have heard a lot from Ministers about the need for investment, but what they mean is public investment and public spending. What is fundamentally needed is private investment, but we hear nothing about that and do not see much sign of it. We have a broken capital market. Again, I recognise that a lot of this goes back many years—to well before this Government—but it is difficult for businesses to find the capital they need to start and, crucially, to scale. All the incentives are towards rushing to private equity or to an initial public offering and cashing out as soon as possible. We heard from my hon. Friend the Member for Mid Norfolk (George Freeman) during Prime Minister’s questions earlier about the failure of the London capital market to direct capital into UK businesses. That is a perennial challenge with our finance sector, and it needs addressing.
I echo the point made by the Liberal Democrat spokesman, the hon. Member for St Albans (Daisy Cooper), who was absolutely right about the importance of investing in UK resilience. We need money—crucially, private money—to go into small and medium-sized enterprises and the key growth sectors that will be needed in the turbulent times to come. We need to use the incentives in the tax and regulation systems to direct finance towards British businesses. Crucially, we also need to make British businesses more competitive.
That brings me to the national insurance increase. This huge jobs tax has been imposed on the country with no warning and, in fact, in direct breach of promises made by the Labour party.
Mr Richard Quigley (Isle of Wight West) (Lab)
As a business owner who is pleased to see more money in the pockets of not just my team but my customers, can I ask the hon. Member whether he agrees that the Conservatives are very good with their own money, but absolutely appalling with the country’s finances?
Danny Kruger
I am delighted to hear that there is, in fact, a businessman on the Labour Benches; that is tremendous, and I hope that he and his business prosper under the Government that he is supporting. The fact is that the OBR itself said in its commentary on the Budget that payroll tax rises are “passed through” into lower wages. The direct effect is that the Government are taxing workers to fund their spending commitments. Those spending commitments go partly towards what they call investment capital projects, but also towards public services’ running costs. As we have heard today, the bulk of that money will be front-loaded at the start of this Parliament, in what one would have thought was direct contravention of good fiscal management. However, more importantly and more worryingly, as we heard, the effect will be largely circular, because the additional spending will simply be taken in tax through the NIC increases.
On behalf of my constituents, I would quickly add that the one spending area where I have particular regrets is the cutting of the transport budget. The Government talk about increasing investment in the public sector, but they have cut the transport budget overall and, particularly to the regret of constituents in Wiltshire, scrapped the plan to upgrade the A303 and divert all that horrendous traffic around Stonehenge. I deeply regret that, and I am sorry that we have yet to hear any plans from the Department for Transport or the Treasury to alleviate our chronic traffic problems.
Let me finish by saying how much I regret the missed opportunities that this Budget represents. We need growth and productivity, which, fundamentally, will come only from the private sector. We need to see more savings in the public sector, so that we can fund proper deficit reduction, but we are not going to see that. We also need meaningful tax cuts, so that we can get the economy going. One area where we urgently need more spending is defence, which is the one area we really have not heard about. When will we hear about the timetable to get to 2.5%?
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
Order. There will have to be a time limit, but after we have heard all the maiden speeches. I call David Williams to make his maiden speech.
David Williams (Stoke-on-Trent North) (Lab)
Thank you, Madam Deputy Speaker. I am really pleased to follow the excellent maiden speech by my hon. Friend the Member for North Ayrshire and Arran (Irene Campbell), and I look forward to many more such speeches as the afternoon goes on.
It is an absolute honour to represent Stoke-on-Trent North and Kidsgrove, an area that has made me who I am. I am also proud to speak in this incredibly important debate. This Government take seriously the need to boost household incomes and to lift families out of poverty. I am delighted that the increase in the national living wage outlined in the Budget will put an extra £1,400 in the pockets of thousands of workers across Stoke-on-Trent and Kidsgrove.
In memory of Sharlotte-Sky Naglis, I would like to thank my predecessor, Jonathan Gullis, who campaigned to change the law to allow blood samples to be tested without consent where loss of life has occurred following dangerous driving. I said to Sharlotte’s mum last week, “I will continue to fight for this critical legislation, though I know nothing can make up for the loss of your child.”
I will also say thank you to Baroness Anderson, who put the national scandal of holiday hunger firmly on the radar during her time in this House. So many children up and down our country are now fed during school holidays.
I did not set out to become an MP. After studying at Keele University—one of our two great local universities—I worked in a local Sure Start centre. I saw how mums had been let down by the state, but I also saw how, with a hand up from the new Labour Government at the time, they were able to get back on their feet. I then worked for the YMCA, where we set up training schemes, secured funding to reopen youth clubs that were closed under austerity, and supported young people into affordable housing.
However, 14 years of Conservative Government left our services on their knees and levelling up was a failed promise. We faced a 97% cut in spending on youth services in my constituency alone. Our Sure Start centres were hollowed out. Annual household incomes have fallen behind rising living costs. Indeed, in some areas of my constituency as many as two thirds of families live in poverty and weekly earnings are some £100 lower than the England average.
I put myself forward to be an MP to break this cycle of broken promises. Our young people locally should not feel they need to move away for well-paid work. I want our families to live in affordable, decent homes, and I want high-quality care for everyone who needs it—real investment, high-quality public services, restoring hope to our people.
My dad once told me, “People like us don’t become MPs.” While, thankfully, he was wrong, because I am here today, many people still believe that where we are born will forever dictate our life’s direction. That is why I am a member of the Labour party, because we believe that everybody, no matter where they are from, should have equal access to opportunities.
I am incredibly proud of my background. My mum and my grandad worked in our local potbanks—H&R Johnson, Richard Tiles and Dunn Bennett and Co. My mum and dad met in the old Adulte ballroom in Burslem. My weekends as a child were spent at Burslem and Tunstall markets, playing out in Tunstall park—after mass, of course—and doing our weekly shop in the Normid hypermarket in Talke Pits. Having worked locally for over 20 years, I know how blessed we are to have so many local people, charities, businesses and faith groups that provide vital support to our community. Whether it is the Chell Area Family Action Group, Middleport Matters, the Hubb Foundation or excellent community organisers like June Cartwright, Anne Marie and Colin, or Mark Porter, I am so grateful for the contributions they make to our towns.
Our history is one of hard-working people, from the potters and the miners, who powered us through the industrial revolution, to the public sector workers who care for us and the business owners who create opportunities for our community. Our history is forged by our people, who have contributed enormously to our local economy and the success of our country: Reginald Mitchell, from Butt Lane, the engineer behind the Spitfire, which helped lead us to victory in the second world war; Clarice Cliff, a pioneering potter who took on a male-dominated industry to make a name for herself; and A. R. Wood, our best-known architect, who created some of our most beautiful buildings including the Burslem school of art and the Queen’s theatre.
These buildings, and our many other historical sites, are ready to have new life breathed into them. We need new spaces for small businesses and new homes for our families, and I want to see our history build our future. In my constituency, we are proud of our past and ambitious for our future, and I know that ambition will be matched by our new Labour Government.
Traces of our proud history can be found in our bottle kilns; whether Moorcroft Pottery in Cobridge or Moorland Pottery in Burslem, it fills me with pride to see the flames of our history continue to burn in these modern times. And I am part of what we call “the turnover club”, and I have attracted some bemused looks as I walk around the cafés in Westminster and lift each plate, bowl and saucer to see where it was crafted; I am pleased to see that so many were made at the Steelite factory in Burslem or at Churchill in Sandyford. I am so proud that my constituency continues to lead the way in ceramics production.
Finally, I would like to pay tribute to my friend and predecessor, Joan Walley, who represented Stoke-on-Trent North for 37 years. Joan truly embodies what it means to be a good constituency MP. In her maiden speech she spoke eloquently about the quality of housing. Her fight for improved living standards continues to this day, and I am incredibly proud to be a part of a Labour Government who have delivered their commitment to working people through their first Budget in 14 years.
Madam Deputy Speaker (Caroline Nokes)
I call Charlotte Cane to make her maiden speech.
Charlotte Cane (Ely and East Cambridgeshire) (LD)
I want to thank those who elected me as the first MP for the new Ely and East Cambridgeshire constituency, although I follow in the Liberal footsteps of Clement Freud and others before him. I congratulate the hon. Member for North Ayrshire and Arran (Irene Campbell) on making her first speech to this House; her constituency sounds almost, but not quite, as beautiful as mine. I also congratulate the hon. Member for Stoke-on-Trent North (David Williams) on his first speech. My mum is a member of “the turnover club” and I became an honorary member when I came to this House because I felt I needed to check the saucers so that I could report back to her; so I understand where the hon. Gentleman is coming from.
Ely and East Cambridgeshire contains part of the old North East Cambridgeshire constituency and most of South East Cambridgeshire. I thank the right hon. Member for North East Cambridgeshire (Steve Barclay) for being so helpful in passing over casework from constituents and I thank Lucy Frazer KC for representing South East Cambridgeshire and in particular for supporting the much-needed upgrade to Ely rail junction. I was disappointed to hear nothing about funding for that in the Budget. We all want economic growth for this country and the Government need to help us fix Ely junction if we are to get freight to and from the ports and allow us to have that growth. I am a chartered accountant so I know that the business case is unanswerable and I urge the Chancellor to put the funding for the Ely junction upgrade in the spring spending review.
My constituents have a range of occupations: we have farmers, we have people in horseracing, and we have cutting-edge technology. Going back to the comments of the hon. Member for Stoke-on-Trent North, I was amazed to be invited to accompany Almath Crucibles to receive the King’s award for innovation—people have been making crucibles for 8,000 years, yet it has come up with an innovation, which, as an archaeologist, I found utterly amazing. I was also amazed to look at how they make those crucibles in my constituency; they make them with fantastic materials, but they do so in a way that our parents would recognise from the pottery industry. It is stunning.
We are also a beautiful constituency, with an amazing natural environment. We have chalk grasslands, wetland peat and the River Great Ouse running through it all. Over the centuries, people have added things: have ditches, dykes and lodes that help control the water in the fens; and the Devil’s dyke, which runs from my home village of Reach through to Woodditton, a beautiful, probably late Saxon earthwork and a chalk grassland. Watching over all that, we have the “ship of the fens”, which many say is one of the best cathedrals in Europe. Personally, I think it is the best but I would not claim to be an expert in cathedrals.
The National Trust is doing a lot of work near me with Wicken fen, as it has a vision to enlarge the wetland peat area to protect the biodiversity that depends on it and, as we heard in an earlier debate, capture the carbon that is within. I was lucky enough to visit recently, and was promised that we might see a kingfisher. We did indeed see that beautiful kingfisher going back and forth across the river. It was fantastic.
However, there are some downsides to my constituency. It is very expensive to buy or rent a home, which is pricing out young people and families. The median price of a house in my constituency is 11 times the average salary, and the rental market follows on from that, basically. It is unaffordable for many people. On top of that, a lot of our affordable housing is badly insulated, and people rely on oil for their heating. Across my constituency, there are families who cannot afford to heat their homes. As the Government are rebuilding Britain, which I hope that we can do, they should ensure that homes are built that are affordable for people to live in—not just homes that have an affordable price or rent but that are energy-efficient so that they are cheap to run. We must also ensure that we have the infrastructure and support around those homes, whether that is doctors, dentists, schools, green space or water. We need to have all those things.
On the subject of dentists, Ely and East Cambridgeshire is a dental desert. I am horrified to say that people cannot get on an NHS dental list in my constituency. That has to change. I have met people who have spent their life savings on dental treatment or people who, for heaven’s sake, have done it themselves. It is horrendous and we have to address it.
My great-grandfather grew up in the workhouse around Stoke-on-Trent. My parents were the first people in their families to go to university, and they always brought me up to believe that I could do anything I wanted as long as I worked hard on it. I first stood for Parliament in 1987, and mum and dad helped me with that campaign. Sadly, my dad died a few years ago, but my mum supported my election campaign this year, and I know that dad would have been really pleased to see me elected to this House, just as mum was.
I now have to correct an error I made on election night. I did not expect to win, so I had not written a victory speech. I remembered most of the people I had to thank but, as my husband and my children have repeatedly reminded me since, I forgot to thank them, so I am delighted to put on record, and in Hansard no less, my thanks to my husband, Jon, and my children, David and Kathryn, for their unswerving support and encouragement. This might sound a bit odd, but I also need to thank Fosters mill, which is a 19th-century windmill in Swaffham Prior that is still going strong. Its Prior’s oats fuelled my campaign and now give me a breakfast boost each morning to get me through the day. I have to thank my agent Lorna Dupré for running a wonderful campaign and all my campaign team for delivering leaflets and doing all the canvassing. Most of all, I want to thank the people of Ely and East Cambridgeshire for engaging in the conversations and putting their trust in me to be their MP. I will do my utmost to make sure that their voices are heard in this House. I will also try to be the very best local MP possible.
Madam Deputy Speaker (Caroline Nokes)
There will be a three-minute time limit after the next speaker. I call Michelle Welsh to make her maiden speech.
Michelle Welsh (Sherwood Forest) (Lab)
To stand here is such an honour, in a place that is bestowed with such history, and that honour has been bestowed on me by the good people of my constituency of Sherwood Forest. I wish to pay tribute to my predecessor, the right hon. Sir Mark Spencer, who served the constituency of Sherwood for 14 years. Born and raised locally, he was very proud to be the MP.
When I tell people I am the Member of Parliament for Sherwood Forest, most think of Robin Hood and what a legend he is. Many have tried to claim him, but we all know that Robin Hood really belongs to Nottinghamshire. However, Sherwood Forest is so much more than Robin Hood. It was a beating heart of our coal industry, and it was the place where the first vertical flight took place and where engines for planes were built and tested for our war efforts in the second world war. Sherwood Forest is Lord Byron, it is Ada Lovelace, it is our farms, villages, our towns, and most importantly, it is our people. The communities of Sherwood Forest are kind people. They are strong, they are proud, and they tell you exactly how they feel. To be their MP is an absolute honour.
I was raised on a council estate in Nottinghamshire in the 1980s—hard to believe, I know. I saw poverty every single day in my community. I looked it in the eye. I saw social injustice, and I saw a system that not only took away an industry, but did its very best to break working people. It was those experiences growing up that have brought me here today to be a voice for the most vulnerable and to stand up when it counts. I start from the premise that where someone is born should not determine their future.
As the first woman, and the first working-class woman, to be the Labour Member of Parliament for Sherwood Forest, I thought I had smashed a glass ceiling, but the truth is I have merely cracked a porch window. The battles that my mum and her fellow sisters were fighting all those years ago for equality, for better services and for health services for women still exist. As the Member of Parliament for Sherwood Forest, I will be fighting those battles so that every girl or woman and every working-class child knows that they can, and they will.
My son was born in the first week of the very first lockdown. The care that we had at the hands of maternity services was far from the standards that any mother should expect. The trauma of what happened to me has not left me, but it is that very trauma and the strength and courage of my precious son that have driven me to campaign for better maternity services. We were one of the lucky ones; my partner and I left the hospital with our son, but many families in Nottinghamshire did not. That is why I will continue to support the 2,000-plus families in Nottinghamshire who are part of the biggest maternity review in NHS history. It is why I will work alongside the trust and organisations to improve maternity services and to ensure that those families in Nottinghamshire get the answers they need and deserve.
I went to school in the ’80s—again, hard to believe, I know—and early ’90s, in an era of leaky buildings, not enough textbooks and not enough paper to write on. I then worked in education under the previous Labour Government, an era of different educational pathways, high-quality work experience, the education maintenance allowance and a national careers service. I remain so proud of the work that I did in establishing Sure Start, on the No Child Left Behind campaign, on tackling child poverty and on raising standards. I am proud to be part of a Labour Government who are transforming education once again and giving back the life chances to so many children living in Sherwood Forest.
Health inequalities in Sherwood Forest are stark. Those living in the south of Nottinghamshire live on average seven and a half years longer than those who live in the north of my constituency. We must do more to combat this. Early diagnosis, prevention and healthcare in the community are absolutely vital.
Sherwood Forest is a rich tapestry of people and organisations helping each other, from the carers’ support group in Hucknall to In Sam’s Name in Ollerton. Sherwood Forest knows, through its history, how to stand shoulder to shoulder. I am proud of the businesses in my constituency that employ local people, including J. Murphy & Sons, founded in 1951, a global specialist engineering and construction company with over 3,500 employees. It is clear to me that we are a Government of business, and I will do everything I can to bring investment into my constituency and to support our local economy.
My journey to this place speaks to the values and morals of my mother and father—the ones they instilled in me through the endless overtime they worked—the times that they went without so that I and my brother would not, their endless backing, and the absolute faith they placed in me. My journey speaks to my courageous son, who already in his four and a half years has been through so much, and the commitment and support from my unwavering partner. My journey here speaks to every child who thinks that they do not belong in the corridors of this building, or in this Chamber, because of where they come from. My politics is a politics of service, and that is what I will do: serve the people of Sherwood Forest.
Wendy Morton (Aldridge-Brownhills) (Con)
I am grateful for the opportunity to speak in the Budget debate. I congratulate the hon. Member for Sherwood Forest (Michelle Welsh) on making her maiden speech, and wish her well.
Last Wednesday, we sat in this Chamber to listen to the Chancellor’s Budget of broken promises, and as each day has gone by, we have witnessed the mask slip from this Labour Government. Even before the Budget, we saw the Chancellor start to set out her stall with the callous cutting of the winter fuel allowance, and just this week Labour has attacked students with a monumental hike in tuition fees—a tax on aspiration and on young people and their hard-working families. As the week has gone by, we have seen the Budget unravel as manifesto promise after promise has been broken. I have constituents —from pensioners and farmers to businesses, charities, community organisations, GPs and many more—coming to me with anxiety and worries.
My local farmers are devastated. Promises made to them have been broken with no consultation, giving them no opportunity to plan. The Government have shown that they are no friend of the farmer, the producer of our food and the guardian of our countryside. Farmers have gone from food heroes during covid to being abandoned in the cold. The Government seem to have failed to grasp that family farms are not only farms; they are much more. Family farmers invest in their businesses for the long term, for the next generation. The Government need to keep their promises, reverse the changes to agricultural property relief and business property relief, and abolish what I and others now term the family farm tax.
Graham Stuart
I think it was Thomas Jefferson who said that honesty is the first chapter in the book of wisdom. Does my right hon. Friend agree that the way that this Government are serially breaking all the promises they made during the election is corrosive for our politics?
Wendy Morton
Absolutely. Small businesses also face a tax on aspiration and entrepreneurship. Inheritance tax will be the death of enterprise. The increases to employer national insurance and the minimum wage will stymie growth and investment. Inflation looks set to be higher than growth under the Chancellor’s measures. In fact, far from this being a Budget for growth, the measures set out by the Chancellor will be a hindrance.
If we put all this together, who does it hit? Working people. Even the Chief Secretary to the Treasury admitted that on TV. Think, too, of the jobs for working people that will be lost, or never even created, thanks to the Budget of broken promises. This is a Budget that punishes pensioners, destroys our countryside, chases after our motorists, denies working families and their children choice over education, and saddles young people with more student debt. It is a Budget about ever-increasing spending, ever-higher taxes and an ever-expanding state. Prosperity has never been the result of the state handing out more taxpayer money; it has come from empowering businesses, entrepreneurs and families, and it is about enabling opportunity.
Once upon a time, Labour would have been thought of as the party of working people, but not now. Far from fixing the foundations, it is digging an even bigger hole.
Dan Carden (Liverpool Walton) (Lab)
What a privilege it is to follow so many accomplished and particularly moving maiden speeches. I start by congratulating my right hon. Friend the Chancellor on her first Budget. It shows the first steps of this new Labour Government as the work of change really begins. I hope that it will mark a turning point from decline to investment, from instability to security and from self-interest to public service. The choices made in the Budget certainly turn the page on the last 14 years. They begin to restore our public services and improve the rights and rewards of low and middle-income earners.
In the short time that I have, I want to touch on three areas of particular concern to my constituents. First, I welcome the £25 billion-plus of investment to get our national health service back on its feet, cut waiting times and deliver 40,000 extra elective appointments a week. That move will give real hope to people worrying about their healthcare. It recognises our NHS staff across the service, such as those at Aintree university hospital in my constituency and in specialist facilities like the Walton centre.
Dan Carden
I will not. I also welcome the intention to shift the focus to prevention in healthcare. My constituency is one of the most deprived in the UK, and far too many suffer the health impacts of poverty, addiction and despair. I hope to work with the Government to address those long-term public health crises.
Next, and crucially, the Budget delivers some long overdue justice and fairness for those who have been failed by the state. It will transfer the investment reserve fund in the mineworkers’ pension scheme to its members, and will fund compensation schemes for the victims of the Post Office Horizon scandal and the infected blood scandal, including a number of my constituents. It gives me hope that the Government have shown a commendable will to right historical wrongs. I hope that in the months and years ahead, the Chancellor will also consider the claim of the Women Against State Pension Inequality—women born in the 1950s, including 5,000 in my Liverpool Walton constituency.
Finally, I want to mention the hospitality industry, which is central to Liverpool’s visitor economy. The 40% relief on business rates for retail, hospitality and leisure is welcome, but with costs continuing to rise, there remains a climate of uncertainty for far too many local businesses. We need to level the playing field between bricks-and-mortar businesses and the online global giants, and we need to prioritise our high streets and take the necessary steps to give relief to local businesses.
Dame Caroline Dinenage (Gosport) (Con)
You will know, Madam Deputy Speaker, that the Gosport constituency is a community built around a shared history of service in and for our armed forces. Thirteen per cent of my constituents are veterans. Those are good, hard-working people who have served our country and asked for little in return, but they are not wealthy people. They are disproportionately impacted by the Budget, which delivers the opposite of the growth we were promised: it delivers taxes and cuts that will leave my constituents disproportionately poorer. It started with the baffling decision to cut winter fuel payments. Many of my constituents exist just outside the pension credit threshold and are hanging on by their fingertips. The Government’s own data suggests that 13,000 of them will lose that lifeline through the cold winter months. Age UK says that it will be 5,000 more than that, which will be 91% of pensioners in Gosport.
I have real concern for the health of older people in Gosport during these winter months. That concern extends to the future of some of our most important businesses: the care homes and nurseries who do such vital work and employ so many of our constituents. At this stage, I must direct the House to my entry in the Register of Members’ Financial Interests. Those organisations are seriously impacted by the triple whammy of minimum wage increases, employer national insurance threshold decreases and contribution increases.
Hopscotch nursery in my constituency told me that the £25 billion tax increase will impact businesses that employ a high number of low-wage workers. It estimates that the changes will add almost £1 million in costs to their businesses. That cannot be alleviated by productivity increases or headcount reductions, because childcare ratios are set by the Government. The services to which we entrust our most precious and loved family members rely on face-to-face care and human interaction, so the extra costs facing childcare and adult social care services will be borne by their customers—working parents and the vulnerable elderly—and by employees through lower wage growth.
Graham Stuart
My hon. Friend is making a powerful speech. It is good to see the Chief Secretary to the Treasury in his place. I hope he will take on board these arguments, and perhaps the overall settlement can be reworked to minimise the negative impacts that my hon. Friend outlines.
Dame Caroline Dinenage
I agree. I would love to see something done to exempt the childcare and adult social care sectors in particular from the policy.
The Budget also threatens many organisations that are central to the regeneration of our communities. I welcome the fact that the cliff edge for business rate relief for hospitality, leisure and retail has been reduced, but what the Chancellor gave with one hand she took away with the other, because hospitality venues can now expect to see their costs increase by £3 billion. In my constituency, that will potentially cripple 146 businesses, which employ around 2,000 people.
While Ministers talk about the value of our creative industries, tourism and hospitality, they are ignoring their fragile state. The chief executive officer of the Sound and Music charity has said that the measures will impose an extra £7 million in additional taxes on the grassroots live music sector. The Music Venue Trust estimates that, without additional support, 10% of remaining venues will see their doors close. That is up to 120 venues, 4,000 jobs and 25,000 performances opportunities all lost.
As well as being a Budget of broken promises, I suspect that this will become known as a Budget of unintended consequences. The decisions that the Chancellor has taken will have real, tangible impacts on the community and those across the country. Not only that, but we are saddling future generations with billions of pounds of debt to pay for it.
Liam Conlon (Beckenham and Penge) (Lab)
Let me start by congratulating the Members who have made their maiden speech this afternoon: my hon. Friends the Members for North Ayrshire and Arran (Irene Campbell), for Stoke-on-Trent North (David Williams), for Sherwood Forest (Michelle Welsh), and for Ely and East Cambridgeshire (Charlotte Cane) made the first of many brilliant, I am sure, contributions to this House.
It is a pleasure to speak in today’s debate in support of the Budget presented last week. It was historic: the first delivered by a Labour Chancellor in 14 years; the first delivered by a female Chancellor, and, just as importantly, the first delivered by a Chancellor who went to school in Beckenham and Penge. On behalf of everyone in Beckenham and Penge, I congratulate the Chancellor, and I look forward to taking a signed copy of the Budget to her old school in Penge very soon.
Two fun facts about my constituency are that we have the second biggest percentage of rail commuters in Britain, and the most train stations of any constituency. We are a constituency of commuters, and the vast majority who board trains every morning go to work in private sector jobs across London. I know that life well, as it is exactly what I did before I was elected as the MP for my constituency this year.
A criticism levelled by Opposition Members is that Labour Members do not understand business. That is simply not true. For the decade before being elected, I worked in the private sector, first at PwC on the graduate scheme and later for two big tech firms. The private sector adds so much value to our country, and I am a passionate advocate of it. Private sector companies are an engine for innovation. They contribute to the economy, help us pay for vital public services and provide high-skilled, well-paid jobs—the sort of jobs that thousands of people in my constituency do, and want their children to do in the future.
In order for business to plan and invest, economic and political stability is vital, and businesses have been starved of that in recent years. We have had six Chancellors in just over three years, and sharp cuts followed by serious increases, and then further planned cuts. Corporation tax went from 28% to 19%, and then to 25%. They said that they were going to build key infrastructure; then they paused it, renamed it, announced it again, but could not tell us how they were going to fund it. They told us that Brexit would solve all our problems, but made a disaster of that too.
This Budget—like this Government, in sharp contrast to the one before—is serious about providing the economic and political stability that businesses in our country need to invest and grow. I am delighted to see investment in vital infrastructure, including Transport for London infrastructure, and a new, co-operative approach to working between my good friend the Transport Secretary and our excellent Mayor of London, Sadiq Khan. I have no doubt that that will be of great benefit to my constituents, including the thousands who commute across London each day and the businesses for which they work, and I look forward to supporting it later.
Rupert Lowe (Great Yarmouth) (Reform)
This is a Budget of the public sector, by the public sector, for the public sector. Neither the Chancellor nor the Prime Minister was able to define a “working person” with any clarity in various confused and stumbling attempts. Does the definition include the entrepreneurs who take risks, invest money, employ “working” people, work hard themselves, and collect VAT, national insurance and pension contributions—which they gift-wrap and pay to the state—as well as paying corporation tax on any residual profits? If not, why not?
However, we can now see that that is irrelevant, as the massive increase in employers’ national insurance contributions and the equally venal cut in the payment threshold from £9,000 to £5,000 is a huge tax on employment in the private sector, which, unlike the state, cannot print money in taxpayers’ collective name to cover any budget shortfall. This will mean that the private sector will employ fewer people by design, and will reduce pay rises, increase prices, invest less, and pay less corporation tax. It is a disaster for a Government to hand out taxpayers’ money like confetti, without proper checks and balances, taking hard-working taxpayers for fools. This Budget is only possible because quantitative easing has allowed the state to grow without justification, nurturing the culture of central planning, misguided net zero obsession, and all the elements of collectivism that took a generation to destroy the Soviet Union. The Chancellor has landed a knockout punch on private sector entrepreneurs.
It is not only small businesses that suffer. The farming industry, already in a parlous state, has been further undermined by revised death tax amendments. If a rethink of this lunacy is not forthcoming, the continuity and long-term investment required to provide this over-populated island with a degree of food security will be destroyed by forced sales of land on death. Farming is a tough, vocational career, and the average age of farmers is now over 60. The same is true for family businesses, which are also set to suffer disruptive death taxes. The backbone of Britain’s nation of shopkeepers is being broken by socialist design. As Winston Churchill presciently observed,
“I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”
Dr Simon Opher (Stroud) (Lab)
I thank the hon. Member for Great Yarmouth (Rupert Lowe) for his speech, but he should know better, because one of his relatives used to be a doctor in my village in the Cotwolds.
I, and the rest of the country, have waited for this Budget for 14 years. I have worked as a GP throughout that time, and I have watched with horror as our NHS has gone from being the best health service in the world—as it was in 2010—to being a service on its knees. For 14 years I have watched the gap between rich and poor grow wider and wider. For 14 years I have watched the fabric of our schools, and the NHS, fall apart. I therefore welcome this Budget. It is a Budget that lifts the curse of low pay and invests in the special educational needs of our children. It is the Budget that will finally compensate those who have been wronged by the infected blood scandal. It is a Budget that will rebuild Britain.
Lifting people out of low pay and making our country more equal is probably the most effective way of preventing ill health and making our population healthier, so what I really welcome in this Budget is the huge amount of funding for the NHS—the biggest amount in 14 years. With that funding, though, need to come reform and an increase in productivity, and I want to outline a few little projects on which we need to concentrate to increase our productivity. On GP access, Dr Tom Sutherland of Dursley practice has—
Freddie van Mierlo (Henley and Thame) (LD)
Will the hon. Member join me in expressing concern about the rise in national insurance contributions and the impact it will have on GP surgeries, including potential closures? GPs in my constituency have been asking me about the impact.
Dr Opher
I understand that it will be mitigated through funding. I am not exactly sure how, but I have no doubt—[Interruption.] That is because I have not been informed, but I have no doubt that it will be coped with. I know that this Government will rebuild general practice, just as the Conservative party trashed it and broke the back of it. I am not taking any criticism from any of you about the NHS.
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Please be seated. You are not taking any criticism from me. You said “you”. Please do not refer to colleagues as “you”.
Dr Opher
Sorry. I did get rather angry there, and I shall not get angry any more.
Let me talk about GP access. We need to get doctors, not receptionists or 111, to perform triage, and we need to start thinking in a different way. We do not want a protocol-driven NHS; what we need is a genuine doctor-patient relationship. We also need to develop neighbourhood—
Graham Stuart
No, it is relevant here. I wonder whether it is in order for the hon. Gentleman to have been given assurances by the Government that funding will be put in place to mitigate the impact on GPs, because that information has repeatedly been refused to this House. I know, Madam Deputy Speaker that you represent all Back Benchers, like me, in making sure the truth is out.
Madam Deputy Speaker
You can definitely raise that in your contribution later. It is not a point of order for the Chair, but no doubt the Minister and Front Benchers have heard and can respond accordingly.
Dr Opher, you will shortly run out of time, so I would be quick.
Dr Opher
Okay. I worked in general practice for 30 years. There is always mitigation for tax changes, and I have no doubt that the Government will look after GPs.
Dr Opher
I have no doubt.
I would like to finish my speech, if I may. We need to invest in neighbourhood health centres. In Suffolk, Dr Tim Reed is developing a genuinely holistic service, which will save money and increase productivity in mental health provision and among paramedics. This is something that we need to explore much more.
I spent 48 hours with a loved one in Bristol Royal infirmary’s A&E department, and I saw the huge pressure that it was under. I notice that Dr Simon Laing is using innovative ways of going out with paramedics, keeping patients at home and working with paramedics in his department. That is the type of adaptation we need in the NHS.
This Budget begins the process of transforming the NHS and will reward NHS staff up and down the country, who continue to deliver excellent unscheduled care. We must fix the foundations of care and use the new funding to ensure that more patients are cared for at home. Difficult decisions are being taken, but all of us on both sides of the House want to see the NHS become the best in the world again, and this Budget starts that process.
Martin Wrigley (Newton Abbot) (LD)
We know that growth comes from investing in productivity and skills, and I, too, welcome the £22 billion for the NHS. Long-term public investment is essential for the security and stability that the UK needs. However, we heard about the issues relating to employers’ NI contributions, which will hit doctors, dentists, care homes and local hospices, adding a significant amount to their annual cost base per employee.
There is also pressure on voluntary, community and social enterprises. In my district, Teignbridge Community and Voluntary Services tells me that the sector employs some 3% of the local population, who are now all subject to the NI increase. Although it is better than nothing, the business rates reduction from 75% to 40% will disappoint local retail, hospitality and leisure businesses—not forgetting the inheritance tax threat to Devon’s family farms. There is nothing in this Budget for social care, for Devon’s crumbling hospitals or for Devon’s essential transport.
Ben Maguire
Bank shares are soaring following this Budget. Does my hon. Friend agree that the Liberal Democrat proposal to reverse the Conservative Government’s cut to the big bank levy, raising around £4 billion a year, would mean that we would not need the GP tax, the family farm tax or the winter fuel cut and that we could fund upgrades to the Treliske, Derriford and North Devon hospitals—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. This is too long an intervention.
Martin Wrigley
My hon. Friend is absolutely right: there are other ways that this money could have been found. The Liberal Democrats have long been saying that we should be looking to the banks, the big oil companies and the big international tech companies to pay their fair share, and that is where money should be sought.
There is nothing in the Budget for Devon’s essential transport. Last year’s pothole fund was a “drop in the ocean”, according to Devon County Council, and the 50% increase in this Budget still leaves a big hole. Not even mentioned in the Budget is the completion of the Dawlish rail resilience project, which is key to connecting the south-west. Without funding, the design team will soon be redeployed and all the progress to date will be lost. This project will cost millions more if it is not done now, and I urge the Minister to meet us to get it funded. Growth in the economy in Devon and Cornwall is heavily dependent on fast, reliable train services, and we saw what happened with Dawlish.
The Budget also mentioned housing and local government. Until July, I was leader of my district council, and I am proud that the Lib Dem administration started building council homes—the first in 30 years. They were cheap to rent and cheap to heat because they were well insulated and powered by air source heat pumps and solar power. Additional capital for social homes is welcome, but the frozen local housing allowance hampers housing associations that have already scaled back their plans for development, and commercial developers will still try to cut affordable homes from section 106 responsibilities.
The Budget also offers 300 new planning officers, but those are spread very thinly over the 326 planning authorities. Newton Abbot’s social housing need has increased by 50%. In my constituency—like in Ely—the average house price is 11 times the average earnings and rents have soared. The broken housing market is failing Newton Abbot, and the proposed changes to the planning rules are insufficient to fix it. Homes are unreachable for too many families. People are being denied the right to a safe and secure place to call home.
I welcome the multi-year settlements for councils and the removal of the “Hunger Games”-style bidding for grants involving huge amounts of wasted efforts writing bids and unachievable timeframes. We cannot let that centralised control continue. We need real devolution, but devolution is not just reorganisation—
Rosie Wrighting (Kettering) (Lab)
Like many of my hon. Friends, I have spent my career in business—specifically, in retail head offices—so I am proud to be a part of a Government that is pro-business and pro-worker. The last time a Labour Government delivered a Budget in this House, I was 12 years old. That Labour Government looked after our public services, focused on cutting crime, were ambitious about our education and invested in our NHS. It is because of those decisions that I had the opportunities that I did and that I am standing in this House today. Since then, those priorities have been forgotten and our constituents have had to bear the brunt.
People in my constituency of Kettering know all too well the price they have paid for the last 14 years of Tory failure: crumbling hospitals and schools, rising crime and a crisis in SEND. Working people in this country have not had a Government who have worked for them for 14 years. It is shameful that the previous Conservative Government promised funding that simply did not exist. They let our communities think that they were going to receive money, knowing that it was not there and that it would be someone else’s problem after the election.
We now finally have a Labour Government and a truly Labour Budget that prioritises working people. It is incredible to be the youngest woman in the House today, but it is even more incredible to have watched the first female Chancellor deliver the first Labour Budget in 14 years. It shows me and many young women that there is no limit to our ambitions. Regardless of what the Leader of the Opposition thinks, this was a glass ceiling shattered.
There are some hugely important measures in this Budget for the people of Kettering. Our public services deserve better than the treatment they have had for the last 14 years, and I am proud to be part of a Labour Government who are fixing the foundations and rebuilding Britain. People all over the country are waiting to see what this Government will deliver and, thanks to this Budget, we can give them hope that they will have an NHS fit for the future and a country that invites investment, without barriers to opportunity, and in which working people are at the heart of everything we do.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Charlie Maynard. Not present.
Dr Andrew Murrison (South West Wiltshire) (Con)
Given the raid on family firms, it is worth pointing out that the art of a good Budget and smart taxation is plucking the goose to get the maximum number of feathers with the minimum amount of hissing. On that basis, I am afraid this Budget fails lamentably, and it certainly does in my constituency.
The Secretary of State for Business and Trade, in his opening remarks, said that 500 farms a year will be affected by the Budget’s changes to agricultural property relief. He said it casually, as if it is acceptable. Well, that is approximately one for every constituency, and very much more in rural constituencies. The prospect of this affecting, and potentially closing, two farms a year in my constituency is, frankly, horrendous. I urge the Government to think again.
I agree with the Government that it is legitimate to look at those who are land-banking to avoid inheritance tax. If that is their intention, they will have support across the House, but attacking family farms is not on, and I hope the Government will think again.
The Government say that growth is their No. 1 priority. How so? In my constituency, as we have heard, the long-awaited A303 improvements have been canned, and I suspect that the A350 improvements will follow, as the north-south strategic study that was to be the prelude to a Westbury bypass looks like it has been indefinitely delayed.
Dr Caroline Johnson
My right hon. Friend is making a characteristically excellent speech, and he mentions the transport projects that have been scrapped. We have not heard about what is happening to the North Hykeham relief road in my constituency. Does he agree that investing in roads in this way creates growth?
Dr Murrison
My hon. Friend is absolutely right. A Government who are going for growth do not can big infrastructure projects.
As the mercury drops, the removal of the winter fuel allowance is becoming a real worry to many of our rural constituents who live in old, cold homes, many of which have no access to gas.
As we approach Remembrance Sunday, the Department for Education, in its wisdom, has decided to remove funding for combined cadet forces. CCFs have tripled since 2012, and they are a powerful engine for social mobility, as are our armed forces overall. They give kids the confidence they need, for a small amount of money. The withdrawal of funding is appalling. As we all stand around our war memorials this Sunday, we will, of course, be admiring our cadets. It seems spiteful and vindictive that the Government are removing their support.
The Government need to go for growth, but damaging our farmers and our infrastructure, particularly in rural areas, is not the way ahead. I urge them to think again.
Steve Race (Exeter) (Lab)
I am pleased to be able to speak in the debate on behalf of my constituents in Exeter. This Budget is a welcome break from 14 years of policy uncertainty, fiscal incompetence and austerity for our public services. It starts to put this country back on a firm footing, rebuilding the foundations, and investing in communities and places like Exeter. Exeter people have had a tough few years. The inflation they experienced as higher mortgage costs, higher rents, higher energy prices and higher food prices was made worse by the last Government’s catastrophic and incompetent financial management, and yet we have no apology from the Conservative Benches.
Exeter has huge potential as a thriving economy. Indeed, Exeter is the economic driver of our region, with a gross value added of around £6 billion pounds. It sits at the heart of a travel-to-work area of over 470,000 residents. Exeter is home to a world-class research-led university, and we have a best-in-class further education college and good secondary schools. We have the Met Office and the Exeter Science Park, and we are home to further cutting-edge research, including one of the UK’s supercomputers. However, Exeter has been held back over recent years by a Tory Government that have not invested in public services and our economy in the way we need to succeed. That changes with this Budget.
I am particularly pleased that this Budget commits the UK to an R&D budget of £20 billion, which will mean Exeter and the UK remain at the forefront of scientific innovation. From climate change to land management, healthcare to biotechnology and beyond, Exeter is already a hub for scientific research, but we can do even more.
I listened to my residents on the doorsteps in the Newtown area of Exeter at the weekend, who were really pleased about the investment in our NHS. From long waiting lists to our lack of NHS dentistry services and closures of community pharmacies, my residents have been affected by the huge strain the NHS has found itself under in recent years. I am pleased that this new investment in the NHS budget will begin to fix our local NHS, though people realise that will take time.
While the secondary schools in Exeter do not suffer from the awful RAAC crisis, because every single one of them was rebuilt under the last Labour Government, I know how important the new funding will be to schools around the country. Investing in our education settings is important. I will be supporting the excellent Exeter College as it seeks to grow its campus, to continue to deliver exceptional education to young people in Exeter and across the south-west.
Having a healthy, well-educated city, with opportunities to work in the high-tech sectors of the future is vital to our future economic prosperity. I close by welcoming that this is a Budget that recognises that reality, and also recognises that the south-west region, and Exeter in particular, has huge potential and will play a significant role in the growth of the UK economy in the future.
Seamus Logan (Aberdeenshire North and Moray East) (SNP)
I congratulate all those who made their maiden speeches today.
This Budget is heralded as a Budget for rebuilding Britain, so let us take a closer look at one or two aspects of that. First, as far as I am concerned, the care sector is an integral part of our national health and wellbeing. How will the additional employer national insurance costs affect that sector? Recently, I had the pleasure of visiting the Burnbank care home in Buckie, in my constituency, one of 12 care homes run by Ron Taylor and his partners. Ron and his colleagues pride themselves on the ethos of their homes, where personalised care is provided at the expense of larger profits, and where staff turnover is low and morale is high. Ron tells me they came through the pandemic without a single case of covid in their homes. How will the national insurance changes help to rebuild the economy, when Ron and his partners must consider how they will find the substantial additional sums necessary to ensure the homes continue to operate with the same wonderful care and humanity? Can there not be an exception made for this sector?
Secondly, let me turn to farming. Food security is the bedrock of everything else. We cannot rebuild Britain without food security. Recently, during a political discussion with my daughter, I asked her, “Where do you think your food comes from?” She said, “Sainsbury’s.” Just under a year ago, the then shadow Secretary of State for the Department for Environment, Food and Rural Affairs stated that the Labour party had no intention to raise additional revenue through the agricultural property relief provisions. To reverse that decision, after making an explicit promise not to do so, is shameful, and will put confidence in this Government at an all-time low, after only four months. That is quite an achievement.
Thirdly, let me press the issue of rebuilding public confidence. The new Government rightly prioritised sorting out the infected blood and the Post Office scandals, which are two important steps in rebuilding public confidence in our public services and in Government generally. But what of the WASPI women, who were referred to by the hon. Member for Liverpool Walton (Dan Carden)? There was no mention of them in the Budget and no understanding that this is a vital part of the process of rebuilding public confidence in what we do in this place. Compensation was recommended six months ago by the parliamentary and health service ombudsman, and I call on the Government and the Minister to address that issue. These women deserve justice, not just means-tested justice—no ifs, no buts, just do it.
Finally, the people of Scotland are left wondering exactly how this Budget, billed as rebuilding Britain, will actually work for them. I have many other questions, Madam Deputy Speaker, but I will have to leave it there.
Kirsteen Sullivan (Bathgate and Linlithgow) (Lab/Co-op)
I congratulate all hon. Members who have made their maiden speeches today and who have spoken so powerfully.
I am very honoured to speak in this debate, as it is a Budget that breaks the mould. It breaks the mould with its delivery by Britain’s first female Chancellor of the Exchequer. It breaks the mould with its ambitious investment in industry and public services, which speaks to every part of the United Kingdom. And it breaks the mould of Tory Budgets and mini-Budgets, which lumbered the country with declining living standards, a painful lack of investment, public services at breaking point, and no economic growth to show for it.
The imperative for investment in services and industry has never been greater. My right hon. Friend the Chancellor has responded to that challenge, delivering a Budget that has ambition, aspiration and fairness at its heart. We are fixing the foundations so that we can rebuild this country.
The priority of this Labour Government is growth—growth for our economy, for wages, for living standards and for our public services. This means an uplift in the national living wage and the national minimum wage, giving a wage boost to those on the lowest incomes. There is a record £22.6 billion investment in the NHS, which covers 40,000 new elective appointments a week and a programme to modernise services and slash waiting times. Let me be clear: this additional funding has to make its way to frontline services in Scotland, where one in six Scots is languishing on a waiting list.
We have also had a massive increase in education funding but, again, the Scottish Government must make sure that this money makes its way to our council budgets. We must also get the money into those schools impacted by the RAAC crisis, such as St Kentigern’s academy in Blackburn where West Lothian council has not received one penny in financial support for the £35 million partial rebuild of the school.
Patrick Hurley (Southport) (Lab)
I thank my hon. Friend for giving way. Conservative Members have said that they would like to see tax cuts in the Budget, but does she agree that they have not spelled out how they would pay for those tax cuts and which public services and investments they would cut to pay for those cuts?
Kirsteen Sullivan
My hon. Friend makes a good point. Investment must be paid for. I think that Members across the House are very much aware of the desperate need for investment in our public services and in industry. Investment is required in social and affordable homes across the UK, to offer security and stability to more than one million people who have nowhere to call home. Again, the Scottish Government must grasp the nettle here and deal with the housing emergency throughout Scotland. They have to deliver funding to the councils and the registered social landlords to bring down the shameful levels of homelessness that we see right across the country.
My right hon. Friend the Chancellor is delivering the largest budget settlement for Scotland in the history of devolution. As I have said, this money must reach frontline services, struggling families and local communities. No more excuses from the SNP Government. For too long, they have bungled Scotland’s finances and under-invested in public services, with many services, such as the NHS and council-run services, stretched to breaking point, all while crying, “It wisnae me,” and pointing to Westminster. No more. At the election, we said, “Don’t send a message to Westminster; send a Government,” and that is exactly what the people of Scotland did. The Budget makes good on Labour’s commitment to deliver the change that the Scottish people voted for—change that delivers for Scotland and every part of the UK.
Mr Paul Kohler (Wimbledon) (LD)
I congratulate all those who made their maiden speeches today, and I congratulate President Trump on his election. While many of us in this House have legitimate concerns about what his victory presages for democracy and the rule of law, we should not undermine those values by criticising the American people for the choices that they have made.
It was a consequential presidential election, and this should have been a consequential Budget, given the cost of living crisis, record NHS waiting lists, crumbling public services and decaying infrastructure. After years of broken promises by an out-of-touch Conservative Government, people are desperate for fundamental change. Sadly, the Budget failed to deliver it. There are aspects that my party and I welcome, particularly extra investment in our NHS, although where is the structural change and reform of social care that are key to saving our NHS?
More fundamentally, despite the Government’s talking the talk, they have not walked the walk to grow our economy. In fact, much of what the Chancellor announced last week will hold us back. As the Liberal Democrat spokesperson for transport, I question whether the Chancellor is serious about economic growth, given that she has inflicted a real-terms cut to the transport budget. Our transport system should be the engine of our economy. After years of neglecting our infrastructure, the time has come to make targeted investments that would make a real difference to people’s lives by initiating organic growth, rather than the sugar rush of increased Government spending, which, as the OBR has shown, will dissipate in future years. Sadly, the Transport Secretary’s previous promises of “unprecedented funding” have resulted in little more than recycled infrastructure announcements, including some that have already been built, and increases to bus and rail fares that will hit the poorest hardest.
It is not just with regard to transport policy that the Budget disappoints. Labour claims to be championing working people and growth, but the increase in employers NI contributions is a tax on jobs, as it was when the Tories did it. It will put small businesses, which should be in the vanguard of our growth strategy, in jeopardy, and as the IFS has said, it will depress wages in the long run. We all appreciate the mess that the Government have inherited from the Conservatives. Earlier today, the Prime Minister said that his Government
“made the economy the centrepiece of our Budget”.
However, a Budget that damages the finances of families and businesses while stifling growth is not doing what it says on the tin, but rather kicking the can down the road, and doing nothing to reset our economy by laying the foundations for genuine, productive, organic growth.
Dan Tomlinson (Chipping Barnet) (Lab)
I thank Members for their maiden speeches—such warm and thoughtful contributions. I look forward to hearing more from the Members who spoke today.
Growth for higher living standards is the defining mission of this Government, and rightly so. Labour Members know—we have seen it play out over the last 14 years—that there is a link between the health of the national economy and the health of family finances up and down the country. Why have families in this country suffered in the last 14 years? It is because productivity growth has been on the floor. Had wages in this country continued to grow since the financial crisis at the rate they had before, families would not be just £1,000 or £2,000 a year better off; on average, workers would be £10,700 better off had the Conservative party grown the economy and our productivity so that families’ living standards could improve.
I think particularly of young people and children, and the economy that they will grow up in. I want people all over the country—not just in Chipping Barnet but across the United Kingdom—to enter a jobs market where good jobs are available in every place. In elections to come in five, 10 or 15 years’ time, I want our politics to be defined not by scarcity and fighting over limited resources because we have continued on the path of decline that the Conservatives set us on, but by abundance and there being enough—maybe even more than enough—for every family. Then, children from whatever background —particularly those from backgrounds like mine, growing up in low-income families, in social housing and on free school meals—can have the opportunities that they need. This Budget has done so much to help children and families like that.
We have changed the fiscal rules so that we can invest again in our public services and infrastructure. We are reforming welfare so that we can support more people into work. We are putting money into affordable housing so that we can get to 1.5 million new homes. We are investing in transport, including Northern Powerhouse rail and here in London. I am confident that, thanks to those reforms, the Office for Budget Responsibility, which set out that it had not yet taken account of many of the reforms that the Government are implementing, will be able to revise up those growth forecasts so that, as the Chancellor said, what we have achieved so far is not the summit of our ambitions but only the beginning.
Graham Stuart (Beverley and Holderness) (Con)
It is a pleasure to take part in the debate. We have heard fantastic maiden speeches from across the House, and I am sure that we have all enjoyed the insights from them. It is a pleasure to follow the hon. Member for Chipping Barnet (Dan Tomlinson). I loved the way he set out his aspiration for the kind of country of abundance that we should seek. He is entirely right, but I am just not sure that this Budget is the way to get there. If the penny drops with him over time, I hope that he will be able to engage with us in coming up with a more constructive way of delivering the growth that this country needs.
Not only is this a Budget of broken promises, but unfortunately—and this is an important issue—it is a bad faith Budget. I do not want to rehearse—although there is so much to rehearse—the 50 promises not to raise taxes or the bogus £22 billion that was not validated by the OBR, but those are serious points. It is good to see the engagement from Labour Members, because in politics one cannot afford to have a reputation for being dishonest and not doing what one says. [Interruption.] Labour Members who laugh at that should remember Cicero’s advice. He was always better at giving advice than following it, but he said:
“The foundation of justice is…good faith; that is, truth and fidelity to promises and agreements.”
Without that, we lose trust.
Mike Martin
Does the right hon. Gentleman think that the former Member for Uxbridge and South Ruislip was honest at all times?
Graham Stuart
Yes. And with respect to the hon. Gentleman’s point, I think that the former Prime Minister and Member for Uxbridge and South Ruislip was true to himself, true to his heart and true in his expressions—although, like all of us, he probably had his moments. What he never did was set out on a deliberate path to mislead people. He set out his honest view of the way the world should be.
Unfortunately, 9.7 million people, including 15,000 of my constituents, believed the promises of the now Labour Government, and even 410 Members of Parliament thought that they were being honest.
Dr Caroline Johnson
I thank my right hon. Friend for the speech that he is making. Does he agree that many of those people will now feel betrayed?
Graham Stuart
I think people do feel betrayed. We need to conduct our politics as honestly as we can. The Labour Government broke their promise not to raise taxes on working people, because, as the OBR has made clear, the NICs raise will overwhelmingly fall on working people. In fact, if we go through the numbers, as I did, it turns out that there is a bigger reduction in wages than there is net receipt to the Exchequer. That is quite a remarkable achievement—probably only a Labour Government could do that.
Of course, the Government have also put up the cost of getting on the bus. If ever there was a symbol of working people, travelling from my constituency to a low-paid job in Hull, that is it. It will cost them £500 a year extra out of taxed income. I do not know why the hon. Member for Hitchin (Alistair Strathern) is grinning—I know he grins a lot, but it should not be funny to him that someone in a low-wage job who travels into Hull every day will pay £500 a year more because of the decisions his Government are making. For a couple, it is £1,000 a year. That cost is real, and it should not be glossed over.
There is just one train station in my constituency, and people who live in Withernsea have no choice but to travel 26 miles to get there. The Prime Minister’s constituents are blessed with a pick and mix of ways to get to the office: the tube, the overground, trains, Ubers, Bolts, and even Boris bikes. That is not the case in rural and coastal East Yorkshire: my constituents get the bus at 7 o’clock in the morning, and they get another bus at 6 o’clock at night. That is their lived reality, and the serious impact of this Budget should be recognised.
Another broken promise was to pensioners, who were told that they would have security in retirement—that their benefits would not be touched. Taking £300 from the very poorest pensioners is not keeping that promise. [Interruption.] The very poorest pensioners are those eligible for pension credit.
Graham Stuart
I will not. The very poorest pensioners are those eligible for pension credit, and nearly 900,000 of them will not get that £300. That is the truth—there is no point denying it.
Finally, there is the awful betrayal of British farmers, many of whom work from dawn to dusk to ensure our supermarkets are full of fresh fruit and veg. According to my constituent William Hodgson, who runs a small family farm near Withernsea, it is a “rural catastrophe”. I ask the Government to think again.
Tony Vaughan (Folkestone and Hythe) (Lab)
One thing that people in Folkestone and Hythe said on the doorstep during the general election was that public services, particularly the NHS, do not work any more. I am proud that the first Labour Budget in 14 years has answered those calls: billions of pounds will be invested in the UK’s public services. That will be the start of a long process of rebuilding those services, which were left flat on their face after 14 years of Tory neglect.
It was interesting that in the minutes after the Budget, Folkestone and Hythe Conservatives were tweeting at me on social media, complaining about higher taxes and higher borrowing. That sounds to me like the arsonists criticising the fire service. The Chancellor was very open about what was required to start fixing the foundations of our country, and the question that the Conservatives cannot answer is what taxes they would have increased instead. If they would have borrowed less, what public services would they have cut? The truth is that after another five years of Tory rule, we would have seen more austerity, leaving our public services to rot—more hardship and literally more pain for the working people who have borne the brunt of 14 years of austerity, covid restrictions and the rising cost of living. I am proud to be a Labour MP supporting a Labour Government who chose not to go down that road. I fully accept that this Budget involved hard choices, but they were hard choices that were ducked by the Conservative party for years and years.
In addition to the headlines from the Budget, which I warmly welcome—such as the £22 billion for the NHS and raising the national minimum wage—this Budget has given hope to the hundreds of constituents writing to me about a whole range of matters, including children with special educational needs and disabilities. In Kent, the Tory-run county council’s SEND provision is on its knees; thanks to Labour’s Budget, there will now be £1.3 billion of extra help to build an education system that can cater for every child’s needs. For people in rural areas of my constituency, such as Romney Marsh, who have no, or no proper access to, broadband, £500 million will be allocated to help improve such services.
The Budget’s increase in carer’s allowance will be welcomed by the over 2,000 carers in my constituency receiving that allowance, and the extra £600 million in grant funding to local authorities for social care is especially urgent in areas such as mine, where the population is older and more vulnerable. I also warmly welcome the £100 billion of infrastructure investment over the next five years, and will continue to make the case for investment in upgrading the rail freight infrastructure in Kent, particularly to maximise the use of the channel tunnel’s rail freight capacity.
Ayoub Khan (Birmingham Perry Barr) (Ind)
I congratulate those hon. Members who made their maiden speech in this debate. Their speeches were touching and very inspirational.
The Chancellor promised us that by making the necessary tough choices, the autumn Budget would provide the blueprint for unlocking growth and prosperity, yet I struggle to see the substantive improvement that my constituents will experience to their lives—and for good reason. Many people in Birmingham Perry Barr have never felt as poor, as disheartened and as ignored as they do at this moment, and it does not take much soul-searching to see why. The Budget did not deliver for the 73.7% of pensioners in my constituency who are no longer eligible for the winter fuel payment, many of whom are now forced to choose between keeping warm, feeding themselves or incurring an inordinate amount of debt.
The Budget did not hear the pleas of families in low-income households. Some 48.9% of children in Birmingham Perry Barr live in poverty, and 5,930 children in my constituency alone live in households directly impacted by the two-child benefit cap, yet despite the child poverty crisis unfolding nationally, this Government’s refusal to remove that cruel measure has limited their ability to tackle the issue head-on. In the wake of the Budget, the safety net for our nation’s most vulnerable stakeholders is unable to support the weight of living; the protections are brittle and hollowed out.
This Budget did not serve my constituents in Birmingham Perry Barr, nor did it ease the burden for Birmingham’s 1.2 million residents, who continue to face indiscriminate cuts to local government spending. Following mismanagement, Birmingham city council, which, incidentally, is Labour-run, is essentially bankrupt. Necessary services such as transport for schoolchildren with special needs, adult social care, youth centres and libraries are being cut and closed—the list is endless. What was once a far-reaching local government authority has been reduced to a minimalist, bare-bones, skeleton service. While I welcome the Government’s slight increase in local government finances, Birmingham city council needs a significant amount of funding. I urge the Government to consider increasing local government finance.
Jo Platt (Leigh and Atherton) (Lab/Co-op)
It is a great honour to speak in today’s Budget debate. This is the first Labour Budget in 14 years, delivered by the first female Chancellor in 800 years, and it lays the foundation for local and national economic growth. Like many high streets across the UK, town centres in my constituency have faced serious challenges. Over the years, businesses have closed, unemployment has risen and crime has increased—all signs of 14 years of Conservative under-investment and neglect that has hurt not only our local economy, but the very fabric of our communities.
One thing we can all agree on is that we want our town centres to come back to life. We want to restore the vibrancy that makes our high streets the heart of our communities. That is why I will speak about the possibilities that this new Budget opens for towns such as Leigh, Atherton, Golborne, Lowton and Tyldesley—towns that have been fighting back, despite years of disinvestment.
We have seen that targeted support can make a real difference. Take Leigh Spinners Mill, my former place of work: this community-owned, co-operative venture hosts more than 80 businesses, from start-ups to social enterprises, all thriving right there in Leigh. Those businesses have flourished with minimal investment, proving that when we create the right conditions, such as affordable rents and reduced business rates, local economies can thrive. As much as we celebrate projects such as the Mill, however, the question remains how we bring the same success to our high streets. The Government’s new business rates initiative is a step in the right direction, protecting small businesses and encouraging entrepreneurship.
Supporting high streets is not just about economics; it is about revitalising the unique character of our communities and creating the independence needed for businesses to grow. I am particularly encouraged by the Government’s commitment to the long-term plan for towns, despite the £22 billion black hole left by the previous Government. That strategy aligns with Labour’s manifesto priorities, reaffirming our commitment to building a sustainable, inclusive economy that benefits everybody in our communities.
Shockat Adam (Leicester South) (Ind)
Like everyone else, I would like to extend my congratulations to those who have made their maiden speech, and to say what a pleasure and honour it is to share the Chamber with them. I refer Members to my entry in the Register of Members’ Financial Interests, which details my professional career as an optometrist providing NHS services and owning small businesses.
This is my first Budget, just as it is for many other Members in the Chamber, and I have listened carefully to Members dissecting it and weighing up the details—as always, the devil is in the detail. As an NHS care worker, I welcome the increase in the NHS budget, but I am concerned by the absence of specific measures to address the funding crisis in professions such as dentistry, pharmacy and optometry, all of which have important roles to play in providing care to patients. Investment in such services will save millions in the long run. In my constituency, there is a real disparity in patient and GP numbers; in fact, it is the second largest such disparity in the country. For every GP, there are 3,262 patients. That is untenable. As a result, many people cannot see their GP, and that is where optometry, dentistry and pharmacy play a huge role, serving those who do not even have a registered GP. I am sorry that there is a need to do more to promote the contribution that those professions make to the NHS, and ensure that they are properly funded in the future.
I welcome the increase in funding for social care and special educational needs and disabilities, and in the national minimum wage. However, in placing a burden on pensioners and small business owners, the Budget has missed an opportunity. The Government could have used wealth taxes on those in our society with the broadest shoulders to raise the revenue necessary to fund improvements in our public services. Instead, they allowed the money to be raised from small businesses and those who are most vulnerable, such as our pensioners.
Joani Reid (East Kilbride and Strathaven) (Lab)
I warmly welcome the additional £47.7 billion that this Budget will deliver to the Scottish Government—the largest settlement in the history of devolution. That additional funding can rebuild Scotland and our failing public services, but the Scottish Government must now take responsibility, admit their failures and take a long-term approach that is serious about addressing Scotland’s challenges.
Economic and political stability underpin the Chancellor’s Budget. The undoubted attractiveness of Scotland for domestic and international investment requires the removal of uncertainty, which can hinder investment plans. Only when there is a Government in Scotland who seek to genuinely work collaboratively with the UK Government and the private sector on investment plans for not just the next decade but beyond will we fully reap the benefits of this Budget.
However, we have a Government in Scotland who make policy and economic decisions through the prism of the constitution, and who seek, as a matter of ideology, to find points of difference and divergence. That was demonstrated by their failure to even turn up and vote for GB Energy—unquestionably an economic opportunity for Scotland. The Chancellor has committed the UK Government to working closely with the Scottish Government on the industrial strategy and the national wealth fund, but the vehicle for promoting that collaboration—the Council of the Nations and Regions—is unfortunately being undermined by the SNP, which cannot bear the prospect of UK joint working being a success. It has been manufacturing grievances on behalf of local councils regarding representation on the council, although it has been the most centralising Administration that these islands have ever seen, disproportionately stripping local government in Scotland of power and resources. I welcome the efforts of the Secretary of State for Scotland to rise above this petty divisiveness in pursuit of a higher vision for jobs, growth and prosperity.
This Budget is a serious, strategic, long-term approach to fixing our country—an approach that we have not seen from the Scottish Government or in the last 14 years from the Conservative Government. It sits alongside an ambitious investment and industrial strategy—again, something that we have not seen from either the SNP or the Conservatives in power in the last decade or so. I am confident that, with this new approach, we can rebuild our economy and country, and I therefore welcome the measures outlined in the Budget to rebuild Britain.
Carla Lockhart (Upper Bann) (DUP)
It would be remiss of me not to take this opportunity to congratulate the 47th President of the United States of America, Donald Trump. The fact that President Trump made such a comeback after one term out of office should be a warning to this Government: if they continue on a trajectory of burdening ordinary working-class people and businesses financially, and with their anti-life policies, their stay in office will be equally short.
The theme for today’s debate is rebuilding Britain, yet in reality the Budget has the potential to rock the very foundations of the United Kingdom. This Government’s Budget has dealt the most devastating blow to so many: 10 million pensioners are left reeling from the decision to cut the winter fuel payment, with many now having to choose between heating and eating; and the WASPI women have been failed again, as there is no provision to right the wrongs that have impacted so many women across the United Kingdom, including in my constituency of Upper Bann.
Prior to the Budget, I had warned this House that in the space of a month, four cafés in Portadown in my constituency closed their doors. This Budget will undoubtedly close many more. The requirement on businesses to pay additional national insurance contributions will tell a tale. This is not a Budget for working people, despite the rise in the living wage, because that rise will be swallowed up by higher retail costs due to the rise in national insurance contributions for employers. It is a cause-and-effect algorithm. This Budget hits workers and businesses.
The Prime Minister and his Chancellor have betrayed our nation’s farmers, decimated our family farms and jeopardised our proud rural heritage. The introduction of a 20% inheritance tax on family farms valued at over £1 million marks an unprecedented and unjust assault on the backbone of our nation. No farms or farmers means no home-grown food, and rising costs as we have to import food to eat. This policy threatens the survival of family-run farms, forcing many, especially in Northern Ireland, to consider selling off land or assets to meet tax liabilities, thereby undermining the continuity of farming businesses across generations. For Northern Ireland, this tax burden looms heavy. Family farms will be dismantled to cover liabilities, eroding the very fabric of rural life.
I urge the Government to stop with the spin and, more importantly, stop the farm tax, and to implement policies that support our farmers, rather than hinder them. We must prioritise the sustainability of our agricultural sector to preserve our rural communities, and to ensure the prosperity of our nation, and food security, for future generations.
Melanie Ward (Cowdenbeath and Kirkcaldy) (Lab)
Some have spoken today of the wait for this Budget. Depending on our perspective, we waited either 16 weeks or 14 years, and I was in the latter camp. I was proud to sit behind my right hon. Friend the Member for Leeds West and Pudsey (Rachel Reeves), the first woman Chancellor in the 800-year history of the office, as she delivered the Budget last week, and I was even more proud of the Budget that she introduced and what it means for working people of all ages in Cowdenbeath and Kirkcaldy. One in four children in my constituency are growing up in poverty; they have been failed by two Opposition parties. Save the Children Scotland said this year that the Scottish Government’s policies would not “move the dial” on child poverty, and the SNP has consistently failed to meet the targets it has set. Once again, its Members are not here to listen to the debate.
Because of this Budget, Labour’s fair repayment rate will mean that more than 1 million of the UK’s poorest households will be £420 a year better off from next April. That is expected to benefit 110,000 households in Scotland and to begin at last to drive down dependence on emergency food parcels. Many of those visiting food banks are in work, and the 6.7% increase to the national living wage and the even larger increase for 18 to 20-year-olds is an important recognition of the financial difficulty in which many of my constituents find themselves.
In Fife alone, more than 8,000 low-paid workers stand to benefit from the increase to the national living wage. The mineworkers’ pension scheme will return more than £1 billion to 112,000 former coal workers, 824 of whom are in my constituency. That means that the people who powered our country, who were so badly mistreated for so many years by the Conservatives, will receive a 32% increase to their annual pensions.
Finally, Labour’s Budget delivers the largest financial settlement to the Scottish Government in the history of devolution, with an extra £3.4 billion next year alone. It is over to the SNP now to use that competently to fix Scotland’s precious public services, which the SNP has run down over the past 17 years.
In conclusion, this Budget delivers for all age groups and all parts of my constituency in enacting our manifesto commitments to make work pay, to revive our public services and to tackle poverty. I am proud to support this historic Budget.
Steff Aquarone (North Norfolk) (LD)
I commend those who have made their maiden speeches, and I commend Members for their collegiate and warm response.
People in North Norfolk will welcome aspects of this Budget, such as the promise of greater spending on our national health service, but for all that welcome stability, they have several significant concerns. The potential for increased costs for North Norfolk’s GP surgeries and all sorts of other care providers through the national insurance rise is a huge worry.
The huge challenge facing rural constituencies from this Budget is the Government’s family farm tax. I want to share the story of Judith with the House. She is a constituent of mine who lives on her farm in Antingham. She and her husband are fifth-generation farmers, and they have reared prize-winning cattle on their small farm. Their son has been working on the farm with them for the past 40 years. He is also a carer for his father—Judith’s husband—who is in the advanced stages of Alzheimer’s disease. Judith is losing sleep over whether her son will be forced to sell the farm and its machinery to pay the death duties, which will mean an end to generations of family farming on their land. These are hard-working, honest Norfolk farmers, not multimillionaires or land barons. Indeed, many Norfolk farmers have contacted me before and since the Budget to share their concerns, and I am proud to be standing up for them today.
North Norfolk will also feel the brunt of the increase in the bus fare cap. Rural public transport is a lifeline for many residents living in our villages. It gets them to the shops, to the doctors and to see friends and family. Asking them to swallow an increase in cost while Londoners continue to enjoy a £1.75 cap is ludicrous. They, along with pensioners in North Norfolk who have already lost the winter fuel allowance, are starting to question the change that this Government are offering.
I honestly believe that this was a Budget of extremely good intentions from Labour, but sadly a handful of missteps have led many in North Norfolk to question the direction in which we are going. I hope to work with the Government to see how we can ensure that the positive parts of this Budget deliver for North Norfolk and remedy the issues causing the most angst. As ever, I will be putting North Norfolk residents first, standing up for constituents, raising their concerns and ensuring that their voices are heard loudly and clearly.
Louise Jones (North East Derbyshire) (Lab)
Families in my constituency have been hit hard in recent years by rising inflation outpacing their take-home pay. I am delighted, therefore, that the Chancellor has already recognised the importance of public servants with a fair pay rise of 5.5%, or 6% for the military, meaning that nurses, teachers and service personnel are fairly recognised for their hard work. We are also recognising workers through the rise in the national living wage to £12.21 an hour, which will make a huge difference to living standards for my constituents in North East Derbyshire, enabling more people, particularly young people, to stand on their own two feet.
One of the biggest issues I hear about from constituents is the terrible state of the special educational needs and disabilities provision by Derbyshire county council. The Conservatives have determinedly and deliberately run the council into a dire financial position, leaving many children paying the price through long waiting lists for assessments and inadequate support, which costs the council even more in fines. I am proud that we in Labour will not accept this Tory neglect of vulnerable children and have allocated an extra £1 billion to reform SEND. That shows the difference a Labour Government can make to ordinary families.
We are fortunate in North East Derbyshire to have a wealth of small businesses, including retail on our high streets, and service businesses, whether in landscaping or consulting. We in Labour know the value of rewarding those who are prepared to take a risk and build their own business. I am delighted that the threshold at which employer national insurance contributions are made has been increased to £10,500, meaning that many small businesses in North East Derbyshire will see the cost of employing people fall and their ability to grow rise. Under Labour, we know the future is bright for business.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
I declare that I have a financial interest in some of the Budget measures.
The Budget is one of broken promises and poorly thought out measures for every generation. For children who attend private schools, their schools will face VAT. Quite apart from the disruption that will cause, it is unlikely to raise the money the Government suggest, because the wealthier parents have already paid, more students will need to be looked after in the state sector, there will be greater demand on SEND services and there will be a reduction in employment among staff who previously worked at such schools.
The Prime Minister told those who go to university that he wanted to abolish tuition fees. I wonder whether they are surprised that he has put them up. Young people wanting to buy their first home will see stamp duty thresholds fall, and many more will pay stamp duty on their first home.
What of those working people the Labour party has found it so difficult to define? First, they have to get to work. Those who use the bus will find that the fare has increased by 50%. Those who have commercial pick-up trucks will see that the tax on them has gone up too. What about the national insurance rise? It is a tax on every single working person and it has not been thought through, as public sector workers will also need to pay the national insurance.
The Government said to The Times that they were going to provide mitigation, but the Department of Health and Social Care does not seem to know how much it is going to cost to start with. I asked a written parliamentary question and was told it will take longer to prepare an answer. The Department does not seem to know how much it will cost directly or indirectly. Many right hon. and hon. Members have talked today about the indirect costs that will face air ambulances, hospices, general practices, opticians, care homes, mental health services and outsourced laundry, catering and human resources.
What about the private hospitals delivering waiting list initiative work for the NHS? They will also need to put up prices. Will the nurse who works at a private hospital doing a proportion of her or his work for the NHS and a proportion for private enterprise be partly recompensed, or not? It has not been properly thought through. We will need the NHS for all those old people, cold and vulnerable in their homes, who have had the winter fuel allowance snatched from them—people the Labour Government have let down. If they die, they have the prospect of further taxation on their pensions, business assets and family farms.
Dr Neil Shastri-Hurst (Solihull West and Shirley) (Con)
My hon. Friend raised the issue of family farms; does she agree that it has been hugely disingenuous of the Government to repeatedly say they have farmers’ backs, only to abandon agricultural property relief at the first opportunity?
Dr Johnson
I do. As a farmer’s wife, I particularly recognise the effort of families to work together on farms. It is not the most profitable work, but is a labour of true love.
Those who need a pint after listening to all the increases in taxation across the generations may be pleased to hear that pints are going to be a penny cheaper—woo-hoo—but with business rates relief for pubs and other hospitality having gone from 75% to 40%, and the rise in the minimum wage and in national insurance contributions, the likelihood is that prices will not go down at all, leading to further disappointment.
The Budget is bad for business, bad for growth, bad for the young and bad for the old. But most of all it is a break of trust. It is a litany of broken promises from the Labour Government to the public. Labour voters, like the Prime Minister’s favourite singer, may be saying to themselves, “Did you have to do this? I was thinking that you could be trusted.”
Lillian Jones (Kilmarnock and Loudoun) (Lab)
It is a pleasure to contribute to this debate on the first Labour Budget in 14 years, and particularly to mention the impacts that it will have on my constituents in Kilmarnock and Loudoun, and on Scotland as a whole. This Labour Budget delivers the largest settlement for the Scottish Government in the history of devolution. It means an additional £1.5 billion for the Scottish Government to spend this financial year and an additional £3.4 billion next year. This is a Budget that keeps our promises to Scotland, ends the era of 14 years of Tory austerity, provides billions in investment in public services and prioritises economic growth. The Budget is good for the Scotland Office, good for Scottish Labour and, most importantly, good for the people of Scotland.
An aspect of the Budget that is particularly welcome is the reserved spending from the UK Government, which is necessary due to the SNP Administration in Scotland at best spending on their own priorities and, at worst, wasting money on silly vanity projects or legal fees to cover up freedom of information requests. The reserved spending will go directly to those communities who need it, such as Kilmarnock, the largest town in my community.
Despite the aforementioned biggest financial settlement in the history of devolution, the nationalists have taken Scotland in the wrong direction and have been careless with Scotland’s money. The SNP Administration cannot continue to blame others for their own economic incompetence. It is about time that they apologised to the people of Scotland for their mismanagement of public funds, but I will not hold my breath.
The problems in Scottish public services created by the SNP are not solved by having more money to spend. Put simply, the SNP needs to get smarter at spending it. The SNP wastes millions on delayed discharge and agency staff in our NHS, on ferries that never sail and on pet projects that do not deliver for Scotland, all the while decimating local communities’ funding, meaning that vital services are being lost. While Labour has committed not to increase taxes on working people, the SNP continues to try to use income tax as a substitute for economic growth, with those earning over £29,000 paying more.
Labour’s manifesto commitment to “Brand Scotland” has been realised. An initial investment of £750,000 will fund trade missions, promote Scottish goods and services around the world and help Scottish businesses export for the first time. This is the Budget that my constituents have been waiting for, the Budget that Scotland has been waiting for and the Budget that the UK has been waiting for. I fully support it.
Mike Martin (Tunbridge Wells) (LD)
I will start by welcoming a few measures in the Budget, in particular the increase in the carer’s allowance and the funding for the NHS that is sorely needed after the last Government. There is something that I am confused about, though. This, as trailed in the Labour manifesto, was meant to be a Budget for growth—indeed, that was how the Chancellor introduced it last Wednesday, and the Secretary of State in opening the debate today said that the Budget will bring growth—but it does not appear to help small businesses, which are the engine of our economy, employ over half the people in it and provide 50% of the revenue.
In my constituency of Tunbridge Wells is Adrian Scripps, which grows 10% of the UK’s apple crop. James, its managing director, tells me that its labour costs will go up by 8%, so this year, if he does nothing about it, he will lose 50% of his profits—and this is a good year, so in a lean year he would lose money. If a business producing 10% of the UK’s apple crop is to lose out from the Budget, what does that mean for the wider SME sector?
As an aside, if I were to ask James what he thinks about the Government’s policy on Europe, which is essentially a continuation of the previous Government’s, I could not repeat what he would say in the Chamber. As a result of this Budget, James will have to lay off staff. People losing jobs does not grow the economy.
I have a short time left, but I would like to talk about Toby, who runs The Chapel salon in Tunbridge Wells. He is also the head of the Salon Employers Association, which represents 1,900 salons across the United Kingdom. He estimates that more than 25% of salons may go under as a result of this Budget. Cutting hair is labour intensive and the margins are wafer thin. Businesses going insolvent does not grow the economy. I understand, and I agree, that we need to invest in our public services—I think the Government have got that bit of the Budget right—but I disagree with who is taxed to pay for it. The Liberal Democrats think that we should tax big businesses, and the Labour Government think that we should tax small businesses. That is not on.
Andrew Cooper (Mid Cheshire) (Lab)
After more than a decade of stagnation, this Budget provides the vital reset that our economy needs, not just to address the immediate challenges we face but to lay the foundations for a brighter and fairer future for all.
There are many welcome measures in this Budget, and of particular importance to my constituency will be the increase in the carer’s allowance weekly earnings limit, giving carers greater flexibility to work and increase their financial security. The additional £1 billion for SEND and alternative provision is a vital first step as we begin the work to rebuild the broken system, and to restore trust with parents that education can be inclusive, supportive and break from the adversarial model that is the root of the crisis they face.
Today, I will focus on housing as we strive to get Britain building once again. Having worked in the social housing sector for the past 20 years, I am convinced that whether the issue is educational opportunity for children living in overcrowded accommodation, the healthcare needs of people with the blight of damp and mould on their bedroom walls, or the cost of living pressure caused by poorly insulated or draughty homes, fixing the housing crisis is the solution. A safe, decent and affordable home is the cornerstone of a dignified life. When people have decent, safe accommodation that is suited to their needs, they have a strong foundation on which to build their lives. That, in turn, has a stabilising effect on their families and the wider community.
In recent years, we have witnessed a dramatic rise in house prices and soaring rental costs, leaving many individuals and families struggling to secure a roof over their heads. In my area, average prices have increased by 59% since 2010, while earnings have increased by only 23% over the same period. For many young, hard-working people, the dream of home ownership has slipped away. That is why the £500 million investment in the affordable homes programme is so important, as well as the long-term settlement for social rents, to give confidence to our registered providers to make their own investments.
It is important that we ensure that support is in place for vulnerable populations, which is why I welcome the additional £233 million allocated to tackling homelessness, bringing total spending in this area to £1 billion. We believe that every individual deserves a safe and stable place to call home. That is how we transform lives and strengthen communities. I am proud that we have a Labour Government in office who take the housing crisis seriously—a Government who are dedicated to delivering the change that our country so desperately needs, and delivering hope for a brighter future for everyone. This Government will build a Britain where everyone has a place to call home.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. To ensure that I can get in as many people as possible, there should be no further interventions.
Alison Bennett (Mid Sussex) (LD)
In Mid Sussex we do not have many large employers, so small and medium-sized enterprises truly are the backbone of our economy. When watching the Budget statement, Bob from Hurstpierpoint, who is involved in multiple small Mid Sussex businesses, told me:
“the big loser was small business.”
Bob is already having to make contingency plans and think seriously about his workforce going forward. He is right to say that
“without thriving small businesses and SMEs the ability of local communities to thrive is inhibited”.
That is true in Mid Sussex and in communities up and down the country. Another constituent of mine, Ian, who has invested considerably in a local business and employs a number of local people, says that he feels “abandoned”.
The catastrophic impacts of the decision will be not just on employers but on employees—none more than those in Mid Sussex GP and care businesses who have written to me since the Budget. Niki, from Hassocks, a director in a social care organisation supporting adults with learning disabilities, raised two points. First, the national insurance changes will have a disastrous impact on the sector, with social care providers already struggling. Hit in recent years by covid, interest rate hikes, rises in the national living wage and the cost of living crisis, many are teetering on the brink. Secondly, social care providers will feel the Government’s measures acutely and disproportionately. They are people businesses, so almost their entire cost base is hit by the national insurance increase. They employ many people on low wages, so shifting the national insurance threshold to £5,000 has a huge impact.
Katie, a Lindfield GP, said that the changes would directly undermine patient access and patient care. “In our area,” she said,
“there are dwindling partner numbers, old estates, difficulties recruiting staff. We partners aren’t sure how long we can keep providing increasing healthcare for.”
My constituent Tom, a GP partner, told me that because practices do not charge patients, they do not have the option to put up their prices as a business might. He is trying to digest how he feels about partners’ bearing the brunt of these changes. GPs have told me that they are not entitled to claim employment allowance, and we need clarity on that essential point.
This is why the Liberal Democrats are calling for GPs and care providers to be exempt from national insurance rises. When those who employ us, care for us and choose to base their businesses in Mid Sussex feel “insulted, “abandoned” and “unsupported”, 1 fail to see how this decision is the right one.
Jacob Collier (Burton and Uttoxeter) (Lab)
The Budget speaks to the needs and ambitions of my constituency, supporting our communities in ways that matter deeply. It is a Budget that delivers on infrastructure, on industry and on opportunities to keep our towns and villages thriving.
On transport, the message is clear: we cannot afford to leave our communities disconnected. I have long been vocal about the pressing need for upgrades to the A50/A500 corridor, a critical route linking Uttoxeter and surrounding villages to the rest of the midlands and beyond. The road has needed vital improvements for years, not just to reduce congestion but to ensure the safety and reliability on which our residents and businesses depend. The Conservative party has failed to invest in our infrastructure—a fact well known to Branston residents, who now face a crumbling bridge and roads across my constituency riddled with potholes. Given this Government’s increased focus on local roads and public transport, I am optimistic that our ongoing efforts will soon deliver the changes that my constituents deserve.
My area has a proud industrial heritage, and the Budget provides a lifeline to manufacturing areas. With the first industrial strategy since 2017, we will finally be taking a long-term approach to training, skills and investment. This means that our skilled workers and young people in Staffordshire will not have to leave for opportunities elsewhere, but will instead find them exactly where they should be, backed by investment in green technologies and clean energy initiatives such as Great British Energy. These are not just big-ticket items; they are the jobs, training and progress that people in my constituency need.
Then there is public procurement, with our commitment to back British firms and British jobs with public tenders. With new regulations requiring faster payments and favouring British firms, we are seeing tangible support for the small and medium-sized businesses that are the backbone of our society. We must buy more British, and build more British too. We will use the purchasing power of the British state to invest in our communities. By buying from local companies we are investing in local companies, and by investing in local companies we invest in local jobs, which means more money for our communities—including communities like mine in Anglesey, Shobnall and the Heath. That is real levelling up, not the pale imitation attempted by the Conservative party. It is delivering on promises that we made, not breaking them.
This Budget is a blueprint for a Britain rebuilt. It is not just about growth; it is about renewal. It is about supporting the spirit of innovation and resilience in every part of the country. It is about reminding every family in Burton and every business in Uttoxeter that they are not just part of the economy; they are part of Britain’s future, too.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
Thank you for calling me, Madam Deputy Speaker —I was not expecting you to do so. May I associate myself with the remarks made by my hon. Friend the Member for North Norfolk (Steff Aquarone) apropos farms and farmers?
Madam Deputy Speaker, you—I can call you “you”—have heard me talk about health services in the remote far north of Scotland more times than I care to remember. Members refer to the NHS as being on its back, which is nowhere truer than in my constituency. The people in Caithness and Sutherland knew that when they came to put a cross on the ballot paper in July, which is why we got the result that we did. I would say to my hon. Friends who represent other Scottish constituencies that that is true elsewhere, too.
Two doctors in my constituency, Dr Alison Brooks in Thurso and Dr Ewen Pearson in Wick, have made it very clear to me what the effects of the increase in employers’ national insurance will mean. I do not want to bore the Chamber, because we have heard a lot about that already, but the hon. Member for Stroud (Dr Opher), who is not in his place, referred to possible mitigation, and I hope that that will prove to be the case. Otherwise, we could face the diminution of services and even find that jobs will go, which would be totally and completely unacceptable.
I was sitting in the Chamber when the Chancellor announced the £3.4 billion for the Scottish Government, and I heard nine soft thuds as nine chins hit the deck behind me. The SNP had the old, wailing dirge ready: “It’s Westminster what done it. We ain’t got the cash.” Oh! None of them is here. What a shame! Well, I am just going to say what other Members have said. I hope that the SNP Scottish Government get off their backsides and spend the money properly. There is no hiding now, and there is no excuse—they have got the dosh.
Madam Deputy Speaker, how many times have you heard me talk about mums having to go on a more than 200-mile return trip to give birth in the middle of winter? Are we joking? It is amazing that something dreadful has not happened. The doctors I spoke to about national insurance contributions told me that gynae services in the far north of Scotland are on their knees. Dr Pearson told me about a mum who had to wait two years to get a hysterectomy. Is that not a disgrace?
In the county of Caithness, there is not one psychologist —a damning fact, because we know that mental health is such a problem. There is no hiding. The Scottish Government should get on with the day job and sort out the NHS in my constituency and the rest of Scotland. They have no excuses.
Andy Slaughter (Hammersmith and Chiswick) (Lab)
In the time allowed, I will confine myself to a few comments on the Budget’s financial settlement for the Ministry of Justice.
The MOJ is one of the smaller Departments in budgetary terms but has suffered the largest cuts in proportion to its size. Given its role in keeping us safe, providing a high-quality judicial and court system, and offering access to justice that is not dependent on means, the previous Government’s actions were not just regrettable, but reckless. I was, therefore, pleased to see substantial real-terms investment for the first time in 14 years. It is not enough to resolve all the crises, but it is a start in turning things around.
Total MOJ spending will rise from £11.9 billion in the last financial year to £13.8 billion in the next—an average real-terms increase of 5.6% a year—and the Law Officers’ budget will increase by 7.5% a year over the same period. Some of that funding has rightly been directed at prisons and probation, with £2.3 billion to be spent on new prisons, half a billion pounds on maintenance and security budgets, and the same on recruiting new staff. However, the Budget made no mention of civil and criminal legal aid, or of additional money to address the unsustainably large courts backlog. This year’s settlement funds 106,500 Crown court sitting days—not enough to address the backlog, which grows ever larger. Trials are being listed for 2027, and there are similar logjams in the civil and family courts and tribunals.
As of 4 November, the prison population was 85,794. Prisons are running at almost full capacity and the prison population is projected to increase to 94,000 by March 2025, and up to 106,000 by March 2027. Prisons are in a dire state. Prisoners are being held in unsafe, crowded conditions on an estate plagued by widespread disrepair and severe maintenance backlogs. Fire safety standards on the prison estate are woefully poor, and we have to ensure that there is a plan for probation to grow in response to measures to reduce prisoner numbers.
Legal aid is another area of acute pressure. Will any of the new money allocated to the Department be spent on legal aid? Failure to invest will deny access to justice, and it would not be possible to tackle the growing court backlog without further investment in criminal and civil legal aid. I was pleased that the Minister said yesterday, in replying to a question from me in the House, that there will be announcements in the next few weeks on legal aid. This is an excellent start, but there is a long way to go to repair our broken justice system.
David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)
It was a pleasure and a privilege to listen to some excellent maiden speeches. As a Welsh Liberal Democrat, I am pleased to play my part in constructive opposition. I want to see things get done for Wales, and there are certainly parts of this Budget that we welcome—for example, the increase in the carer’s allowance that my right hon. Friend the Member for Kingston and Surbiton (Ed Davey) and the Liberal Democrats have campaigned so hard for. Around 10% of the Welsh population are estimated to be unpaid carers, and many of them will see a real difference thanks to this initiative.
We also thank the Government for listening to our calls for extra funding for the NHS and social care. It is now over to the Welsh Government to ensure that all consequential money is spent on health and social care, which has not always happened in the past. With 800,000 people stuck on waiting lists in Wales, which is nearly a third of the population, this could not be more urgent. We want to see further action on social care. Some 50% of beds in Powys are currently blocked, and the patients are unable to be discharged to go back to their homes and families. That is something that must end.
Fixing our health services is key, and it is for this reason that we have called for the national insurance hike to be removed for care providers and GPs. I am proud to have mining heritage in my family, and I welcome the boost to former miners’ pensions, but confusion remains over the future of the British Coal staff superannuation scheme, which has over 41,000 members, many of them across south Wales. Further clarification has not been provided so far for those former miners. Time is running out for many of them, and we urgently call on the Government to provide some reassurance to them.
We have less favourable views on other elements of the Budget, including the changes to agricultural property relief, which are causing a great deal of genuine anxiety across my constituency and Wales as a whole. If the Labour Government do not change course, they will be throwing family farms to the wolves in the same way that other industries have been let down in the past. The impact will be felt not just by young farmers unable to take on a viable farm business, but in wider consequences. The entire rural economy is dependent on farming incomes, so the changes will threaten jobs across Wales. We do not understand why the Government are not raising the revenue from other sources. Why should Welsh farmers bear the brunt of repairing the economic damage caused by the Conservatives?
Mr Alex Barros-Curtis (Cardiff West) (Lab)
It is a privilege to speak in this debate following the first Labour Budget in over 14 years and the first in 800 years to be given by a woman. This might not be an achievement that the Leader of the Opposition thinks is of any note, but I can tell her and the House that in my constituency of Cardiff West it is a proud moment, and one that women and girls in my constituency take great pride in.
After 14 years of chaos and instability, this Labour Government have made their choices known in this Budget. This Labour Government have chosen to deal with the £22 billion black hole left by the Tories, and to be honest about it with the British public. This Labour Government have chosen to stabilise our economy so that we can grow our economy. This Labour Government have chosen to invest in our public services and to end the austerity of the last 14 years. And this Labour Government have chosen to support and work with our devolved Governments, rather than denigrate them.
Despite our dire economic inheritance from the Tories, the Chancellor has made some tough choices while holding true to our party’s values in delivering a Budget that supports and invests in working people throughout our regions and nations. This Budget has delivered for my constituency and for Wales more generally. This is the biggest Budget since devolution. It provides a record £1.7 billion spending boost for the Welsh Government to support public services. As a result, my constituents will see the benefits both through the Barnett formula and through direct spending.
I am also proud that the Budget has set aside £100 million to support steel communities, both through the transition board and through the town centre regeneration fund. For the first time ever, it allocates funding to make coal tips safe, with £25 million in new money.
But let us not forget why the choices in this Budget were necessary. The Tories crashed the economy, and we had to fix it. In so doing, we have ensured that working people will not face higher taxes in their payslips, and we are increasing the national living wage by 6.7%.
When we talk about choices, let us not forget the choices that the Conservatives have made. They have chosen to oppose this Budget, which means they are opposed to the investment that will grow our economy. They are opposed to investing in and reforming our public services, which can only mean that they remain committed to continuing austerity.
I do not even know where to begin with the Tories’ disgraceful position of allocating no money whatsoever to their promise to pay compensation to the victims of the contaminated blood and Post Office Horizon scandals. My constituent Sue Sparkes and others have fought this injustice tirelessly.
This Budget shows the difference being made by the Labour Governments in Westminster and Cardiff, and I celebrate it.
Josh Babarinde (Eastbourne) (LD)
The returning tide of populism that we have seen today is a sobering reminder of what can happen when people feel that the system has not been delivering for them. This reality makes fiscal events, such as a Budget delivered by a new Government, so critical. A Budget is more than just an annual accounting practice; it represents an opportunity to reassure our communities that they can trust us—all of us—to recognise their needs, aspirations and concerns. A Budget is an opportunity to meet those needs and to inoculate our communities and our country against the populist contagion that has invaded yet another host today.
Against that backdrop, I will shamelessly share some of Eastbourne’s needs. Eastbourne needs support to tackle homelessness, which has meant that our food bank was the country’s busiest last year. I therefore welcome the £230 million announced in the Budget for homelessness prevention, and I hope the East Sussex floating support service can benefit from it, but we have been let down by the lack of emergency support to help councils like mine with the unsustainable cost of temporary accommodation, as so eloquently described by the hon. Member for Vauxhall and Camberwell Green (Florence Eshalomi).
Eastbourne also needs services at our local hospital, where I was born, to be protected. I welcome the NHS investment announced in the Budget, but I am disappointed that the status of investment in our hospital via the new hospitals programme has still not been confirmed. This means that local mums, who in many cases are having to travel more than 20 miles to have their babies, are still unclear about what investment their hospital will get.
Our significant population of local pensioners and I have pleaded with the Government to review their decision to remove the winter fuel allowance from many pensioners who need it. It is unacceptable that those calls have been ignored.
Our local businesses need additional support to thrive, yet the increase in employer NICs will make it harder for them to survive—especially many of our hospitality businesses, which I am proud to represent as a patron of the Eastbourne Hospitality Association.
Eastbourne’s WASPI women, led by Angela Boas, deserve compensation, which was missing from the Budget. Eastbourne’s SEND families, supported by advocates like Kate Humphries, must benefit from the £1 billion SEND funding that was announced.
Overall, the Government have made progress, but they must go further to reassure my community that they will deliver for Eastbourne on all the counts I have described. Failure to deliver will leave my town more vulnerable to the vice of great hardship, and more exposed to the venom of populist predators.
Claire Hughes (Bangor Aberconwy) (Lab)
I congratulate Members on both sides of the House on their excellent maiden speeches today. It is a pleasure to speak in the debate.
For far too long, people in north Wales have suffered because of stagnant wages, falling living standards and rising costs. That is the legacy of the last Conservative Government and why our country has voted for change. Last week, we saw a Budget that turns the page on an era of unfunded policies and sticking-plaster politics. Last week’s Budget was an honest Budget, which will fix the foundations of our economy and improve living standards for people in communities like mine. I thank the Chancellor for this historic Budget and what it means for Wales. The Chancellor has delivered a record £21 billion to the Welsh Government to invest in public services, with £1.7 billion in consequentials through the Barnett formula, but there is more to welcome.
Like my hon. Friends the Members for Beckenham and Penge (Liam Conlon) and for Kettering (Rosie Wrighting), before I came to this House, I worked mostly for and with small businesses. Many measures in the Budget will be welcomed by businesses in my constituency of Bangor Aberconwy. Support for pubs and smaller breweries from cutting duty and providing additional relief will mean brilliant brewers, such as Wild Horse, in Llandudno, and Cwrw Nant, will be supported to thrive.
The continued freeze on fuel duty will be welcomed not only by those who live in rural communities and depend on their cars, but by logistics businesses, such as Baynes & Son in Bangor. The increase in employment allowance is also welcome. Perhaps most importantly, more than 70,000 people in Wales will receive a pay rise next year as a result of the increase in the minimum wage, meaning more people have more money in their pockets to spend in our local economy, including in our shops and cafés and on our high streets.
I am proud that we now have two Labour Governments working hand in hand in the interest of the people of Wales and the UK. This Budget is not just about rebuilding our country; it is about rebuilding trust in politics. Nowhere is that more clear than in the return of a constructive relationship between this UK Government and our Welsh Government in Cardiff. That is the difference a Labour Government and a Labour Budget make. This Budget delivers for Wales and the people of Bangor Aberconwy. We can be proud of the Budget and I know we will see the benefits it will bring in the years to come.
Dr Neil Shastri-Hurst (Solihull West and Shirley) (Con)
It is a pleasure to follow so many excellent maiden speeches this afternoon.
The Budget marks a seminal moment in the parliamentary calendar. Irrespective of party politics, there is a collective desire that any Budget provides the foundations for our great nation to succeed.
My constituency of Solihull West and Shirley, with its range and breadth of businesses, is an important economic driver for the west midlands. Having sat down with 17 business leaders last Friday, and having visited multiple businesses in the lead up to the Budget, it is important that I convey their balanced and market-led views.
Businesses look for stability. They want to understand the Government’s growth and economic plan for an industrial strategy. However, as one CEO described it, the Budget represents private industry versus public sector, employer against employee. One cannot have well-funded public services if there is no private industry to pay for them; one cannot have high employment rates if there are no private business to spur job creation; and one cannot have economic growth if private investment is driven out of this country.
This Budget has brought businesses more complexity and uncertainty. As a consequence of last Wednesday’s announcements, businesses in my constituency have already announced recruitment freezes.
By now, the Chancellor will have received my letter, sent yesterday and signed by approximately 40 Members of this House and the other place, regarding the impact that her new national insurance contributions policy will have on general practitioners, dentists, hospices and care homes. These vital services will be forced to decrease staff numbers, thereby creating further pressures on the NHS and public services.
Graham Stuart
I am grateful to my hon. Friend for giving way. [Interruption.] Government Members do not like to hear this.
Graham Stuart
Not when an intervention is happening. Every Labour Government in history have ended with higher unemployment than when they began. From the look of these measures, does it not seem that this one will be exactly the same?
Madam Deputy Speaker (Judith Cummins)
Order. Although the hon. Gentleman will be very grateful for the intervention, may I remind Members that time is tight?
Dr Shastri-Hurst
I am grateful to my right hon. Friend for his intervention, and I agree with him entirely. I am mindful of the tightness of time, Madam Deputy Speaker.
Will the Chancellor reconsider the exemption list, to protect the vital services I mentioned, much as she reconsidered when it came to VAT on continuity of education allowance payments? We all understand how much money the Chancellor hopes to raise, but I ask today that she sets out a realistic plan to raise the money. What is her plan to grow the economy? GDP growth predictions are lower than inflation rise predictions, which effectively means the economy shrinking over the next five years.
Finally, I ask the Minister to set a firm date for the publication of the Government industrial strategy, so that businesses have stability, rather than being on the receiving end of the Chancellor’s smash-and-grab tax raid.
Jo White (Bassetlaw) (Lab)
Let me welcome the first Labour Budget in 14 years, and the first ever delivered by a woman. The Budget’s positive interventions for Bassetlaw have the vibe of the late, great, Ian Dury’s song, “Reasons to be Cheerful”. The song has wonderful lyrics listing the joys in life; it was written in response to his band mate surviving a brutal electric shock. Well, this Budget is Labour’s response to the shock of the Truss mini-Budget, and 14 years of neglect and no economic plan.
In Bassetlaw, we now have significant support for UK fusion energy research to build on the UK’s position as global leader in sustainable energy. Building the first fusion power plant in Bassetlaw will take us to the next generation of carbon-neutral energy creation, providing huge opportunities to develop talent, skills, local jobs and wealth, and to build on business.
The massive injection of funds into the NHS means that the waiting lists at Bassetlaw hospital will be tackled head-on, with a crack team from London hospitals going in to get our operating theatres open seven days a week, and driving those waiting times down. People are waiting too long for the operations that they desperately need. They want to be in work and bringing home a wage. That is central to rebuilding our economy and lifting people out of poverty. This is our Government putting joined-up thinking into action.
I welcome the fact that in Bassetlaw, 2,500 retired mineworkers will see their pensions go up by £30 a week, as we deliver on our manifesto commitment, but it does not end there: our Government will continue to review surplus sharing arrangements, and I call for this to include those retired miners in my area who are in the scheme for supervisors and overseers. They cannot be ignored. They paid into an identical scheme and they deserve equal treatment.
When Bassetlaw people told me that they were too scared to go into our town centres, I promised that I would take action. I welcome the funding to crack down on the organised gangs that target retailers. I welcome, too, the Government scrapping the law that gives immunity for low-value shoplifting—an immunity granted by the Conservative Government in 2014.
The Tories talked the talk, but they did not walk the walk. They were all hot air, promises and no delivery. Whether it is the challenge of getting a GP or a dentist appointment, the challenge of sorting out the funding for flood alleviation schemes in Retford and Worksop, or the failure to stop Doncaster airport closing, the Tories have left it to Labour to pick up the pieces, to sort out their mess and to get Britain back on course.
Dr Al Pinkerton (Surrey Heath) (LD)
I congratulate all of today’s maiden speakers on their excellent contributions.
In her Budget statement last week, the Chancellor announced a £1 billion increase for special educational needs and disabilities. Any additional funding is of course very welcome, especially in Surrey, where the SEND system is in crisis, but it is important to put that figure in context. Estimates suggests that the national SEND budget is running an annual deficit of £4 billion, rising to nearly £6 billion in 2025. The whole system is being saved from complete collapse thanks only to a statutory override—an accountancy trick that allows councils to keep these deficits off their books until March 2026. What happens after that no one yet knows, but the National Audit Office has warned that the UK’s SEND system teeters on the brink of collapse.
Surrey county council alone is carrying an eye-watering £118 million SEND deficit, so while the Chancellor’s additional £1 billion investment may sound promising, it really only buys a little time. A few weeks ago, I spent a morning with a group of nearly 70 parents, each of whom has a child or children with special educational needs. Many of those children have been unable to attend school for months, and in some cases years, due to the lack of an appropriate setting or support. Parents are being forced into becoming full-time carers, with one or both parents giving up paid employment to take on caring responsibilities. Each year, thousands of private and public sector workers are lost from the economy because SEND provision is failing children and parents alike.
Parents tell me that when they are not educating their children, they work late into the night administering appeals processes, gathering evidence for tribunals, and seeking help from charities and agencies that might just help to unlock the broken SEND system for them. That is the daily pattern for many thousands of households across the country, yet the experience can feel crushingly lonely. The SEND system pulls working people out of their careers and out of the workforce, while permanently limiting the life and career chances of children with incredible potential. Those human and economic costs are barely accounted for in the Government’s budget-setting.
If this is indeed a Government who prioritise economic growth and seek to invest in working people, I encourage them to see reform and proper funding of special educational needs as a vital component of their national mission.
Claire Hazelgrove (Filton and Bradley Stoke) (Lab)
When I was out knocking on doors and listening to fellow residents at the weekend, many people in Winterbourne said how pleased they were to see us begin the change that has been so desperately needed by so many for so long. From our NHS and our schools to our industry and our roads, this Labour Budget is focused on fixing the foundations, delivering change that matters, and rebuilding Britain. After 14 years of decline and neglect, simple things have become much harder than they should be, and although people know that it will take time to deliver the scale of change that Britain needs, we now have funding for 40,000 more NHS appointments a week, and money to rebuild schools that are crumbling around our children and to start to improve SEND support, so that every child can thrive, and to make life fairer for carers who look after loved ones. This is a Labour Government delivering as promised.
The Filton and Bradley Stoke constituency is a rich tapestry of towns and villages that have strong local character and great national and international impact. I am proud that our communities are at the heart of aerospace in the UK. We are the home of both Concorde and the future of flight, and major companies, supported by brilliant SMEs, are innovating every day to reduce emissions and lead the way in British enterprise. I know that local people will join me in welcoming our Government’s investment of £975 million in the aerospace sector in the Budget. That will fund vital research and development for the latest aerospace technology in our region and beyond. That is important because rebuilding Britain is also about restoring Britain’s leadership and place on the world stage. We have a strong defence sector locally, including MOD Abbey Wood, so I welcome the £2.9 billion uplift in defence funding, in addition to the funding for Ukraine for as long as it is needed. Our support must never waver.
As the first ever woman to represent my constituency, I note what an important moment it was to see the first woman Chancellor in our country’s history stand to deliver the Budget. Representation matters, as does delivering change.
This Budget does what our new Labour Government were elected to do: it sets the path for rebuilding Britain. I look forward to supporting those efforts on behalf of my community, who elected me to deliver that change.
Olly Glover (Didcot and Wantage) (LD)
Certainly, the Budget has been on the minds of many of my constituents. It was even a topic of conversation with the owner of Gurkha Sunkoshi when I collected an Indian takeaway last night. I will say more about the impact on small businesses such as his shortly, but let me start with the positives.
It is certainly excellent to see the Government commit to NHS investment, which has been the subject of a key Liberal Democrat campaign, including in my constituency. I also welcome the compensation for victims of the infected blood and Post Office Horizon scandals. I agree with colleagues who have highlighted the point that the increase in carer’s allowance and SEND provision is welcome, but does not go far enough.
Nevertheless, there is much cause for concern for my constituents, particularly small business owners. GP and dental surgeries are concerned about rising costs as a result of increases to employer national insurance contributions and the minimum wage. Alas, so far, they have not received assurances of additional funding to match the liabilities that they will face. Of course, they run the risk of needing to reduce staff recruitment or even lay off staff, which could add to pressures on the local health service.
The same issue applies to the wider small business and high-tech sectors in my constituency—including Indian restaurants. My constituency has been assessed by the Startup Coalition as No. 16 in the country for new businesses, not least thanks to our high-tech business parks: Milton park, Culham campus and the Harwell science and innovation campus. Those businesses will be worried about the ability to grow because of the costs that they face. Many of my colleagues have highlighted concerns about the proposed family farm tax. The Liberal Democrats call for an extra £1 billion a year in support for farming communities.
It is on transport policy that the Budget most disappoints. Perhaps, given the proposed increase in the bus fare cap and the above-inflation increases to rail fares, the Government are under the impression that working families only use cars. A season ticket from Didcot in my constituency to London, plus travelcard, already costs around £7,000 a year. Those policies undermine the Government’s stated objectives on economic growth, climate change and reducing congestion. I also regret that there is no commitment to local rail schemes in my constituency, such as a new station at Wantage and Grove, and electrification between Didcot and Oxford.
Today’s election result in the United States emphasises the importance of managing the economy and public services so that people feel listened to and supported. My fear is that some of the Budget measures will have the opposite effect, but I genuinely wish the Government success, and hope that they will listen to and address the many concerns raised by the Budget.
Dr Zubir Ahmed (Glasgow South West) (Lab)
I congratulate hon. Members who have delivered maiden speeches today on their thoughtful contributions.
This Budget marks the end of an era of austerity inflicted by the Conservative party over the past 14 years, during which time take-home pay was cut to the bone and our public services almost reached existential crisis. In Scotland, we had the trouble of two failing Governments. The SNP promised Scandinavian-type public services, while the Conservative party promised North American levels of taxation. The result was broken public services and a complete misuse of taxpayer money.
I am proud of many things in the Budget, but I am most proud that next April the national minimum wage will rise to £12.21 an hour. That will lift the earnings of 200,000 people in Scotland and 3,000 people in my Glasgow South West constituency. This Labour Government will ensure that work pays, and that it is secure and dignified.
The Budget continues and increases direct investment in Scotland through the innovation accelerators programme, which supports 11 projects in Glasgow. It also establishes Brand Scotland, and supports Scottish trade abroad by contributing £750,000 to the Scotland Office. This is the biggest uplift in Scotland’s funding through Barnett consequentials since the beginning of devolution in 1999, with £3.4 billion of additional funding. Within that funding, Labour has increased the overall education budget by 3.5% in real terms and increased local government funding by 3.2%, so SNP-run Glasgow city council has no excuse to be cutting 450 teaching posts over the next three years. It must not rob young Glaswegians of their future, because theirs is the contribution that will make our economy grow.
Conservative Members used to tell us frequently that they believed in Britain, and SNP Members—conspicuous by their absence today—used to tell us that they were stronger for Scotland. What better embodiment of strength and of that belief than investing in our infrastructure and our people? We on the Labour Benches have made our decision; it is now up to them whether they back Britain or not.
Charlie Maynard (Witney) (LD)
In this Budget debate, I am going to focus on the massive disconnect between the Government’s talk about growth and investment and what the OBR considers will be the outcome. Sadly, we can want something and talk about it, but if we do not enact the policies, we are not going to get it. That will hit everybody across the country really hard, particularly the most vulnerable. I am seeing that reality in my constituency, where a lot of employers are relocating plants abroad to the EU, rather than relocating and growing those jobs in the UK. That is not just happening in my constituency: very likely, it is happening in every other Member’s constituency as well. That is a huge problem for our public services, which are ultimately underwritten by our taxes.
As a result of this Budget, real private consumption as a share of GDP is set to fall by 0.4% by 2029, and real business investment is set to fall by 0.6%. It is not me saying that: it is the OBR. That is very different from what the Secretary of State has told us. It leaves real GDP growth lower in the outer years, in the 2027-29 forecast—again, not my words, but the OBR’s. As per OBR data, Brexit is cutting our long-run productivity by 4%, and is cutting the overall trade intensity of our economy by 15% in the long term. The UK has a free option to boost economic growth at zero fiscal cost by restoring a closer economic relationship with Europe. However, although not a single person on Labour’s Front Bench even voted to leave the EU, we find ourselves with a Government supporting daft Conservative economic policies that nobody in the country voted for, such as remaining outside the customs union and the single market.
Even before Trump’s win today, we as a country could not afford to be taking these wrong decisions. Continuing to do so, wilfully and in direct contradiction of the facts, is neglectful and shows a disregard for the wellbeing of our country. I urge the Government to change course.
Jack Abbott (Ipswich) (Lab/Co-op)
This Budget was about rebuilding Britain after 14 years of incompetence, negligence and chaos. Conservative Members—all four of them who are left in the Chamber today—cannot even bring themselves to apologise for the inheritance that they left, not just to our Government but to the country as a whole. They should have spent the past few months reflecting on why, as we can see before us, the country rejected them so profoundly. Instead, they engaged in yet more infighting and asked people not to believe their own eyes. Even now, they tell people that the economy has never had it so good—that they should ignore their depleted bank accounts, the increased mortgage rates they have to pay, and the state of our high streets. They talk as if our hospitals and our schools were not left to crumble; as if they did not savage local government finances and the services so many people rely on; and as if the criminal justice system had not been pushed to the point of ruin. Even when they admit to the desperate state of mental health, special educational needs, dentistry, social care, homelessness and poverty, they talk as if those things had nothing to do with them. It is always someone else’s fault.
This Budget ends the cycle of Conservative decline and restores hope that things can get better. Just like our NHS, Britain might have been broken by the Conservatives, but we are not yet beaten. That is underlined by the choices this Budget makes—not always easy, but necessary: the choice to protect pensions with the triple lock, the choice not to raise national insurance, income tax and VAT for working people, the choice to unfreeze income tax thresholds so that people have more money in their pockets, the choice to increase carer’s allowance, the choice to raise the minimum wage to record levels, the choice to fund thousands of new homes for families in towns such as Ipswich and far beyond, and the choice to start rebuilding our NHS, our schools and our infrastructure. Those are the choices we have made to fix the foundations of the economy and our public services, to invest in Britain’s future and to deliver the change that people voted for.
I return to a specific issue that has been mentioned many times in this debate, special educational needs. That is now very much a national crisis, but it is one that we have been battling in Suffolk for the best part of a decade. A £1 billion injection into SEND is much needed as our Government look to repair a broken system starved of funding, resources and focus. No, money alone will not solve the multitude of issues facing families desperately trying to get the support their children need—we need bold and wide-ranging reforms too—but new specialist staff and places do not come free, and unfunded reforms are a complete non-starter. SEND cannot be treated as a Cinderella service any longer. The new funding is a much-needed statement of intent from this Government, and one that will be welcomed by families in Ipswich and Suffolk and across the country.
Shaun Davies (Telford) (Lab)
This first Budget is about cleaning up the mess of the last 14 years—five Prime Ministers and seven Chancellors—and repairing Britain’s foundations. It is about investing in Britain and backing it to succeed, and ensuring that when we need public services, they are there for us. It is an important first step. But my goodness, the Conservative party have made an incredible mess.
During the general election campaign, my team and I spoke to thousands of people across Telford. Every conversation was about decay—our crumbling NHS, the struggles of our education system and the breaking of our council services, the fact that we do not see enough police officers on our streets, high streets in need of support, a SEND system that is letting children down, roads and transport systems that do not work for working people—I could go on. There was a real sense that the Government had given up on governing and made many people believe that there was no hope, and that decline and doom, chaos and corruption was the norm.
This first Budget is a watershed moment. It marks the return to a state that cares about making sure people can get the medical treatment they need when they need it, that they feel safe on our local streets and that they can afford housing. The contrast between the hope that this Budget offers and the bleak future I described under the Conservatives is striking.
I am particularly pleased that this Budget has delivered a real-terms funding increase of more than 3% for local government next year. Before I came to this place, I was a council leader and the chair of the cross-party Local Government Association—I declare an interest on the basis that I am now the honorary vice-president of that organisation. Every councillor, regardless of political persuasion, will talk about the last 14 years, with councils of all political stripes going bankrupt almost every single year. The LGA has called this Budget
“a step in the right direction”,
but after 14 years of stumbling in the wrong direction, it is just the start of a long journey back. That journey must start with the reforms of local government. The Government recognise the urgent need to give local government leaders more skin in the game, and I look forward to seeing more reforms in that regard.
Like other hon. Members, I welcome the fact that the national living wage is increasing, which will impact 4,000 people in my constituency. This Budget is pro-growth, pro-business, pro-worker, pro-family, pro-public sector, and it is giving people a Britain they can be proud of.
Paulette Hamilton (Birmingham Erdington) (Lab)
This Budget truly marks an historic shift, with real steps to rebuild Britain for lasting change. After 14 years of Conservative mismanagement this Budget brings hope, with a commitment to rebuild and restore fairness for working families, essential workers and vulnerable communities.
I am especially pleased that the Budget has put working people at the forefront by increasing the national living wage and ensuring that they will not face higher taxes in their payslips. That will benefit thousands of working families in Erdington who have been hit hardest by rising costs, stagnant wages and insecure work. The food banks at Six Ways church and Spitfire Support Services are heartbreaking reminders of the last Government’s legacy, but now hard-working people are finally getting the fair pay they deserve.
As a nurse of 25 years, I am deeply heartened by the commitment to our NHS. Years of underfunding have left it struggling, and the Budget’s £25.6 billion investment is a lifeline, promising timely, quality care. That funding will help to reduce the painful waiting lists that have left many in my constituency suffering as they wait months, if not years, for essential care.
Community safety is also a priority. Traders on Erdington High Street have spoken about the rise in low-value shoplifting. I am grateful that the Government have pledged to scrap immunity for such crimes, restoring accountability and safety.
Education is the foundation of a fairer society. The Budget’s investment in the core schools budget and free breakfast clubs is exactly what our schools need in order to support young people and prepare them for success.
Today we reject the chaos and cuts of the past. This Budget restores integrity, fairness and hope, offering a path that allows us to invest in people, protect families and rebuild communities for a stronger Britain. I am proud to support a Budget that works for Erdington, Kingstanding, Castle Vale and South Oscott and for every community that deserves better.
Nadia Whittome (Nottingham East) (Lab)
The mission of any Budget should be to ensure that the needs of all people in this country are met and to shape our economy towards that end. After 14 years of Conservative-led Governments, working-class people do not have the standard of living they deserve. The Tories have pushed children into poverty, normalised low-paid, insecure work and increased economic inequality. Meanwhile, the public sector has been decimated by austerity. While the rich pay to go private, millions of people are stuck on NHS waiting lists, their pain increasing and their quality of life diminishing.
So I welcome a Budget that includes higher spending for public services and that funds our NHS and our schools. The increase to the minimum wage and carer’s allowance will make a tangible difference to many people’s lives. The injustices of the mineworkers’ pension scheme will finally be rectified, benefiting thousands of former miners across Nottinghamshire. And there is more—but there are also elements of this Budget that worry me.
Disabled people fear that the target of delivering savings through reforms to the disability benefits system will mean that people are excluded from the support they need. It is shameful that people have been forced into poverty by the welfare cuts of previous Governments; some have even lost their lives thanks to a system that, all too often, seeks to punish rather than to help.
We must do things differently. We must fund a social security net that gives everyone, whether in work or not, the resources they need to live a decent life. We must also prioritise ending child poverty, as previous Labour Governments have, so I am disappointed the Chancellor has not moved to scrap the inhumane two-child benefit limit.
Meanwhile, the richest 1% of Britons have £2.8 trillion between them. Although the Budget will modestly increase their contribution to our public finances, we must go further to make the super-rich pay their fair share. We should introduce a wealth tax, taxing earnings from wealth at the same rate as wages.
I am confident that this Budget takes important steps to deliver change, but is it at the scale we need after the devastation caused by the Conservative party? I am not so sure. I say that not to undermine the Budget, which stands in welcome contrast to the last 14 years, but to push for even greater ambition, because the job of a Back-Bench Government MP is to tell their party when it needs to go further.
Trump’s election is a warning to us here: if people do not see their lives improve, the populist right stands to benefit. So let us build on the good work our Government have started in the first 100 days, ensure that every person has a decent standard of living and tackle the inequality that continues to blight our society.
Jessica Toale (Bournemouth West) (Lab)
As the Business Secretary and many hon. Friends have said, the central mission of this Government is to get the economy growing after years of stagnation. Fourteen years of poor economic management and short-term decision making are writ large in my town centre in Bournemouth West and in high streets up and down the country, as my hon. Friend the Member for Leigh and Atherton (Jo Platt) set out so powerfully. We see this in our creaking infrastructure and the crumbling schools that my hon. Friend the Member for Kettering (Rosie Wrighting) mentioned and the pothole-ridden streets we drive our cars on. While the public made their views on the state of the country very clear on 4 July, the Conservative party seems still to be in denial. This Budget gives us the opportunity to turn a page, fix the foundations and rebuild our country.
I welcome the Business Secretary and Chancellor’s focus on investment. My constituency of Bournemouth West is a microcosm of the UK’s diverse economy. Just last week I visited a new manufacturing plant whose products have “Made in Britain” proudly branded all over them. We have a vibrant retail, hospitality and leisure sector and while there are some concerns about rising costs it is given confidence by the Government’s focus on growth and getting money back into people’s pockets. We have strong education and finance sectors and a burgeoning tech and creative industry sector, and I was pleased to see support for these industries reflected in our industrial strategy, giving them certainty over the long term.
Underpinning all of this are our people. This Government’s Budget will benefit the 8,300 people in my constituency on the minimum wage and the 1,880 people in receipt of, or eligible for, carer’s allowance, and the 30% of children who live in poverty and their families will benefit from the investment in our schools, hospitals and affordable homes to live in. Healthier, happier and more secure workers and constituents are good for business; it is good for growth and good for our economy.
I wish to make one point on infrastructure. My hon. Friend the Member for Folkestone and Hythe (Tony Vaughan) mentioned that when we knock on doors people always bring up our public services and the NHS, and they do, but every good constituency MP knows that potholes are the bane of everybody’s life, so I welcome the £500 million for potholes announced in the Budget.
We cannot achieve sustainable growth without a solid foundation with stable public finances and public services that benefit everybody. This is what we are doing with this Budget and I look forward to supporting it today.
Chris McDonald (Stockton North) (Lab)
Several of the previous speakers, including the hon. Members for Solihull West and Shirley (Dr Shastri-Hurst), for East Wiltshire (Danny Kruger) and for Witney (Charlie Maynard), expressed concerns about growth and productivity and I hope to draw on my previous experience working in industry to set their minds at rest, but we first need to acknowledge the dire starting point and the damage done both to our economy and to business confidence by the last Government.
I know from my time spent in industry that over the last decade and a half our country has lost out in the race for international investment from a combination of political uncertainty and a long-standing indifference to industrial policy. I listened carefully to the words of the hon. Member for Great Yarmouth (Rupert Lowe) and I think he must have read a different Budget from me. The Budget I read committed us to public sector investment of over £100 billion over five years, which along with our modern industrial strategy sets the scale of the Government’s ambition for increasing prosperity and security across the whole of our country.
Several Members, including the hon. Members for Wimbledon (Mr Kohler), for Tunbridge Wells (Mike Martin) and for Didcot and Wantage (Olly Glover), mentioned small businesses. These are the very businesses which stand to benefit from our industrial strategy as our new approach to industry and manufacturing sees the private sector crowding in investment, producing well-paid jobs and exports that will support our small businesses in supply chains. This will also reverse the tide of deindustrialisation, a frankly bizarre policy of inaction enacted by Conservative Governments over many years that has left much of our industry, including steel, chemicals and ceramics, mentioned by my hon. Friend the Member for Stoke-on-Trent North (David Williams), at a serious disadvantage.
It seems clear that to grow our economy we need to boost productivity and simply build more factories, but I know as an advocate of industrial strategy that this position is not a settled one, particularly in the party opposite. That is in big contrast to the collaborative approach of this Government, who work pragmatically with business leaders. We have heard some warm words from Conservatives about industrial strategy, including from Opposition Front Benchers, but they perhaps have not had time to consult with their new leader, the right hon. Member for North West Essex (Mrs Badenoch), who has described such policies as part of the law of diminishing returns.
Having seen my right hon. Friend the Secretary of State for Business and Trade secure £63 billion of private sector investment, we can be sure, to borrow a metaphor from the right hon. Member for South West Wiltshire (Dr Murrison), that had their goose not been cooked at the last election, returns would most certainly have been the diminished.
This Budget will be of benefit to my constituents in Stockton, Billingham and Norton who value well-paid industrial and manufacturing sector jobs. I can understand the confusion of the right hon. Member for Beverley and Holderness (Graham Stuart)—he is not used to a Government who deliver on their manifesto—but this Government are determined to do that. We will release the finances required to restore the public services that the people of Britain deserve and only a Labour Government can deliver.
Mr Connor Rand (Altrincham and Sale West) (Lab)
People in my constituency of Altrincham and Sale West voted for change at the last election, and last week the Chancellor delivered a Budget to start changing their lives for the better. As Members from all parts of the House have reflected, the first Labour Budget in 14 years comes at a time of challenging economic circumstances, with the £22 billion black hole in the public finances, 14 years of sluggish economic growth, a massive squeeze on living standards, creaking national infrastructure and public services on the floor. Our first female Chancellor has never been one to back away from a challenge, and despite the dire inheritance left to her, there was so much in our Budget that will change our country and the lives of my constituents for the better, be it our record investment in the national health service, our pay rise for 3 million low-paid workers, funding for breakfast clubs in every primary school and our £1 billion lifeline for special educational needs provision. That will be transformative for families in Altrincham and Sale West.
As I said in my maiden speech, my constituency is also a place of business, full of thriving smaller enterprises that offer so much to our local economy and culture. That is why it is so important that even in the face of the dire economic circumstances we inherited, the Budget ensured that smaller firms—those least able to shoulder additional costs—have been protected. Some 865,000 employers now will not pay any national insurance next year and more than 1 million will pay the same or less than they did previously. The Budget enables those firms to employ four national living wage workers full-time without paying national insurance on their wages at all by more than doubling the employment allowance. For the small businesses that make up the high streets and market of my constituency, that change will make a huge difference. I am pleased that the Federation of Small Businesses has welcomed our changes to the employment allowance as a huge help for small firms.
There is still much to do, but this Budget starts to turn the corner, fixing the foundations of our economy to deliver a brighter future. It accepts the huge challenges we face, but is optimistic about our ability to overcome them. This Budget sets out a serious path to rebuilding Britain for the benefit of our people and my constituents.
Perran Moon (Camborne and Redruth) (Lab)
This is a truly landmark Budget, not only for its glass ceiling smashing—I sincerely hope that the girls and young women in my constituency will be inspired to see the first female Chancellor for England after 800 years—but because it provides the basis for a clean break from the race to the bottom, trickle-down economic drivel, riddled with vested interests, to which the Conservatives have subjected the country for the past 14 years, with austerity, recession, dodgy personal protective equipment contracts and economic collapse. The public should never forgive and never forget what the Conservatives have done to our country.
This Budget marks an end to using public finances and the British people as guinea pigs in an economic experiment that sent interest rates and mortgage rates soaring and living standards plummeting and saw families gripped in the vice-like clutch of the Conservatives’ cost of living crisis. When I listened to the response of the former Leader of the Opposition—it is hard to keep up—it was crystal clear to me that the born-to-rule Conservatives simply have not understood that they are not ruling any more. I only wanted to hear one word from the former Leader of the Opposition: sorry. That word never came.
As someone with over 30 years of private sector experience, I am getting a bit bored of the trope that no one on this side of the House has any private sector experience—
Perran Moon
The right hon. Gentleman asks about the Government Front Bench. I appreciate that a large proportion of Conservative MPs now serve on the Front Bench; that begs a question about the quality of the people left behind.
On the one hand the Budget places desperately needed money in the hands of the lowest-paid workers, where it will be spent locally, and on the other hand it heralds a new era of much-needed infrastructure investment—the kind that will stimulate growth in the economy and thousands of new jobs across the country, based on a coherent industrial strategy. It sets us on a course to rebuild depleted public services and lays the foundations for the pillars of a decade of economic and social renewal.
The Budget recognises the importance of the shared prosperity fund, which the Conservatives wanted to scrap to pay for their hare-brained national service plan —a decision that would have been devastating for the people of Cornwall, as well as for many other communities around the UK. The Budget places British workers at its heart—those same British workers who rejected the failed economic experiments of the Conservatives, along with the chaos, infighting and fiscal incompetence. They voted decisively for stability and security—a sea change from the previous 14 years. They voted for change; this Budget delivers it.
Chris Webb (Blackpool South) (Lab)
I start by thanking Members across the House for their well wishes, and I give my sincere thanks to the Metropolitan police officers who were with me till the early hours of Tuesday morning—they were brilliant and a credit to the force.
Labour is the party for working people and the Chancellor’s Budget has confirmed that. With the increase in the national living wage, thousands of people in Blackpool South, where work is often precarious, are set to receive a 6.7% pay rise. Our 18 to 20-year-olds will see their wages increase by 16.3%, which is a huge boost for young people in my home town, who often face barriers to opportunity and well-paid work.
Much of the work available to my constituents is in hospitality and tourism. As the leading voice and chair of the all-party parliamentary group for hospitality and tourism, I am proud that I can now represent Blackpool’s voice with this platform. Blackpool’s tourism economy is valued at £1.7 billion a year and supports more than 22,000 jobs. We deserve a seat at the table. Like many British seaside resorts, Blackpool faced significant periods of decline in the latter half of the last century. But unlike others, our tourism trade never collapsed.
My home town has adapted and reinvented itself. We are now on the cusp of a new era of growth, in which our economic development can help to tackle our social problems by improving lives and inspiring pride in the place that we call home. In 2022, Blackpool’s tourism figures topped the 20 million mark and accounted for more than 30% of all visits to Lancashire. Well after the summer season is over, we are welcoming 4,500 tourists a day, adding £200,000 to the local economy daily.
Just as Blackpool is an outlier in most statistics, businesses there operate in a unique economy that is traditionally seasonal, with low per capita spend per visitor. I welcome the Chancellor’s move to permanently lower business rates for retail, hospitality and leisure, and the decision to extend some business rate relief to next year to avoid the cliff edge that businesses faced thanks to the previous Government.
But I know that businesses in my constituency are hoping for more reassurance from the Government. Those businesses include grassroots music venues such as the Bootleg Social, which is already fighting to keep its doors open, but makes a huge contribution to our cultural landscape in Blackpool. I have reassured business owners in Blackpool that the Government’s approach to the economy is both pro-worker and pro-business, but I would welcome the opportunity to discuss with the Government the individual circumstances of small businesses in my constituency.
The tourism and hospitality sector in Blackpool welcomes investment in our town’s transport, to make the town more accessible and fit for the future. I am grateful to the Chancellor for supporting towns like mine. The Conservatives left behind a huge economic mess for Labour to clear up, but we are the party of working people and we are getting on with that job.
Helen Hayes (Dulwich and West Norwood) (Lab)
I congratulate all hon. Members who have made their maiden speeches today. The economic inheritance from the last 14 years could hardly have been any worse. Conservative Governments have serially undermined our public services: they stripped them of funding, made it harder to deliver and demoralised dedicated public servants. The impact of their political choices could not have been clearer. In multiple crises, which spanned from our NHS and social care to local authority services, schools, prisons, policing and criminal justice, housing and universities, instead of reinvesting to rebuild, they promised billions of pounds of entirely unfunded tax cuts in a desperate bid to cling on to power. They have been the vandals of our public services and our economy, and they have left this new Labour Government with a colossal and daunting task to restore and rebuild.
I welcome the Budget, which seeks to fix the foundations and begin the restoration that is needed. I regret that the actions of the previous Government mean that the road to recovery is so long. The additional £1 billion in the Budget for SEND is as welcome as it is essential. The crisis in the SEND system is the biggest current challenge in the education system, with far-reaching consequences for children and families who are being let down, schools that cannot meet the needs of their pupils, and local authorities that are being driven to the edge of bankruptcy by the costs. I urge the Government to ensure that SEND remains at the forefront of discussions in the comprehensive spending review, because £1 billion, while welcome, is only a third of the current in-year deficit in the SEND budget. The statutory override, which protects local authority general fund accounts from SEND deficits, is due to come to an end in March 2026, and local authorities will soon need certainty about what will happen after that date. Without a clear plan, more local authorities will be issuing section 114 notices—that is not something that the Government can allow to happen.
As a constituency MP, I want to use my remaining time to raise two other issues arising from the Budget. The additional funding for the NHS is desperately needed. The allocation for individual areas and health trusts has not yet been made. I want to make a particular plea for capital funding for King’s College hospital. King’s is currently facing severe financial challenges, which it is working hard to address, but that is made harder by a lack of funding for the essential equipment that staff need to increase productivity and deliver the services that patients need.
Finally, while the additional injection of £100 million for social housing in London and changes to the regulations on right to buy are welcome, the crisis in London is so deep that the Government must turn their attention to the local housing allowance, which must keep pace with rents in London to avoid even more families being forced into temporary accommodation, with knock-on consequences for local authority budgets.
The Budget seeks to fix the foundations and undo the damage that the Conservatives have done. There is much more to do, but the Budget is a very welcome first step on the road. I am pleased to vote for it today.
Connor Naismith (Crewe and Nantwich) (Lab)
This is a Budget that answers the call made by many of the constituents I spoke to during the general election. It is a Budget for change: change for our national health service, change in the living standards of working people and change to our declining investment in infrastructure. Yes, there were tough decisions; we on the Government Benches do not shy away from that fact. The key difference between this Government’s approach and that of our predecessor for the last 14 years is that we simply refuse to place the burden of those tough choices on the backs of working families.
There has been lots of talk about business during the debate, but the Opposition do business a disservice, as if the only thing that business cares about is the tax bill. Businesses also rely on a functioning health service, a quality education system and investment in our broken infrastructure. They also rely on their customers having money in their pockets to spend in the local economy. I am, therefore, delighted to see a transformational uplift in the minimum wage, which will positively impact thousands of workers in my constituency of Crewe and Nantwich.
I welcome also the commitment to extending High Speed 2 to Euston and the recognition that spending on major infrastructure does not merely carry a cost to the taxpayer but has the potential to pay back to society through economic growth and wider societal benefits. It is imperative that we now turn our focus towards delivering a solution between Birmingham and Manchester. The Birmingham to Crewe leg of the original HS2 project was due to return £1.91 for every £1 spent. I welcome the Government’s new approach to infrastructure investment, and I look forward to working with them to realise the potential of my constituency as a transport hub.
My constituents did not elect a Labour Government to continue the failed, miserable image of the future projected by the Conservative party—a future where public services can only decline, where growth flatlines and where the only figures rising are debt, destitution and the number of failed Prime Ministers in a single Parliament. They voted for change, and that is what this Government delivers, so I commend the Budget to the House.
Josh Fenton-Glynn (Calder Valley) (Lab)
I am proud to stand up on behalf of my constituents in Calder Valley and thank this Government for the Budget delivered by our Chancellor—a Budget that rebuilds the country and protects the NHS. As someone who spent eight years in local government before coming to this place, I recognise some of the huge steps that this Budget takes to cement local government, guaranteeing funding for high street projects like those in Calder Valley, and ending the beauty contests that see communities pitted against one another for meagre funding. There was £600 million guaranteed for social care and a commitment to longer-term, proper funding for our highways and the scourge of potholes. Most importantly, we get three-year funding settlements—no more annual scrabble in December to work out how to make a budget fit. Local authorities and businesses can plan long-term, which is what they want, and it is the stability that we need.
It has been quite something to sit through this Budget debate for the past few days, because it seems like there have been two Budgets. One was delivered by my right hon. Friend the Chancellor of the Exchequer, which fixed our foundations, supported hospitality and the high street, provided billions for the NHS, found funding for SEND and opened breakfast clubs. Then, there has been the Budget that exists in the imagination of Opposition Members. Today, the Leader of the Opposition claimed that it did not mention the word “defence”. The speech mentions it six times, and the Budget has a whole section in the funding settlement for defence.
Today, we heard from the hon. Members for Solihull West and Shirley (Dr Shastri-Hurst) and for Sleaford and North Hykeham (Dr Johnson) about the problems of social care. That should not be a new concern for Conservative Members. Andrew Dilnot released his report in 2011. We were then promised that we would get some kind of proposal in 2014. In 2017, the Conservative Government released their proposal, but then withdrew it because they had an election. They then delayed it in 2018. It came back in 2021 and was delayed again in 2022. Then they said that they would deliver it in 2024, but did not find the funding.
Throughout all that, there has not been a shred of contrition or acknowledgment from the Conservatives that they left the country on its knees. They have no idea yet why the public rejected them so resoundingly at the last election. I hope that as they sum up, they will perhaps show some contrition and answer the Budget as it is, not the one that exists only in their imagination.
Daniel Francis (Bexleyheath and Crayford) (Lab)
I refer the House to my entry in the Register of Members’ Financial Interests. My wife is employed as a special educational needs co-ordinator in one of our local authority schools.
My constituents in Bexleyheath and Crayford have been clear: they want a country and community where public services work and the economy is growing. Our Government have been bequeathed an inheritance of 14 years of low to no growth, the impact of the Conservatives’ Kamikaze mini-Budget and the £22 billion black hole left in the public finances. This Budget invests in public services—the OBR has outlined that the direct effect of policy changes in this Budget is the largest sustained increase in spending in at least the past 15 years.
The path to rebuilding Britain will include building the homes that we need, and I welcome the investment in the affordable homes programme in this Budget to kickstart progress towards 1.5 million new homes over the Parliament. It will include investment in the capacity of local planning authorities. In my local authority in Bexley, applications from the council’s own development company take 15 months to reach committee from submission. If our local economy is to grow, applications need to be determined more quickly than at present.
Phase 1 of the spending review provides record levels of capital investment for health. My local authority’s local plan has identified sites for new homes, but not the sites to deliver the additional local health provision that is required. I will be pressing for this capital investment to deliver a new neighbourhood health centre to help the Government’s objectives.
The Budget delivers £6.7 billion of capital funding for education in England, alongside the increase in funding for the core schools budget. I particularly welcome the £1 billion to support the special educational needs and disabilities system. While we await the detail, my local authority signed a safety valve agreement to avert effective bankruptcy, and, like other authorities we have heard about today, it now faces a ticking time bomb signalling the running out of the statutory override in 2026. Its finances will be boosted by the increased spending power provided in the Budget. It is three years since my Conservative council sought a capitalisation order and made 15% of staff redundant to stave off bankruptcy, and I believe that this Government will work with local authorities to ensure that the impact of austerity is not repeated.
For those reasons, I will be supporting the Budget this evening.
Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)
Finally, after 14 years of patching up, we have a Budget that puts down the first bricks as we start to rebuild our country. With this Budget we will be able to start to put the NHS back on its feet with a £25 billion boost, provide a shot in the arm for our schools with extra funding including £1 billion for SEND, and invest in our transport and energy infrastructure.
On a local level, the Budget contains positives for my constituency and for Cornwall more widely. Local transport in rural areas will receive £650 million, and the Chancellor named Cornwall in particular as an area that will benefit directly in terms of connectivity. The freeze in fuel duty, and fixing those potholes, will help people who still have to rely on their cars in rural areas such as ours. We are also getting some solutions for our housing crisis with a stamp duty rise of up to 5% for second home buyers, which should lead to more houses on the market for local people. The Budget provides extra money for councils to build affordable and social housing, as well as limiting the discounts on selling off council houses and changing the rules so that councils can build more social housing with the proceeds.
I am pleased that Cornwall Council has been supported with extra funding, although I do want to raise the case of the other councils—such as town and parish councils—that have taken on so many of the services of which the unitary authorities have divested themselves, and as a consequence are often large employers with big budgets. I am also pleased that the important shared prosperity funding for Cornwall has been extended for another year at a national figure of £900 million, so that all the investment in schemes to get people into work and into Cornish businesses can continue. However, I should like to hear confirmation that the funding formula continues to recognise the huge loss that Cornwall suffered when we lost the EU structural funding.
The Government are also boosting public investment, and next year will publish a new industrial strategy setting out high-growth areas where the UK has real competitive advantage. Some of the areas ripe for investment will be renewables, technology, food, and the creative industries, in which Cornwall has real strengths. In my constituency we look forward particularly to investment in floating offshore wind in the Celtic sea and in ports such as Falmouth, as well as investment in our vital creative arts.
Our Chancellor has chosen the bold path to save and rebuild the NHS, schools and other public services and invest in the country’s infrastructure, while also ensuring that people do not face higher taxes in their pay packets. This is a big Budget of renewal, which will set us on the road to recovery.
Laura Kyrke-Smith (Aylesbury) (Lab)
I congratulate the Chancellor on delivering the first Labour Budget in 15 years, and on doing so as the first ever female Chancellor.
Speaking to residents in and around the Stocklake area of my constituency over the weekend, I was glad to hear positive feedback and optimism following the Budget. Of course we had to make tough choices, but people get that, and personally I am very proud of the choice we have made to invest in our public services first and foremost and to get them working for people again.
There is much to commend in the Budget, and I want to highlight four points. First, the national minimum wage has increased to £12.21 per hour, which has been very well received by my constituents. Over 9,000 people in Buckinghamshire are on the national living wage, and they are all set for a pay rise. Secondly, the core schools budget has increased by £2.3 billion, and £1 billion has been allocated to support children with SEND, which I know cannot come soon enough for my constituents. Thirdly, there is a commitment to infrastructure investment, including the commitment to East West Rail, which I know will unlock growth and opportunity. I will keep pushing for the Aylesbury spur to link up with that. Finally and most importantly, we have made a huge commitment to the NHS in this Budget, including through a £22 billion increase to day-to-day spending and £3.1 billion of capital investment, which will be used to bring waiting lists down, invest in new technology and deliver 40,000 extra appointments every week, including at Stoke Mandeville hospital. I am excited about the budget for mental health, which will be crucial.
I am conscious that improving our nation’s health will take time, and that our goals are necessarily long term. I was reminded of that at this morning’s parliamentary launch of the fantastic Health Equals campaign, which highlights the work that we have to do to tackle the social determinants of health inequalities and halve the gap in healthy life expectancy. However, this Budget delivers the biggest cash injection into the NHS outside covid years since 2010, which has put us firmly on the road to recovery. This Budget is firmly on the side of those who need our support, and firmly on the right side of history, and I cannot wait to see what it delivers for my constituents in Aylesbury.
Catherine Atkinson (Derby North) (Lab)
My constituents go to work to make trains, planes and automobiles at Alstom, Rolls-Royce and Toyota, and they work in their supply chains. This Budget delivers ambitious plans for rail infrastructure, nearly £100 million in R&D funding for aerospace, and £2 billion to support the automotive sector. To get to work, many of my constituents commute; 1.2 billion vehicle miles were travelled on Derby’s roads last year. The fuel duty freeze and the extra half a billion pounds to fix potholes are hugely welcome.
My constituents teach and learn at our great university and schools. They treat others and are treated at the Royal Derby hospital. They work in our shops and restaurants, and on the building sites where the regeneration of our city is taking shape. We in Derby are laying the foundations for growth—literally. Building is under way on a new university business school, a new mental health unit at Kingsway and a new performance venue at Becketwell. At Friar Gate goods yard, which has stood derelict for over 50 years, new homes and businesses are being built. There is also investment in our theatres—£20 million of funding that this Budget underwrites.
We needed and got a Budget that supported our ambitions. Last week, I went from the Budget statement to a meeting of small businesses in my constituency, which was organised by the Federation of Small Businesses. We discussed how this Budget will grow the cake, from investment in skills and reform of business rates to the approval of the east midlands investment zone and start-up loans. This is a Budget that is, at last, honest about the public finances being in a mess, and we have made tough decisions so that our businesses can have the stability and certainty they need.
To rebuild Britain, however, we also need to reset the broken contract with working people. For 14 years, in Budget after Budget, from austerity to Liz Truss’s mini-Budget, working people were barely offered crumbs from the table, while productivity and growth flatlined—but no more. Working people now have a proper seat at the table. The minimum wage will increase from £11.44 to £12.21 an hour next April, which will affect one in 10 Derby North workers. For 18 to 20-year-olds, there will be a 16% increase to £10 an hour. Derby has the second highest average salaries outside London, so for those moving on with their careers, there will be a rise in the income tax and national insurance contributions thresholds from 2028-29. Finally, investment—
Sam Rushworth (Bishop Auckland) (Lab)
The Conservative party was keen for us all to declare our membership of trade unions in the debate on the Employment Rights Bill, so we should probably all declare that most of us received funding from businesses during the general election campaign. I certainly did, and I pay tribute to the small businesses in my constituency. Some 89% of them are considered microbusinesses with fewer than 10 employees, so the majority will pay less national insurance under this Budget. I thank the Chancellor for protecting working people and small businesses.
Listening to Conservative Members, as we have been doing for the past five hours, it seems that many of them see the business community as caring about nothing but quick profits and avoiding tax, but the local businesses that I speak to are proud not only to deliver quality products and services, but to create good jobs and strengthen the local economy. They have been doing that in trying circumstances, and many of them have supported Labour candidates at this election because they want a Government who match their ambition. When I ask them what they want to see from Government, they say they want not only a fair tax system but investment, and that is what this Budget delivers. They want a secure power supply. They also want faster planning decisions, including the young farmer who came to see me because he has been pushed back for two years now in his attempt to just build some pig pens.
The biggest barrier, however, is that businesses cannot get the staff, and this is true from manufacturing to hospitality. Britain is held back by a skills shortage, so I welcome a Budget that will invest in Britain’s most precious, productive asset: her people. When we invest in faster NHS appointments, in emergency dentistry, in mental health, in SEND provision, in specialist teachers in STEM subjects and in childcare, we invest in business too, because these are the people who will rebuild Britain.
The people of Durham have been held back for too long. In the past 14 years, our life expectancy has fallen behind. Our children are shorter, and the number of children in care has increased by 250%, so we can see the impact of austerity in people’s bodies and family life. I welcome a Budget that has brought the end of austerity and begun the long, hard job of rebuilding this country. I also welcome a Budget that has put more money in people’s pockets, including by honouring the triple lock, which the Conservatives failed to do in 2022, costing pensioners in my constituency £488.
Madam Deputy Speaker (Ms Nusrat Ghani)
We come to the final Back-Bench speaker, Patrick Hurley.
Patrick Hurley (Southport) (Lab)
When I stand to speak in this House, I often criticise the former Government, and to be fair, there was a lot to criticise, but Liz Truss at least got one thing right. She claimed to make economic growth the driving force behind her plans, but while Truss took a reckless big-bang approach to tackling the stagnation that this country has experienced since 2010, our focus is on long-term investment, not short-term tax cuts. This speaks to one of many big problems with recent Tory Governments—a problem that any business owner in this country could tell you about. It is all about return on investment. Over the last 14 years, there has been too little return because there has been too little investment. To combat that, we have secured £63 billion in private investment, and we have put £2 billion into electric vehicle development. I note, too, that the UK Space Agency says that the space industry is worth £17 billion a year to our economy. It is no doubt helping to ensure that we get early warning of any new super-massive black holes we might not be aware of.
This Budget is the beginning of the change our country voted for. It will make Britain better off; there will be more money in people’s pockets, an NHS that is there when people need it, businesses creating wealth and opportunity for all, the house building that we need, the transport infrastructure that we are crying out for, wages that make work pay, and a state pension that is uprated as it should have been all along. This is a Budget of change, a Budget of investment and growth, a Budget to put more money in working people’s pockets, and a Budget to get our public services back on their feet. It is the most welcome Budget for many years—a Budget in line with the values of the British people. I am proud to support this Labour Budget.
Richard Fuller (North Bedfordshire) (Con)
I thank the 67 Back-Bench Members who have spoken in this debate, and I commiserate with the two Labour Members who did not get in. I am sure that they will have their opportunity in future.
I congratulate the four Members who gave their maiden speech: the hon. Members for North Ayrshire and Arran (Irene Campbell), for Stoke-on-Trent North (David Williams), for Ely and East Cambridgeshire (Charlotte Cane) and for Sherwood Forest (Michelle Welsh). Many in this House will remember their maiden speech and will know how anxious those four Members were before they stood up to speak, and how relieved they were when they reached the end and could sit down. That feeling does not go away.
We end this Budget debate where we began: with the deceit that the Labour party showed to the British public about its intention to launch one of the biggest tax grabs in our history. At the election, Labour Front Benchers toured the country, staging photo ops, snapping cheeky selfies and soliciting reassuring quotes from businesses, farmers and senior citizens, saying to each in turn that they could trust Labour and that a Labour Government would have their back. This Budget of broken promises shows that they have all been conned.
My Conservative colleagues have laid bare, always clearly and frequently with strong feeling, the consequences of the political choices this Labour Government have made with this Budget. Colleagues have spoken on behalf of Britain’s farming families, on behalf of our country’s small businesses, on behalf of parents with children in education, on behalf of GP surgeries and hospices, and, above all, on behalf of the working people they represent, who have been targeted by this Budget.
This is a Budget of choices, and the choices are Labour’s, and theirs alone—their choice to increase taxes, their choice to increase debt, their choice to change the fiscal rules, and their choice to rip up election promise after election promise. Just as the Labour Government have made their choices, today we must start to make our own choices. Our choices are to help the small business owner, to help the aspiring entrepreneur, to help those thinking of using their talents to help build Britain, to help the farmers whose parents and grandparents have toiled in our fields, to help the children who will be turfed out of their schools in the middle of the year—some having no school place to go to—and to protect the workers of Britain who believed what Labour said at the election and who now know they were conned. That is why we will vote against Budget resolutions this evening.
Two groups of people have been clobbered drastically by this Budget, groups who are the cornerstone of our economy. As we have heard throughout these debates, the Labour Government’s decision to increase employers’ national insurance contributions is not only a manifesto breach but a barrier to growth. Sadly, this Labour Government do not understand that there will never be a sustainable public sector without a thriving private sector. The private sector in this country is a delicate fabric of small and medium-sized businesses. Many have been just scraping by for years, but each is spurred on by the endeavour that is the spirit of free enterprise.
Running a small business—Labour Members may want to take a note—is not easy. Our constituents run some 5.4 million small and medium-sized enterprises across the UK, so when the Minister responds, will she explain to those people, in my constituency and across the country, what they are to do in the face of Labour’s jobs tax—the massive increase in employer national insurance contributions? The Office for Budget Responsibility said that the jobs tax would be passed on by “most” firms to their employees through reduced wages; the Resolution Foundation said it will have the biggest proportional impact on low-paid workers; and the Federation of Small Businesses said it will cause “many SMEs” to “struggle”. That is the truth, and a far cry from the warm words the Labour Chancellor offered businesses during the election campaign.
When the Prime Minister, in February this year, looked farmers in the eye and said that they “deserved better”, was he already hatching Labour’s family farm tax? The NFU has said:
“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”.
The truth is that the Labour Party does not understand even the basics of farming. Reducing the relief and imposing inheritance tax on farmland will devastate family farms and pose a serious risk to domestic food security and food prices.
Throughout the debate, Labour MPs have sneeringly referred to those farmers as “millionaires”, but many family farmers are not rich. They eke out a modest and—[Interruption.] Labour Members should have been here for the debate. Many family farms eke out a modest and highly uncertain income, year after year. That is why we ask taxpayers each year to subsidise British farmers so they can continue growing food for Britain. The family farm tax is not just taxing farmers; it is taxing Britain’s farmland, the very land we need to grow the food we eat.
This Budget of broken promises sends a series of clear messages: don’t start your own business, because Labour will tax you; don’t have a plan to hire new employees because Labour will tax you; don’t take a risk and expect to keep a reward, because Labour will tax you; don’t invest in the education of your children, because Labour will tax you; and don’t, whatever you do, farm your land to grow British food, because Labour will grind you into that very same ground, and tax you too.
Finally, I say to the Minister that the trust that has been broken in this Budget will not be recovered. People will never forget what happens when Labour is given its chance. They will never forget the harm done when Labour makes its choices, and they will never forget that Labour’s first Budget was a Budget of broken promises.
The Economic Secretary to the Treasury (Tulip Siddiq)
It is an absolute honour to make the closing speech on this historic Budget. It is historic for two reasons. First, it is the first ever Budget to be delivered by a woman—the first female Chancellor of the Exchequer after 800 years. She has smashed the glass ceiling, and I hope all the women and young girls watching know that they can be in the driving seat of a Labour Government. Secondly, it is historic because we are finally wiping the slate clean and turning the page on 14 years of Tory incompetence, chaos and outright instability. This Budget will make meaningful change by focusing on the fundamentals.
Ms Julie Minns (Carlisle) (Lab)
Does the Minister agree that one of the best ways of celebrating this Budget is with a pint of locally brewed beer? Does she agree that the consultation on the pubs code announced by the Government in the Budget statement will be joyful to the ears of local, independent breweries in all our constituencies?
Tulip Siddiq
I thank my hon. Friend for her intervention. I know that she is a doughty champion of the pubs in Carlisle. The pubs in my constituency are celebrating the penny off pints.
Let me get back to the previous Government, who were wrong when they claimed that they would fix the roof while the sun was shining. While chasing a budget surplus— for which, 14 years later, all they had to show was catastrophic public finances—they merely painted over the ever-growing cracks in the bedrock of our society and our country. That is why this Government are right to focus on fixing the foundations of our economy, because that is the only way that we can change the country, deliver for working people and rebuild Britain. Of course, buying a home is harder if the seller has misled us about its true condition by underestimating the size and cost of any required repairs. In that sense, rebuilding our economy is no different, because the previous Government’s public spending plans existed only on paper; there was no real allocation of money to back up any of the spending plans. They behaved no better than some huckster trying desperately to sell a flat that they know will never be built.
That is why the OBR has said that, had it been made aware of the scale of the spending pressures during the spring 2024 Budget, its assessment of the previous Government’s spending plans would have been “materially different”. That is why it was right that we took our time to conduct a full survey of the economic inheritance that they left us.
Tulip Siddiq
The right hon. Gentleman has intervened 18 times. I shall not give him another chance.
Let me continue. That is the only way that we can really fix the foundations. Of course, that involves taking tough decisions, particularly on spending and taxation, but I will take no lectures from those who were content to levy a £22 billion pound tax on this country’s future, and, through their unfunded spending commitments, attempt to undemocratically bind the hands of a future Government. Well, guess what? This Government will do things differently. While the previous Government allowed investment in our country to fall to its lowest level on record, this Government will put investment at the heart of everything that we do.
That is why we held the international investment summit in October—to show firms at home and abroad that Britain is open for business once more. That is why we have introduced a new fiscal rule—the investment rule—which, alongside appropriate guardrails provided by the OBR and our new stability rule, means that this Government can meaningfully invest in our country’s future.
Of course, investment means taking a long-term view. As anyone who has bought a property, built a business or raised a family will know, the early days are always the hardest. But if they take the hard calls now, in time they will get back far more than they put in. I pick those examples deliberately, but with regret. The sad truth is that, for working people—particularly young people—up and down the country, home ownership, entrepreneurship and starting a family have never been more distant. This Budget will start to change that.
Our manifesto made a clear commitment to get Britain building again. This Budget puts the first shovels in the ground, with a commitment to spend an average of 2.6% of GDP on public sector net investment over the course of this Parliament. This will include an additional £500 million in new funding for social and affordable homes, which brings total investment in housing supply to more than £5 billion and supports the delivery of tens of thousands of new homes.
We will build more than just homes; we need to build communities. Infrastructure is key to tying those communities together while ensuring that they plug into the wider economy. [Interruption.] The shadow Foreign Secretary asks how. If she listens, she will learn, so she should pay attention. Getting our country moving again will be key to growing the economy. [Interruption.] She should not chunter from the Front Bench. She needs to listen, because our commitment to infrastructure investment will help us to do so—by, for instance, increasing local roads investment by £500 million in 2024-25. These are the things that the previous Government failed to do, but we will deliver for our country. For working families, that means less time wasted dodging potholes and more time for the things that actually matter. Of course, infrastructure helps not just families but firms. In an increasingly volatile world, Government should play an important role in securing our energy supply so that firms can price that into their business plan.
We heard powerful and authentic maiden speeches today from my hon. Friends the Members for North Ayrshire and Arran (Irene Campbell), for Stoke-on-Trent North (David Williams) and for Sherwood Forest (Michelle Welsh). We will see them as huge assets to Parliament. Some of them mentioned that their families did not think that they would get here; I am really pleased that their families were wrong.
I will finish by echoing something that the shadow Minister, the hon. Member for North Bedfordshire (Richard Fuller), said. It is not often that I agree with him, but he said that we had choices. The truth is that we did have choices, and guess what? We chose to act. In 10 years’ time, the country will look back on this Budget as the moment when we got Britain’s future back. In the future, the economy will have grown because at this moment we chose to prioritise a healthy workforce; we will have record levels of investment because we prioritised fiscal and economic responsibility; and people will have more money in their pockets because we prioritised protecting hard-working people’s payslips. The merry-go-round of austerity and economic irresponsibility is over. We made a choice—a choice to rebuild Britain.
Question put and agreed to.
Resolved,
That income tax is charged for the tax year 2025-26.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
Madam Deputy Speaker (Ms Nusrat Ghani)
Let me explain what will happen next. I am now required under Standing Order No. 51(3) to put successively, without further debate, the Question on each of the Ways and Means motions numbered 2 to 62, and the money motion on which the Finance Bill is to be brought in. These motions are set out in a separate paper distributed with today’s Order Paper.
The Deputy Speaker put forthwith the Questions necessary to dispose of the motions made in the name of the Chancellor of the Exchequer (Standing Order No. 51(3)).
2. Income tax (main rates)
Resolved,
That for the tax year 2025-26 the main rates of income tax are as follows—
(a) the basic rate is 20%,
(b) the higher rate is 40%, and
(c) the additional rate is 45%.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
3. Income tax (default and savings rates)
Resolved,
That—
(1) For the tax year 2025-26 the default rates of income tax are as follows—
(a) the default basic rate is 20%,
(b) the default higher rate is 40%, and
(c) the default additional rate is 45%.
(2) For the tax year 2025-26 the savings rates of income tax are as follows—
(a) the savings basic rate is 20%,
(b) the savings higher rate is 40%, and
(c) the savings additional rate is 45%.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
4. Income tax (starting rate limit for savings)
Resolved,
That—
(1) For the tax year 2025-26 the amount specified in section 12(3) of the Income Tax Act 2007 (the starting rate limit for savings) is “£5,000”.
(2) Accordingly, section 21 of that Act (indexation) does not apply in relation to the starting rate limit for savings for that tax year.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
5. Income tax (appropriate percentage for cars)
Resolved,
That (notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills) provision may be made taking effect in a future year increasing the appropriate percentages mentioned in sections 139 to 142 of the Income Tax (Earnings and Pensions) Act 2003.
6. Capital gains tax (the main rates)
Question put,
That—
(1) In section 1H of the Taxation of Chargeable Gains Act 1992 (the main rates of CGT)—
(a) omit subsection (1A) (which sets out the rates for residential property gains accruing to individuals),
(b) in subsection (3) (which sets out the rates for gains accruing to individuals that are not residential property gains or carried interest gains)—
(i) for “10%” substitute “18%”, and
(ii) for “20%” substitute “24%”,
(c) omit subsection (4A) (which sets out the rates for residential property gains accruing to personal representatives),
(d) in subsection (6) (which sets out the rates for gains accruing to personal representatives that are not residential property gains or carried interest gains), for “20%” substitute “24%”,
(e) omit subsection (7) (which sets out the rates for residential property gains accruing to trustees), and
(f) in subsection (8) (which sets out the rates for gains accruing to trustees that are not residential property gains or carried interest gains)—
(i) omit “Other”, and
(ii) for “20%” substitute “24%”.
(2) The amendments made by this Resolution have effect in relation to disposals made on or after 30 October 2024.
(3) If an asset is transferred on or after 30 October 2024 under an unconditional contract made before that date, the disposal is, despite section 28(1) of the Taxation of Chargeable Gains Act 1992, to be treated for the purposes of the amendments made by this Resolution as taking place at the time the asset is transferred (rather than at the time the contract is made) unless the contract is an excluded contract.
(4) A contract is an excluded contract if—
(a) obtaining an advantage by reason of the application of section 28(1) of the Taxation of Chargeable Gains Act 1992 was no purpose of entering into the contract, and
(b) where the parties to the contract are connected persons, the contract was entered into wholly for commercial reasons.
(5) A contract is not to be regarded as an excluded contract unless the person making the transfer makes a claim which includes a statement that the contract meets the conditions to be an excluded contract.
(6) But no claim is required if the total amount of—
(a) the chargeable gain accruing on the disposal, and
(b) the chargeable gains accruing on all other disposals made under excluded contracts, does not exceed £100,000.
(7) For this purpose the amount of any gain accruing on a qualifying business disposal is to be taken to be the amount of the gain under section 169N(2) of the Taxation of Chargeable Gains Act 1992.
(8) If the person making the transfer makes—
(a) a claim under section 169M of the Taxation of Chargeable Gains Act 1992 in relation to a qualifying business disposal (business asset disposal relief), or
(b) a claim under section 169VM of that Act (investors’ relief) in relation to a disposal, section 169M(2) and (3) of that Act, or (as the case may be) section 169VM(1) and (2) of that Act, apply to a claim under paragraph (5) in relation to the disposal as they apply to a claim under the section concerned.
(9) In this Resolution “qualifying business disposal” has the meaning given by Chapter 3 of Part 5 of the Taxation of Chargeable Gains Act 1992.
(10) In this Resolution any reference to the transfer of an asset includes its conveyance.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
Part of relevant consideration | Percentage |
|---|---|
So much as does not exceed £250,000 | 5% |
So much as exceeds £250,000 but does not exceed £925,000 | 10% |
So much as exceeds £925,000 but does not exceed £1,500,000 | 15% |
The remainder (if any) | 17%”. |
Alcoholic strength of alcoholic product | Rate of duty per litre of alcohol in the product |
|---|---|
Less than 3.5% | £9.61 |
At least 3.5% but less than 8.5% | See Table 2 |
At least 8.5% but not exceeding 22% | £29.54 |
Exceeding 22% | £32.79 |
Description of alcoholic product (of an alcoholic strength of at least 3.5% but less than 8.5%) | Rate of duty per litre of alcohol in the product |
|---|---|
Still cider Sparkling cider of an alcoholic strength not exceeding 5.5% | £10.02 |
Beer | £21.78 |
Spirits, wine and other fermented products Sparkling cider of an alcoholic strength exceeding 5.5% | £25.67”. |
Description of alcoholic product | Rate of duty per litre of alcohol in the product |
|---|---|
Alcoholic products of an alcoholic strength of less than 3.5% | £8.28 |
Still cider of an alcoholic strength of at least 3.5% Sparkling cider of an alcoholic strength of at least 3.5% but not exceeding 5.5% | £8.63 |
Beer, spirits, wine and other fermented products of an alcoholic strength of at least 3.5% (but less than 8.5%) Sparkling cider of an alcoholic strength exceeding 5.5% | £18.76”. |
Discount band | Start threshold (hectolitres) | End threshold (hectolitres) | Marginal discount (£) | Cumulative discount (£) |
|---|---|---|---|---|
1 | 0 | 5 | 9.61 | - |
2 | 5 | 50 | 2.44 | 48.05 |
3 | 50 | 100 | 1.47 | 157.99 |
4 | 100 | 200 | 0.49 | 231.28 |
5 | 200 | 600 | - | 280.15 |
6 | 600 | 1000 | - | 280.15 |
7 | 1000 | 4500 | -0.08 | 280.15 |
Discount band | Start threshold (hectolitres) | End threshold (hectolitres) | Marginal discount (£) | Cumulative discount (£) |
|---|---|---|---|---|
1 | 0 | 5 | 6.35 | - |
2 | 5 | 50 | 2.44 | 31.76 |
3 | 50 | 100 | 1.47 | 141.70 |
4 | 100 | 200 | 0.49 | 214.99 |
5 | 200 | 600 | - | 263.86 |
6 | 600 | 1000 | - | 263.86 |
7 | 1000 | 4500 | -0.08 | 263.86 |
Discount band | Start threshold (hectolitres) | End threshold (hectolitres) | Marginal discount (£) | Cumulative discount (£) |
|---|---|---|---|---|
1 | 0 | 5 | 10.02 | - |
2 | 5 | 50 | 2.55 | 50.10 |
3 | 50 | 100 | 1.53 | 164.78 |
4 | 100 | 200 | 0.51 | 241.24 |
5 | 200 | 600 | - | 292.21 |
6 | 600 | 1000 | - | 292.21 |
7 | 1000 | 4500 | -0.08 | 292.21 |
Discount band | Start threshold (hectolitres) | End threshold (hectolitres) | Marginal discount (£) | Cumulative discount (£) |
|---|---|---|---|---|
1 | 0 | 5 | 19.94 | - |
2 | 5 | 112.5 | 11.08 | 99.68 |
3 | 112.5 | 225 | 9.97 | 1290.33 |
4 | 225 | 450 | 5.54 | 2411.75 |
5 | 450 | 900 | 3.32 | 3657.77 |
6 | 900 | 1350 | - | 5153.00 |
7 | 1350 | 4500 | -1.64 | 5153.00 |
Discount band | Start threshold (hectolitres) | End threshold (hectolitres) | Marginal discount (£) | Cumulative discount (£) |
|---|---|---|---|---|
1 | 0 | 5 | 25.67 | - |
2 | 5 | 50 | 2.61 | 128.35 |
3 | 50 | 100 | 2.61 | 245.84 |
4 | 100 | 200 | 1.31 | 376.37 |
5 | 200 | 600 | - | 506.91 |
6 | 600 | 1000 | - | 506.91 |
7 | 1000 | 4500 | -0.14 | 506.91 |
Discount band | Start threshold (hectolitres) | End threshold (hectolitres) | Marginal discount (£) | Cumulative discount (£) |
|---|---|---|---|---|
1 | 0 | 5 | 20.89 | - |
2 | 5 | 50 | 2.61 | 104.43 |
3 | 50 | 100 | 2.61 | 221.92 |
4 | 100 | 200 | 1.31 | 352.46 |
5 | 200 | 600 | - | 483.00 |
6 | 600 | 1000 | - | 483.00 |
7 | 1000 | 4500 | -0.14 | 483.00 |
Discount band | Start threshold (hectolitres) | End threshold (hectolitres) | Marginal discount (£) | Cumulative discount (£) |
|---|---|---|---|---|
1 | 0 | 5 | 8.28 | - |
2 | 5 | 50 | 2.11 | 41.40 |
3 | 50 | 100 | 1.26 | 136.13 |
4 | 100 | 200 | 0.42 | 199.28 |
5 | 200 | 600 | - | 241.38 |
6 | 600 | 1000 | - | 241.38 |
7 | 1000 | 4500 | -0.07 | 241.38 |
Discount band | Start threshold (hectolitres) | End threshold (hectolitres) | Marginal discount (£) | Cumulative discount (£) |
|---|---|---|---|---|
1 | 0 | 5 | 5.47 | - |
2 | 5 | 50 | 2.11 | 27.37 |
3 | 50 | 100 | 1.26 | 122.09 |
4 | 100 | 200 | 0.42 | 185.24 |
5 | 200 | 600 | - | 227.34 |
6 | 600 | 1000 | - | 227.34 |
7 | 1000 | 4500 | -0.06 | 227.34 |
Discount band | Start threshold (hectolitres) | End threshold (hectolitres) | Marginal discount (£) | Cumulative discount (£) |
|---|---|---|---|---|
1 | 0 | 5 | 8.63 | - |
2 | 5 | 50 | 2.20 | 43.15 |
3 | 50 | 100 | 1.32 | 141.93 |
4 | 100 | 200 | 0.44 | 207.78 |
5 | 200 | 600 | - | 251.68 |
6 | 600 | 1000 | - | 251.68 |
7 | 1000 | 4500 | -0.07 | 251.68 |
Discount band | Start threshold (hectolitres) | End threshold (hectolitres) | Marginal discount (£) | Cumulative discount (£) |
|---|---|---|---|---|
1 | 0 | 5 | 17.17 | - |
2 | 5 | 112.5 | 9.54 | 85.86 |
3 | 112.5 | 225 | 8.59 | 1111.41 |
4 | 225 | 450 | 4.77 | 2077.34 |
5 | 450 | 900 | 2.86 | 3150.59 |
6 | 900 | 1350 | - | 4438.49 |
7 | 1350 | 4500 | -1.41 | 4438.49 |
Discount band | Start threshold (hectolitres) | End threshold (hectolitres) | Marginal discount (£) | Cumulative discount (£) |
|---|---|---|---|---|
1 | 0 | 5 | 18.76 | - |
2 | 5 | 50 | 1.91 | 93.80 |
3 | 50 | 100 | 1.91 | 179.66 |
4 | 100 | 200 | 0.95 | 275.06 |
5 | 200 | 600 | - | 370.46 |
6 | 600 | 1000 | - | 370.46 |
7 | 1000 | 4500 | -0.11 | 370.46 |
Discount band | Start threshold (hectolitres) | End threshold (hectolitres) | Marginal discount (£) | Cumulative discount (£) |
|---|---|---|---|---|
1 | 0 | 5 | 15.26 | - |
2 | 5 | 50 | 1.91 | 76.32 |
3 | 50 | 100 | 1.91 | 162.18 |
4 | 100 | 200 | 0.95 | 257.58 |
5 | 200 | 600 | - | 352.98 |
6 | 600 | 1000 | - | 352.98 |
7 | 1000 | 4500 | -0.10 | 352.98”. |
“TABLE | |
|---|---|
1 Cigarettes | An amount equal to the higher of— (a) 16.5% of the retail price plus £334.58 per thousand cigarettes, or (b) £446.67 per thousand cigarettes. |
2 Cigars | £417.33 per kilogram |
3 Hand-rolling tobacco | £476.83 per kilogram |
4 Other smoking tobacco and chewing tobacco | £183.49 per kilogram |
5 Tobacco for heating | £343.91 per kilogram”. |
Business without Debate
Road Fuel Market
(2 weeks, 1 day ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Graeme Downie (Dunfermline and Dollar) (Lab)
The topic for this, my first Adjournment debate, is fair fuel pricing, an issue that has been raised repeatedly with me by residents of Dunfermline and Dollar since I was elected in July, and that has been examined by previous Governments of all colours and by the Competition and Markets Authority.
In July this year, the CMA said that weakened competition in the fuel sector is negatively impacting drivers’ wallets. Its examination found that, in 2023 alone, high prices cost motorists a staggering amount of money. In the midst of a cost of living crisis, that seems especially egregious. The CMA’s warning was not, however, the first or even the second significant warning on fuel pricing. After launching a market study in July 2022, which reported a year later and made a series of recommendations to protect consumers, the CMA has issued three interim reports. In those reports, the CMA found that drivers were overcharged at the petrol pump by £900 million in 2022 and a further £1.6 billion in 2023. That means that, in just two years, drivers were overcharged by some £2.5 billion on their fuel in the midst of a cost of living crisis. That is shameful profiteering, which we know hits lower-paid workers and families the hardest. The cost of living crisis has meant that changes in the prices of utilities and fuel have been sorely felt.
We have long understood the argument that rural drivers might pay more for fuel due to the increased logistical costs and additional staffing costs. I do not always find such arguments convincing, but they at least have a perceived logic to them. However, fuel is not a luxury; it is a lifeline. It enables people to commute to work, take their children to school, and provide care and support to loved ones.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Gentleman on bringing the debate forward. I spoke to him beforehand; he and I share the same concerns in relation to fuel. Drivers in rural constituencies, such as ours of Strangford and Dunfermline and Dollar, are very much at the mercy of those who seek to charge more for fuel. Some have to travel far to get cheaper fuel, and it is debatable whether that is competitive or even logical. Does he agree that when it comes to competitiveness, we must have fairness and equality for every postcode, and recognise that prices in Kircubbin, the Ards peninsula and Dunfermline are similar, yet in Manchester fuel is almost 8p a litre cheaper?
Graeme Downie
I thank the hon. Member for his intervention; I believe that taking an intervention from him is a rite of passage in this House. I could not agree more, particularly in relation to constituencies such as my own, where there is a mix of urban and rural areas and the rural pricing hits particularly hard. Those are often areas that have poorer public transport as well, so the impact is felt even more.
Most small businesses rely on efficient and cost-effective transport for their deliveries, staff and customers, and that often means running and fuelling a car or van. High prices at the pumps have a direct impact on small businesses and squeeze already thin margins in the ongoing crisis in the cost of living and of doing business. Research by the Federation of Small Businesses shows that more than three quarters of small businesses saw their costs go up in the last quarter, and of those more than a quarter said that the increased price of fuel was one of the main reasons for that rise.
My constituency is just 20 miles from Scotland’s oil refinery in Grangemouth, yet residents in Dunfermline consistently pay a full 5p a litre more than those nearby in Glasgow, Stirling, Glenrothes or Kirkcaldy. That is despite the local supermarkets Tesco and Asda, as well as a host of other outlets in the city such as BP, all supposedly competing to be the driver’s choice. What we see in Dunfermline is a cluster of prices around the same level within the city, and price clustering around Dunfermline as well, with all supermarkets and suppliers at roughly the same price. That is not local competition; that is a local cartel. Even worse, my constituents are paying 134.7p per litre at Asda in Dunfermline, whereas in the Asda Bridge of Dee store in Aberdeen, 112 miles further north, they pay just 121.7p at the pump. Never mind 5p—that is a difference of 13p per litre.
In rural and semi-rural areas, as was said earlier, where public transport infrastructure is less entrenched—certainly in my constituency, where the train service is frequently short-formed, delayed or cancelled at short notice—fuel is not a choice; it is a necessity. My Dunfermline and Dollar constituents rely on their vehicles more heavily, yet often face the highest prices. That is an issue of basic fairness. I am all in favour of market forces being used to shape prices, but not where the market is demonstrably broken, and fuel pricing has all the signs of a broken market mechanism.
It is nothing short of outrageous that the most essential aspects of daily life are subject to broken competition, a non-functioning market and what appears to be price clustering by retailers. Across the constituency, small businesses and sole traders such as plumbers, builders, florists and taxi drivers, along with families, are paying the price. As we might say in Scotland, small businesses are being pumped at the pumps. Like many fellow Members of this House, I welcome the Chancellor’s announcement in the Budget, which we passed this evening, on freezing fuel duty, which will help people who are still feeling the impact of out-of-control inflation on their take-home pay. However, while this pricing behaviour by retailers continues, I am concerned that the full benefit of the Government’s efforts to keep down fuel costs will not be passed on to my constituents.
To help the House understand fully the consequences of this kind of price clustering and the effects of a broken market, I will share the experience of one of my constituents, Aimee, a 20-year-old apprentice who wrote to me last month. Aimee was proud to secure her apprenticeship, which she started this autumn, earning the apprentice minimum wage of £6.40 an hour. With just over £1,000 a month to live on, Aimee uses £200 a month of her hard-earned wages on fuel. She gets her petrol at Asda in Dunfermline where, as I mentioned, unleaded was 134.7p per litre yesterday. Her £200 is buying her 148.48 litres of fuel. However, if Aimee was buying her petrol at Asda Bridge of Dee in Aberdeen, where unleaded was 121.7p a litre yesterday, she would have paid just £180 for the same amount of fuel. That is a full £20 a month difference. Over the course of a year, Aimee would have to work an additional 36 hours just to pay for the difference in price of petrol for her to get to and from work. That is not justifiable. Aimee, who is learning while earning, is experiencing a real-terms pay cut differential due not to anything she has done, but to the effects of this broken market.
We encourage the use of greener transport, but we have seen the failures of the SNP Government and ScotRail to provide Fife with a reliable service, so that is not an option for people such as Aimee, with short trains and unreliable service, particularly in West Fife. One step that the SNP-Green coalition at Holyrood did take was to remove peak fares, which saw a 6.8% increase in train usage. However, that encouragement of behavioural change was swiftly removed—just like the Scottish Greens from the coalition—when the financial incentive of fairer train fares was also removed.
Behavioural change of a positive nature does not happen overnight, but the switch back to the car from the train does, and has. That short-sighted decision—like the short-formed trains that often serve the region—has put people off using green transport. Having been let down by the Scottish Government, commuters in Dunfermline are being taken advantage of by fuel retailers and market competition in my constituency.
Alex Ballinger (Halesowen) (Lab)
My hon. Friend is making an excellent speech. I have also noticed in my constituency that many fuel retailers are not passing on benefits to drivers and, as he recognises, the Competition and Markets Authority has said that those competition practices are unfair. I notice that the Government are taking forward a fuel finder app, which will allow customers and drivers to find out more information about different retailers and will drive competition. Does he agree that the Government should do that as soon as possible, so we can get that transparent and accurate information, and drivers in my constituency and others are able to get savings on fuel?
Graeme Downie
I thank my hon. Friend for that intervention. I will come on shortly to the action the Government are taking and where I think there is still more to be done.
The impact goes beyond personal strain; it creates an uneven playing field for businesses, hindering economic growth by harming small business owners in Dunfermline who rely on vehicles for operation. In this Budget the Government have taken a wide range of steps to help working people across the country, including in my constituency: a wage rise for 200,000 Scots, record funding to Scotland, fixing the mineworkers’ pension scheme, protecting the pensions triple lock and, as I have said, committing funds to maintain the freeze on fuel duty that the Conservatives failed to do and which would otherwise have seen people like my constituent Aimee paying even more for fuel.
I am also pleased that this new Government have confirmed that they will implement two of the CMA’s recommendations: an open data scheme called fuel finder that will require all fuel retailers to share their prices in real time, and a road fuels monitoring function that will report on the state of competition in the road fuel market. Scenario modelling by the CMA suggests that pump prices could reduce by between 1p and 6p a litre as a result of these measures, helping to ensure that drivers get a fair deal for fuel across the UK. I am keen to hear from the Minister what more she thinks the Government can do specifically around ensuring a fair and functional fuel market, so that pricing is fair and not allowed to cluster into local price-fixing, as seen in Dunfermline.
Fuel prices are undoubtedly subject to a range of external factors, as we have seen over the years, but by increasing transparency and ensuring real competition between forecourts, we can have a functioning market where competition helps drive down prices. However, nothing is preventing fuel retailers from choosing to do the right thing right now and to stabilise fuel prices, to remove price clusters like we see in Dunfermline and to ensure that people such as Aimee are not financially penalised for where they live. I hope this Government will build on the excellent start they have made to protect working people and small businesses, and I hope we will be able to do more to stop fuel retailers profiteering on the back of hard-working people up and down the country.
The Minister of State, Department for Energy Security and Net Zero (Sarah Jones)
I start by congratulating my hon. Friend the Member for Dunfermline and Dollar (Graeme Downie) on securing this debate, making such an excellent contribution and championing the needs of consumers, both in his constituency and across the UK, where so many people have the same struggles.
I welcome the opportunity to discuss the important matter of the road fuel market. This Government are committed to fixing the foundations of the economy, delivering change by protecting working people and rebuilding Britain. It cannot be the case that fuel retailers register record profits and do not pass on savings when the burden is being unduly felt by hard-working families and businesses. That is why I am so grateful for my hon. Friend’s story about Aimee. Her story is one that I suspect is familiar to many other MPs from their constituencies. We are committed to supporting people with the cost of living and the cost of fuel.
I agree with my hon. Friend that, for so many, vehicles are more than just a means of transport; they are a lifeline. They play an integral role in connecting working people, families, communities and businesses, especially in rural areas. In the case of young people, including Aimee, their car is a means to forge a career and earning meaningful, well-paid work. This Government are committed to delivering for drivers, but also providing a range of transport options to make it possible that people such as Aimee should not have to worry about how they get to work.
That is why this Government made the decision at last week’s Budget to freeze fuel duty for a further year, which I know my hon. Friend has welcomed. I commend his dedication to campaigning against high fuel prices and for families, working people and small businesses to get a fairer deal on fuel across his constituency and Scotland. It is imperative that we have a well-functioning, transparent and competitive road fuel market. We want to ensure that drivers can get a fair price for their fuel, and that fuel retailers remain transparent and do not overcharge. We expect all fuel retailers to pass on any savings at the pump.
As my hon. Friend set out, the Competition and Markets Authority published its road fuel market study in July 2023, and it found that competition across the retail market had weakened. The CMA found problems in relation to three aspects of the retail market: national, local and motorway.
At a national level, the CMA found that retail margins had risen significantly since 2019, with the supermarket retailers following a similar trend of increased margins on fuel. The historic price leaders in the market—primarily Asda, but also Morrisons to some extent—had taken a less aggressive approach to pricing and had significantly increased their margins over recent years. The rest of the fuel retailers took a passive approach and followed that trend.
At a local level, the CMA found significant price differences between local areas, with lower prices at a forecourt typically associated with having a supermarket competitor nearby. I know that my hon. Friend is concerned about that and recently raised it with the Leader of the House at business questions, as he has done today in this debate by sharing Aimee’s experience.
On motorway pricing, the CMA found that drivers without access to fuel cards, which account for 20% to 25% of fuel sales on motorways, were paying significantly more to fill up at a motorway service area than they would elsewhere, due to limited competitive pressure.
As a result of those factors, the CMA found that drivers have been paying more than would otherwise have been the case. It is estimated that the financial impact of the 3% increase in average supermarket fuel margin from 2019 to 2022 resulted in a combined additional cost of around £900 million for customers of the four supermarket fuel retailers in 2022 alone. That is equivalent to approximately £75 million a month for this period.
While fuel prices are now a lot lower than at the all-time peak in July 2022, weakened competition persists. The CMA’s latest monitoring update in July this year estimated that the increase in retailers’ fuel margins compared with 2019 resulted in increased fuel costs for drivers in 2023 of over £1.6 billion. Weak competition is still failing consumers; that is hugely concerning. The price of petrol and diesel is an important issue. When prices are high, the impacts are felt by everyone. We expect all fuel retailers to pass on any savings at the pump.
As my hon. Friend said, to address these issues, the CMA made recommendations for the Government to implement an open data scheme for fuel prices, requiring retailers to share their prices on a real-time basis and allow drivers to be better informed on prices and easily compare prices, and to launch an ongoing monitoring function for the retail market to assess how well competition is working. The Government accepted those recommendations.
On the CMA’s first recommendation, as part of the Budget last week, we confirmed that we will implement a statutory open data scheme called fuel finder. It will require all retail petrol filling stations in the UK to report prices and when a fuel becomes unavailable within 30 minutes of a change. The data will be shared openly and freely to third parties so that it can be incorporated into their price comparison websites or apps, sat-navs and other consumer-facing products that consumers can use. Fuel finder will empower drivers to compare prices more easily and make more informed decisions on where to buy their petrol and diesel. That will increase pressure on fuel retailers to compete strongly to attract consumers by lowering their prices or improving their services at the forecourt.
The Government are committed to implementing fuel finder as quickly as possible. We will begin procurement for the fuel finder aggregator in early-2025. The Data (Use and Access) Bill that the Government have introduced will provide the legislative basis to set up fuel finder. Subject to parliamentary timings, we aim to launch fuel finder by the end of 2025.
On the CMA’s second recommendation, it will receive statutory information-gathering powers through the Digital Markets, Competition and Consumers Act 2024 to undertake the permanent monitoring function. We are aiming to commence those provisions by January 2025. The CMA will be able to assess and monitor the state of competition in the retail market, both nationally and locally, provide ongoing scrutiny of prices and advise the Government if further intervention is needed to protect consumers.
The transition from fossil fuel to zero carbon vehicles is likely to lead to further risks of weakening competition in the remaining fossil fuel-based road fuels market. The transition is likely to be felt particularly by less well-off consumers and those living in rural areas. The CMA will be able to monitor the market through the transition and benefit consumers by ensuring that the market continues to function properly.
The CMA will therefore publish an annual report on the state of competition in the sector, three shorter updates on prices, costs and margins, and information on price trends across the UK and over time. Taken together, fuel finder and the CMA monitoring function will reinforce each other in providing a new source of competitive pressure in favour of greater competition in the road fuel retail sector.
Tom Gordon (Harrogate and Knaresborough) (LD)
One of the interesting things brought to my attention by residents in Harrogate and Knaresborough is that while we are quite rural, being on the periphery of North Yorkshire, there is an aspect about being an area with tourists, along with higher housing and other costs more generally. When we are talking about trying to reduce fuel prices, can the Minister give any further information on what consideration will be given to regional and inter-regional inequalities in pricing?
Sarah Jones
The hon. Gentleman makes a good point. That is why we need to start monitoring the situation properly. When we all have access to that real-time data and can understand exactly what is happening—the CMA can be monitoring that and reporting to the Government—the Government can say, “Actually there is a more systemic problem here that we need to tackle. We need to make more interventions.” The Government stand ready to look to do those things, but the first stage of having the data available so that we understand properly what is going on will help us to do that.
Fuel prices are inevitably uncertain and sensitive to wider global factors, but our published impact assessment estimates that increasing transparency and encouraging competition between petrol filling stations could result in fuel cost savings for drivers totalling £7.7 billion over 10 years. That amounts to savings of 1p to 6p per litre at the pump. I am sure that my hon. Friend and others will agree that that would be welcome.
In addition, at the Budget the Chancellor announced that the Government are extending the temporary 5p cut to fuel duty rates for a further 12 months, until 22 March 2026. Alongside that, the Government will not increase 2026 rates in line with the retail price index, or RPI. Taken together, that is a tax cut worth £3 billion in 2025-26. The freeze in fuel duty will save the average car driver £59 in 2025-26. These actions have been welcomed by stakeholders such as the RAC and the AA.
Let me assure the House and my hon. Friend that the Government are committed to delivering for drivers. Our ultimate goal is to increase the levels of transparency for consumers and encourage fuel retailers to become more competitive. That way, consumers will send the clearest signal to them that they will not pay extortionate prices when given a range of options to choose from. We are confident that these measures will help facilitate a competitive road fuels retail market, increase price transparency and protect consumer interests. I thank hon. Friend again for securing this important debate.
Question put and agreed to.
Draft Packaged Retail and Insurance-based Investment Products (Retail Disclosure) (Amendment) Regulations 2024
Draft Consumer Composite Investments (Designated Activities) Regulations 2024
Draft Securitisation (Amendment) (No. 2) Regulations 2024
Draft Prudential Regulation of Credit Institutions (Meaning of CRR Rules and Recognised Exchange) (Amendment) Regulations 2024
(2 weeks, 1 day ago)
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The Economic Secretary to the Treasury (Tulip Siddiq)
I beg to move,
That the Committee has considered the draft Packaged Retail and Insurance-based Investment Products (Retail Disclosure) (Amendment) Regulations 2024.
The Chair
With this it will be convenient to consider the draft Consumer Composite Investments (Designated Activities) Regulations 2024, the draft Securitisation (Amendment) (No. 2) Regulations 2024 and the draft Prudential Regulation of Credit Institutions (Meaning of CRR Rules and Recognised Exchange) (Amendment) Regulations 2024.
Tulip Siddiq
It is a pleasure to serve under your chairmanship, Mr Efford. The regulations that we are introducing today will ensure effective, proportionate regulation for the financial sector by laying the groundwork for wholesale reform of consumer disclosure for financial services, and for effective prudential arrangements.
Let me turn first to the draft Consumer Composite Investments (Designated Activities) Regulations 2024. The packaged retail and insurance-based investment products regulation, or PRIIPs regulation, was designed to standardise disclosure across a wide range of financial instruments and across the EU in an attempt to improve transparency and enable comparison between products for retail investors. However, as many Members will be aware, the regime was overly prescriptive and burdensome with the one-size-fits-all template of the key information document, or KID, resulting in the presentation of misleading information to consumers on potential risks and returns. The previous Government took urgent action to address the most pressing issues with the KID in the Financial Services Act 2021, and the draft statutory instrument will deliver on this Government’s commitment to wholesale reform of these EU-inherited rules, with a new regime tailored to UK markets and firms.
The SI provides the Financial Conduct Authority with tailored rule-making and enforcement powers to deliver this long-called-for reform and to ensure its effective implementation. The new regime for CCIs will have tailored and flexible rules that address the key issues with PRIIPs and will support investors to better understand what they are paying for. The FCA’s consultation later this year will provide an opportunity for a full range of stakeholders to provide feedback on the new regime to ensure that it works as intended.
I return to the draft Packaged Retail and Insurance-based Investment Products (Retail Disclosure) (Amendment) Regulations 2024. I have heard concerns from industry about PRIIPs. The current disclosure requirements have had unintended consequences on the investment trust sector specifically. Listed investment trusts are a British invention dating back 150 years, and they are unique to our country. Representing over 30% of the FTSE 250, and predominantly investing in illiquid assets—including infrastructure projects and renewables—they play an active role in supporting the Government’s growth agenda.
Investment trusts are a unique and well established type of closed-ended investment vehicle, and the Government recognise that the prescriptive cost disclosure methodology required by the PRIIPs regulation does not reflect the actual cost of investing in these close-ended funds. The industry has told us again and again that the methodology is negatively impacting its ability to fundraise, and competitiveness. Therefore, this instrument will immediately exempt listed investment trusts from the current PRIIPs regulation and other relevant assimilated law as we finalise the replacement CCI regime, delivering on a key industry ask.
We have worked quickly to deliver these changes and firms are able to take advantage of this provision immediately, before the legislation takes effect, due to the FCA’s regulatory forbearance. This approach is intended as an interim measure, and investment trusts will be included within the scope of the new CCI regime, once it is in place. The FCA, recognising that the pace of legislative reform can be slow, has already implemented regulatory forbearance so that firms can take advantage of the provision immediately, before the instrument takes effect. In the long term, investment trusts will follow bespoke and tailored rules befitting the industry, and I encourage all sides to come together to find a sensible solution under the CCI regime.
Let me now turn to the draft Prudential Regulation of Credit Institutions (Meaning of CRR Rules and Recognised Exchange) (Amendment) Regulations 2024, which make two amendments. The first is a technical change supporting the implementation of Basel 3.1, the final round of bank capital reforms following the global financial crisis. Bank capital rules are contained in the capital requirements regulation, part of assimilated law on financial services. This SI will enable revocations of these regulations, allowing the Prudential Regulation Authority to replace those rules in its rulebook, while ensuring that the PRA’s rule making remains subject to appropriate accountability and scrutiny.
The second amendment will expand the definition of a “recognised exchange”, from referring only to domestic investment exchanges to include those from overseas. This will enable stocks and shares from qualifying overseas exchanges to receive preferential prudential treatment when used as collateral to secure financial services, and will broaden our definition, making the UK comparable with international counterparts and ensuring that we are competitive.
Finally, the draft Securitisation (Amendment) (No. 2) Regulations 2024 extend a temporary arrangement allowing UK banks to treat EU securitisation products as though they originate from the UK, providing that they meet the standards of the “simple, transparent and standardised” framework. This means that banks and insurance firms holding such products may be able to benefit from preferential capital treatment. The current arrangement is due to expire at the end of December 2024, which would mean that no additional EU STS securitisations would be able to enter the temporary arrangement after that date. As that could impact the range of investment options for UK market participants, the Government are legislating to extend this arrangement to June 2026.
The EU securitisation regulation was recently incorporated into the European economic area agreement, and the EEA-European Free Trade Association states have indicated their intention to align themselves with the EU securitisation regulations over the course of 2025. The extension granted by this instrument will allow time for the EEA-EFTA states to implement these changes and for UK authorities to make a more informed decision about the non-time limited designation of EU STS securitisation products by June 2026.
These SIs will empower regulators to ensure that our financial services industry is subject to a rulebook that is fit for purpose, more proportionate, and tailored to UK markets. I know that the hon. Member for Grantham and Bourne is familiar with the regulations, as I have debated with him several times in Committee. I hope that he and the Committee will join me in supporting the regulations, which I commend to them.
Gareth Davies (Grantham and Bourne) (Con)
It is always a pleasure to see you in your place and to serve under your chairmanship, Mr Efford. I also welcome the Economic Secretary to the Treasury to her place. I have spent many hours with her in these rooms, and that may or may not continue—we will find out soon.
The UK is one of the world’s leading financial centres and our financial services sector is one of the great engines of our economy. We should never forget that the sector employs some 2.3 million people, two thirds of whom are based outside of London—a slightly underappreciated fact about the sector.
Investment trusts are currently subject to disclosure requirements under the EU-inherited packaged retail and insurance-based investment products regulation—or PRIIPs, which is much easier to say—regulation, alongside other assimilated EU legislation. Ensuring that retail investors can make informed investment decisions is crucial for maintaining healthy capital markets. Industry leaders widely agree that the single aggregated figure currently produced under these EU-inherited rules fails to accurately reflect the true cost of investing in shares of an investment trust. The previous Government recognised those concerns completely and launched a consultation on a proposed alternative framework for retail disclosure in the UK. This consultation was designed to ensure that, following the repeal of the PRIIPs regulation, the new framework would be better aligned with the UK’s dynamic capital markets and foster more informed retail participation.
As the Minister quite rightly set out, the draft Consumer Composite Investments (Designated Activities) Regulations 2024 replaced assimilated law relating to PRIIPs regulation, establishing a new legislative framework for the regulation of consumer composite investments. Replacing those assimilated laws was a crucial part of the previous Government’s plans to develop a smarter regulatory framework.
The draft Securitisation (Amendment) (No. 2) Regulations 2024 extend a temporary arrangement, granting preferential prudential treatment for EU origin STS securitisations, and the draft Prudential Regulation of Credit Institutions (Meaning of CRR Rules and Recognised Exchange) (Amendment) Regulations 2024 make amendments to primary legislation in connection with the revocation by the Financial Services and Markets Act 2023 of the EU capital requirements regulation, which currently forms part of assimilated law on financial services.
All that is a long way of saying that His Majesty’s Opposition welcome these draft regulations, and hope that they will provide listed investment companies with the long-term regulatory certainty that they need. However, I will end by saying that the financial services sector thrives on stability and predictability, and I am deeply concerned that such certainty will be undermined by the recent Budget of broken promises and betrayal, though I am happy to leave those discussions for another day.
Tulip Siddiq
I thank the shadow Minister—or perhaps temporary shadow Minister—for his support and associate myself with his comments about the financial services sector. It is a success story of our country. During the passage of the legislation that is now the Financial Services and Markets Act, he and I talked often about the importance of the financial services sector to the overall economy, but I will not associate myself with his comments on the Budget or rise to anything he says in that regard!
These SIs represents an important step in our approach to regulation for financial services, which we want to be proportionate, effective and tailored to the UK. We want to get the best out of our financial services sector. I encourage all interested parties to engage with the FCA as it consults on the proposed CCI regime later this year, because it is important to hear from the industry and ensure that we make regulation according to what it will thrive on.
I thank the Committee for listening to me speak for quite a long time. If Members have any questions, I would be happy to answer them. I thank the shadow Minister, and I thank the Whips for organising us today.
Question put and agreed to.
DRAFT CONSUMER COMPOSITE INVESTMENTS (DESIGNATED ACTIVITIES) REGULATIONS 2024
Resolved,
That the Committee has considered the draft Consumer Composite Investments (Designated Activities) Regulations 2024.—(Tulip Siddiq.)
DRAFT SECURITISATION (AMENDMENT) (NO. 2) REGULATIONS 2024
Resolved,
That the Committee has considered the draft Securitisation (Amendment) (No. 2) Regulations 2024.—(Tulip Siddiq.)
DRAFT PRUDENTIAL REGULATION OF CREDIT INSTITUTIONS (MEANING OF CRR RULES AND RECOGNISED EXCHANGE) (AMENDMENT) REGULATIONS 2024
Resolved,
That the Committee has considered the draft Prudential Regulation of Credit Institutions (Meaning of CRR Rules and Recognised Exchange) (Amendment) Regulations 2024.—(Tulip Siddiq.)
Draft Barnsley and Sheffield (Boundary Change) Order 2024
(2 weeks, 1 day ago)
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The Minister for Local Government and English Devolution (Jim McMahon)
I beg to move,
That the Committee has considered the draft Barnsley and Sheffield (Boundary Change) Order 2024.
It is a pleasure to serve under your chairmanship, Mrs Harris. The draft order is straightforward. It provides for the boundary between Barnsley and Sheffield to be revised so that the whole area of the Oughtibridge Mill housing development will be in the city of Sheffield, as well as providing for consequential changes to corresponding ward and parish boundaries. The councils concerned both support the boundary change, as do the affected parish councils.
Before I go into the detail of the draft order, and with apologies, I must draw the Committee’s attention to the correction slip that has been issued to correct minor drafting and formatting errors. First, it removes the phrase “Ministry for” where the order refers to the Secretary of State for Housing, Communities and Local Government in the preamble; in article 2; in the signature box at the end of the order; and in the second and sixth paragraphs of the explanatory note. Secondly, it provides a clearer map of the boundary change for the explanatory note. A formatting issue meant that the map lacked clarity when it was inputted into the draft order. With the help of the statutory instrument registrars, the correction slip now enables the same map to be sufficiently clear and to cover a full page. Those minor errors in the original draft order have now been corrected. The substance of the order is unchanged, and I hope that the reformatted map provides greater clarity for those who read the order.
Few reviews of the external administrative boundaries of local authority areas in England have been carried out since 1992, so from time to time new developments and population changes have caused small-scale boundary anomalies between local authorities. In practice, local government will put in place informal arrangements to deal with such situations, but the very fact that they need to do so is not conducive to effective and convenient local government. Such anomalies can also impact perceptions of community identity: where residents do not feel, for whatever reason, part of a particular area, they may be less likely to take an interest in their council.
On 14 April 2022, the Local Government Boundary Commission for England received a formal request, made jointly by Barnsley council and Sheffield city council, for a review of the boundary in the area. Because the existing boundary runs along the River Don, the Oughtibridge Mill development has been split between the two councils. Both councils told the boundary commission that, because of the geography of the local communities and the existing road layout, the impact on service demand would mostly be felt by Sheffield city council, and that services would be better delivered by that council.
The boundary commission undertook a review of the boundary and consulted those affected, and a majority of the 19 responses supported the boundary change. Following the consultation, the commission’s final recommendation was to transfer to Sheffield the area of the Oughtibridge Mill housing development that is in Barnsley. Doing so would move a section of the councils’ shared boundary at the River Don so as to encapsulate the Oughtibridge Mill development of 12 existing and 284 future dwellings. There was also a recommendation to realign ward and parish boundaries. After receiving the final recommendations, the Secretary of State allowed four weeks for interested parties to make representations. The Department received none in that period.
The draft order provides for the boundary between Barnsley and Sheffield to be revised, so that the whole area of the Oughtibridge Mill housing development will be in the city of Sheffield.
David Simmonds (Ruislip, Northwood and Pinner) (Con)
His Majesty’s loyal Opposition have no objection to these entirely sensible proposals and will not seek to divide the Committee.
Barry Gardiner (Brent West) (Lab)
How good it is to have your guidance, Mrs Harris, for our first legislative duty of the day. Today will be a busy one for all of us, with votes on the Budget and the ramifications of the US election competing in our minds for attention. While boundary changes may seem like minor political fare in comparison, it is important that we recognise that we are dealing with the fine grain of politics. People are affected at the most local level by the decisions we make.
I want to express my profound gratitude to our Whip, my hon. Friend the Member for Wellingborough and Rushden, for thinking of me as someone who just might be interested in the draft Barnsley and Sheffield (Boundary Change) Order 2024. I know that many colleagues would willingly have supplanted me and usurped my duties on this Sixth Delegated Legislation Committee. I can only guess at why she so singularly favoured me with the appointment, but I trust that the length of the speech I am about to make will be sufficient to express to her just how appreciative I am that she allotted me this task.
Inevitably, boundary changes can be controversial. Sometimes we risk separating a region from its history. I do not know whether this is an old saying or just something I have been saying for a very long time, but scratch history and you find geography. Our history is moulded by our natural environment. Each region has its own that depends entirely on the fertility of its land, its proximity to the oceans, and trade routes and its access to fresh water and natural resources such as coal or precious metals. The boundary commission has the serious job of keeping our democracy relevant and connected to people, but sometimes, quite without wishing to, it can end up dividing the community and confusing future residents, all at the expense of the taxpayer.
The Minister made much of the fact that the draft order would affect only 12 households, and the final recommendations of the Barnsley and Sheffield principal area boundary review say:
“Our final recommendation to change the district boundary in this area currently affects 12 households”.
However, the recommendations also say that that figure will rise to 284 households by the time the development has been built. That is about 800 to 1,000 people. The Minister also said that no representations were made. Well, of course they were not; people have not yet moved into those 284 households, so how could they have been? That is why it falls to us here in Parliament to consider what those individuals, when they move in, might wish to know.
Let us look carefully at what will be at stake for those 284 families. Of course, we should be just as concerned were the draft order to affect only the current 12 families, but let us consider precisely what will divide those future families from their nearest neighbours in the other part of Oughtibridge Mill. The local authorities’ argument is that it would be more convenient administratively for them if the whole development came under Sheffield, but we ought to be more concerned with the families and what that might mean for them; the decision we take today will have a profound influence on their lives.
Any hon. Member who has looked carefully at the map of the area will have noticed that the part of the Oughtibridge Mill development currently under the jurisdiction of Barnsley council in the Penistone East ward is not only by far the larger part of the site—I would say it is about three to four times the size of the part in the Sheffield area—but actually separated from the residential area of Oughtibridge village by not one, but two major physical barriers.
The first barrier is the River Don, with only one narrow river crossing available to the whole Barnsley side of the estate. Any resident travelling from the eastern part of the development at the far end of Aspen Road who wanted to walk to the post office in Oughtibridge village would face a 1½-mile journey—a 3-mile round trip. But the River Don is not the biggest problem; there is also the A6102. Langsett Road North is a major road—in parts a four-lane highway—and runs parallel to the River Don. It is not a shared artery that binds the people on one side of a community to the people on the other; it is a road that forms a natural boundary and separates people. No doubt that double barrier was what the boundary commission was accounting for when it made its original proposal.
We must not assume that some of the 284 families would not rather enjoy being residents of Barnsley council and appreciate the vision of individuals such Councillor Sir Stephen Houghton CBE, who chairs the Barnsley 2030 strategy board, and Bob Kirton, his vice-chair. Their strategy is about “celebrating and championing” the borough as it progresses to 2030 and sets out some bold ambitions. In developing the Barnsley 2030 strategy, they have worked closely with communities, businesses and organisations across all sectors and with local councillors. In the strategy, it was confidently stated that
“our borough’s vision and ambitions represent everyone who has an interest in the future of Barnsley.”
When it was written, that included the people in the Oughtibridge Mill development. Who are we to deny those residents access to the bold and ambitious plan that these councillors speak of? The strategy concludes:
“We truly believe that together we can tell a better and shared story of our borough and we have a real opportunity to turn Barnsley into the place of possibilities.”
In passing this order, we would deny those possibilities to 284 families.
I live in the London borough of Brent, but I am only too aware of how many families in Brent prefer to say that they have a Harrow address. Indeed, many of them have a Harrow postcode to justify their little white lie. We have seen no impact assessment of what such a boundary change might do to the value of these properties in Barnsley and Sheffield.
Barry Gardiner
Indeed. I am talking about the effect on the future value of these properties. Residents who have moved in under one local authority may find the value of their property affected by its suddenly being designated under another. I must stress that I respect both councils and have no doubt that they look after their populations equally well, but we should have been provided with an impact assessment to show that there are such—
David Simmonds
On a point of order, Mrs Harris. We have heard from the Minister about the strong support of the two local authorities, and that has given us a great deal of detail to reflect on. On that basis, may I move that the Question be now put?
Jim McMahon
Thank you for that, Mrs Harris. I thank my hon. Friend the Member for Brent West for his contribution. Given his diligence in preparing for his speech, I am happy to recommend to the Whip that he joins us for future Delegated Legislation Committees. I thank members of the Committee for—
Barry Gardiner
On a point of order, Mrs Harris. A point of order was made and I believe a motion was made, but I did not hear any vote taken on the motion. I would have thought that that was the function of the Chair.
Jim McMahon
I do not have a great deal to say in rounding up, other than to reflect on the fact that the consultation included the residents who live in the Oughtibridge site at present, the majority of whom were in support of the move. On the 284 properties that will be brought into the wider development, I would say that most normal people—we are not among them, because we are talking about local government boundaries, which we care a lot about—live in places with identities that they feel connected to. I draw Members’ attention to the sales brochure for the site, which describes it as one of the most attractive developments in Sheffield, and to the fact that the development has a Sheffield address and a Sheffield postcode. I think most people moving into the new development will believe they are moving into Sheffield, and the draft order will allow them to enjoy the services of Sheffield city council.
Question put and agreed to.
Draft Windsor Framework (Non-Commercial Movement of Pet Animals) Regulations 2024
(2 weeks, 1 day ago)
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Emma Hardy)
I beg to move,
That the Committee has considered the draft Windsor Framework (Non-Commercial Movement of Pet Animals) Regulations 2024.
It is a pleasure to serve under your chairwomanship, Ms Vaz. This instrument was laid before the House for consideration on 10 October this year. Its purpose is to implement arrangements under the Windsor framework announced in February last year. It provides for the introduction of the Northern Ireland pet travel scheme. The framework significantly improves on the arrangements under the original Northern Ireland protocol and represents an important step forward for the people of Northern Ireland. This Government have been very clear in their intention to secure new, better arrangements for sanitary and phytosanitary matters with the EU. We are clear that we want to continue to simplify that process in order to support those across the United Kingdom while protecting our internal market.
Turning to the statutory instrument itself, the Northern Ireland pet travel scheme will significantly simplify the requirements associated with moving pet dogs, cats and ferrets from Great Britain to Northern Ireland. It replaces single-use animal health certificates with a lifelong travel document that is free of charge and removes the need for costly pet-health treatments. Pet owners who travel frequently with their pets and those who rely on the service of an assistance dog to travel independently will benefit substantially from this change in approach.
The SI will also benefit the movement of pets for other reasons, such as the movement of young assistance dogs into Northern Ireland for training or of police or military working dogs from GB to Northern Ireland. I am pleased to say that that benefit has been recognised by Guide Dogs UK, which has noted the positive impact of removing single-use EU certificates for assistance dog owners travelling into Northern Ireland. The SI also reaffirms the Government’s commitment to unfettered access: there will be no requirements whatsoever for pets from Northern Ireland beyond the need for a microchip, as is good practice already and in line with the Government’s approach to high animal welfare standards.
Finally, the SI empowers relevant competent authorities to carry out their respective responsibilities as part of the scheme in Great Britain and Northern Ireland. That will ensure that the scheme is sufficiently robust and that those travelling with their pets have the best experience possible.
In summary, the instrument is essential in implementing the benefits of the Windsor framework, an international treaty negotiated by the last Government which this Government have committed to delivering in good faith. The Windsor framework is successfully restoring the smooth flow of trade within the UK internal market by removing the burdens that have disrupted east-west trade, as well as safeguarding Northern Ireland’s place in the Union. I hope Committee members agree that the Northern Ireland pet travel scheme delivers significant benefits for pet owners and assistance dog users across the UK, and I urge all to support its implementation.
Jerome Mayhew (Broadland and Fakenham) (Con)
It is lovely to see you in the Chair, Ms Vaz. I agree that the statutory instrument represents an improvement on what has gone before. Pet-owning families will not be exposed to costly and time-consuming veterinary certification, nor will they have to ensure that animals are rabies-vaccinated or examined for tapeworms. I am glad to see that the regulations apply not only to cats and dogs, but to ferrets. As a former ferret owner, I am reassured that ferrets are being properly represented in this House.
The single document lasts a lifetime. I have personal experience of bringing a couple of dogs across the Irish sea, and being treated as coming from a third country brings significant costs and delays for pet owners. With these improvements, and in the interests of not creating increased uncertainty for pet owners across the country, I support these regulations. However, I am aware that a number of pet owners have some concerns, and I would like to seek reassurance and clarification from the Minister. A number of pet owners are deeply concerned that this change will prevent or hinder them from travelling freely to Northern Ireland, and I fear that has been exacerbated by the lack of a full public consultation. Will the Minister explain why a public consultation was not undertaken and what steps will she and the Department take to reassure pet owners more fully about the impact of these changes on them?
On a much more serious point, the regulatory regime that underpins this legislation is the responsibility of, and open to future amendments by, the European Union. Will the Minister reassure me that the European regulations to which these regulations operate in reference will continue to be monitored closely by His Majesty’s Government? Will the Government give an undertaking that this legislation will be revisited, should the underlying regulations change to the detriment of the UK and its citizens who want to travel to Northern Ireland?
It is also concerning that full EU entry requirements will remain in place for individuals moving from Northern Ireland to the Republic of Ireland, as if they were travelling from a third country. That implies that SPS border checks would be required between the Republic and Northern Ireland. Will the Minister clarify whether that is the case, and whether this statutory instrument introduces any measures to ensure that the Irish border—the land border between the north and south on the island of Ireland—remains without a physical border and without physical checks for pet owners?
Jim Allister (North Antrim) (TUV)
I urge the Committee to reject these regulations. I take issue with the Minister saying that this is an improvement. The original propositions of the protocol were never implemented. The grace periods remain the current position, which is that no pet passports, no documentation and no requirement to be part of a pet scheme is needed to bring your pet from GB to the other part of the United Kingdom.
What these regulations do is impose a pet passport scheme. People must belong to a pet scheme and submit their dog, cat or ferret to documentary and identity checks on getting on the boat and on leaving the boat—all that is within the one country. All that is because, for the first time since Brexit, the EU has legislated for the United Kingdom. I want that to sink in. What these regulations do is impose EU regulation 2023/1231. Let me read the title of that measure, which is a regulation of the European Parliament, not of this Parliament, and of the Council:
“Regulation (EU) 2023/1231 on specific rules relating to the entry into Northern Ireland from other parts of the United Kingdom of certain consignments of retail goods, plants for planting, seed potatoes, machinery and certain vehicles operated for agricultural or forestry purposes, as well as non-commercial movements of certain pet animals into Northern Ireland”.
These regulations impose that foreign-made regulation, made not for the EU—it is not applicable to the EU—but for this United Kingdom. How is it that we have got to the point that this Committee is expected merely to nod to legislation made not by this House, for this United Kingdom? It is not that it is imposing obligations unique to Northern Ireland; it is imposing obligations on GB citizens, who want to bring their pet to visit family, the Giant’s Causeway or the many tourist attractions in Northern Ireland. Now, courtesy of the demands of this foreign EU legislation, they must belong to a pet scheme, apply for and obtain a pet passport, subject their pet to document and identity checks, and then—and only then—can they move their pet internally within the United Kingdom. That is an astounding situation, and an astounding imposition on citizens of Great Britain.
As I read the regulations, that imposition extends even to guide dogs. Think about it. If someone who needs a guide dog comes from GB to visit a relative in my constituency or elsewhere, or the Giant’s Causeway in my constituency, they must have a pet passport. Why? Not because of regulations made by this House, but because legislation passed by the EU says that he or she must have one. Many guide dogs are reared in Northern Ireland for GB use. They are trained in Northern Ireland, and every one of them will be subject to this unnecessary regulation.
We are told that it is all to protect the EU market. We are told that we cannot have an SPS border where it should be—where the actual border is—but we must have it in the Irish sea. The farce of these regulations is that if someone brings their dog from GB to Northern Ireland, and wants to visit Donegal or Dublin across the border, then they must subject themselves to a full SPS border where we were told it cannot be—at the actual border. How farcical is that? We cannot have an SPS border where it should be. We must therefore impose restrictions on animals coming from GB to Northern Ireland, but if we take a dog onwards to the Republic, then yes, we are subject to full SPS checks. Where? Where we are told we cannot even have an SPS border.
The other dimension of the regulations, and the subservience that we are invited to submit ourselves to, is that if the EU is dissatisfied with the United Kingdom’s implementation of them, then under EU regulation, it can suspend them or take whatever steps it wishes. What this Parliament has been asked to do, on behalf of its citizens—primarily its GB citizens—is put them at the mercy of the EU’s regulations, not United Kingdom registration, which could allow their animal to be put into quarantine. Indeed, under the regulations, if an animal fails the document or identify check, it has to go into SPS custody. I assume that means it goes into quarantine, in its own country. Little wonder the other place debated these regulations. I have initiated an early-day motion for this House to debate them. I suspect it will not, but it certainly should, because they are a fundamental assault on basic freedoms.
The other point to stress is that most other things governed by the Irish sea border are governed under the pretext that they are commercial. This is the extension of the Irish sea border to the non-commercial movement of pets. Why should that be? We are told that this improves the present situation, but I have already explained why it does not: the present situation is free movement.
At present, cats and ferrets do not need to be microchipped—yes, dogs need to be microchipped, but not cats or ferrets. Under these regulations, cats, ferrets and dogs must all be microchipped to move within this United Kingdom. Frankly, that is a step far too far. The Committee should take a stand and say, “We cannot—we will not—put this upon our citizens.” Why should we, if all someone is doing is bringing their best friend—their dog—with them within the United Kingdom? That is why I invite the Committee not to approve the regulations.
I raise considerable concern that there was no impact assessment on the regulations on the fatuous grounds that they were less severe than they might have been— that is no comfort; there should have been an impact assessment—and because, equally fatuously, there is no impact on business. Of course there is not—the movements are non-commercial. It is all the worse that we have now got to the point where non-commercial movements are being dictated to us under regulations.
As the hon. Member for Broadland and Fakenham said, there was no public consultation. Why not? These regulations affect every dog, cat and ferret owner in Great Britain. Should there not have been a public consultation, particularly as they affect every guide dog owner? That is where it really cuts to the quick. I say to the Committee that the case is not made for these regulations and they should be taken back, because to go down this road is to take a step far too far in being subservient to a foreign Parliament telling us what people in this country can do with their dogs, cats and ferrets.
Emma Hardy
I am grateful for the contributions in today’s debate. I am confident that the Committee will agree that we could not have a debate about pets without the mention of some of our beloved pets—after all, we are a nation of animal lovers. This allows me to mention for the first time my two new kittens. My beloved cat, Thomas, became quite famous after being mentioned by me, but sadly passed away. We now have the terrible two, Meglatron and Lily, who are enjoying spending time with the family.
I will give Cats Protection a bit of a plug, having got my pets from them. In England, cats need to be microchipped before they are five months old. That has been a requirement since June 2024, so anyone who is seeking to get a cat from Cats Protection or anywhere else will find that it is a legal requirement for the cat to be microchipped.
Now that I have given my animals a shameless plug I will turn to the points made in the debate. I thank the hon. Member for Broadland and Fakenham for agreeing to support the measure and for the tone of his remarks. I gently point out that, yes, there are not any checks at the moment, but that is because this is a continuation of the situation when we were a member of the European Union. We are no longer a member. Brexit has taken place, and with that came the Windsor framework. The aim of the original Northern Ireland protocol and the framework was to avoid the need for any hard border, as I am sure the hon. and learned Member for North Antrim knows, in the island of Ireland, between Northern Ireland and the Republic of Ireland. The scheme safeguards that position. The position that he advocates is one that does not exist—we are not a member of the European Union. We are fulfilling our requirements under the Windsor framework, because the Government believe in our international obligations. We believe in keeping our word and in fulfilling our obligations. When we make an agreement, as with the Windsor framework, we fulfil that agreement, and do everything we can to ensure that that is done in good faith.
As I have said, pets need to be microchipped. That is a legal requirement in England. It is considered good practice, and is part of the Government’s commitment to world-leading standards in companion animal welfare. The measure reflects existing requirements and practice.
On the question of public consultation, the UK Government have engaged comprehensively with interested stakeholders, and we used research from pet owners, ferry and airline companies operating travel routes between GB and Northern Ireland, and commercially owned pet microchip database operators in drafting the regulations. Guide Dogs UK, as I have mentioned, has highlighted the positive impact of removing single-use EU certificates for assistance dog owners travelling to Northern Ireland, as has the British Veterinary Association, and has outlined the fact that the arrangement will reduce paperwork for vets on pet health treatment. There is no change in the requirements on travel between Northern Ireland and Ireland. I reassure the hon. and learned Member for North Antrim that we will, of course, monitor everything closely. I hope that that offers him some reassurance—any changes will come back to the House.
In response to the suggestion that the scheme will be more burdensome for the public, the new arrangements will create a cheaper and smoother experience for people travelling with their pet from Great Britain to Northern Ireland, because it removes the need for pet health treatments. The scheme does not require pet health treatments that are costly because it recognises the rabies-free status of the UK. In addition, the pet travel document is free, simple and quick to apply for online, and lasts for the lifetime of the pet.
On the question of the checking regime, I must make it clear that Northern Ireland pet owners will not face any checks. There will be no checks for pets travelling from Northern Ireland to Great Britain, and there will be no checks when ferries arrive in Northern Ireland. The scheme must ensure that GB pet owners have a valid pet travel document to mitigate abuse of the scheme. The new arrangement creates a smoother experience than the current legal requirements and is a significant improvement—this Government like to fulfil requirements —on those under the old Northern Ireland protocol. Those are the current legal requirements; the instrument improves on them.
The Windsor framework provides capacity for the smooth passage of goods and pets from Northern Ireland to Great Britain while protecting the integrity of the island of Ireland. The instrument implements arrangements agreed under the Windsor framework, significantly improving existing legal arrangements for pet travel between Great Britain and Northern Ireland.
May I conclude by summarising the benefits of the new Northern Ireland pet travel scheme? It is a sustainable and durable framework for non-commercial pet travel between Great Britain and Northern Ireland. It secures the smooth movement of pets within the UK and removes costs, pet health treatments and red tape. I thank all Members for their contributions.
Question put and agreed to.
Westminster Hall
(2 weeks, 1 day ago)
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Uyghur and Turkic Muslims: Forced Labour in China
(2 weeks, 1 day ago)
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Blair McDougall (East Renfrewshire) (Lab)
I beg to move,
That this House has considered UK supply chains and Uyghur and Turkic Muslim forced labour in China.
Thank you for chairing this debate, Mr Dowd, and for the opportunity to highlight the issue. I thank the Minister, my hon. Friend the Member for Lothian East (Mr Alexander), for being here to respond to the debate: in his last period in office and during his sabbatical from this place he was a consistent advocate for the dignity of people all over the world.
That human rights have never been respected by the People’s Republic of China is a given, but the persecution of Uyghurs and other Turkic Muslims since 2017 has been unprecedented even for the Chinese Communist party. More than 1 million Muslims have been imprisoned in an enormous network of camps; possibly as many as 3 million out of a population of 11 million Muslims have made their way through the camps at some time. This is the largest mass arbitrary detention since the second world war. Uyghur women face forced sterilisation, forced abortion, sexual violence in the camps, and forced marriage to Han Chinese men. Thousands of mosques have been demolished. Hundreds of Muslim graveyards have been bulldozed. Countless sacred Islamic shrines have been destroyed. Uyghurs are forced to consume pork, drink alcohol and eat during the Ramadan fast.
These crimes are part of a deliberate effort to destroy the Uyghurs as an ethnic group with a distinct culture and religious identity. International organisations and human rights groups too numerous to list assess that crimes against humanity are taking place in Xinjiang, and this House of Commons has voted to recognise that what is going on is a genocide—an intentional policy that seeks to destroy a people.
All of that provides context to the issue of forced labour in Xinjiang, but it is important to understand that Uyghur Muslim slavery is not a by-product of the attempt to destroy a people; it is an integral part of China’s project. Indeed, as the camps were built, factories for forced labourers were constructed alongside them. For those Uyghurs who are not inside the camps, the threat of incarceration is used to coerce them into the PRC’s wider labour transfer programme.
There is a dark contradiction at the heart of all this. The atrocities are happening in a region that is increasingly closed to those who would testify to the crimes, the journalists and human rights groups who would document them and of course those who would flee to freedom if they could. However, at the same time that the region is closing down, it is increasingly open to and integrated into the global economy. Xinjiang mines, refines and manufactures for the world. Some of the best-known global brands are profiting from the destruction of a people.
The scale of slavery in the region is enormous and is barely disputed: four years ago, official Chinese Government documents acknowledged that 2.6 million Uyghurs and other Turkic minorities had gone through labour transfer programmes. The scope of the industries affected is too large to cover in the time afforded to us today, so I will focus on three areas that especially expose the UK’s economy and that risk consumers being unwittingly complicit in Muslim slave labour: clothing, cars and climate change.
Xinjiang produces a quarter of the world’s cotton. The idea of hundreds of thousands of slaves working in cotton fields evokes an image of slavery and forced labour from another era, but this is not historical practice. It is a well-documented economic reality in the Uyghur region today.
Dr Zubir Ahmed (Glasgow South West) (Lab)
I am grateful to my hon. Friend for securing the debate and for illuminating an issue that still too few in the international global order are willing or brave enough to talk about. I assure him that Muslim communities across the country will be particularly grateful to him for securing the debate. Important as it is for us to be ethical about our own supply chains, does he agree that as a major global player we should double down on our efforts to persuade China’s near neighbours to adopt a similar ethical approach to the one that he espouses?
Blair McDougall
I could not agree more. I thank my hon. Friend for the time he has taken to meet me and meet Uyghurs in the UK, and for his concern.
On cotton, it is highly likely that high streets around the UK are today selling goods made by Muslim slaves from Xinjiang for brands such as Primark, Next, Tommy Hilfiger, Ralph Lauren, Calvin Klein, Hugo Boss, Pull&Bear, Mango, Guess, Jack & Jones, Levi’s, Burberry, Nike, Adidas, PUMA and Max Mara. In my city of Glasgow, I have identified 15 retailers on the famous style mile that stock brands that have been identified as at risk of being implicated in Uyghur forced labour. The same story is true of every shopping mall and high street across the UK. The price of disposable fashion is Muslim forced labour.
I turn to cars. The automotive industry is also deeply compromised: the steel, aluminium, electric vehicle batteries, electronics, tyres and spare parts used all have chains stretching back to the Uyghur region, to companies that we know take part in PRC-mandated labour transfer programmes. Audi, Honda, Ford, General Motors, Mercedes-Benz, Toyota, Tesla, Renault, LEVC, which is the maker of electric London black cabs, Aston Martin, Bentley, Daimler, Jaguar and Rolls-Royce have all been identified by researchers as having supply chains at high risk of being compromised by Muslim slave labour.
Even if we were not appalled at the inhumanity of the persecution of Muslims, the theft of children from their parents, the sexual violence and the sterilisation, we should be angry as a nation at the economic unfairness of it. We cannot build our own manufacturing industries and create good jobs for our own people while competing with companies that have little or no labour cost. This Government are building a new green energy future for the country, but we cannot generate the green jobs that are part of that vision while competing against Muslim slave labour.
That brings me to my final point, which is on climate. The primary material for the production of solar panels is polysilicon. That manufacturers of polysilicon in the Uyghur region use forced labour is not in dispute. Every single polysilicon manufacturer in the Uyghur region has reported its participation in labour transfer programmes or is documented as being supplied with raw materials by companies that have participated in those programmes. More than a third of the global production of polysilicon takes place in the Uyghur region. No company or public authority in the UK should be sourcing solar materials that originate in that region. A further third of global production of polysilicon takes place in other parts of China, with a high likelihood that those supply chains ultimately begin with Muslim slave labour.
I am keen to hear the Minister expand on the welcome pledge that the Secretary of State for Energy Security and Net Zero made during the passage of the Great British Energy Bill that the Government are working to ensure that the extension of solar energy in the UK is not built on Uyghur forced labour. I would argue that the only real solution, given the Chinese dominance of the market, is an urgent international effort to develop alternative supply chains that, from quartz to panel, never pass through China. The measures in the Modern Slavery Act 2015 have not stopped companies profiting from the slave labour of Uyghurs and other Muslims in China.
Nothing that I have said today is new. These stories have been splashed over front pages and broadcast on television news. Shame, it seems, is not a greater motivator than profit margin. Sunlight is not disinfecting. Legislation based on transparency and reporting alone is not getting the job done. Other nations in the European economic area have gone further than us by requiring companies to conduct human rights due diligence on their supply chains. I ask the Minister whether it is time to introduce UK legislation that emulates the Uyghur Forced Labor Prevention Act, which was signed into law by President Biden and which creates a presumption that any goods manufactured wholly or in part in the Uyghur region should be assumed to be the product of forced labour unless clear and convincing evidence proves otherwise.
I recognise that supply chains can be difficult to unravel and that exports often pass through multiple companies on their way into our economy. However, there is a direct freight flight from the Uyghur capital Ürümqi to Bournemouth that brings goods from the epicentre of forced labour in China. Yesterday, a flight from Ürümqi arrived just before 7 pm; another will arrive on Friday, and another on Sunday. That will continue week after week. This is not opaque or convoluted: it is a clear and obvious route and there is a significant risk that those flights will contain goods compromised by Muslim slave labour. I ask the Minister whether import inspections have been or can be carried out on the goods arriving on the freight flight to Bournemouth from Ürümqi.
After the results of yesterday’s election in the United States, there will be much debate about the state of the global struggle between autocracies and democracies and between strongmen and human rights. As we look for a policy response, we can begin by ensuring that our own economies are not funding the worst excesses of such regimes.
Several hon. Members rose—
Peter Dowd (in the Chair)
Order. I remind Members that they should bob if they wish to be called. Only those who were here at the start will be able to speak.
Jim Shannon (Strangford) (DUP)
Thank you for the opportunity to speak, Mr Dowd. I thank the hon. Member for East Renfrewshire (Blair McDougall) for setting the scene so well and with such compassion, understanding and detail. There is no one in this House or outside it who would say that he does not understand the issue very well. We look to the Minister to respond to our requests. I wish him well in his position—it is nice to see him back—and hope that he can give us reassurance. I am pretty sure we will be unanimous, requesting the same thing with one voice.
I congratulate the hon. Member for East Renfrewshire on his unwavering support for the Uyghur people. In my role as chair of the all-party parliamentary group for international freedom of religion or belief, it is my duty and responsibility to speak on behalf of all those who face persecution on account of their faith, their beliefs or simply their right to exist. That is what we are really talking about here: the right to exist.
In recent years, the situation for the Uyghur Muslims in Xinjiang province has intensified to a level that is almost incomprehensible. International human rights organisations, survivor testimony and investigative journalism have documented alarming reports of abuses encompassing forced labour, torture, arbitrary detention, cultural erasure and much more. Evidence from credible sources suggests that since 2017 up to 3 million Uyghur Muslims may have been detained in what Chinese authorities term “re-education camps”. What a term! That is so wrong.
The vastness of the detention camps indicates an industrial-scale operation. Detainees are stripped of legal recourse, are often held without charge and are separated indefinitely from their families. The hon. Gentleman referred to children being taken away from their mum and dad. It must be incredibly difficult for someone to deal with not knowing where their children are or whether they will ever see them again.
Disturbingly, reports indicate that detainees are forced to abandon their cultural practices and religious observances under the guise of re-education. Many have been detained for so-called infractions as minor as possessing the Koran or praying at home—imagine being imprisoned for praying in your own house where nobody can see you. Somebody must have seen those people and told on them. Such charges reveal a policy not of reform but of deliberate, state-sanctioned erasure.
An estimated 80,000 Uyghurs have been forcibly moved from Xinjiang province to work in factories across China in conditions that indicate forced labour. Investigations have implicated prominent global brands—the hon. Gentleman referred to many of them; Apple, Nike and Volkswagen are just three—in benefiting from that exploitative system. Those companies need to be accountable. It is not all about profit, how much they can make for their shareholders or what they can do; it is about what is right. Human rights abuses are not right. No company that does that should think that it can get away with it. We in the west should make companies that sell in the west accountable for the process.
In 2023, a coalition of human rights groups urged global supply chains to sever ties with any forced labour practices in Xinjiang province, yet companies continue to engage in such transactions on opaque terms. In the light of that, I will ask the Minister some questions. What measures are the Government taking to enforce stricter import regulations to prevent products from those supply chains entering the United Kingdom? The hon. Gentleman gave three times at which those products are arriving in Great Britain. If we know what time they will arrive, we should be able to do something about that. It is essential that our economy does not implicitly endorse such abuses. I know that the Minister and the Government will not do that, but we need action to follow up the words in today’s debate.
The surveillance infrastructure in Xinjiang province is one of the most technologically advanced in the world. Reports from 2022 indicate that companies such as Hikvision and SenseTime have supplied facial recognition technology specifically designed to identify Uyghurs. The level to which the Chinese Communist party will go to identify Uyghurs is incredible. I do not begin to understand technology—I am from a different generation —but I understand that that is wrong. That facial profiling extends beyond Xinjiang, infiltrating public places and tracking individuals across the country, wherever they may be.
In a troubling parallel, the use of artificial intelligence by the Chinese authorities has expanded to track behaviours deemed to be suspicious. What is meant by behaviours? Is it walking down the street on the wrong side, talking to somebody or bumping into somebody by accident? What does “behaviour” mean, and who decides what behaviour is incorrect? We seem to be talking about behaviours ranging from owning certain apps to communicating with overseas contacts. That digital repression is paired with a social credit system that penalises Uyghurs and other minorities for perceived infractions, curtailing their freedom of movement and employment opportunities.
The Chinese state is taking over the very life and blood and breathing of the Uyghur people. One of the most horrifying allegations to emerge in recent years is that of forced organ harvesting. Some years ago —I believe it may have been prior to 2015—I brought forward a debate about organ transplants taking place among the Falun Gong, another religious group. There was a report that the Chinese Government were doing organ transplantation on an industrial scale. They are at it again, only this time it is not the Falun Gong but the Uyghurs, so we really need to step up.
The China tribunal chaired by Sir Geoffrey Nice found credible evidence to suggest that Uyghurs, alongside other minorities such as Falun Gong practitioners, have been killed for their organs—killed for their organs. The Government remove them on an industrial scale, showing total disrespect for the people who lose their organs. In 2022, the UN Human Rights Council called for greater transparency and accountability from China and demanded clarity on how organs are sourced. Despite those international calls, there has been no co-operation whatever from the Chinese authorities. That is no surprise, given that it is an autocratic state that does not believe in human rights or liberties, or the right for people to have their own religious views and freedoms.
In the light of those grave allegations, I again urge the Minister to adopt stronger legislative measures to prevent UK citizens—citizens from this country—from engaging in transplant tourism. I understand that the previous Government took some action on that, but I am keen to hear what has been done and to get an update on where we are.
Another area of grave concern is the extensive use of biometric and DNA data collection. Since 2021, every Uyghur in Xinjiang province has been required to undergo biometric registration, including facial scans, fingerprints and even voice samples—my goodness! Alarming questions are raised about that mass data collection and its potential uses, which include heightened monitoring and the suppression of an entire ethnic group. What is it for? Repression is already there, but with the rise of sophisticated AI-driven tools, such databases could further enable targeted repression that is even more subjective, violent and difficult. I again call on the Government to press for an independent investigation by international human rights bodies and to seek accountability for that systematic abuse.
Beyond physical oppression, an insidious campaign aims to erase Uyghur culture, their language and their right to practise their religion as they wish, which is a right that I uphold and support across this great world. Xinjiang’s mosques have been destroyed or repurposed —my goodness, a mosque repurposed—when their sole objective is to let people worship their God and follow their religious viewpoints. Uyghur language schools have also been shut down and traditional practices have been banned.
In 2022, UNESCO expressed concern about the cultural genocide unfolding in Xinjiang province, yet China continues to stifle cultural expression with impunity, seeming to think that it can do whatever it wants and get away with it. Those responsible may think that they can get away with it in this world, but I believe that they will be held accountable to God in the next world for what they do wrong. I would also like to see them accountable in this world, so they get it in both places. Whatever the Government can do to make that happen would be helpful.
We are not talking about a mere matter of policy; it is a deliberate attempt to erase people’s identity, their history and their place within China’s fabric. This great nation of the United Kingdom of Great Britain and Northern Ireland champions the freedom of belief and cultural expression. The UK must therefore continue to voice its condemnation.
In 2023, the United Nations High Commissioner for Human Rights issued a detailed report condemning the abuses in Xinjiang province, describing the situation as “crimes against humanity”. Those are not just words; they explain implicitly and fully what it means to be a Uyghur Muslim in China. Numerous countries have since imposed sanctions against Chinese officials involved in the abuses. Will the Minister say whether we have done likewise where we can? The UK’s response has been measured, but we now have a new Government and an opportunity to do better. I look to the Minister and our Government to do better if we can.
I call on the Government to consider imposing Magnitsky sanctions on individuals and entities proven to be complicit in the abuses. In this debate, we must send a very clear message that the United Kingdom will not tolerate human rights violations by any power in this world, no matter how great it thinks it is. I believe in a God who can strike those people down. This is a call to action: the horrors faced by Uyghur Muslims must not be met with silence or passive disapproval. The Government have an opportunity—indeed, I believe they have a responsibility —to stand with the persecuted, uphold justice and affirm our commitment to human rights.
I will conclude with this: the Chinese Government are guilty of genocide. The evidence is enormous. The cries of the Uyghurs and Turkic Muslims have to be addressed and the Chinese Communist party must be held accountable. I urge the Minister, on behalf of the House, to address the issue with clarity, conviction and above all a steadfast commitment to justice. The world is watching, and history will remember how we responded to this dark chapter and the role that we played.
Tim Roca (Macclesfield) (Lab)
I thank my hon. Friend the Member for East Renfrewshire (Blair McDougall) for securing this important debate and for setting the tragic scene so well regarding the appalling human rights abuses occurring in Xinjiang against Uyghur and Turkic peoples. Those abuses have been perpetrated on an unimaginable scale. They are crimes against humanity, which this House clearly resolved form part of a genocide. I pay tribute to hon. Members who have been speaking out and speaking up on this issue and who are suffering the consequences from the Chinese state through sanctions and other effects.
Many hon. Members are familiar with the dreadful situation in Xinjiang, but I suspect that very few people outside this place realise how complicit many companies are in their use of supply chains that involve forced labour. Those supply chains touch on many industries, as my hon. Friend pointed out, but I will focus on the automotive industry.
The Helena Kennedy centre at Sheffield Hallam University, which I commend, has done lots of research on the matter and has documented clearly the links between automotive industry supply chains and forced labour in the Xinjiang Uyghur autonomous region. Its claim, as profound as it is harrowing, is that anyone in the UK who has bought a new car in the last five years will have benefited from a product that was produced with forced labour. It found that the Chinese Government have deliberately shifted raw materials, mining, processing and auto-parts manufacturing into the region, making international supply chains captive to repressive programmes and systematic forced labour. The investigation found massive and expanding links between western car brands and those abuses in everything from hood decals, car frames, engine casings, interiors and electronics to the raw materials involved.
A combination of the weak enforcement of forced labour laws, the Government’s perceived blind eye to environmental standards in China in the past and convoluted supply chains has left the industry reliant on abusive suppliers. Every car brand—Volkswagen, BMW, Honda, Ford, Mercedes-Benz, Toyota, Tesla—is at risk of sourcing from companies linked to those abuses. As my hon. Friend pointed out, it is not just cars; the issues permeate many other sectors, with Sheffield Hallam University’s forced labour lab finding links between the cotton garment and solar panel industries and the use of forced labour.
There is some light. In September, the Court of Appeal removed certain legal barriers to investigations into businesses suspected of profiting from alleged forced labour in China, but that was after the National Crime Agency formally declined to investigate companies accused of importing cotton into the UK that might have benefited from forced labour. That is just the tip of the iceberg. We have to go further. Companies themselves need to conduct thorough reviews of supply chains with their procurement teams, down to the raw materials, and suppliers should remove themselves from contracts with companies that have engaged in the use of forced labour.
The only way to ensure that a company is not sourcing goods made with forced labour is not to buy anything from suppliers that are willing to use forced labour anywhere in their operations and to take a risk-averse approach where there is any chance that that might be the case. The Government should consider enacting and implementing mandatory human rights due diligence laws—we have heard about legislation and regulation being passed in the United States—in recognition of the fact that abuses can be easily distanced from direct suppliers under state-controlled economic systems. Forced labour import bans are a necessary complement to mandatory human rights due diligence, especially where state-sponsored repression effectively prevents companies from conducting the on-the-ground assessments that they would usually do of forced labour risks.
If companies and the Government adopt robust and thorough mechanisms to look at their supply chains, we will eventually see divestment from firms that endorse state-sponsored repression, and send a clear message to the Chinese Communist Government that their treatment of Uyghurs and Turkic peoples is wholly unacceptable. It has been pointed out that we play a key role in the international community: we are a leading industrialised country and a member of the G7, and people will look to us to set an example in how we approach these affairs. In the best British tradition, we should be upholding human rights in every sphere that we can.
Ms Marie Rimmer (St Helens South and Whiston) (Lab)
It is a pleasure to work under your chairmanship for the first time, Mr Dowd. I thank my hon. Friend the Member for East Renfrewshire (Blair McDougall) for securing this essential debate.
Now that we have a Labour Government, we have an opportunity to review our trade and diplomatic relations with nations, not least with China. We know that many manufactured goods exported from China have used forced labour by Uyghur and Turkic Muslims, not least in the solar, electric vehicle, cotton and seafood industries. Absent from the last Parliament was a human rights approach to trade. We have an opportunity to reset our trade policies and international relations and to ensure that countries that exploit labour know the consequences. We must not stand by when Uyghur and Turkic Muslims are exposed to slave labour, torture and re-education programmes.
As the Minister knows, I have been challenging the UK’s approach to trade with China in the light of the harvesting of organs and the use of forced labour; I sought to amend the Medicines and Medical Devices Act 2021 and the Procurement Act 2023. Over the past few years, UK legislation has fallen behind developments in the supply chain. Our laws urgently need to be enhanced to protect human rights.
Such crimes must be held against the standards set in international law, and where found wanting, sanctions imposed. I call on our Government to clean up the supply chain and ensure that China is held to account for the abuses perpetrated. Britian has been a soft touch and now we need to be in touch with the reality of these atrocities. The evidence is there—from submissions to The Hague to inside reports—that these crimes are being committed.
Today it is estimated that 40% of the UK’s solar industry and 45% of the world’s solar-grade polysilicon supply are connected to the Uyghur region of China. That means that 97% of the world’s solar panels could contain polysilicon made in the Uyghur region of China, which has credibly been reported as being at risk of association with Uyghur forced labour. As Labour progresses with its green energy sprint, it is vital that clean energy means clean procurement. Similar breaches have been exposed in the batteries for electrical vehicles.
Will the Minister introduce a presumptive ban on imports from Xinjiang, akin to the US Uyghur Forced Labor Prevention Act, so that unless a business provides clear and convincing evidence that goods sourced in Xinjiang were not made with forced labour, they will be prohibited?
We need to further review our modern slavery legislation. Section 54 of the Modern Slavery Act 2015 needs to be more robust. Can we please review it so that companies and their supply chains can be held to account? Should companies be found in breach of cleaning up their supply chains, significant penalties should be applied to the perpetrators.
We need a serious trade framework making it explicitly clear that the UK will cease all trade if there are traces of forced or slave labour. The reported abuse of Uyghur and Turkic Muslims is a significant breach of the values of our country and our Government, and we must seek to lead the way to ensure that our trade restrictions become freedoms for the Uyghur and Turkic Muslims.
It has been less than 16 hours since I sat and listened to two Falun Gong people—a woman and a man—in Room G off Westminster Hall last night. One had been imprisoned in Xinjiang for over 20 years—taken in and brought out, taken in and brought out, for years, and tortured. She is now here in this country. I listened to her. It was harrowing. It was horrifying. A younger man was also there; he had been in a number of times and escaped—got out.
I have met a doctor who escaped and is now living in this country. He did not know what the scar he had was until he was taken into hospital for something while over here. It was found that part of a kidney and part of a lung had been extracted, and there was no point in taking those from him. He was a prisoner.
They were all Falun Gong, and what is happening to Uyghurs now is what has happened to Falun Gong. Since we started looking at this situation and raising things in the UK, the Office of the UN High Commissioner for Human Rights concluded in 2022 that violations in the region
“may constitute international crimes, in particular crimes against humanity.”
The UK Parliament voted on 22 April 2021 to recognise those atrocities as genocide. Since then, Beijing has renamed hundreds of villages and towns, continuing the effort to subsume and eradicate any Uyghur culture. New regulations are in force that further restrict religious practice. Volkswagen and SHEIN have come under heavy pressure for continuing to source from the Uyghur region, with attendant risk of supply chain slavery.
Many internment camps have been abandoned since 2023. Information from the region is scarce, but it would be accurate to suggest that persecution has not ceased. Rather, there appears to be a move away from internment in labour camps towards larger numbers imprisoned—one in 26 Uyghurs. The extraction of organs in organ harvesting happens at age 28. The three organs survive when taken from these young men while they are alive, because it is most successful if they are fresh and taken from live bodies. That is what happens in organ harvesting.
In April 2022 the Health and Care Act came into force, introducing significant reforms to the administration and delivery of health and care services in England. Section 47 of the Act mandates a comprehensive review by the Secretary of State for Health and Social Care to assess the potential risks of slavery and human trafficking within the NHS chain. The recent review undertaken by NHS England and Supply Chain Coordination Ltd scrutinised 1,361 suppliers. It encompassed 600,000 products, including approximately 30,000 cotton-based items. The review revealed that 21% of UK health procurement is categorised as being at high risk of involvement with slavery.
An estimated 40% of the UK solar industry is credibly reported to be at risk of being tainted by Uyghur forced labour. We have inadequate laws on public procurement, and they need to be sorted out. Falun Gong is near the end. The hounding of these people is international; it is even in this country. A woman was left splayed on the ground outside our British Museum. No one went near her and no police came—nothing. We are having further investigations into that.
We have had police in “stations” in Manchester. This is all about controlling different categories of Muslims. There may be slight changes, but we can all practise our religion or practise none if we so wish. What steps will the Minister and our Government take to ensure that Great Britain cleans itself up? How will we ensure that people can live in other countries and not be persecuted for cheap labour?
All this is about keeping the Communist party in China, along with the Communist party in Russia. We are in a dreadful situation in our world, and Great Britain really must step up. Our Government cannot allow us to drift along, which is what will happen if we do not step up soon.
Clive Jones (Wokingham) (LD)
It is a pleasure to serve under your chairmanship, Mr Dowd. I congratulate the hon. Member for East Renfrewshire (Blair McDougall) on securing a debate on such an important topic. It is also good to see the Minister; I look forward to working constructively with him.
The Liberal Democrats welcome the news that the Court of Appeal has overruled the National Crime Agency’s decision not to launch an investigation into whether high-street brands are using forced labour in the Xinjiang province in China. I congratulate the Global Legal Action Network and World Uyghur Congress on that success. Importantly, in the short term, the ruling means that the National Crime Agency needs to seriously consider its decision not to carry out an investigation, because with 19 billion units of clothing produced in China yearly, it is not unbelievable that much of it is produced by detainees in Xinjiang.
The Global Legal Action Network says that there is an abundance of evidence that UK companies import cotton made with forced labour from China, and that 85% of Chinese cotton is grown in the Xinjiang region. Let there be no confusion: slavery is not an issue of the past. Today, almost 50 million people worldwide are trapped in slavery. That is why the Liberal Democrats are calling on the Government to reverse the Conservative party’s roll-backs of modern slavery protections and to introduce legislation obliging retailers to guarantee full traceability of their supply chains, ensuring ethically sourced materials, decent livelihoods and safe working conditions in the products that we buy.
My constituents in Wokingham do not want to buy clothes that are the result of forced labour, but they simply do not know where they are sourced from. Retailers need to be forced to take action to review their supply chains and take due diligence seriously. We should not allow evil to profit from British consumers. We should not let genocide be a means of increasing a company’s profit margin. We are better than that.
I would like to focus on the word “genocide” for a moment. In 2020, the world discovered that the Chinese Government’s treatment of the Uyghurs was more widespread and systematic than previously known: forced sterilisation, destruction of religious sites, torture, and detainment in re-education camps. The appeal judges in the National Crime Agency ruling stated that there was
“a diverse, substantial and growing body of evidence”
that human rights violations are taking place in the region. The horrific acts found in Xinjiang have been described in different ways, with the UN concluding that China’s actions would constitute crimes against humanity.
The Liberal Democrats agree with Sir Geoffrey Nice KC, whose independent tribunal found that the Uyghurs are being subject to genocide by China. Specifically, these actions constitute a genocide based on the description of genocide laid out in article 6 of the Rome statute of the International Criminal Court. The Liberal Democrats believe that the Government need to be explicit in their condemnation of these actions as being those of a genocide. In recognising that, we need to champion human rights and support survivors and the Uyghur and the Turkic people, who are being persecuted simply for their beliefs.
The Liberal Democrats are calling for the Government to issue a comprehensive China strategy that places human rights and effective rules-based multilateralism at its centre. My colleagues and I will continue to stand up for people’s human rights around the globe, to protect, defend and promote human rights for all, including those persecuted for their religion and belief. Liberalism and co-operation have a vital role to play in securing peace, promoting democracy and defending human rights across the world. The UK must work with its global allies to ensure the end of the persecution of the Uyghurs and Turkic people.
The UK must introduce a general duty of care for the environment and human rights in business operations and supply chains, to guarantee that no human is taken advantage of for a piece of clothing. I ask the Minister to support the Liberal Democrat policies laid out in my speech. Will he back Magnitsky-style sanctions on persons and entities involved in the persecution of Uyghurs and the Turkic people, under the Sanctions and Anti-Money Laundering Act 2018? Will he ensure that the UK grants asylum to those fleeing genocide—and, to reiterate, will he explicitly condemn the actions of the Chinese state as genocide?
Mike Wood (Kingswinford and South Staffordshire) (Con)
I suspect that this will be the final time that I speak on behalf of His Majesty’s official Opposition in an international trade debate. Following the events across the water overnight, there might be an alternative vacancy in Government that means the Minister may move on before too long. If this is the last time we face each other, let me thank him for the courtesy that he has shown during my brief time shadowing him. It has been greatly appreciated.
I join other Members in congratulating the hon. Member for East Renfrewshire (Blair McDougall) on securing this important debate on an urgent and deeply troubling issue. It affects not only our values and moral standing as a nation, but the integrity of our supply chains.
The evidence of the systematic forced labour of Uyghur and Turkic populations in China’s Xinjiang region is clear and undeniable. Reports indicate that over 1 million Uyghurs and other Muslim minorities are detained in camps, facing conditions that are nothing short of abhorrent and genuinely disgraceful. They are subjected to forced labour under the watchful eye of a regime that seeks to erase their identity and culture. The situation is not just a distant tragedy; it is intertwined with our own economy and lifestyles, affecting the products that we import, buy and consume in the United Kingdom.
We have long recognised the importance of aligning our trade policies with our commitment to human rights. Our strategy for UK-China relations has been built on three pillars: protect, align and engage. That approach has driven us to strengthen our national security protections, deepen collaboration with our allies and engage with China where our interests converge.
The previous Government introduced measures to ensure that British organisations, both public and private, are not complicit in and do not profit from the human rights violations in Xinjiang. Those measures include the review of export controls as they apply to Xinjiang, to ensure that the Government do all they can to prevent the export of goods that may contribute to human rights abuses in the region; the introduction of financial penalties for organisations in the UK that fail to meet their statutory obligations to publish annual modern slavery statements under the Modern Slavery Act; new robust and detailed guidance to UK businesses, setting out the specific risks faced by British companies with links to Xinjiang and underlining the challenges of effective due diligence there; and a Minister-led campaign of business engagement to reinforce the need for UK businesses to take action to address the risk.
We have led the international community in condemning China’s gross human rights violations. In March 2021, we imposed sanctions on key officials involved in those abuses, acting alongside 29 other countries. Furthermore, we were the first nation to lead a joint statement at the UN condemning those violations, back in 2019. This year we did so again, now with a record-breaking 51 signatories. These actions demonstrate our unwavering commitment to holding China accountable, which I know is being continued by the new Government.
In 2023, our updated public procurement rules were designed to mitigate modern slavery risks, ensuring that no taxpayer money inadvertently supports these violations. We also introduced strict measures under the Procurement Act 2023 to exclude suppliers involved in labour market misconduct, further reinforcing our commitment to ethical sourcing. However, it is essential to recognise that although we have made significant strides in previous years, huge challenges remain, particularly in how businesses engage with entities that may be complicit in these gross abuses.
Sadly, the situation with fast fashion companies such as SHEIN raises enormous concerns. SHEIN has been widely criticised for its alleged links to forced labour in Xinjiang, yet we see troubling ties emerge between the current Government and companies such as SHEIN. It is deeply concerning that the chief executive of SHEIN has recently been engaging with senior figures within the Labour party. That raises uncomfortable questions about access and influence within Government when we should all be standing firm against human rights abuses. Although we have taken decisive action, we cannot allow our progress to be undermined by those who seek to profit from exploitation.
As has been said, the European Union has taken a proactive stance against companies such as SHEIN. However, the disparity between the EU’s action and our own lack of action highlights a critical point: we must be unequivocal in our commitment to human rights and free from the taint of associations that contradict our values.
The implications of forced labour in our supply chains extend beyond ethical concerns; they pose serious reputational risks for the businesses themselves and threaten our trade relations around the world. We have a responsibility not only to protect the rights of the Uyghur and Turkic populations but to safeguard the integrity of UK businesses. Companies that choose to engage with suppliers linked to forced labour rightly risk facing a backlash from consumers who demand accountability and transparency. It is our role to make that accountability and transparency easier.
I have five questions that I hope the Minister will address in his response. First, before the election Labour promised to declare formally what is taking place in Xinjiang as a genocide. Is that still the Government’s intention? If so, did the Foreign Secretary raise that intention with Wang Yi during his recent visit to Beijing? Secondly, when do the Government plan to launch the international legal action against China on Xinjiang to get what is happening there formally declared on an international level as a genocide, as they also promised before the election? Thirdly, how does the Energy Secretary’s decision to sign off on three enormous solar farms, some of which involve companies judged to be the most complicit in human rights abuses, sit with the Government’s commitment to remove the products of forced labour from UK supply chains? Fourthly, will the Government introduce measures to ensure that the UK does not become a dumping ground for solar panels made by slave labour, as both the United States and the European Union have already done for their markets? Finally, has the Minister met with Uyghurs and Turkic Muslims and their representatives, as his Department develops its China audit?
As we move forward, all UK businesses must conduct thorough due diligence to ensure that their supply chains are free from forced labour. It is imperative that we renounce any friendly or commercial ties with entities engaged in or linked to forced labour. We must remain steadfast in our commitment to human rights, standing alongside those being persecuted in Xinjiang and ensuring that we do not profit at their expense.
The Minister for Trade Policy and Economic Security (Mr Douglas Alexander)
I congratulate my hon. Friend the Member for East Renfrewshire (Blair McDougall) not just on his recent election, but on securing this important debate. I feel obliged to declare an interest in paying that compliment, given that I have known, campaigned with and long admired the political judgment and moral seriousness of the new Member for East Renfrewshire—I know how dearly he holds that title as a local representative of that community. What we witnessed today in his remarks evidenced not only that he will be a doughty local fighter, but that he has the kind of global perspective and moral conscience that will serve this House.
I thank all the others who have participated in our debate, which was genuinely worthy of the seriousness and urgency of the matters under discussion. I thank the hon. Member for Strangford (Jim Shannon), who spoke with characteristic passion and clarity in his advocacy of the need for urgent action. I will endeavour to return to the specific points that various Members have made, but I will offer a few introductory remarks before going into more detail.
My hon. Friend the Member for Macclesfield (Tim Roca) brought to the debate careful research, particularly on the car industry’s risk of sourcing goods produced through forced labour. My hon. Friend the Member for St Helens South and Whiston (Ms Rimmer) made the case with passion and force that clean energy must not mean procurement secured through slave labour—an approach with which I wholeheartedly agree. I am particularly grateful to her for sharing the deeply harrowing accounts of those she has had the privilege of meeting in recent days, and for bringing that perspective and understanding to our debate.
The hon. Member for Wokingham (Clive Jones), the Liberal Democrats’ new Front-Bench spokesman, spoke with characteristic eloquence and raised a number of points that I will seek to address. Finally, I thank the hon. Member for Kingswinford and South Staffordshire (Mike Wood) for his gracious words. With no disrespect to his remarks, I sense that there are much bigger issues at play this morning than the future prospects of either of us.
It was two years ago that the Office of the UN High Commissioner for Human Rights released its assessment of the situation in Xinjiang. It concluded that clear evidence had been found of serious human rights violations and that the scale of the arbitrary and discriminatory detention of Uyghurs and other largely Muslim minorities within Xinjiang
“may constitute international crimes, in particular crimes against humanity.”
Multiple other bodies and independent human rights experts have since taken similar views, relying extensively on China’s own records. Those findings and recommendations detail evidence of large-scale arbitrary detention; family separation, as we heard very eloquently from the hon. Member for Strangford; enforced disappearances; forced labour; systemic surveillance on the basis of religion and ethnicity; severe restrictions on cultural, religious and linguistic identity; torture; sexual and gender-based violence, including forced abortion and sterilisation; and the widespread destruction of religious and cultural sites. The Government are deeply and sincerely concerned about those human rights abuses, and we continue to work with international partners to find ways of effectively holding China to account.
Last month, the UK signed an Australian-led joint statement at the UN Third Committee that called on China to uphold its international human rights obligations; implement United Nations recommendations; release individuals arbitrarily detained in Xinjiang; and allow access to Xinjiang for independent observers to evaluate the human rights situation. Although, as my hon. Friend the Member for East Renfrewshire suggested, sunlight is not sufficient, transparency is none the less essential. We therefore want those independent advisers and observers to evaluate the human rights situation.
The United Kingdom has also undertaken direct action against those who have aided or abetted these activities. In 2021, under the previous Government, the United Kingdom announced sanctions against four Chinese officials and one entity based on compelling and widespread evidence of serious and systemic human rights violations in Xinjiang. The Government also conduct independent visits to areas of major concern where possible, and continue the delicate but vital work of supporting non-governmental organisations in exposing and reacting to human rights violations.
More widely, this Government are carrying out a comprehensive audit of the UK’s relationship with China, as we have discussed this morning, to improve our ability to understand and respond to the challenges and opportunities that China poses in today’s world. Work on the audit is ongoing and will inform the long-term and consistent approach to China that the Government will set out. I was asked whether it is being led by the Department for Business and Trade, and whether we are therefore meeting the Uyghurs in DBT. The audit is actually being led out of the Foreign, Commonwealth and Development Office, but I can assure the House that efforts are being made to ensure that voices are heard as part of this comprehensive audit.
For that work, engagement with China is vital so that we can not only co-operate on shared challenges but challenge it on areas where we disagree. The Prime Minister and the Foreign Secretary raised human rights in their introductory discussions with President Xi and Foreign Minister Wang Yi, and the Foreign Secretary raised human rights with Wang Yi again in Beijing last month. The Foreign Secretary has also called on China to lift the unwarranted and wholly unacceptable sanctions on UK parliamentarians—a matter to which I will return. That will remain a top priority for the Government.
I now want to address some of the specific legislative and regulatory measures that the Government and the Department use to address forced labour, before coming to colleagues’ questions. That work is a vital part of the Government’s efforts to ensure businesses do not use forced labour or cause or contribute to other human rights abuses and violations within their supply chains, no matter where they operate in the world. The UK addresses forced labour in global supply chains under section 54 of the Modern Slavery Act 2015, which requires commercial businesses that operate in the UK and have a turnover of £36 million or more to report annually on the steps they have taken to prevent modern slavery in their operations and supply chains. The purpose is to provide transparency and ensure businesses monitor their supply chains with rigour, are open about their risks and mitigations, listen to their workers, and act where they find issues.
We have also taken action under the Procurement Act 2023 to strengthen the rules on excluding suppliers linked to modern slavery. A number of Members asked whether our commitment to clean energy will come at the cost of the integrity of our approach to procurement. I can assure them that it will not. For instance, the Act expands the mandatory exclusion grounds that apply if a supplier or a connected person has been convicted of certain offences under the modern slavery legislation. Suppliers can be investigated for debarment on modern slavery grounds, and may be placed on a central debarment list of suppliers that must or may be excluded across the whole of the public sector.
In addition, my Department takes a number of steps to address forced labour within UK supply chains. We negotiate and implement forced labour and modern slavery provisions within our free trade agreement programme. The developing countries trading scheme allows for the suspension of preferential trading arrangements, specifically on grounds of serious violation of labour rights. UK Export Finance also reviews environmental, social and human rights risk factors for transactions in scope of its policy responsibilities.
Furthermore, our overseas business risk guidance makes clear to UK companies the risks of operating in certain regions that we have been discussing today, and urges them to conduct appropriate due diligence. The UK Government expect, encourage and support UK businesses to undertake due diligence so that human rights and environmental issues are considered in their operations and supply chain relationships, in line with the OECD guidelines on responsible business conduct and the UN guiding principles on business and human rights.
On supply chain due diligence legislation, the UK maintains regular dialogue with the European Union following the recent passage of the corporate sustainability due diligence directive, and the Government continue to review how we in the United Kingdom can best tackle forced labour and environmental harms in supply chains. We also regularly engage with business and international partners on domestic and international tools to combat forced labour. Our trade and forced labour business roundtable allows businesses and the Government to come together to speak frankly, and it gives His Majesty’s Government the opportunity to understand how we can better support businesses than has been the case in the past in their efforts to combat forced labour in supply chains globally.
That package of policy tools goes some way towards addressing the concerns that have been raised today, but I assure the House that there are absolutely no grounds for complacency. In line with sustainable development goal 8.7 and commitments made through the G7, referenced earlier, the Government are committed to ensuring that no company has forced labour in its supply chain. With that in mind, we continue to consider actor-agnostic measures that would improve worldwide supply chain transparency and traceability.
We are aware, however, that some sectors are at higher risk of forced labour in their supply chains. A number of contributions have focused on solar supply. On solar supply chains, the Government are committed to tackling the issue of Uyghur forced labour, including the mining of polysilicon used in the manufacture of solar panels, about which my hon. Friend the Member for East Renfrewshire spoke so eloquently, and are therefore taking robust action.
The solar taskforce has been relaunched by the Government and will specifically focus on identifying and taking forward the actions needed to develop resilient, sustainable and innovative supply chains that are free from forced labour, to support the significant increases in the deployment of solar panels needed to meet the ambition that we discussed this morning to increase UK solar power capacity by 2030.
On cotton and auto supply chains, about which a number of hon. Members spoke, we have been clear that no company in the UK should have forced labour in its supply chains. As I have set out, there are rules in place to compel companies to publish statements demonstrating they have met their legal obligations on modern slavery.
Let me seek to address some of the other specific questions raised during the debate. The hon. Member for Strangford spoke about the harvesting and trafficking of human organs. That is a heinous crime that deserves our complete and unequivocal condemnation. The Government are determined to stamp out that form of exploitation, by catching the perpetrators and safeguarding the victims. There are a range of offences under the Modern Slavery Act 2015 and the Human Tissue Act 2004 that were extended on 1 April 2024, ensuring that perpetrators are held accountable, leaving no room for this crime to go unpunished.
On the further question from the hon. Member for Strangford about sanctions, I have spoken in general terms about the approach the Government are taking. Let me be more explicit: China’s sanctions are completely unwarranted and unacceptable. The issue will remain a priority for the Government, given the integrity and importance of our democratic legislature in the House of Commons. The Foreign Secretary has called on China to lift the sanctions, in meetings with his Chinese counterpart Foreign Minister Wang Yi at the Association of Southeast Asian Nations meeting in July and during his most recent visit to Beijing on 18 October.
The sanctions announced by the UK on 22 March 2021 against four Chinese officials and one entity were based on compelling and widespread evidence of serious and systemic human rights violations in Xinjiang. Although 30 countries were united in sanctioning those responsible for those violations, China’s response was simply to retaliate against its critics.
On the point about genocide raised by the hon. Member for Wokingham and a number of colleagues, it is the long-standing policy of the British Government that any judgment on whether genocide has occurred is a matter for the competent national and international court, rather than for Government or non-judicial bodies. Regardless of any court’s decision, this Government will stand firm on human rights, including China’s repression of Uyghurs and others in Xinjiang. That includes raising our concerns, as I have suggested, at the highest levels of the Chinese Government, and co-ordinating efforts with our international partners to hold China accountable for the actions it takes, and to account for human rights violations. For example, as I mentioned, on 22 October the UK joined Australia’s statement at the UN Third Committee on China’s human rights situation.
On whether the UK will issue sanctions against perpetrators—those accused of having forced labour in their supply chains—we keep all evidence and potential listings under close review. It is not appropriate for me to speculate about whom we may designate in the future, as doing so could reduce the impact of those designations, but I have listened carefully to the points made in the debate.
The hon. Member for Strangford and my hon. Friend the Member for East Renfrewshire asked whether we would impose stricter regulations. The United Kingdom recognises the importance of ensuring that businesses are not complacent on the issue of forced labour and human rights violations. I can assure the hon. Member for Strangford that we will continue to monitor the effectiveness of the existing measures about which I have spoken today, as well as monitoring the impact that other countries’ measures are having, to reach a view about the appropriate approach to tackling forced labour effectively.
My hon. Friend the Member for East Renfrewshire raised the issue of GB Energy and solar. I have spoken about the solar taskforce, and I hope that that provided some comfort. We are working with colleagues across Government on the issue, and the Government are united in their determination. The solar taskforce has been relaunched to develop sustainable supply chains, and it will of course give due consideration to this issue. The solar stewardship initiative will support the delivery of the solar road map. The Procurement Act also strengthens rules around existing suppliers that are linked to modern slavery.
In relation to other issues that have been raised, I can assure Members that we will continue to work with domestic and international businesses across all sectors of the economy to ensure that their supply chains are diverse, resilient and, of course, free from human and labour rights abuses.
Finally, I should address the issue of direct cargo flights from Ürümqi to Bournemouth, which was raised by my hon. Friend the Member for East Renfrewshire. Border Force does not assess whether goods on freight entering the UK may have been made using forced labour, but I can assure my hon. Friend that the Government are committed to working with partners to ensure that we can best tackle forced labour in supply chains.
As I say, we are continuing to assess and monitor the effectiveness of the steps that we have taken and will continue to take. The Government will continue to assess emerging policy tools, such as the import bans introduced by international partners, to understand their effectiveness in tackling forced labour in supply chains. That includes our better understanding the potential impacts here in the United Kingdom of the operation of the US measures, about which a number of hon. Members spoke, and the implementation of the EU forced labour regulations.
Summarising the sentiment and approach of the Government, I find that we are in broad agreement with the points made about the character of the forced labour crisis, as well as with hon. Members’ sincere and genuine desire to address these issues. Thankfully, the United Kingdom is still a leading voice in international efforts to defeat modern slavery and end human and labour rights abuses in public and private sector supply chains, and we will continue to assess the most effective ways to address these issues.
I can assure colleagues that we will continue to stand firm on human rights, including in Xinjiang, where China continues to persecute and arbitrarily detain Uyghurs and other Turkic Muslim minorities. That includes raising our concerns at the highest levels with the Chinese Government, as the Foreign Secretary and the Prime Minister have done, and co-ordinating our efforts in international fora such as the G7 to identify, expose and hold China to account for serious and systemic human rights violations.
May I thank you again, Mr Dowd, for your service to the House today, and thank my hon. Friend the Member for East Renfrewshire for raising this urgent topic? I assure him and other hon. Members that the Government are sincerely committed to tackling these issues. We will continue to work to ensure that UK supply chains are free from forced labour and to speak out against human rights abuses, no matter where we find them.
Blair McDougall
Thank you, Mr Dowd, for the opportunity to close the debate. I thank hon. Members for speaking up on behalf of the dignity and humanity of Uyghurs and other Muslims in this situation. I thank them for not using sanitised language in describing what is going on in the Uyghur region, which I was potentially guilty of myself. We talk about “labour transfers” when we are really talking about slavery. We talk about “sexual violence” when we are talking about women being raped. We talk about “re-education centres” when we are really talking about concentration camps. We talk about “the removal and transfer of children” when we are talking about state kidnapping.
I particularly thank the hon. Member for Strangford (Jim Shannon). In the short time I have been in the House, I have been in the room countless times when he has spoken up on behalf of religious freedom. He made a point essential to understanding the nature of what is happening in Xinjiang: it is religiously motivated. He mentioned the small infractions for which people can end up in the internment camps. I would add that having a beard, going on a pilgrimage to Mecca or simply travelling to another Muslim country is enough for someone to find themselves in a camp.
Sometimes, in politics, the word “Orwellian” is used. It has become a hyperbolic cliché that we turn to, but I do not think that there is a more appropriate word to describe what is happening in the Uyghur region. I have heard stories of people phoning home on FaceTime or video calls to find a uniformed Chinese state security person answering their relative’s phone, stories of artificial intelligence being used to identify particular ethnicities, and stories of the collection of biometric information on millions of people. It is almost impossible to imagine the traditional approach to forced labour and due diligence working where the oppression of people is so intense and so pervasive.
In Parliament, the causes and intent behind human rights issues are often a matter of nuanced debate. When it comes to the situation of the Uyghurs, it is incredibly clear what the intent, plan and motivation are. My hon. Friends the Members for Macclesfield (Tim Roca) and for St Helens South and Whiston (Ms Rimmer) both hit the nail on the head: the political and economic power of China is driving the forced labour crisis. The longer it continues without being challenged, the deeper the problem becomes. Others in the debate have spoken about how pervasive it is, from the cars we drive to the clothes we wear. It is also in the food we eat, whether it is tomatoes or seafood. Our moral complicity grows, and the longer it goes on, the more our own economic ruin grows as well. We cannot possibly compete with industries that have no labour cost.
Some of this is about international action as well as the action of individual Ministers. We know that authoritarians are increasingly organised, and those of us who believe in the rule of law and in basic standards have a responsibility to pursue the same multilateral actions. The hon. Member for Wokingham (Clive Jones) and others named and shamed some of the companies that are involved in this process. The awful truth is that some companies are literally shameless. They are more motivated by the bottom line than they are by public reputation and international opinion.
I thank the Minister for showing such moral clarity. Given China’s economic power, all Governments have to work with it, but to hear the Minister give such clear and unambiguous condemnation of the attacks on Uyghurs is important. From my time working with Uyghurs, I know that they often feel forgotten and unheard. Many of the things that hon. Members have spoken about today that happen to them, happen unseen. Today, we have shown that they are not happening unheard. That is incredibly important.
I welcome the Minister’s use of the word “innovative” about the approach to supply chains, which is essential given the dominance of China in the polysilicon matter. I also welcome his commitment to continue to assess, monitor and learn from the approaches that other countries have taken. He knows that other Members and I will continue to press him to do that at speed.
I close by paying tribute to those who, at considerable risk to themselves, ensure that the story of what is happening in Xinjiang escapes an increasingly closed society—to the Uyghurs who have lost contact with their families and risk imprisonment when they travel. I also pay tribute to civil society organisations such as Anti-Slavery International and the World Uyghur Congress. Uyghurs often feel forgotten, and if this debate has done one thing today, it has shown the world that we will not forget them and that they have a voice within our Parliament.
Question put and agreed to.
Resolved,
That this House has considered UK supply chains and Uyghur and Turkic Muslim forced labour in China.
Peak Forest and Macclesfield Canals
(2 weeks, 1 day ago)
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Peter Dowd (in the Chair)
Before I call Lisa Smart to move the motion, I inform hon. Members that the parliamentary digital communications team will be conducting secondary filming during the debate. As is the convention for 30-minute debates, the Member in charge of the debate will not have an opportunity to wind up.
Lisa Smart (Hazel Grove) (LD)
I beg to move,
That this House has considered funding for Peak Forest and Macclesfield canals.
I rise to speak about a subject close to my heart: our beautiful canals, including the magnificent 16-lock flight in Marple. Our canals are not just waterways. They are part of our national story and are deeply woven into the fabric of our community. They are remarkable pieces of living heritage that we must protect, and protecting them is one of my three asks of the Minister today.
I want us to protect our canals as precious green corridors and as a direct link with our nation’s and my community’s proud industrial heritage. I want our canals to be funded as a critical part of our infrastructure. I want us to value our canals. We should look at them as assets to be cherished, not simply as liabilities to be managed.
The Peak Forest canal, one of Britain’s most scenic waterways, runs alongside the River Goyt for much of its length. The Macclesfield canal is a historic link between Manchester and the midlands. They are both jewels of our waterways. They are where they are because of the Stockport mills—notably Mellor mill, which was the largest cotton-spinning mill in the world in its time—and the Derbyshire quarries. We can still see that heritage along the canals, with Unity mill in Woodley, Romiley board mill and Goyt mill in Marple.
As the canals cross through Marple, they make up 5 km of designated conservation areas. Each lock on the Marple flight is grade II listed, meaning that it is protected as an area of special interest. The Marple aqueduct, itself a historic landmark, is the highest in England and is a grade I listed structure. Protecting these landmarks costs money. With 16 locks, and with lock gates costing approximately £150,000 each because they have to be hand-crafted, the bills quickly add up.
Back in 2012, all British Waterways’ assets and responsibilities in England and Wales were transferred to a newly founded charity, the Canal and River Trust. Unfortunately, these heritage and community treasures now face an uncertain future. Alongside the regular care and maintenance of the canals and the 71 large reservoirs that feed them, the CRT has had to tackle significant work such as the extensive restoration project for Toddbrook reservoir, which supplies both the Peak Forest and Macclesfield canals. After a partial failure in 2019, the repairs came at a hefty cost of £15 million. Such massive efforts highlight just how vulnerable this vital infrastructure is.
Funding changes made by the previous Conservative Government, which will mean cuts of 5% a year for 10 years, will drain nearly £300 million from the trust. Those reductions will undoubtedly undermine the trust’s ability to sustain the canal network. I fear that that will make the closure of those treasured public spaces sadly inevitable, unless something changes.
Jim Shannon (Strangford) (DUP)
I commend the hon. Lady for securing the debate. She is presenting a lovely visual account of her constituency. Based on what she says and on what I observe, the potential for tourism, for the betterment of the environment and for people living across the community has not yet been realised. Does she agree that there is so much to gain that perhaps the Government should search their pockets and find the extra money?
Lisa Smart
I am grateful for the hon. Gentleman’s point about potential not yet realised. I will highlight later in my speech some of the uses of our canals, but there is an awful lot more that we could be doing. I encourage the Government to look at the canals in the round and consider what they could do for the environment, for tourism, for health and for our communities, as well as how they make it easier for people to walk to work the most direct way. I completely agree with the hon. Gentleman.
I am a proud and long-standing trustee of the Stockport Canal Boat Trust for Disabled People; I refer all colleagues to my registered interests. I cannot overstate the joy, the serenity and the community value that can be found in spending time cruising at a maximum speed of 4 mph. The trust operates the New Horizons, a fully accessible 72-foot narrowboat run by volunteers that offers passengers of all abilities time to enjoy our canals. While cruising, we see families walking their dogs and enjoying nature. We see joggers, we see cyclists and, as I said to the hon. Gentleman, we see people simply using the towpath as the most direct route to walk to work.
Beyond their cultural and historical significance, the waterways are crucial for nature, for wellbeing and for combating climate change. They provide a vital habitat for wildlife and serve as a natural green corridor connecting diverse ecosystems that are bursting with biodiversity. Canals also play a really important role in water management, reducing flood risk and increasing climate resilience. Problems with reservoirs are problems for all of us.
For health and wellbeing, canals offer an unparalleled sanctuary. Our waterways are freely accessible and provide opportunities for walking, cycling and relaxation in green spaces. At a time when public health concerns are high and when such spaces in urban and suburban areas are scarce, they deliver a cost-saving gift to the NHS. Research suggests that that gift amounts to more than £1 billion a year.
Our canal towpaths are often flat by design and can offer accessible physical and mental health benefits to many, as my constituents in Hazel Grove know well. After securing this debate, I asked for stories about how the canal had touched their lives. I was moved by the overwhelming response: I received more than 100 messages in only a couple of days. Older community members shared how they find solace and companionship in walking along the towpaths. Parents and grandparents spoke of the joy of exploring the canals with their children and grandchildren. One resident shared how walks along the canal were crucial to recovery after a heart attack and a major cancer operation: the serenity and beauty of the canal were key to their healing.
For many, the canals are an escape from traffic pollution and noise. They are a sanctuary of peace amid a busy world. Imagine looking at them as part of the solution—as a way to encourage people out of their cars, rather than as problems to be managed and towpaths to be fixed.
I want to make the case for the 16-lock flight in Marple to be designated as a world heritage site. It is an extraordinary testament to our industrial and engineering heritage that represents a pivotal era in Britain’s industrial past. Such recognition would not only attract global interest and boost local tourism, but ensure that the locks are protected and celebrated for generations to come. I am committed to working closely with our local community, with heritage experts and with international bodies to make that vision a reality and ensure that the locks get the recognition they truly deserve.
I ask the Minister to protect our canals, to fund our canals and to value our canals. They are assets. With a bit of creative, holistic thinking, they could do so much more: they could save money for the NHS and for our transport budget, instead of simply being liabilities to be managed.
Tim Roca (Macclesfield) (Lab)
Thank you for your service in the Chair today, Mr Dowd. I thank the hon. Member for Hazel Grove (Lisa Smart) for securing this important debate on a valued public amenity.
The Macclesfield and Peak Forest canals both mean a lot to me, not just because they are in my constituency, but because I am familiar with them from childhood—from walking my first dog down by the Peak Forest canal in Disley, plugged into my Walkman and listening to the Spice Girls, to using it now for rest and relaxation after a trying week here in Westminster. It matters to many of my constituents as well. A third of Macclesfield sits within the Peak District national park, and the canals that run through our countryside add to the beauty of the area that I represent.
The Macclesfield canal is the first in the world to receive the coveted Green Flag award under the Ministry of Housing, Communities and Local Government’s scheme to recognise and reward well-managed parks and green spaces. The award is judged on eight strict criteria, including environmental standards, cleanliness, sustainability and community involvement. It is no wonder that the Macclesfield canal has hit that high standard, especially considering the tireless hours that volunteers put into maintaining it. I pay tribute to the volunteers involved in maintaining our wonderful canals.
The beauty of the canal is further enhanced by the impressive and historical buildings and places of interest located alongside it. The hon. Member mentioned some of them, but I draw attention to those in my neck of the woods, including the Clarence and Adelphi mills in Bollington and the famous Hovis mill in Macclesfield, and my mum would be disappointed if I did not mention her home, which sits alongside the Peak Forest canal. Our canals are not only beautiful green spaces; their significance as a network that provides jobs, homes, transportation and a thriving habitat for wildlife cannot be overestimated.
What is especially heartbreaking is the threat that our canals face because of the ongoing financial strain on the Canal and River Trust, which is a legacy of the last Conservative Government. Cuts to CRT funding by 2027 will amount to more than £300 million. That is against a backdrop of mixed performance and some boater dissatisfaction with the CRT. Boaters in my constituency have raised real concerns with me. They deserve to be treated fairly and to receive the services they need.
The increase in the cost of boat licences and surcharges for those without a fixed home mooring risks a way of life that thousands have chosen. Continuous cruisers often have the lowest incomes, but are being asked to pay more. I am sympathetic, as I know other hon. Members are, because the costs that the CRT is passing on are a result of austerity. Sadly, as we have been discovering since the election in July, there are pressures across many aspects of public life that are a consequence of the inheritance from the last Government.
I am pleased to have been appointed last month to the Environment, Food and Rural Affairs Committee, which had its first meeting yesterday. I know that canals are high on the Committee’s agenda and that we will be speaking to the CRT in the coming weeks and months. I am grateful to be in a position to advocate for canals and for rural communities, both in general and for my Macclesfield constituents in particular, to ensure that rightful environmental concerns are heard and that we protect our cherished countryside and our amazing canals. I commend the hon. Member for Hazel Grove again for securing the debate.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mary Creagh)
What a pleasure it is to serve under your chairmanship, Mr Dowd. I begin by congratulating the hon. Member for Hazel Grove (Lisa Smart) both on her election and on securing this important debate. Similarly, I congratulate my hon. Friend the Member for Macclesfield (Tim Roca) on his election and on his excellent participation today.
We have heard a lot this morning—both hon. Members articulated it so eloquently—about the many benefits that the two beloved canals bring to so many people in Hazel Grove and Macclesfield. I was particularly interested to hear about the work done by CRT with the New Horizons canal boat, widening access to the canal, importantly, for children who are landlocked in the centre of the country and might not have had much access to the water. That is bringing water closer to the people.
As I was listening to the hon. Member for Hazel Grove, I was thinking about how our canals helped build our country and how our mills helped clothe not just our country, but the world. They are a vital part of our industrial heritage. I had a wry smile when she spoke about lock gates and the flight locks, because the last remaining lock gate maker is in Stanley in Wakefield, my former constituency. They are a very precise piece of manufacturing and an incredibly difficult thing to engineer. When the hon. Lady was bidding for world heritage status for the lock flight, which I am sure is an incredible piece of engineering and which I hope to visit one day, I was thinking about the canal at Marsden by Huddersfield near my old constituency. That canal has what was the longest, deepest and highest canal tunnel in the world, a real feat of pre-Victorian engineering, starting on one side of the hill and going through to the other with fingers crossed that everyone would meet in the middle, which thankfully they did.
Our canals and inland waterways are a real asset to our country. They are important for heritage and provide many public benefits. People live on them, love being by them and use them for leisure, recreation and, as the hon. Lady said, to cycle to work. They are an important part of our natural environment, providing green corridors along which nature can flourish. I know that she has kingfishers on her canal, a rare and vanishing species in our country. Canals and inland waterways also contribute to the growth of local economies through domestic tourism, about which we have heard a great deal this morning.
In my constituency is the Oxford canal, which runs through the north of Coventry. It fed and took the silks away from the old Cash’s factory, which then became the factory for Courtaulds, which invented rayon— the rest is history, as they say. As well as being really popular for walkers, joggers and cyclists, it is a nationally important site for river voles—Ratty, for those of us who loved reading “The Wind in the Willows” to our children. I feel proud that we have a nationally important site for river voles in my bit of Coventry. It is very incongruous: if you saw the site, Mr Dowd, you would not think it was a little haven for nature. Canals provide really important biodiversity corridors.
We have two navigation authorities, the Canal and River Trust and the Environment Agency. The CRT reports that there were nearly 860 million visits to its canals last year, many of which were repeat visits, with around 10 million individual users each fortnight. That gives a real sense of the scale of the popularity of our canals. Our navigation authorities have a vital role to play in the future. They must help to ensure that this part of our nation’s key infrastructure is resilient to climate change, and they will help to meet net zero targets through sustainable transport and energy generation and contribute to water security through flood mitigation measures and water transfers.
The trust is a charity independent of Government, and Ministers do not have a role in its management or operational decisions. Because it is a private sector organisation, it is free to set its fees and charges accordingly. However, we expect it to engage constructively with the boating community and take account of issues of concern it raises, such as those that my hon. Friend the Member for Macclesfield mentioned.
On the funding of the Peak Forest and Macclesfield canals, about which we have heard much today, it is the Canal and River Trust that manages the canals, as the hon. Member for Hazel Grove observed. It was set up in 2012 as a charity independent of Government to replace the publicly owned British Waterways. It owns and manages a network of 2,000 miles of canals and rivers in England and Wales, including the two that are the subject of our debate. The trust is free of public sector financing constraints, so it can source alternative revenue streams, including charitable donations and legacies, charity tax relief and third-party project funding, and it can borrow on the financial markets.
The Canal and River Trust is also endowed by the Government with a significant property and investment portfolio from British Waterways, which is now worth around £1 billion as a result of the trust’s sound management, on which I congratulate it. To provide support and certainty for the trust, a 15-year grant totalling around £740 million was provided when the trust was set up. The grant was inflation-adjusted in the first 10 years and then fixed in the final five years. It is now set at £52.6 million a year until the grant ends in 2027, representing about a quarter of the trust’s annual income. Returns from the investment portfolio provide another quarter of the annual income, which means that the trust now successfully raises half its annual income from other sources.
An important part of the transfer from British Waterways was an agreed objective that the trust would move progressively towards greater financial self-sufficiency and reduced reliance on public funding. With a reported increase of £12 million in total income last year over the previous year, the trust is already making good progress towards that objective.
A review of the current grant funding concluded that the trust was performing well and delivering value for money, and, as the Department for Environment, Food and Rural Affairs confirmed directly to the trust this summer, a further substantial grant funding package of £401 million will be provided by the Government over 10 years from 2027. Given the tough fiscal climate in which all Government spending is being closely scrutinised, and the financial black hole in which we were left by the previous Government, as my hon. Friend the Member for Macclesfield said, the new funding is a clear sign of the importance that this Government place on our inland waterways.
With all the benefits of canals that I outlined, the Government are supportive of canal restoration generally to bring those benefits to even more people. Bringing canals back into active use contributes to the regeneration of areas that have been in decline. We have seen that in urban settings and in more rural areas, where there has been growth in local economies through increased tourism. However, although we are sympathetic towards the many restoration projects under way around the country, no general Government funding is available for canals. I pay tribute to the local volunteers who come out on a Sunday morning, do the litter picks and help with the restoration, because their commitment and general surveillance of canals is an important part of making them a safe space for everyone. The navigation authorities, local authorities and canal societies, such as the one mentioned by the hon. Member for Hazel Grove, can work well together to preserve the canals for which they are responsible, including through fundraising and on restoration and maintenance work. Successive Governments have encouraged greater local community involvement in their waterways in that way.
I hope I have reassured hon. Members that the Government very much value our inland waterways and the many, varied benefits that this blue and green infrastructure brings to so many people up and down the country. We have demonstrated our commitment to ensuring that this fantastic national asset is able to thrive by providing both the trust and the Environment Agency with substantial funding over the years and into the future with a further significant new 10-year grant funding settlement for the trust.
Question put and agreed to.
Fuel Poverty
(2 weeks, 1 day ago)
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Mr Alistair Carmichael (Orkney and Shetland) (LD)
I beg to move,
That this House has considered Government policies on tackling fuel poverty.
It is a pleasure to see you in the Chair, Sir Roger. A household in fuel poverty is defined as one that commits more than 10% of its income on energy to maintain a satisfactory heating regime. Fuel poverty includes three elements. The first is the household’s income, from which we compute that 10%; the second is the household’s energy requirements, on which the quality of the housing stock and the availability of cheaper tariffs have an influence; and the third is the fuel prices themselves. It is sobering to think that across the United Kingdom as a whole, no fewer than 6 million households are living in fuel poverty. In Scotland in 2022, some 791,000 households were fuel-poor.
Sarah Dyke (Glastonbury and Somerton) (LD)
I have recently received more than 200 emails from pensioners in Glastonbury and Somerton who do not know whether they can afford to turn on the heating this winter. Does my right hon. Friend agree that the Government should provide targeted energy discounts for vulnerable households, to reduce the number of people living in fuel poverty?
Mr Carmichael
It will be the first surprise of the day for everyone that the answer is yes. I very much agree that we need that—or if not that, something of the sort. Meaningful action that is fit to meet the needs of the different parts of the United Kingdom is long overdue.
While households in fuel poverty are committing more than 10% of their income, households in extreme fuel poverty are committing more than 20% to meet their energy needs and keep their home warm. In Scotland, there were 311,000 such households in 2019. By 2022, the figure had risen to 472,000.
This issue is particularly acute for us in the northern isles. In Orkney and Shetland, 31% of households live in fuel poverty; the Scottish average, which is higher than that of the rest of the United Kingdom, is 24%. It is not difficult to see why fuel poverty is particularly acute in the northern isles. Winters are longer, darker and colder than in other parts of the country. We are off the gas grid. Most of our homes are heated using electricity, oil and sometimes liquefied petroleum gas or solid fuel. Yes, an increasing number of people are able to use photovoltaics and ground or air-source heat pumps, but the bulk of our heating still comes from conventional sources.
Helen Grant (Maidstone and Malling) (Con)
I congratulate the right hon. Gentleman on securing this important debate. I recently visited the home of an elderly pensioner in my constituency. I sat in her freezing cold living room with her for more than an hour while I took instructions on a matter. She was wearing two jumpers, a scarf, thick trousers and boots. She was dressed in that way because she was too afraid to put the heating on, as she did not think she would have the money to pay the bill. Does the right hon. Gentleman agree that the Government’s cruel cut to the winter fuel allowance will have a serious impact on the health and wellbeing of some of our most vulnerable people?
Mr Carmichael
I am sad to say that I do agree. I have seen the same thing time after time in houses across my constituency. I have seen people sitting with two, three or four layers on and a blanket over their knees. If there is any heating, it might come from a single bar on an electric fire or something of the sort. With the winter fuel payment, we have to understand that there is a generational difference: the people who were getting that payment were in large part brought up in an age when people did not borrow; they lived within their means. Taking away that money puts them more acutely at risk than people of other ages. When we devise policy, we sometimes have to look at the social and psychological impact as much as at the political and the economic. The hon. Member makes a good point.
In communities such as mine we have older, much less energy-efficient housing stock. Some elements of last week’s Budget may mitigate the worst effects. It did not have the comprehensive strategy that I wanted, but in the interests of fairness we should acknowledge that if the increase in the minimum wage leads to increased household incomes, it will have an impact on some people living in fuel poverty. The retention of the state pension triple lock will also provide some mitigation. To that extent, those things are welcome, but in the context of the wider influences on fuel poverty, they will hardly hit the sides. The energy price cap has now been put up to £1,717, which is an increase of £150, and it seems likely that there will be a further increase come January. The situation among the fuel-poor is only likely to get worse, which is where the hon. Member’s point about the winter fuel payment comes in.
It is true that the mechanism of pension credit is there to mitigate the worst effects, as I anticipate the Minister will say, but we have known for 20 years that there are problems with all the tax credit schemes and with the variation in uptake across the board. Again, it is a generational thing. Knowing the community that he comes from, the Minister will know that among older people in parts of the country there is still a real stigma attached to a means test. They will always be less likely to apply for something that they could otherwise have been given by right. For those who live in fuel poverty, it now feels as though anything given with one hand is being taken away with the other.
What can we do? What tools have we at our disposal? We have the warm home discount and the energy company obligation scheme, to which I will turn in a minute, but I first wish to raise a couple of more specific issues that relate to tackling fuel poverty in communities such as mine.
The Minister has already heard me raise the question of an isles tariff; in fact, we met earlier this week to discuss it. Orkney and Shetland has been at the heart of supplying the nation’s energy needs for the past 40 or 50 years, as we have played host to the oil and gas industry. Shetland now has one of the biggest onshore wind farm developments anywhere in the country, but in the shadow of the turbines are some of the greatest and most acute problems with fuel poverty. That is now generating genuine frustration. As we play host to major energy developments—latterly renewables—there is very little or no community benefit for those who host them.
Serious attention now needs to be given to the question of an isles tariff. It does not need to be an isles tariff; it could be something that applies across the highlands and islands and in other areas that are particularly badly affected. I am pretty sure that Ofgem will not be keen—as far as I can see, Ofgem is never keen on anything that will actually make a difference—but if it can accept the principle of differential treatment through a social tariff, which is now the subject of a consultation, a geographical tariff should also be given serious consideration.
Many of my constituents rely on electric storage heating. Access to “total heating with total control” tariffs, which were designed by the former hydro board specifically with communities like mine in the highlands and islands in mind, still provides them with the best and cheapest available source of heating. However, it does not allow them to take advantage of different tariffs when switching or other ways of saving money are available. It requires two meters, one of which has two readings. As smart meters are rolled out, it appears that although they may be smart, they are not smart enough to do something that the old technology did quite easily.
There is then the question of the radio teleswitch, which is the delivery mechanism for many tariffs. It is due to be switched off in 2025, as the last of the BBC analogue signal is decommissioned. We all need to cross our fingers and hope it lasts until 2025, because it could quite easily fall over at any point. When it does, the string and chewing gum that are keeping it going at the moment will simply no longer be enough.
Will the Minister give me an update? Before the election, his predecessor agreed to hold a roundtable. The election intervened, but I am pleased to hear that the roundtable went ahead and that the different players were brought together in the room. It appears to have made some progress, but my constituents would be keen to hear the details.
The Government’s manifesto promised a strategy with a warm homes plan, whereby £13.2 billion would be committed to address fuel poverty. The Budget last week allocated £3.4 billion over three years. That is a sizeable chunk of money, but it is not the £13.2 billion that we were promised. Presumably the remaining £9.8 billion will have to come in years four and five of this Parliament if the Government’s commitment is to be met.
I have two problems with that approach. First, it will leave a lot of people in fuel poverty for another three years while they wait for the money to come. Secondly, if the money comes at all, we will be shovelling it into wheelbarrows to get it out over the two years, a situation that always brings the law of unintended consequences into play, as we have seen time and again with energy efficiency measures, renewable energy development and so on. There is money that must be spent within a target time, but there is neither the existing labour force nor the skills base to deliver the work, so a whole load of fly-by-night companies are set up that come into our communities from outside, do substandard work, go away and eventually go bankrupt while constituents are left to pick up the pieces.
It is obviously for the Treasury to decide how the money will be spent, but looking towards years three, four and five of this Government, can the Minister give me some assurance that there is a view towards a strategy that will use the money that is currently committed, that we will have a clear idea, and that we can start planning now how to use any money that comes in future?
The two existing vehicles for alleviating fuel poverty—the warm home discount, which reduces bills by £150 a year for those who qualify, and the energy company obligation, which assists people with energy efficiency adaptations, renewable energy adaptations and so on—are both means-tested, which takes us back to the question of cliff edges. Most concerningly of all, those measures are due to end in 2026 unless they are renewed by the Government. The Minister will have an easier conversation with the Treasury if he bears it in mind that the funding for the schemes comes not from the Treasury but from the energy companies.
We need to know that there is a plan for the continuation of those schemes or for something that will seek to achieve the same end. It would be good if that plan could come as part of a Green or White Paper outlining a strategy. That is what is lacking at the moment: we have a scheme here, a scheme there, an idea of this and an idea of that, but there is no overarching strategy to ensure the best possible delivery. At the beginning of this debate, I gave the stat that 6 million homes across the whole United Kingdom are living in fuel poverty. That is not something that we should be prepared to live with.
Anna Dixon (Shipley) (Lab)
It is a pleasure to serve under your chairmanship, Sir Roger. I congratulate the right hon. Member for Orkney and Shetland (Mr Carmichael) on securing this important debate on fuel poverty.
I would like to highlight the impact of poor-quality housing on fuel poverty. I am acutely aware of that in my constituency of Shipley. We have some really poor-quality housing. As is typical for a northern town or city, we have a higher proportion of homes that are non-decent, which means that they do not meet the standards for a warm and dry home. That has knock-on effects for people’s health and wellbeing. As I know from my work, older people are more likely to live in those non-decent homes, which can have significant impacts.
Data from Friends of the Earth, shared with me, shows that in Shipley alone there are 17 energy crisis hotspots. Those are neighbourhoods that have below-average household income but above-average energy bills. We need to use those sorts of data to focus our efforts to tackle fuel poverty, and the excellent work that the Government are doing to invest in home insulation, on those energy hotspots. I am very proud that the Government are looking to invest in new homes, but it is critical that those homes are warm and energy-efficient so that we can reduce the incidence of fuel poverty in future with new social housing. I was pleased to see that the Liverpool city region is working with Octopus Energy and with home manufacturers to create homes that will be guaranteed zero bills for at least 10 years. They could do that at scale because of the new methods of manufacturing. In addition to home insulation, there are some huge opportunities to address fuel poverty as the Government embark on the housing programme.
There are clear links between fuel poverty and pensioner poverty: the two go hand in hand. It is a scandal that between 2010 and 2024, under the watch of the past Conservative Government, the number of pension credit claimants halved from 2.6 million to just 1.35 million. Sadly, over the same period, pensioner poverty rose from 12%, or 1.2 million people, to 16%, which is 2.1 million people. That is a real scandal.
I agree that we should be targeting winter fuel support to the poorest pensioners, but we must also do all we can to ensure that those who are eligible for pension credit, and thereby for a winter fuel payment, are brought on to pension credit. The Department for Work and Pensions estimated that almost 900,000 eligible households were not claiming that benefit. It is fantastic that colleagues in government are working to raise awareness of pension credit among our poorest pensioners and to ensure that support is available.
I pay particular tribute to local organisations in my constituency, such as Age UK Bradford and Citizens Advice Bradford, that support pensioners who experience fuel poverty. I also thank housing associations and Bradford council, which provide both advice and direct support to tackle fuel poverty and to ensure that people have the right advice and benefits. I hope that the Government will continue to make efforts to ensure that the poorest pensioners receive the support available to them.
Obviously not everyone in fuel poverty is a pensioner and not every pensioner is in fuel poverty, so I am glad that the right hon. Member for Orkney and Shetland is holding this broader debate on the subject. We must recognise that fuel poverty affects not just older people, but families of all ages.
A lot has been done through the Budget to raise people out of poverty by increasing the national living wage, but we must also target bills. Families who care for someone with a disability or a chronic condition can use much more energy, and therefore have much higher energy bills. For those families, it is really important that, through GB Energy, we invest in clean energy to get bills down.
This debate is really welcome. We must recognise that tackling fuel poverty requires a comprehensive approach that takes housing into account, lifts people out of poverty and gets bills down. I hope the Minister will outline how those actions together will reduce fuel poverty for people of all ages.
Dr Danny Chambers (Winchester) (LD)
Thank you, Sir Roger, for calling me to speak. I pay tribute to my right hon. Friend the Member for Orkney and Shetland (Mr Carmichael) for securing this debate at this crucial time as we head into winter.
Last week, I spoke in the debate on NHS winter preparedness. We know that our A&E departments, doctors and other health services are particularly busy in winter. People living in fuel poverty end up contributing to that, because if you are elderly, vulnerable or ill and you cannot afford to turn on your heating, you are more likely to suffer complications, get sick with flu or covid or be admitted to hospital with hypothermia. The NHS spends about £1.4 billion every year to deal with the consequences of people living in cold or damp homes. It is worth noting that this is about the impact not just on an individual’s finances, but on the resources of the health services.
Victoria Collins (Harpenden and Berkhamsted) (LD)
In Harpenden and Berkhamsted and, I am sure, across the country, local charities and even local district and county authorities are looking at how they can support those who are falling off a cliff edge after the winter fuel payment was scrapped. Does my hon. Friend agree that the impact he mentioned is not confined to the NHS? Charities and councils are picking up the slack created by fuel poverty’s not being dealt with properly.
Dr Chambers
That is a good point. Citizens Advice Winchester told me that it spends a huge proportion of its time dealing with people who have issues with energy bills, particularly at the moment. A variety of organisations are being drawn into this.
The hon. Member for Shipley (Anna Dixon) mentioned housing quality. It is worth noting that the UK has the oldest housing stock in Europe: 38% of houses in the UK were built before the 1940s, compared with about 11% in Spain. Those houses were obviously not designed with particularly high energy standards. One thing the Liberal Democrats were calling for during the general election was an emergency home energy upgrade programme for people who are living in poverty, people in social housing and people who cannot afford their bills. Retrofitting insulation is good not only for people who are struggling and the NHS, but for the environment. We urge the Government to double down on retrofitting and improving the quality of our old housing.
Directly linked to that issue are buildings’ energy efficiency standards, which were reduced under the last Government. New builds should be net zero; they should be hugely energy-efficient. There is no excuse for any new house to have occupants who live in fuel poverty, and we should do everything we can to ensure that that does not happen.
I grew up on a farm in the middle of nowhere, and I represent a large area of the Meon valley, which is very rural. As my right hon. Friend the Member for Orkney and Shetland pointed out, many rural villages, farms and houses rely on solid fuel heating—they are not on the gas grid—and have to have electrical storage heaters. That is hugely expensive. Rural areas also have a slightly higher proportion of elderly people. I have had a huge amount of correspondence from people living in rural areas and elderly people who are particularly worried about the coming winter. I heard from someone called Julia, who has osteoarthritis and osteopenia and has to walk with crutches. She is on a waiting list to be transferred to more affordable accommodation. She often has to skip meals to make ends meet and she dreads turning on the heating because of the cost. With poor circulation, she frequently loses feeling in her feet from the cold.
I acknowledge what the hon. Member for Shipley said: not all elderly people rely on the winter fuel allowance to heat their homes—we know that—but because the removal has been brought in so quickly, right before winter, a lot of elderly people were not expecting it and will be plunged into crisis. Julia emailed me with a clear ask for the Minister: if the Government are removing the winter fuel payment, will they consider expanding qualifying benefits to include housing benefit, council tax support, disability benefits and attendance allowance? That would be a lifeline for her and many others who face similar hardship.
Jim Shannon (Strangford) (DUP)
It is a pleasure to serve under your chairship, Sir Roger. I thank the right hon. Member for Orkney and Shetland (Mr Carmichael) for securing the debate, which gives us all an opportunity to participate. To be perfectly honest, I do not think that the right hon. Gentleman has ever had a debate that I have not come along to: he brings forward issues that I am very interested in, and I thank him for that.
I want to give a Northern Ireland perspective, which I hope will illustrate exactly what the issues are. Others have given theirs, and I am sure that those who follow will back up the theme. Reports on fuel poverty in Northern Ireland certainly make grim reading. Northern Ireland Fuel Poverty Coalition highlights comparative statistics showing that fuel poverty levels throughout the United Kingdom are as follows: 21.5% in Northern Ireland, 10.4% in England—people might be pretty lucky to live in England, but those in fuel poverty would not say that—26.5% in Scotland and 23% in Wales.
We should try to figure out exactly what those stats mean. A recent Northern Ireland Housing Executive report indicates that if the measure is based on 21° heat in living rooms, the figure for Northern Ireland is closer to 30%. In other words, it is the highest in the United Kingdom. It gives me no pleasure whatever to say that, but it gives an idea of where the problems are.
I should have said at the start—I apologise for not doing so—that it is nice to see the Minister in his place. I look forward to his response. I also look forward to the contribution by the shadow Minister, ever my friend.
The fact is that people have got used to dressing for outside when they are living in their house. The right hon. Member for Orkney and Shetland illustrated that incredibly well in his introduction, but that is a fact for those people. The hon. Member for Maidstone and Malling (Helen Grant), who is no longer in her place, also gave an illustration, describing a constituent she visited who was wrapped up almost like a teddy bear, with all the clothes that she had on. The fact is that if she had not had those clothes on, that lady would probably have been fairly close to hypothermia.
Victoria Collins
We all have those stories, and I am always heartbroken when they come in. One constituent told me:
“I live alone on my pension and will either have to stay in bed all day or keep a coat on and hot water bottle it, if I can afford the electricity to keep boiling the kettle.”
It is a very sad state of affairs, is it not?
Jim Shannon
The hon. Lady illustrates a point that she rightly says is replicated regularly among all our constituents. This debate today is about them, and that is why we are here. We are here to make a point on behalf of our constituents who are in those predicaments and under other incredible pressures.
From a quick survey I did in my own office, one staff member sets her heating temperature at 21°C, while the rest of the staff would set it at less, as they would just take the chill off by sitting under blankets. Fuel poverty may affect more people than perhaps the Minister, shadow Minister or anyone really understands. That staff member said that she has to do so because she has children, so she has to prioritise heat. That is understandable: if there are children in the house, we would want to keep them warm.
Here are some stats and figures, which are quite stark: the staff member’s gas statement showed that last November she topped it up with £294. She did the same in December and January, and then in February it was down to £245. For her, in that four-month period, the gas cost £1,127. If we add that up over the year, it is almost £3,500 for the energy, just to keep the house warm. Thank the Lord for summer and the heat that it sometimes brings—maybe it is not as much as we wish, but none the less it brings heat and we can have the gas on less.
My example illustrates the problem. My staff member is not in the house from 8.30 am until 5.30 pm, but for those months she is still in fuel poverty. By the way, she is well paid; I say that to make the point that many people find themselves in a predicament on this issue. How much more so for our pensioners, who are not out of the house and warm in their workplace—for the stay-at-home parents, for our disabled, or for all those people who have different pressures? I often think that when we illustrate something with an example, there are so many other examples of people who are in different circumstances but under the same pressures.
We have told people for years to get rid of the fire and get a cleaner heater that uses oil or gas. Now people cannot afford to turn it up, and that is all before we take into account the crushing blow of the removal of the winter fuel allowance, which affects millions in the UK. It particularly affects my constituents in Northern Ireland, who are so reliant on oil as their method of heating.
Anna Dixon
Does the hon. Gentleman agree that part of the solution is building more higher-quality housing for older people? In many of our communities, people are living in unsuitable homes that are cold and damp, but they do not have affordable alternatives to move to within their own communities. Does he agree that part of the solution is providing more high-quality but affordable housing to give older people, such as those he was describing, opportunities to move into much better-insulated homes that are easier to heat?
Jim Shannon
The hon. Lady is right. Others have illustrated the issue of house building. We live in older houses: that is a fact. The Government have committed themselves to 1.5 million new homes in this Session, and I wish them well in that, because I want to see that happen. We can only hope that those homes will be energy-efficient. I chair the healthy homes and buildings all-party parliamentary group, and one of the things we are pushing for is to ensure that whenever new homes come through, they will be energy-efficient and enable people with disabilities, vulnerable people or elderly people to have that quality of life in their homes. Within that, we must also look at upgrading older homes that do not have all the things rightly asked for by the hon. Lady, which we also try to bring forward.
By way of comparison, the figures in the latest census indicate that 62% of households in Northern Ireland use oil. Every time we have a war, we become incredibly worried, because oil prices will go up and the cost of oil in our central heating will therefore increase. Every time that happens, it affects 62% of households in Northern Ireland. The cost of oil is down a wee bit now, and it is good to have it down, but it is still an incredibly expensive way to heat a home.
Many houses in Northern Ireland depend entirely on oil, whereas the percentage of households in England and Wales was just 4%. Again, that illustrates the pressures that we have in Northern Ireland compared with other places. Oil can be expensive and inconvenient for Northern Irish consumers while also having high associated carbon emissions. Although the use of gas has expanded since 2011 to around 200,000 households, the usage of gas is still firmly behind that of oil, which has led to higher levels of fuel poverty.
Northern Ireland is currently preparing an energy strategy. The Minister is diligent, and he may have had the opportunity for discussions with his compatriots in Northern Ireland. Has that happened and what was the outcome? The energy strategy is due for release in 2025, so the skeletal story of what the energy strategy will be is probably there already, although it has not been released just yet. I quote its aim:
“Alleviating fuel poverty will have a positive impact on both mental and physical health,”—
the right hon. Member for Orkney and Shetland referred to that earlier—
“especially for more vulnerable populations. In addition, making our homes more sustainable and easier to heat”—
as the hon. Member for Shipley (Anna Dixon) said—
“will help fight climate change”.
The issue of climate change cannot be ignored either. It is all part of the strategy that the Government try to bring together, and it will lead to a more just transition. We all have aspirations, my goodness, but along with them we need factual, actual, physical help to make them happen.
The hon. Member for Winchester (Dr Chambers) referred to attendance allowance forms. I was on the election trail back in July and knocking on doors, as I do. I am of a certain age now, so I resonated with the pensioners, and I recognise that we can do things to help. During my time on the doors, I managed to get slightly over 80 of those applications filled in. They take an hour and a bit to do, and it took us quite some time to get them cleared up, but it helps those who have had their winter fuel allowance removed. If they are pensioners, have disabilities and are on medication, it is quite possible, as the hon. Member for Winchester said, that they will qualify for that attendance allowance. That is just a thought, but we should have a more positive reaction from Government to address those things and let people know their rights.
The fact is that words on paper have no impact on the pensioner who did not know that they could have saved more of their pension to get their oil this year, but they expected to have help with the winter fuel allowance that they relied on. I know that that is not the Minister’s responsibility—it is for the DWP—but I believe there is an onus on Government to introduce that option to as many pensioners as will qualify. The pensioners who I know had no time to prepare and save their pennies, and the outcome will be an uplift in cold-related illness and perhaps even cold-related death.
I will conclude, as I realise that I have gone on a wee bit longer than I thought. I seriously urge Government to do the right thing, even at this stage, and to reinstate this much-needed help for pensioners in the country. We discuss fuel poverty in this place, and yet Government then take help for warmth from them. I do not know about anyone else, but that certainly leaves me a lot colder and a lot poorer in spirit.
Clive Jones (Wokingham) (LD)
It is a pleasure to serve under your chairmanship, Sir Roger. I thank my right hon. Friend the Member for Orkney and Shetland (Mr Carmichael) for securing this very important debate. I am pleased that the Minister and the shadow Minister, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie), are present to listen.
My colleagues are exactly right: tackling fuel poverty needs to be a priority for the Government. Progress has stalled under the Conservatives, with no notable decrease in the percentage of households in fuel poverty since 2019. The situation in the country is pretty dire and we need action now. UK homes are among the least energy-efficient in Europe, making fuel poverty worse given the cost of heating. A Resolution Foundation study noted that UK housing stock offers the worst value for money of any advanced economy.
I was particularly shocked, like my hon. Friend the Member for Winchester (Dr Chambers), to read that British housing is the oldest in Europe, with 38% of homes built before 1946. That is particularly noteworthy given that four years before that date, in 1942, Sir William Beveridge, the Liberal economist, politician and true father of the NHS, published his report uncovering the five great evils that plagued British society. One of the great evils in his report was “squalor”. He was shocked by the condition of housing, with its link to ill health and the discomfort that brought to inhabitants. More than 81 years later, however, he must be rolling in his grave.
We still find ourselves failing to do the basic duty of a welfare state: we are unable to protect the most vulnerable in our society. That has a tangible impact on people’s lives. Again, as my hon. Friend the Member for Winchester said, the NHS spends an estimated £1.4 billion annually on treating illnesses associated with cold and damp housing. When wider societal costs are considered, such as healthcare, that figure rises to £15.4 billion. With that information in mind, I am perplexed about why the Government axed the winter fuel payment and allowed the greater evil of squalor to grow deeper into our communities.
In my constituency of Wokingham, vulnerable pensioners continue to express concerns that they are not being considered by this Government. Age UK’s data shows that the vast majority of older people in poverty, or those just £55 a week above the poverty line, will not be protected from the cuts to the winter fuel payment. We need to ensure that they are protected, especially at a time when energy bills are set to rise yet again this winter.
With 16,577 pensioners in Wokingham expected to be affected, yet again I make clear my complete and total opposition to the cut in the winter fuel payment. That is why I voted against the Government’s decision to scrap it, and why I have suggested in the main Chamber alternative means by which the Government could have paid for reversing the cuts, without any additional burden on the Exchequer. Despite overwhelming opposition from all over the country, however, the Government clearly intend to press ahead with their cuts. I therefore join my Lib Dem colleagues in calling on the Minister to set out how the Government intend to support households to cut their energy bills, and especially how they will ensure that pensioners are protected from fuel poverty.
Mr Angus MacDonald (Inverness, Skye and West Ross-shire) (LD)
Thank you very much, Sir Roger, for allowing me to contribute to the debate. I thank my right hon. Friend the Member for Orkney and Shetland (Mr Carmichael) for securing it.
The two big issues facing rural Scotland, and the highlands in particular, are the care sector and fuel poverty. I am sure hon. Members have not spent too much time worrying about this, but although the mean daily temperature in London is 16°C, it is 9°C on the island of Skye, where God comes from. On Skye we have longer nights, colder weather, windier conditions and older, draughtier houses. In June this year, the daily standing charge for electricity was 61.1p in the north of Scotland and 40.8p in London, so in the north of Scotland we pay 50% more to be connected to our electricity. That is shocking.
Mr Carmichael
Standing charges, which vary massively and randomly across the country—from memory, I think the worst area is actually north Wales—are one thing, but just a couple of weeks ago OVO Energy announced that it would start charging its customers £1.50 every time it sends them a paper bill. Is that not just—I say this, Sir Roger, for the purposes of staying on the right side of you—taking the mick?
Mr MacDonald
What is absolutely clear is that the electricity companies are not losing money. Their total profits add up to tens of billions of pounds, but the costs are being borne by the poorest people in our society.
Anna Dixon
Will the hon. Gentleman therefore join me in congratulating the Chancellor on increasing the windfall tax on gas and oil companies in recognition of the excess profits they are making? That money is being invested in some of the priorities that we have been talking about, such as home insulation.
Mr MacDonald
That is also Liberal Democrat policy, so I am pleased to support that.
Interestingly—I know you will find this interesting, Sir Roger—France, Italy, Ireland and others have an equalisation of standing charges. Ofgem’s reluctance to reform standing charges has been raised many times in Westminster Hall and in the main Chamber, so we need to get proper answers.
Town gas is by far the most affordable way of heating a house, but 60% of houses in the highlands do not have access to it. As my right hon. Friend the Member for Orkney and Shetland says, kerosene, bottled gas, electricity, wood and coal are very much more expensive, but people in the highlands have no option but to use them.
It is easy for us to have a go at the policy of stopping the winter fuel allowance. I do not understand why the figure was set at £13,000, rather than at the average household income of £34,000. That would have been a huge relief to many of the people who have been most affected, and it would probably have been much more popular for the Government.
In the highlands, incomes are much lower than in the rest of Scotland and Britain as a whole, and we have a much older population. The cost of living is between 15% and 30% higher than in the rest of Scotland, according to the Scottish Affairs Committee in 2021. We have a substantial depopulation problem and the highest cost of living in the UK, to which fuel is a major contributor.
I know the Energy Minister has heard this from me before, but community benefits from renewables are potentially the biggest saving grace from this. My No. 1 call is for fuel vouchers to be given to affected locals, and of course in the highlands we have lots of renewables. That would make a very big difference. The second thing the Minister could do is to get Ofgem to review standing charges. I estimate that if they were equalised, there would be a £75 a year saving at no cost to the Treasury. Thirdly, we should concentrate the winter fuel allowance on the most deserving people, who tend to be the older, the poorer and the more remote.
Vikki Slade (Mid Dorset and North Poole) (LD)
It is a pleasure to serve under your chairmanship, Sir Roger. I congratulate my right hon. Friend the Member for Orkney and Shetland (Mr Carmichael) on securing this important debate and raising the issue of geography and the urgent need to support people living in extreme weather. That was backed up by the hon. Member for Strangford (Jim Shannon), who is of course present, as he is for every debate in Westminster Hall, and by my hon. Friend the Member for Inverness, Skye and West Ross-shire (Mr MacDonald).
Those of us who live in the south can be similarly affected, where many of the homes have solid walls and thatched roofs, which are incredibly difficult to insulate or upgrade, although I do accept that it is slightly warmer down south. It is shameful that in a modern society many families are being forced to choose between heating and eating. Food banks hand out not only food parcels, but hot water bottles for people to stay warm. In Dorset, the Help for Warmth scheme, alongside some of the major energy suppliers, is now providing households with air fryers to help them reduce energy costs this winter.
Liberal Democrats welcome the extension of the household support fund and the added flexibility given to allow councils and delivery partners, such as Citizens Advice, to use some of the funding to address the causes of poverty. Although it is welcome, giving households funds simply to pay the bill is putting a sticking plaster over the problem, which is rising energy costs.
For the sake of people’s health and wellbeing, for their financial stability and the future of our planet, we need to move to a position where we reduce demand. As has been mentioned by my colleagues, UK homes are among the worst insulated in Europe. That is why the Liberal Democrats have focused for so long on upgrading the homes that we have and building low-energy homes for the future. It is disappointing that the Government rejected the amendment to the Great British Energy Bill from my hon. Friend the Member for South Cambridgeshire (Pippa Heylings), which would have ensured that the new body facilitates a home insulation programme, following on from our general election manifesto commitment for an emergency programme that would provide free retrofits for low-income households, as was flagged by my hon. Friend the Member for Winchester (Dr Chambers).
It is also shocking that new homes are still being built without basic low-energy measures. I welcome the New Homes (Solar Generation) Bill, a private Member’s Bill introduced by my hon. Friend the Member for Cheltenham (Max Wilkinson)—the sunshine Bill, which we hope will see solar PV installed as standard on new homes. Residents in my constituency have written to me completely bemused that they are expected to welcome vast solar farms on what they see as open farmland, when the rooftops in Wimborne and Merley are not being covered in solar panels. The Government said that they would unleash a solar rooftop revolution; we need to see it happen. Analysis from Solar Together has shown a drop in uptake.
The developers’ claim, made under the previous Government, that such measures would add significant costs to housebuilding is spurious. When I served on the Local Government Association’s environment, economy, housing and transport board, we spent many hours collating the views of councils everywhere. I pay tribute to the former leader of Barking and Dagenham council, who chaired the board. He eloquently made the case that if councils were funded to cover the rooftops of social housing and public buildings with solar PV, we could transform the sector.
The scale of the investment would enable colleges to deliver courses in green skills, and the supply chain would be developed. It would further reduce the cost for homeowners to invest in their properties, so it is not the preserve of the wealthy. The Lib Dems would balance that with policy that would allow homeowners to offset spending on insulation, low-carbon heat sources, EV charging points and climate adaptation measures against income tax bills. We already know some providers of green mortgages are providing beneficial terms for such investments.
Fuel poverty is a trap. Once households are stuck in a place where they are simply feeding the meter to stay warm, they cannot look beyond to plan for the future. We need social tariffs for those who are struggling and we need the Government’s response to the consultation on standing charges to progress more quickly. It is reassuring to know that Ofgem is looking at that, but I ask the Minister to provide an urgent timeline for that.
On social tariffs, to which my hon. Friend the Member for Inverness, Skye and West Ross-shire referred, it is worrying that the reliance at the moment is on the warm home discount. I visited the staff at my local Citizens Advice in Wareham, who consider that the warm home discount needs total reform, including a requirement for all energy companies to be included in the programme. It feels rather ironic that our local water company, Wessex Water, offers a social tariff but the energy companies do not.
While talking about supply, I cannot miss the opportunity to remind those present that Liberal Democrats believe that the windfall tax must go further. The super-profits of oil and gas producers and traders should help to fund not just the renewables sector but the upgrade of homes, so that no one need use as much energy to heat their homes.
I could not wind up without referring to the winter fuel allowance, as every Member has done so far. My team tells me that close to 500 residents in Mid Dorset and North Poole have written to me about this. Colette from Poole told me:
“I cannot afford to get cold as I have 3 lung diseases. I will likely die as the NHS is crumbling under the strain and others will be taking up the beds.”
Glynis from Corfe Mullen, like the constituent of my hon. Friend the Member for Harpenden and Berkhamsted (Victoria Collins), said that she would stay in bed longer. Steven from Wimborne said he would have to hug his dog to keep warm.
I am glad that hon. Members have mentioned the councils’ role in this. Every time I visit a library or community centre, I am told that those places are now being used by people relying on them to stay warm. I have also heard that my bus company is concerned about people riding the bus all day to avoid putting the heating on at home. However, buses are not running in many places because rural areas do not have them, and more and more councils are having to close their libraries. What happens then?
I do not think the risk of fire has been mentioned. The strategic assessment by Dorset and Wiltshire fire and rescue service has even listed fuel poverty as a risk. It states that
“there has been a rise in alternative heating methods, increasing the risk of fire in the home.”
In conclusion, Liberal Democrats believe that people in fuel poverty need support now. As my right hon. Friend the Member for Orkney and Shetland said, they cannot wait three more winters. The most effective way to end fuel poverty is to invest substantially in renewable technologies and give councils and communities the power to develop community energy schemes, including delivering housing efficiency measures street by street. I look forward to a commitment from the Minister to some of those measures.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
It is an absolute pleasure to serve under your chairmanship this afternoon, Sir Roger, and to join so many colleagues here in Westminster Hall for an incredibly important debate. I congratulate the right hon. Member for Orkney and Shetland (Mr Carmichael) on securing it.
It has been great to hear from colleagues. The hon. Member for Shipley (Anna Dixon) spoke about the removal of the winter fuel allowance and how the push to get more pensioners on to pension credit is incredibly important. However, when the figures suggest that the push for pension credit will actually offset the money being saved by the apparent removal of winter fuel allowance, I wonder whether the Treasury and the Department for Work and Pensions have thought their plans through. The comments by the hon. Member for Winchester (Dr Chambers) about the knock-on impact of fuel poverty on the NHS and charities were well made and should have been listened to carefully by all in this room and beyond.
As ever, the hon. Member for Strangford (Jim Shannon), who is a friend, made powerful points about the unique situation facing residents in Northern Ireland, where so many more houses than in Great Britain are off grid and rely on LPG and oil for their heating. Households over there face unique challenges when combating fuel poverty. As he said, the removal of the winter fuel allowance is a crushing blow for pensioners facing a cold winter this year.
The hon. Member for Wokingham (Clive Jones) raised insulation. I completely get his point. We need to go further and move faster to insulate more homes. I am proud of the Conservative Government’s record on that. We inherited a situation in which only 12% of households had an insulation EPC rating of C or above. When we left office earlier this year, it was up to 41%—a near 30% increase. Could we have gone further? Absolutely. Could we have done more? We absolutely should have. But that was a near 30% increase on the situation in which we found ourselves when we came to office, and that is something about which I am very proud.
Mr Carmichael
Is EPC not something else that we could reform? The way in which EPC bandings are rated seems to be utterly random and occasionally quite counter-productive.
Andrew Bowie
I agree. I would love to see the Government commit to a review of EPC ratings and how homes are judged. Maybe the Minister will speak to that if there are any plans coming through the Department for Energy Security and Net Zero, or indeed any other Departments that would be responsible for that as well.
The hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald)—it is taking time to get used to that constituency name—raised some very interesting points and concerns that I share, as I represent a vast rural constituency myself. However, he is entirely wrong: God, of course, comes from Aberdeenshire, not the Isle of Skye, although Skye probably comes a close second.
I wonder what the constituents of the hon. Member for Inverness, Skye and West Ross-shire and the right hon. Member for Orkney and Shetland, as well as companies reliant on the oil and gas sector, think of the Liberal Democrats’ support for the extension of the energy profits levy—something also raised by the Liberal Democrat spokesperson, the hon. Member for Mid Dorset and North Poole (Vikki Slade). As we will be voting on the Budget resolutions in a few hours’ time, they may go away and reconsider their support for those Government measures. The Conservatives will certainly be voting against any extension.
Keeping homes warm this winter will be at the forefront of people’s mind in many households across the United Kingdom. We can feel the temperature falling outside as we speak. As a consequence of various pressures such as Putin’s illegal invasion of Ukraine and the ongoing instability in the middle east, the cost of heating homes has risen and has hit many families hard.
Myriad factors contribute to fuel poverty, including energy efficiency, income, housing costs and energy prices. That is why the Conservative Government took steps to support families to keep their homes warm. Through the energy bills support scheme and the energy price guarantee, we supported households the length and breadth of the UK at the height of the energy crisis. The steps we took amounted to approximately £1,500 for a typical household, covering about half the energy bill of every home in Britain. The warm home discount scheme meant support for 3 million households at risk of fuel poverty: that was 3 million families who could afford to keep warm and keep more of their money in their pocket. We stepped up support for our pensioners, delivering up to £600 in winter fuel payments and pensioner cost of living payments to 11.8 million pensioners. Some 1.1 million cold weather payments, worth £29.6 million, were paid out last winter alone. Those were all steps to support some of the most vulnerable people in our society in the cold weather.
Anna Dixon
Despite all the measures that the shadow Minister says the previous Government took, The Lancet and the Institute of Health Equity have estimated that 102 excess winter deaths in the Shipley constituency alone were due to cold homes. It seems to me that those are shocking figures and that nothing the last Government did actually reduced fuel poverty or deaths from cold homes.
Andrew Bowie
One death from fuel poverty or from living in a cold home is one too many, let alone the number that the hon. Member gave for her constituency. We must all look at what more we can do to ensure that homes are better insulated and that pensioners and other vulnerable people in society can keep their homes warm through the winter, but I am proud that over the energy crisis last year the Government stepped up and paid half the energy bill of everybody in this country. That was important, as were the other measures we brought forward to support so many people in this country. Could we do more? One person living in fuel poverty is one too many, but it is important that we recognise that the previous Government took steps to ensure that fuel poverty was addressed and that people could keep warm last winter.
I have no doubt that Members on both sides of the House will have heard from elderly constituents and their families how worried they are that the winter fuel payment is being taken away. For pensioners in my constituency and in other vast rural northern constituencies represented in the Chamber today, it is particularly alarming. They understand what it is to live in parts of rural Britain during winter. As I have mentioned before on the Floor of the House, Braemar in my constituency of West Aberdeenshire and Kincardine holds the coldest UK temperature record of minus 27°C; I believe it shares that record with Altnaharra in the constituency of the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone).
It is in such rural communities, which face the coldest temperatures more frequently, that support is so needed. That is why it is so regrettable that the new Government made the political decision not only to take critical funding away from those vulnerable pensioners, but to do so at the same time that they found an extra £11 billion from somewhere to hand out inflation-busting pay rises to public sector workers. That is a political decision that Age UK has said
“will leave millions of struggling pensioners without money they rely on”.
Without the lifeline that they so badly need, many pensioners will be left in serious trouble.
In February this year, it was estimated that fuel poverty would fall over 2024. In choosing this path, the Labour Government risk reversing that, pushing more vulnerable households into choosing between heating and eating. I never thought that I would see a Labour Government take such a decision. Prior to the debate, I had a look over the Labour manifesto—something that Government Ministers must have failed to do, seeing as they keep breaking the promises in it. Interestingly, there is a quote in that manifesto from a pensioner called Gary, who talks about the challenges of keeping on top of his energy bills and how apparently only Labour has a plan to help him. I wonder how Gary feels now, knowing that this Labour Government have taken away the support that pensioners like him are reliant on. Gary also talks about GB Energy. We heard a lot from the Labour party about how GB Energy would reduce bills by £300; we do not hear much talk about that any more.
Politics aside, all of us in this debate and in this building—across all parties and all parts of this United Kingdom, which are represented quite well in this room—want to see fuel poverty eradicated. I have visited the wind farm on Shetland that the right hon. Member for Orkney and Shetland mentioned. I, too, represent a rural constituency that also hosts a number of wind farms and associated energy infrastructure and that has too much fuel poverty, both because it is incredibly rural and because many people rely on oil and LPG to heat their homes, so they are far more exposed to wildly fluctuating prices. I do understand the challenges and I do understand why we must get a grip on this.
Six million people living in fuel poverty is far too many. One person living in fuel poverty is too many. Politics aside, despite what I have said in leading up to this, I assure the Minister, the right hon. Member for Orkney and Shetland and all hon. Members that His Majesty’s Opposition will work as constructively as we can to find solutions and find a way forward to tackle fuel poverty in this country and ensure that nobody has to choose between heating and eating.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
I thank all right hon. and hon. Members for participating in the debate. I particularly thank the right hon. Member for Orkney and Shetland (Mr Carmichael) for securing the debate and for his commitment on this issue in debates over many years. I know that it is a considerable issue in his constituency, where I think 31% of households are in fuel poverty, and he is right to raise it in this House. I always appreciate conversations with him, including our recent conversations on many of the topics that have been raised today.
I agree on the importance of this debate on tackling fuel poverty, although I should say at the outset that fuel poverty is devolved across the UK. Certain things that I will speak about relate to the UK Government’s responsibility for fuel poverty, which focuses on England. In the Budget last week, a considerable amount was assigned to the devolved Administrations, including one of the biggest devolved settlements for the Scottish Government in many years. I am sure that the right hon. Gentleman will raise these issues with colleagues in the Scottish Parliament to get much-needed funding to projects in Scotland as well.
On devolution, it is also important to say that we measure fuel poverty in very different ways across the country, with different metrics and targets for how we identify it. In Scotland, the metric for fuel poverty is the same as that used in England to measure energy affordability. It includes deeming a household fuel-poor if it has to spend a certain proportion of its income after housing costs on energy, which is a slightly different figure from the one used in Scotland.
Nevertheless, much of what we have heard today is true across all parts of the UK. Many hon. Members made the point that the choice between heating their home and feeding their family or paying other bills is a stark one for any family. In a country as wealthy as ours, that should not be a choice that families have to make.
I welcome the point made by the shadow Minister and others that we can all work together to move forward on the issue. However, we need to take more action than has been taken in the past 14 years. That is why our manifesto committed to slashing fuel poverty and delivering our warm homes plan. We have already taken the first steps in delivering that. In the Budget last week, the Chancellor committed £1.8 billion to support fuel poverty schemes, helping over 225,000 households to reduce their energy bills by over £200. We have announced that we will consult this year on increasing the minimum energy standards in the domestic private rented sector: 35% of all those in fuel poverty in England are in the private rented sector, so it is vital that we provide as much support as we can.
I will pick up on several points raised during the debate, but the critical point was about trying to bring all the different policies together into a cohesive fuel poverty strategy. That is indeed what the Government have committed to publishing in due course, to ensure not only that we have a clear focus on tackling fuel poverty but that the whole Government are aligned on delivery. That is the approach that the new Government have taken on a range of issues; in my Department that includes clean power by 2030. We making sure that all Ministers, wherever they are—in whichever Department and with whichever responsibility—come together to make the situation better.
I want to provide a little bit of context. I repeat that much of fuel poverty policy is devolved. In 2023, an estimated 13% of households—just over 3 million—were in fuel poverty in England, under the metric that is used here. That remains effectively unchanged since 2022. The Committee on Fuel Poverty, which advises on the effectiveness of policies and scrutinises them in England, stated that progress towards tackling fuel poverty has effectively stalled. In England, the target is to ensure that as many fuel-poor homes as possible achieve the minimum energy efficiency rating of band C by 2030, but 46% of all low-income households in England were still living in a property with a fuel poverty efficiency rating of band D or lower. That shows the sheer amount of work we have to do on the issue.
We are therefore working on a number of policies. In reflecting on the point made by the hon. Member for Mid Dorset and North Poole (Vikki Slade), I accept that there is an urgency to moving forward on all these issues. We have inherited quite a lot of issues that require urgent action. I ask for just a little patience, but I absolutely recognise the point that for someone living in fuel poverty, the impending winter is a crisis. The Government are therefore moving as quickly as possible on the issue.
The warm homes plan, which we announced in our manifesto and on which we are moving forward, is about transforming homes right across the country by making them cheaper and making energy clean to run, rolling out upgrades from new insulation to solar and heat pumps. We will partner with local and combined authorities, and the devolved Governments where possible, to roll out the plan. That was in the Budget speech last week, in which an initial £3.4 billion was announced towards heat decarbonisation and household energy efficiency over the next three years. That includes £1.8 billion to support fuel poverty schemes, which, as I said, will help more than 225,000 homes.
The right hon. Member for Orkney and Shetland raised several points. He rightly notes that the radio teleswitch service situation will be a worry to many people, particularly in rural communities. As he said, a roundtable was held, which was important and brought together the key stakeholders. Ofgem has updated its action plan to make sure that we are pushing forward and in particular that we are putting pressure on the energy companies responsible for delivery, to make sure that the upgrades are made and that targets are in place, including some key milestones that they must meet early next year.
Several hon. Members mentioned community benefits. This is a debate that we have had in this Chamber and across the House before. It is extremely important that if communities are hosting energy infrastructure such as the Viking wind farm in the right hon. Gentleman’s constituency, which I visited not long ago, there should be some benefit. We certainly do not want the communities that host vital energy infrastructure to be those that are most likely to be in fuel poverty. We are therefore doing a lot of work, building on the previous Government’s consultations, on what community benefits might look like. We want to make sure that communities and individuals get a genuine benefit, because some community benefits do not currently deliver quite the change that we would like.
Mr MacDonald
Will the Minister allow humble servants such as myself to get involved in that? I have spent several years working with the Highland council and others on community benefits, and I would appreciate a meeting.
Michael Shanks
I am always willing to take help from any Member. If the hon. Gentleman can take some of this work off my plate, I will be very happy to work with him. Of course, we will first have to work out the answer to the question of where God comes from, but if we can settle on the fact that it is self-evidently Rutherglen in the central belt, I will be happy to work with the hon. Gentleman. That spoils the joke I was going to make about his comparison of temperatures, which is that seeing him wear a very woolly jumper this morning in London made me wonder what he wears in Skye, but that is for another debate.
Genuinely, though, we want to have an open and collaborative approach, and we want to make this work. The consultation that the previous Government carried out and the feedback we have from a number of partners show that there are really good examples of community benefits working well, along with a lot of examples where they are not working well. If we could build on that approach together, I would very much appreciate it.
While we are discussing the hon. Gentleman, he made a very good point about remembering the different types of fuel that households use, and the real issue for off-grid homes—particularly in the north of Scotland, but right across the UK. Again, fuel poverty is devolved, so some of those questions are for the Scottish Government to answer—I know that the questions will be put to them—but we are aware that in England, for which the Department for Energy Security and Net Zero is responsible, 12% of rural households are in fuel poverty, and those are the ones with the largest fuel poverty gap. Tackling those particular challenges in the rural context is therefore really important.
Jim Shannon
I am very much listening to the Minister, who was perhaps about to tell us what will happen in Northern Ireland, where 62% of households are dependent on oil. In comparison, the proportion for England—I say this gracefully, Sir Roger—is only 4%. The greater emphasis on Northern Ireland will therefore fall upon us. The Minister says that this is a devolved matter and that money has been set aside by Labour to help, but the differential is massive and cannot be ignored.
Michael Shanks
The hon. Gentleman, as always, makes a very good point, although I noticed that he called the shadow Minister his friend but not me. But, over time, I think we will build on that and—
Michael Shanks
I aspire to that—quite. The hon. Member for Strangford (Jim Shannon) made a number of important points, and I have to confess that I was not aware of the statistic that he cited. That puts the difference into stark contrast, so I absolutely take the point.
The hon. Gentleman spoke earlier about engaging with the Northern Irish Executive. I have met both Ministers with responsibility for different parts of the energy policy—most recently, in fact, in the inter-ministerial working group across all the devolved nations. One of the key topics that we discussed was decarbonisation, particularly of such households, so we absolutely are taking that issue forward.
I am conscious of time, Sir Roger, so I will just pick up on a couple of other points that hon. Members raised. The hon. Member for Wokingham (Clive Jones) tempted me to be drawn into Beveridge’s “five giants”. Actually, I think that is an important statement about where this Government have come in, because it feels to me like want, disease, ignorance, squalor and idleness are yet again the five giants that we have to tackle as a country, and we are tackling them all as quickly as we can. I take his point, but it brings into stark contrast the fact that we have come in with some really tough decisions to make. There are pressing needs in the NHS, the education system, housing and energy, and we are doing what we can to improve all those. The Budget last week was about fixing the foundations and investing in our public services again. We can undoubtedly do more, but we are moving forward as quickly as we can.
I want to touch on consumer protection, which a number of Members have raised, and the point of the regulator. The ministerial team in the Department have had a number of meetings with Ofgem over a variety of issues, but there is no doubt—Ofgem shares this view—that suppliers could do much more to protect customers and provide them with a better quality of service. We are therefore looking at how we strengthen the regulator—a consultation is under way—so that it can hold companies to account for wrongdoing, require higher performance standards and ensure that there are much better levels of compensation when providers fail.
Last year, Ofgem introduced much more stringent rules around the involuntary installation of prepayment meters, an issue that I raised in one of my first questions after I was elected to Parliament. That was a shocking situation, but much more stringent requirements are now in place. We continue to monitor the situation to see whether much more is required.
I thank all hon. Members who have participated in the debate. There is agreement across all parties that this issue is extremely important. Progress has stalled in recent years, and we now need to make significant advances. The Government are committed to slashing fuel poverty. We will do that through the fuel poverty strategy for England, and also, we will look across the whole of the UK at what we can do with our energy system to reduce bills and provide more secure energy for everyone, and to improve home standards. We will do that by protecting low-income and vulnerable consumers and by trying to raise households out of poverty across the board. Our strategy on child poverty, the raising of the minimum wage and other factors combine to support households struggling in fuel poverty.
We will no doubt return to this topic again. We do not pretend to have all the answers, so we are open to any ideas from hon. Members right across the House. Together, we can tackle this issue, but it needs concerted effort and investment, and this Government have started that.
Mr Carmichael
This has been an exceptionally good debate, and I have been encouraged by the degree of consensus. We have to approach a subject such as this with humility and recognise that nobody has ever found the answer to these fairly intractable problems.
I did not anticipate that the main point of contention would be where God came from. Of course, as the theologians tell us, God is omnipotent, omniscient and omnipresent, so all those who have claimed that He is from their constituency are able to do so quite accurately. A point that I think is beyond any debate is that He is happiest, if not necessarily warmest, when he is in Orkney and Shetland.
Question put and agreed to.
Resolved,
That this House has considered Government policies on tackling fuel poverty.
Energy Rebates: Highlands and Islands
(2 weeks, 1 day ago)
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Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)
I beg to move,
That this House has considered the potential merits of energy rebates for the Highlands and Islands.
It is a pleasure to serve under your chairmanship, Sir Roger. I am here to address a matter of critical importance to my constituents in Moray West, Nairn and Strathspey, and indeed to residents across the highlands and islands: the vital need for a highland energy rebate. I first pay tribute to my predecessor, Drew Hendry, who played a leading role in the campaign, and my hon. Friend the Member for Argyll, Bute and South Lochaber (Brendan O’Hara), who has been involved in the campaign since its inception.
Our region’s unique energy challenges would be met by a highland energy rebate—a solution that is as equitable as it is necessary. First, let us acknowledge the glaring inequity and downright discrimination in our energy landscape. The highlands and islands contribute disproportionately to the UK’s renewable energy supply, yet we bear the highest energy costs. That is particularly unjust considering that our region generates about 5.5% of the UK’s total renewable energy, while our population constitutes only 0.4% of the UK total. Despite the fact that we power homes across the UK, our residents face some of the highest fuel poverty rates in the UK.
That regional discrimination has been compounded by the removal of the winter fuel payment from so many vulnerable people in some of the coldest parts of the UK, in communities such as Aviemore, Kingussie, Newtonmore, Grantown-on-Spey and Tomintoul in the Cairngorms in my constituency, and many others across the entirety of the highlands and islands and Moray. For decades, these communities have paid far more than most for the basic human need to stay warm. People living in the north of Scotland quite literally have energy generated within sight of their homes, but it is transmitted hundreds of miles away so that other consumers can pay significantly less to heat their homes.
This situation is simply a legacy of long-standing structural failures in the energy regulation system, and a lack of action by successive UK Governments and the regulator, Ofgem. In a previous debate, the Minister mentioned giving Ofgem more teeth to deal with energy suppliers, but who deals with Ofgem’s failings? We need to tackle that. As a result of the situation, our residents, especially those not connected to the gas grid—representing the vast majority—rely almost exclusively on electricity for heating. That electricity comes with elevated standing charges and higher unit rates compared with the rest of the UK.
What are the consequences? The impact on the quality of life and economic wellbeing of our communities is severe. Recent data from the Highlands and Islands housing associations’ affordable warmth group reveals that households in our region pay about 40% more than the UK average for energy. To highlight the disparity further, daily standing charges for electricity in northern Scotland stand at 61.98p, compared with 41.59p in London. That, coupled with higher per-unit rates, translates to energy bills that burden our residents and, for many, make basic heating a struggle to afford.
Jim Shannon (Strangford) (DUP)
I thank the hon. Gentleman for securing the debate. I recall the two Members to whom he referred, including a former colleague, and their campaigns. In the previous debate, I also referred to the 26.5% of people in fuel poverty in Scotland. Does the hon. Gentleman see a methodology to get help with an energy rebate based on temperature, or would he base it on the cost, where it is higher for fuel, in the circumstances that he is referring to?
Graham Leadbitter
The basic issue relates to the regional inequity, which has to do with the regulation of the system and of how distribution charges are applied and basic unit prices charged. Those are generally much higher. It is more than just the temperature issue; it is about the whole structure of the energy system.
Fuel poverty rates in our region are stark: 39.8% of households in Na h-Eileanan an Iar, 32.9% in the highlands and 31.6% in Moray experience fuel poverty. In Na h-Eileanan an Iar alone, 24.3% of households face extreme fuel poverty, a rate that is unmatched across the UK.
The highland energy rebate would represent a fair solution. It would be an actionable, just and necessary response to the challenges. The rebate would provide essential financial relief to those burdened by the high cost of energy. Such a measure would help to alleviate the financial pressure on families and individuals who already endure the highest levels of fuel poverty in the UK. Beyond the immediate household impact, a rebate would boost the local economy and reinforce the economic stability of the highlands and islands. By lessening the financial burden of energy costs, we can empower residents, enabling greater participation in our communities and stimulating local economic activity.
What can we learn from the existing frameworks? Critics may argue that implementing such a rebate is complex or costly, but let me be blunt: people who live in fuel poverty and face the choice of heating or eating on a day-to-day basis have a day-to-day existence that is also complex and costly.
Similar rebate frameworks exist not only in various countries across Europe—Norway and Denmark, for example—but here in the UK. The hydro benefit replacement scheme was well intentioned, but it fell short of supporting our vulnerable consumers adequately. In 2022, a brief review noted that the scheme
“does not…provide an efficient or effective way of”
supporting
“vulnerable consumers”.
Given the additional £49 million paid by highlands and islands energy consumers over the past three years, our communities cannot afford continued shortfalls in targeted support. We deserve a scheme that is equitable, modern and regionally tailored. The recently proposed household energy rebate of £10,000 over 10 years for those living near new energy infrastructure underlines the precedent for providing regional support. A highland energy rebate would take us a step further, applying it to areas where renewable energy infrastructure already exists, and supporting the nation.
In conclusion, this is a matter of fairness, equity and regional support. The highlands and islands play a pivotal role in the UK’s clean energy production, yet we bear the highest costs. The highland energy rebate would be an acknowledgment of the contributions of our communities and would ensure a share in the benefits of the energy they help create. I urge everyone here today to support this campaign for a fairer energy system and for economic justice for the highlands and islands, and I hope the Minister will take this opportunity to provide an assurance that the new Government will take this matter seriously and act quickly to address the inequalities in our energy system and lift people out of fuel poverty.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
I thank the hon. Member for Moray West, Nairn and Strathspey (Graham Leadbitter) for securing this incredibly important debate. He has the pleasure of representing one of the most beautiful parts of Scotland, to which I enjoy going on holiday often. It is great to be discussing this long-standing issue for the highlands and islands of Scotland, which, as he mentioned, was also raised by former Members.
The context of this discussion is important. Energy bills are too high for too many people right across the country, not just in the highlands and islands. This Government have made it clear from the outset that we want to put in place an energy system that delivers lower bills permanently; removes the price spikes that all our constituents, including those in the highlands and islands, have faced over the past few years; and speeds up the transition to home-grown clean energy.
The hon. Gentleman made the point, as have others, that the north of Scotland plays an important role in delivering clean energy at the moment. That brings us back to a conversation that we have had in this place a number of times—indeed, in the previous debate, I recruited the hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald) to help me with it—on community benefits. We need to do much more for the communities that host this nationally important energy infrastructure and the network infrastructure that goes with it to get power across the country. They should feel benefits from that in their bills and their local communities, and we are looking at that.
The creation of Great British Energy, the first publicly owned energy company in this country for 70 years, is about harnessing clean energy and investing in communities, and of course it will be headquartered in Scotland. I know that the hon. Member for Moray West, Nairn and Strathspey and his SNP colleagues did not support the Great British Energy Bill, but I hope that in time they will see the benefit of Great British Energy delivering a greater quantity of cheaper energy right across the UK, which will bring down bills for everyone, wherever they are.
The hon. Gentleman made an important point about locational pricing. If we were to design an energy system from scratch, we would not design the system we have at the moment, which is the legacy of electricity infrastructure being built in different places, at different times and in different ways across this country for a century. Our ambition is to deliver a lower-cost, renewables-based energy system, so we are considering what reforms to the energy market will look like to enable electricity prices to better reflect local conditions. That could have a significant impact on communities like the one the hon. Gentleman represents, recognising that there should be some relationship between where energy is generated and the price people pay for it.
There are potential reforms on the table. The previous Government started the consultation and we have picked it up. Many hon. Members will be aware of the options. They include the possibility of zonal pricing, but it is important that we balance such options with potential capital investment impacts, so there is detailed work going on before we reach any decisions. Reform of the electricity market does not have to be defined simply by locational pricing; we will look at a number of other reforms to the national pricing model, and we continue to work closely with the regulator, Ofgem, and the new publicly owned National Energy System Operator to look at how they might work.
The hon. Gentleman’s point about transmission and distribution costs comes up in debates inside and outside this place. It is important to recognise the difference between the two. Electricity network charges are paid for connecting to, and using, the electricity network. They are paid by consumers across the country, both industrial and domestic, through the standing charge on their energy bill. Transmission charges are based on the costs that users impose on transmission by connecting in different locations, which means that there are higher charges for those areas that require energy to be transmitted a long distance. However, as we have discussed, transmission costs are generally lower in the highlands and islands than in other parts of Great Britain because Scotland is a net exporter of energy.
As the hon. Gentleman pointed out, the difficulty comes with the distribution cost, which is the cost of supplying households in each area with electricity. It is based on the complexities of how we get electricity to individual households, so places like the highlands and islands face higher distribution costs, for obvious reasons: the mountainous terrain, sparse population, distance between houses and poor weather conditions all contribute to those costs being some of the highest in the UK.
Graham Leadbitter
On the point about transmission charges versus distribution charges, transmission is, in effect, distribution to the rest of the UK. Energy is transmitted for people to purchase at the other end. It does not cost any less to do that—in fact, it costs more. Purchasing energy hundreds of miles away from where it is created, but paying less to receive it, seems completely inequitable.
Michael Shanks
I think that would be true if transmission charges were higher in Scotland than in other parts of the UK, but that is not the case. Distribution charges might be lower in certain parts of the rest of the UK, but the transmission charges are higher, taking into account exactly that point.
We would like to get the grid into a place where we have much more generation capacity being built next to population centres, as well as the investment in the highlands and islands and the North and Celtic seas, but there is no doubt that the grid we will need to build in the future will be very different from the one where we built a gas or coal power station next to a city. We do have to wrestle with these questions of how we get power to the right place.
We also have to take into account how to build in capacity for when renewables are not generating. Parts of Scotland may well generate more electricity than they can use, but not always—not 24/7, 365 days of the year—so the whole grid has to be part of the answer. As the hon. Member referred to, one solution is the hydro benefit replacement scheme. It provides annual assistance of about £112 million to reduce distribution costs for domestic and non-domestic customers in the region, which works out at around a £60 annual reduction in household bills.
Many hon. Members have raised the really important point of standing charges, which are considerably higher in the highlands and islands than in many other places. The setting of standing charges is a commercial matter—they are not fixed by Government—and is regulated by Ofgem. However, the Government have taken the view, as we made clear during the election and in subsequent weeks, that the burden of standing charges on energy bills is far too high. We have had a number of conversations with Ofgem and others about that, including on the amount of variance between standing charges across the UK.
We are committed to lowering standing charges overall, and we have been working constructively with Ofgem on that. In August, Ofgem published a discussion paper addressing many of the issues on standing charges. It sets out the options for how we can reduce them, including moving some supplier operational costs off the standing charge and on to the unit rate, which would rebalance some of the issues raised by the hon. Member; increasing the variety of tariffs available to consumers in the market; and, in the longer term, reviewing how system costs are allocated. That will affect consumers in many ways, but in the meantime we want to work with Ofgem on any practical steps we can take to reduce standing charges as much as possible.
Before this debate, we had a debate on the wider questions around fuel poverty. I will not go over many of those points again, but I will just make the point that many aspects of fuel poverty are devolved to the Scottish Government, which in the autumn Budget last year received the biggest settlement since devolution. We have also announced £1 billion through the warm home discount, which provides an annual £150 rebate off bills for low-income households. That has a Barnett impact and there is therefore money for the Scottish Government to invest if they wish to do so.
The household support fund is an England-only scheme to provide support for those most in need. Of course, it is for the devolved Governments to decide how they want to allocate the additional funding, and the Scottish Government have not implemented a like-for-like scheme, but they do have a wide range of support for households in response to the cost of living crisis.
As I said, we had a very good debate just before this one on fuel poverty. The Government are committed to tackling it. Policy in this area is devolved in Scotland, but this is one of many questions about how we bring down costs for all consumers right across the UK. In our plan for clean power by 2030, we commit to delivering what will be cheaper energy—that was confirmed by the NESO this week. It will require a huge amount of effort, but as part of that we are committed to looking at the review of energy market arrangements as well.
This is a complex issue with a number of layers to it. I thank the hon. Member for Moray West, Nairn and Strathspey for raising it again. The challenge of how we lower bills for all is part of the energy trilemma that we are facing around how we demonstrate climate leadership, improve our energy security and lower bills in the long term. It is one that we are tackling head on, and we are determined as a Government to ensure that we do what we can to lower bills for all households across the country—in the highlands and islands, and right across the UK.
Question put and agreed to.
Furniture Poverty
(2 weeks, 1 day ago)
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Sir Roger Gale (in the Chair)
This is a one-hour debate. Four Members, in addition to the Member in charge, have already indicated that they wish to speak. We are pushing the clock a bit, so anybody who has not already so indicated is unlikely to get called, although that depends on how long Members speak for. Members may wish to consider intervening rather than trying to make a speech.
Sam Carling (North West Cambridgeshire) (Lab)
I beg to move,
That this House has considered furniture poverty.
It is an honour to serve under your chairmanship, Sir Roger. I am delighted that many colleagues have come to this debate, as furniture poverty often flies under the radar. Other colleagues have been campaigning on it for some time. My hon. Friend the Member for Uxbridge and South Ruislip (Danny Beales) asked a question about it recently, and I noted a written question about it from my hon. Friend the Member for Liverpool Riverside (Kim Johnson). Soon, my hon. Friend the Member for Neath and Swansea East (Carolyn Harris) is hosting an event in Parliament on the subject, and I encourage colleagues to attend.
Furniture poverty is the lack of essential furniture items to make a house a home. That typically means a bed, a mattress and bedding; a table and chairs; a sofa; a wardrobe or chest of drawers; carpets or other flooring; curtains or blinds; a washing machine; a fridge and freezer; and a cooker or oven. In no way is it about want. It is about need—the furniture needed to attain a socially acceptable standard of living. Without all those items, it is difficult to achieve that. For example, living without a proper bed leads to poor sleep and difficulty focusing at work for adults and at school for children.
Mr Jonathan Brash (Hartlepool) (Lab)
In my constituency it is estimated that around 1,500 children do not have a bed to sleep in at night. Given the monumental impact on their education and mental health, does my hon. Friend think that there is a special case that needs to be addressed, particularly to support children in my constituency and others?
Sam Carling
My hon. Friend makes his point well. Lots of children are affected in a number of constituencies around the country. I have some statistics on that later in my speech, and I am grateful to him for highlighting the situation.
Living without a cooker means more ready meals and takeaway food, which is less nutritious and more expensive. No cooker means an average of £2,100 extra for a family of four per year on their food bill. No fridge or freezer tacks on another £1,300 to that food bill, due to an inability to buy in bulk or store food safely for future use. To avoid damp or dirty clothes without a washing machine, going to a launderette—of which there are few—adds just over £1,000 to the household bill. Those figures are from April 2023; increases in inflation and to energy bills since then mean that costs are likely to be higher now.
This is a poverty premium. Furniture items are a huge initial expense, and many low-income households simply do not have the money to shell out for them. However, their absence is far more expensive over time.
Kim Johnson (Liverpool Riverside) (Lab)
I thank my hon. Friend for securing this important debate, although I am sure he agrees that as the sixth richest economy in the world, we should not be having it. End Furniture Poverty has worked with local authorities in Liverpool to ensure that at least 10% of registered social landlords’ properties are furnished. I am sure my hon. Friend agrees that that is not good enough. Will he join me in calling on local authorities to find more resources to ensure that we do not have people living in furniture poverty?
Sam Carling
I am going to mention End Furniture Poverty later in my speech. It is an excellent organisation that is doing good work, particularly with Liverpool city council in my hon. Friend’s constituency. She makes her point well.
Furniture poverty has a huge impact on both physical and mental health. According to a National Centre for Social Research survey of people experiencing furniture poverty, six in 10 reported that it caused them physical pain, while nine in 10 felt stressed or anxious living without essential items and, crucially, worried that they would not be able to replace items should they break. The anxiety is constant. Seven in 10 reported feeling ashamed or embarrassed by their own home, reflecting a social stigma around furniture poverty that leads those suffering to invite family and friends around less, increasing isolation.
Upsettingly, seven in 10 people surveyed who also had long-term conditions or disabilities said that living in furniture poverty made their condition worse. For those coming from homelessness, it is especially difficult. In my region of Cambridgeshire and Peterborough, I know of a resident who was finally offered a flat, after living in her car for months. Although that was a relief, not having anywhere to sleep in the unfurnished flat significantly undercut the benefits, as did the lack of other essential items.
As many as 9% of UK adults are missing at least one essential item, and more than 1 million are living in deep furniture poverty, which is defined as missing three or more essential items, while 1.2 million children are in furniture poverty. This issue also disproportionately affects those from minority ethnic backgrounds, with 16% missing essential items, compared with 7% of white British people.
Tahir Ali (Birmingham Hall Green and Moseley) (Lab)
I thank my hon. Friend for securing this debate. There are two wards in my constituency where child poverty is at 63%. That cannot be allowed to continue. In the past 10 years, from 2014 to 2024, it has increased considerably. We need to take action and ensure that that increase declines. This is a once in a lifetime opportunity to do that.
Sam Carling
I thank my hon. Friend for raising that point. He cites the specific statistics in his constituency; I am sure we will hear more in the Minister’s response about the Government’s plans to address that situation.
Starkly, if someone has a disability, they are three times more likely to be in furniture poverty than non-disabled people. The issue is at its worst in the social rented sector. Only 2% of social properties come with any furniture at all, meaning that most people move into an empty box, not a home. That means that more than a quarter of social tenants are in furniture poverty.
Landlords also often throw away any furniture that is left when tenants move. That extends, most absurdly, to flooring. Nearly 760,000 adults in the social rented sector are living without flooring. That means walking around on cement, wood with nails sticking out, or dirty underlay. That is often because it is ripped up by landlords when previous tenants leave, supposedly because the floor might be dirty. In most cases, perfectly good flooring is removed just because it is the quickest and easiest thing to do. That means that tenants have to put in flooring themselves. Data from May this year show that 83% of residents self-funded floor coverings, with only 1% receiving support from their landlord.
Very few charities or local welfare schemes cover flooring, meaning that many just have to make do with nothing. Beyond being a hazard, a lack of carpet or adequate flooring makes a property far colder in winter, increasing heating costs. The Welsh Government recently took the extremely welcome step of requiring social rented homes to provide flooring from the point of let, regardless of whether properties are considered furnished or not. I strongly encourage the Government to follow the lead of our Welsh colleagues by bringing in a similar measure, as we review our own decent homes standard.
In the private rented sector, things are better, with 29% of properties let as furnished, which provides tenants with choice. However, there is ambiguity over that figure. It could include serviced flats for those with higher incomes. There is also no legal definition of a furnished property, meaning that what counts as furnished can vary from landlord to landlord and property to property. Some properties are advertised as furnished, only for tenants to arrive and find they do not have a mattress, cooker, fridge or another essential furniture item.
I have personal experience of that. When I moved into a new flat in August, I arrived to find there was no mattress to sleep on. I had to order one myself at short notice, but I am lucky to have been able to do that. So many people are not able to deal with significant unexpected expenses like that. I firmly believe that we need to define formally what “furnished” means, to empower tenants to challenge landlords who misleadingly advertise properties as furnished.
We have unfair trading regulations that should protect tenants but, when landlords are able to define “furnished” however they please, and with many not providing inventories of properties until a lease agreement has been signed and a tenant has been locked in, tenants cannot use those regulations effectively to challenge misleading practices. Other countries already have a legal definition—France, for example—so it would not be an unusual step. There are ample opportunities for us to do it, either through the decent homes standard, as we review it, or in secondary legislation arising from the Renters’ Rights Bill.
Other problems in the sector can exacerbate furniture poverty, with the sheer levels of rent people pay in the private sector being a major one. Private renters spend on average more than the recommended maximum of 30% of their wages on rent, which can make it difficult to buy or replace costly items. It is also possible that replacement furniture items are required more often in the private sector, due to mould and damp, given that a higher proportion of homes in the sector do not meet the decent homes standard compared with other forms of tenure. I welcome the fact that the Government have already taken steps to address that situation in the Renters’ Rights Bill.
I want to highlight some of the work done by charities and local authorities. End Furniture Poverty, a charity based in Liverpool, is the leader on research in this area and I have drawn on its useful statistics throughout my speech today. End Furniture Poverty has worked with councils up and down the country, including Liverpool city council; in Liverpool more than 50% of social landlords have pledged to start a scheme to tackle furniture poverty. It has also worked with Cambridgeshire county council. Next week at its parliamentary event, I look forward to the presentation of End Furniture Poverty’s work and to hearing how that will affect my constituents in North West Cambridgeshire.
However, although charities do good work, they cannot do it all and they have been impacted by the difficulties in local government finances under the last Government.
Jess Brown-Fuller (Chichester) (LD)
I am sure the hon. Member will join me in celebrating Second Chance Chichester, which in my constituency is working with an organisation of crafters to restore furniture, in order to make sure that local families have access to the essential furniture they need. However, because of pressures in local government, it is becoming increasingly hard to get grants for the charitable work that it does. Does he agree that the local government settlement cannot come soon enough?
Sam Carling
I have been a councillor myself for a number of years, so I am very much aware of the difficulty that local government is facing and I agree that we need to see improvements in that regard. The situation is extremely difficult for the Government, of course, given the horrendous inheritance that we have had from the previous Government on this issue and on the broader economy in general. However, I certainly look ahead, especially to the multi-year settlements that the new Government have pledged to bring forward, which will be incredibly useful for councils.
In February, three in 10 charities that work with local authorities said that they expected their funding to fall, but even charities that derive no income from local government felt that challenges in local finances would affect them, with 33% of them saying that there would be a knock-on effect for their organisation.
What can be done about furniture poverty? There is a case for some work to be done on local welfare assistance. These schemes are an ideal source of support for people who require one or two essential furniture items. They also provide vital assistance for food and fuel, and many of them offer a wide range of other support. However, budgets for local welfare assistance have dwindled over the past decade, after responsibility for schemes was devolved from central Government to local government and as local authority budgets have been greatly reduced. That is the key point. Devolution is not a bad thing, but it must come with the funding to deal with the new powers.
Right now, 36 local authorities have closed their local welfare scheme, meaning that whether people can get the support that they need has become something of a postcode lottery. That is no huge surprise given the perilous state of local government finances after the last Government’s failures. The new Government’s extension to the household support fund in the Budget is very welcome and will be vital to so many people who need it.
What will be key is effective regulation of the social and private rented sectors. The statistics from the social rented sector are stark. Social landlords need to provide more of their stock as furnished, and I believe that potential legislative routes to achieve that should be considered. In the private rented sector, the Renters’ Rights Bill does much to tackle the overriding issues that exacerbate furniture poverty for renters and shows how important regulation is. I encourage the Government to consider the small, additional regulatory changes that I have outlined in this speech, which could make a real difference to people in furniture poverty.
I appreciate that because this issue is a cross-departmental one, the Minister may not be able to respond to all of my points, in which case I ask her to raise any outstanding points with the relevant Minister and ask them either to write to me or to meet me to discuss them. That would be very helpful.
I will end there and defer to colleagues, who I know have lots of valuable contributions to make.
Several hon. Members rose—
Sir Roger Gale (in the Chair)
Order. If we can keep contributions to about five minutes each, we might be able to get everybody in.
Jim Shannon (Strangford) (DUP)
It is a pleasure to serve under your chairmanship again, Sir Roger. I congratulate the hon. Member for North West Cambridgeshire (Sam Carling) on securing and introducing this debate. I will give a Northern Ireland perspective, as I often do, and say what we are doing in my constituency.
End Furniture Poverty has stated that 9% of all UK adults over 18 are missing at least one essential furniture item. Furthermore, 1 million adults are in deep furniture poverty, meaning that they are missing more than three essential furniture items. Those items can include a bed, a wardrobe, a cooker, blinds or curtains, or indeed a fridge-freezer. Those things are absolute necessities for all homes.
End Furniture Poverty estimates that at least 6 million people in the UK are experiencing some sort of furniture poverty. In addition, in the year 2022-23 the number of people living in absolute poverty increased by half a million people before housing costs and by some 600,000 people after housing costs. Further analysis has revealed that at least 1.2 million children, or at least 9% of all children, are experiencing furniture poverty within those households. The average cost of an item is some £250, which means it would cost approximately £2.25 billion to end furniture poverty. That is quite a challenge.
We often forget about the different types of poverty and how they can affect families across the UK. The debate today on furniture policy is so apt and important for our constituents, as I will illustrate.
I am very fortunate to have a number of churches in my constituency that help with furniture poverty. I would like to mention one in particular that I deal with regularly simply because it is available and very attentive to any requests that we put forward. My office has a great relationship with the St Vincent de Paul organisation, a UK charity that supports those who are on the breadline and at risk of being plunged into absolute poverty, and which estimates that almost 1 million people—a massive figure—experience enforced deprivation. St Vincent de Paul has been fantastic, working with my office to provide direct support for household goods, and it does so regularly without any questions whatsoever. Each week in the office, we deal with people in desperate need.
It is also great to hear that other organisations in Northern Ireland have schemes to support people with household goods this winter. We are at that time of year again; Christmas time brings it home very clearly. Today’s debate comes at a time when many of us are focused upon this very issue, as so many people are struggling with rising energy bills, the cost of living, and cold weather on the horizon. We are often reminded that individuals and families out there are really struggling, and it is important that there is support for them out there.
I will conclude now and hopefully allow others a few minutes to participate. It is critical that provision is made to ensure that families have the best support. This debate gives that opportunity. We look forward to the Minister’s contribution and that of the shadow Minister. Furniture poverty has proven to be a real issue, which so many people are experiencing, given the dire statistics that I have mentioned. We must do more to support the charities. If the Minister does not mind my saying so, I think there is an opportunity for us to work hand in hand with charities. That should be done as a matter of course. Perhaps the Minister will comment on that point, and perhaps together we can provide support for the people who need it.
Danny Beales (Uxbridge and South Ruislip) (Lab)
It is a pleasure to serve under your chairmanship, Sir Roger. I thank my hon. Friend the Member for North West Cambridgeshire (Sam Carling) for securing this important debate. We can see from Members’ interest the importance of the subject to everyone.
This topic is also quite dear to my own heart, as I have discussed before. Growing up, my mum and I were unfortunately homeless twice. After moving to hostels, B&Bs and temporary accommodation, we were finally given the keys to a new council house—but with no curtains to keep out the daylight and give us privacy, and no bed, only a duvet, and then eventually a shared mattress on the floor to sleep on, so although we had a roof over our heads, we certainly did not have a comfortable and warm home. Unfortunately, experiences like that are all too common in 2024.
For families like mine when I was growing up, who have been made homeless or squeezed out by the precarious private rented sector, it is rare to be able to afford to furnish a property. Colleagues will have seen properties in their constituencies with furniture dumped outside, as people have to quickly leave their private rented sector property with nowhere to go. That challenge has been compounded by the cost of living crisis: we have seen a 31% increase in the cost of furniture between 2020 and 2023.
When my constituents in Uxbridge and South Ruislip are evicted from their homes—my inbox is a testament to the fact that that is an all too common occurrence—they have no idea where they are going to sleep that night. They are told by the council to fit all their belongings into one black bin bag and to turn up at the civic centre. Clearly, one bag of belongings will not contain a bed frame for their children to sleep on, an oven to cook their meals or a fridge to store their medication. These families are also clearly unable to afford storage, which is very expensive, or transport to move their belongings to whatever temporary accommodation they are eventually given. They have to throw away vital belongings or leave them behind, leading to further distressing and life-changing impacts, on top of their homelessness.
Should a family eventually be fortunate enough to get a permanent house, as we have heard today and from the excellent work of charities, only 2% of social housing is furnished—significantly less than in the private rented sector. Many are left without the essential items that we all need for a constructive and healthy life. As we have heard, this issue affects 26% of people in social housing, and a significant group are in deep furniture poverty as they lack three or more essential items. That particularly affects the most disadvantaged, the disabled and people from ethnic minority communities, who have a higher rate of furniture poverty.
The impacts of furniture poverty are scarring; they are often lifelong and life-changing. There is a health impact if a young family cannot get the nutrients they need from a balanced diet because they cannot afford an oven, or even a microwave to heat up a ready meal. If children are unable to get a good night’s sleep because they do not have a bed, or if they cannot do their homework because they do not have a desk like their peers do, there will be a lasting impact on their development. Great research from the End Furniture Poverty campaign, about which we have rightly heard fantastic things, shows that there is a significant extra financial impact on families, through their food and heating bills, if they are not able to afford those basics.
Lacking the necessary furniture items is a trap. It often forces families already facing financial hardship and homelessness to approach unscrupulous loan sharks, take out further debt or borrow money from friends and family if they can, and that leads to a cycle of poverty and destitution, which leads to rent arrears and higher eviction rates—and the cycle begins again.
The good news is that we can end furniture poverty. Since taking power, the Government have shown that they understand the importance of working with local government, where many of the solutions lie. We need to empower and support local authorities to tackle this issue. There are many good local initiatives—we have heard about some in Liverpool—but we need more. We need to work with local and regional government on regional reuse hubs, so that furniture and appliances left behind in properties can be reallocated to the families most in need. Local recycling centres often have furniture that people do not want to see go to waste. Why can we not reuse it for those in social housing and furniture poverty?
We need to look at the household support fund, to which the Government made a strong commitment of £1 billion in the Budget. Unfortunately, a lot of that funding is used not for household items, but for other issues. Can the guidance for the fund be strengthened to highlight the importance of tackling furniture poverty?
As has been said, we need to work with housing providers and registered social landlords to help them reach the key goal of 10% furnished social housing stock. We are rightly updating the decent homes standard, but it must include both the inside and the outside of a home. Furnishings are part of decent housing. I welcome the Government’s commitment to the homelessness strategy and the child poverty taskforce. Those welcome and much-needed pieces of work could play convening roles in tackling this issue.
Tackling furniture poverty will also address the strain on the public purse. We know about the impact on poverty, health and education. Although there is a cost to tacking this issue, it will ultimately lead to savings for health, education and special educational needs bills and for the welfare state.
I thank the charities for their fantastic work on this issue. They give much-needed support to families in our communities—Trinity Homeless Projects in my constituency does fantastic work—and provide advocacy and action in this space. I thank Members for their contributions. I look forward to hearing from the Front-Bench team and working with them to tackle this issue, deliver the change that people in this country not only want but desperately need, and end furniture poverty for good.
Mike Reader (Northampton South) (Lab)
It is a pleasure to serve under your chairmanship in my first ever Westminster Hall debate, Sir Roger. I am very grateful to be here. It is an honour to follow some fantastic contributions. I thank my hon. Friend the Member for North West Cambridgeshire (Sam Carling) for raising this issue.
As has been said, 6 million people in the UK live in furniture poverty, which means that nearly 10% of the UK population do not have access to at least one essential item of furniture. As my hon. Friend said, that definition is not clear. Even though I have become interested in the issue since joining the House and witnessing the advocacy of some great organisations, when I speak to my friends about furniture poverty they think it is about cookers and fridges. In actual fact, a big part of furniture poverty, and what I want to focus on today, is fabrics: carpets, floor finishes and window coverings.
To pick up on some of the points that have already been made, furniture poverty more generally has a much bigger societal impact than just that direct impact on families. There is a link between families in insecure homes, their health outcomes, and the pressures placed on their local authorities and care organisations. Families who do not have good fabric in their homes—carpets or window coverings—typically have higher energy bills, and the insecurity that furniture poverty creates causes social and other issues.
My hon. Friend the Member for North West Cambridgeshire mentioned that 70% of people feel socially isolated due to the impact of furniture poverty. That leads to shame, with people, including kids, not having their friends round when they want to, causing families and older people to become isolated as they struggle with stress and anxiety. It was also mentioned that 60% of those in furniture poverty struggle to maintain healthy eating habits, which has a knock-on effect not only on the individual but on our health system and the health of our nation.
I want to talk a bit more about carpets and window coverings. I have joined the House from the construction industry and found that this Government have a big focus on housing—it is fantastic to see that that is one of our five missions. There are 1.2 million people living without suitable floor coverings in their homes and about three quarters are in social housing. Similarly, about 870,000 people are in homes without appropriate window coverings, and about half of them are in social housing. Although this is a big issue for the social housing sector, it affects not just people in that sector, but everyone. Indeed, we have had representations today from Northern Ireland to the north of England and even down to London, showing that this is clearly an issue that affects the whole UK.
From an environmental perspective, the lack of suitable floor and window coverings means we see significant heat loss from properties, which ultimately raises people’s energy bills and can compound the impact of cold winters on elderly people. With rising temperatures in the summer, particularly as a result of climate change, we also see an impact on the ability of older people and families to keep cool in the heat. End Furniture Poverty recognises, and has fed back to me, that the issue also creates hazards for those with mobility challenges, particularly where floors are not suitable for the use of mobility equipment.
I welcome the fact that the Government have extended the household support fund, because one of the big things we can do is make sure that funding is available for people, particularly where there is no local welfare scheme in place. My constituency of Northampton South is part of the West Northamptonshire council unitary authority area, and there is no local welfare scheme there, so people rely on the household support fund. Frustratingly, despite my council having a cross-party anti-poverty taskforce, I have yet to see a focus on furniture poverty. When I meet the council leader in a few weeks’ time, it will be on our agenda to discuss how, of the £5.2 million from the household support fund given out by West Northamptonshire council, only £168,000 went towards alleviating furniture poverty, despite massive levels of it in my constituency. We have heard similar cases, and I am sure we will hear more from others.
I will end by asking what the solutions could be, and hopefully help the Minister to address this challenging situation. My hon. Friend the Member for Uxbridge and South Ruislip (Danny Beales) rightly talks about furniture reuse, and although that is a solution, it is becoming increasingly difficult. Fire retardants used in older furniture are now proven to be hazardous, and the Furniture Industry Research Association, which tested furniture that could potentially be used in social housing, found that only in one in six passed modern standards, showing that sometimes when we reuse furniture, we are actually passing on the problem. Ultimately, the problem of social landlords’ liabilities is exacerbated if they encourage furniture reuse but cannot prove that it is safe for families, children or older people.
Design for reuse is also important. We are seeing an economy and a society where there is more disposable furniture that is used only once or for a few years, or bought on the cheap and then chucked away. If we are to drive up the reuse of furniture, we have to do more to encourage industry to address that challenge in the way it designs furniture for reuse.
As my hon. Friend the Member for Liverpool Riverside (Kim Johnson) mentioned, we see many furnished tenancies in some areas such as London, and fewer in constituencies such as Northampton South. End Furniture Poverty has advocated for a 10% target for social landlords. I agree in principle that that is a good idea, but without the funding and support for social housing—particularly, in my constituency, for Northampton Partnership Homes—that would put real pressure on services and is not a viable solution. I know that the Government are working hard on getting that funding right.
We can also design out the need for reuse in the way that we design our buildings. The Government committed to a council house building revolution to design out the need for temporary floor coverings, and to design windows, fixtures and fittings to allow for the easy replacement of curtains and blinds. The way that we design our buildings in the first place can make it easier for social landlords to replace things cheaply and efficiently when they run out.
The corporate social responsibility of carpet manufacturers has piqued my interest. It is a niche issue, but Northampton South is the home of the UK’s only carpet recycling centre for non-wool based carpet. Through a small innovative business in Duston in my constituency, we can take old carpet cut-offs from carpet manufacturers, break them down through electrolysis, and turn them into pellets that make car bumpers.
I am interested to check what happens to wool based carpets that cannot be recycled through that process. If Tapi Carpets and those other big manufacturers get to the end of the line and they cannot sell the carpet, where does it go? How can we get it back into the system, potentially through social enterprises? There is an interesting social enterprise in my constituency called Goodwill Solutions that may have a solution for how we can reuse it and get it into the homes that desperately need floor coverings.
As my hon. Friend the Member for North West Cambridgeshire said, I recognise that we must end furniture poverty. I am confident that the Government understand the issue and that we will address it in our drive to improve housing standards and, hopefully, through the decent homes standard and the housing quality standard in Wales.
Chris Bloore (Redditch) (Lab)
It is an honour to serve under your chairmanship, Sir Roger. I congratulate my hon. Friend the Member for North West Cambridgeshire (Sam Carling) on securing the debate. I will share my experience and reaffirm my incredible admiration for my hon. Friend the Member for Uxbridge and South Ruislip (Danny Beales): every time he tells the story of his upbringing and the challenges that he has faced, I am grateful to consider him a colleague in the House and grateful that he has shared his message with the Chamber.
I admit that I had a fortunate and comfortable childhood. I had a stable home with everything that I could ever need to do my homework, organise my things and get a good sleep—things that I shamelessly took for granted. It was not until I left primary school that I realised that many of my friends faced different challenges and experiences at home that I could not have even imagined at such a young age. It was then that I first understood the detrimental impact that furniture insecurity had on the lives of many of my friends. I remember visiting one of my closest friend’s houses for months, with the washing machine broken and their parents frantically hand-washing every evening while we played video games and ate pizza.
Mrs Sarah Russell (Congleton) (Lab)
I want to raise a point about washer-dryers, as opposed to washing machines. As a mother of three, I spend a lot of time doing the washing. It sounds like a trivial point, but in north-west England it is incredibly difficult to get washing to dry—it starts raining in October and keeps going all year. It is all well and good if the household support fund provides washing machines, which are great and a good start, but that will not solve the whole problem. I implore the Minister to raise the point about dryers. Of course, there are other problems about affording the electricity to run them, but we will create damp in homes if people cannot dry clothes in them.
Chris Bloore
My hon. Friend makes a valid point.
At the time, I did not know that both my best friend’s parents had lost their job and had gone for months without work, which meant that their important savings were going towards keeping a roof above their head, rather than on a new washing machine. I remember suddenly not being able to visit my friend or to stay over. Later, I learned that that was because his bed was broken and he was too afraid to let me sleep over, as I would see him sleeping in a sleeping bag on the floor. Only thanks to donations from family friends were the issues resolved. In those years, the economy was in a relatively good position. Now, in my constituency, almost 1,000 children will sleep without a bed.
I am trying to be quick, but I will mention NewStarts, a community reuse social enterprise that was based in my county council division in Bromsgrove and has now opened a second branch with partners in my constituency in Redditch. For more than a decade, the chief executive Marion Kenyon, her staff and team of volunteers have provided free furniture, emergency food and household supplies to families and individuals in the greatest need, whether they are on low incomes or in financial crisis. Their dedication and compassion are unmatched. I look forward to visiting the branch next week. Their work, however, shows that furniture poverty is not an acute but a chronic problem, often the canary in the coal mine alerting us to many of the problems facing households.
Furniture poverty is absolute. It is a heartbreaking indictment of how all of us in politics must do more to support those who need support the most. Many of the ways that we can support those people were listed by my hon. Friends the Members for North West Cambridgeshire, for Liverpool Riverside (Kim Johnson) and for Uxbridge and South Ruislip.
I am happy to be a signpost. My excellent office team of Theresa Deakin and Monica Stringfellow are doing great work to link those who need support with existing organisations and funds, such as the household support fund, but that is not enough. I welcome the contents of the Renters’ Rights Bill, but it is time for a radical look at our welfare system and how we reward work and recognise when the system is not working. I am pleased that the Minister is present and that she has promised to reform our welfare system, but right now 10% of all adults live in furniture poverty. When I walk around my constituency, when I visit my schools and when I talk to careers advisers and teachers, it is the same children who are deeply affected by this issue. It is their life chances that we are talking about, and it is their dreams that have been broken by the fact that as a country we have not come to grips with this problem.
I implore the Minister to act. She has been a hero of mine for many years, outside this House, but the children who will staff our NHS, who will be the next generation of teachers, and who will rebuild this country and fix our foundations, are the children that need the Government’s support now.
Sarah Gibson (Chippenham) (LD)
It is a pleasure to serve under your chairmanship, Sir Roger. I thank the hon. Member for North West Cambridgeshire (Sam Carling) for securing this important debate.
No one should fear for their future, struggle to put food on the table or worry about heating their homes. The cost of living crisis has been a huge financial hardship across the country and has restricted the lives and chances of millions. Furniture poverty is particularly common in social housing, and it is a scandal that only 2% of social housing is fully furnished. As a new MP, like the hon. Member for North West Cambridgeshire, I have already experienced two examples where I helped constituents out of homelessness and into social housing, only to find that they moved into homes that were not furnished. Unfortunately, that is all too commonplace.
I am very grateful to the hon. Member for Uxbridge and South Ruislip (Danny Beales) for sharing his personal experience of homelessness and indeed of furniture poverty. Unfortunately, I must agree with him that the experience is sadly commonplace. In my constituency, we see it regularly.
The End Furniture Poverty group considers flooring to be an essential item and with good reason. Without flooring, as we have heard, it is hard to keep a property clean and, if the property is old—in particular, if it was built before the 1980s—not having flooring will make rooms difficult to heat. As the hon. Member for North West Cambridgeshire mentioned, that flooring is often thrown out, which makes it even more ridiculous.
Vulnerable members of our community, when they move into a home that should be a new start, should not feel as if it is still under construction, but that is often how they feel. Like the hon. Member for Northampton South (Mike Reader), I have a background in construction, and I was grateful to him for sharing his insights on the fabrics, in particular his point about the lack of flooring being the cause of various environmental issues. We should not feel as if that is happening. One point that I would make is that wool carpets can be composted.
We still have 1.2 million people in the UK whose lives and homes are without flooring. In my constituency, where more than 44,000 people are struggling with fuel poverty and 17,000 pensioners are due to lose their winter fuel allowance, many people are forced into choosing between heating their homes or visiting and having friends. I take the very clear point that people suffer from social isolation due to lots of these issues, and they do not dare to let people into their homes. I am sure we have all seen that when canvassing, when someone hardly opens the door because they are scared to let people see what is behind it. That is bound to cause all sorts of quite serious issues.
For the record, I note that Wiltshire Money in my constituency has held focus forums on the subject of furniture poverty, and I applaud the charities working across Wiltshire that have worked so hard to find ways of alleviating poverty in all its forms. As the hon. Member for Strangford (Jim Shannon) mentioned, the churches and charities are working hard, but the burden should not fall on them alone, and we are not doing enough.
I congratulate the hon. Member for North West Cambridgeshire on securing the debate and on raising this important issue. The Liberal Democrats are happy to support hon. Members on both sides of the House in any efforts to end the cost of living crisis and address furniture poverty as part of that goal.
Mims Davies (East Grinstead and Uckfield) (Con)
It is a pleasure to serve under your chairmanship, Sir Roger. I thank the hon. Member for North West Cambridgeshire (Sam Carling) for securing this debate and for his thoughtful speech that I learned many things from. We also had contributions from the hon. Member for Strangford (Jim Shannon), as ever, and from the new hon. Members for Hartlepool (Mr Brash) and for Northampton South (Mike Reader), who made an interesting point about home design. I agree with the Lib Dem spokesperson, the hon. Member for Chippenham (Sarah Gibson), about charity. The challenge is that “Hello, I’m from the Government and I’m here to help” is not always the right approach, but there has certainly been much to consider in this flooring debate.
I thank the new hon. Member for Uxbridge and South Ruislip (Danny Beales) for sharing the impact on him. I lost my home when my dad was made disabled, and I certainly did not have people round, due to his disability. We may have different approaches in this House to fixing things, but many of our experiences are similar. I thank him for sharing that, because these things are never easy to do.
The outgoing Conservative Government, certainly when I was in the Department for Work and Pensions, found furniture poverty to be a hidden issue. I will welcome hearing from the Minister, because we have often debated together and it is a pleasure to be in the Chamber with her. I believe that we had a strong record of understanding in this area in the DWP—I recognise some of the officials in the Chamber this afternoon—but the challenge is always about how to approach such matters.
Despite our delivering the fastest-growing economy in the G7—the economy was mentioned—the challenges around the pandemic and the war in Ukraine meant that supporting the most vulnerable was often a crucial challenge in the last few years. Benefits were rightly uprated with inflation, however: the state pension was uprated by 10.1% in 2023 and again by 8.5% this year. I was also proud to work on the £94 billion cost of living support, which I am sure the Minister will mention, and I was the Minister who delivered the key cost of living payments to 8.3 million people in 2023. That was no mean feat for the Department for Work and Pensions. I also signed into law the regulations to provide 6 million people with extra cost disability benefits—an additional £150 for disabled people.
The report by End Furniture Poverty is stark, showing that 55% of adults in fuel poverty have a disability and therefore need those extra payments. In fact, I have seen for myself some of the furniture poverty support that we provided as a Government, particularly in Wolverhampton. It was clear that fuel poverty is as much about materials and fabrics as it is about beds. I thank End Furniture Poverty for its report, and I appreciate that this is an issue that the Department is seeking to understand.
I also appreciate that the Minister and the Labour party have a somewhat complicated relationship with universal credit, but we know that universal credit works in getting support to those people who need it; it particularly worked during the pandemic. The move from a paper-based process was a key change that we certainly leaned on during the pandemic.
When I was a Minister, we were able to allocate £900 million from the dormant assets scheme to projects across the UK to alleviate wider poverty and to support the charity sector. I know that many local authorities understand the challenges and needs of their communities best, which is why I absolutely support the extension of the household support scheme. When I was a Minister, we really worked on flexibility in guidance for local councils. Whether it was about buying an air fryer, supporting people with energy bills, or buying a washer and a dryer, it was absolutely possible. In the first tranche of funding, £3.8 million and £4.8 million were awarded to my own local authorities in East Sussex and West Sussex respectively.
As I say, I have seen that funding in action in Wolverhampton. I have also seen the support that has needed to be given in libraries through the Citizens Advice services in East Grinstead and Uckfield in my constituency. I am glad that we are close to this need on the ground. I applaud the Government for supporting this, and I hope that alongside the uplift to the local housing allowance on which we were able to deliver, the Minister can persuade the Treasury that this is important work to continue with.
The Government’s decisions in the Budget will certainly add to the challenges. It is frankly shocking, as I think the Minister would agree, that the Joseph Rowntree Foundation has concluded that the average family will be £770 worse off in real terms by October 2029 than they are today because of the Budget. Our constituents need to know where the £300 of energy savings will materialise from.
There were also the shameful changes to pensioner payments for 10 million pensioners. It is really important that the Government respond to the Social Security Advisory Committee about the potential poverty impact. I ask the Minister to explain how furniture poverty will be affected. We have heard about the choice between heating and eating, which is certainly something that I worked to alleviate.
I would also love to hear from the Minister on the point about disabled people, including on the future of the cross-Government work of the disability champions, which I understand has been somewhat sidelined. Their work meant that each Department had a particular focus when it came to disability and poverty.
Taking all this together with the impact of the Budget of broken promises, and looking to the future, I hope that the Government will ensure pensioners can keep warm this weekend, and that they will continue to work with local authorities and the Treasury to help people who find themselves affected by furniture poverty. Some very practical ways of alleviating the issue have been mentioned today. The Opposition will work with the Government and with all Members to ensure that we support any changes that are possible, but I say to Government Members that when they troop through the Lobbies this evening to vote on the Budget, I hope they will remember this debate.
The Minister for Employment (Alison McGovern)
As ever, Sir Roger, it is a pleasure to serve under your chairship. I thank my hon. Friend the Member for North West Cambridgeshire (Sam Carling) for securing this debate and for the very important work that he has done to support the Renters’ Rights Bill, which will make a big difference to the experience of people living in privately rented homes.
On behalf of us all, may I congratulate the hon. Member for East Grinstead and Uckfield (Mims Davies) on her new appointment? She is right to say that she and I have debated these issues many times. I will miss doing so, and I know that many of my colleagues in the DWP miss her. We wish her all the very best in her new role.
The current level of poverty is unacceptable: 1.3 million more people are in poverty than in 2010. Poverty damages lives in so many ways, as we have heard this afternoon. People simply cannot fulfil their potential when struggling to pay for basic essentials, or in many cases going without them. I am determined that we will take steps to put that right.
Good work will always be the foundation of our approach to tackling poverty. Hon. Members will know that we had a manifesto commitment to bring forward changes in this area. We will shortly publish the “Get Britain Working” White Paper, which will announce our reforms in that area. We will have a new service to support more people to enter, remain and do better in work, and a youth guarantee, with increased join-up of employment and health, which are causing so many challenges in this area. Through our plan to make work pay, we will ensure that we create opportunities for all by tackling low pay, poor working conditions and job security. This is a truly ambitious agenda to empower working people and grow our economy.
We want to protect living standards, and wages are important in doing that. The national wage introduced by the new Labour Government back in 1999 has had a transformative effect on the fortunes of working people. In last week’s Budget it was announced that the national living wage will rise to £12.21 an hour from next April, boosting the pay of 3 million workers. That is an increase of 6.7%, worth £1,400 a year for a full-time worker, helping us to make progress towards a genuine living wage.
Hon. Members have mentioned the child poverty taskforce. I will take today’s debate as a submission through the child poverty taskforce process, because we have shown how interconnected many of the issues are. It is shameful that in a rich country such as the UK, 4 million children were living in relative poverty last year, and that 800,000 children have used a food bank in the past 12 months. As has been said, the End Child Poverty campaign has suggested that 1.2 million children were in furniture poverty in 2022. That is just unacceptable. It scars children’s lives now and can damage their long-term health, education and employment outcomes. It holds our country back, and we are determined to see change.
I hope it is helpful to hon. Members if I give a brief update on the child poverty taskforce, which is working to publish a comprehensive and ambitious child poverty strategy in the spring. Last month, we published a framework to set out how we will develop the strategy, harnessing all available levers because, as so many Members have said, policy in one area affects another. We want to develop the strategy with exactly that in mind. We have four key themes: incomes, costs, increasing financial resilience and getting better local support. On that note, I recently visited Glasgow, where the city council is doing excellent work to join things up locally, as Members have suggested.
Later this month, the taskforce will meet employers, trade unions and think-tanks to discuss options to increase incomes and financial resilience in low-income households. We want to ensure that the strategy addresses poverty in every corner of the land and that we hear and learn from families in poverty as we shape it. We will be holding engagement events across the UK—I have already visited various constituencies myself—bringing together a diverse range of voices and setting up a new forum for parents and carers to ensure that the experiences of our kids are included at the heart of the strategy.
The Government believe that a wealthy country like the United Kingdom should have a social security system that meets the needs of people who are unable to fully support themselves through work. We know that for many, the system we inherited is not currently achieving that. We are determined to fix the fundamentals so that low-income families can afford the basics. We have inherited a number of policies and a challenging fiscal climate that have left us with difficult choices.
In response to the shadow Minister’s point about universal credit, it is fair to say that the policy has been on a long journey. Some of the points she made about the responsiveness of social security during the pandemic are important. We must learn from that and try to address the challenges we now face. That is why we have committed to reviewing universal credit and will listen to a full range of views on potential changes to make sure that it is doing its job now.
As a first step, the Chancellor announced in last week’s Budget that we will introduce a fair repayment rate. That will help households on universal credit who are having deductions made from their benefit, perhaps because they had a loan of some kind or moved into a new home and needed to buy furniture or other items. We will ensure that they can retain more of the money from their benefit to help them to budget for essentials like this. Over 1.2 million households on universal credit will benefit from the changing of the deduction cap from 25% to 15%. It will mean an average of £420 a year, which is a good down payment on a future plan.
I turn to the specific issue of furniture affordability. Most of us will experience large one-off costs or unexpected expenditure at some point. As hon. Members have explained fully, these costs can be difficult to budget for, and we do not want to drive people into debt.
Jim Shannon
I mentioned the significant work done by charities and particularly churches, including St Vincent de Paul. What are the Minister’s thoughts on that?
Alison McGovern
The hon. Gentleman makes his point very well. Let me respond briefly to questions that Members have raised. I will ask the relevant Minister to write to my hon. Friend the Member for North West Cambridgeshire about the regulatory changes arising from the Renters’ Rights Bill, on whose Public Bill Committee he served ably. I reassure him that the DWP will work across Departments, because these areas cover different departmental responsibilities. We will include all those points in the child poverty taskforce. The hon. Member for Strangford (Jim Shannon) is right about charities—Wirral Repair Café in my constituency does a fantastic job.
My hon. Friend the Member for Uxbridge and South Ruislip (Danny Beales) made an excellent speech on household support fund guidance. I encourage him to be part of that conversation. I will take away what he has said, but he might want to write to me with more detail. To other hon. Members, I say that we are looking at all the ways in which poverty is now affecting people, given the spikes in energy prices and other issues. The comments were about the construction of homes and how we can limit the cost of energy are very important. I encourage Members to keep bringing those points forward, because now is the time to address them.
Hon. Members will know that the social security system has always made provision to help people on low incomes without adequate savings, and we do consider the impact of budgeting loans, advances and other measures. I mentioned the change in deductions. We know that while there will always be people who struggle to meet unexpected costs, no one wants a system in which large numbers of people are relying on crisis support to help them to feed their families or pay for heating and other day-to-day essentials. We want the system to genuinely respond to this as a crisis, not a chronic problem.
To support the upcoming child poverty strategy and address the demand we face, as the hon. Member for East Grinstead and Uckfield mentioned, we are continuing to provide substantial funding for crisis support through the household support fund and discretionary housing payments. We will invest £1 billion, including the Barnett impact, to extend the household support fund in England for an additional year until 31 March 2026 and to maintain the discretionary housing payments fund for a further year. This will ensure that the current targeted support is available for the most vulnerable.
In the end, we know that there is no quick fix. The issues that we have in this country are deep rooted and complicated, but that can never be an excuse for not trying to tackle them. We have taken the first steps, and there is more to come in the child poverty strategy and the “Get Britain Working” White Paper. I look forward to working with all Members here to get this right.
Question put and agreed to.
Resolved,
That this House has considered furniture poverty.
Written Statements
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Updated Ministerial Code
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The Chancellor of the Duchy of Lancaster (Pat McFadden)
The Government have today published an updated ministerial code. The code is available on www.gov.uk'>www.gov.uk. The new code will be instrumental in setting out the high standards that the British people expect and that Ministers must follow.
Changes to the code include incorporating the seven principles of public life directly into the code; strengthening the powers of the Prime Minister’s independent adviser on ministerial standards; setting out guiding principles for Ministers on gifts and hospitality; and introducing improved transparency arrangements to align more closely the publication of ministerial gifts and hospitality with the House of Commons register.
The new code has also been restructured into three distinct sections: Ministers’ standards of conduct; Ministers’ interests; and Ministers and Government procedures. This brings ethical standards to the forefront of the new code, ending the confusing blend of public service values and everyday governing processes found in previous versions.
The new ministerial code also:
Reinserts an explicit reference to international law and treaty obligations as part of Ministers’ overarching duty to comply with the law.
Includes updated terms of reference for the Prime Minister’s independent adviser on ministerial standards—previously the independent adviser on ministers’ interests.
Ensures the code reflects existing rules, guidance and procedure, including the guidance on use of non-corporate communications channels for Government business, quasi-judicial decisions, and public appointments.
This new ministerial code will help to restore the public’s trust in politics, and shape this Government’s mission to return Britain to the service of working people.
The List of Ministers’ Interests
The list of Ministers’ interests is also being published today on www.gov.uk by the independent adviser on ministerial standards. The list provides details of the personal interests of members of the Government that are judged by the independent adviser to be relevant to their ministerial portfolios and duties.
The List of Ministerial Responsibilities
The Government will today be publishing the list of ministerial responsibilities and the list of non-ministerial departments and executive agencies on www.gov.uk'>www.gov.uk. I have requested that a copy of the list of ministerial responsibilities be deposited in the Libraries of the Houses of Parliament. The list of ministerial responsibilities includes details of ministerial Departments, their correspondence contact details, the Ministers within each Department, and their portfolio responsibilities. The list of non-ministerial departments and executive agencies includes details of each of these organisations, along with associated correspondence contact details, the parent Department and the responsible Government Minister.
The Special Adviser Code of Conduct
The Government have today published an updated code of conduct for special advisers, in line with the Constitutional Reform and Governance Act 2010. The code is available on www.gov.uk'>www.gov.uk. Alongside establishing the key responsibilities of special advisers, the updated code of conduct for special advisers sets out the standards of behaviour this Government expect of them and formalises the existing policy for managing interests. The code of conduct for special advisers is part of special advisers’ terms and conditions of service.
The Special Adviser Contract
The Government have today published an updated special adviser model contract, which is available on www.gov.uk'>www.gov.uk. The model contract sets out the terms and conditions that apply to all special advisers appointed by Ministers and employed by Government Departments.
This Government have introduced a small number of changes to the terms of the model contract. These are:
To require special advisers to obtain the required level of security clearance for their role within the first four months of starting in post.
To enable special advisers to leave Government with a severance payment at the start of the pre-election period before a general election—or at the Dissolution of Parliament.
To confirm that special advisers are entitled to an annual review of their salary, and the process for determining any increases in salary.
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Silicon Valley Bank UK: Bank of England’s Transfer Power
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The Economic Secretary to the Treasury (Tulip Siddiq)
In March 2023, the Bank of England used its transfer power under the special resolution regime—provided for by the Banking Act 2009, as amended—to resolve Silicon Valley Bank UK by transferring ownership of the firm to HSBC UK.
Section 79A of the Banking Act 2009 requires the Bank to provide a report to the Chancellor of the Exchequer, my right hon. Friend the Member for Leeds West and Pudsey (Rachel Reeves), where it has used the power to make share transfer instruments or property transfer instruments to sell a firm in whole or in part to a commercial purchaser.
The Bank has provided this report to the Chancellor. The Government and the Bank of England are committed to transparency concerning the application of their resolution powers, so copies of the report have been deposited in the Libraries of both Houses, and the report is also available on the Bank’s website www.bankofengland.co.uk.
I thank the Bank of England’s staff for the dedication they demonstrated when they took swift and decisive action to protect financial stability and secure a good outcome for Silicon Valley Bank UK’s customers.
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Media Mergers Regime
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The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)
The Government are committed to a pluralistic media landscape, where citizens are able to access information from a range of sources in order to form opinions. The public’s ability to access a wide range of news, views and information about the world in which we live is central to the health of our democracy.
The Enterprise Act 2002 gives the Secretary of State (Lisa Nandy) the power to intervene in media mergers if she believes one or more public interest considerations may be relevant. The Secretary of State may ultimately order a media merger to be blocked or unwound if she decides that it has operated or may be expected to operate against the public interest.
However, the media landscape has changed significantly since the Enterprise Act became law more than two decades ago. The world has changed; Ofcom’s news consumption survey, published in September 2024, shows over two thirds (71%) of UK adults now access news online. It is essential that our regimes move with the times, are fit for purpose, and are future-proofed to protect the availability of a wide range of accurate and high-quality news, particularly for younger audiences, as technology and news habits evolve.
To reflect the way news is increasingly consumed and the need to protect the freedom of the press as a cornerstone of democracy, I am today launching a six-week technical public consultation on expanding the legislation governing media mergers, to allow the Secretary of State to intervene in mergers involving a wider range of print news publications, online news publications and news programmes. This follows advice from Ofcom as part of its 2021 statement on the future of media plurality.
The consultation will seek views from industry, Parliament, and the public, on whether our proposed updates to the regime achieve our desired effects.
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Defence Nuclear Enterprise
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The Secretary of State for Defence (John Healey)
The UK is exploring options to re-establish a nuclear fuel cycle for reactor fuel for defence purposes. The Government are committed to modernising defence nuclear fuel production under the Defence Nuclear Enterprise. We are commencing engagement with industry to develop options for how this requirement can be delivered.
The UK takes its nuclear responsibilities and obligations seriously. This fuel production cycle will be fully consistent with the UK’s international obligations, including the treaty on the non-proliferation of nuclear weapons. It will also be fully consistent with the UK’s voluntary moratorium, established in 1995, on the production of fissile material for nuclear weapons or other nuclear explosive devices.
The UK will continue to maintain the highest standards of safeguarding of civil nuclear materials, ensuring a separation from defence materials and complying with our obligations under the UK’s voluntary offer agreement with the International Atomic Energy Agency.
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Energy Infrastructure Planning
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
The Minister for Energy Security and Net Zero, my noble Friend Lord Hunt of Kings Heath OBE, has today made the following statement:
This statement concerns an application for development consent made under the Planning Act 2008 by West Burton Solar Project Ltd for the construction, operation, maintenance and decommissioning of a solar photovoltaic array electricity generating station situated in Lincolnshire.
Under section 107(1) of the Planning Act 2008, the Secretary of State (Ed Miliband) must make a decision on an application within three months of the receipt of the examining authority’s report unless exercising the power under section 107(3) of the Act to set a new deadline. Where a new deadline is set, the Secretary of State must make a statement to Parliament to announce it.
The current statutory deadline for the decision on the West Burton Solar Project application is 8 November 2024.
I have decided to allow a short extension and to set a new deadline of 24 January 2025 to allow time for necessary public consultation on potential variations to the application.
The decision to set the new deadline for this application is without prejudice to the decision on whether to grant or refuse development consent.
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Biodiversity COP16
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mary Creagh)
The climate and nature crisis defines our times, and it is the most vulnerable who bear the brunt. Over half of global GDP is moderately or highly dependent on nature. Loss of biodiversity poses a serious risk to global food security by undermining the resilience of many agricultural systems to threats such as pests, pathogens and climate change. The Government are committed to ending poverty on a liveable planet.
The UN biodiversity summit—CBD COP16—held in Colombia closed on the morning of Saturday 2 November. The UK Government took a leading role in driving forward key elements of work necessary to mobilise more international finance for nature and deliver on our mission to halt and reverse nature loss. The Secretary of State for Environment, Food and Rural Affairs, my right hon. Friend the Member for Streatham and Croydon North (Steve Reed), and I led the UK delegation.
The conclusion of complex negotiations on digital sequence information (DSI) means that businesses have the option of voluntarily contributing to a new fund—known as the Cali fund—if they use this genetic information from nature. DNA that has been sequenced from the natural world is available online for use in research. This research can be applied to important work across agriculture, conservation, medicine and public health. This fund will then support further use of DSI and the conservation and sustainable use of nature, with a significant proportion flowing to indigenous people and local communities.
Progress was made on several fronts, including the UK launching the biodiversity finance trends dashboard to increase transparency and demonstrate that nature finance flows are increasing. The Government welcomed the launch of the framework for high integrity biodiversity credits markets, developed by the Independent Advisory Panel on Biodiversity Credits (IAPB), which was sponsored by the UK and France. Alongside the framework, the IAPB also showcased in Cali a suite of pilot projects as a meaningful way of illustrating the current state of the market and its development prospects.
At the conference, the Secretary of State set out new criteria to meet our “30 by 30” targets, which commit to the protection of 30% of land and ocean by 2030. A newly published update outlined criteria for eligible land in England and laid out next steps to achieve this milestone, which is essential for nature conservation and biodiversity.
The UK was pleased that a new permanent body for indigenous peoples and local communities was created at COP16 to increase their formal decision-making power, given that they live on an estimated 50% of the world’s land. I launched the principles for inclusive, gender-responsive, locally-led biodiversity action, which will help focus and co-ordinate action to strengthen the gender equality and social inclusion aspects of the transformative change required to implement the Kunming- Montreal global biodiversity framework and tackle the biodiversity crisis. The Secretary of State and I made commitments to increase support to the global biodiversity framework fund and to join the legacy landscapes fund.
The UK was, however, disappointed that COP16 concluded before reaching an agreement on international strategies for mobilising nature finance. It is only through our international action and leadership that we tackle the twin threats of climate change and biodiversity loss, which threaten growth, our future prosperity and wellbeing.
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South West Water: Customer Rebate
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Emma Hardy)
The Government are fixing the foundations to put public finances on a sustainable path to restore stability, and taking difficult decisions on tax, welfare and spending. This includes needing to address a £22 billion black hole. To support this effort, the taxpayer-funded contribution to the water and sewerage bills of South West Water (SWW) household customers will end after 31 March 2025.
The rebate was originally introduced in 2013 because SWW customers faced significantly higher water bills than customers in other regions due to the level of investment the company was required to make in the region’s infrastructure to meet environmental and water quality standards. Over the last decade, the difference between water bills in the south-west region and others has decreased. Over the next price review period, 2025 to 2029, Ofwat’s latest projections are that SWW customers’ bills will be similar to those in other regions.
The Government are committed to taking action to address water poverty and help vulnerable customers with their water bills. All water companies have measures in place for people who struggle to pay for their water and waste water services, including measures such as WaterSure, social tariffs, payment breaks and holidays, and debt management support. We expect all water companies to proactively engage with their customers to ensure that they know what support schemes are available and how to use them.
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Oxford Nanopore Technologies: Strategic Partnership
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The Parliamentary Under-Secretary of State for Health and Social Care (Andrew Gwynne)
My noble friend the Under-Secretary of State for Health and Social Care, Baroness Merron, has made the following written statement:
We have announced the Government’s intention to enter into a strategic partnership with Oxford Nanopore—a world-leading UK-based life sciences company whose technology is used to advance biomedical research and translate discoveries for improved patient care across cancer, genetic disease and infectious disease. This collaboration also involves NHS England and two of our world-leading scientific institutions—Genomics England and UK Biobank.
The collaboration will seek to utilise Oxford Nanopore’s technology to enhance research and, using insights from the UK’s genetic databases, could pave the way for new treatments for cancer and rare diseases.
The collaboration is another vote of confidence in the UK’s life sciences sector, which will help kickstart economic growth and support the 10-year health plan’s ambition to shift the health service from analogue to digital and from sickness to prevention, helping keep patients out of hospital. The collaboration also builds on the Chancellor’s commitment to support UK spinouts announced as part of the Budget.
Separately, following a successful pilot at Guy’s and St Thomas’ Hospital, we are announcing the scale-up of NHS England’s respiratory metagenomics programme, offering fast-track genetic testing for patients with suspected respiratory infectious diseases. Through this programme, Nanopore’s sequencing technology will be rolled out from 10 to up to 30 NHS sites to detect new pathogens emerging in the UK. Patients suspected of having severe acute respiratory infections will now be diagnosed within six hours thanks to this technology, compared to the previous norm of around three days.
This will create an “early warning system” for future pandemics, supporting the Government to take quicker action on emerging infectious disease, and monitor the threat of future pandemics.
I will provide further updates to the House on this collaboration as it develops
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Failure to Prevent Fraud: Corporate Offence Guidance
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The Minister for Security (Dan Jarvis)
My noble Friend the Minister of State for the Home Office (Lord Hanson of Flint) has today made the following written ministerial statement:
To strengthen corporate criminal liability a new offence of failure to prevent fraud was included in the Economic Crime and Corporate Transparency Act 2023. The offence is intended to hold large organisations to account if they profit from fraud and to drive a culture change towards improved fraud prevention procedures.
The offence will hold corporates to account if they fail to prevent a fraud that benefits them, or in some circumstances, their clients. It is limited to large organisations and partnerships only.
Organisations will have a defence in court if they can prove that they had reasonable procedures in place to prevent the fraud, or if it was not reasonable, in all the circumstances, to have any procedures in place. The Government are required to publish guidance to explain the fraud prevention procedures that organisations should have in place to have a defence in the event of prosecution.
The guidance is similar in structure to the guidance for the existing offences of failure to prevent bribery in the Bribery Act 2010 and failure to prevent the criminal facilitation of tax evasion in the Criminal Finances Act 2017. Most organisations subject to the offence will therefore be familiar with the concepts and approach set out in the guidance.
In developing the guidance, the Home Office has worked closely with prosecutors, regulators and across Government. We have also engaged with industry, including trade professional bodies. The devolved Governments have also been consulted.
The guidance has been published today and is available on www.gov.uk.
To allow organisations to prepare and develop their fraud prevention procedures, Government intend to commence the offence nine months after publication of this guidance.
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Homelessness and Rough Sleeping: Winter Pressures Funding
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The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rushanara Ali)
I am pleased to announce to the House that the Ministry of Housing, Communities and Local Government has today taken an important step towards tackling homelessness.
The Deputy Prime Minister, my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner), will chair the first cross-Government inter-ministerial group on homelessness and rough sleeping, following the confirmation at Budget of nearly £1 billion to tackle homelessness and rough sleeping. Further, my Department will be providing £10 million of rough sleeping winter pressures funding to local authorities across England this winter.
The inter-ministerial group will bring together Ministers from across Government to drive progress on the development of our strategy to get back on track to ending homelessness, making sure we are working across Government, and in partnership with local authorities and mayors, to tackle the root causes. This first meeting marks an important step to developing our strategy and follows the announcement at Budget of nearly £1 billion of funding for homelessness and rough sleeping for 2025-26, an increase of £233 million on 2024-25. This will help to prevent the rising number of families in temporary accommodation and help to prevent rough sleeping.
The £10 million funding allocated across London and to 115 local authorities outside London will provide a range of services to tackle rough sleeping this winter in the areas with greatest rough sleeping pressures. This includes specialist support to vulnerable groups such as veterans, care leavers and victims of domestic abuse sleeping rough. It also includes support to people at risk of rough sleeping, as well as immediate off-the-street accommodation and support to prevent individuals returning to the streets. Services provided from the winter pressures 2024-25 funding will enable local authorities to act during periods of extreme weather over winter and help save lives.
Today’s announcement is a further demonstration of our commitment to getting back on track to ending homelessness, and I hope that colleagues across the House will work with me in this endeavour.
[HCWS194]
Arrangement of Business
The Deputy Chairman of Committees (Baroness Healy of Primrose Hill) (Lab)
My Lords, before the Minister moves that the Bill be considered, I remind noble Lords that the Motion before the Committee will be that the Committee do consider the Bill. I should perhaps make it clear that the Motion to give the Bill a Second Reading will be moved in the Chamber in the usual way on a later date, with the expectation that it will be taken formally. Also, there may be further Divisions in the Chamber; I will adjourn the Committee for 10 minutes each time.
Property (Digital Assets etc) Bill
Wednesday 6th November 2024
(2 weeks, 1 day ago)
Grand CommitteeRead Full debate Property (Digital Assets etc) Bill [HL] 2024-26 View all Property (Digital Assets etc) Bill [HL] 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Ponsonby of Shulbrede) (Lab)
My Lords, as we begin, I would like to set out some of the history of property law and how this Bill came into being. It is worth noting at the outset that these proposals are concerned with the law of personal property in England and Wales; that is, anything that is not land or real estate. Specifically, the Bill is designed to respond to the challenge the common law faces in recognising certain digital assets, such as crypto tokens, as property; and to position the UK as the pre-eminent jurisdiction for the transaction of digital assets and the resolution of disputes arising from them.
As your Lordships will be aware, certainty around personal property rights is important for a number of reasons, including: in cases where objects of property rights are interfered with or unlawfully taken; in cases of bankruptcy or insolvency; and for the legal rules concerning succession on death. These rights are also important for the proper characterisation of numerous modern and complex legal relationships, including custody relationships, collateral arrangements and structures involving trusts.
Traditionally, personal property has been categorised into two types: tangible property that you can hold or otherwise physically possess, known as “things in possession”; and intangible property that can be claimed or enforced only through a court action, such as a debt or contractual right, known as “things in action”. These categories have been recognised in English and Welsh law for centuries, long before digital assets existed. It is not surprising that they do not fit neatly into either category, yet some digital assets have characteristics that mean they should be recognised as property by the common law and treated as such.
For example, it has long been held that pure information cannot be the object of property rights because it can be copied exactly without affecting the original version. If one party sends another party a Word document, for example, the original party still has their copy. By contrast, the technology used to create crypto tokens means that they cannot be duplicated or “double spent”. This has been recognised in some recent case law, which found that certain digital assets, specifically crypto assets, can still attract personal property rights even though their unique nature means that they are neither things in action nor things in possession.
It is worth noting, however, that these cases are not definitive in that the decisions were not made by a precedent-setting court. This has left some ambiguity, as there is old case law suggesting that something cannot be personal property if it does not fall within either of the two traditional categories. Under the previous Government, in 2020, the Ministry of Justice asked the Law Commission to review the law on crypto tokens and other digital assets, and to consider whether reform was required. In its 2023 report, the Law Commission concluded that certain types of digital assets can attract property rights and recommended legislation to reflect this. This Government agree wholeheartedly with that approach, which is why we have brought forward this Bill.
I turn to the details of the Bill, which has only one limited and technical operative clause. It recognises that:
“A thing … including a thing that is digital or electronic … is not prevented from”
attracting
“personal property rights merely because it is neither … a thing in possession, nor … a thing in action”.
The Bill simply signals a further category of personal property. What it does not do is state which assets fall within this further category. It also does not provide for the legal consequences of falling into this category. These are matters purposefully left to the common law, which is best placed to respond in a nuanced and flexible way.
The Bill does not mean that all digital assets will be recognised as property. There are many kinds of digital assets with different features, including crypto tokens, non-fungible tokens, virtual carbon credits, digital files, and domain names. The well-established common-law tests for personal property will be applied by the courts to each specific digital asset. This means that only things with the necessary characteristics of property will be recognised as attracting property rights.
We believe that the Bill has clear benefits for England and Wales as a legal jurisdiction, and the UK as a whole, enabling more efficient dispute resolution, attracting international businesses to use our law, and promoting economic growth. The Bill will: first, encourage the use of English and Welsh law by international businesses by increasing confidence in how our law will treat certain digital assets; secondly, ensure protections for owners of crypto tokens and other assets in the event of unauthorised use or misappropriation; thirdly, decrease litigation costs and court time by giving certainty as to the existence of a further category of personal property; and, lastly, empower the courts with the tools to develop our world-leading common law.
Ultimately, the Bill will ensure that our jurisdiction continues to be an attractive place to do business with, and litigate in respect of, crypto tokens and other emerging assets that have the characteristics of property under the common law. The Property (Digital Assets etc) Bill represents a step forward in modernising the law of personal property in England and Wales. By recognising a further category of personal property, it recognises the unique features of digital assets, ensuring that they can be protected and managed effectively under the law.
The Bill underscores our commitment to fostering innovation. It supports our efforts to ensure that our jurisdiction remains at the forefront globally, providing a flexible legal framework that can react to the dynamic nature of digital assets and other emerging technologies. I hope the Bill receives strong support and I look forward to noble Lords’ contributions. I beg to move.
Lord Holmes of Richmond (Con)
My Lords, it is a pleasure to take part in this Second Reading Committee on the digital assets Bill, and to follow the Minister. I congratulate him on his erudite and excellent introduction. I declare my technology interests as set out in the register, not least as an adviser to Lombard Electronic Market Infrastructure and to MCM Ltd. I shall set out a bit of history around the technology that underpins the Bill and the opportunities for the UK, say some words on the Bill itself and then ask some questions of the Minister. Before all that, I put on record my thanks to the Law Commission, particularly Professor Green, for her work and the work of her team in bringing this Bill to your Lordships’ House for our consideration.
Turning to the technology, we can all be forgiven for believing that artificial intelligence, not least gen AI, is the only technology show in town. It certainly has enough column inches to keep feeding itself until the end of time. But there are other technologies that we should consider when we look at the social, economic and democratic opportunities for the UK. Chief among them is blockchain or distributed ledger technology, which I believe could be a far more profound driver and enabler of value than even some of the greatest claims about artificial intelligence. That is why I have been interested in blockchain for decades and wrote a report on the subject in 2017, Distributed Ledger Technologies for Public Good: Leadership, Collaboration and Innovation. I believe that leadership, collaboration and innovation remain three wise watchwords for our approach to this Bill.
I shall give an example of the transformative powers of this technology, which was in my 2017 report. Currently, 25,000 doctor days are used up in the NHS on proof of credentials. Of course they are important—you want to know that the person operating on you is who they say they are and has the experience and the credentials to do so—but with a relatively simple DLT solution, those 25,000 doctor days could be converted into 25,000 doctor days of care.
Crucially, when we consider these technologies, we need to put the human right at their heart. They are extraordinarily powerful, but they are technologies in our human hands: we decide, we determine and we choose how to develop and deploy. It is down to us.
On the opportunities of digital assets, I could cite any statistic from one of the four consultancy firms. I am not going to, but take this: by 2030, the majority of value exchange will take place under or using digital assets. By 2030, tokenisation of real-world assets will be in excess of $10 trillion. This technology came into being only in 2017 and is still highly nascent—my noble friends may be aware of non-fungible tokens or stablecoins, which are the two obvious examples—but we are talking about more than $10 trillion by the end of this decade.
The opportunities for the planet are extraordinary. The opportunities for the UK are immense, not least because of our financial services ecosystem, our fantastic higher education, our start-up and technology communities, and the greatest gift of all: English common law. Some £250 billion of M&A activity takes place around the globe and 40% of commercial arbitration is done under English common law. We have a unique opportunity in this country: as individuals, to assist with financial inclusion, through to financial market transformation, the dematerialisation of capital markets, and a transformation of our economy and society for the benefit of all, if we get it right—all potential, none of it inevitable.
I will quickly list some use cases. The Electronic Trade Documents Act that we passed last year, which also came from Professor Green’s team at the Law Commission, is an excellent example of a short Bill with a significant impact: enabling efficiency in international trade, driving economic and environmental benefits, and collapsing the time it takes to perfect trade, potentially from 10 to 14 days to a matter of moments.
With regard to individuals and the housing crisis we have in this country right now, what about looking at fractionalised models for home ownership so that our young people in particular can get a grip on and a piece of the housing market? There are extraordinary opportunities through all the social and economic challenges that we currently face. For our global workforce in the UK, there is transforming overseas payments, taking friction and cost out, so that they can send that money back to their families around the world. On the environmental challenge, we should all be highly cognisant of the environmental impact of blockchain and AI, not just in development but in each and every query and interaction. But none of that is inevitable. We can choose, we can determine, and we can say that all digital assets have to be driven by and generated through renewable sources. All this is in our power. If we get this right, to quote a phrase, digital assets could be a key enabler of “growth, growth, growth”.
I turn to the Bill itself. What do we need to consider? What do we currently not have when it comes to the law of property in England and Wales? The question must revolve around clarity, certainty, consistency and coherence. We have already seen the role the EU has played with MiCA and its definition of crypto assets, in a prescriptive code, and how that is currently evolving. Perhaps more pertinent to the UK are the examples in the UAE—Dubai—and Saudi and, indeed, the approach of the Hong Kong Monetary Authority. This is a global game, and the UK needs to decide what role we want to play within it.
The Bill is short in nature but could be extraordinarily significant in impact. At the heart of it is that question set out by the Minister: are the current classifications and categorisations of property in this country, developed over centuries, insufficient to cover digital assets? It is a significant question, because set out in the Bill is a suggestion that a third category of property right should be developed as a consequence, if we pass the Bill as drafted. There are so many elements at play internationally but, looking at home, is there a case to consider that the courts have in some ways overtaken the Law Commission and, indeed, the parliamentary process? I am thinking not least of recent High Court decisions.
When it comes to Committee, I believe that we will need to go into a series of issues in significant detail, and this brings me to the questions for the Minister. First, and most important, are the Government sure that the current categorisation of property into things in possession and things in action is not exhaustive and not able to accommodate digital assets? If not, is the development of a third category desirable in English common law? If we take that path, what are the implications for the courts? Will it become inevitable that the courts follow the parliamentary steer and think, “Well, there must be a need to develop this jurisprudence as a result of the activities of Parliament in passing the Bill”?
Similarly, what will it mean internationally for our common-law community, in which we are such a key player? One of the strengths of common law is consistency in whichever jurisdiction one finds oneself. To that extent, can the Minister say what the Government’s position is on the impact of the Bill on other common-law jurisdictions, which have already determined that digital assets can be classified as things in action? I am thinking not least of Singapore and New Zealand, and the relevant cases well passed at precedent level in those jurisdictions. Perhaps closer to home, we should strongly consider the situation in Scotland, as its law on incorporeal movable property seems highly capable of taking digital assets into account.
Noble Lords will have an extraordinarily interesting and detailed exposition of all these matters in Committee. The Bill may seem small, but it is incredibly significant, and we need to consider whether the existing two-state classification of property law is in fact sufficient for the task in hand, and if not, what case law and evidence we are bringing to bear. For example, do we find the 2012 High Court decision in Armstrong compelling in this respect or not?
Ultimately, this is not about the law—the statute itself. It is about what we do in this place and in courts up and down the land as a consequence of this statute, and what that means for individuals, businesses, our economy, our society and our very democracy. I believe that, if we get this right, there will be an extraordinary, almost limitless, unique opportunity for the UK to drive benefits for citizen and state alike to pass a Bill which drives economic and social benefits, which shows Parliament playing her role in this digital future, enabling the courts to play their role in interpretation and development, and reaching out to our common-law communities right around the world. That will be a fine digital assets Bill.
Lord Thomas of Cwmgiedd (CB)
My Lords, it is a pleasure and privilege to follow the noble Lord, Lord Holmes, in his exposition of most of the main issues. I thank the Minister for his careful introduction to the Bill and join him in thanking and paying tribute to Professor Sarah Green, who has done so much to bring our law up to date.
Lord Thomas of Cwmgiedd (CB)
My Lords, as I was not using written notes, I rely on the absolute skill of Hansard to make it look as though I have continued at the point where I stopped. I thanked the Minister for his very careful introduction, and I added my thanks and praise to Professor Sarah Green for what she has done, which is important in two respects.
First, it is wonderful to be able to go into the Royal Gallery as a lawyer and say, “You can actually do law on one piece of paper”, because most complain that lawyers do law in volumes. That is an immense tribute to her.
Secondly, the Bill achieves the right balance to making the critical change—which probably has to be made by statute—but not getting ourselves into an area where you cut off development of the common law.
There is one other respect that I hope the Special Public Bill Committee will be able to consider. We live in different times to when the dominance of English law was achieved. We were then a great industrial and commercial power. We cannot claim to be that in the world relating to digitalisation and digital technology. It is important that the solution adopted by the Law Commission is an internationally attractive solution. We must retain at the forefront of our mind the enormous contribution that having contracts governed by English law provides—it is far more important that they are governed by English law than that dispute resolution occurs here, which is a less significant industry—and that people will choose English law on the basis that they like the solution. This is important because the transnational view is emerging that selection of the governing law will almost certainly be the basis upon which most disputes are likely to be decided.
So we want to say, “Look, come: our law is a good solution and, if you’re under our law, you’ll get a solution that is attractive”. I think the answer is probably right. Another tribute to Sarah Green is the acknowledgement that this is not a matter for looking at solely through the eyes of English law. You have to look at what the Americans are doing, and she has looked at what the American Law Institute has done and what the commissioners at UCC have done—and she has also looked at what is incredibly important these days: the work of UNIDROIT. We have to recognise that it is vitally important that our law is seen in this transnational context.
As I understand it, the Law Commission is going to do a project on the proper law to be attributed and on jurisdiction. It is extremely urgent that this is done from the perspective of commercial transactions. It may be important in other areas, but where it is critical from this Bill’s point of view is that we want people to choose English law and put that into the contract—and if it is chosen in the contract, and it is likely that most of the pointers for the selection of the law that governs digital assets will be the law chosen by the contract, people are then happy that our solution is the right one. We simply cannot be little Englanders and just look at this through the narrow perspective of what is good for England. We have to look at it in a much broader context—at what is good for our legal system as producing money in very large amounts from its transnational use. If we lose sight of that objective, in an area that one reads about all the time, and which we were reminded of this morning, which is an area of intense international competition, we will cede away to other people’s legal systems the business that is done here.
I regard that as the paramount task: to see that this is attractive to those who are not British but who dominate the world’s commercial and industrial life. That is our audience—it is not the audience in the UK.
Lord Vaizey of Didcot (Con)
My Lords, it is an honour to have an opportunity to speak on this Bill. I refer to my entry in the register of interests, which includes sitting on the advisory board of two crypto- currency companies and, indeed, one environmental company that uses tokens and the blockchain.
I begin by saying what an honour it is to follow two such distinguished speakers, including the noble Lord, Lord Holmes, who has established himself over many years in this House as a real expert in the emerging technologies that are going to transform not just the British but the global economy. Hearing his thoughts about the use of blockchain going forward was very instructive. I am also following a Lord Chief Justice, who made a point that I was going to make at the end of my speech but will now move up the agenda in terms of where this Bill sits in the international context of different legal systems and jurisdictions.
I thank the Government for fielding such a heavyweight team of hereditary Peers, because it reminds us yet again of the incredible contribution that our hereditary Peers make in this House, particularly on technical but very important, narrowly focused Bills. I hope that they will do so for many years to come.
Obviously, today we are welcoming—well, welcoming may be too strong a word, but we are noting—the election of President Trump. I have been looking at my bitcoin holdings as they soar on the back of it, because he is, apparently, the crypto president. It will be interesting to see the developments that happen in the US, because I want to focus on crypto and technology.
Two important points—I hope that does not sound too patronising—have been made by my noble friend Lord Holmes and the noble and learned Lord, Lord Thomas, on whether the Bill is necessary and whether the common law already defines what a digital asset is or could be. The Minister said that a digital asset is considered property if it has the necessary characteristics of property, by which I assume he means it exists as a unique and unchangeable asset that can be passed from one party to another. He referred to intangible assets and made the point that multiple copies of a Word document can be made. However, within that word “document” sits the intangible asset of intellectual property. Legislation has made it clear what can count as property, including copyright Acts dating back to the beginning of the 18th century, so this Bill may well be necessary to make it clear that the courts have jurisdiction to define a digital asset as property.
That links very well with a point from my noble friend Lord Holmes. Interestingly, this is a Ministry of Justice Bill which resulted from a Law Commission report, but it is also a digital and technology Bill. It is in many ways a flagship not just of our English legal jurisdiction keeping up with the times but of this Government leading on digital policy. I feel strongly as a former Minister in this area that the British Government need to maintain their lead and status as one of the jurisdictions to which people look for policy innovations. I recently spoke to the Malaysian Digital Minister, who was in London last week and made it very clear that Malaysia looks to us on policy for such things as artificial intelligence and digital identity. I appreciate that I am straying somewhat from the core of this tiny Bill, but within it lies the important message that the Government are prepared to bring forward legislation that will maintain Britain’s status in this important area.
My noble friend Lord Holmes mentioned that he has been talking about blockchain since 2017; I am pleased to get one over on him, as I was lucky enough to write the preface to the Government’s consultation on distributed ledger technology in 2015. Those were the days when George Osborne, echoing what I have just said, wanted the British Government to be at the forefront of emerging technologies and the Treasury to be on the front foot in embracing them. Rather like with artificial intelligence and the metaverse, we have been through so many iterations of how this will eventually play out. The market will eventually show that, but we have talked about central bank digital currencies, for example, and the Bank of England has done many reports on it.
I will dwell a bit on what we call cryptocurrencies and know as bitcoin, which is becoming more and more mainstream. It is interesting that there are now these things called exchange-traded funds, through which normal consumers can go to very well-established financial institutions and effectively buy bitcoin, rather than going to the Wild West of the many crypto companies that have emerged over the last few years. I find bitcoin and cryptocurrency a fascinating development. In theory, there is no reason why bitcoin cannot be currency. It has all its attributes; it can be traded and used to purchase things—just as gold can effectively be a currency because we decided that it has a value and we are willing to exchange it for value. However, bitcoin and cryptocurrency quickly get involved in the geopolitical debate—the prominence of the dollar and the role of the nation state in issuing currencies—which is why it is so controversial. It is also controversial because it can be misused by nefarious elements, but it can be a fantastic asset for people excluded from normal banking facilities. The ability to use bitcoin to transfer aid to Ukraine is an obvious example.
I would like the Minister perhaps to reflect on this. I appreciate that it is not really his department that would oversee cryptocurrency regulation—it would be the Treasury and perhaps the Department for Science, Innovation and Technology—but it is the case that the last Government were very much on the front foot in talking about putting regulation in place for crypto- currencies. In February 2024, the then Economic Secretary to the Treasury, Bim Afolami, said that the UK Government were going to get new rules governing stablecoins and staking services for crypto assets approved by Parliament within the six months ahead of the general election. That consultation has obviously run into the sand, but this plays to my fundamental point about technology: once the genie is out of the bottle, it will not go away. It is much better to regulate these technologies than simply to allow them to develop in a grey area. In that respect, we encourage this Government to review the effectiveness of the new rules that the last Government introduced governing the financial promotions of digital assets, to ensure that this new regime is working. This was only recently introduced, at the end of last year, and people would like clarity on whether these rules are effective.
Fundamentally, the opportunity for the UK potentially to take a lead in this important area would be the licensing of digital asset firms by the Financial Conduct Authority. It remains the case that this kind of licensing is very slow. It takes more than a year—about a year and a half—to get a licence in order to be a digital asset firm. The number of applications has fallen by more than 50% because of the bureaucracy involved. It is also difficult for a lot of these firms to get access to banking services and other professional services, such as insurance and external auditors. Some G7 jurisdictions have leaned into this issue and taken action to mandate banks to provide bank accounts to these kinds of firms.
There needs to be continued—indeed increased—engagement between the Government, the digital assets industry and the blockchain industry. As I say, the UK remains a technology leader. There was a moment in time a couple of years ago when people expected the UK—particularly under the last Prime Minister, given his interest in technology and financial services—to put the UK at the forefront.
So the digital assets Bill is seen by this industry as an important step forward and a recognition that digital assets can be exchanged and have value. My message to the Minister is that the Treasury and the Department for Science, Innovation and Technology need to step up alongside him and at least give clarity on the Government’s thought about this industry, how and whether it should be regulated, and whether they want the UK to be a centre for it.
Baroness Bennett of Manor Castle (GP)
My Lords, I rise as the only female speaker in this debate, noting that, should we see a restructuring of your Lordships’ House in future, we might create some space for some female Members with interests in this area. I thank the Minister for a clear introduction to the Bill. It is not my intention in this speech to debate the legal detail or indeed to oppose the Bill, but I shall reflect on how the Government and other noble Lords have suggested the Bill will be used and its potential impact. I guess you could sum up this speech as one that sends a strong note of caution.
I agree with the noble Lord, Lord Holmes of Richmond, that it is up to us how we deploy the powers in the Bill. That means it is a matter of choice. Like the noble Lord, Lord Vaizey, I noted the broader international political context in which we debate today, although my perspective is rather different to his. I note that Susie Dent, the lexicographer, declared that the word for today is “recrudescence”, which means the recurrence of an undesirable condition. That is an appropriate term for the context we speak in today. It is also relevant to some of the points I wish to make, which fall into three main areas: the relationship between the kind of goods we are talking about here and corruption and fraud; the situation in the UK economy, where we have too much finance already; and the environmental impacts of cryptocurrencies, other digital resources and the things we are talking about here.
Since we are in Committee, I am reminded of a quote from the noble Lord, Lord Evans. He was then the chair of the Committee on Standards in Public Life, although speaking in a private capacity in a debate on corruption secured by my noble friend Lady Jones of Moulsecoomb. Referring to the most recent decade or two, he said that
“we have clearly, as a matter of policy, turned a blind eye to the perpetrators of corruption overseas using London for business or leisure purposes”.—[Official Report, 13/10/22; col. GC 156.]
If we look around the world at what cryptocurrency is associated with, we see that it opens up entirely new and lucrative avenues for scammers, terrorists, plutocrats, oligarchs and dictators. They have been using it. There is the well-known case of Sam Bankman-Fried from the exchange FTX in the US. Indeed, the most recent figures from the FBI, from September, show that, in the US alone, consumers have lost more than $5.6 billion through cryptocurrency-related fraud—a 45% jump from 2022. I note that, here in the UK, our officials—after a difficult, complex and no doubt expensive investigation—seized £3 billion-worth of bitcoin in April. The Chinese apparent owners of that bitcoin are now seeking to get it back. Think about the costs: they are very much starting to add up here.
I have to contrast that with the Government’s press release dated 11 September, which says that Britain wants to
“maintains its pole position in the emerging global crypto race”
and
“maintain its position as a global leader in cryptoassets”.
We are already a leader in global corruption and fraud. How much do we want to magnify that leadership?
Following on from the comments of the noble Lord, Lord Vaizey, I note that this is very much an equalities issue, too. I am sure that many noble Lords have seen the no doubt expensive and high-profile advertising campaigns for cryptocurrencies. They clearly target young, minoritised communities that are suspicious —with good reason—of the traditional financial sector, with its association with colonialism and slavery, but are at risk of being exploited by a new Wild West of finance.
I come to my second point, which is about having too much finance. I shall quote a study; I have quoted it before, in your Lordships’ House, but it is worth going back to it. Back in 2018, the Sheffield Political Economy Research Institute concluded that the UK had lost £4.5 trillion over two decades because of its oversized financial sector. We are taking scarce human resources—people with PhDs in maths and physics—and letting them go into sectors of corruption that crash and cost us all a great deal of money. The SPERI researchers concluded that, in the 30 years following Margaret Thatcher’s deregulation of the City, financial workers were overpaid by around £280 billion compared to people from similar financial educational backgrounds in other jobs, and financial services reaped £400 billion in excess profits.
Noble Lords may think, “Well, that is not in my political frame”. I point them to yesterday’s article from Martin Wolf in the Financial Times, headlined “More muddling through won’t deliver the growth Britain craves”. In it, Wolf says that
“pre-crisis GDP and GDP growth were either exaggerated, or unsustainable, or both”.
He suggests that a big source of that unsustainability is
“that the pre-2008 global financial bubble, from which the UK, home to a leading financial hub, benefited, also distorted GDP. It not only exaggerated the sustainable size of the financial sector, but also exaggerated the sustainable size of a whole host of ancillary activities”.
Let us think carefully about future bubbles.
My third point picks up a point made by the noble Lord, Lord Holmes of Richmond, about the environmental impact of the digital sector, which has been of increasing concern in the past year. Last year, United Nations scientists evaluated the environmental impacts of just one—although probably the biggest—cryptocurrency: bitcoin. They looked at the activity of 76 bitcoin-mining nations from 2020 to 2021; the study was published in the journal Earth’s Future. If bitcoin were a country, its energy consumption would have ranked 27th in the world, consuming 173.42 terawatt hours of electricity; that is about the equivalent of Pakistan’s consumption, with its population of 230 million people.
Energy footprint is just one aspect of this. The water footprint over a similar time was enough to have filled 660,000 Olympic-sized swimming pools, which would meet the current domestic water needs of more than 300 million people in rural sub-Saharan Africa. The land-mining footprint of bitcoin activities was 1.4 times larger than the area of Los Angeles. We are talking about growing this and seeing how far we can make it go. What can the planet bear?
Those are my three main points but I have a couple of final questions, or comments, to put to the Minister. There has been some discussion about non-fungible tokens. Thinking about the way in which, through Brexit, a loss of government funding et cetera, our artists have been scrabbling around and struggling for financial income, securing non-fungible tokens might be a good thing in the art world. That would be something small to celebrate.
In his introduction, the Minister talked about virtual carbon credits being covered by the Bill. We know that carbon offsetting has been an area of massive fraud and corruption—an absolute failure of governance. Might the Minister, either in summing up or in a letter to me, be able to reflect on how the Government will deploy the Bill to ensure that that is not the situation?
I shall come to a slightly more abstract area of consideration, then a concrete one. Taking the abstract first, digital spaces are now where many of us meet, gather, communicate, conduct politics and conduct democracy. They are in some ways a new kind of Commons, if we think about the Commons as a public space where people gather on the street. Again, I shall understand if the Minister would prefer to write, but I ask him to reflect on how this might affect the public use of digital spaces or digital knowledge.
I finish with this concrete question: how does the Bill interact with the decision taken at the COP 16 biodiversity talks to introduce a multilateral mechanism, including a global fund, in order to share the benefits from the use of digital sequence information on genetic resources—known as DSI—more fairly and accurately? It aims to share the benefits with the global South, indigenous people and local communities, and is known as the Cali fund. How will the Bill interact with it?
Lord Meston (CB)
My Lords, we should indeed be grateful to the Minister for his introduction to this Bill. It concerns a topic for which there are mixed messages, as we have already gathered.
Digital assets are now said to be a fundamental part of modern society and economies, yet it is clear that many people continue to regard them with suspicion. They see them as a currency for criminals; as a sophisticated way to launder money or otherwise put funds out of reach in order to evade tax or creditors; or, in the legal area with which I am most familiar, as a way to frustrate claims by estranged spouses and partners. Others regard any investment in digital assets as a peculiarly risky way for fools to be parted from their money, lacking even the colourful excitement of a horse race or tulip fever.
However, it is also clear from the enthusiasm we have heard today that the market in crypto assets is here to stay and grow. Nevertheless, these are programmable assets that remain volatile, illiquid and an intangible species of wealth. They are transferred, stored or traded electronically on what are described as permissionless and public global systems with unregulated intermediaries, which are, as I recently read, detached from traditional geographical boundaries.
It seems that the criminal law is ahead of the civil law in this regard, as was shown by the Economic Crime and Corporate Transparency Act of last year. The law and many non-criminal lawyers have had to get to grips with unfamiliar technological terminology and legal complexities. Bitcoins, altcoins and Bored Apes are beyond the experience and ambitions of many of us; I admit that, before starting work on this Bill, I had never heard of, let alone thought about, reification or rivalrousness. Doubtless others present for this debate talk of little else.
The remarkable feature of the debate is that we are now considering a Bill, as has been said, with just two clauses on less than one page; indeed, the use of the abbreviation “etc” in the short title is hardly justified. It follows, of course, a report by the Law Commission of more than 300 pages and a supplementary report of a further 80 pages. The Law Commission reports on this topic show a breadth and depth of research and analysis based on wide consultation, making its conclusions authoritative and compelling. Of particular help is the way in which those reports expressly consider, balance and address differing and contrary arguments and viewpoints.
The fundamental proposition underlying the Bill is the conclusion of the commission that, in the common law world and elsewhere, there is now a persuasive, clear and well-reasoned body of case law that holds that certain digital assets are capable of being objects of personal property rights; and the further conclusion that the law should focus on the attributes or characteristics of the thing with which it is concerned in a particular case, without rigid application to so-called “third-category things”—legal principles formulated by reference to other things that are capable of being objects of personal property rights.
The Bill itself, admirably drafted with unambiguous brevity, is designed to knock out potential arguments about the essential nature of the property rights relating to digital assets. It is now to be hoped that, as a result, there will be no further doubt that such property rights fall within Article 1 of the first Protocol to the European Convention on Human Rights; and that, nearer to home, digital assets can be property capable of transfer in matrimonial and family cases before the courts.
I suggest that the points to take away from the Law Commission’s work are these. First, statutory confirmation through the Bill will provide greater and valuable legal certainty for many cases, and will allow the law to develop from a clear foundation and from a considered parliamentary decision that has recognised existing modern realities.
Secondly, the Law Commission has recognised the limits of what it wishes to propose in this area, expressing its confidence in the flexibility and capabilities of the common law and our courts to provide for any necessary further development and definition of boundaries. The commission has not attempted to provide a Bill with greater detail or exhaustive definitions, so avoiding what was once called the vain search for greater certainty; indeed, rather than trying to make the legislation judge-proof, it is expected and intended that the courts will deal with developments as they arise. As the commission stated:
“We also consider that the market will, in general, gravitate towards legal structuring of arrangements where existing legal certainty is high”.
It was therefore suggested that much remaining uncertainty will be transient and will diminish through the operation of markets. There was a welcome conclusion that much of the current law can be applied to provide causes of action and remedies.
Thirdly, the Law Commission supplemented its view of what could be achieved through the courts with the recommendation of the creation of a panel of experts, practitioners, academics and judges to discuss difficult factual and legal issues, particularly relating to control, and to provide guidance, albeit non-binding. It is welcome that this recommendation has been accepted and, as I understand it, is being implemented.
Fourthly, these mechanisms should provide the foundation for the courts to consider both the duties of developers and intermediaries towards users and consumers and potentially complex international jurisdictional questions.
Fifthly, the commission tells us that the large number of crypto-related frauds and scams is likely to serve as a catalyst for further development of the law relating to following and tracing.
Finally, it was hoped that the statutory confirmation of the position would reduce the time spent by the courts on questions of categorisation, allowing them to focus on substantive issues. Certainly, the law reports in this area show how much time and effort have had to be devoted to discussion of the legal status of the assets concerned. This Bill, if enacted, should help to reduce this tendency, although I suspect that the legal profession can still take comfort from the adage that there is always at least 10 years’ work in a new Act of Parliament. Given the position taken by the Law Commission, it is now for Parliament to respect that position and the reasoning behind it.
It is to be hoped that the separate and different action required in Scotland will be encouraged, so far as possible, to align the law in each jurisdiction. More practically, this is not just esoteric law for lawyers; at a practical level, the greatest challenges to the public and their advisers relate to insolvency practice and to those dealing with succession and probate, who have to try to locate, realise and value these assets and any liabilities. Even if the owners of such assets manage to avoid tax and debt, they cannot avoid death. The now well-known case of the Canadian gentleman, Mr Cotten, who died while the sole password holder of an account containing £105 million worth of cryptocurrency, demonstrates the fragility of digital assets on death.
As the Law Society and consumer bodies remind us, not enough people make or update their wills and even fewer prepare a digital inventory or legacy plan or give directions to help their loved ones or personal representatives to identify or access digital accounts. There is a lot of good and necessary advice for those of us who have failed to do so, and I for one am going home to prepare just such an inventory.
Viscount Stansgate (Lab)
My Lords, I will say a few words in broad support of the Bill and thank my noble friend the Minister for the way in which he introduced it. This is my first involvement in a Law Commission Bill and the special procedure attached to it. I commend the Law Commission for its work.
I have a few points to raise which I hope will be considered legitimate. I am not a lawyer but, clearly, for many years, many lawyers have reached the view that the law in this area is inadequate when faced with the realities of modern life. It is not the first time that technological developments—in this case, crypto assets, bitcoin, et cetera—have, in effect, overtaken and bypassed the legal system.
Although I do not intend to talk about bitcoin, I ought to say that the points made by the noble Baroness, Lady Bennett of Manor Castle, who has just left her place, about the quantities of energy involved in bitcoin mining, were very well made. About two years ago, I was going down the Columbia River in Washington state when I saw my first server farm—an enormous building next to the river, which generates the water and electricity needed. We will have to face up to the point the noble Baroness made about the sheer quantity of energy involved. As I say, I do not intend to talk about that now, but the point is worth making.
The House spent a long time in the previous Session considering the Online Safety Bill for the same reason—technological developments had overtaken the framework of the law. We are still not sure whether that Act will work and do its job but, on the surface, this new Bill seems to be fairly simple and straightforward, as reflected in the briefing by the House of Lords Library. You could not have a shorter Bill if you tried, as has been said. I suspect, however, that it might have somewhat wider ramifications than we initially realised.
The Law Commission described digital assets as
“increasingly important to modern society”.
I absolutely agree, but the examples given—crypto tokens, cryptocurrency and non-fungible tokens—are not the only ones. I do not know when Members here first came across the idea of a non-fungible token— I did when I went to the Louisiana Museum of Modern Art just north of Copenhagen in Denmark to see a collection of art by David Hockney. They were pictures drawn on iPads and there were 50 of them around the room. David Hockney is of course one of our most famous artists. I found myself looking at these pictures, which were all very lovely, and saying, “If I took that one off the wall and bought it, in what way would that be an original David Hockney?” You could have passed it to any other noble Lord on their iPad.
A non-fungible token derives from the idea that, unlike in the old-fashioned art world where you buy a painting and take it home with you, you need some other way of ascertaining who is the owner of a particular —in this case—artwork. I began to realise that you could not possibly tell what was an original, in the sense that we do about paintings—references have also been made to Word documents in this debate—so the concept of the non-fungible token clearly grew out of that type of experience.
The emphasis in the Bill is clearly on the financial aspects of new digital things, hence the Law Commission’s 2022 Digital Assets consultation paper and its advocacy of
“a third category of personal property beyond things in possession and things in action”
taking form in the Bill. I notice that the House of Lords Library briefing refers to the Law Commission’s final report on the consultation in 2023, saying:
“The final report … concluded it would be best to avoid hard boundaries of what a third category”
is. Can the Minister confirm that it is intended to create or continue the expert panel—that has been suggested or maybe even set up—designed to give a guide in the future on emerging technical and legal issues?
I turn briefly to one of the more personal aspects of the effect of the Bill. I read an article recently about a new type of legal expertise making great strides. I cannot remember what it is called—something like crypto accountants. These specialist lawyers are much in demand in divorce cases where one party, usually the man, is thought to be hiding assets from the other party, usually the woman. I look towards those Members opposite who may have expertise in this direction but it strikes me as being entirely possible that that is happening. I presume that the Bill will help with those
“complex cases where digital holdings are disputed or form part of settlements”.
I hope that the Committee will not mind if I raise an issue that might turn out to be covered by the Bill, which is what you might call our personal digital lives. I am not referring to money, although the sheer scale of the monetary value of digital assets mentioned by the noble Lord, Lord Holmes, is astonishing. Mention has briefly been made of our online life: the records, messages, Zoom calls and the case of the person who died with a digital password unknown to others.
In divorce cases, one often reads about the business of dividing up assets: “Who keeps this? Who keeps that? Who keeps”—this is a very old-fashioned term these days—“the CD collection? And who keeps the photo albums?” In what way will this Bill apply to disputes over things such as digital photos? I have here a mobile phone. A lot of noble Lords have them. They may have large quantities of digital photos on their phones—tens of thousands, in some cases. As I said, we all have them. Will this Bill lead to the courts applying this legislation in some way to whether a phone is a digital asset that can be apportioned in the case of, for example, a divorce?
I read something that interested me the other day. An AI company has apparently set up a digital version of a BBC broadcast with Michael Parkinson, who died a few years ago. In conjunction with his family—at least, with the approval of his eldest son—the company is creating a digital Michael Parkinson, who will be programmed to take part in digital conversations in future with real, alive people. This may seem strange to noble Lords but it looks to me as though this type of thing is coming. What I want to know is, supposing this does happen but part of the family objects to it, if it came to the courts, how might this Bill be applied to decide whether a digital version of a former relative counts as something that can, as an asset, be divided, disputed and so on? I would be interested to know that. I very much doubt that the Minister has anything in his brief relating to it but, nevertheless, I feel it is the type of issue that will arise in terms of the Bill and its potential applications.
I entirely understand the wider international benefits to the UK legal system of this legislation. I hope that it will keep the UK at the forefront of the international legal industry, where we are already recognised as being able to apply the rule of law when so many other jurisdictions around us are not.
Lord Freyberg (CB)
My Lords, it is a pleasure to follow the exposition from the noble Viscount, Lord Stansgate, on digital assets; I particularly enjoyed what he had to say on David Hockney, whose work I admire. I add my thanks to the Minister for introducing the Bill. First, I declare my interests as someone with a background in the visual arts and as an artist member of DACS, the Design and Artists Copyright Society.
The Bill before the Committee looks to make a narrow and specific change in law to give property protection to digital assets. Although I commend the lucidity of the evidence put forward by the Law Commission and its findings as part of its consultation process, some aspects of digital assets have unfortunately been overlooked by that process. I refer in particular to the impact that non-fungible tokens—NFTs—have had on artists, the art market and the wider creative industries, which were not adequately considered in the consultation by the Law Commission. This represents a potentially missed opportunity to address wider concerns around the roles that digital assets play in a variety of marketplaces. I note in particular that, although NFTs have been widely aligned with artworks—such as the first NFT, which sold at auction for almost $70 million in 2021—only cursory references were made to this important store of value in the consultation and, therefore, in the responses.
Although the sale of NFTs made headlines and could be considered somewhat fanciful, the reality is that NFTs and NFT marketplaces opened the doors to a plethora of issues, from intellectual property infringement to fraud. I therefore wish to highlight some of the important work of the Government’s Select Committee in addressing these concerns, which were not considered in the earlier 2022 Law Commission Digital Assets: Consultation Paper, as they were discussed nine months later in August 2023.
The Culture, Media and Sport Committee undertook an inquiry into non-fungible tokens and blockchain to assess the role of NFT marketplaces, the impact of blockchain on the traditional art market, and issues of intellectual property arising from a surge in NFT sales on international platforms. The committee heard from witnesses that the role of NFT marketplaces facilitated widespread copyright infringement and, in some cases, fraud. Marketplaces selling NFTs subjected their users, whether consumers or artists selling their NFTs, to terms and conditions of use that absolved them entirely of any responsibility regarding the veracity of the products sold and of any liability for wrongdoing.
Consumers trading in NFT marketplaces face high financial risks. They must first convert fiat currency into volatile cryptocurrency and contend with unpredictable service fees, known as “gas fees”. These risks are intensified by a lack of transparency, with marketplaces often not disclosing complete product information or taking responsibility for fluctuating transaction costs.
There is also a lack of reliable data on the scale of the NFT market to adequately evaluate, and therefore mitigate, these risks. At the time the CMS committee conducted its inquiry, it was understood that OpenSea, one of the largest NFT marketplaces, had over 80 million NFTs on its platform. However, no data on how many individuals were purchasing these or converting fiat currency into cryptocurrency was available. None the less, there was some speculation that around $100 billion- worth of cryptocurrencies were in circulation, leaving an enormous amount of capital subject to losses caused by fluctuation in prices.
Although the anticipated benefits of NFTs did not meaningfully materialise, the real risks and harms to creators and consumers in their use have persisted. The most pressing issues uncovered by the CMS committee’s inquiry pertained to risks to intellectual property. These included the infringement of creators’ copyright when NFTs were created or “minted” from their creative works—a restricted act under copyright law—as well as the limited avenues for recourse and redress available to creators whose works were minted, and the consumer confusion around the transfer of rights to, or even ownership of, the underlying assets in transactions of NFTs.
To mitigate the identified issues, the committee recommended that the Government engage with NFT marketplaces to address the scale of infringement and enable copyright holders to enforce their rights. It also recommended that the Government address the impact of safe harbour provisions by introducing for online marketplaces operating in the UK, including NFT marketplaces, a code of conduct that protects creators, consumers and sellers from infringing and prevents fraudulent material from being sold on these platforms. However, the Government’s response to the report, received on 4 January 2024, stated that they would not seek to introduce any legislation or code of conduct for online marketplaces, including NFT marketplaces.
So, although it is commendable and necessary, the Property (Digital Assets etc) Bill does not address the full extent of the issues arising from the sale and trade of digital assets in the real world. Sadly, it also does not factor in the work conducted by the CMS committee in April 2023. These issues are still valid—artists depend on fair pay for the use of their works in an online environment and are particularly impacted by unauthorised and unremunerated uses.
These problems are only intensifying. We now have generative AI platforms that have scraped images from the internet, without permission or pay, to train AI models. A lot of generative AI products will even encourage customers to prompt the models to produce an output in the style of another artist. Why would anyone need to ask permission or license the work of our talented artists if these platforms give something identical to their customers for free?
Given these concerns, will the Minister look to conduct a thorough review of the CMS committee’s work to support the advancement of the Property (Digital Assets etc) Bill? This review should aim to improve benefits while addressing the adverse effects that non-fungible tokens have had on artists, the art market and the broader creative sectors.
Lord Clement-Jones (LD)
My Lords, I remind the Committee of my interests in the register. I add my thanks to the Minister for his clear introduction. I am an admirer of the work of the Law Commission, so it is intriguing to be debating the merits of this one-clause Bill with such a distinguished group of digital aficionados. Despite the brevity of the Bill, as the Minister has described, it has seen quite a careful run-up through consultation, response, report and draft Bill to help inform us. We have heard some great speeches today explaining why digital assets are important because of their impact, both negative and positive, on society and the economy.
The Law Commission has essentially recommended that we legislate to confirm that the outcome of the 1885 case Colonial Bank v Whinney, which decided that all personal things are either in possession or in action, is clearly superseded. Effectively, we are confirming that the common law of England and Wales has, over the last 10 years, clearly moved towards explicit recognition of a third category of things to which personal property rights can relate. In the words of the Law Commission, the courts have recognised that those things are
“capable of being objects of personal property rights at law”.
It was interesting to be reminded, while preparing for this debate, of the traditional forms of personal property. In the dim and distant past, I remember my supervising partner when I was an articled clerk—in the quill pen era—being very surprised when I had no idea how to draft an assignment of a chose in action. Actually, I had no idea what a chose in action was, despite two years of law at university. Anyway, young lawyers will now have to learn how to assign a digital asset as well.
The Electronic Trade Documents Act, mentioned by the noble Lord, Lord Holmes—it is also good to see the noble and learned Lord, Lord Thomas of Cwmgiedd—and which I was pleased to help on its way recently, was an exception in that it provided that electronic, or digital, trade documents could be treated as things in possession. Sadly, the Centre for Digital Trade and Innovation, soon to become an international centre, recently said that, while there are some signs of adoption, particularly among large commodity traders using e-bills of lading, the dial has yet to move on more general usage of the Act to make international trade faster, cheaper and simpler—as suggested in the impact assessment—especially for the SME sector. So, sadly, not all Law Commission efforts bear fruit quickly.
However, as the Law Commission discusses in its consultation paper, it did not think that the arguments for using possession as the operative concept for electronic trade documents were as persuasive in respect of other forms of digital asset. It concluded that
“it is not necessary or appropriate for legislation to define the boundaries of such a third category”.
We are essentially being asked to take an act of faith in the adaptability of the common law and to accept that
“the common law remains best placed to describe the parameters of third category things that are capable of being objects of personal property rights”.
This is in line with the first two of the principles that the Law Commission has explicitly and rightly adopted. The first is:
“Championing and supporting the inherent flexibility of the common law and making clear that, in general, it is sufficiently flexible, and already able, to accommodate digital assets”.
The second is:
“Statutory reform only to confirm the existing common law position or where the common law cannot develop the legal certainty the market requires”.
So we see reflected in this short Bill the Law Commission’s recommended legislation confirming the simple proposition that the fact that a thing is neither a thing in possession nor a thing in action does not prevent it being a thing to which personal property rights can relate. As we have heard today from a number of noble Lords—including the noble Lords, Lord Vaizey and Lord Holmes, and the noble Viscount, Lord Stansgate—this is designed to cover crypto tokens, such as bitcoin, ether and stablecoins, NFTs and carbon credits, which may not have rights or claims attached to them so they may not qualify as things in action.
Some lawyers say that there is already a high degree of legal certainty and that there exist certain types of intangible property that are already recognised by the law of England and Wales. In essence, the Law Commission says that the recommendation for statutory intervention seeks merely to confirm and support what it considers the existing position in law. It goes further in its belief that the common law can do the necessary job in further defining digital assets, saying that
“it is not necessary, appropriate or helpful for the law of England and Wales to adopt statutory definitions of digital things for the purposes of answering the question as to whether such things are capable of being objects of personal property rights”.
It continues:
“We think that this logic applies equally to defining hard boundaries of a category of thing to which personal property rights can relate, distinct from things in possession and things in action”.
So, broadly speaking, the Law Commission leaves detailed implications to be fleshed out through future judicial decisions and ongoing common-law development, perhaps with the expert panel.
This includes the important aspect of remedies. The commission concludes that
“the vitiating factors of mistake, misrepresentation, duress and undue influence apply similarly to contracts involving third category things as they do to contracts involving things in possession and things in action”.
We are taking quite a lot on faith here. However, when it comes to certain other aspects, such as the entry into operation and enforcement of collateral arrangements for crypto tokens and crypto assets, the Law Commission concludes that
“it is not possible for the common law alone to develop a legal framework”
and that
“such a regime would be beneficial for the law of England and Wales and would provide market participants with important legal tools that do not exist today”.
Some questions arise. What next steps are proposed for this? Is this another case for the expert panel to look at? Is the common law adequate to deal with transfers and intermediate holding arrangements?
There are a number of additional questions, to which I hope we will get the answers in the course of our Committee proceedings when we take evidence. For instance, the report touches on general consequences, such as clearer rules for inheritance, bankruptcy and insolvency proceedings. The noble Lord, Lord Meston, touched on the vexed issue of digital assets in wills, while the noble Viscount, Lord Stansgate, mentioned it in the context of divorce—happy days. What are the potential legal consequences of the Bill’s approach for the parties involved in digital asset transactions? How will this impact issues such as ownership disputes, inheritance, bankruptcy and insolvency?
The Bill leaves detailed implications to be fleshed out through future judicial decisions and ongoing common-law development. The report clearly states that the courts will play a critical role in shaping the contours of this new category. Are they fully equipped to do so? Is that the best way forward, rather than providing more granular definitions in the Bill itself? Is there any transition of existing digital assets required from their current legal status to their status as a result of the Bill? What are the potential risks or unintended consequences of the proposed legislation? Will the explicit recognition of digital assets as personal property have an impact on the financial, technological and legal sectors? How do stakeholders from those sectors view the proposed Bill?
While the Law Commission in its reports acknowledges the possibility of unintended consequences, it argues that the flexibility of the common law approach will allow for adjustments and refinements as necessary, rather than detailing specific risks, and I am certain that the Committee will want to explore that approach.
Finally, I have two questions that the Minister may be able to answer today. The report discusses potential impacts, such as increased legal certainty and more straightforward asset management, but it does not provide an in-depth analysis of sector-specific impacts. Do the Government propose to produce an assessment of the impact that the recognition of digital assets as personal property will have on various sectors, or do they believe that because of the confirmatory nature of the Bill, that is already baked in?
Then, on a matter that a number of other noble Lords raised today—the noble and learned Lord, Lord Thomas, and the noble Lords, Lord Vaizey and Lord Holmes—there is the whole question of how the proposed legislation aligns with existing international models. We heard mention of MiCA in the EU, while Dubai has digital asset legislation and a regulator, VARA, and the US will probably become more bullish about crypto assets under its new Administration. The noble and learned Lord, Lord Thomas, was also very clear about the importance of the competitive aspect in terms of choice of jurisdiction. This question remains largely unanswered in the report, with the Law Commission not detailing how the Bill will align with international legal frameworks or affect international transactions. What are the potential risks or unintended consequences of any of the proposed legislation in this respect?
Other questions were rightly raised about the future regulation of crypto assets and cryptocurrencies. On whether we are going as far as we should in this respect, the noble Lord, Lord Vaizey, and the noble Baroness, Lady Bennett, are pretty much on opposite sides of the equation. The noble Lord, Lord Meston, rightly made the point that the criminal law is ahead of the civil law—I see we are debating a statutory instrument on this subject on Monday. It may be beyond the Minister’s brief to be talking about the digital Michael Parkinson, but perhaps he could shine some light and give us a glimpse of the regulatory future as regards some of these digital assets.
There are many unanswered questions. I look forward to Committee, when I hope that we will get some more answers.
Lord Sandhurst (Con)
My Lords, this has been a most interesting debate. I am grateful, as are others, to the Minister for his careful opening.
On this side we welcome the Bill. It may be small in size but it is big in importance, and we may yet find that it is perfectly formed. The last Conservative Administration deserves credit, I suggest, for having asked the Law Commission in 2020 to review this field of law. It is also very timely that we are debating this during the presidential election, because I see from my phone that bitcoin has risen over 7% in value today. So, this is an important, real topic for many people.
Lord Sandhurst (Con)
My Lords, the Law Commission has produced two admirable reports. The Bill, we suggest, is a necessary but appropriately constrained measure. I shall be interested to hear the evidence in Committee, but it is plain that such a Bill is necessary to clarify the definition of what is capable of being property and to give enforceable rights where there might otherwise be doubt.
The English common law has given property rights to two categories of thing, as we have heard: so-called things in possession, which are generally tangible, visible objects, and so-called things in action, such as debts, and the rights to sue for breach of contract and company shares.
However, the world moves fast, and we are now confronted with digital assets. These sit less easily in our current definitions. They can include crypto tokens, cryptocurrency and non-fungible tokens. They are increasingly important to modern society, whether we personally like them or not. It is important that we keep the strong position that English common law holds in international trade, as the noble and learned Lord, Lord Thomas of Cwmgiedd, reminded us. We need to enforce the position of the City of London and the role of its lawyers in the important commerce that they bring to this country, and the tax and other benefits which flow from that.
There is a need for action to enable ongoing innovation growth in the sector. This has given rise to the Law Commission’s definition of a third category of property. It should take account of recent technological developments without creating hard boundaries which exclude or misdescribe future categories of property as yet unimagined.
The Law Commission is of the view that the common law of England is the better vehicle for determining those things that properly can and should be the object of personal property rights. They need not necessarily even be digital things. It points out that they could include, for example, carbon emission allowances. The world moves fast, and the law must keep up, but it cannot anticipate everything. As the Law Commission points out, an overprescriptive definition will leave things frozen in time.
In chapter 2 of its July report, the commission explains that the common law is in general sufficiently flexible and already able to accommodate digital assets. It agreed with Sir Geoffrey Vos, Master of the Rolls, who, speaking extrajudicially, said:
“We should try to avoid the creation of a new legal and regulatory regime that will discourage the use of new technologies rather than provide the foundation for them to flourish”.
The Law Commission concluded that it should take a tripartite approach to law reform. First, the common law is in general sufficiently flexible and already able to accommodate digital assets, so any law reform should be through further common law development where possible. Secondly, it recommended targeted statutory law reform and no more. That should confirm and support the existing common law position or fill a gap where common law development is not realistically possible. Thirdly, it said the making of arrangements for the provision of further guidance from industry experts should occur. We are not concerned with that third category.
So, the commission concluded, the law in England and Wales is now relatively certain. Most areas of residual legal uncertainty are highly nuanced and complex, in part because both the digital asset markets and the technology that supports them continue to evolve. Although some digital assets are not easy to place in traditional categories of things to which personal property rights can relate, this does not prevent them from being capable of attracting personal property rights.
The commission has said that it is clear what should take place in common law. It was persuaded by consultees that it would be helpful to express in legislation that certain digital assets are capable of attracting personal property rights and, therefore, to support the existing common law and take away any uncertainty. It set out certain principles that are beyond argument, I suggest. We should champion and support the inherent flexibility of the common law; it is already sufficiently flexible to accommodate most, if not all, digital assets. We should seek by statute only to confirm the existing common law position or to reform it where the common law cannot develop the legal certainty that the market requires. We must ensure that there is consistency with other legal and regulatory regimes where possible.
English common law has already proved resilient in the face of new technology. It has been flexible enough to answer legal questions concerning digital assets. It is developing a sophisticated regime that recognises and protects the newest features. It provides the market with a good balance of certainty and flexibility. Our English jurisdiction is well placed to provide a coherent and globally relevant legal regime for existing and new types of digital asset. As the noble Lord, Lord Freyberg, said in his interesting speech, if the Bill leaves gaps—particularly in respect of non-fungible tokens in the art market—we should examine the potential remedies, if there are any, in Committee. However, intervention by statute should not undermine the high level of existing certainty, lead to undue complexity or create a significant risk of boundary issues—the Law Commission was clear on that—because the wrong sort of statutory intervention might not be capable of distinguishing between different implementations of similar technology in the way the common law can.
The Bill, with its one simple clause, is the product of much deliberation at the highest level. The definition has been drafted with great care. I note the subtle differences between the version now before this Committee and the earlier draft, produced in February. The Committee will hear evidence about whether that balance is now right and whether there are appropriate additions or amendments, but, to me, at the present time, it is plain that the draft before us should not be amended without compelling reasons. I commend the Bill to the Committee.
Lord Ponsonby of Shulbrede (Lab)
My Lords, I am grateful to those noble Lords who contributed to today’s debate. All of them will, I hope, acknowledge the expertise in the Room. Committee stage is likely to be very expert as well; I look forward to it.
I am keen to emphasise, as the noble Lords, Lord Clement-Jones and Lord Sandhurst, did, the great deal of work that has gone into the Bill: from the Law Commission, which produced an excellent report and followed that up with a consultation on the proposed Bill, and from the practitioners, businesses, academics and organisations that engaged with the process throughout. I give my thanks to all who were involved in that work.
The result of those efforts is a simple but elegant Bill. As has been said, most notably by the noble and learned Lord, Lord Thomas, it will support our efforts to remain a pre-eminent jurisdiction, with English and Welsh law the global law of choice, and it will signal that the UK is a leader in innovation and technology. As our society evolves, so too must our laws. The Bill is just one of the ways in which we are modernising our legal framework. I will endeavour to address some of the points made by noble Lords. If I miss any points in particular, I will of course write to noble Lords.
First, the noble Lord, Lord Holmes, asked a number of questions, and I will have a go at answering them— I recognise his expertise in this matter. The first question was on whether the Government are sure that the current categorisation is not exhaustive and unable to accommodate existing digital assets. The Law Commission considered this option as part of its extensive and detailed report. It acknowledged that it would be possible to recognise crypto tokens as falling within an expanded category of things in action—that is, to treat “things in action” as a catch-all category for all personal property that is not capable of possession. However, crypto tokens and similar assets are fundamentally different from other things in action, which can only be claimed or enforced through a court action. For example, unlike debt they can be stolen, which in some ways makes them more like things in possession despite them not being physical objects.
Digital assets could not have been conceived when the original categories of personal property were developed and so it is no wonder that these do not fit neatly into either category. The commission, and most of its consultees, concluded that it would be better for the law to recognise that this unique combination of features means that they belong to a different category. That is why we chose the third category option, which is promoted in the Bill.
The second point the noble Lord, Lord Holmes, made, was on the implications for our courts. One of the great strengths of the common law is its ability to evolve. We are, however, dependent on the right cases being brought to the precedent-setting courts. While we could have left the law to develop, there is no guarantee of if or when this would happen, and in the meantime the uncertainty would remain about whether digital assets could be treated as personal property. The underlying point of the Bill is to put into statute the way that the common law was developing in any case, and to allow the common law to continue to develop once this particular bit of legislation is in place. To that end, the Government took the decision to legislate to give the market confidence and clarity in English and Welsh law. It also provides a strong indication to the courts that Parliament then intends to develop common law and that there is a further category of personal property that some digital assets can fall within.
The third question the noble Lord, Lord Holmes, asked, was on what this means for the common-law community. The Bill does not put the law of England and Wales at odds with other common-law countries. Courts in New Zealand and Singapore have considered that crypto assets are capable of attracting property rights and question the appropriateness of there being only two categories of personal property. The Bill is consistent with further international legal developments —for example, the US, New Zealand, Singapore and the Dubai International Finance Centre have recognised crypto tokens as property, and the latter has recognised them as specifically belonging to a new category of personal property.
The noble Lord, Lord Holmes, asked about Scotland. Scotland’s law of personal property is distinct and does not share concepts of things in action or things in possession, so any legislative intervention in this area would have to be slightly different. I understand that the Scottish Government recently appointed an expert reference group to consider how Scots private law may best accommodate digital assets. It will be interesting to see how its work develops in this area. No noble Lord raised Northern Ireland, but the Bill could be extended to include Northern Ireland, subject to a legislative consent Motion at the Northern Ireland Assembly’s request.
The noble Lord, Lord Vaizey, spoke about the importance of the financial regulation of crypto assets. The Bill supports and complements the work of the Treasury and the Financial Conduct Authority, which are currently working on appropriate financial regulation of crypto assets.
The noble Baroness, Lady Bennett, asked what impact the Bill will have on things such as illegal transactions, fraud and tax avoidance. I recognise her points, and the answer is that the Bill deals only with a specific issue of personal property law. Illegal transactions, fraud and tax avoidance are properly dealt with by other statutes and initiatives.
The noble Baroness spoke about the environmental impact of crypto in a wider sense, and my noble friend Lord Stansgate also made that point. Of course, the Bill does not have a direct environmental impact, as it does not mandate for an increase in the use of crypto tokens or other digital assets—digital assets will continue to be used and created regardless of the Bill. Rather, the Bill is about clarifying the legal status of digital assets that already exist when a dispute has arisen. The Bill will help keep the courts of England and Wales as a leading place to mitigate these disputes.
However, I agree that environmental issues are important. This falls to a much wider discussion on things such as improving energy efficiency and adoptable sustainable power sources, and that is best addressed by other statutes and initiatives. Conversely, it is possible that the Bill could bring positive environmental benefits by enabling innovative green finance for particular projects and things. Nevertheless, I take the noble Baroness’s point.
My noble friend Lord Stansgate asked a number of questions. The first was: is the panel on the legal concept of control proceeding? I am happy to confirm that the UK Jurisdiction Taskforce, an expert group chaired by the Master of the Rolls, is taking forward this work, as a body that already has an internationally credible voice in the intersection of law and technology. In fact, I met Sir Geoffrey Vos last week, and we spoke about that very point.
Secondly, my noble friend asked whether the Bill would help in the division of matrimonial property on divorce—the noble Lord, Lord Meston, made this point as well. I am pleased to say that the Bill will help courts to say with confidence, in divorce cases, that crypto assets are matrimonial property. This is also a case for crypto assets on death.
The third question my noble friend raised was: will the Bill help people access the iPhone photos, for example, of deceased relatives? The situation for other digital assets, such as digital photos, is not addressed by the Bill, as the assets are not personal property. So it will not address that point as such, but it will be for the common law to develop the answers to those sorts of questions.
The noble Lord, Lord Freyberg, in a thoughtful speech of which he gave me good notice—I thank him for that—raised the impact of NFTs on the traditional art market. As he rightly said, there are many different aspects to this, and many uses for digital assets, giving rise to different legal, practical and other issues. This Bill does not purport to deal with all the issues that arise; that would be a very different and hugely extensive Bill. This Bill deals with a discrete issue of personal property law; it does not relate to the existing statutory framework of copyright law, artists’ resale rights or consumer protection law. Those areas of law raise different policy issues and need to be considered separately. I recognise the important work done by the CMS Select Committee on issues such as copyright infringement, and other bodies such as the Financial Conduct Authority on issues of consumer misinformation about crypto. These issues are too varied and complex to be brought within the present Bill, which is deliberately limited in scope.
On the noble Lord’s comments relating to AI, the Government believe in both human-centred creativity and the potential of AI to open up new creative frontiers. The AI and creative sectors are both essential to our mission to grow the UK economy. However, this is an area which requires thoughtful engagement. I understand that the Intellectual Property Office, the Department for Science, Innovation and Technology and the Department for Culture, Media and Sport are working closely with a range of stakeholders, including artists, on issues related to AI, copyright and IP. This includes holding round tables with AI developers and representatives from the creative industries.
I thank the noble Lord, Lord Clement-Jones, for his broad support for the Bill, although he asked whether this should be left to the common law. The idea is that this Bill will enable the common law to continue developing in this field. There will be new technologies, including things that perhaps we have not even thought about in this debate. The law of personal property is an area which has traditionally been developed through common law. If the noble Lord wishes to pursue the issue, we could develop it in Committee.
Baroness Bennett of Manor Castle (GP)
Will the Minister write to me about the issue I raised from COP 16 about digital sequence information on genetic resources, and the broader point about digital commons?
Lord Ponsonby of Shulbrede (Lab)
Yes, I will be happy to write to the noble Baroness.
House of Lords
Gypsy and Traveller Communities: Accommodation
(2 weeks, 1 day ago)
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Baroness Bakewell of Hardington Mandeville
To ask His Majesty’s Government what steps they are taking to ensure the provision of adequate and culturally appropriate accommodation for Gypsy and Traveller communities.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
My Lords, as part of the recent consultation on proposed reforms to the National Planning Policy Framework, we set out changes to how we plan for the homes we need, including accommodation for Gypsy and Traveller communities. We are continuing to analyse the consultation responses and we will publish our government response later this year. We will also consider how planning policy for Traveller sites should be set out in future, including as part of wider work on the national planning policy. The Government’s overarching aim is to ensure fair and equal treatment for Travellers in a way that facilitates their traditional way of life while respecting the interests of the settled community.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I thank the Minister for her very positive response. However, I am not sure that it will meet the 2024 recommendations of the United Nations Committee on the Elimination of Racial Discrimination to create more sites and stopping places. Many sites provided are on busy roads and the outskirts of communities, often some distance from schools. Since 1994, only 30 new sites have been built. Will the Government now legislate for all local authorities to include site provision in their local plans, including bricks and mortar as culturally appropriate accommodation? Gypsy and Traveller children deserve the same rights as children in the settled community.
Baroness Taylor of Stevenage (Lab)
The noble Baroness is of course right that Gypsies and Travellers deserve consideration of their lifestyle and culture in planning. Planning policy makes it clear that local authorities have a responsibility to assess the need for Gypsy and Traveller sites in their area and then plan to meet that need. When considering those applications, decision-makers should consider the existing level of provision, the availability of alternative accommodation and other personal circumstances, which could include the need for culturally appropriate accommodation. When the National Planning Policy Framework comes out, I hope she will see steps towards that.
Lord Watson of Invergowrie (Lab)
My Lords, I welcome the initial comments of my noble friend in response to the noble Baroness, Lady Bakewell. However, there are far too many cases of local plans having been approved without the accommodation needs of Gypsy and Traveller communities having been met. The noble Baroness mentioned 1994. It has in fact been the policy of successive Governments since 1994 that local plans should not be approved without that provision. Will my noble friend use her position in this Government to ensure that steps are taken to enforce that requirement before local plans are approved?
Baroness Taylor of Stevenage (Lab)
I thank my noble friend for that important point. Of course, it is the responsibility of local authorities to assess the need for Gypsy and Traveller sites in their area, as set out in Section 124 of the Housing and Planning Act 2016. They must plan to meet that need, and it should come under the remit of the inspectorate when it is looking at local plans to ensure that that provision is made properly and in accordance with the cultural needs of Gypsies and Travellers. We will look at that closely once the new National Planning Policy Framework is in place.
Earl Attlee (Con)
My Lords, what does the planning system do to improve the education of Travellers so that they can engage in exclusively legitimate economic activity?
Baroness Taylor of Stevenage (Lab)
Of course, Gypsies and Travellers have the right to education, just like every other family in this country. We make every endeavour to make sure that the opportunities that are available to all the children in this country are available to Gypsies and Travellers as well, and that we take account of their cultural needs as we do so.
Baroness Chakrabarti (Lab)
My Lords, no doubt all Members of your Lordships’ House engage exclusively in legitimate economic activity. Does my noble friend the Minister agree that this morning is a good time to reflect on the need to avoid demonisation of minorities and polarisation of communities? Notwithstanding the specific duties she set that local authorities have, maybe the Government could help local authorities to promote good relations.
Baroness Taylor of Stevenage (Lab)
I thank my noble friend for that comment. When I was a councillor, I had a Gypsy and Traveller site in my own ward. It is important that all council officers familiarise themselves with the cultural issues around Gypsies and Travellers. Of course, we must all strive, always, to avoid division in our communities; it is very important that communities move forward together. If we are to achieve the full potential of our country, that is exactly what we must do.
Baroness Brinton (LD)
My Lords, following the withdrawal of the Gypsy and Traveller Accommodation Needs Assessments guidance of 2007, there has been a policy vacuum for the assessment of need. This has allowed private companies, that provide most of the Gypsy and Traveller accommodation needs assessments, to develop their own—and different—methodologies, leading to discrepancies in how those are undertaken. Will the Government develop guidance for local planning authorities on how to properly undertake Gypsy and Traveller accommodation assessments in consultation with Gypsy and Traveller civil society? Can such guidance issue a pitch target for social provision in the same way as bricks and mortar housing needs are assessed?
Baroness Taylor of Stevenage (Lab)
The noble Baroness makes a very important point. I will look at the National Policy Planning Framework when it comes out to see what guidance is provided. Other noble Lords have raised the issue of how this will be enacted. It is very important that local planning authorities demonstrate an up-to-date, five-year supply of deliverable sites. The planning policy for Traveller sites states that this should be a significant material consideration in any subsequent planning decision, so there will be enforcement powers to support the delivery of those sites as set out in planning guidance.
The Earl of Effingham (Con)
My Lords, there are many different peoples within the Traveller community with a diverse range of cultural traditions. How do the Government intend to adequately serve this wide range of cultures when providing accommodation?
Baroness Taylor of Stevenage (Lab)
I thank the noble Lord for his question. The key to all this is consultation and engagement with the communities. There has just been a significant report called Kicking the Can Down the Road. When we read the many changes that have been enacted in provisions for Gypsies and Travellers, it is more than clear that we need to fully engage with a wide range of those in the Gypsy and Traveller community so that we understand what their needs are and make sure they accounted for, not just in the planning process but in all public services.
Baroness O'Grady of Upper Holloway (Lab)
My Lords, it was good to hear the Minister commit to the principle that everybody in every community deserves a decent home. Can the Minister also reassure us that this Government will be committed to tackling the everyday racism that Irish Traveller and Gypsy communities experience—from bullying in schools to discrimination in insurance and financial services? As a recent example, a Gypsy family were required to pay upfront in a Pizza Express branch before they were served.
Baroness Taylor of Stevenage (Lab)
I thank my noble friend. That kind of discrimination is totally unacceptable. The forthcoming Renters’ Rights Bill, which is currently in the other House and will be with us shortly, takes out some of the potential discrimination that could have been involved in the housing market. We will continue to do that and to look across the board at what local government can do. Some great work on this is done in local government, and we will look at sharing best practice with local authorities to ensure we tackle such discrimination.
Lord Young of Cookham (Con)
My Lords, if Gypsies and Travellers are not to camp illegally then, of course, authorised sites must be provided by local councils. After legislation was introduced some 50 years ago, there was a count of how many Traveller and Gypsy caravans there were in England, and the answer was 8,045. There are now 20,000 authorised sites, but 25,000 Traveller and Gypsy caravans. What is behind this increased demand for a nomadic Gypsy and Traveller lifestyle?
Baroness Taylor of Stevenage (Lab)
The noble Lord will know that we face the most acute housing crisis this country has ever had. I cannot help but feel that the issue of further caravan provision is partly to do with that. However, there is a difference between that and the culturally specific provision that needs to be made. I cannot answer directly his question about the numbers, but there may be some further insight in the department. I will ask that question and write to him if there is more information.
Baroness Blower (Lab)
My Lords, is the Minister working with her noble friend at the DfE to ensure that all schools understand the culture of Gypsies and Travellers, and that they are welcoming both in their policies and in their curriculum to ensure that when Gypsy and Traveller children arrive in schools they feel welcomed and are not bullied, and that all children understand that diversity is of benefit to schools?
Baroness Taylor of Stevenage (Lab)
I thank my noble friend. I have seen some wonderful examples of good practice in schools on this issue, but I will refer the question to my noble friend the Minister for Education.
Command Paper Safeguarding the Union
(2 weeks, 1 day ago)
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Lord Lexden
To ask His Majesty’s Government what progress they have made in implementing the measures set out in the Command Paper Safeguarding the Union (CP 1021), published in January.
The Lord Privy Seal (Baroness Smith of Basildon) (Lab)
My Lords, the Government are committed to implementing the Windsor Framework in good faith and protecting Northern Ireland’s place in the UK internal market. We also continue to take forward policies as set out in the Safeguarding the Union Command Paper. Most recently, the Secretary of State for Northern Ireland announced members of the independent monitoring panel and underlined the Government’s commitment to the establishment of InterTrade UK, which I am pleased to see will be chaired by the noble Baroness, Lady Foster. The Government will shortly be announcing a date for the next east-west council.
Lord Lexden (Con)
My Lords, is it not the case that the Command Paper rests upon a principle that everyone should welcome and endorse—namely, that the union of Great Britain and Northern Ireland should be as strong and successful as possible? The measures set out in the Command Paper to strengthen the UK internal market include scrapping the legal duties on Ministers to promote and an all-Ireland economy. Is it not important that this be done and imperative to emphasise that, while cross-border co-operation in trade helps everyone, it takes place between states, any form of joint sovereignty and joint authority over Northern Ireland has been firmly ruled out?
Baroness Smith of Basildon (Lab)
My Lords, I think the noble Lord perhaps misunderstands what is intended. The legal requirement in the report is to “have due regard”, and that persists as long as the section remains in force. In practice, the contents were largely an agreement in principle that has been superseded by the more detailed arrangements of the Windsor Framework and the wider withdrawal agreement. He will know—and I think it is embedded in this House—that we are committed to the place of Northern Ireland in the United Kingdom.
Lord Dodds of Duncairn (DUP)
My Lords, would the Minister accept that, whatever progress is made in Safeguarding the Union—and I, for one, did not believe it goes far enough—it does not deal with the fundamental problem of the Windsor Framework protocol. People in Northern Ireland, of whatever political persuasion, are disenfranchised. We have no power over 300 areas of law, including vast swathes of the economy. A foreign political entity makes those laws, develops and amends them, without any say or vote by any MP elected in Northern Ireland or any Member of the Northern Ireland Assembly. Surely that colonial status, in part of the United Kingdom, the fifth or sixth biggest economy in the world, is something that is untenable and acceptable in economic, constitutional and democratic terms.
Baroness Smith of Basildon (Lab)
My Lords, the noble Lord supported Brexit at the time, and he will be aware that the way in which Brexit was undertaken brought with it enormous constitutional implications. We have always sought to safeguard the position of Northern Ireland in the UK and in the internal market, but he will understand the pressures on business. We will do all we can to reduce those pressures to make it as stable as possible. Northern Ireland is an integral part of the UK, and the internal market is an important part that we will do everything we can to safeguard.
Lord Howell of Guildford (Con)
Does the noble Baroness agree that, even since the publication of this report last January, there has been considerable and important new thinking on trade facilitation of all kinds, particularly within the United Kingdom? Will she assure us that the report published today by the Trade Facilitation Commission, which contains many of these ideas, is taken full account of by the independent monitoring group or whoever is going to be driving this pattern forward?
Baroness Smith of Basildon (Lab)
My Lords, the most important thing here is to safeguard the trading position and the internal market. When ideas, suggestions and reports come forward, of course they will all get the due consideration that they deserve in the best interests of the Northern Ireland.
Baroness Foster of Aghadrumsee (Non-Afl)
My Lords, I thank the Minister for her answers thus far and declare my interest as chair of InterTrade UK. I asked her colleague the noble Baroness, Lady Anderson, about the removal of Section 10(1)(b) of the European withdrawal Act, as committed to in Safeguarding the Union. This follows on from the Question of the noble Lord, Lord Lexden. In a Written Answer, I have been told that the Government are not minded to repeal it, despite the fact that it was a commitment in Safeguarding the Union. My simple question is: why?
Baroness Smith of Basildon (Lab)
My Lords, I apologise if I was not clear in my Answer to the noble Lord, Lord Lexden, but I thought that I was. As was also said in her Written Answer, as I understand it, in practice its contents are primarily an agreement in principle that has now been superseded by the more detailed arrangements of the Windsor Framework and the wider withdrawal agreement.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, is the noble Baroness aware that, just as the Kremlin interfered in the referendum on Brexit, because it is in its interest to see the break-up of the European Union, it is now undermining the United Kingdom in a number of ways, including through social media, particularly in supporting certain parties in Ireland and in the rest of the United Kingdom? Will she discuss with colleagues having increased activity by our intelligence services and others to try to make sure that this is stopped immediately?
Baroness Smith of Basildon (Lab)
My Lords, if there is any malign influence in the elections in this country or its politics from a hostile state, or any other country that seeks to undermine our democracy, we will of course do whatever is necessary to protect our democracy, which we regard as having the utmost integrity.
Baroness Wheatcroft (CB)
My Lords, is the Minister able to tell the House when we might hear a few details about what the reset of relations with the EU might actually mean?
Baroness Smith of Basildon (Lab)
My Lords, there is some indication of that already by the engagement between Ministers and the EU. We are obviously engaging Northern Ireland on that, given its importance to Northern Ireland. As that proceeds further, we will give updates as and when we can.
Lord Caine (Con)
My Lords, the Government’s manifesto committed to implementing the Windsor Framework in good faith, but it was silent on the Safeguarding the Union Command Paper. Does the noble Baroness acknowledge the enormous effort that went into Safeguarding the Union, which, taken in its entirety, was crucial to the restoration of devolved government in Northern Ireland in February? Will she commit to implementing Safeguarding the Union in all its parts? In 2021, the then leader of the Opposition stated:
“I … believe in the United Kingdom and … want to make the case for the United Kingdom”.
But in Belfast, days after becoming Prime Minister, he said that he would be an honest broker on the issue. Which is it?
Baroness Smith of Basildon (Lab)
My Lords, the noble Lord is struggling there to come up with something that does not exist. This party is committed to the union; he knows that. Noble Lords just have to look at the budget for Northern Ireland, which under this Government now has the largest settlement in real terms in the history of devolution. That is one way in which we show our commitment. There have been 14 ministerial visits to Northern Ireland since the election, with the Prime Minister visiting twice. I do not think that anybody could be in any doubt about our commitment to Northern Ireland’s place in the union.
Lord Elliott of Ballinamallard (UUP)
My Lords, as someone who believed that the Command Paper would not do as it said on the tin, it is probably proving that way now. The document mentions the veterinary and veterinary medicine problems with the European Union on at least 15 occasions and there has been no progress on that whatever. I declare an interest as a Northern Ireland farmer. What will the Minister and her party do about progressing that issue?
Baroness Smith of Basildon (Lab)
I can assure the noble Lord that this is a priority for the Government. We are continuing to work at pace. He will be aware that the veterinary medicines working group is advising the Government. It met in September and will do so again this month; we will provide an update as soon as possible.
Lord Sandhurst (Con)
Presumably, the regional envoy has an important role in promoting the union. When will Sue Gray be starting her job?
Baroness Smith of Basildon (Lab)
I must admit that I am quite fascinated by the noble Lord’s obsession with one individual on what is a major issue for the people of Northern Ireland. As and when, I will be happy to update him when she does.
Biodiversity Net Gain
(2 weeks, 1 day ago)
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Baroness Parminter
To ask His Majesty’s Government what assessment they have made of the effectiveness of the implementation of the biodiversity net gain provisions.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)
My Lords, it is almost nine months since biodiversity net gain became mandatory for most developments. We are pleased to see stakeholders embracing this opportunity to deliver much-needed development while improving the environment at the same time. Officials are monitoring implementation closely and engaging with sectors, including developers and local authorities. We have updated guidance to provide clarification on areas of concern and will continue to refine the policy to ensure that it achieves intended outcomes.
Baroness Parminter (LD)
I thank the Minister for her reply. She may know that analysis has shown that only 7% of planning applications are identifying a need for biodiversity net gain, which is massively lower than all of us, including the Government, expected. I am very pleased to hear that officials are monitoring the situation, but will they be reviewing the exceptions, some of which are proving to be rather large loopholes, to ensure that biodiversity net gain builds nature’s recovery and the sustainable homes that we need?
Baroness Hayman of Ullock (Lab)
The noble Baroness is referring, I assume, to the exemptions in place for applications that have no or a very limited impact on biodiversity. That was brought in to ensure proportionality and to keep the planning system moving. However, Defra is working with the Ministry of Housing, Communities and Local Government to review planning statistics and specific applications.
Lord Cromwell (CB)
My Lords, I am currently involved in negotiating with a developer on biodiversity net gain. This involves boxes of huge and very expensive files, which have to be redone every time Defra changes the metric and locks the land into a commitment of 30-plus years. The developers tell me that their traditional landscaping required under planning often exceeded what is required under biodiversity net gain. Can the Minister give us any data on what real net gain is being achieved?
Baroness Hayman of Ullock (Lab)
Clearly, this is still fairly new for planning applications. It came in only eight months ago, so we are considering how we move forward. I do not have data on that to hand, and I am not sure we would have it available at present, as it has been only about eight months, but I will check and get back to the noble Lord.
The Earl of Courtown (Con)
My Lords, the last Government improved biodiversity monitoring, setting targets to prevent species loss and create half a million hectares of habitat by 2042. Given the important role nature-based solutions play in improving biodiversity, can the Minister confirm that the Government will encourage the use of such solutions to tackle pollution from our water sector?
Baroness Hayman of Ullock (Lab)
The noble Earl makes an extremely important point. Of course, it is very important that we use nature-based solutions to tackle all kinds of pollution, not only water-based ones. We are very keen to see such solutions implemented.
Lord Teverson (LD)
My Lords, the Government inherited in their departmental diary a provisional date of November 2025 by which to include biodiversity net gain for nationally significant infrastructure projects. Will the Minister confirm that they will go ahead with that on that date? I encourage them to do so.
Baroness Hayman of Ullock (Lab)
I can confirm that we are planning to consult very shortly on applying biodiversity net gain to nationally significant infrastructure projects—NSIPs—without any broad exceptions.
Baroness Boycott (CB)
My Lords, in all the planning applications in the biodiversity net gain provisions, are the Government paying attention to the importance of corridors that allow nature to travel between different building sites? Otherwise, it gets too isolated and dies off.
Baroness Hayman of Ullock (Lab)
The noble Baroness is right—corridors for wildlife are incredibly important. Many developments have to give due regard to removing hedgerows, for example, in order that they do not stop routes for wildlife such as dormice. It is extremely important and, on all developments, Defra is working with MHCLG to ensure that the environment is taken into full consideration.
Lord Fox (LD)
The Minister has spoken about biodiversity and infrastructure projects. How about marine biodiversity? Can the Minister set out the Government’s position on enhancing the regaining of marine biodiversity?
Baroness Hayman of Ullock (Lab)
I am sure the noble Lord is aware that restoring marine biodiversity is very complicated. In many ways, it is more complex than restoring biodiversity on land; it is a very challenging subject. Clearly, we need to look at the marine conservation zones to see what they can do, and to work internationally on this because it is a broad international area. The Government are reviewing this at the moment.
Lord Fuller (Con)
My Lords, last harvest, the UK’s wheat production fell by 30%—from 14 million to 10 million tonnes. One of the reasons was that so much land had been taken out of production for environmental schemes. We have heard that land for BNG must be locked away for 30 years. What assessment has been made of the long-term impact on our food security of locking land away for a generation, making it unavailable for food production?
Baroness Hayman of Ullock (Lab)
I suggest that the noble Lord looks in detail at our land use frame- work when we put it out for consultation shortly. That is one of the things we want to look at, and it is why we are doing the framework: we need to balance our need to produce food against environmental considerations—where we plant our trees, build our houses, and so forth. I look forward to a good debate on that subject.
Baroness Boycott (CB)
My Lords, is the Minister going to ban bottom trawling in marine protected areas?
Baroness Hayman of Ullock (Lab)
We are looking at bottom trawling at a site-specific level because there are different challenges in different areas. As I said, marine conservation is complex and has to take many things into account. There is quite a lot going on in this area and, if the noble Baroness wants to know the details, I am happy to send them to her or to meet to discuss this further.
Baroness Redfern (Con)
My Lords, in the light of the implementation of the biodiversity net gain provision, and given the need to ensure that assessments are done by competent people and that landowners are paid a fair price for their credits, so that they can deliver on their commitments, how are His Majesty’s Government ensuring that the LPAs are equipped to handle the additional burden on their planning officers, and will additional planning officers need to be recruited?
Baroness Hayman of Ullock (Lab)
Yes, the Government have committed over £35 million in ring-fenced funding to local planning authorities to help them prepare for and implement biodiversity net gain. We have confirmed funding up to the end of next year and further funding will be in the next review.
Lord Cromwell (CB)
As we have some time left, may I ask the Minister to look into why farmers in the higher-level environmental protection scheme—the HLS—are being excluded from joining the SFI scheme, both of which she will be familiar with? I have been asking Defra for months why Ministers are not being advised of this discriminatory approach and I have yet to receive an answer.
Baroness Hayman of Ullock (Lab)
I am happy to go back to the department on this. We are going to open up the high-level applications next year, as I am sure the noble Lord is aware, and we are also looking at what we do with the legacy payments. I am happy to discuss this issue with him further, because we are making quite a lot of decisions on how we move forward.
Lord Teverson (LD)
My Lords, is not the answer to the question from the noble Lord on the Conservative Benches that if we do not have biodiversity and nature recovery, we will not have an agriculture industry in 30 years’ time?
Baroness Hayman of Ullock (Lab)
It is really important that we get the right balance between food production and environmental considerations. It is an important thing for any Government to take forward, and we are taking it very seriously. That is partly why we are doing the land use framework—to ensure that we deliver properly on both areas.
United Kingdom Declining Birth Rate
(2 weeks, 1 day ago)
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Lord Farmer
To ask His Majesty’s Government what assessment they have made of the United Kingdom’s declining birth rate and its likely effect on the future tax base of the country.
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
My Lords, in its annual fiscal risks and sustainability assessment, published on 12 September, the Office for Budget Responsibility has projected an additional 6.5 million people in employment by 2074. This will support future tax receipts.
Lord Farmer (Con)
I thank the Minister for his Answer. The UK’s tax system discourages childbearing; it is one of the least family-friendly in the OECD. No allowances are made for dependants, so our tax system also disadvantages single parents. The current level of marriage allowance gives scant recognition of low-earning or non-earning second parents. Child benefit reform, announced earlier this year, which took both incomes in a household into account and partly mitigated families’ tax situation, was repealed in last month’s Budget. How will this Government make our tax system more family-friendly?
Lord Livermore (Lab)
I am very grateful to the noble Lord for his question. The example he gives of the reform that is no longer going ahead is an interesting one. It was a £1.4 billion commitment made by the previous Government but not a single penny was put behind it in the Budget that they prepared. It is exactly an example of how we got to £22 billion of unfunded spending—it simply was not affordable. If noble Lords opposite would like to find that £1.4 billion or tell us how to raise it, we would be happy to spend it. This Government are committed to family-friendly policies; it is at the core of our opportunities mission. In the Budget, we allocated £8 billion to family services because it is one of our key priorities.
Lord Sikka (Lab)
My Lords, low wages, poverty, poor housing, food, the high cost of living and household debt dissuade many people from having children. the eradication of poverty must be a priority for the Government. Can the Minister ensure that, within a decade, no one on the national minimum wage will pay any income tax or national insurance, and that the cost of that policy will be borne by the ultra-rich? After all, 1% of the population has more wealth than 70% of the population combined. When will he do that?
Lord Livermore (Lab)
I am afraid I cannot agree with my noble friend on that, but I agree with him that alleviating poverty should be central to the Government’s objectives. Clearly, work is one of the best routes out of poverty. Equalising women’s participation rates in the economy with those of men would add 1.3 million economically active people into the workforce, which is why helping women back into work is central to the Government’s goals.
Baroness Kramer (LD)
My Lords, our demographic profile lies at the heart of this Question. I quote from the ONS, which said that
“the population is projected to age twice as quickly under zero migration than under a high migration scenario”.
Facing our dependency ratio, which is worsening by the year, should we not be resetting the conversation on immigration to recognise the role that it plays both in prosperity and in the provision of public services? Does the Minister share my fear that we are ceding this issue to a right wing that has decided that raising resentment and scapegoating is a glide path to power?
Lord Livermore (Lab)
I am grateful to the noble Baroness for her question. I agree with much of the sentiment that sits behind it. The Government recognise and value the contribution that legal migration makes to our country. We will continue to strike a balance between ensuring that we have access to the skills that we need while encouraging businesses to invest in the domestic workforce.
Lord Tyrie (Non-Afl)
Further to that question, what conclusions do the Government draw from the substantial evidence now that immigration at the margin increases the tax yield by more than it increases public expenditure?
Lord Livermore (Lab)
It is a very important point and one that we should retain as we make policy.
Lord Hamilton of Epsom (Con)
My Lords, was the Minister not moved by reports in the press that AI is going to account for 6 million jobs in this country? If that happens, will we not be quite grateful for a low birth rate?
Lord Livermore (Lab)
We have to ensure that changing technology works to the benefit of all in society and contributes to our key objective of economic growth.
Lord Watts (Lab)
My Lords, it appears that the major problem is the number of older people now living longer. It is not a problem for them or for us but it has economic implications. Is it not the case that it takes two working people in each household to pay tax to keep one pensioner at home? What are we going to do to bridge the gap between the number of people working and the number who are not?
Lord Livermore (Lab)
Clearly, we have an ageing society and there are associated costs with that. That is why increasing the levels of economic growth in our country is so important, so that we have the resources to fund the priorities that matter to us.
Baroness Boycott (CB)
My Lords, we will never get women back to work unless we have adequate childcare, which this country has failed to provide. In all the years that I have been involved in feminist things, we have been behind the curve. Can the Minister update us on where the Government are in their provision of free childcare? Are there enough staff in the nurseries and enough places for the children of young women who would like nothing more than to get back into the workplace and pay tax?
Lord Livermore (Lab)
I 100% agree with what the noble Baroness says. The ONS has said that the two biggest barriers to people having children currently are a lack of affordable housing and a lack of affordable childcare. The Government are prioritising making childcare more affordable. We will provide an additional £1.8 billion next year to continue the expansion of government-funded childcare, bringing the total spending on childcare to over £8 billion. This will support working families and help parents, particularly mothers, stay in work and return to work.
Lord Brooke of Alverthorpe (Lab)
Does the Minister agree that we missed a trick, as we saw the internet develop and never found any ways in which we could start to use it as a tax base? To pick up the question of AI, can we ensure that the Treasury is doing some forward-thinking on this, not just in UK terms but about the way that we need to develop international relationships in regard to tax on a worldwide basis?
Lord Livermore (Lab)
My noble friend makes some very interesting points. I assure him that the Treasury is working closely with the Department for Science, Innovation, and Technology to advance the things that he mentions.
Baroness Neville-Rolfe (Con)
My Lords, we have just had a Budget which the OBR says will lead to a loss of jobs and the first ever taxes on education. What does this do for family life and for the birth rate in the shorter term?
Lord Livermore (Lab)
To clarify, the OBR is very clear that, over the next five years, employment will grow by 1.2 million people.
Baroness Wheatcroft (CB)
The Joseph Rowntree Foundation calculates that 30% of children are living in poverty. Does the Minister have access to any information on what that might mean for long-term fertility prospects in this country?
Lord Livermore (Lab)
The noble Baroness makes a very important point, which is why reducing child poverty is central to this Government’s objectives. The previous Labour Government made massive strides towards reducing child poverty and, unfortunately, we had to sit and watch while it rose under the party opposite over 14 years. We have established the Child Poverty Taskforce to ensure it falls. It is a contributing factor, but so are affordable housing and affordable childcare, as I have said, and we are prioritising all those things.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, on the birth rate, does the Minister agree that, although there are dozens of reasons for us to criticize him, this is one area in which we can be grateful to Boris Johnson?
Lord Livermore (Lab)
I sympathise with my noble friend’s point, but I find it hard to sympathise with that man on anything.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, it is the turn of the Lib Dem Benches.
Baroness Walmsley (LD)
My Lords, in providing additional childcare places, will the Government ensure that the additional staff are well trained and highly skilled? Perhaps we should be replacing the word “childcare” with the phrase “early education”, to make sure that children develop well and to give parents going back to work the confidence that their children will be properly looked after.
Lord Livermore (Lab)
The noble Baroness makes an absolutely central point. All the evidence shows that the first months and years of a child’s life are fundamental to the opportunities that they have throughout their life, so I agree wholeheartedly with everything that she said. Skills England, the new body that we have established, is there to make sure that exactly what the noble Baroness said about the skills available to that sector happens.
Mental Health Bill [HL]
Wednesday 6th November 2024
(2 weeks, 1 day ago)
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Renewable Transport Fuel Obligations (Sustainable Aviation Fuel) Order 2024
(2 weeks, 1 day ago)
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Lord Hendy of Richmond Hill
That the draft Order and Regulations laid before the House on 24 July and 9 September be approved.
Relevant document: 1st and 3rd Reports from the Secondary Legislation Scrutiny Committee (special attention drawn to the second instrument). Considered in Grand Committee on 5 November.
Animal Welfare (Livestock Exports) Enforcement Regulations 2024
(2 weeks, 1 day ago)
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Baroness Hayman of Ullock
That the draft Regulations laid before the House on 21 May and 12 September be approved.
Considered in Grand Committee on 5 November.
Arbitration Bill [HL]
Wednesday 6th November 2024
(2 weeks, 1 day ago)
Lords ChamberRead Full debate Arbitration Bill [HL] 2024-26 View all Arbitration Bill [HL] 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 1-I Marshalled list for Committee - (9 Sep 2024)
The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Ponsonby of Shulbrede) (Lab)
My Lords, given the focus of the Arbitration Bill on modifying the arbitral framework, which is devolved to Northern Ireland, we are seeking the legislative consent of the Northern Ireland Assembly. We will continue to work closely with the Northern Ireland Executive to ensure that a legislative consent Motion is put to the Assembly in good time. I beg to move that the Bill is read a third time.
Lord Ponsonby of Shulbrede (Lab)
My Lords, the Bill has now benefited from the scrutiny of two parliamentary Sessions, following its introduction in the last Parliament and examination by a Special Public Bill Committee. It has undergone further scrutiny since its reintroduction by this Government.
I take this opportunity to thank some of the noble Lords who have engaged with and supported the Bill over the past year. I begin by thanking the noble and learned Lord, Lord Thomas of Cwmgiedd, in chairing the former Special Public Bill Committee. He marshalled and managed truly expert feedback on these reforms from across the arbitration sector and the judiciary. The committee process resulted in several technical improvements to the Bill, introduced by the noble and learned Lord, Lord Bellamy. I also extend my thanks to the noble and learned Lord for his commitment to driving forward these reforms, while always recognising the importance of getting the details right.
The Bill has been improved during this Session’s Committee stage too, thanks in no small part to the considered and well-informed input from the noble Lords, Lord Wolfson and Lord Verdirame, and the noble and learned Lord, Lord Mance, who advised that the previous Clause 13 did not adequately reflect the case law on arbitral appeals that it sought to codify. We remedied this issue through my amendments in Committee, fixing a long-standing error in what is otherwise considered a supremely well-drafted framework. Based on sector feedback, the Government also made an improvement to Clause 1 ahead of introducing the Bill a second time, ensuring that its default rule on governing law did not apply inappropriately to certain investor-state arbitrations.
I am also grateful to my noble friend Lord Hacking for his contributions, both as a member of the former Special Public Bill Committee and as an active participant throughout the Bill’s passage. I appreciate his continued interest in full and proper arbitration law reform, after witnessing at first hand so much of its development over many years.
The legislative scrutiny provided by this House has served only to give optimal effect to the Law Commission’s recommendations, made after two extensive consultations. I record my thanks to Professor Sarah Green and her colleagues at the commission, Nathan Tamblyn and Laura Burgoyne, for their brilliant work. I also thank the Bill managers, Iona Bonaventura and Harry McNeill Adams, along with the government lawyer, Wan Fan, the parliamentary counsel, Helen Hall and Neil Shah, and my policy lead, Lee Pedder. I also thank my private secretary, Paul Young.
The measures within the Bill have been much sought after by our arbitral community. I am hugely grateful for its support and engagement with these reforms since the Law Commission’s first consultation.
I conclude by reminding noble Lords of the Bill’s benefits. By reforming and modernising our arbitral framework, it will make dispute resolution more efficient, attract international legal business and promote UK economic growth. We pass the Bill to the Commons in excellent condition, and I hope its passage can be completed swiftly. I beg to move.
Lord Beith (LD)
My Lords, the noble Lord, Lord Ponsonby, and I share the distinction of being the only people participating in the proceedings on the Bill who have neither presided over arbitration nor appeared before arbitrators. We have had a panoply of very expert noble Lords taking part in proceedings, none more so than the noble and learned Lord, Lord Thomas of Cwmgiedd, and the Public Bill Committee.
This is an important—although small—Bill, because it will effectively underpin an important export earner and an important opportunity for this country to assist in many issues across the world, because of the popularity of London as a centre for resolving disputes. It has had two Law Commission consultations, a very well-argued Law Commission report, excellent drafting and two processes through the full proceedings of this House. Not much legislation gets all that. As a consequence, we can be pleased about what has been achieved and wish it well in the Commons.
Lord Thomas of Cwmgiedd (CB)
My Lords, I will briefly add to the thanks, with one exception, that the Minister gave this morning. I give particular thanks to Professor Sarah Green and to the clerk of the Special Public Bill Committee, Joey Topping, who, in the short timescale into which everything had to be compressed, did an outstanding job.
I thank the current Leader of the House and Chief Whip for getting this back when we did not get it through last time, despite their enormous efforts. They really deserve immense commendation, as does the Minister, for having put up with lawyers seeking to build perfection on perfection—something that I am sure many in this House feel inappropriate. I also thank the noble and learned Lord, Lord Bellamy, who really smoothed over some of those difficulties but did not quite get the time for matters I suspect he did not even contemplate, bringing this so speedily to a conclusion.
I will make two more general points. First, as I did not have the opportunity to thank the Senior Deputy Speaker and Duncan Sagar for getting us a bit more time in the Special Public Bill Committee—because the matter moved so quickly—if it is permissible under the rules of the House, I express on everyone’s behalf our thanks for the small change to the procedure. It should make a huge difference, because the more time there is for clever lawyers to think of points in the committee, the speedier it is to get the Bill through the House—something I hope will appeal to the business managers.
Secondly, I have a hope for the future. This morning has reminded us, if we needed any reminding, of the need to remain highly competitive. This is a good day for England, Wales and Northern Ireland—I leave Scotland out because it has its own system. We have brought our law up to date. We must find a means of doing this very rapidly, as we must keep English law— I say English law deliberately—attractive and at the forefront of use internationally, for the benefit of our whole economy.
Lord Hacking (Lab)
My Lords, I give personal thanks to the Minister for his very kind words to me and more general thanks to the Government for pressing forward with this Arbitration Bill. It is very befitting that the Government should have championed this Bill through, as they are at the moment, because it was a Labour Government 46 years ago who brought forward the arbitration reform that brought about the 1979 Act.
I join other noble Lords in thanking the prominent members of the Special Public Bill Committee and the prominent Members who took part in debate in this Chamber for all their contributions. I also thank the Ministers, the noble and learned Lord, Lord Bellamy, and—I keep calling him my learned friend—my noble friend Lord Ponsonby. Special thanks to the noble and learned Lord, Lord Thomas, who quite excellently presided over the Special Public Bill Committee, and to all the supporting officials.
Particular thanks should also go to the noble Lord, Lord Wolfson, and I am sorry he is not here to receive them. When he was the Minister, it was he who referred the arbitration issues to the Law Commission. That really was the beginning of the recent story on the Arbitration Bill.
This Bill is not as fundamental as the 1979 or 1996 Acts, but it deals with some very important issues. Perhaps the most important is Clause 7, giving power to arbitral tribunals to make summary awards. Those of us who practise in the courts—I am looking across the House at the moment—are well familiar with Order 14 proceedings, and this introduces into the arbitration world the Order 14 summary judgments.
It also clears up issues relating to the seat of the arbitration, arising after the unfortunate division in the Supreme Court in the Enka Insaat case, with two Supreme Court judges on one side and three on the other. I would have preferred new Section 6A(2) not to have been included, because I believe it complicates that issue, but none the less it is there, and I am very happy to support the Bill in that condition.
However, there is unfinished business. I suggest that the corruption issue should have further consideration. We know that the ICC has a commission on this and we must wait to hear what it says, but it is certainly a matter that needs further attention.
Other matters should have consideration, including expedited hearings and dealing with the length of written submissions, which sometimes stretch over 100 or 200 pages and argue every point under the sun. There is also the use of third-party funding and the question of what disclosures should be made, as well as the power to order parties into mediation, which is used successfully in litigation.
Baroness Wheeler (Lab)
This is Third Reading. We do not do long speeches. Please wind up. This is not appropriate.
Lord Hacking (Lab)
I am sorry if I am taking a little time; I hear the Deputy Chief Whip. But it is important that we should look to the future and realise that this Bill is unfinished business.
Lord Bellamy (Con)
My Lords, I simply associate myself, on behalf of these Benches and as the previous sponsor of this Bill in the previous Government, with the thanks that have been given to the entire team, not only to the special committee and its chair but to the civil servants who have supported the work. I thank the Government and the Minister himself, who worked very hard in the special committee, collaborated very closely with the previous Government and myself and has, as has been said, managed to bring the Bill forward again with remarkable speed. As the noble Lord, Lord Hacking, said, of course there is always unfinished business and we must look to the future, but we now have an extremely good base on which to do so.
Lord Ponsonby of Shulbrede (Lab)
My Lords, I thank all noble Lords who have spoken in this short debate. I continue to be glad that this Bill has the support of so many noble, and noble and learned, Lords. As I said in my opening remarks, the Bill has now enjoyed robust review and precise revision and I hope it will have swift passage through the House of Commons.
I thank the noble Lord, Lord Beith, for noting that we are the only two noble Lords without direct experience who took part in both this Bill and the previous Bill; he was right in saying that. I also thank the noble and learned Lord, Lord Thomas, and I was remiss in not thanking Joey Topping for clerking the previous Committee stage. I also thank the noble and learned Lord, Lord Bellamy, for his best wishes for the Bill.
I will address the substance of what my noble friend Lord Hacking said on arbitral corruption. Of course, we take this very seriously. We believe that it would not be appropriate to use the Bill to address these matters. However, the arbitral sector is reviewing how corruption can be better identified and dealt with. The Government will continue to support this work and push for the adoption of best practices as they are developed. I beg to move that the Bill do now pass.
Flight Cancellations
(2 weeks, 1 day ago)
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Lord Moylan (Con)
My Lords, I start by joining with the Prime Minister in welcoming President Trump in his restoration to office. Cancelled flights are not merely a domestic phenomenon; they affect transatlantic journeys. In the reset that the Government will no doubt undertake now with the American Administration, perhaps they could work together to improve matters for us all in that regard.
On own domestic arrangements, now that we have left the European Union, are the Government assessing whether the compensation scheme we inherited from the European Union could be improved for cancelled and delayed flights to give a better deal to the customer? Like rail nationalisation, the Minister could score it as a Brexit benefit.
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
Regulation 261/2004 sets out the rights of passengers in the event of flight disruptions, such as cancellations and long delays. On the noble Lord’s question, I have no current information about changing the arrangements, but I will certainly go away to see what can be done.
Baroness Randerson (LD)
My Lords, I am interested in the noble Lord’s question, because one of his predecessors was keen on simplifying and downgrading the compensation in recent months. A key factor in this week’s problems and delays was staff shortages in air traffic control. Can the Minister confirm that the CAA is working to deal with this problem—a repeated problem—to ensure that sufficient staff cover is always available? Can he tell us what conversations the Government have had with our European partners at Eurocontrol, who have emphasised the need for better co-operation across countries to make sure that air passengers fly safely?
Lord Hendy of Richmond Hill (Lab)
I can assure the noble Baroness that the Civil Aviation Authority is working on this and that the Department for Transport has had discussions with it. I cannot answer the question about more European co-operation, but I shall write to the noble Baroness to give her some information.
Lord McCrea of Magherafelt and Cookstown (DUP)
My Lords, I accept that the cancellation of flights due to weather conditions is beyond the control of airlines. However, last-minute cancellations by BA on flights from Belfast City to London City Airport surely undermine reliability and damage confidence in the business and tourism community and among the travelling public. Therefore, can the Minister commit to investigate the reasons for such cancellations on so many occasions and encourage the airlines to live up to their responsibilities?
Lord Hendy of Richmond Hill (Lab)
I thank the noble Lord for his question related to the original Question. The UK aviation market operates predominantly in the private sector and it is for airports to invest in their infrastructure and airlines to determine the routes they operate. It is also for those two parties to minimise delays and cancellations. I recognise the number of cancellations in the past few days. My honourable friend the Aviation Minister recently met British Airways to discuss regional connectivity.
Baroness Foster of Aghadrumsee (Non-Afl)
My Lords, I declare myself a victim of a cancellation on Monday. I was travelling from my home in Fermanagh, the most westerly part of the United Kingdom, at 7.45 am. I received an email at 8.15 am to tell me that my flight at 10.40 am had been cancelled. I was then booked on the 5 pm, which meant that I missed an entire day’s business here in the House of Lords. My question to the Minister is about consumer rights. When I was told the reason for the cancellation, it was “operational challenges”. Surely that is not good enough and surely there should be more clarity around cancellations.
Lord Hendy of Richmond Hill (Lab)
The noble Baroness is entirely right that cancellations affect passengers and businesses relying on punctual services and connections and have an impact on confidence. Her particular case in point showed the damage done by short-notice cancellations. I will say only that that is a terrible phrase to use as an excuse, because it does not mean much—although I am familiar with other forms of transport that sometimes, sadly, also use phrases such as that. We will look at speaking to airlines to make sure that they give intelligible reasons for cancellations and delays, and their effect on the rights of passengers.
Lord Browne of Belmont (DUP)
My Lords, does the Minister agree that removing UK air passenger duty on flights from Northern Ireland would encourage air carriers to open up new routes, allowing Northern Ireland airports to be more competitive with Dublin airport, which would prove beneficial for improving the economy and tourism in Northern Ireland?
Lord Hendy of Richmond Hill (Lab)
The noble Lord will know that the air passenger duty on domestic flights was reduced quite recently to a relatively modest level. The Government are entirely committed to good air connections with Northern Ireland and to the promotion of its airports. I do not think that the removal of the duty—which is, in any case, a Treasury matter—would make a lot of difference. We are committed to good regional connectivity and the future prosperity of the airports in Northern Ireland.
Lord Empey (UUP)
My Lords, I, too, was a passenger on the flight on Monday morning that never was. If you looked at the schedules in advance, it was not there. I took up the email at 8.10 am, although fortunately I do not have so far to travel.
On the wider point, however, this is becoming a repetitive issue. We understand operational challenges; we all have them and we all know that it is also from Covid, with the number of staff that were disposed of at the time. However, I brought a Bill through this House twice to guarantee slots for regional airports at Heathrow and it was rejected in the other place on the grounds that we were part of the European Union and therefore it could not be implemented. Now that that is no longer the case, will the Minister look with his department at ensuring that regional connectivity is guaranteed to Heathrow, because that is where the operational hub in the United Kingdom is? It also bears down on the airlines, because these slots are worth millions.
Lord Hendy of Richmond Hill (Lab)
My understanding is that 18 flights were cancelled in the past four weeks, which is, of course, too many. As I have said, it is the responsibility of airlines and airports to work together to minimise delays and cancellations. The Government recognise completely the need for regional connectivity, particularly by air in Northern Ireland. My honourable friend the Aviation Minister is constantly reviewing the connectivity of Northern Ireland with all of the airports in the rest of the UK. I will take the point that the noble Lord has made and relay it to the Aviation Minister.
Baroness O'Loan (CB)
My Lords, I, too, was a passenger on the cancelled aeroplane. The reality is that, on this occasion, British Airways—which was the airline in question—knew the day before, or before that, that the plane had been cancelled. The airport also knew that the plane had been cancelled. The people who did not know that the plane had been cancelled were the people who were getting up to catch the plane. Does the Minister think it would be helpful if an additional penalty was introduced, payable to the customer who is inconvenienced in that situation?
Lord Hendy of Richmond Hill (Lab)
It is clearly wrong for the transport provider and the airport to know that a flight is cancelled, but for the passengers not to know. Similar circumstances sometimes apply on other transport modes and it is unacceptable there, too. I agree with the noble Baroness that it is unacceptable: what needs to be done about it is another matter. I will speak further to my honourable friend the Aviation Minister to see what needs to be done to stop this practice. It is unacceptable.
Baroness Foster of Oxton (Con)
My Lords, Regulation 261 is actually a robust regulation and I do not believe that the compensation is too little. In addition, in relation to the comment made by the noble Baroness regarding air traffic control issues, I do not believe that was the case either. However, there is clearly an issue here. Given the number of times this specific flight had been cancelled, with our noble colleagues, certainly those from Northern Ireland, so badly affected, it would be quite helpful, perhaps, if the Minister could speak with the Aviation Minister and get the CAA involved with this—because it deals directly with Regulation 261—to find out the specific issue to do with this flight. I do not believe it is a slots issue. Turning round and saying to passengers that this is an operational issue and giving people two hours’ notice, when they know that the flight has been cancelled the day before, means there is clearly something more going on. We would be very grateful if we could get more information on this specific issue, certainly to help our colleagues in Northern Ireland.
Lord Hendy of Richmond Hill (Lab)
If I were the airline concerned, I would not cancel this particular flight. It seems to me that having your operational business discussed in this House is probably not helpful to your reputation. But I shall otherwise do exactly what the noble Baroness suggests.
Passenger Railway Services (Public Ownership) Bill
Wednesday 6th November 2024
(2 weeks, 1 day ago)
Lords ChamberRead Full debate Passenger Railway Services (Public Ownership) Bill 2024-26 View all Passenger Railway Services (Public Ownership) Bill 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 21-R-I Marshalled list for Report - (4 Nov 2024)
12:50 - Division on Amendment 1 - Ayes: 187 / Noes: 132 - Amendment 1 agreed.
13:23 - Division on Amendment 2 - Ayes: 142 / Noes: 128 - Amendment 2 agreed.
14:37 - Division on Amendment 5 - Ayes: 99 / Noes: 138 - Amendment 5 disagreed.
15:58 - Division on Amendment 13 - Ayes: 69 / Noes: 124 - Amendment 13 disagreed.
Lord Gascoigne
“Purpose: improvement of passenger railway services(1) The purpose of this Act is to improve the performance of passenger railway services in the United Kingdom.(2) The Secretary of State must, in taking any actions under the provisions of this Act, have regard to this purpose.”Member’s explanatory statement
This amendment would place a duty on the Secretary of State to have regard to the purpose of the Act, namely the improved performance of passenger railway services in the United Kingdom.
Lord Gascoigne (Con)
My Lords, I rise briefly to fire the starting gun on Report with my Amendment 1. In doing so, I express my gratitude to my noble friend Lord Moylan for his support with this amendment. I also thank the Minister for taking the time to meet me the other day. I very much appreciated the opportunity he took to address my many questions in his usual cordial way.
This amendment today flows from my first amendment in Committee. Everyone wants the trains to improve. That is a given. As I said in Committee, and when I met the Minister recently, the reason I care about this is that we need the whole rail reform package and we need it not to be piecemeal. Personally, I would like to go down the route proposed under the Williams-Shapps review, but I recognise that that ship has probably sailed. That said, the overall goal is the same: to make it more efficient; to make it easier to travel; to make it more punctual and, ultimately, to improve the passenger service.
In Committee I used the word “Ronseal”: making sure that the Bill delivers what it is intended to, so that it does, in effect, what is on the tin. While I will not repeat word for word what I said, there are three technical points I want to address following on from Committee, for the benefit of the House today.
First, is this Tory language being inserted really a sort of Trojan horse, ready to pounce on the unsuspecting Minister in the Labour Government once they have welcomed it? No. In Getting Britain Moving: Labour’s Plan to Fix Britain’s Railways, published during the campaign, the then Shadow Secretary of State said in the foreword:
“We need a modern rail system—with improved services for passengers and better value for money for taxpayers—to serve as the backbone of a modern Britain”.
Later, she said:
“Labour’s challenge is to put our rail system back on track to sustainable growth and improvement”.
This was followed by:
“Labour’s vision is to deliver a unified and simplified rail system that relentlessly focuses on securing improved services for passengers and better value for money for taxpayers”.
Indeed, in just the foreword alone, there are eight references to either “improve”, “improving” or “improved services”, not to mention countless others in the rest of the document.
The Government and Labour may argue that those references are about the whole suite of rail reform: it is only then that you will get a better service after everything has changed. However, after the election, at Second Reading, in response to questions, the Transport Minister in the Commons said:
“Let me begin by dealing with the issue of public ownership. According to the shadow Secretary of State ... we have no proof that it will improve outcomes for passengers, but that is clearly not the case. We know for a fact that this Bill will save tens of millions of pounds in fees, and if that is not a good start, I do not know what is”.
A little later he went on to say:
“I am confident that public ownership will provide the right foundations to drive forward improvements for passengers”.—[Official Report, Commons, 29/7/24; col. 1135.]
I could read out plenty of other quotes which all use the same terminology and the same rationale for this Bill, but, as I hope noble Lords can see, this is not about me inserting language into this debate: it is already there from the Labour Party, both in opposition and in government.
Secondly, are we not overlapping existing commitments? My noble friend made the inspired observation in Committee that similar references are made in the Railways Act 1993. He is, as ever, correct that the obligation to improve services is used elsewhere and is not altered by this Bill, so why cannot it, or a reference to upholding that element of the 1993 Act, be put in this Bill?
Thirdly, from a technical point of view, do we need a purpose clause given that this Bill is focused on how nationalisation will take effect? I have said before that some will question whether a purpose clause is needed, given that this is a tightly focused Bill. I will suggest later why it is needed in general terms, but, from a purely technical point of view, in Clause 2 the Secretary of State will have to take a view and make a judgment of the virtue or otherwise of a franchise when deciding whether temporarily to extend the said franchise. By inserting this purpose clause at the outset, it is a necessary barometer setting out exactly what this Bill is seeking to do and what should be the Secretary of State’s overriding concern when making a decision.
This is not about stopping the Bill, nor is it about inserting assessments, reports or tests before anything can happen. There is no bureaucracy being created here, I am pleased to say to my friend the noble Lord, Lord Snape. It would not be costly—indeed, it would not cost anything—and I am not saying that it would lead to cheaper fares, although that is what people want to see and expect. It would not add anything onerous or new. As I said, this is language used elsewhere in legislation. It does not issue specific demands or expectations about cleanliness, the number of guards, ensuring decent toilets—or toilets that are open, which they absolutely should be. My amendment could talk about access and address some of the shocking things we heard in Committee about the experience of disabled people when travelling, which I know will come up later. But it merely sets out what the goal of reform is, to ensure that everyone from top to bottom knows what the Government are doing this for. We wish them to succeed in improving the service. It is language that Labour has used, and which is used elsewhere in legislation, to make it clear what the Bill will deliver. I beg to move.
Lord Lansley (Con)
My Lords, I support my noble friend on his Amendment 1 and will speak to Amendment 14 in my name. My noble friend very kindly referred to our debate on the same amendment in Committee. I note the reference in the Railways Act 1993 and that I see two merits in my noble friend’s amendment.
First, it is always a good thing for Bills to be clear about their purpose. Unless I am mistaking something, this amendment accurately reflects the Government’s purpose in this legislation. We may debate whether it will be successful or otherwise, but the purpose seems to be straightforward, and to have that in legislation is always helpful.
Secondly, because this Bill is essentially about amending parts of the Railways Act 1993 and nothing else, it is clearly subsidiary to the existing provisions of that Act, as amended. There are 10 general duties in that Act. The first is in Section 4(1)(zb),
“to promote improvements in railway service performance”.
My noble friend has accurately reflected the first of those 10 general duties, one of which we will come to debate in a subsequent group in relation to my amendment.
It seems to me that one of the abiding issues for public agencies, often including government departments, is the multiplicity of duties that are imposed upon them and the risk of conflict between those duties. Here, for these purposes, that would be clarified if it were made very clear that this important change to the way in which the provisions of the Railways Act are structured and to be used is to improve railway service performance. To raise that general duty in importance above the others would be helpful in clarifying the balance which the Government and the other agencies should take. I support Amendment 1 for that reason.
Amendment 14 refers to the new subsection of Section 30 of the Railways Act, inserted by the Bill, which provides that the provision of railway services can be made only via
“a direct award of a public service contract to a public sector company in accordance with regulation 17 … of the 2023 Regulations”.
Noble Lords will be aware of those regulations. Subsequently, the requirement for pre-award publication is disapplied by this legislation. However, paragraph (2) of Regulation 17 states:
“Where a competent authority makes a direct award of a public service contract under this regulation, the competent authority must, within one year of granting the award, and while ensuring the protection of commercially sensitive information and commercial interests, publish a notice on its website”.
The information required about the contract and the contractor is then listed in the regulation. Is one year right? Is it desirable that we should, in any circumstances, wait so long to be given information about the direct award of these contracts, given that they are instrumental to an understanding of whose responsibility it is to provide passenger railway services?
I have discussed my amendments with the Minister, and I am grateful for his time and that of his officials. I hope he has had a chance to think about my amendment and that, if he will not accept it, he will at least be able to tell us that it will be the Government’s intention to make new regulations quite soon, and in those new regulations to reduce to as little as three months after the granting of an award of a contract of this kind the publication of the notice and details. To assist later consideration, I say that it is certainly not my intention to press Amendment 14 when it is reached.
Lord Berkeley (Lab)
My Lords, I will speak briefly to my Amendment 16, which is in this group. I am, as ever, grateful to my noble friend for sparing the time to talk about this. My amendment is designed to be helpful. It is designed from experience of previous railway legislation, in which we got bogged down in massive detail, with hundreds of amendments; we may get somewhere, but it takes longer.
Given the discussion that we had on a large number of subjects in Committee, and will probably have today on Report, I thought it would be useful to probe the Minister’s view of how long it will be before what I call the definitive Bill is published. If that is going to take until spring, as some of us have been told, it might be useful to publish a draft Bill or a draft Command Paper that we could read several months before and have the opportunity to debate. That might help us resolve what the real problems are and how to deal with them, rather than on the Floor of the House for many days in Committee and on Report.
That is the purpose of my amendment, and I look forward to my noble friend’s response. I am not going to press this amendment, but it will be interesting to hear what he has to say.
Lord Grayling (Con)
My Lords, I will speak briefly on some of the themes that my noble friend Lord Gascoigne has been pursuing around reporting on performance. The Government seem to be a little reticent about being willing to accept amendments which increase reporting requirements. However, there is an important issue here: will public ownership do what the Government have promised it will and improve performance on the railways? I have my doubts about that. I think the challenges of the railways are much more complex and not about ownership but the complexity of our system.
I have a very simple question for the Minister. When you arrive in this House as a new Member, one thing that is very noticeable is the extraordinary level of expertise that exists on Benches on all sides. He brings a very considerable degree of expertise in this House after a long and distinguished career in the rail and transport sector. Can he set aside for a moment his ministerial hat and give us a professional judgment about the likely performance? To take a comparison, can he reassure us that the London Overground, for example, would perform better if run directly as a public body by Transport for London rather than being contracted out to a private operator as it is at the moment? Can he reassure us on that, for the precedents that will exist elsewhere?
Baroness Randerson (LD)
My Lords, Amendment 1 is impossible to disagree with. It is fundamental to the survival of our railways that things improve. They have reached crisis point because of decades of under- investment, poor management and poor political decision- making. However, the presence of this reminder might be useful for the Secretary of State. It might be a statement of the obvious in some ways but useful for her because the big problem with nationalisation is that Governments in the UK have consistently failed to invest long-term. We can improve buses by investing within a couple of years, but when you invest in the railways it takes a couple of decades for it to make a big difference. That is the Government’s challenge in renationalising the railways and the buck now stops with them.
On Amendment 16, I understand and strongly support the wish for thorough and transparent public consultation on the contents of the forthcoming rail Bill. I remind noble Lords of the example of the public consultation undertaken by the previous Government on their plan to close ticket offices. It led to a massive national outcry, forcing them to drop the plan, so I am a great believer in the impact of public consultations. The Bill that we are expecting in the near future is considerably more complex, but the problem with this amendment as written is that it extends the timescale that it all will take. It will take far too long before we get the legislation that we all hope will make the big difference. I will listen very carefully to the Minister. We hope that there will be some legislation by the end of next year at the very latest.
One way or another, the Minister has been associated with plans for the future of the railways and the creation of Great British Railways for some years now. There is surely nothing raised in our debates that he has not thought of, he has not worked on, or that would come as a surprise to him. He has been exceptionally generous with his time in cross-party discussions in the last couple of weeks. I urge him to explain when he replies what the timescale is likely to be and to assure us that there will be full consultation and that there is a grand plan.
Lord Moylan (Con)
My Lords, we have had lengthy discussion on this Bill in Committee, and it is not my intention today to repeat unnecessarily the arguments and the evidence adduced during those debates. The longer that we went on in Committee, the clearer it became that this is a very bad Bill that has been accompanied by a degree of arrogance. I do not say this as a personal comment on the Minister; it is on the part of the Government in general. There has been a tone, sometimes said quite explicitly, of “We won so we can do what we want”. That is an argument. It has some merit, but the merit that you would expect to find in an argument made in a playground.
Another type of arrogance has also been underlying our debates: “We want a better railway, but we are not going to tell you what it will look like. That’s all going to come in the future—don’t ask your pesky questions now. That will all be dealt with, and you have to trust us”. That is not a basis on which the House should be passing this type of legislation. The amendment in the name of the noble Lord, Lord Berkeley, goes some way to address that latter point. We all have a common desire for a better railway, but we will no doubt disagree on the details of how it is to be achieved. My noble friend Lord Grayling said that these are very complex issues. I do not think that anyone would disagree.
Therefore, on the prospect of having the Bill published in draft for pre-legislative scrutiny, I disagree with the noble Baroness, Lady Randerson. I do not think that will add materially to the time taken before legislation is enacted because it is likely to produce a better Bill when it eventually arrives in your Lordships’ House, one that can go through faster and be implemented better with better outcomes. It is the outcomes that we are interested in, not a particular timescale, although like her I will hold the Government to their undertaking that a Bill will come forward within 12 to 18 months.
It is more important to get the outcome right than to worry about a few weeks here or there, which is as much as we would be discussing in relation to the amendment tabled by the noble Lord, Lord Berkeley. I am deeply disappointed that he is not going to press it to a Division as I would be very tempted to support it if he did. However, I expect and hope that the Minister, when he stands up, can satisfy the noble Lord, Lord Berkeley, by saying that there will be some sort of pre-legislative scrutiny of the very large and complex Bill that he is expecting to bring before your Lordships’ House in the next 12 or 18 months, to use his phrase.
The amendment in the name of my noble friend Lord Lansley is very good and commends itself. Like him, I would like to hear what the Minister says in response. I note that my noble friend does not intend to press it to a Division.
Amendment 1, tabled by my noble friend Lord Gascoigne, is indispensable. A number of things are missing from this Bill. A number of important parties have been wholly excluded. One of them, for example, which we will come to later in debate, is the staff. There is no reference to the staff in this Bill. We take for granted that they will be TUPE-ed. That basic legislative cover is there and does not need to be stated. They will not lose their jobs as a result of this but will be TUPE-ed over. However, has any consultation been carried out with the staff? You would expect that normally, would you not? Do they want to change their employer? Do they want to be working for the Government? They may all say yes, but one would have thought that in an undertaking such as this the Government would have bothered to ask them. There has been no consultation with the staff.
The other glaring omission from the Bill is, of course, the passenger. It is a passenger railway services Bill, yet it says nothing at all about the passenger. My noble friend Lord Gascoigne is attempting to put this lacuna right and to put the passenger back at the head of the Bill, as the driving force of what the Government are trying to do and to require Ministers to test their actions under this Bill against the standard of whether it will improve matters for the passenger. That is why, if my noble friend intends to divide the House and seek its opinion on this matter, I recommend that we support him.
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
I thank the noble Lords, Lord Gascoigne and Lord Moylan, for Amendment 1. I absolutely support the idea that the Government should be clear about what the railway is for and what we want it to achieve. Far too many conversations in this industry are about tracks, signals and trains and how the railway works—or, in many cases, does not work so well. There needs to be much more focus on what the railway is for, but you can do that only if the organisation fundamentally works.
I am clear that when we establish Great British Railways, we should set out a clear statement of purpose, and we will set out a proposal for this statement of purpose in the consultation we will launch ahead of the substantive railways Bill. I am also very clear about the purpose of the Bill and the Government’s wider plans for the railway. Improving the performance of passenger services is clearly a big part of that purpose, but it is not and cannot be the only purpose. The Secretary of State has set out six key objectives against which she expects the railway to deliver. In summary, the railway should be reliable, affordable for passengers and taxpayers, efficient, of suitable quality, accessible and, of course, safe. She and I are reminding senior railway leaders of these objectives very clearly and very often. I expect that to carry more weight than a statement of purpose in a Bill that, if we are honest, might not be read widely by those on the front line of running the railway. Given the range of objectives that the Government wish to meet, I would not support the idea of singling out one objective, even a vital one, and placing it in this Bill.
Turning to the specific wording of the amendment, which is about performance, the easiest way to improve the performance of passenger railway services would be not to run so many of them, and to try to run fewer freight trains. It would be much easier to make trains run on time if the railway were less congested. Of course, I do not advocate that as a solution, but it illustrates the point that trying to reduce the Government’s objectives for the railway to a single purpose might be counter- productive. I hope that my remarks will have reassured the noble Lord that I am entirely on board with his underlying suggestion that the railway needs a clear statement of purpose, but I am not convinced that it needs to be enshrined in primary legislation right now, nor that it should focus exclusively on the performance of passenger services.
The noble Lord, Lord Grayling, asked me to set aside my ministerial hat and opine about the performance of the London Overground and the type of operator that operates it. I shall not set aside the hat, but I will say that one of the differences with the Overground is that it operates within a consistent and easily understood fares structure, which has enabled a significant increase in patronage over the period it has been operating. We must change the railway fares: there are far too many of them and they are deeply confusing. But one of the reasons for public ownership of the main network is to ensure that we have control of the operation and that there is enough information to be able to do that.
I will not trouble to respond to the point about arrogance and the Government acting, according to the noble Lord, Lord Moylan, as if we won the election, because it is rather self-evident that we did. I will remind him that this measure is very popular with the public, and every recent opinion poll suggests that a very large majority wish to see the railway in public ownership. We will return to the matter of the staff, but he acknowledges that the transfer of undertakings regulations will apply, and they do involve some consultation. But if you went to Waterloo station today and asked the staff there whether they want to change their employer, most of them would tell you that they have changed employer so often that some of them cannot remember who their employer is, and do not much care. The most frequent description of railway employment that I get when I speak to railway men and women—
Lord Moylan (Con)
Are not the staff of Waterloo station already employed by Network Rail?
Lord Hendy of Richmond Hill (Lab)
I was referring to the people who drive and operate the trains. There are more of them on Waterloo station than there are employees of Network Rail.
To finish what I was saying, most people on the railway refer to their employer and their work as “the railway”, which tells you something about the way in which the franchise system has dealt with loyalty to employment.
I thank the noble Lord, Lord Lansley, for Amendment 14 and the discussion we had in the last few days. He is right that Regulation 17 requires the publication of a specified list of information within one year, following the direct award of a contract, where that information has not already been published. However, we expect the majority of the information included in Regulation 17 to have already been published well before one year has expired. That is because Regulation 23, which covers post-award publication, requires a competent authority to publish a similar set of information within two months of contract award. The information which must be published is set out in Schedule 2. Regulation 23 also allows interested parties to request the reasons for a direct award within one month of the post-award publication. I agree that a year would be a very long time to wait before the information is published. However, I do not believe that the noble Lord’s amendment is needed because similar and, in many respects, more detailed publication requirements are already provided for in Regulation 23. I urge him to withdraw the amendment, and I note that he does not intend to press it.
I note that Amendment 16, from my noble friend Lord Berkeley, is somewhat novel constitutionally, as it would constrain parliamentary sovereignty by imposing limitations on when primary legislation relating to the railways could be introduced. I am very happy to confirm to my noble friend, to the noble Baroness, Lady Randerson, and to others who mentioned it that the Government intend to set out their key proposal for the railways Bill in a consultation document that I very much hope will be published before the end of this calendar year. This will give all interested parties, including Members of your Lordships’ House, the chance to review and scrutinise it and to feed in their views before the Bill is introduced later in this parliamentary Session. The Government do not intend to publish a draft of the Bill before it is introduced, as I would expect that to delay progress in implementing the Government’s planned reforms.
It is now more than six years since the previous Government declared that the structure of the railways is
“no longer fit to meet today’s challenges”
and appointed Keith Williams to lead his review. Passengers, freight and everyone on and who uses the railway have waited too far long already to see meaningful change. I have to say that my own experience is that the previous Government went through pre-legislative scrutiny in a desultory manner, and frankly, we all concluded that they did not intend to bring a Bill before either House any time soon.
While the Government are keen to hear the widest possible range of views on their proposals, including the noble Lord’s, I do not on this occasion support the idea of publishing a draft Bill. It also does not seem necessary, given that noble Lords can submit their views during the consultation I have committed to and will be able to debate the Bill once it is before the House. I am of course happy to meet with my noble friend Lord Berkeley and other noble Lords at the time of the consultation launch to seek their views, as we have done during the course of the Bill before us, if that would help persuade him to withdraw his amendment.
Lord Gascoigne (Con)
My Lords, I am grateful to the Minister for his response, to all those who spoke in this relatively short debate, and to those who supported my Amendment 1. I am pleased to see that the Government Chief Whip is on the Front Bench, and I am conscious that many people have sat through days of Committee and we are about to head into recess, so I will not detain noble Lords for long.
As I said in Committee and earlier, I want to make the case for why this amendment is not against the spirit of the Bill. It does not stop it, and I want to ensure that everyone knows that these changes are not being done through ideology and that they are focused on the passengers. Effectively, it forces the department, Ministers, civil servants and everyone to deliver this mission and this mission alone. Otherwise, we will enter into what President Ronald Reagan called “trust me” government.
Without boring on for too long, and to repeat the point I made, Labour has used this language repeatedly, in opposition and in government, so I am still not sure why the amendment cannot be included, especially given that the Minister, who I respect greatly, warmed to the sentiment behind it and understands it. As I said, we risk entering into the world of having to trust the Government that that is the intention. Despite those words of reassurance, the Bill still needs something on the face of it—Ronseal, like I said. With that, I would like to test the opinion of the House.
Lord Moylan
“25B Termination of existing franchise agreements(1) The Secretary of State must terminate franchise agreements for default in accordance with the terms of the agreement as soon as it is possible to do so.(2) The Secretary of State must assess and rank existing franchise agreements according to performance criteria established after consultation with relevant stakeholders.(3) Subject to subsection (1), the Secretary of State must only terminate a franchise agreement pursuant to a break clause if—(a) there are no other franchise agreements which are performing worse under the criteria in the list referenced in subsection (2), and(b) the Secretary of State is satisfied that provision of the services by a public sector company will improve existing service provision.(4) In this section, “break clause” means a contractual provision in a franchise agreement which entitles the Secretary of State to terminate the franchise agreement before the end of the franchise term by notice without reason.”Member’s explanatory statement
This amendment would require the Secretary of State to terminate franchise agreements for default and to nationalise the worst performing operators first, while enabling services that are currently working well to continue.
Lord Moylan (Con)
My Lords, in the course of debate at Second Reading and in Committee, numerous noble Lords drew attention to the fact that the manner in which the Government are approaching the termination of franchises is going to result in some very perverse outcomes. Admittedly, most of the franchises still in existence are relatively short, but the Government—with a view to saving money, as far as I can make out—are determined to terminate them in the order in which the contract falls in.
That has the bizarre consequence that some of the most popular, effective and highly rated franchises are going to be terminated early at the head of the list, while those that are most reviled by the public—I am not going to mention any names in the course of this brief speech—and regarded as being hopeless at what they do will have the longest continuation in existence. It is of course the case that if they fell into default, the Government could terminate them early without expense, but we heard from the Minister earlier that none of them is as bad as that. None the less, some of them are very bad indeed.
This case was made most compellingly at Second Reading by the noble Lord, Lord Browne of Ladyton, but it has been made by other noble Lords as well. I think there is strong demand among noble Lords for the worst franchises to be brought to the head of the queue. My Amendment 2 would have the effect of bringing that about: the worst-performing operators would be terminated first, while services that are currently working well would be enabled to continue. Amendment 10 in the name of the noble Baroness, Lady Randerson, has a similar intent and effect. It is drafted differently—it is expressed as providing flexibility to the Government, whereas mine is perhaps a little more mandatory in its tone—but they are similar in various ways.
With the time the Government have had for reflection on the strength of feeling in the House about this issue, they should be able to come forward and say something now that would alleviate noble Lords’ concerns. Otherwise, I will be interested in testing the opinion of the House on my Amendment 2.
Baroness Randerson (LD)
My Lords, I will speak to Amendment 2, and to Amendment 10 in my name and that of my noble friend Lady Scott. Amendment 2 was the Liberal Democrats’ Amendment 1 in Committee, requiring the Secretary of State to terminate franchises for default and to nationalise the worst-performing operators first, while allowing train operating companies that are currently working well to continue.
The Minister explained to us, both in this Chamber in response to our amendment and in private discussions, that this cannot be done without major costs to the taxpayer. The existing contracts have been written and signed by the previous Government so as to make it difficult to penalise defaulters. We accept what the Minister says and we are not prepared to cause the taxpayer greater costs than necessary in this process. So, having listened and learned, we turned our amendment around and wrote Amendment 10, which simply proposes giving the Secretary of State the freedom to enable services that are working well to have an extension to their franchise and to continue for a period of time suitable to the Government. Can the Minister explain to us the Government’s approach to this and whether existing contracts could be extended, as our amendment suggests?
Our view is that the Government are going to be hard pressed in dealing with the numerous parts of the rail systems that are failing, and they need to allow themselves a bit of space by letting the bits that are working well continue until they get around to the overall process of nationalisation. The Government’s whole approach has been nationalisation gradually rather than one big effort, and I hope this amendment works with the grain of their intentions.
Lord Liddle (Lab)
My Lords, from listening to the noble Baroness, Lady Randerson, I think there is a misunderstanding about what the Government are trying to do. As I understand it as a humble Back-Bencher, we are trying to get rid of the franchising system because, as it is, it does not help us to run a railway in the way we want to. In his opening remarks the noble Lord, Lord Hendy, said that one of the points is to have a simplified fare system that will greatly raise the prospects of increasing passenger revenue and passenger use of the railway, because the fare system is an obstacle to that. We cannot do that while we have the franchise system, so we have to get rid of the franchise system.
If there is any fault in what is happening at the moment, it lies on the opposite side of the Chamber and with the Transport Ministers who gave operators such as Avanti the very loose targets that they have to meet. I advocate that we should be tougher with Avanti, have it in every month, and if things have not improved, we should take the risk of taking the franchise off it and saying, “See you in court”. That would be my approach, but the problem is what the Conservatives have left us with, and that is very difficult to solve. I do not support this amendment, which would result just in extending the existing system.
Lord Young of Cookham (Con)
My Lords, I am glad I let the noble Lord, Lord Liddle, speak before me, because I listened very carefully to what he said at Second Reading, when he made a powerful speech in favour of pragmatism. I think that was an expression that he used; I see him nodding in assent. Pragmatism is the reason behind Amendment 10. It is a question of whether we let ideology trump pragmatism. The amendment is very similar to one I proposed in Committee. It is less ambitious—the one I proposed in Committee would have allowed the franchise to be renewed for a longer period than 12 months—and therefore one that is it easier for the Minister to accept.
There is an additional reason that has not been mentioned so far, which is that there will be pressure within the Minister’s own department to absorb the franchises as they fall due. I think his department would welcome the flexibility under Amendment 10 to enable an existing franchise to be extended for a further 12 months, but no longer. The Minister will get his way: all the train operating companies will be nationalised and all the franchises will come to an end. What we are arguing about is some flexibility. If a franchise is being run perfectly competently, if the existing company would be happy to run on for another 12 months, and if the department is having to recruit more civil servants to absorb the existing ones, I honestly cannot see why the Minister has set his face against Amendment 10. If there is the word “resist” in his brief, perhaps he will reflect on whether a little bit of flexibility would be in order.
Lord Snape (Lab)
My Lords, I expressed some sympathy with this amendment, or an amendment similar to it, in Committee. Without repeating anything I said in Committee, I put it to my noble friend the Minister again—having said one thing, I now contradict myself—that it does not really make any sense to terminate instantly or as soon as it runs out, which is pretty close to instantly, a franchise such as Greater Anglia, which has generated enormous public support for the efficient way that it has run its train services, or c2c, the line from Liverpool Street to Southend, which recently scored a 94% approval rate as far as its passengers were concerned, although I imagine they, like most other sensible people in this country, think the franchising system has been pretty disastrous for the railway as a whole. Coincidentally, those two franchises run out fairly quickly. Although the noble Lord who speaks for the Opposition would not mention specific franchises for some reason, I will. I have been tormented by Avanti since the last Government were unwise to give it the franchise around 2017 and take it off Virgin, for no apparent reason. The last Government then gave Avanti a nine-year extension, despite all the complaints from both sides of your Lordships’ House. Does it really make any sense to terminate franchises that have enormous support from the travelling public, two of which I have just mentioned, and not take any action for another few years—about seven years or so—for companies such as Avanti? Surely there is some flexibility here that my noble friend could press.
If there are good reasons to terminate franchises then surely those reasons, good or bad, have been realised as far as Avanti’s performance is concerned. Perhaps my noble friend can tell us exactly how much it would cost in public funds to dispose of Avanti’s services and how the contracts were drawn up and interpreted in the first place, when a company like that can get away with the shoddy service that it provides daily.
Lord Hendy of Richmond Hill (Lab)
I thank the noble Lord, Lord Moylan, and the noble Baronesses, Lady Randerson and Lady Scott of Needham Market, for their amendments in this group—Amendment 2 and Amendment 10 respectively. The amendments seek to test the Government’s approach of transferring services as existing contracts expire. I also thank my noble friend Lord Liddle for saying that the intention is to get rid of franchises and for explaining why. He is right. I should also say that I and the Government do not believe that we should either pay compensation for termination or keep paying fees to owning groups of train operating companies when we do not need to.
I am happy to begin with a reassurance about the Government’s position. We will not hesitate to take decisive action if Avanti, CrossCountry or any other operator’s poor performance means that the contractual conditions that allow for early termination are met. The contracts we have inherited from the previous Government make it far too hard to get rid of an underperforming operator, but if we have the opportunity to put passengers out of their misery by ending a failing operator’s contract early and bringing their services into public ownership, we will do just that. In those circumstances, we will not wait for those contracts to expire.
The noble Baroness, Lady Randerson, and the noble Lord, Lord Young, asked whether the public sector operator will have the capacity to take in services from a failing operator whose contract has been terminated early, at the same time as other planned transfers. I reassure them that current contracts allow sufficient flexibility to accommodate this. All but two of the current contracts with private operators give the Secretary of State significant discretion to select an expiry date within a range of possible dates specified in each contract. The Secretary of State simply has to give the outgoing operator a minimum of 12 weeks’ notice of expiry. This means that if a contract can be terminated early for poor performance—be it by Avanti, CrossCountry or any other operator—the Secretary of State will be able to adjust the planned expiry dates of other contracts if necessary to ensure that the failing operator’s services can be transferred as quickly as possible without overwhelming the public sector operator. Of course, we also need a programme of return that is reassuringly steady for the good management of the operations as they come back into public ownership. I hope those observations will be sufficient to persuade the noble Baronesses not to press their Amendment 10.
In response to the noble Lord, Lord Moylan, my previous comments address the first part of his Amendment 2. The Government will not hesitate to exercise its contractual rights if an operator’s poor performance means that the conditions for early termination are met. The Secretary of State, my noble friend Lady Blake of Leeds and I have all made the Government’s position on the matter very clear and on the record. There is no need for a statutory obligation to cover this point.
The noble Lord knows very well that I cannot accept the remainder of his amendment because it would substantially delay the programme of transfers to public sector operation. As the noble Baroness, Lady Randerson, said, thanks to decisions taken by the previous Government, the two most poorly performing operators currently have the longest contracts, with terms that make it very difficult to terminate them early for poor performance. I cannot say quite what the cost is, but I will write to my noble friend Lord Snape to tell him the rough quantum. In fact, the amendment from the noble Lord, Lord Moylan, would mean it would be impossible for the Secretary of State to exercise any contractual break clause, as defined in his amendment, until after the worst-performing operator’s contract had ended. That could be as late as October 2027, so it is difficult to see this as anything other than a wrecking amendment. I hope the noble Lord will prove me wrong by withdrawing it.
Lord Young of Cookham (Con)
Before the Minister sits down, can he just clarify something that he said? Is it the case that under new Section 30A inserted by Clause 2(3) he has the flexibility already to renew two of the franchises mentioned by the noble Lord, Lord Snape, by using that particular paragraph in the Bill—namely, that he
“is satisfied that it will not be reasonably practicable to provide”
the services in any other way?
Lord Hendy of Richmond Hill (Lab)
Is that the two worst-performing franchises or two others?
Lord Young of Cookham (Con)
Any franchises. Can he use that section to renew the satisfactory franchises, because it would “not be reasonably practicable” to do so otherwise, and take them in-house?
Lord Hendy of Richmond Hill (Lab)
I thank the noble Lord, Lord Young, for his intervention. I think he is right, but he will forgive me if I consider it further and write to him.
Lord Moylan (Con)
My Lords, with the leave of your Lordships’ House, I may speak for slightly longer than would be normal because I would like to address a comment made by the noble Baroness, Lady Randerson, about my Amendment 2. She said that it was the same as Amendment 1 tabled by the Liberal Democrats in Committee. In fact, that is only superficially the case. While proposed new Sections 25B(1) and (4) are the same as in the amendment tabled in Committee— I think, by the noble Baroness, Lady Scott of Needham Market—the meat in the sandwich, so to speak, has changed. There would be no additional cost in early termination fees as a result of this amendment as drafted because the franchises would be terminated not as they fell in but in order of worst first, even though that might take a little longer.
I listened very carefully to what the Minister said. Although the Minister found it helpful, the intervention from the noble Lord, Lord Liddle, was, to this side of the House, slightly infuriating. Throughout the debate in Committee there was a constant jumping between asking us to please focus on this narrow, technical Bill to then, when we wanted to talk about the narrow, technical Bill, being told that we should be talking about the great, big, wonderful Bill that will be coming in 18 months, because that is really what this is all about. But we cannot talk about that Bill because we have not seen it—indeed, we are not even going to get to see it in pre-legislative form. So although the Minister found it helpful, it illustrated the constant problem we have had in dealing with the Government on this measure.
For that reason, I am afraid I am not sufficiently satisfied with the Minister’s comments in respect of my Amendment 2 and I would like to test the opinion of the House.
Lord Lansley
“(1A) In section 4 (general duties of the Secretary of State and the Office of Rail and Road) omit paragraph (1)(d).”Member’s explanatory statement
This amendment probes when - and in relation to which services - Ministers expect to meet their duty to promote competition.
Lord Lansley (Con)
My Lords, the purpose of Amendment 3 in my name is to explore the question of when and under what circumstances it is the Government’s intention to meet their duty in Section 4(1)(d) of the Railways Act
“to promote competition in the provision of railway services for the benefit of users of railway services”.
It was prompted by a very brief exchange that took place in Committee, where the Minister confirmed that it is not the Government’s intention to remove that duty. However, it is clearly their intention, in relation to passenger railway services, very substantially to reduce competition and perhaps to exclude it altogether. There may well be other areas of activity in the provision of railway services which are open to competition, and I want to examine where those should be. Of course, I approach this not with the intention that the duty to promote competition should be removed from the Act, but with the view that it should be exercised.
I am in favour of competition. I might say, in this context, going back many years, that where privatisation is concerned, we have found that competition between private organisations yields benefits. In the railways, in some circumstances, we have found that the absence of competition has been at the heart of the problem: that the performance has not been exposed to competition and therefore has not improved in the way we would have wished it to. So, competition works, privatisation does not necessarily work, but the combination of privatisation and competition, in my view, has worked in the past. However, we are not here to discuss privatisation; we are here to discuss competition, and there is a continuing role for competition, in my view.
I am not planning to talk at length about Amendments 13 and 17 in this group, I will leave that to my noble friend on the Front Bench, but Amendment 17 is directly relevant. One of the principal opportunities for competition would be with open-access operators. In Committee, we touched upon but did not find out whether, and to what extent, it was the Government’s intention to continue to permit open-access operators or indeed to promote them. In my view, promoting them can be a very effective way of stimulating competition and innovation, which are often—as Schumpeter would have said—very intimately linked together.
My contention in this amendment is very simple: to explore where competition will be available. Clearly, it can be done with things such as the provision of rolling stock and services to railways, and maybe, to some extent, in relation to rail freight. As far as passenger railway services are concerned—and we are dealing with that here—the Government’s intention appears to be that every aspect of the passenger railway services should be subject to the “directing mind”—as the Explanatory Notes sets out. Therefore, it will be very difficult for there to be any substantial competition, except if that can be achieved by the role of open-access operators. I hope, when he responds to this debate, the Minister will be able to say they will have a continuing role, or even that they might be encouraged to bring the innovation and competition that would enable us to avoid the downside of a dominant provider.
We have seen this in other circumstances. For example, in France, the dominance of SNCF has led to abuse such as anti-competitive pricing or the overbooking of train paths to restrict competition from other providers. We do not want to see the dominance of public sector providers, on passenger railway services, to lead to that kind of abuse. Still less do we want to see monopoly activity on the part of public sector companies in passenger railway services lead to an elevation of the interests of the companies themselves over the interests of the users of railway services. The general duty to promote competition is for the benefit of the users of railway services because, very often, they are the ones who most see the benefit of that.
I will just tease the Minister, finally, by saying that in this legislation he has the opportunity to move in the opposite direction to the fourth railway package under the EU’s transport legislation. Here is an uncovenanted Brexit bonus for the Government, in being able to move in the opposite direction to the thrust of legislation in the European Union. With that teasing moment, I beg leave to move Amendment 3.
Lord Moylan (Con)
My Lords, I rise to speak to Amendments 13 and 17 in my name, but also to respond to my noble friend Lord Lansley in relation to Amendment 3. We come now to the heart of a considerable confusion that exists in the Bill, one that the Government have done their very best to avoid and that needs to be flushed out.
My noble friend Lord Lansley refers to competition. In fact, he refers to the abusive practice by monopoly railways in France. That, of course, is in response to European Union legislation, which has had to mandate access to competition in order for it to flourish in the European Union. It is going in the direction that we went in, somewhat later than us. We are now going back to the Attlee Government, basically, and moving away from that. It is a Brexit bonus, as I think I said in an earlier debate.
The matter is made worse because the Government have not been clear about their view on competition. It has been made much worse by the Government’s confusion and blank refusal to address the question: who is going to make the decisions about competition? Who is going to decide, in relation to open access, which providers will have access to the service? I refer, as I was encouraged to do by the Minister, to the Labour Party document Getting Britain Moving. In its section 7 on “The role of open access”, beginning on page 22, it says clearly:
“The ORR will continue to make approval decisions on open access applications”,
but that is not confirmed by the Minister. Instead, we have the spectre of Great British Railways making open access decisions. That appears to be part of the great controlling brain: one of its functions is that it would make those decisions about open access. But in doing so, it will be making decisions directly about competition with itself.
We are very concerned that the sort of abusive monopoly activity seen in France, which my noble friend has referred to, is exactly what we would be exposing ourselves to if we allowed this measure to go through without having appropriate safeguards in place in advance. That is the thrust of Amendment 17, which simply calls for a report. In Committee the Minister made fun of me for calling for so many reports, but he should understand that we are doing this as a way of drawing attention to an issue of serious concern without trying to hobble or wreck the Bill. He has not given us any assurance in response. He has taken no notice of our very genuine and serious concerns.
Amendment 13 relates to a similar topic, in relation not to open access for passenger railway services but rather to access for freight services. They too compete, so to speak, for paths on the railway; they need access to the railway if they are to operate. The previous Government had an informal and non-statutory target of seeing the volume of freight on the railways increase by 75% by 2050 from a base of, I think, two years ago. This amendment would effectively put that target into the Bill.
Nobody in the Labour Party, either in opposition or in government, has resiled from or rejected that target. If anything, I think they want a more exacting target. The Minister, if pressed, would probably say that it was a perfectly respectable target, one that he would want to sign up to, so there should be no objection to seeing it in the Bill. It would give some assurance that Great British Railways, in its operations, would not simply favour its own activities at the expense of freight operators. Ideally, we would also want some sort of assurance that it would not favour its own passenger activities at the expense of open access operators.
Lord Snape (Lab)
My Lords, I rise to say a few words on Amendment 13 and the future of rail freight once this legislation becomes law.
Traditionally, on nationalised rail in the past, freight was often seen as the poor relation. Trying to attract people to the freight side of the former British Rail, particularly getting management involved, was much more difficult than the passenger side. There was a bit of glamour about fast passenger trains that the freight network never shared. My noble friend the Minister spoke in Committee about the Government’s intention to increase rail freight by 75% by 2050. I would be grateful if he could provide some clarification as to how that will be done.
I look at railway operations from time to time on the website OpenTrainTimes—I am a devotee, and this is a terrible confession to make. I note how close to the timetable rail freight adheres these days, which was not necessarily true in the past. There was a welcome introduction of relief from access charges for new business, as far as rail freight was concerned. Can my noble friend tell us whether there is any intention to extend that? Indeed, we should go further. In Committee I pointed out the imbalance in taxation in this country that makes it cheaper and more attractive to buy a fleet of lorries and put them on our road network—where, of course, the infrastructure is paid for out of general taxation—than it is to run rail freight, as Royal Mail has, deplorably, just demonstrated.
While I would not seek to pin down my noble friend the Minister as far as future taxation policy is concerned, I certainly hope he can press Treasury Ministers to see whether something can be done in future to rectify that imbalance between rail and road. In speaking to Amendment 13, I hope that my noble friend can give me some reassurance as to how this envisaged increase in rail freight—welcome though it is—will be implemented.
Baroness Randerson (LD)
My Lords, these three amendments deal with crucial aspects of the running of the railways and they are issues that we on these Benches probed in Committee. I certainly anticipate that, when we get the full Bill next year, there will be long and vigorous debate and discussion about them and I have serious reservations about the possible plans. However, we on these Benches accept that, however concerned we are about freight or open access or competition, the Government have chosen to write a very tightly drafted Bill and to separate ownership from operational organisation in that Bill and it is not appropriate to try to write, in a rather haphazard way, the big, final Bill on Report in this House at this time.
Lord Hendy of Richmond Hill (Lab)
I thank noble Lords for their amendments in this group. In response to Amendment 3, from the noble Lord, Lord Lansley—and I thank him for our discussion a few days ago— I will highlight two important ways in which this Bill promotes competition.
First, there will continue to be huge opportunities for competition between businesses in the supply chain which publicly owned operators and Network Rail will continue to depend on. I was speaking this morning at the Railway Industry Association’s conference and it welcomed clarity about the Government’s intentions with enthusiasm, because it knows as well as we do that the railway, after six years of being promised reform, needs to understand what reform might look like in order for its businesses to prosper. Public ownership and our plans for GBR to provide long-term strategic direction for the whole railway will give greater clarity and certainty to businesses in the supply chain and so will support healthy competition.
Secondly, in relation to competition between train operators, the Bill preserves the existing arrangements for open-access operators. Open-access services are the only source of meaningful competition between operators on today’s railway, and this Bill makes no changes to the way in which open-access applications are treated by either Network Rail or the independent regulator, the Office of Rail and Road.
Having set out how the Government’s approach is consistent with a duty to promote competition, I also note for completeness, referring to the propositions of the noble Lord, Lord Lansley, that the Section 4 duty applies to the Secretary of State only when she is exercising certain functions under the 1993 Act. It does not apply to the exercise of her functions under Sections 23 to 31, which are the franchising functions that are amended by the Bill. As such, there can be no question of this Bill impairing the Secretary of State’s ability to comply with the Section 4 competition duty.
Turning to Amendment 17, tabled by the noble Lord, Lord Moylan, open-access operators are a valuable part of the system and will remain so following this short Bill. Looking ahead to the wider railways Bill, we see a continuing role for open-access services where they add value and capacity to the network. I will say more in a moment about how their interests will be protected. In the meantime, I reiterate that the current short Bill has no impact on open-access operators, the services they provide or the process by which they can secure rights to operate on the rail network. For this reason, the report required by this amendment would serve absolutely no purpose; the Bill plainly has no impact.
Requiring this report—not just once but every single year in perpetuity—would simply place an additional reporting burden on Network Rail and the Office of Rail and Road, and potentially also on open-access operators themselves if they were each required to provide information about their services to inform each report.
Finally in this group, Amendment 13 deals with freight. My noble friend Lord Berkeley is a staunch advocate of the rail freight sector and I hope that I can reassure him and the noble Lord, Lord Moylan, about the Government’s intentions. The Government hugely value the rail freight sector and recognise the importance of its contribution in reducing congestion on our roads and in helping our transport system move towards net zero.
I entirely agree that the Government’s plans for reform under the railways Bill must ensure that Great British Railways promotes growth in the freight sector and must provide suitable protections for freight operators. We will set out our detailed plans in the consultation I have already referred to as soon as we are able to.
In the meantime, I am very happy to reassure noble Lords on three fronts. First, our proposals for the railways Bill will include a statutory duty on Great British Railways. I have reflected carefully on the remarks of the noble Baroness, Lady Randerson, in Committee, and the remarks just made by my noble friend Lord Snape, and as a result I now confirm that this duty will be not merely to enable the growth of rail freight but to promote it. My noble friend Lord Snape referred to variable access charges. I very much agree that we would seek more of that in the future to encourage more freight traffic.
Secondly, the Secretary of State will set a specific freight growth target for Great British Railways. I cannot confirm today the specific detail of what that target will be, but we will set out our plans for that in due course.
Thirdly, I thank my noble friend Lord Berkeley in particular for his comments on the importance of a fair system for the allocation of access. As discussed with my noble friend last week, I have confirmed today that there will be consultation on the Government’s reform proposals, and that the consultation will set out the proposed role for the Office of Rail and Road in the access decision-making process. Any changes will then be set out in the railways Bill itself, so noble Lords will have ample chance to debate these matters before changes are implemented.
I also reassure noble Lords that our proposals for allocating capacity and granting access to the network will include safeguards to ensure that both freight and open-access operators continue to be treated fairly. As I have already said, I would be delighted to meet with my noble friend and other noble Lords with an interest once the consultation has been published, so that we can discuss the details and continue the very helpful conversations we have started here.
Turning to the specifics of the noble Lords’ Amendment 13, the statement required by this amendment would be very short and sweet. There is no need to wait six months after Royal Assent for me to provide this statement; I can give it to the noble Lords now. The Bill is narrow in scope. Its purpose is simply to allow the Government to transfer the operation of franchised passenger services to the public sector. It does not make any changes to the arrangements under which freight services operate. This means that the Bill will not, and cannot, have any adverse impacts on the freight sector or on freight growth.
I have clarified the impacts of the Bill on competition, open access and freight, I have confirmed that we will soon publish a consultation document setting out our proposals for the railways Bill, and I have reaffirmed that these proposals will consider appropriate protections for freight and open-access operators. In light of what I have said, I hope that noble Lords will agree that there is no need to pursue their amendments further today.
Lord Lansley (Con)
My Lords, I am very grateful to all noble Lords who have taken part in this short debate. It has raised a number of important issues, and I am grateful to the Minister for the clarity that he brought to the subject—partly from my own point of view, in understanding how the legislative provisions work, which is always helpful. I have to confess that I know much less about railways than the noble Lord, but I try to find out how legislation works, since that is part of our job, and what he said was very helpful.
What he had to say about there being no changes to the legislative provisions and the arrangements in relation to open access was important and I will come back to that in a minute.
I do not think there is any merit in pressing the amendment now, because when we come to look at the role of Great British Railways in the major Bill to follow, we will look at issues such as the one my noble friend raised—the relationship between Great British Railways and the control of train paths. That is exactly the problem that occurred in France, and I think my noble friend Lord Moylan also discussed the abuse of a dominant position. We will need to look at how that kind of scrutiny and competition can be sustained, notwithstanding the monopoly aspects of Great British Railways. However, in light of all those helpful points, I beg leave to withdraw Amendment 3.
Lord Lansley
Member's explanatory statement
This probing amendment seeks to understand the circumstances where Ministers may provide services other than by direct award of a public service contract to a public sector company.
Lord Lansley (Con)
My Lords, this is the last group on which I plan to speak. My amendment was prompted by a debate in Committee that gave rise to the question of how the new legislation would work. We have established, including during the previous group, a number of things that do not change, including the licensing of railway services and the prohibition on operating without a licence. The relationship with open- access providers therefore does not change, since they can make applications to the Office of Rail and Road for that purpose—I am paraphrasing, but that is, broadly speaking, how it works.
Where we have a change is in the process for franchising, which is to be removed. The Government have chosen to change the franchising provisions in the Railways Act, in Section 30 et cetera, and to replace that text with what we see in the Bill. I really want to explore this question: to what extent will all designated railway services be brought under Section 30, from new Sections 30A to 30C? I want to explore the consequence of the use of the word “only” in that provision. It says that a service must “only” be provided by
“a direct award of a public service contract to a”
wholly owned public sector company. In effect, it will be wholly owned by the Secretary of State—not, as we have discovered, other public sector companies.
The removal of the word “only” would, in the way in which the text works, as far as I can see, create an opportunity for the Secretary of State to provide or secure the provision of services by routes other than the direct award under Regulation 17. Clearly, that is not the Government’s intention. I will not return to the debate I promoted in Committee, but it would be good legislation to leave that option open to the Secretary of State, even if it were not the Government’s present intention to use it, because they may find it valuable to be able to do so in future.
Let us look at a practical example. Imagine that the Government thought it desirable to say that a service such as the one from Fenchurch Street to Southend and Shoeburyness should form part of the Overground services under the operating control of Transport for London. As far as I can see, as things stand, if that service is designated under Section 23 of the Railways Act—the designation requirements—it will have to be run by a public sector company wholly owned by the Secretary of State, unless it is the subject of an exemption under Section 24. In Committee, I think we heard the Minister say that the Government have no plans to extend the exemptions under Section 24. That raises another question for the Minister. Would he entertain that there may be circumstances in which it would be desirable to extend Section 24 exemptions? While London is a straightforward example, will the Government be open to that possibility, if it were a practical mechanism of securing the best operation of those services?
To what extent is the language of the Bill very deliberate, in that it requires that the Secretary of State may secure the provision of these services only through a direct award, but it does not say that the Secretary of State may provide or secure the provision of these services only by this route? I am making the distinction between “provide” and “securing the provision of”. This is customarily seen in legislation as a distinction between a government department doing it itself and doing it by means of a contract.
Where in this does the Department for Transport’s operator of last resort holdings company sit? Does giving an award of a contract to OLR Holdings Ltd constitute securing the provision of a service, or does it constitute providing the service? Is it regarded as part of the department for these purposes, or is it part of a wholly owned public sector company? There would be something rather odd now about treating it as part of a franchise agreement, since these franchises have already ended. Bringing it under a regime that is about the ending of franchise agreements seems odd.
My second example concerns East West Rail. We are not far away from the point when East West Rail will be running services itself on its new rail services. That will be very welcome—not least from my point of view, living in Cambridgeshire—when it reaches, as the Budget told us, all the way into Cambridge in due course. It will be running services quite soon in Oxford and Bletchley. It has not had a franchise; clearly, it will not now be given a franchise. It is a wholly owned public sector company. Is it the Government’s intention that it will be brought within the scope of Section 30? If so, this is odd, as this is an arrangement for franchises, but it has never had a franchise.
Of course, on the face of it, the Government will continue to designate railway services. Presumably—and here is a question to the Minister—there will be a comprehensive designation of railway services under Section 23, and that will, as a consequence, bring them all under Section 30 because of the way the legislation is now to be phrased. Therefore, is the intention, in effect, to bring all designated railway services under the scope of Section 30 et cetera, other than those exempted under Section 24?
I am sorry for asking a range of questions to explore how this works. We did, as the Minister has kindly mentioned, have the opportunity to discuss this a few days ago, so I hope he will have had the opportunity to think about explaining precisely how these interactions in the legislation will work. I beg to move.
Lord Moylan (Con)
My Lords, I am very grateful to my noble friend Lord Lansley for posing those very interesting questions. I am sure that the Government have answers to them, but they illustrate that this legislation is essentially very rushed and that they have not properly considered it.
I promise not to repeat what I said in Committee, but I cannot resist referring back to the final impact assessment, produced by the Department for Transport. It said that the purpose of the Bill is to meet a manifesto commitment, so it has not undertaken the normal practice of looking at alternative methods by which the same objectives might be achieved, because they are all in a terrible rush as the Government want to have a headline, essentially, and want to get ahead of the franchises as they expire. Therefore, I appreciate what my noble friend Lord Lansley has said, and I look forward to the Government’s reply.
Amendments 5 and 6, standing in my name, are linked. If Amendment 5 were to pass, I understand that there has been discussion with the Government Front Bench that Amendment 6 would pass without a Division in order to avoid having two votes on the same topic.
In Committee, I referred to two different models by which the private sector might be involved in the running of railways. One is the franchise system that we are currently discussing, which is the main subject of this Bill, but the other, generally dubbed the concession system, is the one used by Transport for London for the operation of all its services other than the London Underground, which is directly provided by Transport for London. All the other services—the buses, London Overground, the DLR, the tram and so forth—are provided under a concession system; that is, they are run by private companies on a contract.
The key difference between the franchise system and the concession system is that under the franchise system, as envisaged at privatisation, the fares risk rests with the operator. That was the model that was set up back when privatisation was introduced. If the fares went up and the companies generated more fares income, they would keep it; if they lost money on fares, it would be their problem that they did not make money because the fares were not good enough. Companies had the incentive to generate more fares, principally by generating more passengers, through all the clever things that they would do.
I was frank and straightforward in saying at Second Reading that that aspect of privatisation has never worked well because, essentially, private operators are not in control of fares income, which is closely correlated with the economic cycle—which of course they cannot control, manage or in any serious way mitigate. That aspect has never worked well, and Covid put an end to it in any meaningful sense. It has never recovered from that, nor, given this legislation, is it ever going to have the chance to recover.
The concession system is different, in that the fares risk remains with the franchisor. In the case of Transport for London, it is the franchisor of the services I referred to and it retains the fares risk. The obligation of the private sector operator is simply to have the trains and equipment in the right place, pointing in the right direction first thing in the morning, properly staffed, cleaned to a certain standard and so forth. If it fails to do those things, it will suffer financial penalties. The important point is that all those things are within its control. It receives a fee for that, but, in practice, because of competition, it is a modest fee given that risk is very limited. The risks are all things that are just a matter of it doing its job properly; if it does it properly, it will get that modest fee without penalty.
The purpose of Amendment 5 is to open up an option. It makes no obligation on the Secretary of State. When a franchise is terminated, the Secretary of State would have the option of awarding it not only, as the Bill is currently drafted, to a public sector company that is a subsidiary of the Department for Transport but to a private sector entity on a concession basis. The reason for it is simply that we know that it works. We know from Transport for London that the system can be made to work very effectively. We know that some of the best services on the Transport for London network—some of the best modes—are provided under this system. Why should it be that the Government would want to rule that out? Of course there could be a role for the private sector operating on that concessionary basis.
My noble friend Lord Lansley’s amendment gives the Government more options than mine does. My amendment gives the Government one extra option, but he would give the Government effectively limitless options by deleting the word “only”, whatever options might be available. It would give the Government more flexibility in dealing with circumstances that they may not have foreseen when they drafted this Bill.
Amendment 6 goes with Amendment 5 simply by defining in a separate clause what I mean by concession. Amendment 5 opens up the choice to do something on a concession basis and Amendment 6 says what a concession is. Despite every effort on my part and that of the Public Bill Office, we could not quite combine these into one amendment, so they stand on the Marshalled List as two amendments which, in practice, are closely linked, as one amplifies and clarifies the other.
I would very much like to hear from the Minister why Amendment 5 would not be acceptable, except to a control freak. That appears to be perhaps the Government’s vision for the railways.
Baroness Randerson (LD)
My Lords, this group raises some interesting questions about the various shapes that the ownership of rail services can take. Our interest on these Benches, which we raised in Committee, is specifically the interface between the Government’s picture for national rail services run by the Government and those run by devolved authorities. We are interested in seeing that nothing in this Bill attacks devolution as it currently exists or stops the further development of devolution when it is properly and fully thought through. We are interested in ensuring that nothing in this Bill would prevent current devolution models continuing and new ones from being established. Those devolution models include aspects of private sector involvement.
In addition, in Committee, the noble Lord, Lord Liddle, raised some interesting questions about alternative public/private models and not-for-profit models. I hope that he will speak about those again in this debate.
I will be listening very carefully to the Minister’s response. If I understood him earlier in our discussions about this, he has reassured us about devolution, but I need an additional public response on that issue. With that, I take note of a very interesting aspect of this debate.
Lord Liddle (Lab)
My Lords, I will speak briefly, as the noble Baroness, Lady Randerson, mentioned what I said in Committee.
It is right to raise these questions here, but they are questions for the future and for the big Bill that we will get next year. Personally, I do not want to see the re-creation of British Rail. My dad used to work for it, and to my mind it did not have great success as a monopoly nationalised industry. Therefore, it is right that, in the debate about the Bill setting up GBR when it comes around, we should explore the models of ownership that might work on these concessions. I would not rule out co-operative models, or heritage railways, running part of the national network.
My main concern is that we do not get stuck on the idea that this has to be a public sector monopoly. After all, the main thrust of Labour policy, the manifesto on which we won the election and the Budget put forward by Rachel Reeves is that we should use public investment to generate private investment, which will multiply the effects on economic growth. I do not see why the railways should somehow be different from that general principle. I discussed this with the Minister, and he explained how one thing being looked at is using the private development of Network Rail-owned land to improve investment in services. That strikes me as a very good idea and something that we should look at. Noble Lords are right to raise this question, but I hope we are going to have an open-minded debate about it in the coming year.
Lord Hendy of Richmond Hill (Lab)
I thank the noble Lords, Lord Lansley and Lord Moylan, for their amendments in this group. I will speak first to Amendment 4. Following enactment of the Bill, there would be just two routes by which the Secretary of State could secure the operation of passenger services. The first option, and this is the option we plan to use, would be to make a direct award to a public sector company under the amended Section 30 of the Railways Act 1993 and in accordance with the Public Service Obligations in Transport Regulations 2023.
The second option, which is a very limited option, would be to use the power to continue an existing private sector franchise temporarily under new Section 30A. This power is deliberately limited only to circumstances where the Secretary of State is satisfied that a transfer to a public sector company is not reasonably practicable. This means the Government would expect to use it only as a last resort, for a short period, to avoid a transfer causing disruption to passengers or staff. Apart from this very limited power in new Section 30A, the Bill leaves no other route by which the Secretary of State could contract with a private sector operator to run either existing services or new ones. This is entirely consistent with the Government’s very clear policy in favour of public ownership of services that form part of the national railway network.
On the point from the noble Lord, Lord Lansley, about DfT OLR Holdings Ltd, I confirm that award to it is securing the provision. All services currently designated under Section 27 will be provided under Section 30 by a public sector operator as existing contracts expire. The noble Lord also asked about the Secretary of State’s power to secure the provision of new services through a public sector company if those services had never been provided under a franchise agreement. Regulation 21 of the Public Service Obligations in Transport Regulations 2023 allows the Secretary of State to vary the terms of a public service contract to include additional services, and so would provide the necessary statutory basis for her to secure the provision of new services from a public sector operator.
The noble Lord asked whether the Bill will leave an option for the Secretary of State to procure East West Rail services from a new private sector operator, and the simple answer is that it will not. The Government have no plans for long-term private sector operation of the new East West Rail services, which will commence operation next year, nor any other services that the Secretary of State is responsible for procuring.
There are—and, after this Bill, there will remain—two ways in which other parties might operate or secure the provision of services on the rail network. One possibility is that a third party might operate them as an open access operator, as is the case with Hull Trains, for example. Another possibility is that a mayoral or combined authority or other local authority might secure the operation of services either by running them itself or by procuring a third party to do so. As I will explain in relation to the next group of amendments, the Secretary of State can facilitate this by granting an exemption under Section 24 of the 1993 Act, which takes the relevant services out of the scope of the surrounding provisions of that Act.
I noted with interest that my noble friend Lord Liddle remarked about involvement of developers, for example. I echo his sentiment that there will be ways of getting private capital in, particularly through development, that have not really been explored so far.
I hope that my explanation reassures the noble Lord, Lord Lansley, that the Government have carefully considered the implications of the Bill and the options it will and will not leave open, and I hope he will feel able to withdraw this amendment.
Amendments 5 and 6 from the noble Lord, Lord Moylan, deal with competed concession contracts. As I set out to the noble Lord in Committee, these amendments would remove the opportunity to deliver the benefits of public ownership, which a clear majority of the public support and which was a specific commitment in the manifesto on which this Government were elected. For the following reasons, I cannot agree to the amendments.
First, a concession model would mean the taxpayer continuing to fund substantial profits for private sector operators. A concession model along the lines of Transport for London’s contracts would expose operators to more financial risk than today’s contracts, where government bears virtually all the financial risk. Under such a model, train operators would price their bids to generate even more profit than the £110 million to £150 million per annum that they can earn under the current contracts. Our plans for public ownership will eliminate those fees and profits entirely—in the Government’s view, continuing to line the pockets of private shareholders is not a good use of taxpayers’ money.
Secondly, TfL concessions are a relatively inflexible form of contract which is not well suited to the needs of the national railway network. For a concession contract, the procuring authority has to define the service levels and standards at the start of the procurement process, and those levels and standards then endure for the life- time of the contract. Changes to the service specification can be achieved only through costly negotiation and agreement with the operator which already holds the contract.
That is very different from the London bus market, for example, which we discussed in Committee, where the concession model is much more suitable because there is a large number of small individual contracts. For the London Overground, much of which is heavily constrained by the geography of the railway network and the other services that run on it, it might be satisfactory, but the whole of the national railway network requires greater flexibility to adapt to changing patterns of demand. Finally, and most importantly, a concession model would not resolve the fragmentation of the current system, nor would it deliver on the Government’s commitment that rail services should be run by and for the public.
The noble Baroness, Lady Randerson, referred to devolved Administrations and local mayoral authorities. We will come to devolution further in the next amendments.
I urge noble Lords not to press their amendments.
Lord Lansley (Con)
My Lords, I am very grateful to all noble Lords who participated in this shortish debate, particularly to the Minister for the additional clarity sought by my Amendment 4.
My noble friend raised the issue of concessions, which I suspect we will come back to. It is one of those occasions where one looks at the interesting examples of what is happening in the French railway system, which is using concessions to a greater extent and is perhaps not encountering the objections that the Minister cited in relation to TfL’s concessions. That is a comparison that I am not qualified to make, but I know my noble friend on the Front Bench might pursue it.
I thoroughly agree with the point made by the noble Baroness, Lady Randerson, about the desirability of maintaining devolution models or perhaps extending them. The use of the exemptions under Section 24 should be considered. The Minister said that, in addition to the two routes the Secretary of State might use for securing the provision of services, that is the additional route, as it were, alongside open access, which we discussed in the previous group.
Lord Moylan
Lord Moylan (Con)
My Lords, if I may respond to what the Minister said, he is asking us to make a huge bet on what he refers to as the benefits of public ownership. Most of us who are of a certain age can remember public ownership, and we remember that the benefits were few and far between. He is asking us to take a leap of faith that this time round it is going to be different, but he will not—
Lord Bradshaw (LD)
The noble Lord has spoken as if public ownership is something evil. I remember, when I worked on the west coast main line, that 90% of the trains ran on time. That is a far cry from what is now the case. It was so different from what he is saying that he really should take a history lesson in what was right about British Rail.
Lord Moylan (Con)
My Lords, I made no reference to good or evil. I am talking about operational efficiency. I am sure the noble Lord is correct in drawing attention, as has happened several times today, to the deficiencies of the current operation of the west coast main line, but other noble Lords have rightly drawn attention to the fact that there are private sector operators in this country currently operating with the efficiency levels that he refers to, and better—so the private sector has a lot to be said for it as well.
The fact is that public ownership is something about which the country largely breathed a sigh of relief when we moved away from it—rightly or wrongly, whatever the history behind that might have been—and every other European country over the last few years has moved away from exclusive public ownership operation. Even train companies such as Deutsche Bahn, which stood once at the pinnacle of public regard, are now something of a joke in their own country.
Lord Watts (Lab)
It is the introduction to it that is the problem. Is it not the case that the public support public ownership of the railways, and that the public sector had to take over the east coast line because the private company failed to deliver the service?
Lord Moylan (Con)
My Lords, the noble Lord brings me to exactly my point. The benefits of public ownership that the noble Lord was able to refer to were, first, that it is popular and, secondly, that it was in the manifesto. Those two things might be absolutely true, but they are not quantifiable passenger benefits. They are not passenger benefits at all; they are political facts that sit there in the background.
Of course the system has broken down, especially since Covid. I have acknowledged that, and the need for reform. What this amendment seeks to do is allow a degree of variability, non-uniformity, difference of practice, choice, options to the Government, rather than having a single, purely nationalised, purely state-controlled machine that we are told will bring us benefits, one of which, as far as I can make out, will be flexibility.
I really did not discern any others, except that we will not be paying fees to private sector operators—a point the Minister has made several times. We will not, but in the picture of the cost of running the railways the fees are extremely small; they are a tiny percentage of what is involved. If the private sector can continue, post Covid, to generate the sort of growth in passenger numbers that it generated before Covid after privatisation, and we can get back to those happy days, the amount of money being paid to operators would be swamped by the revenues that would be coming in. That is the bar that public ownership has to match and we have no guarantees that it will do so. We are asked to take the whole thing on trust. To that extent, I wish to press my Amendment 5 and test the opinion of the House on it.
Baroness Pidgeon
“30ZA Exemption of passenger services: duty to consult(1) Before making a direct award of a public service contract to a public sector company under section 30(1A), the relevant franchising authority must consult with relevant persons on their willingness and ability to make an application to the appropriate designating authority for the grant of an exemption from designation under section 23(1) for the purposes of applying for or being awarded a public service contract under section 30(1A).(2) For the purposes of subsection (1), “relevant persons” include—(a) the Scottish Ministers,(b) the Welsh Ministers, (c) English combined authorities,(d) the Greater London Authority,(e) directly elected mayors, and(f) any other relevant persons or bodies.”Member’s explanatory statement
This amendment requires the Secretary of State to consult appropriately when awarding a public sector contract in order to encourage more services to be operated by devolved authorities like TfL or combined authorities in the future.
Baroness Pidgeon (LD)
My Lords, our Amendment 7 is about rail devolution, discussed extensively in Committee from all sides of the Chamber. We believe it is really important that this first piece of rail legislation from the new Government not only meets their manifesto commitment to public ownership of the railways but allows further rail lines to be transferred to metro mayors and local and regional authorities where there is a strong case, and a desire, by the locally elected members. Local accountability is key.
I remind the House that we have discussed in detail the huge success of the Overground and the Elizabeth line in London and of Merseyrail in the Liverpool region, and the desire for metropolitan areas such as Greater Manchester to deliver a truly integrated public transport offer, branded under one logo and accountable to the mayor. These not only improve transport but contribute to housing and economic growth. I hope that the Minister can offer some stronger words today about future devolution, not just the limited existing devolved lines. The Minister started to outline this in response to the previous group, and I hope to hear more.
We on these Benches want our railway to become a reliable, fast, cost-effective and efficient service for everyone, with local services run in a way that serves the needs of local areas and local communities. I sensed in Committee that the Minister was listening very carefully to the points that were made, especially given his direct experience in a former role of running and expanding the Overground service in London.
I thank the Minister for his time, since Committee, meeting with my noble friends to discuss our amendments further and the assurances that we would like to hear at this stage. I hope the Minister can today assure the House that, as franchises end and come into public ownership, there will be genuine consultation and discussion with devolved authorities on how future services should look, and indeed on how best to run them—including the option for locally run and accountable devolved rail services, in addition to those already devolved. We believe that this will help bring about the transformation of the railway that is the aim of this Bill. I look forward to hearing from the Minister real assurances in this area. I beg to move.
Lord Moylan (Con)
My Lords, I will speak to the amendments in this group, particularly Amendment 12 standing in my name. I have a great deal of sympathy with the amendment moved by the noble Baroness, Lady Pidgeon. Both amendments are aiming at the same thing.
I said earlier today that there are a number of crucial things missing from this Bill: one is staff, and we will come to that, and another is the passenger, and we have dealt with that. The third is the local authorities, the regions, the metropolitan authorities and devolution as a whole. On this side of the House we have always had great aspirations for the powers of combined metropolitan authorities and regional government, and for their expansion. We are largely responsible for promoting and establishing mayoralties in Manchester and the West Midlands, and in other places as well, such as Teesside and so forth. We have done that with a view to expanding their powers, and part of that was to take on a greater role in transport. We are seeing the beginning of that in Manchester with the buses, and Merseyrail is operated by the combined authority.
In doing that, we are coming from a successful metropolitan model, London, which already has many of these powers. As far as we can make out, these powers, where rail is concerned—not buses—are effectively to be closed down where they do not already exist. They will not be expanded further—the Minister has been quite clear about that—and we will not see the growth of rail on a metropolitan basis.
My Amendment 12 is simpler than that advanced by the noble Baroness, Lady Pidgeon. It would require a preliminary report that outlines the proposed framework in which Great British Railways is going to communicate with local authorities and regional authorities about passenger railway services. That it is going to communicate is something that the Government have committed to, as the Labour Party document Getting Britain Moving said so. There is going to be a great deal of consultation and involvement on every possible front, but, again, we are told that we have to take all of this on trust—that none of this will become manifest until we see the great rail Bill that will come in the future, with a bit of consultation but without seeing a proper text in advance for pre-legislative scrutiny.
We are trying to get it established now, as a principle at least, that the Government can initiate these communications before that Bill comes into effect. They can set up structures that allow those communications to take place; this amendment requires the Government effectively to do that.
If the Minister cannot agree to the precise amendment tabled by the noble Baroness, Lady Pidgeon, I very much hope that he will at least be able to agree to my amendment, which asks him to get those structures—which he envisages happening—in place as soon as possible, so that local authorities and the relevant regional authorities can be involved.
Baroness Randerson (LD)
My Lords, in response to the previous group, the Minister emphasised— I think it was in reply to the noble Lord, Lord Moylan—that the concession model would not comfortably fit national rail services. I accept that, and he made my point for me in making his response. The Government must not be allowed to create a national monolith, because one size will not fit all. Part of the variability that we should celebrate in this House is that which comes with devolution, because it fits local areas comfortably.
The Government have made a great deal of the £22 billion or £40 billion black hole and the shortage of public money. Money is undoubtedly in short supply. The Government have also made a lot of their support for devolution, but if devolution on rail transport services is to flourish then there has to be an alternative source of funding and of investment. Local authorities, even on the big scale of metro mayors, will not have the resources to invest in a pure public sector model.
Our concern in our Amendment 7 is that the Government leave themselves the scope to access or call upon alternative models of funding. That would be very much along the lines of what the noble Lord, Lord Liddle, suggested: some form of local partnership or an alternative structure, other than a pure public sector company. As my noble friend Lady Pidgeon says, we will be listening carefully to the Minister’s reply.
Lord Hendy of Richmond Hill (Lab)
My Lords, I would like to clarify a point for the noble Lord, Lord Moylan, on Amendment 13. If I inadvertently implied that the Government would somehow reduce the present freight target of 75% growth by 2050, I did not mean to. We intend that target to remain.
I will speak first to Amendment 7, proposed by the noble Baronesses, Lady Pidgeon and Lady Randerson, and I recognise the passion with which the noble Baroness, Lady Pidgeon, spoke on this. In responding to this group of amendments, let me start by saying very clearly that this Government are absolutely committed to strengthening the role of local leaders and local communities in shaping the provision of rail services in their areas. We are a pro-devolution Government. A stronger local voice is absolutely essential if the railway is to play its full part in this Government’s missions of kick-starting economic growth, breaking down barriers to opportunity and accelerating towards net zero. Our plans for reform in the substantive railways Bill will provide that stronger local voice. I can reaffirm to your Lordships’ House that the railways Bill will include a statutory role for devolved governments and mayoral combined authorities. They will be involved in governing, managing, planning and developing the railways.
Linked to this, we expect GBR to closely collaborate with areas through partnership agreements, which will build on progress made through existing arrangements the department has with the West Midlands Rail Executive and Transport for the North. We are already working with leaders in areas such as Greater Manchester, the West Midlands, the north-east and Liverpool City Region to discuss how these relationships could work, with governance supporting these discussions established. While final agreement of these partnerships will need to wait until GBR is formally established, the Government are committed to working with mayors to explore opportunities for progress ahead of GBR operation.
We are clear that together the statutory role and partnerships must allow genuine and meaningful opportunity to influence service levels and standards, and to drive forward the integration of local rail services with other modes as part of a genuinely joined-up local transport offer to passengers. It must allow for things like common branding, integrated timetabling, integration of fares and ticketing in the manner that Londoners, and people who live and work in London, completely understand. By getting this right in the wider railways Bill, we can offer local leaders the much greater level of influence that they are seeking. Existing options for local authorities to directly procure or operate their own services will remain in place, subject to the Secretary of State’s approval, as is currently the case. Alongside our proposed statutory role, our plans for the design of Great British Railways will make it easier for local leaders to engage with and influence what happens on the railway. I am so pleased that the noble Baroness, Lady Randerson, raised her dislike of a one-size-fits-all approach, and I agree with her.
First, I expect GBR will adopt a route and regional structure, with—importantly—a single leader responsible for train operations, rolling stock, staff and infrastructure within a given geographical area. This is material to the reason for public ownership and will create revenue growth and efficiencies and improve performance. A regional and route approach will ensure that GBR is close enough to local communities to understand and respond to their needs, while also being clear that they are part of a national system that needs to work coherently as a whole. It will also mean that local leaders will need to engage with just one organisation—GBR—rather than an infrastructure owner and, potentially, several different train operators.
Secondly, where local leaders wish to promote service improvements, having track and train under unified leadership will mean GBR can take a whole-system approach to identify the most cost-effective solutions. In the past, Network Rail has been much too quick—because it is an infrastructure provider—to opt for the most expensive solution, which is infrastructure change. A whole-system approach would begin by asking whether a service enhancement can be delivered with additional staff, while making better use of the existing train fleet on the existing railway infrastructure. If the answer is no, the next question should be whether the improvement can be delivered solely through changes to the rolling stock fleet. If, and only if, the answer to that question is also no, it might then be sensible to look at infrastructure change, which is usually the most expensive option and certainly takes the longest time.
The crucial point is that one organisation, GBR, on a route or regional basis, will be able to take a view across all those options with local leaders. I would encourage local leaders who think they might want to take over responsibility for operating or procuring services in their areas to keep an open mind until they have seen our full proposals for wider reform. I also reassure noble Lords that, where local leaders conclude that they wish to take over that responsibility, the current Bill does not stand in the way.
Existing legislation in Section 24 of the Railways Act 1993 allows local authorities and others to apply to the Secretary of State for specific services to be exempted from the franchising regime. Where the Secretary of State grants such an exemption, the exempted services are no longer caught in the surrounding provisions of the 1993 Act. So long as adequate alternatives are being made available, this means that the Secretary of State is no longer obliged to secure the operation of these services and they are not subject to the restriction that says they can be provided only by means of a public sector company. The relevant local authority can then operate or procure the services to its own specification, using its existing powers under other legislation, which, in the case of Transport for London, are conferred by Section 173 of the Greater London Authority Act 1999.
This is the mechanism by which services have been devolved in London and in the Liverpool City Region. The current Bill does not make any changes to the way this mechanism works. Following enactment of this Bill, the railways legislation will still provide the same opportunity as today for the Secretary of State to devolve services where she considers it appropriate and where it supports a well-functioning national service, and if we receive any such requests for the devolution of services, we will consider them openly, fairly and carefully, taking proper account of local, regional and national interests. I hope this reassures the noble Baronesses.
On Amendment 12, from the noble Lord, Lord Moylan, I thank the noble Lord for this amendment, which would require the Secretary of State to publish a report on the proposed communications framework between Great British Railways and local transport authorities across the UK. I can reassure the noble Lord that communicating effectively with local authorities is of critical importance to the Government. I have already explained that the Government are keen to ensure that local communities can influence the design and delivery of passenger rail services in their areas. We expect that GBR will engage with local transport authorities regularly on this and on key strategic matters, such as housing and economic growth.
I have also already mentioned the proposed statutory role, which will enable partnership agreements between mayoral combined authorities and GBR. The Government are already engaging with mayoral authorities to develop a framework for these partnership agreements and the intention is that the framework will enable varying degrees of influence, depending on the ambitions and institutional capability of partners. This will include close collaboration on the delivery of rail elements of local transport plans and greater opportunities for local partners to directly invest in the railway and to influence service provision.
Due to devolved infrastructure funding arrangements, my department currently has a memorandum of understanding with the Scottish Government which outlines interactions regarding the governance of Network Rail. The devolved operator, ScotRail, also has an alliance agreement with Network Rail which sees both organisations working closely together to better integrate the railway. For devolved services in Wales, there are a number of supporting devolution agreements between the department and the Welsh Government which set out the existing relationship. Under GBR, these devolved accountabilities will remain in place. We will therefore work with the devolved Governments to update existing arrangements and ensure that the benefits of establishing GBR are felt across Great Britain.
In conclusion, the report proposed by Amendment 12 is not necessary, given that the Government will be setting out their plans in a consultation which will be published shortly. This will provide not only detail on our proposals but also the opportunity for local authorities, mayoral combined authorities and noble Lords to input their views on these proposals. I hope my explanations in response to these amendments will be sufficient to persuade noble Lords not to press their amendments.
Baroness Pidgeon (LD)
One thing that has united this House in our discussions is support for further devolution and acknowledgment of the success of devolved lines in London and elsewhere in the country. I thank the Minister for his detailed response and serious consideration of the points we raised in Committee. I was really pleased to hear the words, “This is a pro-devolution Government”, because we have not heard that in the debates to date. I was also pleased to hear that the Minister will ensure that in the next legislation, the role of local authorities will be strengthened, and that he will include that statutory role to ensure their involvement in the governance, management and provision of rail services.
Transport for Greater Manchester, which my noble friend Lady Randerson met with recently, will be reassured to hear that, ahead of Great British Railways being established and on the statute book, there are opportunities for it to develop its ambitious plans for the Bee Network. What was said today about branding and being consistent in these metro areas was really reassuring, given that we want to drive a modal shift and get more people using public transport.
I was really pleased to hear the Minister say that the Secretary of State will still be allowed to exempt lines—that if local leaders want to take over a line, their request will be seriously considered and an exemption granted where appropriate to allow lines to be run across the country, as we have seen in London and Liverpool. On the basis of what the Minister has said, I beg leave to withdraw Amendment 7.
The Deputy Speaker (Lord Ashton of Hyde) (Non-Afl)
Before we move on to the next group, I have to inform the House about the voting in the third Division. The figure was announced as 99 for the Contents. The correct figure is 95, but the result is the same.
Amendment 8
Baroness Brinton
“30ZA Statement of accessibility standards(1) When making a direct award under section 30(1A) the Secretary of State must lay before Parliament a statement to the effect that they are of the view that such an award will comply with the accessibility standards.(2) The Secretary of State must prepare a statement of the standards that they propose to apply in assessing, for the purposes of subsection (1), that a public sector company meets the required level of accessibility.(3) The principles must in particular make provision for the accessibility of—(a) the service,(b) accommodation for individual journeys, and(c) booking platforms and other interactive digital services and systems used in connections with journeys on the relevant franchise. (4) In preparing the statement under subsection (2) the Secretary of State must consult such persons as they consider appropriate, in particular disabled people.”Member's explanatory statement
This amendment places a duty on the Secretary of State to make a statement to Parliament confirming they are of the view that making an award to a public sector company will meet certain accessibility standards.
Baroness Brinton (LD)
My Lords, I declare my interest as vice-chair of the Accessible Transport Policy Commission. I start by thanking the Minister for meeting with myself and the noble Baronesses, Lady Grey-Thompson and Lady Randerson, last week, for the very constructive discussions about issues relating to passenger assistance and support for disabled passengers, and for the other meeting with my Lib Dem colleagues and myself to discuss the Bill more broadly.
Before I speak to my amendment, I want to say that I support Amendment 11 in the name of the noble Baroness, Lady Randerson, which requires the Secretary of State to consult appropriately when awarding a public sector contract in order to encourage more services to be operated by devolved authorities.
Turning to my Amendment 8, I thank the noble Baroness, Lady Grey-Thompson, and the noble Lords, Lord Blunkett and Lord Holmes of Richmond, for signing it. It places a duty on the Secretary of State to make a Statement to Parliament confirming that they are of the view that an award made to a public sector company will meet certain accessibility standards. The Minister has tabled Amendment 15, which puts in legislation for the first time that public sector companies providing train services under Section 30 of the 1993 Railways Act are subject to the public sector equality duty, and I thank him for that.
One of the current issues is that it is not clear what is required by law, whether a train company is publicly owned or not. That has resulted in inconsistent standards and services. I thank all noble Lords, not just those who have taken part in the Bill but others who have spoken to me outside the Chamber, who have commented on the experiences of disabled Peers, including the noble Baroness, Lady Grey-Thompson—and myself. The fact is that our experience is not unusual, and many disabled people report disrupted or poor services daily. People are surprised when we say what has happened, but it is actually the daily experience of many disabled people.
In Committee, the Minister said:
“I was going to list a range of areas where things need to change, but I am embarrassed to do so because so many speakers in this debate have listed them themselves”.
He went on to say:
“All I can do is acknowledge that I have heard the list quite clearly. We know that we need to do better, and it hurts me that the public service that I care about fails so regularly to look after people in the way that it ought to”.—[Official Report, 23/10/24; col. 694.]
I thank the Minister for that. I repeated it because I have some questions, although not on that statement but on the detail that will follow. First, can he clarify that the public sector equality duty does not already apply to the existing OLR train operating companies? If it does not, will the current OLR train operating companies have to comply with it immediately after the Bill is enacted, but before the rail reform Bill is passed? If the answer is yes, how will that work with the next stage of consultation on a stronger assistance service?
Following remarks made in an earlier group today, can the Minister explain the next steps to consult with the disabled community about the new universal assistance standards he wanted to correct in the list of problems? It included too many apps, a lack of level boarding, broken lifts, unsuitable rolling stock, and the lack of staff on trains and at stations, which he and many others referred to in Committee. How does that fit in with the publication of the rail reform Bill, be that later this year or early next year?
Baroness Grey-Thompson (CB)
My Lords, I will speak to Amendment 8 in the name of the noble Baroness, Lady Brinton, to which I have added my name. I draw the House’s attention to my interests as listed in the register, including as chair of the Accessible Transport Policy Commission. I thank the Minister and the noble Baroness, Lady Blake, for their time in looking at this issue.
I will briefly offer my support. In speeches both in Committee and today, the noble Baroness, Lady Brinton, has made very clear what we are seeking. In Committee, there was a lot of support, not just for our own personal experiences but for the treatment of disabled people.
I spend much of my time on social media bemoaning some of the negative experiences I have had, but I will highlight one that was very positive. Today, I have already been on a return trip to Milton Keynes, which was absolutely wonderful. The train manager walked through the train and knew that I was on board. I did not use my legal right to turn up and go; I booked assistance. The train manager was there with the ramp ready and waiting, and I was in the amazing position of having three people there to meet me on the platform.
I have often mentioned that I experience way better treatment than any other disabled person I know—that was highlighted today. All we want is for the same treatment I get to be extended to every other disabled person. As the noble Baroness, Lady Brinton, said, the voice of disabled people in moving this forward is incredibly important. We also need to consider how we avoid future derogations, which I expect will be discussed in the next Bill. As a result of such derogations, instead of trains being step free on 1 January 2020, it will now be 100 years before I, the noble Baroness or other wheelchair users can get on a train without the permission or support of a non-disabled person.
I recognise where we are today. I will strongly support the noble Baroness, whatever she chooses to do with the amendment. I very much look forward to the Minister’s response.
Baroness Randerson (LD)
My Lords, I am very pleased to speak in support of my noble friend Lady Brinton and the significant group of signatories to this amendment. This eye-catching group of people campaign on disability-related issues and have made important points in this debate and others aligned with it. In addition to that amendment, which speaks for itself, there is Amendment 11 in my name and that of my noble friend Lady Scott.
Although the experiences of people using wheelchairs and those who do not have perfect sight and so on are very much at the sharp end of passengers’ experiences, the passenger body generally does not have a good experience in Britain these days. There are huge problems for passengers of every age group and every level of physical ability, so there is a massive job to be done in improving that experience. People would put up with a second-rate experience, perhaps, if they were paying second-level fares, but they are paying premium fares for a very rough deal, and those two just do not sit together.
Amendment 11 seeks to establish a body that will work on behalf of passengers: a body dedicated to passengers’ needs and to creating the kind of experience that those of us who are lucky enough to travel abroad on trains know can be achieved with a perfectly normal, non-premium rail service in other countries. If they can do it, I do not see why we cannot.
I am very pleased to see Amendment 15 in the name of the Minister, and I look forward with great interest to what he is going to say about it, because I hope it will reassure us that the Government’s plans include the creation of a passenger standards authority —or something similarly named—that will look out for passengers. I also hope that the Government will produce a commitment that suits the needs of the signatories of Amendment 8.
Lord Moylan (Con)
My Lords, I rise with some humility to make a few comments on Amendment 8, which, of course, is one where the noble Baronesses, Lady Brinton and Lady Grey-Thompson, bring an experience that cannot be gainsaid in your Lordships’ House. I said in Committee that I fully acknowledge—from my own personal knowledge—that the Minister is personally committed to seeing improvements in regard to accessibility. I know that it is a matter of importance to him, but none the less, fine words and parsnips come to mind. Action is needed and we need to see real progress. If Great British Railways offers something in that regard that has not been offered before, that would be greatly to its credit.
In relation to Amendment 11, from the noble Baroness, Lady Randerson, this is another example of what the Government could be doing now. It is already the Government’s policy to have a passenger standards authority; they have set that out in the document Getting Britain Moving. Like so many other things, it is wrapped up in a Bill that we are told we might see in 12 or 18 months. I have expressed in Committee a degree of doubt and scepticism as to whether the Government will meet that target. I hope they will, but these are very complex issues, and it could take even longer than that before we see the Bill. Then, of course, it has to be passed and enacted, and then, as I keep pointing out, it has to be implemented. Change on that scale does not happen overnight; it will take several years for it to be implemented. Where in that timeframe is the passenger standards authority going to stand? Will we see it coming to life at the beginning of the process or at the end? Could it be four or five years away before it comes into existence? We have no idea.
The amendment from the noble Baroness, Lady Randerson, would at least say, “This is one thing you can get started on now. You can get it up and running very quickly and it could be something that passengers could benefit from at a really early stage”. I really do not understand why the Government cannot accept, if it turns out that is the case, what the noble Baroness is proposing.
I have no comment on Amendment 15 in the name of the Government except to say that it is, of course, entirely unobjectionable from our point of view.
Lord Hendy of Richmond Hill (Lab)
My Lords, I will speak first to Amendment 8, which was tabled by the noble Baroness, Lady Brinton, and is supported by the noble Baroness, Lady Grey-Thompson, the noble Lord, Lord Holmes, and my noble friend Lord Blunkett, and to Amendment 15 which is tabled in my name. I thank the noble Baronesses for their amendment and for the productive discussion we had last week. As I said in Committee, I feel personally ashamed of the industry that I am so familiar with as so many deficiencies come out of the way that it treats passengers, particularly those in need of some assistance. Many of those deficiencies are a result of the fragmented structure of the privatised railway.
The noble Baroness, Lady Grey-Thompson, has shown me and described to me the plethora of apps that you need to buy tickets, the differences in how they work, what they do and whether they enable you to book a seat, a wheelchair space or a ticket for the whole of your journey. I am shocked by it, and I cannot bear for her to show me much more, because all she would do is show me more apps that work differently from those that she has already shown me. We cannot and should not tolerate that. The lack of consistency in train design has been highlighted today, as has the lack of reliable, accurate information about whether crucial facilities such as lifts and accessible toilets are working, and there are other issues.
Looking ahead to the wider railways Bill, establishing Great British Railways will provide the opportunity, for the first time in three decades, to begin to take a coherent approach to these matters. Some of them can be done quickly, some of them we can start now and some of them will, by virtue of the longevity of rolling stock and structures, take a long time, but if we do not start, we will never achieve them. However, I also agree that the noble Baronesses and the many disabled passengers on whose behalf they speak should not have to wait for Great British Railways to come along before we start to improve things, so, as I discussed with the noble Baronesses last week, the Government have tabled an amendment and we also have a number of verbal commitments that I shall place on record in the House today.
First, the Government will work with the disabled community to develop and publish an accessibility road map that will explain the actions we intend to take to improve things for disabled people or others requiring assistance in advance of GBR being set up. We are not waiting for it to do that. The road map will suggest how the Government can work with the industry to prevent situations like those we have heard about in this House so far. As discussed, it will cover important matters that the noble Baronesses have raised with me. They include measuring and reporting on lift reliability and maintenance, providing confirmation and clarity about the legal obligation of operators to provide every disabled person with assistance when travelling whether or not a pre-booking has been made, and improving consistency in the service provided to disabled people across the board. We will engage with the disabled community on the development of the road map to ensure that when it is finished, it works for them.
Secondly, I commit before the House that this Government will provide the funding to develop phase 5 of the passenger assist app. As the noble Baroness, Lady Grey-Thompson, knows from our previous discussions, I have made it clear and will continue to make it clear to those involved that the development of this next phase of the programme must be done in consultation with the noble Baronesses and representatives of disabled people to ensure that it delivers the assistance that people deserve and addresses their needs.
Finally, we have tabled Amendment 15, which is before the House today. It amends the Equality Act 2010 to make it clear that publicly owned train companies are subject to the public sector equality duty. Although it is the Government’s view that the public sector equality duty already applies to publicly owned train operating companies, we are concerned that that is currently not as clear as it needs to be. By adding them to the list of public authorities in the Act, we will ensure that there can be no mistake. Network Rail and Transport for London are already named in the Act, but train operating companies previously were not, which is something that, if this amendment is agreed, we will remedy.
Baroness Brinton (LD)
My Lords, in tabling Amendment 8, I was very aware of standing on the shoulders of giants, including Transport for All and many disabled campaigners over the years.
I thank the Minister for putting the public sector equality duty in the Bill. This is a big step forward. I thank him also for the commitments that the Government have made, albeit for the future. There is a real spirit here to make sure that things start to change. For the first time since I joined your Lordships’ House in 2011, I feel encouraged that we have been heard and understood. Amendment 15 is, we hope— I am not going to get Churchillian about this—the beginning of the end or the end of the beginning, or something like that. It will be the end of the current poor levels of assistance for passengers. I know that the Minister understands that there is much detail to be worked out to make that real change happen.
On that basis, I am happy to withdraw my Amendment 8. I look forward to seeing Amendment 15 become part of the Bill and to us seeing more detail in due course. The future higher standards of assistance services will transform the lives of disabled rail passengers. I beg leave to withdraw my amendment.
Lord Young of Cookham
“30ZA Annual report of public operator liabilities(1) The Secretary of State must lay before Parliament, within six months of the day on which this Act comes into force, and on each anniversary of that date thereafter, a report on the public sector financial liabilities arising from the award of public service contracts to public sector companies under subsection 30(1A).(2) The report published under subsection (1) must include details of rolling stock leasing liabilities.”Member's explanatory statement
This amendment would require the Secretary of State to publish an annual report examining the impact of train company rolling stock liabilities transferring into the public sector.
Lord Young of Cookham (Con)
My Lords, Amendment 9 in my name would require an annual report on public operator liabilities. This might sound rather a dry subject with which to lead the last group on Report, but it is an important one, as it has the potential to totally disrupt the Government’s ambitions for Great British Railways. I begin by thanking the Minister for the meeting that we had last week with the noble Baroness, Lady Blake. He listened patiently to my concerns and was able to allay some of them—though not, I am afraid, this one.
This amendment has grown in prominence since last week’s Budget with its clear fiscal rules, and these were needed to give confidence to the markets that the Government could borrow the substantial sums needed to fund their expenditure; we will debate all that on Monday. In a nutshell, my concern is that, if liabilities which are currently off the Government’s books cease to be off balance sheet, we will revert to the position when I was Transport Secretary, with transport bidding for investment against schools, hospitals and defence and always missing out because of political priorities.
I believe the noble Lord has conceded the risk of this happening, because he has said repeatedly that it will be for the Office for National Statistics to decide in the future how GBR liabilities impact the public sector balance sheet and, specifically, public sector net debt. However, it simply cannot be prudent for the Government to embark on a programme of nationalisation without fully understanding the financial consequences of the ONS classifying GBR as “central government” and without taking the necessary precautions.
We can have a shot at what the ONS will do, because it has stated that in circumstances such as GBR it would run what is called the market body test, and we know that GBR, as the Government envisage it being structured, would fail that test. The integration of track and train within a single entity, as set out clearly in Labour’s Getting Britain Moving document, will mean that GBR will fail the ONS market body test, meaning that its liabilities will be consolidated into the department’s accounts. The Minister has argued previously that the position will not be different from where we are now, but it will be. The creation of GBR as a permanent public monopoly will create a completely different system, which will change the way in which the ONS categorises expenditure.
The Labour document is clear that GBR will be a “single employer”. If so, it will simply fail the market test and its accounts will be classified as “central government”, rather than a public corporation, as LNER is currently. The accounts will then be required to be consolidated into DfT’s accounts, like other bodies that fail the market test, and then classified as “central government”. Crucially, these different accounting treatments will make investment, for example, in rolling stock harder, as it will be in competition with other demands for public investment. The Minister has made it clear that GBR will use its purchasing power to commission new rolling stock through the roscos: rolling stock that will then be leased to GBR. He stated:
“GBR will enable a longer-term view of the rolling stock market, and it will reduce the margins it needs to make”.—[Official Report, 23/10/24; col. 736.]
Those long-term liabilities, totalling potentially some £15 billion, will score immediately on the Government’s balance sheet, increasing national debt, even if the money to manufacture the trains comes from the roscos and is raised on the capital markets.
What I hope the Minister has done—and if he has done it, no one would be happier than me—is get an undertaking from the Treasury that, if the ONS so classifies GBR debt, the Treasury will ensure that the DfT is insulated from that decision. He may have such a letter in his breast pocket. If he has not, we know what is likely to happen because it happened to Network Rail, which was reclassified by the ONS in 2014. The Minister said at our meeting that there was scope for economies at Network Rail when it was reclassified, and I am sure he was right. But those measures were never going to compensate for all the consequences. Network Rail had to divest £1.8 billion by selling property assets; it had to defer renewal works; it had to postpone completion dates; and it had to renegotiate a lot of contracts. Do we honestly want that to happen to GBR?
So, in a nutshell, I am concerned at the gamble the Government are taking with the future of the railways by going back to the pre-privatisation system, where Ministers will have to compete against other spending departments for what the railways need. I beg to move.
Baroness Randerson (LD)
My Lords, I have one very brief question for the Minister, following the warnings by the noble Lord, Lord Young. Have the Government looked at this from the point of view not just of what I would call the finished product of the nationalised railway system but of how the categorisation of a mixed economy would work? We, the nation, will be in a situation of a mixed, some-and-some economy for a significant number of years to come.
Lord Moylan (Con)
My Lords, my noble friend Lord Young sought throughout Committee, with great forensic precision and courtesy, to get answers to the sort of questions he has been raising today, and I have sought, with rather blundering efforts, to get answers to very similar questions. Here we are on Report, still asking questions that the Government have consistently failed to answer throughout. The reason is that, as I said earlier today, this is a rushed Bill that has not been thought through properly as to its broader consequences. These are consequences not to be dealt with in a future Bill coming down the road but that flow directly from the measures in this Bill. I very much hope the Minister can give some account of them today and explain how the Bill and this nationalisation will affect the public finances in what I call, in my blundering way, balance sheet terms.
There are other items. Since we discussed this Bill in Committee, we and the country have had the body blow of the employers’ national insurance increase delivered by the Chancellor of the Exchequer. Amendment 19 in my name is there to probe what the consequences of that will be for Great British Railways. Will there be a very significant increase in staff costs on the railways as a result, and what impact is that likely to have on the revenue expenditure that the railways can undertake?
In Amendment 18, I ask for clarity on something that also flows directly from the Bill—it is a direct consequence of it, and not something to be dealt with in a future Bill—to do with the harmonisation of staff wages, terms and conditions as they transfer from diverse employers in the private sector to a single employer owned by the state. Drivers and other staff are employed by the railway companies on terms agreed with trade unions but not necessarily the same terms as between one company and another, so drivers’ pay, terms and conditions will vary somewhat between one company and another. The Government have resisted saying, at any point, what they will do about this if they are a single employer. Of course, theoretically, each franchise as it falls due will be placed in a separate company from the others, so it is perfectly possible, legally, for it to have a separate agreement with its staff, different from that which another nationalised company has with its staff, replicating the current arrangements, if it chooses to do so. Is that the Government’s intention, or is there an intention that wages, terms and conditions should be harmonised? If the latter, do the Government imagine that they will be harmonised on the basis of the lowest common denominator, the highest common denominator, or some denominator that might be found in the middle as a sort of average? This is a direct consequence of the Bill, but nothing has been said by the Minister about it.
I come back to the question of staff consultation. There has been no staff consultation about the change of employer. The idea that the Minister might wander around Waterloo station randomly consulting drivers as he accosts them, which he held out when he spoke earlier, is an attractive and enticing one. That is to be encouraged—there are not enough Ministers going around randomly accosting staff whom they employ in the public sector—but it hardly constitutes what might be called formal consultation in industrial relations terms.
I hope I am forgiven for saying this, but earlier I saw the Minister having a quiet chat in a break for a Division with his brother, the noble Lord, Lord Hendy, with his great industrial relations experience. Who knows? Perhaps he was pointing out to the Minister that normal industrial relations consultation requires a little more than simply wandering around and chatting to the staff on the station as you meet them, welcome though that is.
I very much hope that by now, with all the warning that the Minister had about these issues in Committee, he will be able to give an account of himself that will satisfy the legitimate questions of my noble friend Lord Young, and will be able to explain to us what his employment and industrial relations strategy is as a direct consequence of the nationalisations that will take place under the Bill.
Lord Hendy of Richmond Hill (Lab)
I thank the noble Lord, Lord Young, for tabling Amendment 9 and for our productive meeting the other day. I recognise that there is a question of whether public ownership will lead to certain liabilities moving on to the public sector balance sheet and therefore counting towards the public sector net debt. I cannot speculate about future balance sheet treatments and impacts as those will always depend on classification decisions that are a matter for the independent Office for National Statistics.
What I can say is that four train companies are already owned by DOHL, including LNER for six years and Northern for four, and the position has not changed so far. The Office for National Statistics recently considered the classification of TransPennine and concluded that it should remain classified as a public non-financial corporation. The mixed economy that we already have is relevant to the question asked by the noble Baroness, Lady Randerson, about the categorisation of a mixed economy. We are going to be there over the next several years as the train operations come back one by one.
It has been suggested in debate that, if liabilities move on to the public sector balance sheet, that would affect public sector net debt and unduly constrain future investment. The noble Lord, Lord Young, referred to events at Network Rail after it was reclassified, many of which I witnessed when I went there in 2015. In fact, a large number of the things that happened were really good. The organisation was not on the public balance sheet. It had spent an enormous amount of money: when I turned up in July 2015, it had debt of £54 billion, roughly equivalent to the whole of New Zealand’s national debt. With the last chief executive and the present one, we have put it into great order and reduced its expenditure. It has reduced capital expenditure too, which I think was also wise. The list of enhancements that it was proposing to carry out were beyond its capability then, and beyond the funding of even the unlimited amounts of debt that it could call on.
Nevertheless, the existing publicly owned train operators are the driving force behind the current multibillion-pound pipeline of new rolling stock orders. Network Rail is still investing in the railway infrastructure, and it shows that public ownership need not be a barrier to investment.
Looking more broadly across the public services, noble Lords may have seen that, alongside the Budget, the Chancellor announced changes to the fiscal rules to measure government debt in a way that recognises the need to better support capital investment. This Government recognise the pressing need to rebuild our economy and invest in our public services after years of underinvestment.
It might be helpful to provide the noble Lord, Lord Young, with some specific reassurance, and I can reassure him that we are not seeking to close the door on private investment. Where there are genuine opportunities for private investment—which, for example, might well be, and in the future should be, in relation to property development around stations or car park investment—we would expect Great British Railways to work with relevant local authorities and the private sector to promote these opportunities. I reassure the noble Lord that securing appropriate private investment will be an absolute priority for this Government. I hope that provides him with enough reassurance to withdraw the amendment.
Next, I will address Amendments 18 and 19 in turn. I thank the noble Lord, Lord Moylan, for these amendments. Amendment 18 would require the Secretary of State to lay a Statement before Parliament within three months of the Bill’s enactment. The Statement would need to set out the Government’s intentions concerning the terms, conditions and pay rates of staff of existing train operating companies as they transfer to become employees of public sector companies.
At that stage, it would be a very simple Statement. The Government fully expect that the TUPE regulations will apply, preserving employees’ existing contractual terms and conditions as they transfer from private operators to subsidiaries of directly operated holdings, in the same way as they have done in previous transfers. I can also confirm that the Secretary of State’s contracts with public sector companies would ensure that staff could continue to be members of the railways pension scheme. That being the case, there is no need for a further Statement of the kind mandated by the amendment.
The noble Lord asked what the Government intend should happen to pay, terms and conditions in the period after employees have transferred to a public sector operator. Although this is beyond the scope of the amendment the noble Lord has tabled, I am happy to address the question by saying three things.
First, public ownership under this Bill does not give rise to any imperative to harmonise or otherwise amend staff terms and conditions. Decisions about any such changes are for the future. In contrast to the previous Government’s approach, we would expect to discuss these matters openly and constructively with the workforce and their representatives before settling on any specific proposals. If the noble Lord was serious in his proposal, he would be able to tell me, for example, that the previous Government consulted the staff of LNER when it was transferred into the public sector. I think he will find that they did not. I am not going to speculate about the outcome of any such future discussions.
Secondly, resolving the long-standing disputes with the rail unions, as we have done and are doing, clears the way for vital workforce reform to modernise our railways and do away with outdated working practices. We do not need to wait for Great British Railways to start this essential work—although we have needed to clear up a number of disputes, including one so long-standing that it has been a dispute since 2015—and we will do this by working with the workforce, not against them.
Thirdly, looking further ahead to Great British Railways, the overall structure for GBR and the mechanics of how staff will transfer into it are still to be decided. We will want to make sure that GBR retains and treats fairly the committed and talented staff who are essential to keep the railway running for its customers. We will have more to say about this when we publish our proposals for the railways Bill.
Amendment 19 would require another report, this time on the impact of national insurance employer contributions on the operational costs of public sector companies. I am sure that the noble Lord will recognise that employer national insurance contributions are just one relatively small component of train operators’ overall costs—less than 2.5% of total costs in this financial year. Furthermore, other significant costs, such as diesel and electricity, are volatile. It would therefore take significant resource to routinely report on all these different costs, which are subject to change all the time.
This reporting would add little value, particularly when any national insurance costs incurred by a DfT-contracted operator are simply paid to another part of government. Public ownership will make no difference to the net cost to government of the relevant train operators’ employer national insurance contributions; the Government are already both the funder and the recipient of these.
Having said that, I will be pleased to provide an estimate of any impact as soon as I am able to. At that point, I will happily write to the noble Lord and place a copy of the letter in the House Library. In the light of this, I urge the noble Lord, Lord Moylan, not to press his amendments.
Lord Young of Cookham (Con)
My Lords, as this is the last debate and possibly the last speech on Report, I commend the Minister for the patient way he has dealt with the proceedings on Report, drawing on his unique knowledge of the industry we are debating. It has been a pleasure to watch the contrasting debating styles of him and the more flamboyant style of my noble friend Lord Moylan.
I welcome what the Minister said about private investment, but I have to point out that the Bill specifically precludes the sort of investment we saw with the franchise. For example, Chiltern widened single track into double track and built new railway stations. That sort of investment by a train operating company is specifically precluded by the Bill.
On the substance of my concern, he said right at the beginning that there is a question about how the liabilities will be classified. He then sheltered behind the well-known phrase that he “could not speculate” about what the ONS will do. I think there is a distinction between the present position with LNER within the department, with relatively short-term liabilities for rolling stock, and the position with a 20-year liability and GBR. I remind the Minister that, in order to avoid Network Rail being reclassified as public sector body, Treasury Ministers specifically asked—this is under the Labour Government—other Ministers not to criticise the salaries of Network Rail for fear that the ONS would classify it as a public body.
Having said that, the Minister has gone as far as I could have expected him to. He does not have in his breast pocket a letter from the Treasury giving him a guarantee against the consequences of reclassification, but against the good-natured reply he gave me, I seek leave to withdraw my amendment.
Lord Moylan
“30D Preliminary Report on Communication with Local Transport AuthoritiesThe Secretary of State must, within six months of the day on which the Passenger Railway Services (Public Ownership) Act 2024 is passed, publish a preliminary report outlining the proposed framework for communication between Great British Railways (GBR) and local transport authorities across the United Kingdom.”
Lord Moylan (Con)
My Lords, this amendment deals with devolution and requires the Government to start work on that in the next few months and explain how they are going to do it. One thing that is new today, as far as I am aware and I have listened fairly carefully to all parts of this debate, is that the Minister has said that he intends to issue his consultation document before the end of this calendar year. Did my ears hear that correctly?
Lord Moylan (Con)
On the basis of that “hope”, which I imagine the Minister will expect to be held to—and which I will be holding him to—I am prepared not to move this amendment, because it will simply be timed out by that consultation document which would replace it, so to speak.
Lord Moylan
“30D Statement on the impact of the Act on rail freight targetThe Secretary of State must, within six months of the day on which the Passenger Railway Services (Public Ownership) Act 2024 is passed, make a statement in each House of Parliament outlining how the Government’s plans to achieve a 75% increase in the volume of rail freight in the United Kingdom by 2050 are affected by the provisions of that Act.”Member's explanatory statement
This amendment would require the Secretary of State to make a statement outlining the Government's plans to take all reasonable steps to achieve a 75 per cent increase in the volume of rail freight in the United Kingdom by 2050.
Lord Moylan (Con)
I am afraid the case is rather different in relation to Amendment 13, which relates to freight and requires the Government to state not simply that they intend to meet the 75% target for the increase in freight volumes but how they intend to do so. It remains wholly mysterious how the Government are going to do this, and it is time that that veil should be drawn back and we should be allowed to know. This amendment would require them to do that. I wish to test the opinion of the House on Amendment 13.
“Application of public sector equality dutyIn Part 1 of Schedule 19 to the Equality Act 2010 (authorities subject to public sector equality duty), at the appropriate place under the heading “Transport”, insert—“A public sector company providing services for the carriage of passengers by railway under a public service contract awarded under section 30 of the Railways Act 1993 (public sector provision of services).””Member’s explanatory statement
This amendment provides for public sector companies providing train services under section 30 to be subject to the public sector equality duty.